Impact on Peer-to-Peer Cases: Vicarious Liability Claims May Have Their Limits

In the area of copyright law, however, courts have developed an expanded form of vicarious liability that has been applied without regard for traditional limits on vicarious liability. The Ninth Circuit described this court-created copyright rule in its 1996 decision, Fonovisa Inc. v. Cherry Auction Inc.: “The concept of vicarious copyright liability was developed in the Second Circuit as an outgrowth of the agency principles of respondeat superior. … Noting that the normal agency rule of respondeat superior imposes liability on an employer for copyright infringements by an employee, the court endeavored to fashion a principle for enforcing copyrights against a defendant whose economic interests were intertwined with the direct infringer's, but who did not actually employ the direct infringer.” 76 F.3d 259, 262 (9th Cir. 1996) (citing Shapiro, Bernstein and Co. v. H.L. Green Co., 316 F.2d 304 (2d Cir.1963)). In light of Fonovisa and the Second Circuit case law it followed, courts now impose vicarious liability for copyright infringement where the defendant has “the right and ability to supervise infringing activity and also has direct financial interest in such activities,” regardless of whether a principal/agent relationship exists. See In re Aimster Litigation, 252 F.Supp.2d 634, 654 (N.D. Ill. 2003).