Sega Sues BBS Over Illegal Downloads
(This is an archived case summary)
MAPHIA was a San Francisco-based BBS provider whose users had been uploading and downloading Sega video games without authorization. SEGA was able to prove that the System Operator of MAPHIA had knowledge of this practice, and in fact had encouraged it among the users of the BBS. The BBS provided downloading privileges to users for Sega games in exchange for either the uploading of Sega Games or other software to the BBS, payment, or both. The Sega trademark also appeared frequently in connection with the activities of, and marketing by, MAPHIA.
In December 1993, a judge issued a temporary Restraining Order and Seizure Order, which resulted in the confiscation of the MAPHIA server. Evidence to support the Plaintiff’s motion was subsequently discovered on the MAPHIA hardware. The court found that the test for copyright infringement was met. Sega’s certificates of registration established a prima facie valid copyright in all the registered games, and Sega could easily prove that the copying was unauthorized. The court held that the unauthorized copying took place both when the games were uploaded to the BBS, and when users downloaded them onto their personal computers.
However, the court relied on an earlier decision, Religious Technology Center v. Netcom On-line Communication Services, Inc. 907 F. Supp. 1361, 1368-70 (N.D. Cal. 1995), which held that "[a]lthough copyright is a strict liability statute, there should be some element of volition or causation which is lacking where a defendant's system is merely used to create a copy by a third party.". The court found that although the Defendant’s actions were more participatory than those of the defendants in Netcom, and although Sega had shown that the Defendant knew infringing activity was occurring, those facts had no bearing on whether the Defendant directly caused the copying to occur. The court held that the Defendant’s actions were more appropriately analyzed under contributory or vicarious liability theories. Such liability is established where the Defendant, "with knowledge of the infringing activity, induces, causes or materially contributes to the infringing conduct of another."
The 9th Circuit court in Fonovisa, Inc. v. Cherry Auction, Inc., 76 F.3d 259, 261 (9th Cir. 1996) held that "providing the site and facilities for known infringing activity is sufficient to establish contributory liability." The MAPHIA court relied on this authority and held the Defendant liable for contributory infringement. It found MAPHIA liable for providing the facilities for copying the games by providing, monitoring, and operating the BBS software, hardware, and phone lines necessary for the users to upload and download games. The court held that even under an alternative and higher standard of "substantial participation," the Defendant was liable.
The court found that Sega was entitled to damages and injunctive relief.
Sega Enterprises Ltd. and Sega of America, Inc. v. MAPHIA