Copyhype

The briefs for Viacom’s appeal against the District Court’s decision in its lawsuit against YouTube have been filed. Last June, the Southern District of New York granted the video hosting site’s motion for summary judgment, saying the DMCA’s safe harbor immunizes YouTube from liability for copyright infringement by its users.

The crux of the case involves the interpretation of 17 USC § 512(c)(1)(A) and §512(c)(1)(B) — whether YouTube had actual knowledge of infringing works that were uploaded and whether it had the right and ability to control the uploading of infringing videos.

Today, however, I wanted to look at one of the other, and (to me, at least) more interesting issues raised on appeal. Does YouTube even qualify as a “service provider” under the DMCA in the first place?

Title II of the DMCA, the Online Copyright Infringement Liability Limitation Act, provides “safe harbors” for online service providers that limit their liability for copyright infringement arising out of specific situations. The one YouTube and most user-generated content sites claim protection under regards “information residing on systems or networks at direction of users” and is found in §512(c). Specifically, 17 USC § 512(c)(1) provides that “A service provider shall not be liable for monetary relief, or, except as provided in subsection (j), for injunctive or other equitable relief, for 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”.

Viacom argues that YouTube’s activities go beyond the collateral scope of the storage functions described in §512(c). If the 2nd Circuit agrees, this means YouTube wouldn’t receive the DMCA’s harbor no matter what “knowledge” or “right and ability to control” mean — its liability would be analyzed under traditional secondary liability doctrines. And some have suggested that, absent this safe harbor, there is a likelihood that YouTube could end up liable for copyright infringement of its users — at least as far as its operation during the time that is at issue in this lawsuit. ¹Trevor Cloak, The Digital Titanic: The Sinking of YouTube.com in the DMCA’s Safe Harbor, Note, 60 Vanderbilt Law Review 1559, 1573-78 (2007).

Under Construction

The internet looked a lot different in 1998 when Congress passed the DMCA. The amicus brief filed by the Washington Legal Foundation provides a good look at the differences:

At that time ‘service providers’ were generally thought of as the ‘doorways’ to the Internet — the means by which individual users accessed the Internet to exchange electronic mail, view websites, and download files.  Common service providers in the 1990’s were America Online, Compuserve, and individual educational and work institutions.

User content was typically located on that user’s individual web page, which was ‘hosted’ on the service provider’s computer systems.  In this manner, a user’s individual web page was made available to other Internet users around the world.  These individual web pages often contained copyrighted material belonging to others — at that time mainly photographs and music recordings.

Content owners, to protect their intellectual property, brought lawsuits against both the website owner (often an individual) for placing the content on the web page and the service provider for ‘hosting’ the web page.  Service providers were thus faced with exposure to copyright liability solely by virtue of their desire to provide to individuals the ‘doorway’ to the Internet.

The problem confronted by Congress in the 1990’s with respect to the Internet and intellectual property rights was how to strike the balance between protecting a content owner’s rights, on one hand, and encouraging service providers to continue to offer Internet access on the other.  Congress thus sought, through the DMCA, to address this problem.

As stated in the floor debates: ‘One of the things we do here is to say:  ‘If you are on-line service provider, if you are responsible for the production of all of this out to the public, you will not be held automatically responsible if someone misuses the electronic airway you provide to steal other people’s property. There is a balance here.  We want to protect property, but we do not want to deter people from making this [the Internet] widely available.  We have a problem here of making sure that intellectual property is protected, but we do not want freedom of expression impinged upon'” …

The DMCA was enacted with that balance in mind:  encouraging access to the Internet while at the same time protecting intellectual property.

It’s easy to forget how much has changed since then. According to an article on Buzzle.com, the top 10 websites in 1997 were:

1. Geocities
2. Yahoo and Yahooligans, Yahoo Sports and My Yahoo
3. Starwave Corporation – Where More People Click
4. Excite, Magellan and City.Net
5. PathFinder, and Time/Warner and CNN sites: Warner Bros., HBO, DC Comics, Extra TV, Babylon5, CNN , CNN Financial Network and AllPolitics
6. AltaVista Search Engine
7. AOL Member Home Pages
8. CNET, Search.Com, News.Com and Download.com
9. The New York Times on the Web
10. Ziff Davis and HotFiles

Many of the things we take for granted on the internet today had yet to arrive back then. Wikipedia launched in 2001. Social networking sites didn’t take off until after the new millennium — Friendster launched in 2002, Myspace in 2003, Facebook in 2004. Terms like “blog” and “Web 2.0” were years away from becoming over-used. And, of course, YouTube itself didn’t launch until 2005.

