## Facts

- Twenty-six record companies owned copyrights in 156 sound recordings and trademark rights in 24 trade names used in the recorded-music market.
- Mohammad Abdallah was the president and sole owner of General Audio Video Cassettes, Inc. (GAVC), which sold blank cassette components, duplicating equipment, and “time-loaded” audio tapes cut to a customer-specified running time.
- From 1990 to 1992, three customers used GAVC’s time-loaded tapes to produce unauthorized cassette copies of plaintiffs’ recordings and used plaintiffs’ trade names on cassette insert cards to market the counterfeit products.
- The counterfeiters required tapes timed to match particular albums; standard-length tapes would either truncate music or leave substantial silence, making the counterfeit product less marketable.
- In September 1991, customer Rizik Muslet sought a new supplier for his counterfeiting operation, met with Abdallah, disclosed the nature of the operation, and agreed with Abdallah on pricing for time-loaded blank cassettes.
- Abdallah assisted Muslet in obtaining insert cards by referring him to a supplier who contacted Muslet shortly thereafter.
- Witness testimony, credited by the court, supported that Abdallah knew customers were counterfeiting specific recordings and nonetheless supplied time-loaded tapes and related assistance.

## Issues

1. Whether Abdallah was liable for contributory copyright infringement by supplying time-loaded tapes with knowledge of customers’ counterfeiting and by materially assisting their infringement.
2. Whether Abdallah was liable for contributory trademark infringement and false designation of origin under the Lanham Act based on knowing facilitation of customers’ use of plaintiffs’ marks on counterfeit cassette packaging.
3. Whether plaintiffs were entitled to injunctive relief and statutory damages against Abdallah.

## Decision

- After a bench trial, the court found Abdallah liable for contributory copyright infringement.
- The court found Abdallah liable for contributory trademark infringement and false designation of origin.
- The court rejected Abdallah’s characterization of his conduct as merely selling lawful blank media, emphasizing his knowledge and the specialized, infringement-enabling nature of the time-loaded tapes and his additional assistance.
- The court entered injunctive relief and awarded statutory damages against Abdallah.

## Legal Principles

- A defendant is liable for contributory copyright infringement when, with knowledge of infringing activity, the defendant induces, causes, or materially contributes to another’s direct infringement.
- Material contribution may be shown where the defendant supplies specialized or essential inputs without which the infringement would be materially harder to accomplish, particularly when the goods are tailored to the infringing use.
- Contributory trademark infringement and false designation of origin may attach when a defendant knowingly facilitates another’s infringing use of trademarks and materially contributes to the sale of counterfeit goods that mislead consumers as to source.
- Supplying ostensibly lawful goods does not avoid secondary liability where the supplier has actual knowledge of counterfeiting and provides targeted assistance that enables production and distribution of counterfeit products.

## Conclusion

The court held that Abdallah’s knowing supply of custom time-loaded cassette tapes, coupled with assistance in obtaining counterfeit packaging materials, materially supported customers’ illegal copying and trademark misuse, making him contributorily liable under both copyright and trademark law and subject to injunction and statutory damages.


A & M Records, Inc. v. Abdallah, 948 F. Supp. 1449 (C.D. Cal. 1996)