On June 23, Viacom's claim for $1 billion in damages was shot down when the District Court for the Southern District of New York found YouTube and its owner Google not liable for copyright infringement in a much-anticipated decision. The two corporate giants have been at it since 2007, when Viacom joined with other plaintiffs including Paramount Pictures and sued YouTube, claiming that the online video service was legally responsible for copyright infringement when users posted clips of copyrighted material, including The Daily Show and The Colbert Report, owned by plaintiffs.
YouTube argued that it qualified for protection under the DMCA's safe harbor provisions and could not be held liable. District Judge Louis Stanton granted summary judgment in favor of YouTube, meaning the case didn’t even need to go to trial- Viacom will certainly appeal, but it's often tougher (though not impossible) for a party who has lost on summary judgment to later win on appeal.
The rest of this post will outline the major legal issues in the case and explain how aspects of the decision will affect online service providers and copyright owners.
YouTube Was Protected by the DMCA Safe Harbor
The court found that YouTube did qualify for protection under the DMCA safe harbor provision for Online Service Providers (17 U.S.C. § 512(c)). This provision protects "providers of online services" from secondary liability for copyright infringement by users as long as the OSP follows certain procedures, such as designating an agent to receive complaints and promptly removing infringing material.
First, the court determined that YouTube fit within the statute's definition of an OSP also and noted that users upload over 24 hours of new video to the site every minute of every day. Despite the huge volume of material on the site, YouTube still acted swiftly to remove allegedly infringing material from the site in accordance with DMCA takedown notice procedure. Generally, then, Youtube was much like the standard setting Veoh video service, in that it took the necessary affirmative steps to gain protection under the DMCA.
Did YouTube Have "Actual Knowledge" of Infringement?
A site cannot be protected by the DMCA if it had “actual knowledge” of infringement. Viacom claimed that YouTube had "actual knowledge" of infringing material and was "aware of facts or circumstances from which infringing activity [was] apparent, but failed to do anything about it." YouTube's prompt removal of infringing material plainly demonstrated that they did not fail to act, so this issue turned on the interpretation of "actual knowledge". The court considered two possible meanings: 1) a general awareness that infringements are occurring or, 2) actual and constructive knowledge of specific and identifiable individual infringements.
The court first looked to the legislative history of the DMCA to help interpret the phrases. After examining the language in the Senate and House Committee Reports, the court concluded that the "actual knowledge" and "facts or circumstances" describe knowledge of specific and identifiable infringements of particular items and that "[m]ere knowledge of prevalence of such an activity is not enough." This is very important for heavily user generated content websites, in that simple knowledge that users are making use of the service to engage in infringing activity is not enough to eliminate DMCA protections. It would go against the purpose of the DMCA safe harbors if it were the responsibility of the service provider to discover which particular user posting is infringing. Instead, this court reinforces that the burden of identifying allegedly infringing material rests on the copyright owner, who must notify the service provider of alleged infringing activity.
YouTube Isn't the New Napster
Case law also proved unhelpful to plaintiffs in this case. The differences between YouTube and peer-to-peer file sharing programs such as Napster and Grokster are too vast to apply the holdings of those cases here. Whereas Napster and Grokster were held legally responsible, in part due to lack of monitoring for users' infringement, YouTube designated a DMCA agent to receive copyright complaints and quickly removed infringing material. The DMCA specifically carves out protection for service providers like YouTube, even if they otherwise would be held liable as contributory infringers. The fact that in one day, YouTube was able to remove every single video of the 100,000 that Viacom alleged was infringing in one mass take-down notice was viewed by the court as an example of the efficiency of the DMCA notification regime.
The court also rejected Viacom's additional arguments, including that YouTube could not be entitled to safe harbor protection given under the DMCA to "infringement of copyright by reason of the storage at the direction of a user of material" on a service provider's system or network because the site's replication, transmission, and display of videos was not the same as "storage". The court correctly declined to apply such a narrow definition of the term "storage."
YouTube Acted Fast to Remove Infringing Material
Just as in similar cases against Veoh, this decision placed a lot of emphasis on the defendant's prompt removal of material in response to DMCA notices, which helped in avoiding liability. The continued concern here is for fair use and free speech online. The extra-judicial, out of the courtroom process continues to result in a lot of dolphins being caught in the tuna net, and a lot of bullying and bogus takedown letters being sent and respected, but it is the system we have under the DMCA. At the very least, the Youtube court’s interpretation of the DMCA maintains robust protections for our service providers who provide diverse forums for speech online.
For their part, Viacom and its supporters, including the RIAA, feel that this decision will discourage service providers from taking steps to minimize infringement. It is difficult to see how an opinion that praised the defendants' prompt removal of allegedly infringing material could cause the opposite to happen. That said, content owners retain a strong, outside the courtroom process for getting objectionable reuse of content removed from the internet.
Mostly, however, this ruling upholds the DMCA’s safe harbors as a tangible protection for online service providers and makes clear that it remains the responsibility of copyright owners to identify infringing material online and to notify OSP's, who will continue to best avoid liability by responding promptly to takedown notices. The decision is another victory for OSP's who follow the DMCA procedures closely, and who can now use YouTube as an example of how to ensure DMCA safe harbor protection in the future.
