October 2003


Lowry’s Reports Inc v Legg Mason Inc et al
In this case, two related financial services companies were found to be vicariously liable for copyright infringement as a result of the acts of an employee. The employee re-distributed e-mail newsletters containing a daily stock market analysis originating from the plaintiff, Lowry’s Reports Inc, by posting these on Legg Mason’s intranet which was available to all brokers and by e-mailing copies of the newsletter to other Legg Mason employees. The Lowry newsletter contains up to date stock market information and valuable predictive data calculated using confidential algorithms. Lowry’s require subscribers, who are limited to individuals and cannot be corporations or organisations, not to make unauthorised copies nor to disseminate the newsletters or their content. An existing Legg Mason policy prohibited copying of such copyrighted materials by employees.
The US District Court in Maryland ruled that the activities of the defendant’s employee infringed the plaintiff’s copyright. The defendant was found to be vicariously liable for copyright infringement because it had (a) the right and ability to supervise the infringing activities and (b) it has an obvious and direct financial interest in exploitation of the copyrighted material. The fact that the employee’s actions contravened company policy did not have a bearing on liability although the court held that this could influence the amount of damages and costs to be awarded.

For the court’s decision, see:
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