Letter from AmeriKat II: Viacom v YouTube - The Viacom Appeal

Willfull Blindness cannot save you now

Viacom argues that, even if Section 512(c) excludes from liability those that do no not have URL-specific knowledge of infringement, the district court erred by finding for YouTube where the evidence showed that it was willfully blind to the massive scale of copyright infringement on the site. It was held In re Aimster Copyright Litigation (2003), cited in Arista Records v Doe 3 (2010) and recently in Tiffany v eBay that “willful blindness is knowledge in copyright law…as it is in the law generally.” Willful blindess occurs where a person engages in “deliberate avoidance” amounting to knowledge where “the circumstances were such to alert [the person] to a high probability” of the relevant fact, but the defendant “consciously avoided learning” that fact. A potential finding of willful blindness can be defeated where a defendant “continually taking steps to further refine its anti-fraud measures”, as was the case of eBay in Tiffany v eBay. Viacom argues that YouTube actually did the opposite of eBay in taking “affirmative steps to shut down any mechanism that might have provided the URL-specific knowledge YouTube claims is indispensable” for a finding of liability by removing the ability for community users to flag suspected infringing videos and only “selectively” implementing fingerprint technology. (picture, top left - YouTube's business policy? - "See no evil, hear no evil, speak no evil")

The Section 512(1)(B) Problem: YouTube Profiteering from Infringement

Section 512(c)(1)(B) requires that a defendant who benefits from a safe harbour protection must “not receive a financial benefit directly attributable to the infringing activity, in a case in which the service provider has the right and ability to control such activity.” Judge Stanton held that YouTube lacked the “right and ability to control” the activity because they did not have “item-specific” knowledge of the activity, but did not rule on whether or not they received a financial benefit. Viacom again argues that the touchstone of “item-specific” knowledge is not a pre-requisite for being able to control an activity. This is because, says Viacom, YouTube has the “ability” to control third-party infringement by implementing Audible Magic filtering.

Further, like with the district court’s interpretation holding Section 512(c)(1)(A)(ii) virtually meaningless, their interpretation of Section 512(c)(1)(B) is rendered likewise. This is because, if “right and ability to control” requires an ISP to have “item-specific knowledge”, this appears to be the same knowledge required for and ISP to fall foul of Section 512(c)(1)(A)(i) and (ii). Section 512(B), on this construction, essentially duplicates Section 512(c)(1)(A) as any service provider who has item specific knowledge of users’ acts of infringement automatically falls foul of Section 512(c)(1)(A) and thus never gets to Section 512(B).

Viacom argues that Congressional intent of Section 512(c)(1)(B) was to track the common law rule that a defendant may be found vicariously liable for copyright infringement where the defendant

“derive[s] a direct financial benefit from the infringement and ha[s] the right and ability to supervise the infringing activity.” (Ellison v Robertson (2004); Matthew Bender v W. Publishing Co. (1998))

This interpretation, says Viacom, is confirmed by Congress in the HR Rep NO 105-551(I) at 25-26, by the courts in Perfect10 and by academics in Nimmer on Copyright (section 12B.04[A][2] at 12B-38). Because vicarious liability turns on financial benefit and control, even in the absence of actual knowledge of infringement (Shapiro (1966); Grokster (2005)), YouTube’s activities clearly fall within the scope of Section 512(c)(1)(B). This is because, Viacom argues, YouTube has the right to control activities on the site by reserving editorial control in and the right to remove content and terminate accounts. It also has the ability to control the site by way of community flagging of suspected infringing videos, by way of its search feature and index and by implementation of fingerprint filtering technologies. YouTube also obtained a direct financial benefit attributable to the infringement because the infringing material acted as a “draw” or “major lure” for an ever-increasing YouTube audience. Such popularity resulted in YouTube being bought by Google for $1.65 billion only about 18 months after it was founded. This financial element is also seen by the placement of ads next to videos up until 2007.

No storage, no harbour!

A final requirement of Section 512(c)’s safe harbour is that the infringement is “by reason of the storage at the direction of a user” of the material. This includes service space for a user’s website, chatroom, or other forum where material is posted by users, which on the face of it may include a YouTube-type service. However, Viacom argues that its claims of infringement do not have anything to do with “storage” with or without the direction of a user: YouTube, in transcoding user-uploaded material into a standard format for display, distribution and performance of the content from its site, does not just facilitate storage but facilitates broadcasting. Viacom argues that a user’s decision to upload a video on to YouTube is not a direction to YouTube to then make copies of the video in different formats, to index and feature the material, or to licence the material to third parties to make viewing of the video easier on hand-held devices (such as the case with Verizon wireless). Viacom argues that YouTube takes those actions independently and for its own benefit and profit.

