Supreme Court rules on contributory copyright infringement

In an important recent decision the Supreme Court recognised contributory infringement in copyright (Hebrew University of Jerusalem v Cohen 5977/07). The case related to pirate textbooks available from a student society supported by a political party. The court of first instance found the publisher directly guilty of copyright infringement and the political party and the university guilty of contributory infringement – a judicial tort previously available only for patent infringement.

On appeal, the Supreme Court upheld the concept of contributory copyright infringement and aiding and abetting infringement, but found the university not responsible. The issue of fair use, particularly in academia, was also discussed. Although the case in question related to book publishing, the decision is expected to have repercussions concerning the downloading and reproduction of digital data.

The Israel Labour Party subsidises student society Teh Ofek (Horizon Cell) at the Mt Scopus campus of the Hebrew University. As an incentive to get students involved, it provided cheap versions of a course textbook titled Traditional Japan. The bootleg copies were sold under the name Readings for NIS10, while the official version sold by publisher Shocken retailed at NIS89. Shocken sued the publisher distributor, Yaakov Cohen, as well as the Labour Party and the Hebrew University.

The court of first instance applied the judicial doctrine of contributory infringement recognised in Rav Bareach, a patent case where an importer of two parts of a three-part crook lock for the steering wheel of a car was found guilty of contributory infringement. Without this concept, the patentee would have had to sue each and every purchaser for literal infringement. With this doctrine, the importer could be sued, enabling effective enforcement. The court also ruled that there was a breach of legal obligation. There was no proof of how many copies were sold. Instead, Shocken was awarded NIS20,000, the maximum statutory damages under the former Copyright Law. The court divided this up as 40% to be paid by Cohen, 30% by the Labour Party and 30% by the Hebrew University.

On appeal, the Hebrew University challenged the doctrine of contributory infringement, arguing that it is not in the public interest to impose sweeping liability on universities, internet service providers and forums for copyright infringement that takes place on their real or virtual premises. Furthermore, the university argued that it gained no financial benefit from its "contribution". As to the breach of legal obligation, the university argued that this tort can be applied only where there is no statutory punishment, which is not the case for copyright infringement. Furthermore, the university argued that it was unaware of the specific infringement and therefore could not be held responsible. Finally, it submitted that distributing course material at cost to students constituted fair use.

The Labour Party agreed with the university's legal arguments regarding contributory infringement and breach of law, and also argued that there was no evidence that the book was published using its photocopiers or with its financial assistance. The publisher argued that the university library held only 11 copies of the book, which was required reading for some 370 students, thereby encouraging them to make illicit copies. It further argued that:

• There was trespass under Section 13a of the Law of Chattels.
• The fair use doctrine invoked by the university was an inadmissible widening of its defence.
• The use was financial rather than academic.

The Court of Appeal found some support for the doctrine of contributory copyright infringement with regard to the requirement for venues such as wedding halls and theatres to check that DJs have licences from copyright societies. It explained that the doctrine was well established in the United States and cited a range of Israeli academics – including Tony Greenman, Guy Pessach, Neil Netanel and Michael Birnhack – who have discussed the issue with reference to the new Copyright Law 2007 and believe that there is room for this tort. The Supreme Court then pontificated on the balance of interests between the public and private domain and the need to encourage creativity by preventing commercial copying and thereby providing a financial incentive. The court ruled that as long as there was direct infringement, in the interest of efficiency it was legitimate to sue the conduits of the copying.

In so ruling, the Supreme Court found that the Labour Party benefited from this incentive to students to join the club and had aided and abetted the infringement, and thus should be punished. In regard to the university, the court did not clarify the boundaries of fair use for study; nor did it rule on how much of a book could fairly be copied. However, it did rule that there was no evidence of specific knowledge, and that the university was not obliged to police all clubs and societies, the Internet and student email accounts. In dismissing the contributory infringement charges against the university, the court saw itself as no longer required to rule on the fair use defence, thus avoiding ruling on both the issue of widening the defence and the issue itself. The court absolved the Hebrew University of liability, upheld the imposition of 40% of liability on Cohen and imposed the remaining 60% of liability on the Labour Party. Shocken was obliged to pay NIS10,000 to the Hebrew University to cover its legal costs.