Flea market beats music giant Sony in copyright suit

NOTE: This article was updated and corrected on April 20 and April 23, as noted below.

A flea market owner does not have to police his vendors in order to ensure that the music they sell is legal, a court in Texas has ruled. Judge Lynn Hughes of the Texas Southern District Court said in his Opinion on Summary Judgment that Cole’s Antique Village & Flea Market of Pearland, Texas, did not contribute to copyright infringement.

Cole’s was sued by entertainment behemoth Sony Music, and the suit was dismissed on March 31. According to the judge, market owner Elwin J. Cole did not violate copyright law:

To be a contributory infringer, Cole must (a) know of the vendors’ infringement; and (b) induce, cause, or directly assist in its execution.

Sony wants to stretch these requirements to the point where they have become empty gestures. According to Sony’s reasoning, Cole knew infringing activity had occurred and may continue to occur, and therefore Cole had knowledge of all infringements on his site at the time of sale. Without Cole’s supply of facilities — booths, parking, food, bathrooms — the sales would not have occurred; thus, Cole could be said to have materially contributed.

Sony does not argue and cannot show that Cole aided or enhanced infringing sales specifically, in a manner distinct from Cole’s facilitation of all sales at the flea market.

… Cole is not akin to the driver of a get-away car; he is closer to the service station manager who sells the bank-robber gasoline.

In the decision in Sony Discos Inc. v. EJC Family Partnership, Hughes wrote that the owners of a work are the ones primarily responsible for finding copyright violators and bringing them to court. According to Hughes, “A flea market owner does not have the duty to police his vendors, or enforce the producers’ copyrights.” He did note that Sony was free to hire investigators to increase enforcement at the market.

Before bringing the suit, Sony had offered Cole free training to better distinguish legitimate and infringing copies, but Cole declined the training. The judge wryly noted that the cost to Cole’s of the training would have been less than the cost of litigation, but said that “arguably bad choices” did not constitute “willful blindness.” Cole’s was under no obligation to accept the training, she wrote.

Fred von Lohmann, senior staff attorney for the Electronic Frontier Foundation, says that the ruling may have wider applicability beyond the flea market industry. A vendor hosted at a flea market could be compared with a Web site hosted at a server — von Lohmann says it reminds him of the famous case involving Napster.

“This Sony vs ECJ ruling is a great ruling,” says von Lohmann. “It strikes the right balance for secondary liability. Just because you own the land on which an infringement occurs does not mean that you have to cover the copyright owner’s costs.” He also thinks that if an appeals court confirms the ruling, which is at odds with some precedents set by other courts, the case could go to the Supreme Court.

Cole's Flea Market includes 145,000 square feet of air-conditioned vendor space.

Cole’s Flea Market, located ten miles south of downtown Houston, has been in operation for over 40 years and hosts 900 vendors. It covers 145,000 square feet of air-conditioned indoor space and offers hundreds of outdoor booths as well. An infomercial for the market is available online.

Thanks to Ray Dowd of the Copyright Litigation Blog for the post that alerted FMZ to the news.

Correction: FleaMarketZone has learned that the judge in the case, Judge Lynn Hughes, is actually a gentleman. We regret the error.

20 April Update: Scott Morrison, an attorney with Oaks, Hartline & Daly, who represented Cole’s in the case, comments on the ruling to Flea Market Zone: “The record companies were trying to stretch the law and impose the burden of enforcement on the flea market owner. We think it is the correct ruling.” He says that he does not know if Sony and the other record labels who brought the suit will appeal. “I have a call in to them right now.”

23 April Update: Brian Garrity, a Sony Music spokesperson, declined to comment on this story or on the possibility of an appeal.