In the case of F. W. Woolworth Co. v. Contemporary Arts, Inc., 1952, the U.S Supreme Court ruled in favor of Contemporary Arts, a company that manufactured and sold ceramic statuettes protected by copyright law. The defendant, F.W Woolworth Co., had purchased similar figurines from a Japanese manufacturer and resold them in their stores without permission from Contemporary Arts who held the copyright for these items. The court found that even though Woolworth did not directly infringe on the copyrights (as they didn't manufacture or copy), they were still liable because they knowingly imported copyrighted works without authorization which constituted contributory infringement under US Copyright Law. This ruling established an important precedent regarding secondary liability for copyright infringement; it is not necessary to be directly involved in copying or manufacturing to be held accountable if one knowingly contributes to such activities.

In the dissenting opinion for F. W. Woolworth Co. v. Contemporary Arts, Inc., Justice Robert H. Jackson argued that the majority's decision to award statutory damages based on each individual item infringed upon was a misinterpretation of copyright law and could lead to excessive penalties that were not intended by Congress when they drafted the legislation. He contended that such an interpretation would mean even minor violations could result in astronomical fines if many items were involved, which he believed was unfair and disproportionate punishment for what might be unintentional or negligible infringement cases.