Torts and the Construction of Inducement and Contributory Liability in Amazon and Visa

Abstract

In Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd., the Supreme Court clearly expressed its understanding that the common law of tort provides the foundation for third party copyright liability. Grokster did not, however, offer a complete account of how tort law defines guides the application of third party copyright liability. Accordingly, lower courts now face the challenges of filling in the details that Grokster left out. This Article examines two recent, closely followed opinions that apply tort law to the problem of third party copyright liability, Perfect 10 v. Amazon and Perfect 10 v. Visa. It makes sense to study Amazon and Visa because they involved large, high profile businesses whose primary services simultaneously supported infringing and noninfringing behavior. In Amazon, the plaintiff Perfect 10 (copyright holder in a number of photographic images) sued Google because Google’s search engine helped Internet users find and view infringing copies of the plaintiff’s photographs. In Visa, Perfect 10 sued credit card companies for processing credit card payments on behalf of websites that charged users to view infringing images. Claims like these are both plausible and problematic. The scope of copyright infringement on the Internet is significant. It is arguably wrong for businesses to profit from assistance provided to illegal activities. Furthermore, if Google and Visa withdrew that assistance, the incidence of copyright infringement would presumably decrease. At the same time, however, it is perhaps unfair to hold a business liable for supporting the infringement of others when the business did not act with the specific purpose of supporting infringement. Moreover, it may be socially undesirable to impose liability on these businesses for two reasons. First, attempts to stop infringement may be very costly and ineffective. Second, while liability may force entities like Google and Visa to withdraw their services from those who have committed infringement, liability might also result in withdrawing services from those who have not infringed. Society must therefore balance the potential benefits of third party copyright liability against its associated costs. Amazon and Visa try to integrate third party copyright liability and tort law, but with only modest success. Two problems share the blame. First, the doctrinal formulations of third party copyright liability do not map cleanly onto tort law. Accordingly, those formulations can easily distract courts from the considerations most relevant to tort. Second, although both opinions acknowledge the importance of tort law to the construction of third party copyright liability, they pay insufficient attention to the overall structure of tort, distinctions between basic types of tort actions, and the reasons for those distinctions. This robs Amazon and Visa of truly cogent explanations for their results. This Article proceeds in four parts. Part I describes the general problem of third party copyright liability and applies tort law to it without regard to existing copyright doctrine. Part II lays out the present doctrinal formulations of third party copyright liability, namely inducement, contributory liability, and vicarious liability. Part II then explains how these formulations correspond to the overall structure of tort and describes areas of possible confusion. Part III uses Parts I and II to analyze Amazon and Visa. It shows how those opinions struggle to make sense of third party copyright liability’s doctrinal formulations in light of tort and how more attention to the overall structure of tort could have improved the opinions. Part IV concludes by arguing that future decisions will more effectively apply tort to third party copyright liability if courts must significantly rework third party copyright liability’s doctrinal formulations or their interpretation.