`
`No. ______
`
`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
`________________
`PETITION FOR WRIT OF CERTIORARI
`________________
`
`
`
`April 27, 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
`
`
`
`
`QUESTION PRESENTED
`Respondent William Sagan purchased thousands
`of bootleg concert tapes that were made by various
`concert promoters and venue operators without the
`consent of either the performers or the owners of the
`copyrights in the musical works being performed. He
`bought them forewarned about the lack of necessary
`authorizations and licenses. Undeterred, Sagan used
`his position as the president, CEO, and sole owner of
`respondent Norton LLC to commercially exploit those
`bootleg concert recordings on the Internet on a
`massive scale. Sagan hired his brother-in-law and
`specifically directed him to digitize the tapes and
`make them available for download or streaming
`online, eventually putting tens of thousands of concert
`recordings up for sale—all without licenses for the
`copyrights in the underlying musical works. The
`district court held that Sagan was directly liable for
`copyright infringement for acquiring the bootleg
`recordings, developing the plan to digitize them and
`distribute them online, and instructing his brother-in-
`law which recordings to post online. The Second
`Circuit reversed, concluding that Sagan was not liable
`for direct
`infringement because “direct
`liability
`attaches only to ‘the person who actually presses the
`button,’” and Sagan instructed his employee to post
`the recordings instead of doing so himself.
`The question presented is:
`copyright
`for
`Whether
`direct
`liability
`infringement is limited to the person who actually
`“presses the button” to make the infringing copies.
`
`
`
`
`
`ii
`
`PARTIES TO THE PROCEEDING
`Petitioners are ABKCO Music, Inc.; Colgems-EMI
`Music Inc.; Sony Music Publishing (US) LLC; EMI
`April Music Inc.; EMI Blackwood Music Inc.; EMI
`Consortium Music Publishing, Inc.; EMI Consortium
`Songs, Inc.; EMI Feist Catalog Inc.; EMI Robbins
`Catalog Inc.; EMI Unart Catalog, Inc.; Jobete Music
`Co., Inc.; Screen-Gems-EMI Music Inc.; Stone Agate
`Music; Stone Diamond Music Corp.; Imagem Music
`LLC; Peer International Corporation; PSO Limited:
`Peermusic Ltd.; Peermusic III, Ltd.; Songs Of Peer,
`Ltd.; Lyric Copyright Services, L.P. o/b/o Crescendo
`Royalty Funding, L.P.; Warner-Tamerlane Publishing
`Corp.; and W Chappell Music Corp. d/b/a WC Music
`Corp. Petitioners were plaintiffs/counter-defendants
`in the district court and appellees/cross-appellants in
`the Second Circuit.
`Respondents are William Sagan; Norton LLC; and
`Bill Graham Archives, LLC, d/b/a Wolfgang’s Vault,
`Concert Vault, Music Vault, and Daytrotter.
`Respondents were defendants/counterclaimants in the
`district court and appellants/cross-appellees in the
`Second Circuit.
`
`
`
`
`
`
`
`
`iii
`
`CORPORATE DISCLOSURE STATEMENT
`ABKCO Music, Inc. is a wholly owned subsidiary
`of ABKCO Music & Records, Inc. No publicly traded
`company owns 10% or more of the stock of ABKCO
`Music, Inc.
`Colgems-EMI Music Inc. is a wholly owned,
`indirect subsidiary of Sony Group Corporation, a
`publicly traded company organized under the laws of
`Japan. No publicly traded company other than Sony
`Group Corporation owns more than 10% of the stock
`of Colgems-EMI Music Inc.
`Sony Music Publishing (US) LLC, formerly EMI
`Algee Music Corp., is a partially owned, indirect
`subsidiary of Sony Group Corporation, a publicly
`traded company organized under the laws of Japan.
`No publicly traded company other than Sony Group
`Corporation owns more than 10% of the stock of Sony
`Music Publishing (US) LLC.
`EMI April Music Inc. is a wholly owned, indirect
`subsidiary of Sony Group Corporation, a publicly
`traded company organized under the laws of Japan.
