YouTube Wins Safe Harbor in Viacom Copyright Suit

24 June 2010 Publication
Authors: Andrew Baum

Legal News Alert: Trademark, Copyright & Advertising

The June 23, 2010 decision by the U.S. District Court for the Southern District of New York in Viacom’s $1 billion copyright action against YouTube holds that YouTube is not liable for contributory copyright infringement and need not police its site to identify posted materials that may infringe a copyright. The District Court, in the combined action Viacom Intern., Inc. et. al. v. YouTube, Inc. et. al, granted YouTube summary judgment on its claim of protection from liability for all direct and contributory infringement via the Copyright Act’s “safe harbor” provision for online service providers. In reaching this decision, the Court cited other decisions that placed the burden of policing infringement squarely on the rights-holders and noted YouTube’s prompt action and compliance with the DMCA’s safe harbor procedures.

YouTube users upload video files that are then copied, formatted, and made available for viewing on YouTube’s site. In the suit, owners of copyrighted works such as Viacom and The Football Association Premiere League Ltd. sought to hold YouTube liable for copyright infringement resulting from third parties’ posting of material on the site.

Under Section 512(c) of the Copyright Act, added in 1998 as part of the Digital Millennium Copyright Act (DMCA), online service providers can avoid monetary liability for copyright infringement by appointing agents to receive “takedown” notices from rightsholders and then acting promptly to remove infringing materials from the provider’s service. In order to qualify for this safe harbor, the service provider also must either “not have actual knowledge that the material or an activity using the material on the system or network is infringing” or, in the absence of actual knowledge, not be aware of “facts or circumstances from which infringing activity is apparent.” The provider also must (1) “not receive a financial benefit directly attributable to the infringing activity,” where the provider has the right and ability to control such activity, and (2) establish and enforce a policy to bar repeat infringers from the service.

Viacom had identified more than 100,000 instances of its copyrighted works being posted on YouTube’s site. It claimed that YouTube had “actual knowledge” of copyright infringement and was aware of “facts and circumstances from which infringing activity [was] apparent.”

The Court acknowledged a jury might find that YouTube was not only aware of the posting of copyright-infringing material, but even welcomed it, as such materials are attractive to users and enhance YouTube’s income from advertising. The critical question, however, was whether a service provider is barred from enjoying safe harbor protection if it has “a general awareness that there are infringements,” or if it is only barred if it has “an actual or constructive knowledge of specific and identifiable infringement of individual works.”

Following a review of the legislative history, the Court held that “mere knowledge of prevalence of [infringing] activity in general is not enough” to bar a service provider from enjoying safe harbor protection. It found that safe harbor would only be denied if the service provider had “knowledge of specific and identifiable infringements of particular individual items.” Imposing responsibility on service providers to police their users’ postings “would contravene the structure and operation of the DMCA.”

For further guidance, the Court looked to The Court of Appeals for the Second Circuit and Ninth Circuit. In Perfect 10, Inc. v. CCBill LLC, 488 F.3d 1102 (9th Circ. 2007), the Ninth Circuit held that the DMCA places “the burden of policing copyright infringement … squarely on the owners of the copyright.” Further, the Second Circuit in Tiffany Inc. v. eBay, Inc., 600 F.3d 93 (2d Cir. 2010), recently examined analogous issues of knowledge concerning liability for contributory trademark infringement and held that even general knowledge that infringement is “ubiquitous” does not impose a duty to police for infringements.

In fact, the District Court noted, “the present case shows that the DMCA notification regime works efficiently: when Viacom over a period of months accumulated some 100,000 videos and then sent one mass take-down notice … by the next business day YouTube had removed virtually all of them.” The Court also noted that “[I]t is uncontroverted that when YouTube was given the notices, it removed the material. It is thus protected ‘from liability for all monetary relief for direct, vicarious and contributory infringement’ subject to the specific provisions of the DMCA.”

Although Viacom analogized YouTube to Grokster (which had distributed software to facilitate copyright infringement via file sharing after the early Napster site was closed down), the District Court noted that Viacom did not disagree with YouTube’s position that YouTube’s purpose is not “solely to provide the site and facilities for copyright infringement.” Indeed, Viacom’s own general counsel had written that “the difference between YouTube’s behavior and Grokster’s is staggering.”

The District Court also specifically upheld all of YouTube’s procedures for awarding “strikes” toward a “three strikes” limit before a user’s account was terminated as reasonable under the Act.

YouTube’s speedy action on Viacom’s massive takedown notice seems to have helped convince the Court that the DMCA’s model of rights-owner policing is working. Though Viacom has already indicated it will appeal the ruling, the finding of safe harbor for YouTube demonstrates to Web site operators the value of carefully following the DMCA’s safe harbor procedures.

A copy of the full decision can be found online at: http://tinyurl.com/28z7dqa.

 


Legal News Alert is part of our ongoing commitment to providing up-to-the-minute information about pressing concerns or industry issues affecting our clients and our colleagues. If you have any questions about this update or would like to discuss this topic further, please contact your Foley attorney or the following:

David Copland
Special Counsel
Chicago, Illinois
312.832.4598
dcopland@foley.com

Andrew Baum
Partner
New York, New York
212.338.3527
abaum@foley.com

Authors

Andrew Baum

Retired Partner

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