Grokster decision interpreted the Napster I decision as requiring actual knowledge of specific
infringing acts at a time during which the OSP materially contributes to the infringement in order
for there to be contributory liability for such acts. However, the Supreme Court’s Grokster
decision found that the Ninth Circuit erred in the latter ruling, so it is unclear how much of the
Ninth Circuit’s adjudication of the knowledge requirement for contributory liability survives the
Supreme Court’s Grokster ruling. In her analysis of this issue in her opinion in the Hummer
Winblad case, Judge Patel was able to conclude only that the Supreme Court’s rejection of the
Ninth Circuit’s ruling suggests that, taken as a whole, the Supreme Court’s decision provided for
liability under broader circumstances than those permitted under Napster I, but the precise scope
of that liability remains unclear.
Beyond knowledge, how much the operator must contribute to the infringing activity
after gaining such knowledge beyond the mere provision of the facilities used to accomplish the
infringement is also unclear. The Ninth Circuit’s interpretation in the Napster I case of its
Fonovisa decision seems to require little more than continuing to provide such facilities after
knowledge that infringing activity is taking place. The MAPHIA, CoStar and Ellison courts
interpreted the Netcom decision to require more (note that, although the Netcom case was
decided before both Fonovisa and Napster I, the CoStar and Ellison cases were decided after
Fonovisa and Napster I).
As discussed in detail above, the Ninth Circuit’s Napster I decision contains a number of
ambiguities with respect to the scope of the duty to police for occurrences of infringing material
upon receipt of such knowledge. However, the cases seem to require at least that a service
provider actively attempt to verify a claim of infringement after receiving notice of the same and
to take appropriate action in response. In addition, several decisions have imposed contributory
liability on the part of a BBS where the BBS operator actively encouraged the acts leading to the
infringements. See the discussions of the Sabella case^2117 and the Hardenburgh case^2118 above.
As discussed in Section III.C.6(b) below, the DMCA defines certain safe harbors against
liability for OSPs who act as merely passive conduits for infringing information and without
knowledge of the infringement. These safe harbors may provide a defense against liability in
certain instances to claims of contributory liability.
- Vicarious Liability
A party may be vicariously liable for the infringing acts of another if it (1) has the right
and ability to control the infringer’s acts and (2) receives a direct financial benefit from the
(^2117) Sega Enterprises Ltd. v. Sabella, 1997 Copyr. Law. Dec. ¶ 27,648 (N.D. Cal. Dec. 18, 1996).
(^2118) Playboy Enterprises, Inc. v. Hardenburgh, Inc., 982 F. Supp. 503 (N.D. Ohio 1997).