`
`No. 22-1053
`
`In the
`Supreme Court of the United States
`________________
`ABKCO MUSIC, INC., et al.,
`Petitioners,
`
`v.
`WILLIAM SAGAN, et al.,
`Respondents.
`
`________________
`On Petition for Writ of Certiorari to the
`United States Court of Appeals
`for the Second Circuit
`________________
`REPLY BRIEF FOR PETITIONERS
`________________
`
`
`
`June 28, 2023
`
`PAUL D. CLEMENT
` Counsel of Record
`C. HARKER RHODES IV*
`JAMES Y. XI*
`CLEMENT & MURPHY, PLLC
`706 Duke Street
`Alexandria, VA 22314
`(202) 742-8900
`paul.clement@clementmurphy.com
`*Supervised by principals of the firm who
`are members of the Virginia bar
`Counsel for Petitioners
`
`
`
`
`TABLE OF CONTENTS
`TABLE OF AUTHORITIES ....................................... ii
`REPLY BRIEF ............................................................ 1
`ARGUMENT ............................................................... 2
`I. The Decision Below Contravenes The
`Statutory Text And Settled Law ......................... 2
`II. The Decision Below Conflicts With Decisions
`From Other Circuits ............................................ 7
`III. The Question Presented Is Important And
`Cleanly Presented ............................................. 10
`CONCLUSION ......................................................... 13
`
`
`
`ii
`
`TABLE OF AUTHORITIES
`
`Cases
`Am. Broad. Cos. v. Aereo, Inc.,
`573 U.S. 431 (2014) .................................................. 6
`Bell v. Wilmott Storage Servs., LLC,
`12 F.4th 1065 (9th Cir. 2021) ................................ 10
`Columbia Pictures Industries, Inc.
`v. Aveco, Inc.,
`800 F.2d 59 (3d Cir. 1986) ....................................... 9
`Lewis Galoob Toys, Inc.
`v. Nintendo of Am., Inc.,
`964 F.2d 965 (9th Cir. 1992) .............................. 5, 10
`Metro-Goldwyn-Mayer Studios Inc.
`v. Grokster, Ltd.,
`545 U.S. 913 (2005) .............................................. 5, 9
`Society of the Holy Transfiguration
`Monastery, Inc. v. Gregory,
`689 F.3d 29 (1st Cir. 2012) .................................. 7, 9
`Sony Corp. of Am.
`v. Universal City Studios, Inc.,
`464 U.S. 417 (1984) .......................................... 3, 4, 5
`Statutes
`17 U.S.C. §106 .................................................... 2, 4, 5
`17 U.S.C. §501 .................................................... 2, 4, 5
`Other Authorities
`M. Nimmer & D. Nimmer, Nimmer on
`Copyright (2023) ...................................................... 8
`Restatement (Third) of Agency (2006) ....................... 3
`W. Patry, Patry on Copyright (2023) ......................... 3
`
`
`
`
`
`REPLY BRIEF
`The Second Circuit’s decision below explicitly
`holds that direct liability for copyright infringement
`extends only to “the person who actually presses the
`button” to make the infringing copies. Pet.App.21.
`That impossibly narrow understanding of direct
`infringement contravenes the text of the Copyright
`Act, this Court’s precedent, settled common-law
`principles, and decisions from several other courts of
`appeals. And as multiple amici have underscored, the
`decision
`below will have
`serious negative
`consequences, threatening to leave wide swathes of
`classic infringement behavior unremedied in one of
`the Nation’s most important forums for copyright
`litigation. This Court’s review is plainly warranted.
`Sagan’s opposition brief is a study in misdirection.
`Rather than explain how the Second Circuit’s refusal
`to find direct infringement here can be reconciled with
`text, precedent, common law or common sense, Sagan
`characterizes the decision as an application of the
`Second Circuit’s “well-established ‘volitional-conduct’
`requirement.” BIO.1. That is nonsense. This is not a
`case where the defendant supplied a machine but
`otherwise
`refrained
`from
`volitional
`conduct.
