Amazon is not vicariously liable for copyright infringement based on the conduct of its associate vendors

By Béatrice Martinet Farano

In an unpublished decision issued on September 10, 2014, Sandy Routt v. Amazon, the 9th Circuit held that Amazon was not vicariously liable for copyright infringement based on the conduct of its associate vendors.

In this case, Sandy Routt, a designer of jewelry, apparel and collectibles, sued Amazon for copyright infringement and false designation of origin after noticing that certain “Amazon Associates”, participants in Amazon’s affiliate-marketing program, used her copyrighted photographs on their websites without her permission on the theory that Amazon should be held vicariously liable for the conduct of its Associates.

The 9th circuit first restated that to state a claim for vicarious copyright infringement, a plaintiff must allege that the defendant has (1) the right and ability to supervise the infringing conduct and (2) a direct financial interest in the infringing activity.

The 9th circuit then ruled that although Amazon’s relationships with its associates was governed by an operating agreement, notably prohibiting Associates from infringing on another’s copyright or trademark and giving Amazon the right to monitor, crawl, investigate and eventually terminate noncompliant Associates, this operating agreement did not give Amazon the right and ability to supervise and control the infringement.

The Court went on to consider that for Amazon to have control over its associates’ website, it should have had the ability to put an end to that conduct.

The Court distinguished this case from its prior decisions in Fonovisa (9th Cir. 1996) and Napster (9th Cir. 2001) where the operator of a swap meet and a software operator were respectively held liable for the infringing activity conducted by their users on the grounds that they had the power and ability to put an immediate end to their infringing activity (by excluding them from the swap meet in the case of Fonovisa or blocking their access to the peer-to-peer software in the case of Napster).

Here, differently from Fonovisa or Napster, the Court held that the infringing conduct occurred on third party websites and nothing suggested that an infringing Associate could not “continue to reproduce, display and distribute its infringing copies after its participation in the Amazon Associates program has ended”. Therefore, Amazon could not be considered as having “control” over its partner. The Court reasoned that Amazon’s relation with its partners was more akin to Google’s relation with its AdSense customers or to Visa’s relation with third party websites using its payment services, where, albeit the existence of a contractual relationship with their customers giving Google or Visa the power to monitor and even terminate their services in case of copyright infringement,  Google and Visa were not found to exercise any control over their customers likely to engage in liability under a theory of vicarious liability (see Perfect 10 v. Amazon and Perfect 10 v. Visa, 9th Circuit 2007).