The John Marshall Review of Intellectual Property Law Blog
Viacom v. YouTube and the Capricious Contours of the DMCA Safe Harbors
Posted in General, on May 3, 2012, 5:46 pm by Ross Drath, Staff
On April 5, the Court of Appeals for
the Second Circuit filed its highly anticipated decision in
Viacom
International, Inc., v. YouTube, Inc.Legal BackgroundIn 1998,
Congress passed the Online Copyright Infringement Liability Limitation Act
(OCILLA) as part of the Digital Millennium Copyright Act (DMCA).
OCILLA was conceived as a compromise between the interests of the content
industries on one hand, and Internet intermediaries—Internet Service Providers
(ISPs), search engines, and webhosts—on the other.
As such, the Act establishes four “safe harbors,” which exempt Internet
intermediaries from liability for certain types of conduct, provided they
comply with a series of requirements.Section
512(c) of the Act creates one such safe harbor for webhosts that allow users to
store content on their networks. Subsection (1) provides three conditions that
such a webhost must meet in order to exempt itself from liability: The first of
these, the knowledge requirement, is itself a three-pronged, disjunctive
condition: (i) the webhost must not have actual knowledge of specific
infringement, or, (ii) in the absence
of such knowledge, awareness of “facts or circumstances from which infringing
activity is apparent,” or (iii) in
the event that the webhost obtains knowledge or awareness of infringing
activity it must “act expeditiously to remove, or disable access to, the
material.” Provided the webhost complies with the knowledge provisions, it must
also show that, if it had the right and ability to control the infringing
activity, it did not receive a financial benefit therefrom. Finally, the
webhost must also show that it responded expeditiously to takedown notices that
comply with the formal requirements of § 512(c)(3).
Factual Background
In 2005, three former Paypal
employees started YouTube, a website that displays videos uploaded by its
users.
YouTube has since been bought by Google,
and is now the third most-visited website both in the United States and
worldwide.
In 2007, Viacom sued YouTube in the southern district of New York, arguing that
the site should be held liable for its users’ many infringing posts.
The suit was later consolidated with a class action filed by the English
Premier League.
In 2010, the district court dismissed both actions on the ground that YouTube
had complied with the requirements of § 512(c) and was thus entitled to a
complete exemption from liability.
This
post will discuss the Second Circuit’s analysis of the key DMCA provisions:
those that concern the knowledge requirement and financial benefit/right and
ability to control.
Knowledge
YouTube argued, and the district
court agreed, that both §§ 512(c)(1)(A)(i) and (ii) require specific knowledge
of particular infringing files.
This standard has been adopted consistently in a recent line of cases.
In contrast, the plaintiffs submitted that subsection (ii), the awareness or
“red flag” provision, could be satisfied by generalized knowledge of widespread
infringement. If the same level of specificity was required for both (i) and
(ii), they claimed, (ii) would be rendered superfluous.
On this point, the Second Circuit held that
violation of the red flag provision does indeed require specific knowledge of
particular instances of infringement. This reading of the statute does not
render subsection (ii) duplicative of subsection (i), the court argued, because
the existence of actual knowledge is determined by a wholly subjective
standard, whereas the existence of red flag awareness is determined by a
two-pronged inquiry with subjective and objective components: “whether the
provider was subjectively aware of facts that would have made the specific
infringement objectively obvious to a reasonable person.”
This position is well supported by the legislative history.
Though the appellate court
substantially agreed with the district court on the proper interpretation of
the red flag provision, it disagreed with the district court’s application of
that provision to the facts of the case, at least at the summary judgment
stage. The court pointed to several internal e-mails which indicated that
YouTube’s proprietors had identified clips which they thought were infringing,
and had nonetheless declined to remove the clips from their site. Because a
reasonable juror could have decided that these e-mails showed either actual
knowledge or red flag awareness, the court held that the grant of summary
judgment was premature.
Importantly, the court also held
that the DMCA did not abrogate the common law doctrine of willful blindness,
and that the doctrine may therefore be used to support claims of actual
knowledge or red flag awareness. Though it is unclear how successful this claim
will be on remand, the court’s willingness to apply willful blindness in a DMCA
case is notable, as it reinvigorates a debate between the Ninth and Seventh
Circuits that was left unresolved by the Supreme Court’s Grokster decision.
Financial Benefit/Right and
Ability to Control
Creating a split with the Ninth
Circuit,
the Second Circuit reversed the district court’s holding that a service
provider cannot exercise the right and ability to control infringing activity
if it does not have specific knowledge of that activity. This interpretation,
the court held, reads the right and ability to control requirement out of the
statute by equating it with the knowledge requirement.
The court further disagreed with Viacom’s suggested standard, which would have
made the subsection (B) requirement co-extensive with common law vicarious
infringement. Equally flawed, this interpretation would make the same factual
circumstance a requirement of the statute under the provisions that require
removal of noticed material, and a disqualifier under the right and ability to
control provision. Unfortunately, the court declined to provide its own rule,
saying only that a subsection (B) violation would “involve a service provider
exerting substantial influence on the activities of users, without
necessarily—or even frequently—acquiring knowledge of specific infringing
activity.”
Conclusion
In my opinion, this decision is
important for four principal reasons. First, the court confirmed that
generalized knowledge that infringing activity is taking place does not suffice
to support a claim of red flag knowledge. Second, the court indicated that red
flag knowledge could be shown by internal e-mails that identify specific works.
Since, in Shelter Capital, the Ninth
Circuit suggested in a footnote that third-party notifications could constitute
red flags,
plaintiffs now have two identified methods of proving knowledge under §
512(c)(1)(A)(ii). Third, the court reintroduced explicit discussion of willful
blindness into the DMCA debate. And fourth, the court strongly rebuked the
Ninth Circuit’s § 512(c)(1)(B) analysis, but declined to clearly announce its
own interpretation of that provision.
