Internal Emails Key to A Major Decision Involving YouTube and Copyright Infringement

Internal Emails Key to A Major Decision Involving YouTube and Copyright Infringement

by Jerry Glover
Arpil 5, 2012

In 2007, dozens of copyright owners including Viacom, owner of Paramount Pictures among other entertainment entities, filed suit against YouTube (now owned by Google) for various types of copyright infringement as a result of third parties posting videos containing copyrighted material owned by one of the defendants. This lawsuit brought into question the meaning of several sections of the Digital Millennium Copyright Act (the “DMCA”; 17 U.S.C. Secs. 512(a)-(d)) and the protections afford Internet service providers (ISP) like YouTube against copyright infringement claims as a result of third party postings. Today, the U.S. Court of Appeals for the Second Circuit has weighed in on the extent of the DMCA’s so-called “safe harbor” protection provided to ISP’s. Viacom International, Inc. v. YouTube, Inc., #10-3342-cv (2d Cir. 2012) (hereinafter Viacom).

Sec. 512(c) of the DMCA provides an ISP a “safe harbor” against infringement claims by copyright owners as a result of third party postings only if the ISP:

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

(ii) in the absence of such actual knowledge, is not aware of factors or circumstances from which infringing activity is apparent; or

(iii) upon obtaining such knowledge or awareness, acts expeditiously to remove, or disable access to, the material;

(B)            does not receive a financial benefit directly attributable to the infringing activity, in a case in which the service provided has the right and ability to control such activity; and

(C)            upon notification of claimed infringement … responds expeditiously to remove, or disable access to, the material that is claimed to be infringing or to be the subject of infringing activity.

One of the important issues raised by the lawsuit was whether 512(c)’s safe harbor applies only if YouTube does not know that a specific video posted to its site and owned by the plaintiff is infringing or only if YouTube has no general knowledge that videos posted to its site are infringing.   The trial court stated that a “jury could find that … [YouTube] not only [was] generally aware of, but welcomed, copyright-infringing material being placed on [its] website.” Nevertheless, the trial court, granting summary judgment to YouTube, held that actual knowledge by the ISP that a specific video is infringing someone’s copyrighted material is required by the statutory language before the ISP loses its safe harbor protection. Viacom International, Inc. v. YouTube Inc., 718 F.Supp.2d 514, 523 (S.D.N.Y. 2010). The Second Circuit agreed.

The appeals court noted that an ISP’s general knowledge of infringing activity does not, by itself, cause loss of safe harbor protection; the ISP must also fail to “respond[ ] expeditiously to remove, or disable access, to the material … .” But how, the court asked, can an ISP remove material expeditiously if it has only a general knowledge that third parties are posting infringing material on the site (YouTube users post 24 hours of videos on the site every minute of the day). The ISP must know “with particularity” which items to remove (Viacom, Slip Op. at 16). The appellate court noted that several other courts had reached the same conclusion even when those courts noted that the defendant ISP “[was] aware that some level of infringement occurs” on the site. Id. at 18 quoting Capitol Records, Inc. v. MP3tunes, LLC, 2011 WL 5104616 at *14 (S.D.N.Y. 2011) (hereinafterMP3).

Despite this statutory interpretation, the Second Circuit held that the trial court had granted summary judgment to YouTube “prematurely.” Id. at 19. The court cited various e-mails exchanged by YouTube employees acknowledging that certain videos posted on the site were infringing. In one instance YouTube employees attempted to search for Premier League videos that had been posted to the site (Premier League was a plaintiff in this lawsuit) in order to gauge their “value based on video usage.” Id. at 20. The YouTube employee requesting this search wanted a calculation of the number of daily searches for the terms “soccer,” “football,” and “Premier League” to help prepare for a YouTube bid on the global rights to Premier League-content. Id. Later YouTube employees were asked to take down any “clearly infringing, official broadcast footage” about Premier League clubs in advance of a YouTube meeting with sports teams and leagues. Id. Another example which the court pointed to was a 2006 YouTube report from YouTube’s founder noting that “[a]s of today [,] episodes and clips of the following well-known shows can still be found [on YouTube]: Family Guy, South Park, MTV Cribs, Daily Show, Reno 911, [and] Dave Chapelle [sic].” Id. Some of these shows are owned by plaintiff Viacom. The founder report also stated that YouTube would “benefit from preemptively removing content that is blatantly illegal and likely to attract criticism.” Id. at 20-21. The founder requested a “more thorough investigation.”

The appeals court noted that a reasonable juror could conclude based on the founder’s report that “[he] knew of the presence of Viacom-owned material on YouTube, since he presumably located specific clips of the shows in question before he could announced that YouTube hosted the content.” Id. at 21. The court added that the founder seemed to know the clips were infringing since he labeled the clips “blatantly illegal.” Id.

