So now you know what a copyright is, and you know about the various economic rights and moral rights associated with copyrighted works. The United States Copyright Act provides that anyone who violates any of these rights is liable for direct infringement of the copyright. This liability is to the owner with regard to the economic rights, and to the artist with regard to the moral rights. In addition, a person knowingly induces, causes or contributes to the infringing conduct of another is liable for contributory infringement. To clarify the difference, think about a flea market. The flea market owner provides space to vendors and promotes the flea market. A vendor sells bootlegged copies of Lady Gaga CDs, obviously without getting Ms. Gaga's permission to do so. A local police officer on patrol at the flea market noticed this behavior, and warned the flea market owner about the infringing activity, but the flea market owner did nothing to stop it, and continued promoting the flea market. In this case, the vendor of the Lady Gaga CDs would be liable for direct infringement because he violated Lady Gaga's economic rights. The flea market owner, on the other hand, would be liable for contributory infringement because he contributed to the infringing conduct of the vendor, and he knew about the infringement.
But consider a different circumstance. The flea market owner operates his business differently, and receives a set percentage of each vendor's sales. He also has the right per an agreement with the vendor to control what the vendor sales and ensure that the vendor follows the rules. So he has both (1) the power to police the vendor's conduct, and (2) a direct financial interest in the vendor's proceeds. If he permits the vendor to sell the Lady Gaga CDs that infringe the copyright, he will be liable for vicarious infringement of the copyright. The vendor would still be liable for direct infringement.
Tomorrow, we'll talk about the Digital Millenium Copyright Act, and how it effects infringement liability for internet-related activities. Send us your questions or comments, or post them on the blog. The email is JDellinger@mainspringlaw.com. We also have a free pamphlet discussing copyright law as it effects small businesses and individuals.