`Volitional conduct abounds here. The only question is
`whether Sagan’s volitional conduct in authorizing the
`uploading of copyrighted works is direct infringement
`where he delegated the volitional conduct of pushing
`the copying button to an underling. The Second
`Circuit alone holds that Sagan’s wholly volitional
`conduct does not constitute direct infringement.
`Sagan’s other principal effort at misdirection—
`alleging that this case is nothing more than an
`
`
`
`2
`
`unforced pleading error—is entirely question-begging.
`If the Second Circuit’s novel holding is correct, and one
`who directly violates the copyright holder’s exclusive
`right to authorize copying is only indirectly liable for
`the copying of the button-pusher, then petitioners
`erred in limiting their claim against Sagan to direct
`infringement. But if the First, Third and Ninth
`Circuits are correct that Sagan’s authorization of
`illicit
`copying
`and
`distribution was
`direct
`infringement even if an underling pushed the copying
`button, then there was no pleading error at all. That
`the complaint alleged only direct infringement just
`underscores that this case cleanly presents the
`question presented.
` This Court should grant
`certiorari to resolve that question and reverse the
`Second Circuit’s novel and atextual holding.
`ARGUMENT
`I. The Decision Below Contravenes The
`Statutory Text And Settled Law.
`The decision below is egregiously wrong under the
`text of the Copyright Act and settled law. By its
`express terms, the Copyright Act gives a copyright
`owner the “exclusive rights” not only to copy and
`distribute the copyrighted work, but also “to
`authorize” such copying and distribution. 17 U.S.C.
`§106. In equally clear terms, the statute declares
`anyone who violates “any of the exclusive rights of the
`copyright owner” to be “an infringer of the copyright.”
`Id. §501. The import of that text is straightforward:
`Anyone who “authorize[s]” someone else to make or
`distribute copies directly infringes the copyright
`owner’s “exclusive rights,” even
`if the person
`
`
`
`3
`
`authorizing the copying does not himself push the
`copier button.
`in Sony,
`This Court recognized as much
`explaining that infringement includes “authorizing
`the use of the copyrighted work,” and so “one who
`authorizes the use of a copyrighted work without
`actual authority from the copyright owner” is an
`infringer. Sony Corp. of Am. v. Universal City Studios,
`Inc., 464 U.S. 417, 433, 435 n.17 (1984). The leading
`treatises uniformly confirm the point, explaining that
`a “direct infringer … need not itself actually create the
`infringing work.” W. Patry, Patry on Copyright §21:40
`(2023); see Pet.19 (providing additional citations).
`That same rule follows equally from common-law
`principles, under which a principal who authorizes his
`agent to commit a tort “is subject to direct liability,”
`not vicarious liability. Restatement (Third) of Agency
`§7.03 (2006); see Pet.21-22.
`Sagan makes almost no effort to reconcile the
`decision below with any of that. See BIO.17-19. He
`does not dispute that the Copyright Act grants
`copyright owners the exclusive right “to authorize”
`copies, in addition to the exclusive right to make and
`distribute those copies. 17 U.S.C. §106. Instead,
`Sagan offers a novel (and atextual) theory: He argues
`that violating the exclusive right to make and
`distribute copies is direct infringement, but violating
`the exclusive right to authorize copies is only
`contributory
`infringement.
` BIO.17-18.
` That
`nonsensical approach finds no basis in the Copyright
`Act, which enumerates all its exclusive rights together
`and applies the same provision to make anyone who
`violates any exclusive right “an infringer of the
`
`
`
`4
`
`copyright.” 17 U.S.C. §§106, 501. The notion that
`direct infringement of the exclusive right to authorize
`copying can only give rise to secondary liability has no
`ground in the statutory text.
