Second Circuit YouTube Ruling Will Have Major Impact for Online-Piracy Debate

by Ifrah PLLC

What had been touted as a great victory for Google in particular and for “Internet freedom” in general was just dealt a major blow when the U.S. Court of Appeals for the Second Circuit Court of Appeals overturned a lower court decision in Viacom’s lawsuit against Google and Google-owned YouTube.

Viacom, along with the English Premier League and various film studios and television networks, sued YouTube in 2007 alleging copyright infringement based on YouTube’s broadcast of some 79,000 copyrighted videos. The lower court had thrown out the case, granting summary judgment to YouTube and holding that YouTube was not responsible for the infringing activities at issue. The plaintiffs appealed. The Second Circuit brought new life back to the suit — and new life to the complaints some have made against online piracy, which recently hit the headlines with the introduction of the SOPA and PIPA bills in Congress.

At the heart of the lawsuit is the application of a 1998 federal law, the Digital Millennium Copyright Act, and one of its “safe harbor” provisions. The DMCA was enacted to carry out an international copyright treaty and to protect intellectual property online through anti-circumvention rules. Essential to Internet innovation (and to the growth and success of YouTube) are the DMCA’s safe harbor provisions, which limit liability of Internet service providers (ISPs) for copyright infringement by their users.

It’s been generally understood that, provided the ISP has a notice-and-takedown system in place for receiving complaints of infringing behavior and promptly responds  to those complaints by removing the infringing material, the ISP would be good to go. That general understanding gave online services a major boost. A Wired article celebrating the 10-year anniversary of the DMCA attributed the success of blogs, search engines, e-commerce sites and social networking portals to the safe harbor provisions. And the lower court’s earlier decision in the Viacom-YouTube suit appeared to be an affirmation for “Internet freedom.”

But the recent Second Circuit reversal could mean a major change in philosophy and practice. The court effectively held that a notice-and-takedown regime is not enough to shield an ISP from copyright liability for users’ infringing activities. If it appears that an ISP had knowledge or awareness of specific infringements, it may need to take action before a copyright owner provides notice of the infringing behavior. The Second Circuit asked the lower court to determine whether any specific infringements of which YouTube had knowledge or awareness (as evidenced by internal emails at YouTube) correspond to the clips at issue in these actions. It further asked the lower court to determine whether YouTube made a “deliberate effort to avoid guilty knowledge.”

This latter question of whether an ISP could be held liable for “willful blindness” has not been fleshed out before in the context of the DMCA safe harbor provisions. If the lower court ends up determining that YouTube is on the hook for willful blindness, ISPs’ current M.O. of relying on notice-and-takedown procedures will need to change. Some might argue such a move could stifle innovation and curb “Internet freedom.” But adoption of a willful blindness doctrine may end up benefitting service providers and hosting companies: It could strengthen the argument that new legislation à la SOPA or PIPA is unnecessary as the DMCA already provides sufficient protection against copyright infringement, otherwise known as online piracy.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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