However, the AmeriKat cannot help but find fault with this argument because, if YouTube users just wanted their videos to be stored they would not be uploading them onto YouTube. YouTube users upload their videos on the site for the very reason that YouTube transforms the video into the particular viewable format. Surely their “direction” is implicit from the mere fact they are using YouTube to upload their video.

What’s Next

Almost 55 pages later, the bulk of Viacom’s substantive arguments end and its arguments for their motions for summary judgment on these issues begin—all in all 13,880 words or 15,000 more than this post.

A large swarm of amici curiae including Microsoft, The Washington Post, Newspaper Association of America, The Associated Press, and a group of economic professors also aligned with Viacom – a summary of their briefs can be found here. Microsoft’s brief in particular focused on YouTube’s “intentional efforts to build – and expand – its business based on a model that invited users to upload copyright infringing content to its site” and stating that this type of activity was not intended by Congress to benefit from the DMCA’s safe harbour provisions.

The AmeriKat is cautious about Viacom’s chances of success in their appeal and motion for summary judgment. Although she sees some logic in their arguments, especially in relation to redundancy of Section 512(c)(1)(A)(ii) with the heightened standard of knowledge, the US courts have in recent history been interpreting IP statutes in a way which benefits a Google, YouTube and eBay-type business model and she does not think that this case will be all that different. What do readers think? Will the Appeals Court save Viacom?

As far as the AmeriKat is aware, we have yet to receive a response from YouTube’s camp, be it press release or court filing. The AmeriKat has not been able to find any evidence of a peep or meow from YouTube, but if any reader knows of any, please let her know.

Letter from AmeriKat I: Viacom v YouTube - The Viacom Appeal

The past three Sundays the Amerikat has found herself engaged in many battles. First she was battling London Heathrow's snow incompetency, which delayed her flight home by four days. Then she was left battling a furiously stubborn cold, and then finally she was battling her over-stuffed suitcase in preparation for her trip to Singapore for the Global Foum on IP (more about this later this week). Having flown around the world in four days, she is now battling a bizarre jetlag cocktail. (picture, left - the AmeriKat with more legroom than she has experienced in weeks) However, the AmeriKat has pulled herself together this week with a report on a different battle: this time Viacom's opening brief filing in the Viacom v YouTube litigation, filed last month. For previous IPKat reports on the battle click here.


Viacom v YouTube: Viacom's appeal arguments

Following YouTube's summary judgment success in the Viacom litigation last year it was no surprise that Viacom, supported by several amici curiae, would appeal Judge Stanton’s June summary judgment (here and reported here). Sure enough, on 3 December 2010, Viacom filed its opening brief with the US Court of Appeals for the Second Circuit and requested summary judgment on the issues. Readers will recall that this case focuses on Viacom’s copyright-protected content being uploaded onto YouTube by third-party users and YouTube, once notified, not doing enough to remove the infringing content or in preventing the uploading of infringing material.

Judge Stanton held that YouTube was able to benefit from the Safe Harbor provisions in the Digital Millennium Copyright Act because it did not have actual or constructive knowledge of every specific YouTube URL containing infringing material on the site. Mere knowledge that there is, or is likely to be, infringing material on the site was not enough to be considered actual or constructive knowledge under Sections 512(c)(1)(A)(i) and (ii) respectively. To hold so would, Judge Stanton held, fly in the face of the DMCA's text, specifically Section 512(m)(1), as well as the Perfect 10 case—both of which indicate that the burden of identifying infringement must rest with the copyright owner, not on YouTube.

The Contentious Section

To refresh your memories, the section at issue is Section 512(c)(1) which provides that a service provider:

“shall not be liable for monetary relief or other equitable relief, for infringement of copyright by reason of the storage at the direction of a user of material that resides on a system if the provider:

(A) (i) – does not have actual knowledge that the material or activity using the material on the system or network is infringing; or

(ii) – in the absence of such knowledge is not aware of facts or circumstances from which infringing activity is apparent (the "red flag test"); or

(iii) – upon obtaining knowledge or awareness expeditiously removes it; AND

(B) – does not receive a financial benefit directly attributable to the infringing activity; AND

(C) – upon notification of claimed infringement it responds expeditiously to remove the material”

Viacom Sets the Scene

In its opening brief, Viacom calls Judge Stanton’s interpretation of Section 512(c) "absurd, disquieting and disruptive" and states that the effect of this interpretation would be that even the most

"piratical businesses held to account in Metro-Goldwyn-Mayer Studios v Grokster (2005) could be immune with just minor tweaks to their business models.”

