The DMCA should allow businesses to ignore their own conclusions about the extent of copyright infringement on their systems until a copyright owner notifies it of individual, specifically identifiable materials on the site, according to YouTube at today’s summary judgment oral arguments at the Second Circuit in Viacom v. YouTube. In other words, service providers wanting to grow their business should be allowed to “wind it up” and let it go unless and until someone forces them to stop what they are doing. Viacom disputes this, saying such an approach ignores the requirements of §512(c) and would leave copyright holders with the “single, grossly inadequate tool” of takedown notices, which can only operate after the fact.
The arguments before the Court were focussed on whether there was a material factual dispute as to YouTube’s protection under §512 DMCA, or whether, construing all the allegations about YouTube “welcoming” copyright infringing clips to the site in the light most favorable to Viacom, the District Court’s judgment should be overturned and Viacom’s $1bn claim should proceed to trial.
The hearing was good natured, for the most part, but the frustration that must be felt by the parties was evident in those listening in in the pews of the Ceremonial Courtroom. Counsel for the Premier League said YouTube’s arguments required content owners to engage in an “endless whack-a-mole” of takedown notices, Counsel for YouTube called Viacom’s arguments on material fact “just plain crazy”, while Counsel for Viacom described YouTube’s argument that Viacom posting promotional material undermined their position on YouTube’s knowledge was “a red herring”.
Viacom came to Court hoping to overturn the District Court’s finding that, as a matter of law, YouTube is entitled to protection under §512, and that Viacom’s claims for direct, contributory and vicarious liability could not proceed. There was no real discussion about Viacom’s claims at this hearing, and even the §512 argument quickly focussed in on its standard of knowledge and the relationship between §512(c) and §512(m). Financial benefit and “right and ability to control activity” got a mention, but what the statute means by “storage” was not explored. Viacom will hope this indicates that the bench was with them on the other points so that further argument was not necessary. Certainly, the judges seemed to wonder how a factual assessment could be avoided, but YouTube was adamant: even if Viacom could prove all its allegations, as a matter of law generalized knowledge of infringements and a hands-off approach to their continued presence on YouTube does not take them outside the DMCA regime. A sort of “we might have created a monster, and ‘welcomed’ others feeding it, but unless Viacom tells us what foods it should not be eating we have no obligation to do anything”.
So, watch this space, though I think it will be some time before the Second Circuit issues its Opinion. The arguments were finely balanced today, but I thought that Viacom prevailed (just) on paper and that Counsel for the Premier League (et al.) was very persuasive, particularly given the high standard required for summary judgment and the bad taste left by some of the documents cited by Viacom in its brief and to which the judges drew attention. There was a sense that summary judgment was just a step too far, even though YouTube may well prevail at a trial. Certainly, no-one disputed that damages would be almost impossible to accurately calculate, which lead to some not-too-subtle hints, including from the bench, that a settlement might be a good outcome.
I will be publishing a detailed note on the case so far, including a review of today’s oral arguments, in the Winter edition of the New York State Bar Association’s IP Journal “Bright Ideas”. This post may also be updated throughout the day so please check back or follow me on Twitter.