Academic journal article Harvard Law Review

Note: Central Bank and Intellectual Property

Academic journal article Harvard Law Review

Note: Central Bank and Intellectual Property

Article excerpt

Is there a legal basis for imposing secondary liability for violations of federal intellectual property rights? A federal statute authorizes secondary liability for patent infringement, (1) but all that undergirds secondary copyright and trademark liability is a mix of federal common law and liberally construed statutory silence. (2) Consider the Supreme Court's recent, unanimous decision in Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., (3) which approved of secondary copyright liability despite acknowledging that "[t]he Copyright Act does not expressly render anyone liable for infringement committed by another." (4) Likewise, in Inwood Laboratories, Inc. v. Ives Laboratories, Inc., (5) the Court endorsed secondary liability for trademark infringement without locating a basis for it in the trademark statute. (6) The modern resurgence of textualism has supposedly rendered such implied causes of action an endangered species, (7) but these holdings suggest that secondary intellectual property liability is impervious to textualism.

Another decision suggests statutory text matters. In 1994, the Court held in Central Bank of Denver, N.A. v. First Interstate Bank of Denver, N.A. (8) that a party cannot be liable for aiding and abetting the violation of a federal statute if there is no statutory authority for such liability. (9) Central Bank involved a securities statute. Yet its reasoning is of such breadth that courts have extracted from it a general rule: "[S]tatutory silence on the subject of secondary liability means there is none." (10) This rule clashes with cases like Grokster and Inwood, but courts and commentators have mostly overlooked the conflict.11 Should intellectual property be exempt from Central Bank's rule? Or is this clash an unwitting doctrinal tension that courts will (and should) smooth out once they realize it exists?

This Note argues that Central Bank should apply to intellectual property, and it assesses what impact Central Bank would have if so applied. Part I examines Central Bank's reasoning and how courts have fashioned from it a general rule governing secondary liability under federal statutes. Part II explains why Central Bank's rule should apply to intellectual property. Considerations of predictability, the separation of powers, and relative institutional competencies all support the Central Bank approach. Particular attributes of intellectual property (such as its importance to technological development) magnify the force of these considerations, making it especially appropriate to subject intellectual property to Central Bank's global rule. Part III applies Central Bank to the four main types of federal intellectual property violations: patent, copyright, and trademark infringement; and trademark dilution. This Note concludes that Central Bank (1) does not affect contributory patent liability, (2) helps identify a statutory basis for contributory copyright liability that Grokster failed to see, (3) erodes the basis for contributory trademark infringement liability, thereby suggesting that Inwood should be overturned, and (4) precludes recognizing a cause of action for contributory trademark dilution.

A brief note on terminology. There are two types of secondary intellectual property liability. The first--"vicarious liability" (akin to respondeat superior)--is unaffected by Central Bank. (12) This Note, therefore, focuses solely on the second type--"contributory liability"--which is essentially the intellectual property label for civil aiding and abetting liability. (13) This type of liability has two elements: scienter (knowledge or intent) plus contribution (assistance or inducement). (14) A party is contributorily liable (or aids and abets) when he, she, or it knowingly contributes to or intentionally induces another's infringement of an intellectual property right (or another's tort). There are different versions of contributory liability, (15) but the variations are irrelevant to the Central Bank analysis. …

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