Viacom v. YouTube/Google

The Second Circuit Court of Appeals yesterday set aside a 2010 federal district court decision that had granted summary judgment to YouTube and Google, based on the Digital Millennium Copyright Act's safe harbor for storage at the direction of users. Even though the summary judgment was vacated, the Second Circuit opinion largely affirmed the conclusions the district court had reached on several key issues relating to eligibility for the safe harbor. In doing so, the Court of Appeals rebuffed a number of arguments Viacom made that would have narrowed the safe harbor standards for online service providers. Although the case is far from over, it appears dubious that this remains a billion dollar lawsuit. Viacom v. YouTube and Google, No. 10-3270 (2nd Cir. Apr. 5, 2012)

The practical meaning of the decision may not become clear until there are further proceedings in the Southern District of New York court. Below, we set out the key holdings and some lessons.

The "Knowledge" Condition for the Safe Harbor. To be eligible for immunity from monetary damages for copyright infringement, 17 U.S.C. § 512(c) sets forth certain conditions that must be met by an online service provider (OSP). Among these is that the OSP does not have actual knowledge that the material placed on the OSP's system or network by a user is infringing, and "is not aware of facts or circumstances from which infringing activity is apparent" (the so-called "red flag" test). § 512(c)(1)(A).

The Second Circuit affirmed the district court's ruling that an OSP is disqualified from the safe harbor only if it has knowledge of specific infringing activity, not a generalized awareness that there is or may be infringing activity on the website — even if it is aware that infringing activity is extensive. "Actual knowledge" looks to what the OSP subjectively believed to be the case with respect specific infringing activity. "Red Flag" knowledge (knowledge of facts and circumstances making infringement apparent) does not require any lesser degree of specificity. Red flag knowledge must meet an objective standard, namely, whether the OSP "was subjectively aware of facts that would make specific infringement 'objectively' obvious to a reasonable person." Summary Judgment Reversed on Knowledge Issue. Notwithstanding that the court agreed with YouTube on these important issues, the court held there was a triable issue of fact as to whether YouTube did have specific knowledge in some particular instances sufficient to disqualify it from the safe harbor. This means, not that the Second...