YouTube received a resounding win in a recent decision in the long-running Viacom v. YouTube case (Viacom Int’l, Inc. v. YouTube, Inc., 2010 WL 2532404 (S.D.N.Y. June 23, 2010)).  YouTube moved for summary judgment based on the safe harbor provisions of the Digital Millennium Copyright Act (DMCA), and the court granted summary judgment on all direct and secondary copyright infringement claims despite Viacom’s arguments that the safe harbor did not apply.  Although this is only a lower court decision, it is an important victory for social media sites, as they rely on the DMCA safe harbor to provide protection from copyright infringement claims for content posted by third parties. 

The relevant part of the DMCA provides that an online service provider is not liable for copyright infringement for storing content at the direction of a user, provided that certain conditions are met.  In addition to certain preliminary requirements, such as designating an agent to receive take-down notices and adopting and implementing a repeat infringer policy, these conditions require online service providers to remove or disable access to content if a proper take-down notice is received, if the online service has actual knowledge that such content is infringing, or if it becomes aware of facts or circumstances from which infringing activity is apparent.  The safe harbor will also not apply if the online service provider has the right and ability to control the infringement and derives a direct financial benefit from the infringement.  Viacom argued that the safe harbor did not apply in this case for a number of reasons, but the district court rejected each of those arguments.

Generalized Knowledge Not Sufficient to Trigger Take-Down Obligation

The decision was surprisingly short, given the importance of the case, and most of the discussion centered around the question of whether a generalized awareness that there are infringements on a site is sufficient to trigger the obligation to remove infringing content—whether such generalized knowledge constitutes “actual knowledge” or “facts and circumstances from which infringing activity is apparent” under the DMCA.  Although YouTube promptly removed all clips when it received a specific take-down notice, Viacom argued that the DMCA safe harbor was inapplicable because YouTube was aware of widespread infringement on the site and failed to act to stop it.  After examining the legislative history and relevant case law, the court concluded that mere knowledge of the prevalence of infringing activity is not sufficient to trigger a take-down obligation.  Rather, the court found that the required knowledge must be of specific and identifiable infringements of particular individual items.  This decision is consistent with previous cases, such as Perfect 10, Inc. v. CCBill LLC, 488 F.3d 1102, 1113 (9th Cir. 2007), which have found the threshold for proving the required knowledge to be quite high.  It is also consistent with the recent decision in Tiffany, Inc. v. eBay, Inc., 600 F.3d 93 (2d Cir. 2010), in which the Second Circuit held that generalized knowledge of trademark infringement on a site is not sufficient to impose liability for trademark infringement.

Replication, Transmittal and Display of Videos Does Not Fall Outside of Safe Harbor

The court quickly dismissed Viacom’s argument that the replication, transmittal and display of videos on YouTube did not qualify for the safe harbor because such activities went beyond merely storing content at the direction of a user.  The court held that this was too narrow an interpretation of the statutory term “storage,” citing Io Group, Inc. v. Veoh Networks, Inc., 586 F. Supp. 2d 1148 (N.D. Cal. 2008).

YouTube Reasonably Implemented its Repeat Infringer Policy

The court also did not find anything wrong with the way YouTube adopted and implemented its repeat infringer policy.  The DMCA requires that online service providers adopt, notify users of and reasonably implement “a policy that provides for the termination in appropriate circumstances of subscribers and account holders of the service provider’s system or network who are repeat infringers.”  The statute, however, does not define what those “appropriate circumstances” are or what constitutes a “repeat infringer.”  YouTube adopted a “three strikes” policy whereby it terminated users after three warnings, which were triggered by DMCA take-down notices.  Viacom claimed YouTube did not reasonably implement its repeat infringer policy because of the way it counted strikes (e.g., it counted as only one strike a single take-down notice covering multiple videos, and it did not count as a strike content removed through use of the Audible Magic filtering tool).  The court, however, disagreed, citing UMG Recordings, Inc. v. Veoh Networks, Inc., 665 F. Supp. 2d 1099, 1116, 1118 (C.D. Cal. 2009), which concludes that Congress intended to leave the requirements of the repeat infringer policy and the subsequent obligation of the service provider loosely defined.  The court also noted that even DMCA-compliant notices did not in themselves provide evidence of blatant infringement.  This decision suggests that companies have considerable latitude in adopting and implementing their repeat infringer policies. 

Right and Ability to Control Infringing Activity Requires Specific Knowledge of Activity

Perhaps one of the most interesting holdings in the case, albeit one that has received little attention so far, is that the “right and ability to control the infringing activity” also requires item-specific knowledge of the activity.  There has been little case law so far on the meaning of the “right and ability to control” language, and the requirement that the provider must know of a particular infringing activity before the provider can control it is a fairly narrow interpretation of this requirement. 

This is certainly not the last we will hear from this case, as Viacom has already stated it will appeal.  For now, however, it has eased concerns that the DMCA safe harbor is not an effective tool to protect social media sites from the potential copyright infringement liability inherent in their business models.