Viacom also argue that the text of DMCA does the opposite to what Judge Stanton held, in that the DMCA actually "compels" internet service providers who are aware of pervasive copyright infringement, participate and profit from it, to be found liable for copyright infringement under the DMCA.

Viacom's opening brief first sets out the legislative history of the DMCA. The US Congress (picture, left) when drafting the DMCA, sought to achieve a balance between protecting copyright owners from mass online infringement and providing security to internet service providers who served as the "backbone" of the internet. In drafting Section 512, Congress aimed to strike this balance by creating a safe harbor for "innocent service providers" which disappears the moment that they lose their innocence (ALS Scan v RemarQ Communities (2001)). This disappearance of the safe harbor occurs when the ISP obtains actual or constructive knowledge (the "red flag test") of infringing activities and then does not act expeditiously to remove or disable access to the material. Congress also wove into the DMCA safe harbour, principles of vicarious infringement in order to exclude its shield in instances where ISPs receive financial benefit attributable to the infringement.

The brief legislative history segues into a somewhat damning historical account of YouTube's history entitled “YouTube Builds A Business Based on Infringement” which cites gems such as an email from YouTube founder Steve Chen who stated that removing the “obviously copyright infringing stuff” would reduce YouTube views “from 100,000 views a day down to about 20,000 views or maybe even lower”. From further internal YouTube emails, Viacom lifts other extracts which indicate that YouTube was aware of mass copyright infringement but chose to take a passive role in the self-monitoring of the site in order to benefit from the safe harbour legislation. Viacom also points to YouTube’s failure to implement software or digital fingerprint technology that would alert or prevent the upload of copyright material as being indicative of not only YouTube’s knowledge of the pervasiveness of infringement on the site, but as a conscious plan to evade liability by placing the burden of policing infringement squarely on the shoulders of a copyright owner in an effort to maintain their site traffic. In 2006, a “little exercise” conducted by Chen showed that over 70% of the “most viewed/most discussed/top favorites/top rated” videos on YouTube were copyright material. Viacom states that this method of business only grew after YouTube was bought by Google for $1.65 billion in late 2006.

The Section 512(1)(c)(A) issues: Surely YouTube knew what was going on!

Viacom contends that the district court erred in holding that YouTube could benefit from the safe harbour provisions, despite being “generally aware of” and indeed “welcome[ing]” of copyright-infringing material, because they lacked knowledge of the specific URL of each individual infringing video. Viacom argues that there is actual evidence that YouTube did have item-and-location specific information in respect of some of the works complained of and, for those that it didn’t, YouTube chose to actively to blind itself from assimilating specific information of infringement in order to benefit from the safe harbour, i.e. by not implementing infringement detecting software or a community flagging system for infringing videos. The internal email evidence also indicates that, for years, YouTube’s policy and practice was to take “no action”. Viacom argues that because YouTube, in the district court’s own words, “welcomed” “blatant” infringement, and turned a blind eye to such infringement it knew was occurring as evidenced by the internal emails, it cannot be said to not be “aware of facts or circumstances from which infringing activity is apparent” under Section 512(c)(1)(A)(ii). A defendant’s inaction while aware of widespread incidents of infringement, Viacom argues, should not be rewarded with a shield from liability.

That being said, the district court said that the facts above were not specific enough for YouTube not to benefit from the safe harbour provision. However, Viacom argue that the district court’s higher standard of knowledge for Section 512(c)(1)(A)(ii) is not supported by the statutory language. Breaking down the provision Viacom states that the exclusion of the safe harbour depends upon the defendant’s awareness of “facts or circumstances” that make the “infringing activity” “apparent”. This does not mean that these facts have to automatically point to an activity being absolutely and conclusively illegal (citing Jane Ginsburg’s 2008 article in 50 Ariz. L. Rev. 577). Further “facts and circumstances” suggests that Congress intended there to be a more holistic view of the origin, quality and quantity of information of infringement which a defendant may possess to fall within or foul of the provision. That is to say there is not just one type of specific information that is required for the inoperability of the safe harbor under Section 512(c)(1)(A)(ii) ( i.e., the requirement of specific URL addresses) but a combination of information sufficient to raise a “red flag” of warning to the service provider. Holding that there has to be specific identifiable knowledge on the part of the defendant to find an ISP liable renders the purpose of 512(c)(1)(A)(ii) void. If the same standard of knowledge is required for 512(c)(1)(A)(i) as for (ii), what purpose does (ii) serve?

