Viacom’s Copyright Suit against YouTube Again Faces DMCA Roadblocks in the District Court

by Foley Hoag LLP - Trademark, Copyright & Unfair Competition

Following the Second Circuit’s remand order last year on appeal of an initial grant of summary judgment for YouTube, the Southern District of New York has revisited the issues in Viacom’s copyright infringement suit and again found that the Digital Millennium Copyright Act (“DMCA”) shields YouTube from liability for infringing video clips posted by users on its site.  Last year’s Second Circuit decision had laid out specific directives on four topics to be addressed on remand.  In his April 18 opinion, Judge Louis Stanton dutifully addressed the issues one by one, finding in each case that the facts were not sufficient to deprive YouTube of the DMCA “safe harbor.”

Knowledge or Awareness of Infringement of Specific Clips-In-Suit

The Second Circuit agreed with the district court’s initial conclusion that in order to lose the benefit of the safe harbor provided by the DMCA under 17 U.S.C. § 512(c) for “information residing on systems or networks at [the] direction of users,” an online service provider like YouTube must have had either (1) actual, subjective knowledge or (2) should-have-known “red flag” awareness of specific instances of infringement.  In other words, general knowledge or awareness that infringement is likely to be occurring on a service provider’s site is not enough to strip it of DMCA protection.  Because the record contained some communications that seemed to suggest YouTube’s executives had been aware of specific infringing video clips, the Second Circuit remanded for a determination of whether any infringing clips of which YouTube had knowledge or awareness were among the 63,000 clips-in-suit.

As it turned out, neither party could say for sure.  The early communications among executives did not identify clips by specific location or URL, and “neither side possesse[d] the kind of evidence that would allow a clip-by-clip assessment of actual knowledge.”  In the face of this evidentiary vacuum, Viacom argued that, since the DMCA safe harbor was asserted as an affirmative defense, it was YouTube’s burden to prove that it did not have knowledge or awareness.  The district court rejected this argument, relying on the structure of the DMCA itself, and the fact that the statute explicitly places the burden on copyright owners to notify service providers of infringements.  This is a far-reaching and purely legal conclusion that seems likely to end up on the Second Circuit’s docket on another appeal.

Willful Blindness

The Second Circuit held that willful blindness remained a valid concept even in the context of the DMCA’s admonition that service providers have no duty to actively monitor or seek out infringement.  Because the district court had not considered willful blindness in the first instance, the Appeals Court remanded with a directive to consider “whether the defendants made a ‘deliberate effort to avoid guilty knowledge.’” 

The district court’s analysis of willful blindness on remand feels a bit perfunctory.  The court points out that early internal YouTube reports referencing infringing clips of, e.g., “Family Guy” did not identify the specific clips or their location, and that at the time there were over 450 clips on YouTube that might have fit that description.  Relying on the DMCA’s promise that service providers have no duty to actively sniff out infringement, the district court reasoned that YouTube was not required to search those 450 clips to find the ones to which the report referred as infringing.  It seems a bit odd that the Court does not appear to consider the knowledge of the report’s drafter (one of YouTube’s founders) to be attributable to YouTube; presumably he at least knew the location of the specific clips referenced in his report, even if he did not convey  this information in the report.  In any event, none of the conduct the court describes could easily be characterized as a “deliberate effort to avoid guilty knowledge,” so the discussion fails to provide much illumination on the question of what might constitute willful blindness.  It is unclear whether the facts of the case actually lend themselves to an answer, but perhaps the appeals court, if given the opportunity, will see something different worth commenting on to elucidate the issue. 

Right and Ability to Control Infringing Conduct

The Second Circuit also asked the district court to reconsider whether YouTube may have lost its safe harbor by receiving a financial benefit from infringing activity while possessing the “right and ability to control such activity” under 17 U.S.C. § 512(c)(1)(B).  On this point, the appeals court had disagreed with the district court’s original analysis, holding that loss of safe harbor under the right-to-control provision did not require knowledge of specific instances of infringing activity.  The Second Circuit also pointed out, however, that “right to control” must mean something more than the mere ability to take down infringing material, since the DMCA assumes that all service providers have that power.  Without delineating exactly what the right to control might mean, the Second Circuit asked the district court to consider in the first instance whether YouTube possessed it here.

The district court tackled this question in the longest section of its opinion, ultimately concluding that YouTube did not have such control.  The court looked to several cases cited in the Second Circuit’s opinion to hold that “right to control” means something quite substantial, such as influencing, inducing, or participating in infringement.  YouTube’s decision to take down certain kinds of content (such as pornography), its efforts to organize content to facilitate user searches, and its decision to take certain but not all possible steps to assist content owners in locating infringement were not enough, the court ruled, to strip it of the DMCA safe harbor under the “right to control” provision.

Syndication to Third Parties

Finally, the Second Circuit indicated that YouTube’s practice of syndicating videos to third parties – that is, transcoding, or reformatting, certain videos to make them accessible on other devices, such as Verizon Wireless mobile devices – may have removed such selected videos from the realm of content stored “at the direction of users” and therefore from the DMCA safe harbor.  The appeals court therefore remanded for a determination of whether any of the videos selected for syndication were among the clips-in-suit. 

The district court dealt with this question easily as a factual matter: none of the videos syndicated to Verizon were clips-in-suit, and none of YouTube’s other syndication deals involved manual selection of videos.  Rather, for partners such as Apple, YouTube simply transcoded all of the videos on its site.  Because the Second Circuit had held that transcoding itself was not a problem, such syndication without selection was simply a matter of providing access to material stored at the direction of users, and did not undermine YouTube’s safe harbor.

Looking Forward

Viacom has indicated that it plans to appeal again, so it is likely that the Second Circuit will be taking another look at this long-running dispute.  As suggested above, several of the issues involve novel questions of law on which the appeals court may be able to shed additional light.  In the meantime, however, this most recent decision may at least for the time being inspire online service providers to place renewed confidence in DMCA safe harbor protections in appropriate circumstances.


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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