Secondary Liability – Definition

Cite this article as:"Secondary Liability – Definition," in The Business Professor, updated September 9, 2019, last accessed May 30, 2020, https://thebusinessprofessor.com/lesson/secondary-liability-definition/.

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Secondary Liability Definition

Secondary liability refers to a legal commitment where a party assumes responsibility for another party’s action. In layman terms, a secondary liability involves acting as a surety for an entity and taking claim of all their actions. This situation mostly occurs when one party contributes to, assist in, or involves in an act which is illegally performed by the other party. This concept is mostly applied to cases of the infringement of intellectual properties like copyrights, trademarks, and patents.

A Little More on What is Secondary Liability

Secondary liability comes in two forms; vicarious liability and contributory liability. The first is primarily associated with agency ethics under common law, where supervisors and firm representatives are blamed for the actions of their workers related to business. This system is primarily associated with the master-servant system in workplaces.

In recent times, however, the definition of vicarious liability has been extended by the court to cover parties who benefit from illegal activities when they have the right to end it but chose not to. A popular example should be the case of Dreamland Ball Room v. Shapiro Bernstein & Co., where the owner of the ballroom asked the orchestra to play a piece of music which they had not compensated the copyright holder for because the owner benefitted largely from the song. In this case, it would seem disapproving for the owner to be held liable since the orchestra was an independent contractor. However, the reverse was the case as the court action was backed by the respondeat superior principle, which is another name for the master-servant principle stated above.

Contributory Liability

Also referred to as contributory infringement, this concept is a logic from tort theory, which states that third parties are to be held liable if they were aware or if they support the infringement in any way. Unlike the vicarious liability, a third party must be aware and must contribute to the infringement in one way or the other to be held liable. When a third party is found to have known or to have materially contributed in one way or the other, only then will they be held liable by a contributory liability.

For a better understanding of this statute, we will look at the case of Sony Corp. of America vs. Universal Corp Studios, Inc. In this case, Universal Corp Studios Inc sued Sony stating that their sales of a home VCR contributed materially to copyright infringement. The court however decided otherwise and Sony was not held liable. This is because the Betamax VCR which was accused of copyright infringement was a new technology and there was a possibility that the object had different uses apart from playing materials from Universal Corp Studios Inc. Thus, we can see from this example that contributory liability cannot be applied to new techs as they can have a wide application apart from what they’re offering during their starting days.

References for “Secondary Liability

https://en.wikipedia.org/wiki/Secondary_liability

https://www.investopedia.com › Insights › Laws & Regulations

https://www.law.cornell.edu/wex/secondary_liability

https://definitions.uslegal.com/s/secondary-liability/

https://legal-dictionary.thefreedictionary.com/Secondary+liability

 

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