`Nor does Sagan’s theory follow from Sony. Contra
`BIO.18. On the contrary, Sony confirms the correct
`rule: a person “who violates any of the exclusive rights
`of the copyright owner,” including by “authorizing the
`use of the copyrighted work,” is a direct infringer. 464
`U.S. at 433. By contrast, vicarious and contributory
`liability doctrines apply when a copyright owner seeks
`to hold the defendant “liable for
`infringement
`committed by another,” on the theory that the
`defendant encouraged, enabled, or profited from the
`other party’s direct infringement. Id. at 434-35; see
`Pet.7-9. To be sure, as Sony recognizes, a person who
`commits direct infringement by authorizing illicit
`copying may also be
`liable on a contributory
`infringement theory. 464 U.S. at 435-37. But nothing
`in Sony remotely excludes direct liability for violating
`the copyright owner’s exclusive authorization right,
`much less limits direct liability to the person who
`literally “presses the button” on the copier. Contra
`Pet.App.21. Beyond Sagan’s problems with the text
`and Sony, he does not dispute that every major
`treatise contradicts his and the Second Circuit’s view,
`or that his position contravenes other provisions of the
`Copyright Act and longstanding common-law agency
`principles. Pet.19-22; supra p.2.
`In short, it is Sagan—not petitioners—who
`“conflates direct
`infringement with contributory
`infringement.” BIO.17. Direct infringement occurs
`when the defendant himself violates one of the
`
`
`
`5
`
`exclusive rights that the Copyright Act protects,
`including the right “to authorize” copying of the
`copyrighted work. 17 U.S.C. §§106, 501; Sony, 464
`U.S. at 433. Contributory infringement, by contrast,
`occurs when a person “intentionally induc[es] or
`encourag[es] direct infringement” by another, without
`necessarily violating the copyright owner’s rights
`himself.
` Metro-Goldwyn-Mayer Studios Inc. v.
`Grokster, Ltd., 545 U.S. 913, 930 (2005); see Pet.8-9.
`There are many ways to induce or encourage direct
`infringement without authorizing it. But one who
`personally authorizes copying or distribution of
`copyrighted works is a direct infringer, see, e.g., Lewis
`Galoob Toys, Inc. v. Nintendo of Am., Inc., 964 F.2d
`965, 970
`(9th Cir. 1992)
`(“infringement by
`authorization is a form of direct infringement”), even
`if the authorizer never “actually presses the button” to
`make the copies. Contra Pet.App.21.
`Unable to defend the decision below, Sagan tries
`to rewrite it, claiming that the Second Circuit’s
`holding was just “a straightforward application of the
`volitional-conduct requirement.” BIO.21. Nonsense.
`This is not a case where a defendant supplies
`equipment that then facilitates third-party copying
`without any further volitional conduct from the
`defendant, as in the cases Sagan invokes. See BIO.21-
`23. Whatever the validity of the Second Circuit’s
`doctrine in those circumstances, it has nothing to do
`with the decision below or the circuit split. No other
`court has ever held that the volitional conduct doctrine
`(or anything else) limits direct liability in all
`circumstances to the person who “actually presses the
`button” to create the infringing copies. Pet.App.21;
`contra BIO.21-22. And contrary to what Sagan now
`
`
`
`6
`
`suggests, that is precisely what the Second Circuit did
`below—not in “a single line at the end of [its]
`discussion,” contra BIO.3, but three separate times
`across three paragraphs, see Pet.App.21 (“[D]irect
`liability attaches only to ‘the person who actually
`presses the button.’”); Pet.App.21 (no direct liability “if
`a copyright is not infringed by a corporate officer’s own
`hand”); Pet.App.22 (reversing because “there is no
`evidence that Sagan is the one who ‘actually pressed
`the button’ (brackets omitted)). Indeed, even Sagan
`ultimately concedes that the Second Circuit found no
`direct liability because the evidence did not show “that
`[Sagan] himself uploaded the recordings.” BIO.23.
