Strike Three, Viacom

If at first you don’t succeed, Viacom, try try again?  On April 18, 2013, Judge Louise Stanton of the 2nd Circuit District Court effectively wrote the last chapter in the epic one billion dollar copyright battle between Viacom and YouTube.

In the case, the court disposed of the remaining issues left undecided from the April 5, 2012, New York Court of Appeal decision that had essentially dismissed most of Viacom’s case. Viacom had brought the appeal following a previous unfavorable 2nd Circuit decision, which was also decided by Judge Stanton (see here and here for our previous posts on this case).  Viacom had alleged that hundreds of thousands of unauthorized clips of its programming, such as SpongeBob SquarePants and The Daily Show, were readily accessible on YouTube, thereby infringing its copyright. In the most recent decision, the 2nd Circuit District Court considered: (1) Whether YouTube had knowledge of the infringing activity; (2) Whether YouTube was willfully blind to the infringing activity; (3) Whether YouTube had the “right and ability to control” the infringing activity; and (4) whether YouTube could claim protection under “safe harbor” pursuant to Section 512(c) of the Digital Millenium Copyright Act (“DMCA”).  In sum, Judge Stanton found no copyright infringement on the part of YouTube with regard to any of the remaining issues.

Issue 1: Did YouTube have knowledge or awareness of any specific infringement?

On this first issue, Viacom was challenged to bring forth evidence that YouTube had actual knowledge of the 63,060 infringing clips-in-suit. Put another way, Viacom had to demonstrate not only that YouTube had general knowledge of infringing activity on its website, but that YouTube knew exactly which clips were infringing Viacom’s copyright. On this point, Viacom conceded that it did not have evidence to support knowledge of specific infringement. Viacom argued, however, that this did not matter as the onus would be on the defendant to establish each element of its affirmative defence, including lack of knowledge or awareness, if it wished to apply the statutory “safe harbor” defence.  As such, Viacom reasoned, it would be unlikely that YouTube could demonstrate it had no knowledge or awareness whatsoever of infringement, given the high volume of copyright-infringing material uploaded daily onto YouTube.  On balance, the judge held that Viacom’s argument was “extravagant” and that per Congress, the DMCA was enacted specifically to protect service providers from the very burdensome task of monitoring for infringing material uploaded by users.  Judge Stanton held that it was both fair and reasonable, under the DMCA, to place the burden of identifying infringing material on the copyright owners and that Viacom failed in establishing specific infringement by YouTube.

Issue 2: Was YouTube willfully blind to specific infringements?

On this second issue, the court explained that the threshold for willful blindness depended on the particular law governing the factual situation. Specifically, for cases under the DMCA, the threshold for willful blindness and subsequent disqualification from “safe harbor” is blindness to “specific and identifiable instances of infringement”.  In the case at bar, the court did not find that Viacom provided specific locations of infringement, thus leaving YouTube to find the infringing clips on its own.  Under these circumstances, it could not be said that YouTube was willfully blind towards infringing activity, pursuant to the “safe harbor” provision of the DMCA. The holding on this issue is nicely summed up in a footnote of the decision: “Plaintiffs often suggest that YouTube can readily locate the infringements by using its own identification tools. [YouTube] has no duty to do so.”

Issue 3: Did YouTube have the “right and ability to control infringing activity” per § 512(c)(1)(B) of the DMCA?

On this third issue, the court defines the ability to “control infringing material” as requiring “’something more’ than just the ordinary power over what appears on the provider’s website.”  As such, the fact that a provider may be able to remove or block access to material posted is not sufficient to meet the threshold of control set out in § 512(c)(1)(B) of the DMCA. The governing principle on the “right and ability to control infringing activity” is set out as follows: “Clear knowledge of the prevalence of infringing activity, and welcoming it, does not itself forfeit “safe harbor”. To forfeit that, the provider must influence or participate in the infringement.”  Under this governing principle, the court held that YouTube did not meet the threshold for “influence” or “participation,” in contrast to Perfect v Cybernet – the only case to date in which a service provider was held to have met the required “something more” by strictly controlling user experience on its website and refusing access to users who failed to comply with its instructions.

Issue 4: Did YouTube syndicate the clips-in-suit to a third party, and if so, did such syndication occur “by reason of the storage at the direction of the user” within the meaning of § 512(c)(1) of the DMCA, so that YouTube may claim safe harbor?

On this fourth and last issue, the court quotes YouTube’s brief in reasoning that “syndication agreements merely give users alternate ways to view videos that users have stored on YouTube’s system.”  As such, the court held that syndication merely provides access to material uploaded by users and does not imply that YouTube manually selected the infringing materials delivered over mobile and other systems, thus allowing the service provider to claim protection of “safe harbor”.

Conclusion

Does the DMCA tend to favour the service provider over the copyright holder?  In my opinion, this most recent decision reflects a broader, ongoing struggle to protect the commercial value of artistic production while allowing service providers like YouTube a certain amount of lee-way to develop their platforms for users. Enacted in 1998 under the Clinton Administration, the DMCA was drafted to comply with the World Intellectual Property Organization (WIPO) Copyright Treaty and the WIPO Performances and Phonograms Treaty.  The “safe harbors” provision is, arguably, one of the more controversial aspects of the DMCA.  On the one hand, as outlined in the discussion in Viacom v Youtube, it allows for service providers to develop their platforms for third-party users without the overhanging risk of copyright liability.  In this manner, user-generated content is given the space to flourish, hosted by various online platforms.  However, the “safe harbors” provision can also place a tremendous burden on copyright holders to monitor these service providers for potential infringement of their intellectual property.  Short of having round-the-clock staff monitor sites such as YouTube, it is likely that copyright infringement would occur on a regular basis.  Perhaps it is too early to take a side, but as it now stands, under the DMCA, copyright holders must do much of the legwork in protecting their creative productions.

Recent amendments to the Copyright Act under Bill C-11: The Copyright Modernization Act (“CMA) have propelled Canadian IP legislation into the twenty-first century, as the last modification occurred in 1997.  Some would argue that the “enabler provisions” of the amended legislation, along with increased tightening of the digital locks provisions, could potentially have led to a different outcome for Viacom, had it been a Canadian case.  Under the CMA, the service provider is liable for copyright infringement merely if it “enables” copyright infringement, which is a less onerous burden to meet for the copyright holder than that of “specific knowledge” of copyright infringement under the DMCA.  On the other hand, the “enabler provision” under the CMA is being applauded for encouraging innovation in digital products from the copyright holder’s perspective.  Barry Sookman argues that these new amendments, which are in line with WIPO Treaties standards, will allow Canada to become a bigger player in the twenty-first century by expanding legal protection for developers and copyright holders.  Looking forward, as the digital and legal-scapes develop and expand, the Canadian Federal Court may find a homegrown Viacom v Youtube on its docket soon rather than later.

Ying Cheng is an IPilogue Editor and a JD Candidate at Osgoode Hall Law School.

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