Flea Market Operator
Found Guilty of
Copyright Infringement
Found Guilty of
Copyright Infringement
By Joel Herker, Esq.
You have all probably had an experience of seeing photographic prints or music CD's being offered for sale in flea markets. You probably presume that the merchandise is counterfeit in the sense of being
The case, Arista Records, Inc. et al. v. Flea World, Inc. et al., concerned music CD's but is clearly applicable to photography as well.
Two individuals, through two corporate entities, operate a flea market in Western New Jersey. The market is open Thursday through Sunday year round, with more than 200 booths. There is no admission charge and the operator's income comes from renting the indoor booths and outdoor spaces where the vendors sell their wares. The owners provide various services to the vendors and customers including parking, utilities and food concessions. They also heavily advertise and promote the market.
A prospective vendor must complete an application process in order to rent a space and is also required to adhere to a set of written rules and regulations. The market reserves the right to inspect all merchandise offered for sale and prohibits the sale of counterfeit merchandise. The defendants and their security staff observe what is being sold and attempt to police violations.
Notwithstanding these measures, plaintiffs' investigators observed vendors selling illegal recordings on a number of occasions over a period of years. Despite this information the defendants did not take action towards halting such sale of counterfeit merchandise. The defendants argued in the case that they had no real control over these vendors due to the size of the market. In addition, they argued that they had to proceed with caution against vendors because of their fear of potential false arrest claims.
The U.S. District Court Judge found the corporate defendants guilty of both vicarious copyright infringement and contributory copyright infringement. The Court stated that plaintiffs had met their burden for vicarious copyright infringement since the corporate defendants supervised or controlled the premises involved and had a direct financial benefit from the infringing activities. He discarded the defendants' arguments, stated above, by holding that the offenders could have simply been excluded from the market or that defendants should have either reduced the size and scope of the operations or hired more security to meet their obligations (or both).
The Judge found that it is elementary that the greater the number of customers, the more vendors that would be attracted, and therefore higher rental fees could be charged by the defendants. Thus, found the Court, any "draw" necessarily increases revenue and directly financially benefits all defendants. Needless to say, the Court found that the sale of illegal CD's drew customers to the market.
As to the contributory infringement claim, plaintiffs had to show that defendants had knowledge of the infringing conduct and contributed to that conduct. The Court found that the defendants clearly had
The judge entered judgement against the corporate defendants but found that there were genuine issues of material fact concerning how much the individual defendants knew about the daily infringing activities. He therefore set such individual liability down for trial.
One further note of interest concerned statutory damages. The Court refused to adopt the plaintiffs' argument that statutory damages should be determined on a song by song basis. Instead he ruled that each infringing CD would be considered as one work.
Attorney Joel L. Hecker lectures and writes extensively on issues of concern to the photography industry. His office is located at Russo & Burke, 600 Third Ave, New York NY 10016. Phone: 1 212 557-9600. E-mail: HeckerEsq@aol.com.
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