`No publicly traded company other than Sony Group
`Corporation owns more than 10% of the stock of EMI
`April Music Inc.
`EMI Blackwood Music Inc. is a wholly owned,
`indirect subsidiary of Sony Group Corporation, a
`publicly traded company organized under the laws of
`Japan. No publicly traded company other than Sony
`Group Corporation owns more than 10% of the stock
`of EMI Blackwood Music Inc.
`EMI Consortium Music Publishing, Inc. d/b/a
`EMI Full Keel Music is a wholly owned, indirect
`
`
`
`iv
`
`subsidiary of Sony Group Corporation, a publicly
`traded company organized under the laws of Japan.
`No publicly traded company other than Sony Group
`Corporation owns more than 10% of the stock of EMI
`Consortium Music Publishing, Inc. d/b/a EMI Full
`Keel Music.
`EMI Consortium Songs, Inc. d/b/a EMI Longitude
`Music is a wholly owned, indirect subsidiary of Sony
`Group Corporation, a publicly traded company
`organized under the laws of Japan. No publicly traded
`company other than Sony Group Corporation owns
`more than 10% of the stock of EMI Consortium Songs,
`Inc. d/b/a EMI Longitude Music.
`EMI Feist Catalog Inc. is a wholly owned, indirect
`subsidiary of Sony Group Corporation, a publicly
`traded company organized under the laws of Japan.
`No publicly traded company other than Sony Group
`Corporation owns more than 10% of the stock of EMI
`Feist Catalog Inc.
`EMI Robbins Catalog Inc. is a wholly owned,
`indirect subsidiary of Sony Group Corporation, a
`publicly traded company organized under the laws of
`Japan. No publicly traded company other than Sony
`Group Corporation owns more than 10% of the stock
`of EMI Robbins Catalog Inc.
`EMI Unart Catalog Inc. is a wholly owned,
`indirect subsidiary of Sony Group Corporation, a
`publicly traded company organized under the laws of
`Japan. No publicly traded company other than Sony
`Group Corporation owns more than 10% of the stock
`of EMI Unart Catalog Inc.
`Jobete Music Co., Inc. is a wholly owned, indirect
`subsidiary of Sony Group Corporation, a publicly
`
`
`
`v
`
`traded company organized under the laws of Japan.
`No publicly traded company other than Sony Group
`Corporation owns more than 10% of the stock of Jobete
`Music Co., Inc.
`Screen Gems-EMI Music Inc. is a wholly owned,
`indirect subsidiary of Sony Group Corporation, a
`publicly traded company organized under the laws of
`Japan. No publicly traded company other than Sony
`Group Corporation owns more than 10% of the stock
`of Screen-Gems-EMI Music Inc.
`Stone Agate Music is a division of Jobette Music
`Co., Inc., a wholly owned, indirect subsidiary of Sony
`Group Corporation, a publicly traded company
`organized under the laws of Japan. No publicly traded
`company other than Sony Group Corporation owns
`more than 10% of the stock of Stone Agate Music.
`Stone Diamond Music Corp. is a wholly owned,
`indirect subsidiary of Sony Group Corporation, a
`publicly traded company organized under the laws of
`Japan. No publicly traded company other than Sony
`Group Corporation owns more than 10% of the stock
`of Stone Diamond Music Corp.
`Rodgers & Hammerstein Holdings, LLC is a
`wholly owned indirect subsidiary of Concord Music
`Group, Inc. No publicly traded company owns more
`than 10% of the stock of Rodgers & Hammerstein
`Holdings, LLC.
`Peer International Corporation is a wholly owned
`indirect subsidiary of Peermusic III, Ltd. No publicly
`traded company owns 10% or more of the stock of Peer
`International Corporation.
`
`
`
`vi
`
`indirect
`is a wholly owned
`PSO Limited
`subsidiary of Peermusic III, Ltd. No publicly traded
`company owns 10% or more of the stock of PSO
`Limited.
`Peermusic Ltd. is a wholly owned indirect
`subsidiary of Peermusic III, Ltd. No publicly traded
`company owns 10% or more of the stock of Peermusic
`Ltd.
