Court: District Court, S.D. New York; June 23, 2010; Federal District Court
The case involves multiple plaintiffs, including Viacom International Inc., Comedy Partners, Country Music Television, Paramount Pictures Corporation, and Black Entertainment Television LLC, along with The Football Association Premier League Limited and others, suing YouTube, Inc., YouTube, LLC, and Google, Inc. for copyright infringement. The legal proceedings are consolidated under case numbers 07 Civ. 2103(LLS) and 07 Civ. 3582(LLS) in the United States District Court for the Southern District of New York, with a decision rendered on June 23, 2010. The plaintiffs are represented by various law firms, including Sherman, Sterling LLP, Jenner & Block LLP, and Proskauer Rose LLP, among others, while the defendants are represented by firms such as Mayer Brown LLP and Wilson Sonsini Goodrich & Rosati. Additionally, several organizations, including the American Library Association, Electronic Frontier Foundation, and various labor unions, have filed amicus briefs or provided counsel, indicating a broad interest in the implications of the case on copyright and digital rights.
Defendants seek summary judgment for protection under the Digital Millennium Copyright Act (DMCA) safe harbor provisions, arguing they lacked sufficient notice of the alleged infringements. Plaintiffs counter with a cross-motion for partial summary judgment, asserting that defendants are liable for direct and secondary infringement of Viacom's copyrighted works due to: 1) their actual knowledge and awareness of facts indicating infringement without taking prompt action to stop it; 2) their financial benefit from infringing activities coupled with their ability to control such activities; and 3) the nature of their infringement not being limited to merely providing user-directed storage as stipulated in section 512. The resolution of these conflicting motions hinges on an analysis of DMCA's safe harbor provisions, specifically 17 U.S.C. 512(c), (m), and (n), which outline conditions under which service providers are not liable for copyright infringement related to user-stored material, including requirements around knowledge, financial benefit, and responsiveness to infringement notifications, as well as the obligation to designate an agent for receiving such notifications.
The document outlines the requirements for notifying a service provider of claimed copyright infringement. It specifies that notifications must include the agent's contact details, as determined by the Register of Copyrights, who will maintain a public directory of agents available in both electronic and hard copy formats, potentially requiring a fee for access. For a notification to be effective, it must be written and include:
1. A physical or electronic signature of an authorized representative of the copyright owner.
2. Identification of the copyrighted work(s) allegedly infringed.
3. Details of the infringing material and sufficient information for the service provider to locate it.
4. Contact information for the complaining party.
5. A statement of good faith belief regarding the unauthorized use of the material.
6. A declaration of the accuracy of the notification, under penalty of perjury.
Notifications that do not substantially comply with these requirements will not be considered in evaluating whether a service provider has actual knowledge of infringing activity, unless the provider makes reasonable efforts to assist in compliance. Additionally, the section clarifies that service providers are not required to monitor for infringement or take actions that are prohibited by law. It emphasizes that the subsections described are distinct, and each must be evaluated independently for liability limitations. The excerpt also notes that YouTube allows users to upload videos for free, with significant content being added continuously.
YouTube qualifies as a service provider under 17 U.S.C. 512(k)(1)(B) for the purposes of Section 512(c). Plaintiffs argue that the defendants were not only aware of copyright violations on their platform but also benefitted from the increased user engagement that such infringing content generated, leading to heightened advertising revenue. They claim that numerous videos, unlawfully taken from Viacom's copyrighted works, amassed significant views without authorization. The plaintiffs assert that the defendants had "actual knowledge" or were aware of circumstances indicating infringing activity but failed to act. Despite this, the defendants appointed an agent for copyright issues and promptly removed content upon receiving specific DMCA takedown notices, with all contested clips now off the platform. The central legal question revolves around the interpretation of "actual knowledge" and "facts or circumstances from which infringing activity is apparent" in Section 512(c)(1)(A)(i) and (ii)—whether this signifies a general awareness of infringement or knowledge of specific infringing items. Legislative history indicates that the Digital Millennium Copyright Act (DMCA) was designed to protect copyright owners in the digital age and to encourage service providers to invest in Internet infrastructure without the fear of excessive liability for copyright infringement. The DMCA aims to balance the interests of copyright owners and service providers by establishing "safe harbors" for certain activities, rather than overhauling existing legal doctrines of contributory and vicarious liability.
Service providers qualifying for a safe harbor under the DMCA benefit from limited liability protections. The DMCA's structure includes limitations on liability for specific activities categorized in subsections (a) through (d) and (f), which shield qualifying providers from monetary relief related to direct, vicarious, and contributory infringement, as defined in subsection (j)(2). These limitations also restrict injunctive relief as specified in subsection (i). To qualify for these protections, providers must adhere to conditions in subsection (h) and engage in activities outlined in the relevant subsections. The liability limitations extend to networks operated by or for the service provider, including those run by subcontractors.
