The Milwaukee Journal Sentinel reported (registration may be required) recently on a sentencing hearing involving individuals guilty of selling counterfeit copies of software published by Rockwell Automation, Inc. on eBay websites. As savvy intellectual property owners and their IP counsel often do, Rockwell contacted eBay, who in turn provided a mechanism to identify sales of the pirated software on some eBay auctions. In order to avoid liability for contributory copyright infringement, many service providers such as eBay have adopted policies and tools to assist intellectual property owners in identifying and stopping unauthorized distribution of copyrighted works. These practices go a step beyond the standard take-down process that provides safe harbor for service providers when notified of specific instances of infringement.

  Judge J.P. Stadtmueller, apparently recognizing the "whack-a-mole" nature of policing sales taking place on eBay and other such venues, suggested that businesses should do more to encourage service providers to address piracy with internal policies such as reminding users of potential criminal penalties. Speaking of policing, it appears that Rockwell's reliance on the FBI to assist in investigating the matter resulted in too slow a response in Judge Stadtmueller's view. According to the court, a better response would have been to lean harder on eBay for contributory infringement or vicarious liability. Perhaps the prospect of two relative heavyweights squaring off over such issues would have had the potential to provide a contemporary analogue to flea market cases of the past.

  One other note: it seems that restitution to Rockwell and the defendants' sentences were limited somewhat due to an inability to demonstrate lost sales of the software, which typically sells for up to $250,000. That 56 orders were placed using e-mail addresses of Rockwell customers was not conclusive proof of lost sales in the court's estimation.