The National Pulse

Downloading a File of Copyright Woes

Google’s buyout of YouTube shows federal law still lags behind technology

Posted Mar 18, 2007 6:45 AM CDT
By Wendy N. Davis

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When search engine giant Google bought video-sharing site YouTube for $1.65 bil­lion last No­vem­ber, Google be­came the owner of one of the fast­est-growing and most-celebrated prop­er­ties online.

But Google also might have bought itself an endless parade of copyright infringement lawsuits, thanks to users who continue to upload pi­rated videos to the popular site. Today, YouTube has thousands of homemade video clips, including 10-second fragments of toddlers’ first steps and lengthy wed­ding montages. But these efforts live alongside copy­righted material—professional music vid­eos, segments of TV shows and the like—much of which vanishes from the site in response to takedown notices only to sprout again days later.

The pirated clips have already sparked one lawsuit against YouTube by journalist Robert Tur, who owns the news organization Los Ange­les News Service. He’s suing over 1992 video footage that he shot of the beating of Los Angeles truck driver Regin­ald Denny that surfaced on You­Tube.

No major U.S. entertainment companies have sued YouTube as of late January, but many observers expect such suits to come. Google has set aside more than $200 million to defend against such suits stemming from the YouTube acquisition, according to published reports. You­Tube competitors MySpace, Bolt Me­dia and Grou­per Networks currently face suits by entertainment com­pany Universal Music Group.

Whether those lawsuits will be suc­cessful is unclear, especially because key provisions of the major law governing copyright online, the 1998 federal Digital Mil­len­nium Copy­right Act, have never been tested in court.

“It’s a gray area,” says Denise How­ell, an intellectual property and technology lawyer based in New­port Beach, Calif. “There’s a whole mo­rass of issues involved in these cases,” she says.

For one, Howell says, the 2005 U.S. Supreme Court ruling against peer-to-peer company Grokster indicates that courts are reluctant to protect companies that build their businesses based on copyrighted content. In Met­ro-Goldwyn-Mayer Studios Inc. v. Grokster, 545 U.S. 913, the court held Grokster liable because it induced users to share pirated material.

There’s little question that copyrighted materi­al helped YouTube make its name. In December 2005, the video-sharing site was just a small startup, not even one year old, barely known outside small circles of tech enthusiasts and venture capitalists. Then, someone uploaded a video clip of the Sat­ur­day Night Live sketch “Lazy Sunday,” which became a viral phenomenon. NBC eventually balked, and in Feb­­­ruary 2006, it demanded the skit be removed. But by then, an estimated 5 million people had seen it online. With the Saturday Night Live skit, YouTube became part of the cultural zeitgeist. Last year it was named invention of the year by Time magazine. At the same time, the site also has well-documented and popular legitimate uses, with many users going to YouTube to share home­made videos—an activity that was prohibitively expensive even two years ago.

Intent of the Act

Some lawyers say the innovation that enables such vid­eo sharing is precisely the type of activity that Con­gress meant to protect with the DMCA’s safe harbor provisions. Those measures generally give service pro­viders safe harbor from copyright violations when they remove the content as soon as they’re informed it’s pirated.

“The Internet will break if you don’t have the DMCA safe harbor,” says Jason Schultz, a staff attorney with the San Fran­cis­co-based Electronic Frontier Foun­da­tion. “Congress didn’t want com­panies like Goo­gle to be held liable,” he says, adding that YouTube and others that allow users to post their own con­tent couldn’t exist if a single copyright violation can cost six figures in damages.

However, the DMCA’s section 512(c) requires that service providers not “directly” benefit from the copyright violation. And some lawyers say YouTube and other video-sharing sites might be vulnerable because they serve ads alongside the clips—and gen­erate revenue based on display ads, called impressions, and click-throughs. The more visitors to the site, the more ad impressions, and the more revenue for the company. In fact, Tur has filed a motion asking a judge to issue summary adjudication stating that YouTube can’t rely on the DMCA’s safe harbor because of its ads. Argu­ments in the case were scheduled for late January.

Whether ads constitute a direct benefit is unresolved, says Larry Iser, an entertainment and intellectual property lawyer in Santa Monica, Calif. “Courts haven’t explored at what point Internet service providers begin to derive revenue directly from copyrighted work.” But other lawyers, including the EFF’s Schultz, say that if ad revenue is considered a direct benefit, very few online companies would be able to rely on the safe harbor provisions. “What they’re saying is, ‘No Inter­net companies should exist if they ever make money,’ ” Schultz says.

Further complicating the issue is that companies like YouTube have the ability to target ads. Jeffrey M. Lieben­son, a New York City entertainment and intellectual property lawyer, says courts might well draw a distinction between ads that run alongside every clip on the site and those that are targeted to specific clips. For instance, judges might think that ads for celebrity magazines running alongside Britney Spears clips show that YouTube is directly benefiting from those clips.

Section 512(c) also requires service providers to take down the material once they learn it’s not authorized. But copyright owners complain that no sooner do they serve takedown notices than another user has uploaded the identical clip.

YouTube parent Google did not respond to requests for comment. How­­ever, in a July 20 letter to Tur’s lawyer, YouTube’s lawyers argued it was protected by the DMCA safe har­bor provisions.

“YouTube actively discourages infringing material on its site,” according to the letter to Santa Mon­­ica attorney Francis Pizzulli. The letter added that YouTube “promptly responds to notifications of alleged copyright infringement occurring on its site,” and that it “has regu­larly enforced a policy of terminat­ing re­peat infringers.”

But Pizzulli says YouTube makes it so easy for users to upload and share clips that there’s no way to ensure the material stays off the site. Given that, he says, any takedown by YouTube is meaningless. He and Tur want You­Tube to develop filtering technology to keep pirated material permanently off the site.

Internet and technology lawyer Eric Goldman, a mem­­ber of the Santa Clara University School of Law faculty, says service providers don’t have to go that far under the DMCA. Rather, he says, copyright owners have the obligation to police the Web for violations of their rights.

“Congress has, in the main, put the burden on copyright owners to bear that cost,” he says. But, he adds, “not every court has seen it that way.” Some have sided with the copy­right owners and issued injunctions against service providers whose users have repeatedly posted pirated material.

Sailing out of the safe harbor?

another unanswered question is whether YouTube can still claim the safe harbor protection when the site does more than simply store clips. The DMCA refers specifically to storing content, but YouTube also packages and promotes the clips, allowing visitors to share them or embed them on other Web sites—activities not contemplated when the DMCA was passed.

Whether such activities are legally protected remains to be determined, Liebenson says. “The courts will try to do the right thing, but the courts are dealing with a reality that was written with a very dif­ferent Internet in mind,” he says.

Nor do judges have much guidance on the issue. While some courts have issued high-profile rulings deal­ing with intellectual property online—including A&M Records Inc. v. Nap­ster, 239 F.3d 1004 (9th Cir. 2001), and the 2005 Grokster decision—they have not dealt directly with the key portion of the DMCA that appears to apply to YouTube. Meanwhile, intellectual property lawyers say YouTube has a stronger safe harbor argument under a DMCA provision stating that service pro­vid­ers aren’t liable for information residing on systems at the direction of users, as long as the service pro­viders remove the pirated material once they become aware of it.

But some attorneys also predict that judges’ interpretations of the DMCA will be informed by the perception that some companies are unfairly benefiting from copyrighted content, an impression that could hurt YouTube.

“When companies are able to grow at the expense of infringing activity, and sell themselves for huge amounts based on largely infringing content,” Liebenson says, “I be­lieve the courts will try to balance the rights of both sides.”

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