Viacom v. YouTube: Chipping Away At The DMCA

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It was a major legal battle between copyright owners and online businesses. Then, on 5 April, online businesses won. Mostly. The US appellate court ruling in Viacom International, Inc. v. YouTube, Inc. basically upheld the legal protection that a key US statute grants to online firms. However, the ruling also opened several holes in that protection.

The court ruling is here [pdf].

The Digital Millennium Copyright Act of 1998 [pdf] (often called the DMCA) set up a carefully crafted legal balance between copyright owners and online businesses. Among other things, this federal statute created a safe harbor for online firms: So long as firms meet certain requirements, they are not liable if their users post infringing materials online.

Copyright owners, in return, were given the ability to remove infringing online materials without the expense and delay of court litigation. A copyright owner can simply notify an online firm that one of its users posted infringing material, and the online firm must promptly remove the allegedly infringing material. If it doesn’t, the online firm would lose its safe harbor and face liability for copyright infringement.

Copyright owners initially were satisfied with this legislative compromise. But in recent years, as infringing material proliferated online, copyright owners felt the DMCA wasn’t sufficiently protecting their interests. “They believe it puts too much of the burden of copyright enforcement on copyright owners and too little on internet service providers,” said Prof. Jessica Litman of University of Michigan Law School.

So a number of copyright owners went to court, arguing that the DMCA should be interpreted in a way that requires online firms to be proactive in stopping their customers from committing infringement. The 9th Circuit Court of Appeals rejected this interpretation in a 2011 decision, UMG Recordings, Inc. v. Shelter Capital Partners [pdf]. The 2nd Circuit, in Viacom, largely followed suit.

None Are So Blind

Viacom, like UMG Recordings, holds that the DMCA does not require online companies to act when they know, in general, that many of their users are posting material that infringes copyright. These online businesses are not required to monitor their users’ activities or implement new technological measures to stop infringement. The companies can claim the DMCA’s safe harbor protection unless they know of specific infringing activity and do nothing about it. In other words, a company must act only if it knows that a specific file on its service is infringing.

That interpretation of the DMCA is a huge victory for online businesses. But Viacom added several significant caveats.

Viacom held that an online firm is deemed to know about specific infringements whenever it is “willfully blind” to those infringements. “So a company can’t simply put its head in the sand and still receive DMCA immunity,” said Clifford Sloan, a partner in Skadden, Arps, Slate, Meagher & Flom.

Experts disagree about what constitutes “willful blindness” in the online world. Some say that if a company knows, in general, that many of its users are committing copyright infringement, the company will be willfully blind if it fails to use known technology to stop such infringements.

Other experts say such an interpretation goes too far. “The court is very specific about this. You can’t be willfully blind, but you have no duty to monitor and investigate based on some generalized awareness of infringing activity,” said Corynne McSherry, staff attorney for the Electronic Frontier Foundation, a group that advocates for online civil liberties.

Control Issues

Viacom also weakened another aspect of the DMCA safe harbor. Section 512(c)(1)(B) of the DMCA specifies that the safe harbor does not protect an online firm for infringing material posted by users when the online firm receives “a financial benefit directly attributable to the infringing activity” and “has the right and ability to control such activity.”

The 9th Circuit held, in UMG Recordings, that this provision comes into play only when an online firm knows about a specific infringement. “Until [the online firm] becomes aware of specific unauthorized material, it cannot exercise its ‘power or authority’ over the specific infringing item,” the court stated.

The 2nd Circuit, in Viacom, rejected this specific knowledge requirement. Thus, when an online firm knows, in general, that some of its users have posted infringing material, the firm could wind up losing its safe harbor protection if it has “the right and ability to control” users’ activities.

What constitutes a “right and ability to control”? That’s unclear. The ability to remove materials posted by users doesn’t create such control, according to Viacom. The opinion states “something more” is needed, but fails to specify what.

“The 2nd Circuit doesn’t say how much control an online company must have in order to fall out of the safe harbor. The court ducked that issue completely,” Litman said.

Overall, Viacom was a setback for copyright owners. The court rejected the proposition that online businesses, not copyright holders, must bear the main burden of uncovering and fighting online infringements.

However, the decision opened up some new opportunities to get around the DMCA safe harbor and hold online businesses liable for infringements committed by their users. This, according to many experts, will encourage copyright owners to keep filing suits in the US against online businesses and trying to hold those businesses liable for their users’ infringements.

“If the 2nd Circuit had ruled the same as the 9th Circuit, that would have given copyright owners some pause,” said Prof. Neil Netanel of UCLA School of Law. “Since the 2nd Circuit gave them some openings, copyright owners will continue their fight in the courts.”

Steven Seidenberg is a freelance reporter and attorney who has been covering intellectual property developments in the US for more than 15 years. He is based in the greater New York City area and may be reached at info@ip-watch.ch.

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