Background
Beom Su Lee, a copyright holder in musical compositions, sued SBS Corp. and other defendants including eBay over the sale of TJ Karaoke devices on eBay’s platform. TJ Karaoke machines are hardware devices that come preloaded with access to copyrighted songs; third-party sellers listed them on eBay, and Lee alleged the listings facilitated infringement of his copyrights.
Lee sent eBay numerous Notices of Claimed Infringement (NOCIs) identifying infringing listings, and eBay honored those requests by removing them. But Lee wanted more: he demanded that eBay implement permanent “staydown” mechanisms—automated systems that would prevent re-listing of the same infringing items after removal. When eBay declined to build such infrastructure, Lee sued, arguing that eBay’s continued hosting of infringing listings despite notice of infringement constituted contributory copyright infringement.
The Court’s Holding
Judge Scarsi dismissed Lee’s contributory copyright claims, holding that eBay’s consistent compliance with individual takedown notices was legally sufficient. Knowledge of infringement, without more, does not establish contributory liability when a platform has substantial noninfringing uses and does not actively induce infringement.
The court applied the two-part contributory infringement framework from Sony Corp. v. Universal City Studios (Betamax) and MGM Studios v. Grokster. First, on inducement: eBay did not take affirmative steps to encourage infringement, and declining to build automated staydown technology is not the same as encouraging sellers to post infringing listings. Second, on the Betamax standard: eBay’s marketplace overwhelmingly serves legitimate commerce, making infringement of Lee’s specific karaoke copyrights incidental rather than the platform’s “principal object.”
The court also rejected the argument that eBay’s refusal to implement permanent staydowns demonstrated the “volitional conduct” or constructive knowledge sufficient to support liability. eBay responded to each specific notice; that it did not eliminate the category of infringement altogether does not transform its inaction into contributory liability.
Key Takeaways
- Responding promptly to specific takedown notices remains the baseline for online marketplace platforms to avoid contributory copyright liability—they are not required to build staydown systems.
- A platform with overwhelming legitimate use cannot be held liable for secondary infringement simply because some sellers repeatedly exploit the marketplace.
- Intent-to-induce infringement requires affirmative steps to encourage copying—passive failure to prevent future re-listings by different sellers does not meet this threshold.
- Rights holders who want platforms to implement ongoing filtering must seek legislative solutions or negotiate contractual staydown obligations, rather than relying on secondary liability doctrine.
Why It Matters
The karaoke and music licensing industry has long been a testing ground for secondary copyright liability theories. This ruling reinforces a protective baseline for general-purpose marketplace operators: if you take down what you are notified about, you are not liable for what re-appears without fresh notice. For eBay and platforms like it, this is a meaningful win against a legal theory that could otherwise require costly, imperfect automated filtering at scale.
For copyright holders, the ruling signals that the path to systemic platform accountability runs through Congress—not the courts’ secondary liability doctrine—unless there is evidence of active inducement. Rights holders trying to eliminate repeat-infringer ecosystems will need to build that record case by notice by notice, or seek legislative reform that explicitly mandates staydown obligations.
Full Opinion
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Surfaced via Eric Goldman’s Technology & Marketing Law Blog.