Subsection (c)(1)(A) outlines the applicable knowledge standard, which can be satisfied by actual knowledge of infringement or awareness of circumstances indicating potential infringement. The term "activity" refers to wrongful use of material on the provider's network, regardless of whether the infringement is legally classified as occurring on-site or elsewhere. The "red flag" test in subsection (c)(1)(A)(ii) indicates that if a service provider becomes aware of obvious signs of infringement (red flags) and does not act, it loses its liability limitations. This test employs both subjective and objective assessments, requiring consideration of the provider's awareness and whether a reasonable person would recognize the signs of infringement under similar circumstances. Service providers are not obligated to monitor their services unless consistent with subsection (h).
Subsection (c)(1)(A)(iii) establishes that a service provider retains its limitation of liability if it promptly removes or disables access to infringing material once it has actual knowledge of it. Due to varying factual circumstances, a specific timeframe for "expeditious" action cannot be defined universally. Subsection (c)(1)(B) outlines conditions under which a service provider may lose liability protection, particularly concerning financial benefits from infringing activities. Courts are to adopt a practical, fact-based approach rather than a rigid interpretation when assessing if a provider receives a "financial benefit directly attributable to the infringing activity." Generally, if a service provider charges infringers the same fees as non-infringers, it does not receive such a benefit. Fees based on the length of messages or connection time do not fall under this clause unless the service value lies in access to infringing material. A service provider seeking liability limitation under subsection (c) must act on knowledge of infringing material, regardless of notification from a copyright owner. Conversely, if a provider chooses not to act after receiving a notification, its liability will be evaluated independently of section 512(c). Copyright owners are not required to notify providers of infringements to protect their rights. Still, providers cannot claim actual knowledge or awareness based on non-compliant notifications from copyright owners, and the limitation of liability may still apply. Subsection (c)(3)(A)(iii) mandates that copyright owners provide sufficient information for providers to identify and locate infringing material, such as a description of the material and its URL. Subsection (c)(3)(B) clarifies that notifications failing to meet these requirements cannot serve as evidence of a provider's knowledge or awareness for subsection (c)(1)(A) purposes.
A defective notice delivered to a designated agent can influence the assessment of a service provider's awareness of infringement if the complaining party supplies sufficient details about the copyrighted work, the allegedly infringing material, and contact information. If the service provider fails to promptly reach out to the notifier or take reasonable steps to assist in receiving a compliant notice, it may forfeit safe harbor protections. Upon receiving a compliant notice, the safe harbor provisions would then apply.
In relation to section 512(d) of the DMCA, which addresses information location tools, specificity is emphasized. A service provider qualifies for safe harbor if it lacks actual knowledge of infringement or is unaware of facts suggesting infringement, provided it does not ignore obvious "red flags." For instance, if a copyright owner demonstrates that a site is a clear "pirate" site, the service provider could be found to have knowledge of infringement. Merely seeing celebrity photographs on a site does not imply awareness of copyright status or licensing.
The standard aims to exclude "pirate" directories that blatantly link to infringing content, identifiable by terms like "pirate" in their URLs. Such directories do not operate like legitimate service providers, and evidence of their knowledge of infringing content can challenge their claim to safe harbor. The "red flag" test ensures that service providers are not required to make nuanced judgments about potential copyright issues, but if a site is evidently infringing, they must act accordingly, losing safe harbor protections if they ignore these indicators.
Information location tools are crucial for Internet functionality, allowing users to efficiently find relevant data. Directories, like the Yahoo! Directory, which categorizes over 800,000 online locations and attracts over 35 million users monthly, are particularly effective because of the human judgment applied in their curation. The document establishes a safe harbor from copyright infringement liability for directory providers that adhere to specified notice and takedown procedures. It emphasizes that knowledge or awareness of infringement should only be attributed to directory providers in clear cases of obvious infringement, such as pirate sites, rather than simply from encountering infringing content during directory assembly. The law distinguishes between generalized knowledge of infringement and specific, identifiable instances, aligning with the DMCA's intent to place the burden of policing copyright violations on copyright owners rather than service providers. The DMCA explicitly states that safe harbor protection should not require service providers to monitor for infringement. The effective operation of the DMCA notification system is illustrated by the quick compliance of YouTube in removing infringing content after receiving a mass takedown notice from Viacom. Additionally, in the case of CCBill LLC, the court evaluated the defendants' liability in light of questionable website names suggesting infringement, but reaffirmed that mere circumstantial knowledge does not equate to actual knowledge of specific infringement.
