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Third Parties Liability An Introduction

Direct and Indirect Infringement:

Direct Infringement (HK section 22(1) of the Copyright Ordinance):
A Strict Liability Rule Just like all other property rights.
No requirement for actual/constructive knowledge.
A person who commits any of the acts restricted under copyright is liable for primary infringement,
usually whether or not they know of the infringement.
U.S Law - Religious Technology v. Netcom (before the DMCA and section 512): Infringement requires a
certain element of volition and causation.

Authorization UK/HK Law (indirect/third party liability through primary liability) (section
22(2) of the Copyright Ordinance):
One may be primarily liable for violating the right to authorize any act restricted under copyright.
Liability to any person who grants or purports to grant the right to commit the infringing act.
Liability may arise for authorizing an infringing act without the copyright owners consent.
In a leading case, while a company made and sold a dual-cassette deck to purchasers highly likely to
reproduce copyright-protected material, the court did not find that it thus authorized infringements,
stressing that the device could be used for both legitimate and illegitimate purposes and that the
company could not control its ultimate use (C.B.S. Songs v. Amstrad [1988] 2 All E.R. 484
(House of Lords)).
In online cases, service providers have been found to authorize infringing file-sharing upon indexing
and other acts of facilitation, sometimes coupled with inducement, while providers of decoders have
been found to authorize infringing acts of communicating and showing encoded broadcasts.
Twentieth Century Fox v. Newzbin [2010] EWHC 608 (Ch) (authorization in indexing and
providing one-click online access to Usenet files for the benefit of paying subscribers);
Dramatico Entertainment Ltd. v. British Sky Broadcasting Ltd. [2012] EWHC 268 (Ch), paras.
7381 (authorization by Pirate Bay operators in indexing and arranging torrent files, in failing to
remove infringing torrents or prevent infringements, and in inducing infringement);
EMI Records Ltd. v. British Sky Broadcasting Ltd. [2013] EWHC 379 (Ch), paras. 5270
(authorization by website operators who provided directories of Bittorrent files that gave access to
infringing material, did so for profit, and made no real efforts to prevent infringement);
Paramount Home Entertainment International Ltd. v. British Sky Broadcasting Ltd. [2013]
EWHC 3479 (Ch) (confirming that, while the mere provision of a hyperlink may not constitute a
communication to the public, the right was infringed by a website that comprehensively referenced
links to infringing content).
Football Association Premier League Ltd. v. QC Leisure [2012] EWHC 108 (Ch), para. 81,
affirmed, [2012] EWCA Civ 1708 (providers of decoders have been found to authorize infringing
acts of communicating and showing encoded broadcasts).

Torts Law: Joint Tortfeasance

Twentieth Century Fox Film Corp & Ors v Sky UK Ltd & Ors [2015) EWHC (CH):
The suppliers of the Popcorn Time applications are jointly liable with the operators of the
host websites. The Popcorn Time application is the key means which procures and induces
the user to access the host website and therefore causes the infringing communications to
occur. The suppliers of Popcorn Time plainly know and intend that to be the case. They
provide the software and provide the information to keep the indexes up to date. I find that
the suppliers of Popcorn Time have a common design with the operators of the host
websites to secure the communication to the public of the claimants protected works,
thereby infringing copyright.

US Law:

Indirect Liability:
Two alternate tracks: Contributory Liability + Vicarious Liability:
(A &M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (9th Cir. 2001); In re Aimster Copyright Litig. 334
F.3d 643 (7th Cir. 2003)).

Contributory Infringement:
(1) Direct infringement by a primary infringer,
(2) Knowledge of the infringement, and
(3) Material contribution to the infringement.
Vicarious Infringement:
(1) Direct infringement by a primary party,
(2) A direct financial benefit to the defendant, and
(3) The right and ability to supervise the infringers.
The Sony Exception to the two tracks a strict immunity rule: when a product is capable of
substantial non-infringing use, its mere production and distribution do not impose secondary liability
for third parties' infringing uses of it (even if all conditions are met) a tape recorder, a video
recorder, a dvr, a photocopying machine (Sony Corp. v. Universal City Studios, Inc., 464 U.S.
417 (1984).
The Grokster Exception to the Sony Exception:
Inducement: if one distributes such devices with the object of promoting its use for copyright
infringements, or by taking other affirmative steps to foster copyright infringements, this third-party
would be liable for acts of infringements by primary users of the devices, regardless of the fact that
basically, the device is also capable of lawful uses (Metro-Goldwyn-Mayer Studios, Inc. v. Grokster
Ltd. 545 U.S. 913 (2005)).

The Australian Approach:

Section 101 of the Australian Copyright Act, 1968: Infringement by doing acts comprised in
(1) Subject to this Act, a copyright subsisting by virtue of this Part is infringed by a person who,
not being the owner of the copyright, and without the licence of the owner of the copyright, does in
Australia, or authorizes the doing in Australia of, any act comprised in the copyright.
(1A) In determining, for the purposes of subsection (1), whether or not a person has authorised the
doing in Australia of any act comprised in a copyright subsisting by virtue of this Part without the licence
of the owner of the copyright, the matters that must be taken into account include the following:
(a) the extent (if any) of the person's power to prevent the doing of the act concerned;
(b) the nature of any relationship existing between the person and the person who did the act
(c) whether the person took any other reasonable steps to prevent or avoid the doing of the
act, including whether the person complied with any relevant industry codes of practice.
(2) The next two succeeding sections do not affect the generality of the last preceding subsection.
(3) Subsection (1) applies in relation to an act done in relation to a sound recording whether the
act is done by directly or indirectly making use of a record embodying the recording.
(4) Subsection (1) applies in relation to an act done in relation to a television broadcast or a
sound broadcast whether the act is done by the reception of the broadcast or by making use of any article
or thing in which the visual images and sounds comprised in the broadcast have been embodied.
Universal Music Australia Pty Ltd & v Sharman License Holdings Ltd [2005] FCA 1242


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