Under the Ninth Circuit's 2001 opinion in A & M Records, Inc. v. Napster, to establish liability for contributory copyright infringement, the secondary infringer must:

(1) know or have reason to know of the direct infringement; and
(2) materially contribute to the infringing activity

Moreover, as the Ninth Circuit interpreted the Supreme Court's 1984 opinion in Sony Corp. v. Universal City Studios, "distribution of a commercial product capable of substantial noninfringing uses could not give rise to contributory liability for infringement unless the distributor had actual knowledge of specific instances of infringement and failed to act on that knowledge."

To establish liability for vicarious copyright infringement, the secondary infringer must:

(1) have the right and ability to supervise the infringing activity; and
(2) have a direct financial interest in the infringing activity

Under the Supreme Court's 2005 decision in MGM Studios, Inc. v. Grokster, liability is found on a theory of inducement to copyright infringement:

One who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts or infringement by third parties.

Because a majority of the Court find liability based on this theory, it is not necessary for the Court to decide whether liability could rest on the contributory liability theory announced in the Sony decision.