Legal Definitions - Vicarious Infringement

Vicarious Infringement is a legal principle where one party can be held responsible for the copyright or trademark infringement committed by another party, even if the first party did not directly commit the infringing act themselves.

For a party to be held vicariously liable, two main conditions must typically be met:

• Right and Ability to Control: The party being held responsible must have had the power to supervise, influence, or stop the infringing activity. This means they had some authority over the direct infringer or the infringing environment.
• Direct Financial Interest: The party must have gained a clear and immediate financial benefit from the infringing activity. This benefit is often directly tied to the success or occurrence of the infringement.

It is crucial that someone has committed a direct act of infringement for vicarious infringement to apply. However, the party held vicariously liable does not need to have known about the infringement or intended for it to happen.

Examples of Vicarious Infringement:

• Online Resale Platform: Imagine an e-commerce website that allows individual sellers to list and sell products, taking a percentage commission from each sale. If one of these sellers consistently lists and sells counterfeit luxury watches, infringing on various trademarks, the platform itself could potentially be held vicariously liable. The platform has a direct financial interest through its sales commissions, and it has the right and ability to control the activity by monitoring listings, removing infringing items, and banning sellers who violate intellectual property rules. Even if the platform claims it didn't know about every single counterfeit watch, its failure to prevent the widespread infringement could lead to vicarious liability.

• Concert Venue Hosting a Band: Consider a music venue that hosts a local band for a paid performance. During their set, the band performs several songs that are unauthorized cover versions or remixes of copyrighted works, without obtaining the necessary licenses. The venue charges an entrance fee to patrons and pays the band a portion of the door revenue. The venue owner has a direct financial interest in the band's performance, as it draws customers and generates revenue. The owner also has the right and ability to control the activities on their premises, including the music played, and could have required proof of licensing or instructed the band to only play original or properly licensed material. If the venue fails to prevent the band's copyright infringement, it could be held vicariously liable.

• Craft Fair Organizer: A company organizes a large annual craft fair, renting out booths to hundreds of independent artisans. One artisan consistently sells handmade jewelry that incorporates copyrighted characters from popular movies and comic books without permission. The organizing company charges a substantial fee for each booth rental and benefits from the overall popularity and attendance of the fair, which is boosted by the variety of vendors. The organizer has a direct financial interest through the booth rental fees and the overall success of the event. They also have the right and ability to control the types of goods sold at the fair, including the power to inspect merchandise and remove vendors selling infringing items. If the organizer allows the sale of clearly infringing products, they could face vicarious liability for the artisan's copyright infringement.