`That is no mere “restatement of the volitional-conduct
`requirement,” contra BIO.23, but a dramatic
`limitation on direct infringement which gives an
`inexplicable pass to individuals who directly infringe
`the exclusive right to authorize copying, but refrain
`from pressing the copier button themselves.
`In reality, there is no shortage of volitional
`conduct in this case: Sagan volitionally authorized
`copying and distribution and his agent then
`volitionally pushed the requisite button. The only
`question here is what volitional conduct counts, and in
`particular whether Sagan’s wholly volitional
`authorization
`constitutes
`direct
`infringement.
`Pet.24-25; see Am. Broad. Cos. v. Aereo, Inc., 573 U.S.
`431, 454 (2014) (Scalia, J., dissenting) (recognizing
`that “[t]he volitional-conduct requirement is not at
`issue in most direct-infringement cases”). On that
`question—the question presented here—the Second
`Circuit stands alone and without any support in text,
`precedent, common-law tradition or common sense.
`
`
`
`7
`
`II. The Decision Below Conflicts With
`Decisions From Other Circuits.
`The decision below is not only wrong, but also in
`sharp conflict with other circuits—including at least
`one decision on near-identical facts. See Pet.25-30.
`Sagan’s efforts to paper over the split are markedly
`unavailing.
`Sagan’s lead problem, of course, is the First
`Circuit’s
`decision
`in Society
`of
`the Holy
`Transfiguration Monastery, Inc. v. Gregory, 689 F.3d
`29
`(1st Cir. 2012), which held on materially
`indistinguishable facts that Archbishop Gregory could
`be held directly liable for instructing Father Peter to
`post
`infringing materials online—and squarely
`rejected the argument that direct liability could not
`apply because Archbishop Gregory never pressed the
`button to upload those infringing materials himself.
`Pet.26-28. Faced with that seemingly irreconcilable
`conflict, Sagan boldly claims that Gregory is “highly
`distinct from this case” because Archbishop Gregory
`had Father Peter post infringing works on Archbishop
`Gregory’s personal website, whereas Sagan had
`Lundberg post infringing works on his companies’
`websites. BIO.11. But Sagan does not (and cannot)
`explain why that distinction should make any
`difference. Nothing in Gregory’s holding that a
`defendant who “engaged in sufficient acts of authority
`and control … may be held
`liable for direct
`infringement” turns on whether that authority and
`control was directed to a personal website or the
`Archdiocese’s website. 689 F.3d at 57. Similarly,
`nothing in the Second Circuit’s contrary holding that
`“direct liability attaches only to ‘the person who
`
`
`
`8
`
`actually presses the button,’” turns on whether the
`button-pushing uploads to the authorizer’s personal or
`corporate website. Pet.App.21.
`Sagan bravely persists, asserting that any
`attempt to compare Gregory with this case would
`require
`“disregard[ing]
`corporate
`formalities.”
`BIO.12. But the distinction between the authorizer’s
`personal and corporate websites would have to matter
`before corporate formalities were even implicated, and
`the distinction is utterly immaterial. The corporate
`form provides no immunity to any form of direct
`infringement, whether by authorization, copying, or
`distributing. To the extent Sagan implies that only
`the corporation can be liable absent veil-piercing,
`BIO.12, that fundamentally misunderstands basic
`principles of corporate law. Where, as here, a plaintiff
`seeks to hold a corporate officer liable for his own
`conduct, the corporate veil has no role to play. That is
`as true when the corporate officer authorizes unlawful
`copying as when she authorizes securities fraud or any
`other unlawful act. See M. Nimmer & D. Nimmer,
`Nimmer on Copyright §12.04[A][1] (2023) (where
`corporate officer engages in infringement in the scope
`of his duties, both the officer and the corporation are
`liable).
