2nd Circ. to Internet (and YouTube): You can’t knowingly infringe

April 9, 2012

I was surprised back in June 2010 when U.S. District Judge Louis Stanton of federal court in Manhattan granted summary judgment to YouTube and Google in a pair of copyright infringement actions by Viacom and soccer’s Premier League. The case record, after all, was replete with email evidence suggesting that YouTube executives salted their site with videos they knew were illegal, even after they’d received notice that the videos infringed copyrights. YouTube, meanwhile, had alleged that Viacom secretly uploaded its own videos to the site to entrap YouTube. Either way, it seemed to me that the factual allegations demanded an airing, but Stanton instead ruled that YouTube was protected under the safe harbor provisions of the Digital Millennium Copyright Act because (among other things), it had insufficient knowledge of specifically infringing material. The decision was regarded as a boon to Internet content-sharing sites and a powerful endorsement of the DMCA’s safe harbor protection.

Too powerful, according to a two-judge panel of the 2nd Circuit Court of Appeals. On Thursday, Judges Jose Cabranes and Debra Ann Livingston agreed with Stanton that to get past the safe harbor provision, plaintiffs must show a defendant has “actual knowledge or awareness of specific infringing activity.” But they said that a reasonable jury in this case could find YouTube had such knowledge. The judges pointed in particular to YouTube officials’ emails about Viacom and Premier League-owned content, and said a reasonable juror could conclude from that evidence that YouTube “was at least aware of facts or circumstances from which specific infringing activity was apparent.” As Jon Stempel reported for Reuters, the appellate panel remanded the case to Stanton to determine whether YouTube knew infringing material was posted on the site.

The most significant aspects of the ruling, according to Premier League counsel Charles Sims of Proskauer Rose, are the 2nd Circuit’s consideration of willful blindness — an issue of first impression, according to the appeals court — and a defendant’s “right and ability to control” infringing content under the DMCA. The plaintiffs had asserted that YouTube had to be willfully blind to ignore allegedly infringing material on its site. The 2nd Circuit noted that the DMCA doesn’t mention willful blindness, but applied its own precedent from trademark cases to conclude that “the willful blindness doctrine may be applied, in appropriate circumstances, to demonstrate knowledge or awareness of specific instances of infringement.” Whether the doctrine applies in this case, the 2nd Circuit said, is a question for Stanton on remand.

So is the question of YouTube’s “right and ability to control” the posting of infringing material by video uploaders. Stanton had ruled in the district court that Viacom and the Premier League hadn’t shown YouTube’s “item-specific” knowledge of infringement. The 2nd Circuit said that was the wrong standard, but it didn’t articulate a new standard. Instead, the appeals judges said it’s up to Stanton to determine “whether the plaintiffs have adduced 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.”

“We think we’re very strongly positioned on both willful blindness and right to control,” Sims told me. “YouTube has extraordinary systems in place to identify works that come over its portal. When they already have a takedown notice for this work … they are being willfully blind if they don’t take it down.”

Sims said the plaintiffs’ strongest case on remand will be alleging that YouTube refused to take down reposts of works for which it had previously received takedown notices. That’s why, according to him, Internet sites shouldn’t panic about the 2nd Circuit’s ruling. YouTube has the ability to control its content, Sims said, and when it’s on notice that the content is infringing, it has an obligation to take it down. “There’s no big dispute about what the law is,” Sims said.

YouTube and Google counsel Andrew Schapiro, who moved from Mayer Brown to Quinn Emanuel Urquhart & Sullivan after arguing the case at the 2nd Circuit, referred me to Google, which sent a statement:

The Second Circuit has upheld the long-standing interpretation of the DMCA and rejected Viacom’s reading of the law. All that is left of the Viacom lawsuit that began as a wholesale attack on YouTube is a dispute over a tiny percentage of videos long ago removed from YouTube. Nothing in this decision impacts the way YouTube is operating. YouTube will continue to be a vibrant forum for free expression around the world.

Viacom counsel Paul Smith of Jenner & Block didn’t respond to a phone message.

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