Could you be indirectly liable for infringing someone's trademark or copyright?

You've done your homework before building your site. You're not infringing anyone's trademark or copyright on your site. Or so you think.

Direct liability is pretty easy to avoid. Don't take other people's copyrighted material without their permission (No, just giving credit isn't enough) and do your due diligence to make sure that you're not using someone else's trademark.

But what about indirect liability? I hear you screaming "WHAT?!?" from here. Oh yes. You can be held liable for someone else infringing a trademark or copyright of a third party.

Have you heard of contributory infringement or vicarious infringement? No? You're not alone. Most people haven't.

The essence of these principles is that you can be found liable for someone else's infringement of copyright or trademark under certain circumstances. I'm going to try to explain it in a way that will make sense to most businesspeople, but it's confusing, even to many legal professionals.

Contributory Infringement

Contributory copyright infringement has two components. First, that the contributory infringer knew or should have known about the infringement. And, second, that the contributory infringer caused, induced or materially contributed to that infringing activity.

This one's pretty easy to understand. If you're a web designer for a company that you know is planning to include infringing material, you could be held liable for helping them to infringe. It's like being the getaway driver in a robbery.

The standard for contributory trademark infringement is similar, but not exactly the same. For a contributory infringer to be found liable for trademark infringement, the contributory infringer must "have (1) induced a third party to infringe the plaintiff's mark or (2)supplied a product to a third party with actual or constructive knowledge that the product is being used to infringe the mark."

Most businesspeople have to worry more about the second option. If you know or you should have known that the product that you're selling or giving away to another person is violating someone else's trademark, you could be found liable.

Vicarious Infringement

Vicarious infringement is a bit more tricky. Vicarious copyright infringement requires that infringers both have the (1) right and ability to control the infringing activity and that they (2) get a direct financial benefit from the infringing activity.

This is how Napster got itself into trouble and how I see a lot of posters on message boards heading down the same path. Let's say you run a website where you make your money from Google Ads and site membership fees. You allow your users to embed movie clips, mp3s or pictures on your site. In your TOS, you reserved the right to review all posts. You allow these posts to be posted because you figure that you're not the one violating someone's copyright. Wrong!

Less problematic for most people is vicarious trademark infringement. For you to be held liable as a vicarious infringer, it must be proven that you and the direct infringer "have (1) an apparent or actual partnership, (2) have authority to bind one another in transactions with third parties or (3) exercise joint ownership or control over the infringing product."

This only really comes into play when you're working with someone who, without your knowledge, infringes someone else's trademark.

Contributory and vicarious liability for copyright and trademark infringement are often overlooked by unsavvy business owners and web designers alike. Make sure you protect yourself.

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No advice given here should be reasonably relied upon by you or any third party without consulting an attorney who is aware of all of the facts and law surrounding your situation. Any advice given here is not intended to create an attorney-client relationship in any way.