`Peermusic III, Ltd. has no corporate parents, and
`no publicly traded company owns 10% or more of the
`stock of Peermusic III, Ltd.
`Songs of Peer, Ltd. is a wholly owned subsidiary
`of Peermusic III, Ltd. No publicly traded company
`owns 10% or more of the stock of Songs of Peer, Ltd.
`Lyric Copyright Services, L.P. o/b/o Crescendo
`Royalty Funding, L.P.,
`formerly Spirit Catalog
`Holdings S.A.R.L. and Spirit Two Music, Inc., is a
`wholly owned indirect subsidiary of Lyric Capital
`Holdings I, L.P. No publicly traded company owns
`10% or more of the stock of Lyric Copyright Services,
`L.P. o/b/o Crescendo Royalty Funding, L.P.
`Warner-Tamerlane Publishing Corp. is a wholly
`owned indirect subsidiary of Warner Music Group
`Corp., which is a publicly traded company with more
`than 10% of its stock owned by AI Entertainment
`Holdings LLC and certain of its affiliates, which are
`not publicly traded companies.
`W Chappell Music Corp. d/b/a WC Music Corp.,
`formerly WB Music Corp., is a wholly owned indirect
`subsidiary of Warner Music Group Corp., which is a
`publicly traded company with more than 10% of its
`stock owned by AI Entertainment Holdings LLC and
`
`
`
`vii
`
`certain of its affiliates, which are not publicly traded
`companies.
`
`
`
`
`viii
`
`STATEMENT OF RELATED PROCEEDINGS
`This case arises from and is directly related to the
`following proceedings in the U.S. Court of Appeals for
`the Second Circuit and the U.S. District Court for the
`Southern District of New York:
`ABKCO Music, Inc. v. Sagan, Nos. 20-3816, 20-
`4020, 20-4099 (2d Cir.) (opinion issued on October 6,
`2022; decision denying plaintiffs’ petition
`for
`rehearing and rehearing en banc issued on November
`28, 2022).
`ABKCO Music, Inc. v. Sagan, No. 15-cv-4025
`(S.D.N.Y.)
`(opinion and order granting partial
`summary judgment to plaintiffs filed on April 9, 2018;
`opinion and order denying defendants’ motion for
`reconsideration filed on March 26, 2019; judgment
`entered July 23, 2020; motion for new trial denied
`Nov. 13, 2020).
`
`
`
`
`
`
`ix
`
`TABLE OF CONTENTS
`QUESTION PRESENTED .......................................... i
`PARTIES TO THE PROCEEDING ........................... ii
`CORPORATE DISCLOSURE STATEMENT ........... iii
`STATEMENT OF RELATED PROCEEDINGS ..... viii
`TABLE OF AUTHORITIES ...................................... xi
`PETITION FOR WRIT OF CERTIORARI ................ 1
`OPINIONS BELOW ................................................... 5
`JURISDICTION ......................................................... 5
`STATUTORY PROVISIONS INVOLVED ................. 5
`STATEMENT OF THE CASE ................................... 5
`A. Statutory Background .................................. 5
`B. Factual Background ..................................... 9
`C. Procedural Background .............................. 11
`REASONS FOR GRANTING THE PETITION ....... 15
`I. The Decision Below Contravenes The
`Statutory Text And Settled Law ....................... 17
`II. The Decision Below Conflicts With Decisions
`From Other Circuits .......................................... 25
`III. The Question Presented Is Important And
`Cleanly Presented ............................................. 31
`CONCLUSION ......................................................... 36
`APPENDIX
`Appendix A
`Opinion, United States Court of Appeals for
`the Second Circuit, ABKCO Music, Inc. v.
`Sagan, No. 20-3816 (Oct. 6, 2022) .............. App-1
`
`
`
`x
`
`Appendix B
`Order, United States Court of Appeals for the
`Second Circuit, ABKCO Music, Inc. v. Sagan,
`No. 20-3816 (Nov. 28, 2022) ...................... App-32
`Appendix C
`Opinion and Order, United States District
`Court for the Southern District of New York,
`ABKCO Music, Inc. v. Sagan, No. 15 Civ.
