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."