The Ninth Circuit clarified that service providers are not responsible for determining the legality of photographs, emphasizing that they cannot ascertain whether passwords facilitate copyright infringement without specific verification. The District Court in UMG Recordings, Inc. v. Veoh Networks, Inc. noted that if an investigation is necessary to identify infringing material, such circumstances do not constitute "red flags" for liability purposes. Awareness of general copyright infringement does not translate into liability for service providers. In Corbis Corp. v. Amazon.com, Inc., the court required proof that Amazon had specific knowledge of blatant infringement by vendors on its platform, rather than a general awareness of potential infringement risks. Similarly, in Tiffany (NJ) Inc. v. eBay Inc., the court affirmed that eBay's generalized awareness of counterfeit goods being sold on its site was insufficient for contributory trademark infringement liability. The court concluded that a service provider must have specific knowledge of instances of infringement to be held liable, indicating that mere general knowledge does not impose an affirmative duty to act against infringement.
In Tiffany (NJ) Inc. v. eBay, Inc., the court established that mere knowledge of infringement is insufficient to impose liability under the Inwood standard. The DMCA provides a clear safe harbor: if a service provider is notified of specific infringing material or has "red flags" indicating infringement, they are required to promptly remove it. General awareness of widespread infringement does not obligate the provider to actively monitor for violations.
The court referenced several cases, including Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., which primarily addressed contributory copyright liability in the context of peer-to-peer file-sharing networks, a category not protected by DMCA 512(c). In Grokster, the Supreme Court held that distributing a device intended to promote infringement can lead to liability for third-party infringement. However, the Grokster model differs fundamentally from the role of a service provider like YouTube, which does not exist solely to facilitate copyright violations.
Defendants, including YouTube, contended that their platform operates by allowing users to post diverse content while managing infringement complaints through designated agents. YouTube's compliance with DMCA notice-and-takedown procedures, by removing infringing material upon notification, grants it protection from liability for monetary relief concerning direct, vicarious, and contributory infringement, as outlined in the DMCA provisions. The plaintiffs' argument that YouTube's activities fall outside DMCA protection remains contested.
Section 512(c)(1) of the DMCA addresses copyright infringement due to the storage of user-uploaded material on a service provider's system. It critiques the narrow interpretation of "storage" as potentially undermining the statute's intent. The definition of "service provider" in 512(k)(1)(B) encompasses entities that offer online services or facilitate digital communications, suggesting their operations should be protected under the safe harbor provision, particularly as these services arise from user-uploaded content. The Senate Report highlights that service providers routinely perform activities that could expose them to copyright liability, and limiting their liability is crucial for maintaining and enhancing Internet services. Legal precedents, such as Io Group, Inc. v. Veoh Networks, Inc., affirm that facilitating user access does not negate safe harbor protections. The language of 512(c) is interpreted to mean that if copyrighted material is displayed due to user uploads, the service provider is not liable. However, if a provider's actions exceed "storage" and infringe copyright, they are not protected under 512(c). Additionally, to qualify for safe harbor, a provider must not receive financial benefits directly related to infringing activities if they have the ability to control such activities, which necessitates knowledge of specific infringements. There is debate over whether general advertising revenues constitute a financial benefit tied to infringement, but knowledge of specific cases is essential for establishing control.
Providers are not obligated to actively monitor for infringing content but must remove any material flagged with sufficient detail. YouTube's "three strikes" policy, which terminates users after multiple warnings related to DMCA notices, complies with legal requirements despite counting some strikes only once in specific scenarios. Courts, including in Corbis Corp. v. Amazon.com and UMG Recordings, Inc. v. Veoh Networks, have upheld similar policies, indicating that Congress intended for "repeat infringer" definitions to be loosely applied. YouTube's use of the Audible Magic fingerprinting tool automatically removes infringing videos and assigns strikes only upon manual requests from rights-holders, a practice deemed compliant with the law. Concerns regarding YouTube's removal practices, such as only taking down clips specifically identified in DMCA notices, do not impact its safe harbor protections.
The provision in 17 U.S.C. § 512(c)(3)(A)(ii) requires that a notification for copyright infringement must include either a specific identification of the copyrighted work claimed to have been infringed or, for multiple works covered by a single notification, a representative list of those works along with their locations on the site. A generic description, such as "all works by Gershwin," without specifying the works' locations, undermines the required specificity of notice and imposes a burden on the service provider to conduct a factual search, which is prohibited under § 512(m). The following subsection, § 512(c)(3)(A)(iii), mandates that the identification of infringing material must be accompanied by sufficient information to allow the service provider to locate the material, such as a description or copy of the allegedly infringing content and its URL. The court cited UMG Recordings, where insufficient details in DMCA notices failed to meet this requirement. As a result, the defendants were granted summary judgment, affirming their protection under 17 U.S.C. § 512(c) against all claims of direct and secondary copyright infringement, while the plaintiffs' motions for judgment were denied. The parties are instructed to collaborate on any remaining judicial issues and submit a report by July 14, 2010.
