Second Circuit Rekindles YouTube Copyright Infringement / DMCA Safe Harbor Case

Second Circuit Rekindles YouTube Copyright Infringement / DMCA Safe Harbor Case

Yesterday, the Second Circuit issued an opinion clarifying the contours of the Digital Millennium Copyright Act's (DMCA) safe harbor for online service providers. 17 U.S.C. § 512(c) limits liability for copyright infringement that occurs "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."

District Court's Holding

In June 2010, the district court held that YouTube was entitled to DMCA safe harbor protection primarily because it had insufficient notice of the particular infringements in suit. Viacom Int'l, Inc. v. YouTube, Inc., 718 F. Supp. 2d 514 (S.D.N.Y. 2010) [enhanced version available to lexis.com subscribers]. The plaintiffs had alleged copyright infringement based on the public performance, display, and reproduction of approximately 79,000 audiovisual "clips" that had appeared on YouTube between 2005 and 2008.The district court concluded that the "actual knowledge" or "aware[ness] of facts or circumstances" that would disqualify an online service provider from § 512(c)(1)(A) safe harbor protection referred to "knowledge of specific and identifiable infringements." The district court further held that item-specific knowledge of infringing activity was required for a service provider to have the "right and ability to control" infringing activity under § 512(c)(1)(B).

Knowledge and the DMCA Safe Harbor

On appeal, the judgment was affirmed in part, vacated in part. In yesterday's ruling, Viacom Int'l v. YouTube, Inc., 2012 U.S. App. LEXIS 6909 (2d Cir. N.Y. Apr. 5, 2012) [enhanced version available to lexis.com subscribers], the Second Circuit held that the most important question on appeal was whether the DMCA safe harbor required "actual knowledge" or "aware[ness]" of facts or circumstances indicating "specific and identifiable infringements."  In answering this question, the court affirmed the district court's holding that § 512(c)(1)(A)'s safe harbor did require knowledge or awareness of specific infringing activity.

However, the district court erred in prematurely granting YouTube summary judgment. The court held that a reasonable jury could have found that YouTube had actual knowledge or awareness of specific infringing activity on its website. To show YouTube's knowledge or awareness, plaintiffs initially underscored various estimates regarding the percentage of infringing content on the YouTube website (e.g., website surveys estimated that 75-80% of all YouTube streams contained copyrighted material). These estimates were insufficient, standing alone, to create a triable issue of fact as to whether YouTube actually knew or was aware of facts or circumstances that would indicate the existence of particular instances of infringement. However, the court considered internal YouTube communications that referred to particular clips or groups of clips. In light of these communications, a reasonable juror could have concluded that YouTube had actual knowledge of specific infringing activity or was at least aware of facts or circumstances from which specific infringing activity was apparent.

Safe Harbor's "Right and Ability to Control" Provision 

Finally, the court addressed § 512(c)(1)(B)'s provision that an eligible service provider must "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 district court held that "[t]he 'right and ability to control' the activity requires knowledge of it, which must be item-specific." Contrary to the district court's holding, the court refused to import a specific knowledge requirement into the control and benefit provision. The court held that:

importing a specific knowledge requirement into § 512(c)(1)(B) renders the control provision duplicative of § 512(c)(1)(A). Any service provider that has item-specific knowledge of infringing activity and thereby obtains financial benefit would already be excluded from the safe harbor under § 512(c)(1)(A) for having specific knowledge of infringing material and failing to effect expeditious removal. No additional service provider would be excluded by § 512(c)(1)(B) that was not already excluded by § 512(c)(1)(A).

In construing § 512(c)(1)(A), the court favored a fact-based inquiry and concluded that the "right and ability to control" infringing activity required something more than the ability to remove or block access to materials posted on a service provider's website. On remand, the district court was ordered to determine whether there was sufficient evidence to allow a reasonable jury to conclude that YouTube had the right and ability to control the infringing activity and received a financial benefit directly attributable to that activity.

Lexis.com subscribers can view briefs and motions filed in VIACOM INT'L, INC. v. YOUTUBE, INC., Nos. 10-3270, 10-3342

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