Turning away form statutory interpretation, Viacom argues that the district court’s interpretation cannot be reconciled with Congress’s intent in enacting DMCA. A main purpose of the DMCA was to provide reasonable assurance to copyright owners that their copyright would be protected, given the increased risk and ease that their works can be infringed online. Although Viacom has a hint of recognition that the safe harbour provisions in the DMCA are appropriate for “innocent service" it argues that if the DMCA is to

“conform to the central purposes of the statute, [it] must exclude at least those that ‘welcome’, and even intend, their users’ infringement. To conclude otherwise would fatally undermine Congress’s intent to address 'massive piracy.' It would immunize even entities such as Grokster itself, which ‘distribute[d] a device with the object of promotion its use to infringe copyright’, yet designed its system to avoid item-or location-specific knowledge of those infringements.”

Viacom argues that YouTube has not proved that Congress intended the DMCA to be anything other than this original intent and indeed cites another Second Circuit district court decision as recognizing the DMCA’s purpose as being just that (Arista Record LLC v USENET.com, Inc (2009)). To hold otherwise would also place a substantial burden on copyright owners, who would have to continuously and constantly monitor the entire site for infringing videos.

Judge Stanton’s decision also relied on the district court’s interpretation of Perfect 10 v CCBill (2007) where the defendants provided services to websites with domain addresses such as “illegal.net” and “stolencelebritypics.com”. The claimant argued that these domain names gave notice to the defendants of ongoing infringement on these cites. The Ninth Circuit held that the website names alone were insufficient to create awareness of infringement as the names may just be a method of increasing traffic to the site, rather than being conclusively illegal. Viacom argues that

“even the crabbed (picture, above left) construction of red flag awareness in the Ninth Circuit’s analysis would not save YouTube, however, for, the service provide in CCBill was found to have no awareness that infringement was ongoing at all. Here, in contrast, YouTube was well aware that massive infringement as occurring, intended it to occur, and made no attempt to remedy it."

Breaking News: Google wins $1 billion summary judgment against Viacom and Premier League

Yesterday, Judge Louis Stanton of the Southern District of New York granted summary judgment for Google in two cases brought separately by Viacom and the Premier League. Judge Stanton held that general knowledge of copyright infringement, no matter how widespread and blatant, was not enough for YouTube not to benefit from the Safe Harbour provisions of the Digital Millennium Copyright Act. The IPKat sets out in detail the reasoning of the court in its brief 30-page (double-spaced, mind you) decision.

Readers will recall from various IPKat and AmeriKat reports (found here), that the complaints centered on the plaintiffs’ copyrighted content being uploaded onto YouTube by third-party users and YouTube, once notified, not doing enough to remove the infringing content or preventing future infringements. YouTube sailed into the DMCA’s Safe Harbour provisions which state that under Section 512(c)(1) a service provider:

“shall not be liable for monetary relief or other equitable relief, for infringement of copyright by reason of the storage at the direction of a user of material that resides on a system if the provider:

(A) (i) – does not have actual knowledge that the material or activity using the material on the system or network is infringing; or

(ii) – is not aware of facts or circumstances from which infringing activity is apparent (the "red flag test"); or

(iii) – upon obtaining knowledge or awareness expeditiously removes it; AND

(B) – does not receive a financial benefit directly attributable to the infringing activity; AND

(C) – upon notification of claimed infringement it responds expeditiously to remove the material”

In December, Viacom wrote to Judge Stanton stating their intent to file a motion for summary judgment. In March of this year, around 200 pages of summary judgment motions from both parties were filed (see AmeriKat’s report on both motions here and here).

The question to be decided in the summary judgment was whether the statutory phrases under Section 512(c)(1)(A)(i) and (ii) meant that general awareness of infringements (which were claimed by the plaintiffs to be widespread and common), or actual or constructive knowledge of specific and identifiable infringements of individual items was required for a service provider to fall foul of the Safe Harbor provisions. To determine this question the court had delve into first the legislative history of the DMCA and then the case-law.

Legislative Consideration

Senate Judiciary and House Committee Reports were cited at length in Judge Stanton's decision. The Reports specified that Section 512 was intended to limit a service providers’ liability dependent on their “applicable knowledge”. At paragraphs 44-45/53-54 of the Reports, that knowledge standard was met either by actual knowledge or awareness of facts from which infringing activity is apparent. The Reports went on to state that Section 512(c)(1)(A)(ii) could be described as a “red flag test”. Such a test meant that a service provider “need not monitor its service or affirmatively seek facts indicating infringing activity” to benefit from the exception.