`Sagan’s other attempts to distinguish Gregory
`fare no better. Sagan emphasizes that Archbishop
`Gregory personally owned the server, website, and
`computers at issue, and exercised ultimate control
`over the website’s content. BIO.11-12. But Sagan
`likewise exercised control over the content on his
`companies’ websites, see Pet.App.22 (recognizing that
`Sagan “instructed [Lundberg] as to which concerts to
`
`
`
`9
`
`make available for download”), and nothing suggests
`that Gregory would have turned out differently if the
`Archbishop had exercised control of his website
`through a corporate entity rather than directly.
`Contra BIO.11-12.
` Finally, Sagan invokes the
`volitional conduct canard by noting that Gregory
`“expressly declined to address” that issue. BIO.11.
`But Gregory had no need to address that issue,
`because, as already explained, the issue in Gregory
`and here is not lack of volitional conduct, but whether
`the volitional conduct of authorizing improper copying
`constitutes direct infringement when the defendant
`did not engage in the volitional conduct of pushing the
`button himself. On that question, Gregory says yes,
`and the decision below says no. Compare Pet.App.21-
`22, with 689 F.3d at 54-58. The split could not be
`clearer.
`Sagan has no more success in minimizing the
`conflict between the decision below and the Third and
`Ninth Circuits. As to the Third Circuit, Sagan claims
`that Columbia Pictures Industries, Inc. v. Aveco, Inc.,
`800 F.2d 59 (3d Cir. 1986), turned on contributory
`rather than direct infringement. BIO.15-16. Not so.
`Columbia Pictures held that Aveco “infringed [the
`plaintiffs’] exclusive rights to publicly perform and
`authorize public performances of their copyrighted
`works.” 800 F.2d at 60-61; id. at 61-62 (infringement
`by “authorizing the public performance”). That is
`direct infringement, not contributory infringement—
`which is why Columbia Pictures nowhere analyzes the
`elements of contributory infringement, including
`whether the defendant “intentionally induc[ed] or
`encourag[ed] direct infringement.” Grokster, 545 U.S.
`at 930. That the word “contributory” appears once in
`
`
`
`10
`
`the decision—in a quote from a House Report—does
`not make Columbia Pictures a
`contributory
`infringement case.
`As to the Ninth Circuit, Lewis Galoob squarely
`holds that “infringement by authorization is a form of
`direct infringement,” 964 F.2d at 970, which cannot be
`reconciled with the Second Circuit’s decision to limit
`direct liability to the person who pushes the button.
`That is no mere dicta, contra BIO.14, and the fact that
`Lewis Galoob ultimately found fair use, id. at 969-72,
`does not undermine the stark conflict between the
`Ninth Circuit’s understanding of direct infringement
`and the Second Circuit’s. See Pet.29-30; Bell v.
`Wilmott Storage Servs., LLC, 12 F.4th 1065, 1081 (9th
`Cir. 2021) (direct liability attaches where defendant
`“exercised control” or “selected any material for
`upload”); contra BIO.14-15. The Second Circuit’s rule
`also conflicts with the settled rule in patent cases,
`which Sagan barely mentions. Pet.30-31; contra
`BIO.24 n.15.
`III. The Question Presented Is Important And
`Cleanly Presented.
`The question presented is critically important for
`copyright owners. As amici attest, the decision below
`threatens
`to
`seriously undermine
`copyright
`enforcement in the media capital of the world and
`deprive copyright owners of meaningful remedies for
`wide swathes of classic infringing behavior. Those
`severe negative consequences readily warrant this
`Court’s review.
