Maryland Bar Bulletin
Publications : Bar Bulletin : March 2008

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As technological advances are made and such technology is incorporated into products and services entering the marketplace, consumers are given an extraordinary range of access to information and materials that were not previously available at the stroke of a key. For example, consumers are using YouTube™ technology to upload videos onto the Internet for people all over the world to view. Only hours after the live telecast in September 2007 of the comeback of Britney Spears on the Video Music Awards®, consumers could watch a clip of her performance. Consumers are also watching episodes and series finales of popular television shows prior to the official television broadcast. Consumers are uploading a variety of videos, including videos of events happening on our local streets and amateur videos created by consumers themselves.

YouTube is a free video-sharing website and a social-networking site that allows its users to easily upload and share video clips via the Internet. In order to upload videos, YouTube requires users to register; however, unregistered users are allowed to watch most videos on the website. Many of the uploaded videos are amateur videos and clips shared legally among users, but a portion of the YouTube video clips consist of copyrighted material owned by established companies, such as Viacom®, and derivative works of such materials. Reports from late 2006 estimated that YouTube delivered more than 100 million video views every day, with 65,000 new videos uploaded daily. Media behemoth Google® saw the value in YouTube and purchased it for over $1.65 billion dollars.

Viacom, owner of MTV Networks® and Comedy Central®, demanded that YouTube pull more than 100,000 video clips uploaded by users onto the online video-sharing service. Viacom claimed that these video clips had been viewed more than 1.5 billion times. In March 2007, Viacom sued Google and YouTube in the United States District Court for the Southern District of New York, accusing them of copyright infringement, contributory copyright infringement and vicarious copyright infringement and demanding more than $1 billion dollars in damages.

At first glance, YouTube’s posting of material it allegedly knows is copyrighted seems like a simple case. Because a copyright owner has the exclusive right, under 17 U.S.C. § 106, to reproduce, distribute, create derivative works of, publicly perform and publicly display its copyrighted work, it alone generally decides where clips from the shows can appear. Viacom clearly holds the copyrights for South Park®, The Colbert Report™ and other shows.

Despite the likely outcome of the above infringement analyses in favor of Viacom, the Digital Millennium Copyright Act (DMCA), enacted by Congress in 1998, may change the outcome. The DMCA attempts to create a balance between ensuring that copyright holders’ rights are protected and facilitating the robust development and worldwide expansion of electronic commerce and communications in the digital age. Accordingly, Congress created a safe-harbor provision for Internet service providers which specifically states that a service provider is exempt from liability for the infringement of copyright by reason of the storage at the direction of a user of material that resides on a system or network controlled or operated by or for the service provider.

A service provider must follow certain rules to qualify for the safe-harbor provisions. First, a service provider cannot have actual knowledge that the material or activity using the material on the system or network is infringing, and cannot be aware of facts or circumstances from which the infringing activity is apparent. Second, the service provider cannot receive a financial benefit directly attributable to the infringing activity, in a case in which the service provider has the right and ability to control such activity. Third, the service provider, upon notification of claimed infringement, must respond expeditiously to remove, or disable access to, the material that is claimed to be infringing or to be the subject of infringing activity.

The Viacom case may turn on the interpretation of the DMCA provisions, specifically, the “knowledge” requirement. Since the DMCA does not expressly require that the service provider actively monitor the content on its site for potential infringement, Google has a strong argument that it goes above and beyond the requirements of the DMCA because it strictly complies with the notice and takedown procedures of the DMCA. Google argues that it does not have actual knowledge of infringing materials as they are uploaded on a daily basis onto the online video service. With more than 65,000 daily uploads, although Google is working on technology to better track copyrighted material, it may be impracticable to review all of these videos on a daily basis to check for material that may be infringing. In fact, Google complied with Viacoms’s demand that over 100,000 unauthorized clips of their copyrighted programming on YouTube be pulled.

From the other perspective, Viacom claims that YouTube does not qualify for safe-harbor protection under the DMCA. Viacom argues that YouTube has actual knowledge of infringing material on its website, and in the alternative, is aware of facts or circumstances from which the infringing activity is apparent, and that it profits from such activity. Viacom claims that YouTube has done little or nothing to prevent the massive infringement. Viacom argues that the measures taken by YouTube to remove infringing works are inadequate because the infringing videos are reposted by users under different captions immediately afterwards - highlighting the difficulties of placing the responsibility on the copyright owner to monitor the YouTube service.

Laws regarding intellectual property rights continue to evolve to address the continuing changes in technology, but technology is changing faster than the law can keep up. In the end, a balance must be struck between the needs of the public and those of creators of intellectual property and service providers.

Vasilios Peros is a member at the firm of Thomas & Libowitz, P.A. and heads the firm’s Technology & Intellectual Property practice. Munachi O. Nsofor is an associate at the firm of Thomas & Libowitz, P.A.

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Publications : Bar Bulletin: March 2008

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