In a third instance the court recounted how a YouTube employee had sent an email regarding certain Bud Light commercials being posted to the site noting that “we need to reject these… .” Id. In reply, another employee asked if the spots could be left on the site “a bit longer…another week or two can’t hurt.” Id. In another example, a YouTube employee cited a “cnn clip of the shuttle clip on the site today” adding that “if the boys from Turner [CNN’s owner] would come to the site, they might be pissed… .” Id.

The appellate court concluded that the plaintiff “may have raised a material issue of fact regarding YouTube’s knowledge or awareness of specific instances of infringement” (Id.) which, as noted above, would have divested YouTube of its safe harbor.

The plaintiff also argued that YouTube was willfully blind to specific infringing activity. Id. at 22. This was an issue of first impression for the Second Circuit since the DMCA says nothing about willful blindness. But the appeals court noted that courts, especially in the trademark context, had consistently held that “willful blindness is tantamount to knowledge .” Id. at 23 [citations omitted]. The court added that “when [an ISP] has reason to suspect that users of its service are infringing a protected mark, [the ISP] may not shield itself from learning of the particular infringing transactions by looking the other way.” Id. quoting Tiffany (NJ) Inc. v. eBay, Inc., 650 F.3d 93 at 109 (2d Cir. 2011).

The court noted that Sec. 512(m) of the DMCA provides that safe harbor protection for an ISP is not conditioned upon “[the ISP] monitoring its service or affirmatively seeking facts indicating infringing activity … .”   Id. quoting 15 U.S. C. Sec. 512(m). So the DMCA does not require a duty to monitor or seek out infringing activity simply based on a general awareness that the site might include some infringing material. But the court added that the DMCA does not speak directly to the question of willful blindness; Sec. 512(m) may limit that doctrine, the court noted, but the provision does not abrogate the doctrine. Id. at 24. Therefore, the court remanded this aspect of the case to the trial court for further consideration of this doctrine and its applicability to the DMCA.

Finally, the court reviewed the meaning of Section512(c)(1)(B), the “control and benefit” provision which states that an ISP cannot “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.” 15 U.S.C. Sec. 512(c)(1)(B) (emphasis added). The trial court had held that this “right and ability to control” language mean that the ISP must have knowledge of a specific infringing item. The appeals court said this finding was error. Viacom at 25.

The plaintiff had argued that this statutory provision is simply a codification of the common law of vicarious copyright infringement was incorrect. The appeals court disagreed. The court noted that an entity with the right to supervise or control activity or access to that activity combined with direct financial interest in the exploitation of copyrighted materials (even without specific knowledge of infringement) is liable for vicarious infringement. Id. at 26 citing Shapiro, Bernstein & Co. v. H.L. Green Co., 316 F.2d 304 (2d Cir. 1963). The court noted that the DMCA presumes that an ISP has the right and ability to control infringing activity simply because the law requires the ISP to take down infringing material once the ISP has directly, specific knowledge that the material infringes. 15 U.S.C. Sec. 512(c)(A)(iii). But by removing infringing material, the court noted that the ISP would be admitting it has the “right and ability to control” infringing material. Id. at 27. Thus what an ISP is required to do under 512(c)(1)(A)(iii) (take down infringing material it has been made aware of by the copyright holder) would remove it from the safe harbor under t12(c)(1)(B) (the ISP cannot be aware of facts or circumstances from which infringing activity is apparent). Id.

The court concluded that the “right and ability to control” infringing activity “’requires something more than the ability to remove or block access… .” Id. quoting MP3tunes, 2011 WL 5104616 at *14. The court noted only one court had found that an ISP had the right and ability to control infringing activity under Sec. 512(c)(1)(B) (Perfect 10, Inc. v. Cybernet Ventures, Inc., 213 F. Supp. 2d 1146 (C.D. Cal. 2002) but there the ISP “exerted substantial influence on the activities of users” (including detailed instructions about layout, appearance and content of websites using the ISP and forbidding certain types of content) without acquiring knowledge of specific infringements. Id. at 28.

The court remanded to the trial court the question of whether the plaintiffs had provided sufficient evidence for a jury to determine that YouTube had the right and ability to control infringing activity and received a financial benefit directly attributable to that activity.

The plaintiffs in this case can claim a victory. The appellate court has clarified, somewhat, the meaning of DMCA’s safe harbor provisions. But it remains to be seen whether the lower court on remand will nevertheless determine that insufficient evidence has been provided by the plaintiffs of YouTube’s knowledge of infringing activity to remove YouTube from its safe harbor.

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