`Sagan does not dispute that the Second Circuit’s
`decision will allow even the most willful copyright
`infringers to evade direct copyright liability as long as
`
`
`
`11
`
`they ensure someone else physically presses the copy
`button. Pet.31-32. Instead, he claims that problem is
`immaterial, because the decision below did not also
`eliminate “contributory infringement or other species
`of vicarious liability.” BIO.24. But as the petition
`explains
`(and Sagan never disputes or even
`addresses), vicarious
`liability and contributory
`infringement are not substitutes for direct liability;
`they are distinct doctrines that require proof of
`additional elements that direct liability does not, and
`that may be lacking in some obvious cases of direct
`infringement. Pet.33-34. As a result, the decision
`below effectively immunizes some instances of even
`blatant
`infringement—and at
`the very
`least,
`massively complicates copyright litigation in the
`Second Circuit (and distorts settlement dynamics) by
`requiring plaintiffs with straightforward direct
`liability claims to instead develop and prove the
`additional elements necessary for vicarious liability or
`contributory
`infringement.
`Pet.34-35;
`accord
`RIAA.Br.11-17; MPA.Br.15-23. This
`case well
`illustrates the problem, as Sagan was able to avoid
`direct infringement for authorizing the widespread
`distribution
`of
`enormously
`valuable
`bootleg
`recordings, directly devaluing the copyrights lawfully
`owned by petitioners. Sagan has no answer to those
`obvious problems.1
`
`
`1 Sagan asserts that he paid royalties under compulsory
`licenses for some of the works before petitioners sued. BIO.1-2,
`6. That is just further misdirection. Those disputed licenses
`relate only to certain audio recordings, not the numerous
`audiovisual works at issue. App.6-8. Sagan’s discussion of
`licenses for certain sound recordings is similarly irrelevant, as
`
`
`
`
`12
`
`Sagan’s principal vehicle objection actually serves
`to underscore that this case is a perfect vehicle to
`address the question presented. He repeats (and
`repeats, and repeats) that Petitioners did not plead
`vicarious liability or contributory infringement, see
`BIO.3, 4, 7, 13, 15, 16, 17, 19, 20, 24, 25. But whether
`that was a fatal self-inflicted wound—or instead a
`perfectly
`rational
`response
`to Sagan’s direct
`infringement of petitioners’ exclusive rights to
`authorize copying and distribution of copyrighted
`works—is the question presented. It may be that
`future litigants may try to cover their bases by
`alleging both direct liability and vicarious and
`contributory infringement (while shouldering the
`additional burdens of those secondary
`liability
`theories), but that only underscores why this is an
`ideal vehicle for assessing whether direct liability is
`available here, as there is no alternative ground for
`recovery that could complicate this Court’s effort to
`resolve the question presented.2
`Finally, whatever Sagan may mean by his passing
`reference to “issues of waiver,” BIO.20, he does not and
`cannot claim that petitioners waived the direct
`liability theory that they have pressed throughout.
`Put simply, petitioners have asserted direct liability
`throughout this case because—as the statutory text,
`
`this case involves only wholly unlicensed infringement of the
`copyrights on the underlying compositions. App.6; contra BIO.6.
`2 Sagan mistakenly claims the district court applied the wrong
`standard; it correctly found that Sagan “personally participated
`in the infringing activity.” Pet.App.93; contra BIO.19-20.
`Regardless, any district-court error hardly justifies ignoring the
`Second Circuit’s split-creating error.
`
`
`
`13
`
`this Court’s precedent, common-law principles, and
`other courts of appeals confirm—direct liability is
`precisely what should apply when a defendant
`unlawfully authorizes another person to make
`infringing copies. The Second Circuit’s contrary
`holding that such cases must instead be relegated to
`complicated doctrines of vicarious or contributory
`liability is plainly incorrect, seriously problematic,
`and desperately in need of further review.
`CONCLUSION
`The Court should grant the petition.
`Respectfully submitted,
`
`
`
`PAUL D. CLEMENT
` Counsel of Record
`C. HARKER RHODES IV*
`JAMES Y. XI*
`CLEMENT & MURPHY, PLLC
`706 Duke Street
`Alexandria, VA 22314
`(202) 742-8900
`paul.clement@clementmurphy.com
`*Supervised by principals of the firm who are
`members of the Virginia bar
`Counsel for Petitioners
`
`June 28, 2023
`
`
`
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