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Long Awaited YouTube Decision Broadly Interprets Safe Harbor to UGC Websites

June 29, 2010

On June 23, 2010 the U.S. District Court for the Southern District of New York granted summary judgment in favor of user generated content website YouTube, finding that it qualified for the safe harbor of the Digital Millennium Copyright Act (“DMCA” or “Act”)(17 U.S.C. Section 512(c)) and thus could not be liable for direct or secondary copyright infringement arising out of certain content on the site posted by users that infringed Plaintiff’s copyrights. Viacom International, Inc. et al v. YouTube, Inc. et al (SDNY Case 07 Civ. 2103 and 3582 (LLS); Opinion and Order 6/23/10).

The scope and application of the DMCA safe harbor, which provides potential protection from copyright claims for providers of online services if certain requirements such as an adequate notice and take down system are met by the service provider was challenged by the Plaintiffs. The decision is rooted in the Court’s refusal to interpret various provisions of the Act in a way that could conflict with or limit Section 512(m)(1)’s prohibition on requiring service providers to monitor their service or affirmatively seek out infringing activity.

The Court went on to comment that YouTube’s DMCA notice and take down system “works efficiently.” The decision, which can be expected to be appealed to the 9th Circuit, supports websites that seek to avail themselves of the DMCA safe harbor for user posted content on their sites and provides direction to both these websites and to content owners regarding the process required by the DMCA for giving notice of infringements to sites and of the sites’ obligation upon such notice to remove infringing content and terminate repeat infringers.

As a threshold matter, the Court found that a website such as was a service provider for purposes of Section 512(c) and that the hosting of user-posted videos constituted “storage at the direction of a user” under the Act. Accordingly, it ruled, YouTube may qualify for the safe harbor for user posted videos if it otherwise complied with the DMCA’s requirements.

Next, the Court examined language in Section 512(c)(1)(A)(i) and (ii) that reserve the safe harbor protection for a service provider that “(i) does not have actual knowledge that the material or an activity using the material on the system or network is infringing; ... [and] (ii) in the absence of such knowledge, is not aware of facts or circumstances from which infringing activity is apparent....” The plaintiffs had argued that YouTube’s knowledge that massive quantities of infringing materials were regularly posted on the site by users made YouTube ineligible for the safe harbor.

Although the Court found that “a jury could find that the defendants not only were generally aware of, but welcomed copyright-infringing material being placed on their website[‘]” it found that the legislative history of the Act, and Section 512(m)’s rejection of a duty to monitor for infringing materials, supported a finding that the Act requires “knowledge of specific and identifiable infringements of particular individual [content] items,” not a general awareness that infringements were occurring, before a service provider will be denied the safe harbor. The Court opined: “[t]o let knowledge of a generalized practice of infringement in the industry, or of a proclivity of users to post infringing materials, impose responsibility on service providers to discover which of their users’ postings infringe a copyright would contravene the structure and operation of the DMCA.”

The Court also addressed plaintiffs’ allegation that YouTube did not qualify under Section 512(c)(1)(B), which limits the safe harbor to a service provider that “does not receive a financial benefit directly attributable to the infringing activity, in a case in which the service provider has the right and ability to control such activity....” The Court noted that there may be arguments that “revenues from advertising, applied equally to space regardless of whether its contents are or are not infringing, are ‘directly attributable to’ infringements,” but reasoned that the DMCA’s requirement of item specific knowledge before a service provider has responsibility for user posted content and the Act’s expression that service providers have no duty to monitor for infringing content supported a finding that “[t]he ‘right and ability to control’ the activity requires knowledge of it, which must be item-specific.” Accordingly, the court concluded that since “the provider need not monitor or seek out facts indicating [infringing] activity[,]” Section 512(c)(1)(B) must be read to mean that a service provider “must know of the particular case before he can control it” and that only if a service provider fails to exercise control to take down specifically identified infringing materials should it lose the safe harbor.

The Court also rejected defendants’ position that various aspects of the way YouTube operated its notice and take down procedures were inadequate under the Act and thus disqualified it for safe harbor protection. A service provider is obligated under the Act to terminate repeat offenders. YouTube employs a “three strikes” policy for determining what users are terminated for repeat infringement. It, however, treats as a single strike multiple infringements raised in a single infringement notice from a copyright owner and multiple notices received in a two-hour period. It also only counts as strikes infringements raised by infringement notices and not potential infringements identified by YouTube’s software that removes posted content that includes rights management fingerprints unless the rights holder reviews the potentially infringing video and manually requests its removal. The Court found these practices to be sufficient to comply with the Act.

Finally, the Court held that a service provider is only responsible for removing infringing content brought to its attention by an infringement notice if the location is specifically identified in the notice. The Court found that while Section 512(c)(3)(A)(ii) permits notices to identify a “representative list” of the infringing content on the site, Section 512(c)(3)(A)(iii) requires that such identified material to be accompanied with location information sufficiently detailed to enable the service provider to locate and remove it without having to engage in the type of “factual search forbidden by Section 512(m).”

All companies operating web sites that permit users to post material, including on message boards, should have a registered DMCA agent of service and implement and maintain a DMCA compliant infringement notice and take down policy and procedure. Copyright owners seeking to have their content removed from user posting areas of other party’s web sites need to send take down notices that meet the DMCA’s requirements for such notices. The Intellectual Property Group at Wildman regularly works with both online service providers that invite users to post content via those services and content owners seeking to cease infringing activities on the scope and application of the DMCA and related issues.

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