The “red flag test” was proposed to be a test of two halves: First, the test is one of subjectively determining whether the service provider was aware of the facts in question and then objectively determining if the infringing activity would have been apparent to a reasonable person operating under similar circumstances. The Reports go on to discuss the notification requirements, i.e., notice and take down procedure under the DMCA. The Reports state that the copyright owner “must provide information that is reasonably sufficient” and clear “to identify and locate the allegedly infringing material” to the service provider. If the notification is not sufficiently clear and does not comply with Section 512(c)(3), then the service provider may benefit from the limited liability of the Safe Harbor. The Reports repeatedly emphasized the need of the copyright owner to specify the infringing material and activity. As such Judge Stanton held that the sections 512(c)(1)(A)(i) and (ii) meant that the knowledge that a service provider must have to foul foul of the Safe Harbor is

“knowledge of specific and identifiable infringements of particular individual items. Mere knowledge of prevalence of such activity in general is not enough. That is consistent with an area of the law devoted to protection of distinctive individual works, not libraries. To let knowledge of a generalized practice of infringement in the industry, or of a proclivity of users to post infringing materials, impose responsibility on service providers to discover which of their users’ postings infringe a copyright would contravene the structure and operation of the DMCA.”

Judge Stanton said that this standard of knowledge was consistent with the Perfect 10 case which placed the burden of indentifying copyright infringement under the DMCA on the copyright owner, not the service provider. Further, he stated, that the DMCA itself explicitly states at Section 512(m)(1) that the Act should not be construed to condition the enjoyment of a “safe harbour” on a “service provider monitoring its service or affirmatively seeking facts indicating infringing activity”. To illustrate the apparent efficiency of the DMCA notification procedure Judge Stanton stated that when Viacom sent a notice to YouTube about 100,000 infringing videos, YouTube had removed almost all of them the next day.

Case-Law Consideration

Turning to case-law, Judge Stanton cited UMG Recordings v Veoh (2009) which concluded that “if investigation of ‘facts and circumstances’ is required to identify material as infringing, then those facts and circumstances are not ‘red flags’.” This was a further reason why Judge Stanton held that “awareness of pervasive copyright infringing, however flagrant and blatant, do not impose liability on the service provider.”

Interestingly, Judge Stanton went on to cite Tiffany v eBay (2010) (first a summary judgment trade mark case later confirmed by the Court of Appeals) by stating in that case Judge Sullivan held that such generalized knowledge possessed by eBay that some portion of Tiffany goods being sold on its website might be counterfeit was insufficient to impose upon eBay an affirmative duty to remedy the problem. Judge Sullivan held that eBay would have to have knowledge of specific instances of actual infringement to be held contributory liable. As readers may recall, the Court of Appeals agreed. Practitioners will find it interesting, if not useful, that the court was prepared to use trade mark cases to inform the requisite knowledge required in a DMCA case.

Just over two sides of the judgment were devoted to the discussion of the Grokster case (MGM v Grokster, 2005) - a case that was heavily relied upon by Viacom in their summary judgement - and its ‘progeny’ - Arista Records v Usenet (2009), Columbia Pictures v Fung (2009), and Arista Records v Lime Group LLC (2010). The Grokster Court had held that one is liable for the consequent acts of third-party infringement if they “distribute a device with the object of promoting its use to infringe copyright”. YouTube had said that they did not exist “solely to provide the site and facilities for copyright infringement.” [Note YouTube’s use of the word ‘solely’, a word that did not appear in Grokster, as far as this Kat is aware]. Judge Stanton went only so far as to state that Grokster-type cases were not ones of a service provider who furnishes a platform for users to post and access materials, of which the service provider is unaware. The facts of these cases were different. Therefore, he indicated that the Grokster cases were of little relevance in relation to application of the DMCA provisions.

Other Considerations

Judge Stanton went on to consider the plaintiffs’ claim that the display of videos on YouTube fell outside the DMCA protection as it was not “storage” of the material. Judge Stanton held that this construed the term “storage” too narrowly, especially in light of the definition of “service provider” in Section 512(k)(1)(B). This definition included “an entity offering the transmission, routing, or providing of connections for digital online communications.” This was supported by the Veoh case which held that the transmission of online communications was included in the term “storage”.

