Viacom Wins Appeal Against YouTube On Some DMCA Issues

This week seems to be one for interesting or important opinions from the Courts.  Today’s opinion comes from the Second Circuit Court of Appeals.  The initial case was brought in 2007 by Viacom and other plaintiffs claiming that YouTube both displayed infringing videos and encouraged their upload.  The District Court held completely for Google on all aspects of the case in interpreting the Digital Millennium Copyright Act’s safe harbor provisions.  The Court of Appeals for the Second Circuit partially overturns the victory Google received though it upheld much of the ruling as it applied safe harbor provisions to service providers.  Viacom sought a standard that required service providers such as YouTube to take affirmative action on infringing content in order to retain the safe harbor provisions.  The Court of Appeals did not go along with that.

As to knowledge of infringing items, the Court said that a service provider has to have actual knowledge of specific infringing items before it could lose the protection of the safe harbor provision.  Generalized knowledge is not enough.  The service provider otherwise would not know which links to remove under the terms of the DMCA.  From the opinion:

Thus, the nature of the removal obligation itself contemplates knowledge or awareness of specific infringing material, because expeditious removal is possible only if the service  provider knows with particularity which items to remove.  Indeed, to require expeditious removal in the absence of specific knowledge or awareness would be to mandate an amorphous obligation to “take commercially reasonable steps” in response to a generalized awareness of infringement.  Viacom Br. 33.  Such a view cannot be reconciled with the language of the statute, which requires “expeditious[ ]” action to remove or disable “the material” at issue.  17 U.S.C. § 512(c)(1)(A)(iii) (emphasis added).

The Court drew a distinction between the provisions requiring actual knowledge with red flag knowledge.  The former is subjective, as in whether a service provider subjectively knew of specific infringement compared to the red flag standard which turns on whether the service provider was subjectively aware of facts that made infringement objectively obvious to a reasonable person.   

Viacom argued that Credit Suisse, Google’s financial adviser in the YouTube purchase estimated at the time, estimated that 60% of the YouTube content at the time was copyrighted content with only 10% licensed.  A YouTube employee survey similarly showed that 75-80% of YouTube streams contained copyrighted content.  This by itself does not raise a triable issue of fact.  However, emails cited by Viacom as to whether YouTube and Google employees had specific knowledge do raise a triable issue.  From the opinion:

Upon a review of the record, we are persuaded that the plaintiffs may have raised a material issue of fact regarding YouTube’s knowledge or awareness of specific instances of infringement.  The foregoing Premier League e-mails request the identification and removal of “clearly infringing, official broadcast footage.”  The March 2006 report indicates Karim’s awareness of specific clips that he perceived to be “blatantly illegal.”  Similarly, the Bud Light and space shuttle e-mails refer to particular clips in the context of correspondence about whether to remove infringing material from the website.  On these facts, a reasonable juror could conclude that YouTube had actual knowledge of specific infringing activity, or was at least aware of facts or circumstances from which specific infringing activity was apparent.  See § 512(c)(1)(A)(i)–(ii).  Accordingly, we hold that summary judgment to YouTube on all clips-in-suit, especially in the absence of  any detailed examination of the extensive record on summary judgment, was premature.

The Court goes on to say in a footnote that it expresses no opinion as to whether the facts it cited (the details of which appear in the section immediately preceding the quote) would withstand another motion for summary judgment.  The context of the facts are undeveloped and best addressed by a more developed record on remand.

Viacom further argued that YouTube was willfully blind to the existence of infringing material on its site.  The Court said that the willful blindness doctrine does not require a service provider to monitor the site content as the statutory safe harbor provision, by its terms, cannot be conditioned on an affirmative duty to monitor.  However, the doctrine may be used to demonstrate knowledge of specific instances of infringement under the DMCA on remand.  The Court said that the issue of whether YouTube or Google profited from the allegedly infringing videos is as well undeveloped.  The last issue the Court remanded to the District Court concerns whether the syndication function, that is the licensing to third parties, in within the terms of the DMCA.

As of now, the Court of Appeals is affirming the concept that service providers do not have to actively monitor their systems for infringing content.  The idea that service providers need to do monitor to qualify for a safe harbor provision was one of the central arguments that Viacom was making in this suit.  That the Court said no has to disappoint the company.  If I were Google, I would not be quaking in my boots over this one.  They may be found liable due to past practices, though not necessarily as a directed result from this opinion.  [MG]