LITIGATION>> ALERT INTELLECTUAL PROPERTY

APRIL 2012

SECOND CIRCUIT REVIVES VIACOM’S MASSIVE INFRINGEMENT CASE AGAINST YOUTUBEThe Second Circuit recently breathed new life into a copyright infringement lawsuit brought by Viacom and other owners of video content against YouTube that alleges over 70,000 instances of copyright infringement that occurred on YouTube.

BACKGROUNDIn 2010, the District Court for the Southern District of New York granted summary judgment in YouTube’s favor, finding that it was immune from the plaintiffs’ claims of copyright infringement as YouTube was eligible for the “safe harbor” protections against copyright infringement available under the Digital Millennium Copyright Act (DMCA) for qualified service providers. The main issue on appeal was whether YouTube could be deprived of the safe harbor protections available under the DMCA if it was generally aware of prevalent infringement on its site, or whether, instead, it would only be deprived of such protections if it had actual knowledge or was generally aware of specific infringing activity.

The Second Circuit agreed with the District Court’s holding that the DMCA’s safe harbor is only unavailable where a service provider has actual knowledge or is generally aware of facts and circumstances of specific infringing activity. However, it did still reverse the District Court’s granting of summary judgment in favor of YouTube, as it found that a reasonable jury could find that YouTube did in fact have the

requisite actual knowledge or general awareness, and sent the case back to the District Court for this determination.

SAFE HARBOR PROTECTIONSThe safe harbors of the DMCA protect a qualifying online service provider from claims of copyright infringement for content posted by users of the service, as long as the service provider, upon becoming aware of the infringing activity, acts expeditiously to remove the infringing material. One of the criteria entitling a service provider to safe harbor protection concerns whether the service provider was aware, specifically or generally, of infringing activity. The focus of the Viacom appeal was whether the general awareness language in one of the safe harbors, referred to as “Red Flag Knowledge,” only required general awareness of prevalent infringing activity on YouTube, or, instead, required general awareness of facts and circumstances of specific infringement.

VIACOM’S COMPLAINTIn Viacom’s case before the District Court, Viacom alleged that between 2005 and 2008, over 60,000 instances

THE BOTTOM LINE

Online service providers need to

continue to have in place procedures

for expeditiously handling DMCA

Take Down Notices, and should

quickly address instances where

they otherwise have knowledge of

specific infringing activity, whether

that knowledge is actual or general.

As to copyright owners, it is in

their best interests to quickly send

out DMCA Take Down Notices of

infringements that they discover to

service providers and to specifically

identify the infringing materials that

they are seeking to have removed

from the service provider’s site.

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of video clips that were posted on YouTube contained unauthorized copies of Viacom’s copyrighted shows, such as SpongeBob SquarePants and The Daily Show. It was not disputed that Viacom sent a massive Take Down Notice to YouTube in 2007 and that YouTube quickly responded by removing all the referenced clips from its site.

LITIGATION

INTELLECTUAL PROPERTY >> ALERT

APRIL 2012

Viacom argued that YouTube, nonetheless, should not be entitled to the DMCA’s safe harbor because it was generally aware of prevalent infringement on its service. Viacom also argued that its Take Down Notice required YouTube to take down all infringements of its content referenced in the Take Down Notice and not just the specific instances of infringement identified in the Take Down Notice.

YOUTUBE’S DEFENSEYouTube, in opposition to Viacom’s appeal, argued that it was entitled to the safe harbor defense as it was not actually or generally aware of the specific infringements claimed by Viacom until it received the DMCA Take Down Notice from Viacom, and that once it did receive the notice, it acted expeditiously in removing all the referenced clips. YouTube further argued that it did not have an affirmative duty to search for all infringements of Viacom’s content, but only those postings it was made aware of by Viacom.

SECOND CIRCUIT’S DECISIONIn its decision of the appeal, the Second Circuit agreed with the District Court’s interpretation of the DMCA’s safe harbor provision. It held that with respect to the Red Flag Knowledge safe harbor provision, awareness of prevalent infringing activity in general is not enough to disqualify a service provider from protection. Rather, to be disqualified from the safe harbor, in the absence of actual knowledge, a service provider must have awareness of facts or circumstances that indicate specific

and identifiable instances of infringement. It went on to explain that actual knowledge is a subjective standard, while general, red flag knowledge is an objective standard.

However, the Second Circuit did disagree with the District Court’s determination that the plaintiffs failed to demonstrate a fact issue regarding the extent of YouTube’s knowledge. The Second Circuit focused on internal YouTube correspondence in which company founders and other upper-level management acknowledged that certain video clips users had uploaded to the website constituted infringement. The Second Circuit held that these emails “raised a material issue of fact regarding YouTube’s knowledge or awareness of specific instances of infringement.” Thus, the Court reversed the grant of summary judgment in YouTube’s favor and remanded the case to the Southern District of New York for a determination of whether the clips referenced in the emails were clips at issue in the lawsuit, and YouTube was therefore aware of specific instances of infringement.

The Second Circuit further held that the common law doctrine of willful blindness “may be applied, in appropriate circumstances, to demonstrate knowledge or awareness of specific instances of infringement under the DMCA,” and instructed the District Court to consider on remand whether there were sufficient facts to demonstrate that YouTube made a deliberate effort to avoid knowledge of specific instances of infringement, which would deprive it of the protections of the safe harbor.

CONCLUSIONThis decision confirms that online service providers can still rely on the safe harbor provisions of the DMCA in defending against copyright infringement claims, even if these providers have general awareness of prevalent infringing activity on their websites. It is general awareness of specific instances of infringement that makes a service provider ineligible for the protections of the safe harbor. What remains unclear is the factual showing a copyright holder will have to make in order to show general awareness of specific infringing activity and to establish an inference of specific knowledge based upon the willful blindness doctrine. We expect that the proceedings before the Southern District upon remand will flesh out some of these issues.

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Holly A. Melton Associate 212.468.4806 hmelton@dglaw.com

or the D&G attorney with whom you have regular contact.

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