## Facts

- Louis K. Smith authored and copyrighted *The Hardscrabble Zone* and entered a distribution agreement with Smashwords, an ebook distributor.
- The agreement granted Smashwords promotional rights to distribute samples in any media and contemplated free, noncommercial use, duplication, and sharing of samples by end users.
- Barnes & Noble received the book and sample through Smashwords and provided customers access through cloud-based digital “lockers.”
- After Louis Smith’s death, Cheryl Smith terminated the Smashwords agreement, and Barnes & Noble stopped offering the book and sample for new acquisition.
- One customer who had previously obtained a free sample continued to access it through the customer’s digital locker; Barnes & Noble did not remove the sample after termination.
- Cheryl Smith sued Barnes & Noble for direct and contributory copyright infringement based on continued cloud availability of the sample.
- The district court granted summary judgment for Barnes & Noble, and Smith appealed.

## Issues

1. Whether Barnes & Noble’s continued cloud-based access to a previously acquired ebook sample after termination of the upstream distribution agreement exceeded the scope of the governing license and constituted direct infringement.
2. Whether Barnes & Noble could be liable for contributory infringement based on the customer’s continued access to the sample.

## Decision

- The Second Circuit affirmed summary judgment for Barnes & Noble.
- The court held Smith failed to show the complained-of conduct was outside the scope of the applicable license.
- Because the license did not provide that end-user rights in already distributed samples terminated upon cancellation of the distribution agreement, continued locker access to a validly obtained sample was authorized.
- Without unauthorized conduct by Barnes & Noble, there was no direct infringement.
- Without predicate direct infringement by the end user, there was no contributory infringement.

## Legal Principles

- Copyright infringement requires unauthorized exercise of an exclusive right; conduct within the scope of a license is not infringing.
- A plaintiff bears the burden to show the defendant’s challenged use exceeded the scope of the license on which the defendant relies.
- Where a distribution contract authorizes dissemination of free samples and is silent on post-termination revocation of end-user rights in already obtained samples, continued access by the same user may remain authorized.
- Contributory infringement requires underlying direct infringement; absent direct infringement, secondary liability fails.

## Conclusion

The court treated continued cloud-based access to an ebook sample previously and validly obtained as an authorized use under the licensing scheme, and it affirmed dismissal of both direct and contributory infringement claims.


Smith v. Barnesandnoble.com, LLC, 839 F.3d 163 (2d Cir. 2016)