Another argument advanced by the plaintiffs was that YouTube could not benefit from the Safe Harbor because they financially benefited (picture, right - Viacom's view of YouTube?) from the infringing material being uploaded on the site. Readers may recall that during the mud-slinging of late last year and earlier this year, the disclosure documents alluded to YouTube/Google actively uploading infringing content to YouTube to increase site traffic themselves and doing nothing about infringing material once there. Judge Stanton referred back to the knowledge criteria and stated that under Section 512(C)(1)(B) a service provider must not receive a financial benefit directly attributable to the infringing activity, in a case in which the service provider has the right and ability to control such activity...”. Judge Stanton held that the “right and ability to control” the activity requires item-specific knowledge of it. Therefore, he held that without such specific knowledge, YouTube did not fall foul of this section.

The final two pages of Judge Stanton’s judgment was a hodgepodge of how YouTube’s conduct in respect of terminating user accounts after receiving two DMCA notices, not removing similar infringing material as set out in a DMCA notice and other apparently virtuous activities was reasonable and did not restrict their enjoyment of the Safe Harbor.

What's Next?

The IPKat is incredibly impressed with what a glowing report this summary judgment seems to have been for YouTube and Google’s activities. Google and YouTube are obviously delighted. Via their official Blog they have stated that:

"This is an important victory not just for us, but also for the billions of people around the world who use the web to communicate and share experiences with each other. We’re excited about this decision and look forward to renewing our focus on supporting the incredible variety of ideas and expression that billions of people post and watch on YouTube every day around the world."

Considering the mass of documents that Viacom had disclosed which seemingly evidenced YouTube’s own uploading of infringing content, the IPKat wonders why little hay was made of these documents. Unfortunately, several of the discovery documents in the case were redacted, so one wonders if this alleged smoking gun may not have been the pistol Viacom wanted it to be. The IPKat especially finds this interesting because Judge Stanton specifically distinguished the case of Fung, where the defendant was an admitted copyright thief, with this case. Google, whose overworked PR machine has managed to keep a somewhat squeakily clean image (picture, left - a product that Google perhaps may be using?) in never knowingly promoting copyright infringement on their website obviously helped in this determination.

In any event, this case is not over. It would be unrealistic for Viacom to relinquish the fight after presumingly millions in legal fees and the vested interests of many copyright conglomerates at stake. According to this report, Viacom are set to appeal the summary judgment.

So following this decision, the take home lesson for copyright owners wanting to get infringing material off YouTube or any other service provider's site is to draft your DMCA notice with a high degree of specificity and to actively police websites for your copyright works. For service providers, know nothing - but once you do, act fast.

Judge Stanton's summary judgment found here.

Letter from AmeriKat II - Viacom v YouTube (YouTube/Google)

YOUTUBE and GOOGLE

YouTube and Google's motion starts off by explaining the meritorious and important public function of YouTube's activities - specifically that it is "prominent source of political information". So much so that failed Presidential Republican candidate, John McCain's campaign "congratulated YouTube for its "ground-breaking contributions" to the democratic process "by providing a platform for political candidates". The introductory pages also expand on "YouTube's extensive efforts to help copyright owners" including providing "Copyright Tips", "reminding users that they are prohibited from uploading copyrighted content, and terminating accounts of repeat infringers. A quote from the Motion Picture Association of America (MPAA)was also cited in support of their contention:

"YouTube has been a good corporate citizen and taken off copyrighted material."

The filing states that YouTube benefits from the Safe Harbour defence because they have adopted and implemented an appropriate repeat infringer policy including the termination of repeat infringing accounts and they also inform their users of the content policy. They also state that the infringing activity alleged by Viacom is as a result of YouTube's mere storage of the content "at the direction of the user" - which is one of the specified functions of a service provider that will warrant protection under the Safe Harbor. On the specific knowledge point, Google argue that courts applying section 512(c)

"have consistently found that to disqualify an other-wise eligible service provider from safe-harbor protection, the plaintiff must come forward with evidence that the service provider had knowledge of particular infringing material on its service."

Google maintains that therefore without specific knowledge of an infringing activity that would, in the words of section 512(c) enable them to remove "the material", the presence of general knowledge of infringing material somewhere on the site is not enough to fall foul of the Safe Harbour defence (Universal Music Group Recordings v Veoh (2009)). The defendants additionally argue that there were no "red flags" that would have made it aware that there was infringing activity occurring on the site especially given that there are more than 500 million videos on the site.