`4025 (Apr. 9, 2018) .................................... App-34
`Appendix D
`Opinion and Order, United States District
`Court for the Southern District of New York,
`ABKCO Music, Inc. v. Sagan, No. 15 Civ.
`4025 (Mar. 26, 2019) .................................. App-98
`Appendix E
`Relevant Statutory Provisions ................ App-117
`17 U.S.C. §106 ......................................... App-117
`17 U.S.C. §501 ......................................... App-117
`
`
`
`
`
`xi
`
`TABLE OF AUTHORITIES
`
`Cases
`Akamai Techs., Inc.
`v. Limelight Networks, Inc.,
`797 F.3d 1020 (Fed. Cir. 2015) .............................. 30
`Am Broad. Cos. v. Aereo, Inc.,
`573 U.S. 431 (2014) .......................................... 24, 25
`Bell v. Wilmott Storage Servs., LLC,
`12 F.4th 1065 (9th Cir. 2021) .................................. 9
`Brammer v. Violent Hues Prods., LLC,
`922 F.3d 255 (4th Cir. 2019) .................................... 9
`Broad. Music, Inc. v. Meadowlake, Ltd.,
`754 F.3d 353 (6th Cir. 2014) .................................... 8
`Cap. Cities Cable, Inc. v. Crisp,
`467 U.S. 691 (1984) .................................................. 6
`Cartoon Network LP v. CSC Holdings, Inc.,
`536 F.3d 121 (2d Cir. 2008) ............................. 24, 25
`Columbia Pictures Indus., Inc. v. Aveco, Inc.,
`800 F.2d 59 (3d Cir. 1986) ................... 19, 24, 28, 29
`CoStar Grp., Inc. v. LoopNet, Inc.,
`373 F.3d 544 (4th Cir. 2004) .................................. 30
`Crowell v. Baker Oil Tools, Inc.,
`143 F.2d 1003 (9th Cir. 1944) ................................ 30
`Eldred v. Ashcroft,
`537 U.S. 186 (2003) .............................................. 5, 6
`EMI Christian Music Grp., Inc.
`v. MP3tunes, LLC,
`844 F.3d 79 (2d Cir. 2016) ....................................... 9
`
`
`
`xii
`
`Gershwin Publ’g Corp.
`v. Columbia Artists Mgmt., Inc.,
`443 F.2d 1159 (2d Cir. 1971) ............................. 7, 34
`Impression Prods., Inc. v. Lexmark Int’l, Inc.,
`581 U.S. 360 (2017) ................................................ 31
`Lewis Galoob Toys, Inc.
`v. Nintendo of Am., Inc.,
`964 F.2d 965 (9th Cir. 1992) ...................... 19, 24, 29
`Metro-Goldwyn-Mayer Studios Inc.
`v. Grokster, Ltd.,
`545 U.S. 913 (2005) ........................................ 7, 8, 34
`Nelson-Salabes, Inc.
`v. Morningside Dev., LLC,
`284 F.3d 505 (4th Cir. 2002) .................................. 30
`Perfect 10, Inc. v. Giganews, Inc.,
`847 F.3d 657 (9th Cir. 2017) .................................. 30
`Soc’y of the Holy Transfiguration Monastery,
`Inc. v. Gregory,
`689 F.3d 29 (1st Cir. 2012) ............ 19, 24, 26, 27, 28
`Sony Corp. of Am.
