YouTube, Google, and Viacom–a brief overview of secondary liability March 22, 2010
Yesterday, we recorded a special edition of our podcast and devoted approximately 2/3 of the show to discussing the Viacom v. YouTube/Google arguments which were presented in their respective cross-motions for summary judgment. One of the most important pieces of the litigation is whether the DMCA section 512(c) safeharbor will apply to Google and whether Google might be secondarily liable for copyright infringement. I felt it would be helpful to provide a quick and dirty guide to some of the liability principles at stake in the case.
Secondary liability, or “indirect liability,” attaches liability to certain intermediary entities and other persons who are not participating in an infringing act, but are somehow contributing, profiting, or inducing another person’s act of infringement. For example, this might apply to a person who owns and operates a website for the sole purpose of facilitating copyright infringement of song recordings–that operator is not downloading or uploading the sound recordings herself, and therefore is not directly infringing any copyrights, but is providing a medium for others to participate in infringing activities. For you legal history afficionados, secondary liability dates has been recognized in various forms by courts at least as far back as the late 19th century (see e.g., Fishel v. Lueckel, 53 F. 499 (S.D.N.Y. 1892) (recognizing liability for profiting from infringement as a joint tortfeasor)). Despite this, secondary liability has still not been codified in the Copyright Act. Consequently, across federal jurisdictions the standards of secondary liability vary a little from court-to-court. Nonetheless, secondary liability can be parsed into two categories: (1) contributory liability and (2) vicarious liability.
Scholars and practitioners devote hundreds of pages to discussing contributory and vicarious infringement. I’m not here to make your eyes bleed. So, please consider the following points a very broad overview:
Contributory Infringement: When a person, who has knowledge of a direct instance of infringement (e.g., another person uploading a unauthorized video), materially contributes to, *or*, actively induces the infringing conduct.
By a Materially Contribution: The contribution generally needs to add something to the original act of infringement. For example, some courts have ruled that adding either software, hardware, and webspace, to provide a conduit to unlawfully exchange copyrighted works is enough. In another case, the Ninth Circuit held the operators of a swap meet where independent vendors sold unauthorized copies of copyrighted works was sufficient to survive a motion to dismiss. Note, however, that under a contributory liability theory, a defendant must have knowledge that an act of infringement is occurring to be liable.
Or, by Inducement: In 2005, the Supreme Court held in MGM v. Grokster that a person is liable for contributory infringement when she “distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement.”
Vicarious Infringement: When a person has the right and ability to supervise an infringing activity and derives a direct financial interest from the infringing activity. Some courts have interpreted that this does not necessarily mean earned revenue, merely deriving some form of financial interest or financial incentives for tolerating unlawful from the infringing activity may suffice. For example, check out the Napster litigation from 2001: A&M v. Napster, 239 F.3d 1004 (9th Cir. 2001).
As a final note, it’s important to remember that both the contributory and vicarious liability theories require there to be an original act of direct infringement. In other words, there has to be another individual who violates the Copyright Act by directly misappropriating the exclusive rights of a copyright owner.
Enter Google, YouTube, and Viacom. Among the most interesting factoids which have surfaced from the summary judgment motions in the Viacom v. YouTube case, is that prior to Google’s acquisition, the founders and executives at YouTube were aware that the website was being used to upload unauthorized copyrighted content. Viacom’s motion quotes email excerpts from the executives who discuss the importance of allowing users to upload arguably infringing content because it was driving up website traffic, making the site an attractive acquisition target based on traffic metrics. Along one line of reasoning, the executives were inducing users to upload infringing content and may have actually participated in some of this. This would be the “smoking gun” argument. See, once YouTube was acquired by Google, Google has arguably assumed liability from actions which took place before the closing date–this is a very common occurrence in any corporate acquisition, but is often subject to the language in the agreement (buyer and seller can negotiate for certain terms and indemnity of liabilities).
What remains unclear, to some extent, is the amount of knowledge needed by the operators to impute secondary liability beyond the DMCA safeharbor. For instance, just because the YouTube executives knew that some videos were likely to have been uploaded without authorization that doesn’t mean they *actually* knew they were unauthorized. Consider this theory plausible deniability. Unless the executives took the time to check with the actual copyright owners, or unless they received a takedown notice or cease and desist notice, they arguably didn’t know with certainty that a particular upload was expressly unauthorized.
Here’s where the DMCA section 512 safeharbor comes into play. In the past on our podcast and blog (here’s a more thorough overview I wrote), we’ve beaten to death the 17 U.S.C. 512(c) language, but it’s helpful to take a fresh look to see how the precise wording of the statute comes into play:
(c) Information Residing on Systems or Networks At Direction of Users.—
(1) In general.— A service provider shall not be liable for monetary relief, or, except as provided in subsection (j), for injunctive or other equitable relief, for infringement of copyright by reason of the storage at the direction of a user of material that resides on a system or network controlled or operated by or for the service provider, if the service provider—
(A)
(i) does not have actual knowledge that the material or an activity using the material on the system or network is infringing;(B) 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; and(C) upon notification of claimed infringement as described in paragraph (3), responds expeditiously to remove, or disable access to, the material that is claimed to be infringing or to be the subject of infringing activity.
Note 512(c)(1)(A)(i)-(iii), in bold above. That’s the statutory language concerning the level of knowledge that potentially implicates a service provider with infringement by a user. Of particular interest to me is (ii), which states that if a service provider is aware of “facts or circumstances from which infringing activity is apparent,” the service provider cannot take advantage of the safehabor. Depending on how the court applies this language, Google might find themselves in hot water based on the email exchanges of the previous YouTube executives. However, it’s not black and white. Just last year, we saw the UMG v. Veoh case, in which a California Federal Court ruled that a “blanket notice” for the purposes of DMCA takedowns was insufficient to shift the burden of copyright policing to Veoh. This is important, because if the Viacom and YouTube court decides to follow this reasoning, it gives YouTube some of the aforementioned plausible deniability– if there were no notices specifically indicating the exact uploads which were infringing, it might be insufficient to impute actual knowledge on YouTube.
Google has separately argued in their motion that Viacom participated in stealth marketing tactics which would have made it very difficult to determine whether an upload was in fact authorized by Viacom but uploaded by another person. Additionally, Google points to evidence that Viacom had disparate internal policies under which they allowed certain unauthorized videos to remain on YouTube, without flagging or sending any notices to YouTube. This obviously would make it much more difficult for the YouTube executives to independently determine an upload to be infringing without notice. You simply can’t act as a filter if you don’t actually know who is responsible for a particular file.
I do think this is a factually fascinating case and it’s too close to speculate what the court is likely to do. There’s also more detail worthy of discussion on this case that would make this post pages and pages long. Check out the plethora of commentary from the legal blogosphere for additional takes on this case. It’s also worth listening to our show (which will post tonight, around 12AM EST) and hearing myself, Ben, and Dominik debate the merits from different points of view. We dove into much deeper detail on the specifics.
Other Bloggers’ takes:
Ben Sheffner (Copyrights & Campaigns)
Eric Goldman (Technology Law and Marketing)
EFF (Deeplinks)
Mike Masnick (TechDirt)
Nate Anderson (Ars Technica)
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