From pages 39 -48 of the motion, just as where Viacom was pointing fingers at the defendants, the defendants are pointing fingers at Viacom. They state that Viacom itself "uploaded video clips from their movies and television shows to YouTube for promotional purposes" which itself complicates whether or not the defendants could reasonably know which uploaded clips were authorized and which were not. They argue that "much of its marketing activity [in placing materials on YouTube] takes place covertly." Such stealth marketing by Viacom further blurs the lines between authorized and unauthorized content making it impossible for the defendants to possess any legal standard of knowledge of infringing content on the site for the purposes of falling foul of the DMCA. Further arguments were raised regarding Viacom's marketing policies including their "leave up" practices (see p. 45 of filing). The defendants also interestingly countered that the availability of the fair use defence meant that the defendants could not have knowledge that content was infringing as it may satisfy such a defence. Expectedly, this argument was kept to a minimum.

The above arguments were a build up to the main point - that even Viacom lacked the ability to distinguish infringing from authorized material on YouTube which demonstrated that if the claimant's, whose material material it was, could not deduce this, how on earth could YouTube? In fact, countered the defendants, it was the claimant's own marketing activities which contributed to this difficulty. So why should YouTube be charged with policing content that the rightsholder cannot even recognize to be infringing? They also argued that Viacom had failed to deliver evidence on the scale of the Grokster case that could infer that they intended to, either by themselves or by their third-party users, to infringe copyright. They stated that in Grokster the undisputed evidence showed that close of 90-97% of files were infringing. Viacom, they contended, could not show anything as high as that on YouTube because it is "filled with non-infringing materials."

Both parties' filings are filled with juicy gossip of internal e-mails, marketing plans, and general business practices that will stir debate. However, the legal issue that must be determined by the 2nd Circuit is what makes this case so important: How much knowledge and of what type is required for a service provider to fall foul of the Safe Harbor? This may not be the scale of knowledge as was clearly present in the Grokster case, but there appears to be evidence that YouTube knew of at least some infringements and turned a wilful blind eye. Will the 2nd Circuit therefore follow the 7th Circuit in arguing that wilful blindness to infringement will not negate a finding of a lack of general knowledge? And what is 'specific' knowledge? So the question may well be that general knowledge of infringement may be enough, unless it is coupled with a wilful intent to be blind to that infringement. In any event, although Viacom's evidence appears strong, such an issue may be too important to allow either parties' motions for summary judgment to succeed.

There are also those that are heralding a finding in Viacom's favor could place an undue burden on service providers and potentially destroy the value and purpose of the Safe Harbour defence under the DMCA. But in the face of internal evidence of a service provider ignoring infringing material, should the Safe Harbor defence protect such activities? We will await Judge Stanton's decision...

For more information see these articles from the Financial Times, Bloomberg, and BBC.

Letter from AmeriKat I - Viacom v YouTube (Viacom)

Last week the AmeriKat experienced one of those weeks that could only be described as chaotic. Presentations to prepare for, client work deadlines to meet and a flurry of unexpected issues raining down on her like cats, and unfortunately, dogs. When suffering through a week that buries you in a stack of to-do lists and deadlines, it can become easy to lose perspective - especially in a city where one can never see the horizon. (left - the AmeriKat's face after being caught in last week's rain of deadlines and weather) So when Friday evening finally managed to appear the AmeriKat prowled to the Thames, climbed the Golden Jubilee Bridges, and gazed at the horizon featuring a glowing St.Pauls and the flashing towers of Canary Wharf. Seeing the horizon for the first time in weeks put the AmeriKat's worrisome "to-do" list in perspective.

Heated summary judgment motions enliven Viacom v YouTube battle

Two parties that seem not to have gained in perspective during the course of their three year litigation are Viacom and YouTube (and parent company Google - both defendants in this action so terms have been used interchangeably) (previously reported here and here). The AmeriKat spent her weekend lovingly reading the almost 200 pages of their motions to glean idea of whether this battle is looking likely to be determined prior to a full hearing - although not a betting Kat, it seems highly unlikely given the fervour of finger-pointing raised in these filings. YouTube's summary judgment motion also covered the sister action fo the Premier League v YouTube (reported here).

Arguing a summary judgment motion in the US is somewhat similar to that in England. A summary judgment should be granted where "there is no genuine issue as to any material fact [such] that the moving party is entitled to a judgment as a matter of law" (Federal Rule of Civil Procedure 56(c)). The moving party (applicant) must demonstrate an "'absence of a genuine issue of material fact. . . The burden is then on the non-moving party (respondent) to set forth specific facts raising a genuine issue of fact for trial.'" (US ex Rel. Romano v NY Presbyterian (2006)).