`v. Universal City Studios, Inc.,
`464 U.S. 417 (1984) ...... 3, 6, 7, 15, 19, 23, 24, 26, 31
`Twentieth Century Music Corp. v. Aiken,
`422 U.S. 151 (1975) .................................................. 6
`VHT, Inc. v. Zillow Grp.,
`918 F.3d 723 (9th Cir. 2019) .................................. 29
`Constitutional Provisions
`U.S. Const. art. I, §8, cl. 8 .......................................... 5
`Statutes
`17 U.S.C. §106 .............................. 6, 15, 17, 18, 20, 23
`
`
`
`xiii
`
`17 U.S.C. §106(1) ........................................................ 6
`17 U.S.C. §106(3) ........................................................ 6
`17 U.S.C. §§108(a)-(e) ............................................... 20
`17 U.S.C. §108(f)(2) .................................................. 20
`17 U.S.C. §501 ................................................ 6, 18, 23
`17 U.S.C. §504(b) ...................................................... 21
`17 U.S.C. §504(c) ...................................................... 21
`Other Authorities
`Admin. Office of the U.S. Courts, Just the
`Facts: Intellectual Property Cases—Patent,
`Copyright, and Trademark (Feb. 13, 2020),
`https://bit.ly/3KNh7Tw .......................................... 33
`D. Chisum, Chisum on Patents (2023) .................... 30
`P. Goldstein, Goldstein on Copyright (2023) ..... 19, 24
`H.R. Rep. No. 94-1476 (1976) ................................... 26
`M. Nimmer & D. Nimmer, Nimmer on
`Copyright (2023) .............................................. 19, 33
`Restatement (Second) of Agency (1958) .................. 21
`Restatement (Third) of Agency (2006) ......... 21, 22, 27
`Ethan Smith, Music Stash Recalls
`When Rock Was Young, Wall St. J.
`(Dec. 13, 2005), https://on.wsj.com/3He26I8 ....... 1, 9
`W. Patry, Patry on Copyright (2023) .... 19, 20, 22, 24, 30
`
`
`
`
`PETITION FOR WRIT OF CERTIORARI
`This case involves the scope of direct liability for
`copyright infringement for selling massive numbers of
`bootleg concert recordings over
`the
`Internet.
`Disregarding the clear statutory text and established
`precedent, the Second Circuit held that respondent
`William Sagan—who owned and operated the
`companies that sold the infringing recordings and who
`specifically instructed his employee as to which
`recordings to make available—could escape liability
`for direct infringement because he did not personally
`“press the button” to create and upload those
`infringing recordings.
` That absurdly narrow
`understanding of direct infringement is plainly wrong
`under the text of the Copyright Act and accepted
`principles of primary and secondary liability. The
`decision cannot be reconciled with decisions from
`several other courts of appeals, including an opinion
`from the First Circuit reaching the exact opposite
`conclusion on materially indistinguishable facts. And
`the decision creates terrible incentives, as it makes
`avoiding direct-infringement liability for corporate
`executives as easy as ordering their employees to
`make the infringing copies rather than running the
`copier themselves. This Court should grant review
`and reverse.
` In the early 2000s, William Sagan acquired “the
`most important collection of rock memorabilia and
`recordings ever assembled.” Ethan Smith, Music
`Stash Recalls When Rock Was Young, Wall St. J. (Dec.
`13, 2005), https://on.wsj.com/3He26I8. The recordings
`at issue came primarily from the archives of the late
`Bill Graham, a legendary concert promoter enshrined
`
`
`
`2
`
`in the Rock & Roll Hall of Fame, and included never-
`before-seen audio and video tapes of live performances
`from artists like The Rolling Stones, The Who, and the
`Grateful Dead. Graham never tried to commercialize
`those recordings for an obvious reason: while the
`recordings were relatively high quality, they were
`pure bootlegs—i.e., he lacked permission from the
`artists or the copyright holders to make or
`commercialize the recordings.
`Sagan was not similarly deterred. Even though
`Sagan knew full well that Graham lacked permission
`from artists and copyright holders to reproduce and
`distribute the bootleg concert recordings, and that
`Sagan purchased the recordings at a steep discount as
`a direct result, Sagan set about commercializing those
`recordings over the Internet on a massive scale.
`Sagan hired his brother-in-law, Michael Lundberg, to
`digitize the bootleg recordings and make them
`available online, specifically telling Lundberg which
`recordings to upload and ultimately posting thousands
`of recordings for public download without obtaining
`permission from the musicians who performed the
`songs or the songwriters or publishers of the songs
`themselves. On those undisputed facts, the district
`court had no trouble concluding that Sagan was
`directly and personally liable for that massive and
`blatant copyright infringement as a matter of law.
`The Second Circuit reversed in relevant part. The
`court recognized that it was Sagan who “made plans
`to start digitizing tape recordings with an eye towards
`making them available on a public website,” and who
`“instructed” his employee Lundberg “which concerts to
`make available for download.” App.22. But the
`
`
`
`3
`
`Second Circuit nevertheless held that Sagan escaped
`direct liability for the resulting infringement, because
`(according to the Second Circuit) direct liability
`attaches only to “the person who actually presses the
`button,” and Sagan had his employee push the button
`to make and distribute the infringing copies instead of
`pushing that button himself. App.21-22.
`That result cannot be squared with statutory text,
`settled law, or common sense. The Copyright Act
`protects creators against far more than the kid in the
`copy-room. It gives copyright owners not just the
`exclusive rights to copy and distribute their works, but
`also the exclusive right to “authorize” those acts, and
`makes clear that anyone who violates any of these
`rights has committed infringement, with enhanced
`liability for those who do so willfully. This Court has
`accordingly recognized that infringement includes not
`only “using” but also “authorizing the use of” a
`copyrighted work without the owner’s permission.
`Sony Corp. of Am. v. Universal City Studios, Inc., 464
`U.S. 417, 433 (1984). Numerous treatises confirm the
`point, explaining that both the statutory text and
`established principles of agency law impose direct
`liability on (and focus on the willfulness of) the person
`who orders someone to make infringing copies, not just
`the person who
`follows
`the orders.
` That
`understanding is compelled not only by settled law,
`but by common sense: it would be absurd if a
`corporate executive who orders her staff to print a
`million infringing copies of a copyrighted work with
`full knowledge of their infringing nature could escape
`direct liability in lieu of the low-level employee who
`follows
`those
`instructions and actually and
`unwittingly pushes the print button.
`
`
`
`4
`
`Unsurprisingly, the decision below also cannot be
`reconciled with the law in other federal courts of
`appeals. It squarely conflicts with an exact opposite
`decision from the First Circuit, which has explicitly
`held on materially identical facts that direct liability
`attaches to a person who authorizes someone else to
`post infringing materials online, not just the person
`who pushes the upload button. It also conflicts with
`decisions from the Third and Ninth Circuits, which
`similarly recognize that direct liability extends to the
`person who authorizes the infringing copying and not
`just the person who performs the physical act. And it
`conflicts with the long-settled rule in patent law.
`The consequences of the erroneous decision below
`are amplified by the Second Circuit’s centrality as a
`forum for copyright litigation. If permitted to stand,
`the Second Circuit’s approach would allow corporate
`officers to evade direct
`liability
`for deliberate
`copyright infringement, as long as they are clever
`enough to leave the button-pushing to staff. Those
`problems cannot be papered over by artificially
`expanding secondary-liability theories like vicarious
`liability or contributory infringement to cover the gap.
`Direct liability is a different animal from vicarious
`liability and contributory infringement, with different
`elements and different rules. Moreover, limiting
`direct liability to the button-pushers creates the
`prospect of frustrating the willfulness inquiry that is
`central to the Act’s remedial scheme. The decision
`below reaches the wrong result in a central forum and
`creates a massive hole in a critical statute. This Court
`should grant certiorari.
`
`
`
`5
`
`OPINIONS BELOW
`The Second Circuit’s opinion below is reported at
`50 F.4th 309 and reproduced at App.1-31. The district
`court’s opinion and order granting plaintiffs’ motion
`for summary judgment in part and denying in part is
`not reported, but is available at 2018 WL 1746564 and
`reproduced at App.34-97. The district court’s opinion
`and
`order
`denying
`defendants’ motion
`for
`reconsideration is not reported, but is available at
`2019 WL 1382074 and reproduced at App.98-116.
`JURISDICTION
`The Second Circuit issued its opinion below on
`October 6, 2022, and denied a timely petition for
`rehearing on November 28, 2022. Justice Sotomayor
`extended the time to file a petition to April 27, 2023.
`This Court has jurisdiction under 28 U.S.C. §1254(1).