In brief, this dispute arose in 2007 when Viacom (owner of Paramount movies and the MTV music networks) brought copyright infringement proceedings against YouTube (a subsidiary of Google) for the copying, display, broadcast and performance of their copyright videos and sound recordings on YouTube. Once notified of the infringing content on their site, YouTube allegedly did not do enough to remove the content or prevent future infringements. YouTube argued that they were protected by the Safe Harbor provisions of the DMCA, stating that they did not know of the infringement and that they had done enough to protect the claimants' copyright. At the end of December, Viacom informed the New York district judge, Judge Stanton, of their intention to file a motion for summary judgment. Google followed suit a couple of days later. For a breakdown of the parties' letters and DMCA Safe Harbor provisions see this AmeriKat article (which the AmeriKat recommends as prerequisite reading for this article). This post is split into two each dedicated to parties' arguments respectively.

VIACOM

Viacom's summary judgment argument focused primarily on the knowledge and knowing intent of YouTube and Google in uploading knowingly infringing content. Citing Grokster (2005), Viacom argued that YouTube operated with a specific and "unlawful objective of profiting from (to use their phrase) "truckloads" of infringing videos." The filing states that the defendants had "actual knowledge" of the infringing activity, but failed to do anything. Such Grokster intent, they argue, fails any DMCA Safe Harbor defence which is and should only be available to innocent service providers. In support of this contention Viacom referenced several internal e-mails and memos that allegedly show that the defendant's founders and employees intended to increase site traffic by the intentional inclusion of infringing videos. One such email allegedly from one of YouTube's founders Steve Chen

"urged his associates to "concentrate all of our efforts in building up our numbers as aggressively as we can through whatever tactics, however evil."

Another e-mail referenced in the filing stated that the defendants were groping for ways "to avoid the copyright ba****ds" - a term Viacom alleges referred to copyright owners whose works were being infringed. Another email allegedly from Chen stated showed "he opposed removing infringing videos on the ground that 'if you remove the potential copyright infringements....site traffic and virality will drop to maybe 20% of what it is." Viacom claim that the defendants would "benefit form a policy of wilful blindness and toleration of infringement" - basically operating a "take down and notice" policy under the DMCA, despite potentially having the knowledge not to afford them the Safe Harbor protection.

Viacom's filing also argued that Google had shared the requisite knowledge with that of YouTube. In May 2006, Google held a Google Product Strategy (GPS) meeting attended by top executives including CEO Schmidt. At the meeting a final internal memo allegedly recognized that "YouTube is "a 'rogue enabler' of content theft" and its "business model is completely sustained by pirated content." Viacom allege that despite Google's "keen awareness that infringement was the linchpin in YouTube's success" they purchased the company in October 2006 for $1.8 billion. As part of that purchase Credit Suisee prepared a due diligence report for Google that estimated that, according to Viacom's filing, "54% of the video views in the due diligence sample were of premium copyrighted content that was admittedly unauthorized by the content owner." From pages 21-23 Viacom speak briefly about the importance of these internal documents which were never

"produced by Google or YouTube, which claims they were all lost... Fortunately, [Jawed] Karem (one of YouTube's founders) who left YouTube in 2006 and preserved these materials on his own personal computer, discharged his duties to this Court..."

Viacom argue that, as under Grokster at paragraph 938, these internal communications show "unequivocal indications of an unlawful purpose" and it is therefore established that the defendants "are liable for the infringement they intentionally made possible" beyond a question.

Viacom's motion also argued that the defendants are unable to benefit from the DMCA defence because they directly financially benefited from the infringement and that Congress did not intend to "immunize the kind of extremely culpable conduct at issue" in this case which is evidenced by the clear language of section 512(c)(1)(A). The defendants allege that they benefit from the DMCA provisions because they take down specific infringing videos identified to them. Viacom states that if that position was correct, "then the DMCA would just be a takedown notice statute, and all else meaningless surplusage." (Yes..surplusage....) Viacom argues that to benefit from the DMCA defence a service provider has to satisfy one of several preconditions - only one of those is responding to takedown notices. In particular they again reiterate that the defendants benefited directly from the infringements and had knowledge of the infringements. Viacom argues that the defendants' defence that they did not have 'specific' knowledge that a 'particular' clip was infringing takes them nowhere because such an argument of the absence of 'specific knowledge' does not negate wilful blindness on their part - there is not even a requirement of "specific knowledge" in the DMCA. Indeed, Viacom argues and as Judge Posner explained in the 7th Circuit, it intensifies it. (In re Aimster Copyright Litigation (2003)). Viacom also states that the defendants fall outside the DMCA because their activities, specifically their infringement of their copyright, are not those specified as core Internet activities of service providers meriting protection because "the infringement results not from web hosting, but from operating YouTube as a "consumer media company"".