`STATUTORY PROVISIONS INVOLVED
`Relevant provisions of the Copyright Act are
`reproduced at App.117-18.
`STATEMENT OF THE CASE
`A. Statutory Background
`1. The Constitution empowers Congress to
`“promote the Progress of Science and useful Arts, by
`securing for limited Times to Authors and Inventors
`the exclusive Right to their respective Writings and
`Discoveries.” U.S. Const. art. I, §8, cl. 8. The basic
`“philosophy behind the clause … is the conviction that
`encouragement of individual effort by personal gain is
`the best way to advance public welfare through the
`talents of authors and inventors.” Eldred v. Ashcroft,
`537 U.S. 186, 212 n.18 (2003). Copyright law thus
`“promot[es] broad public availability of literature,
`
`
`
`6
`
`music, and the other arts” by “rewarding the creators
`of copyrighted works,” Cap. Cities Cable, Inc. v. Crisp,
`467 U.S. 691, 710 (1984), thereby providing an
`“incentive” designed “to stimulate artistic creativity
`for the general public good.” Twentieth Century Music
`Corp. v. Aiken, 422 U.S. 151, 156 (1975). In other
`words, copyright law “celebrates the profit motive,
`recognizing that the incentive to profit from the
`exploitation of copyrights will redound to the public
`benefit by resulting in the proliferation of knowledge.”
`Eldred, 537 U.S. at 212 n.18 (emphasis omitted).
`To that end, the Copyright Act grants copyright
`owners “exclusive rights to do and to authorize”
`certain uses of their works. 17 U.S.C. §106. Among
`those are the exclusive rights “to reproduce” the
`copyrighted work and “to distribute” it to the public.
`Id. §§106(1), (3). Anyone “who violates any of the
`exclusive rights of the copyright owner” is “an
`infringer of the copyright.” Id. §501. As those
`interlocking
`statutory provisions make
`clear,
`infringement includes “using or authorizing the use of
`the copyrighted work in one of the five ways set forth
`in the statute.” Sony, 464 U.S. at 433 (emphasis
`added). That is, under the plain language of the Act,
`“an infringer is not merely one who uses a work
`without authorization by the copyright owner, but also
`one who authorizes the use of a copyrighted work
`without actual authority from the copyright owner.”
`Id. at 435 n.17 (emphasis added). A person who
`infringes any of the exclusive rights provided by the
`Copyright Act is subject to direct liability for that
`infringement, including damages—either actual or
`statutory damages enhanced in cases of willfulness—
`and injunctive relief. See id. at 433-34.
`
`
`
`7
`
`2. In addition to direct liability, this Court has
`recognized two forms of secondary liability for persons
`who profit
`from or enable acts of copyright
`infringement.
` See Sony, 464 U.S. at 434-35
`(recognizing that although the Copyright Act “does not
`expressly render anyone liable for infringement
`committed by another,” that “does not preclude the
`imposition of liability for copyright infringements on
`certain parties who have not themselves engaged in
`the infringing activity”). Those secondary liability
`doctrines are vicarious liability, which is “imposed in
`virtually all areas of the law,” and contributory
`infringement, which the Court described as “merely a
`species of the broader problem of identifying the
`circumstances in which it is just to hold one individual
`accountable for the actions of another.” Id. at 435.
`Although some defendants may be liable under
`multiple theories, direct liability is a distinct doctrine
`from either vicarious
`liability or contributory
`infringement, and the latter theories each require
`proof of different elements. In particular, because
`vicarious liability and contributory infringement each
`seek to hold the defendant liable for someone else’s
`independent decision to infringe, those doctrines
`require proof of additional elements that direct
`liability does not.
`Vicarious liability, for example, applies where the
`defendant “has the right and ability to supervise the
`infringing activity and also has a direct financial
`interest in such activities.” Gershwin Publ’g Corp. v.
`Columbia Artists Mgmt., Inc., 443 F.2d 1159, 1162 (2d
`Cir. 1971); see, e.g., Metro-Goldwyn-Mayer Studios
`Inc. v. Grokster, Ltd., 545 U.S. 913, 930 (2005)
`(defining vicarious liability as “profiting from direct
`
`
`
`8
`
`infringement while declining to exercise a right to stop
`or limit it”). The essence of vicarious liability is thus
`the right to control the infringing conduct and the
`derivation of financial gain from that conduct, as
`distinct from any direct instruction or authorization to
`engage in infringement. For example, a restaurant
`owner can be held vicariously liable for infringing
`musical performances at his restaurant if he had the
`right and ability to stop the performances and derived
`a financial benefit from the performances (such as
`when the performances bring in more guests), even if
`he never actually told the band to play unlicensed
`music. See, e.g., Broad. Music, Inc. v. Meadowlake,
`Ltd., 754 F.3d 353 (6th Cir. 2014). By contrast, direct
`liability does not require proof either that the
`defendant had the right and ability to supervise the
`infringing activity or that the defendant had a direct
`financial interest in that activity; the defendant can
`be held directly
`liable for participating
`in or
`authorizing the infringing conduct even if he had no
`right to control that conduct or financial interest in
`doing so (for instance, when an infringer convinces a
`friend to help make and distribute free copies of
`musical recordings based on a belief that all music
`should be free).
`likewise requires
`infringement
`Contributory
`additional proof that direct infringement does not. A
`person engages in contributory infringement by
`“intentionally
`inducing
`or
`encouraging direct
`infringement.” Grokster, 545 U.S. at 930. As that
`description suggests, contributory liability requires
`evidence of “intent to promote infringing uses.” Id. at
`931. That contrasts sharply with direct liability for
`copyright infringement, which “is a strict liability tort”
`
`
`
`9
`
`and has no scienter requirement. Bell v. Wilmott
`Storage Servs., LLC, 12 F.4th 1065, 1081 (9th Cir.
`2021); see, e.g., Brammer v. Violent Hues Prods., LLC,
`922 F.3d 255, 265 (4th Cir. 2019); EMI Christian
`Music Grp., Inc. v. MP3tunes, LLC, 844 F.3d 79, 89 (2d
`Cir. 2016).
`B. Factual Background
`William Sagan is the founder, president, CEO,
`and sole owner of his company Norton LLC. App.40.
`In July 2002, Sagan used Norton LLC to acquire Bill
`Graham Archives LLC, which owned the private
`archives of the late Bill Graham—a legendary concert
`promoter who “virtually invented the modern concert
`business in the mid 1960s” and was inducted into the
`Rock and Roll Hall of Fame a year after his death in
`1991. Smith, supra. Unbeknownst to the performers
`at the concerts he promoted, Graham often taped their
`performances to create a personal archival record of
`the concert, generating a large collection of bootleg
`recordings made without permission from either the
`performers being recorded or
`the owners or
`administrators of the copyrights in the musical works
`being performed. The list of those recordings, along
`with other bootleg recordings Sagan later acquired,
`“reads like a veritable who’s who of rock, soul, and
`alternative music, containing the performances of The
`Rolling Stones, The Who, the Grateful Dead, Willie
`Nelson, Ray Charles, Aretha Franklin, and Carlos
`Santana, to name a few.” App.35. “The list of
`songwriters who penned the works embodied in those
`performances is no less impressive and diverse,
`including legends such as Hoagy Carmichael, Carol
`
`
`
`10
`
`King, Mick Jagger, Keith Richards, Pete Townshend,
`and Green Day, among others.” App.35.
`Although Graham created “a world-famous
`archive of concert footage,” he did not exploit the
`recordings
`commercially
`(with a
`few
`limited
`exceptions, such as in documentaries), App.41 n.9, and
`discussed donating his collection to a museum before
`he died, C.A.Supp.App.297. The reason for Graham’s
`reticence
`in commercializing his archive was
`straightforward: Graham never sought or received
`permission from either the performers or the owners
`or administrators of the copyrighted musical works to
`make the recordings, let alone to use them for
`commercial purposes. App.40. Accordingly, when
`Sagan purchased Graham’s archives in 2002, the
`purchase agreement warned him that he was
`acquiring just the physical recordings, and that the
`seller made no representat
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