But perhaps nothing illustrates the evolution of the internet from the time of the DMCA to now better than this note from the Working Group on Intellectual Property Rights White Paper. Established as part of the Information Infrastructure Task Force (IITF), the Working Group was charged with examining the adequacy of IP law in the online world and recommending any changes needed. It released a preliminary draft of its report (the “Green Paper”) in 1994, and the final draft (the “White Paper”) in ’95; the DMCA was largely the end result of the IITF’s work.

The note in the White Paper explains to readers how to access copies of the Green Paper and other IITF documents online:

“The IITF Bulletin Board can be accessed through the Internet by pointing the Gopher Client to iitf.doc.gov or by telnet to iitf.doc.gov (log in as gopher).  The Bulletin Board is also accessible at 202-501-1920 using a personal computer and a telephone modem.” ²White Paper, pg. 4, n.11.

This comparison of the internet at the time the DMCA was passed and now illustrates the challenges courts face in interpreting its provisions. Despite being little more than a decade old, the law is called upon to deal with circumstances largely unforeseen when it was written.

Service Provider or Content Provider?

Viacom argues in its brief that “YouTube’s performance and licensing of user-uploaded copyrighted content are not the type of storage activities that the DMCA immunizes from liability.” ³The entire argument is found at pp. 49-55 of the Opening Brief for Plaintiffs-Appellants. The “storage” services protected by the safe harbor of § 512(c) were meant to cover things like “server space for a user’s web site, for a chatroom, or other forum in which material may be posted at the direction of users” — the safe harbor doesn’t “suspend liability for other [non-storage] acts in which the service provider might engage with respect to the user-posted content.”

Viacom points to several YouTube functions that it considers “non-storage acts.” (1) “YouTube transcodes user uploaded material into a standard format for display, distribution, and performance of the content on its website and third-party platforms”; (2) YouTube’s playback function, where a visitor can view a video stored by another user on a “watch” page containing an embedded video player; (3) the automatic recommendation of additional videos that YouTube displays after playback of a video has finished; and (4) YouTube’s licensing of uploaded videos to third parties, such as Verizon Wireless.

“Congress did not intend to give content-based entertainment enterprises an unfair advantage over traditional media merely because they operate on the Internet,” says Viacom, casting the safe harbor as one intended to apply to “passive providers of storage” that provide “server space for a user’s web site, for a chatroom, or other forum in which material may be posted at the direction of users.”

But YouTube, as Viacom argues, “is an integrated media business that ‘compare[es] [it]sel[f] to, say, abc/fox/whatever.'” The functions YouTube engages in are done “not to facilitate storage, but to facilitate activities that are necessary for wide public dissemination of the works” and “performed ‘as a course of its normal operation … uninstructed by the user.'”

Bruce Lehman, who chaired the previously-mentioned Working Group on Intellectual Property Rights and helped develop the DMCA, adopts a similar argument in the amicus brief filed by the International Intellectual Property Institute:

Companies who receive their value from hosting or otherwise enabling the spread of infringing content are not service providers — and they certainly are not proving a service that contributes to the ‘speed and capacity of the internet.’ … These companies provide content.

The defendant’s stated goal was to create a media business ‘just like TV.’ … It succeeded: users who upload media provided programming which the defendant licensed, controlled, and broadcasted in order to receive ad revenue. This business model is not new, unique, or worthy of a special status under the law simply because it disseminates its media over the Internet.

Lehman relies on the Working Paper to support a distinction between companies providing internet infrastructure — which are protected by the DMCA safe harbors — and “content providers.” YouTube, the brief argues, is a content provider. It calls itself a “consumer media company.” It provides “user access to its servers to upload video files” and “reformats the videos and broadcasts them over its website for its customers” in order to” create a business model which was ‘just like TV.'”

Such a model depends on advertising revenue, which depends on “attracting the greatest possible viewership”; high-value, infringing content draws a lot of traffic, giving YouTube an incentive to do as little as possible to prevent users from uploading this type of content. In short, a “content-based business model” like YouTube forecloses protection under the DMCA.

Interpreting the Statute

Viacom’s interpretation of the storage activity safe harbor was rejected by the District Court. The court relied largely on how the provision was interpreted by other courts dealing with similar situations to come to its conclusion.

In Io Group v. Veoh Networks, the plaintiff argued that a video-hosting site very similar to YouTube was engaged in acts beyond the storage activities protected by the DMCA. But the court disagreed based on the “structure and language” of the safe harbor provisions:

The statute itself is structured in a way that distinguishes between so-called “conduit only” functions under Section 512(a) and those functions addressed by Section 512(c) (and other subsections as well). Perhaps most notably, OCILLA contains two definitions of “service provider.” 17 U.S.C. § 512(k). The narrower definition, which pertains only to service providers falling under Section 512(a), “means an entity offering the transmission, routing, or providing of connections for digital online communications, between or among points specified by a user, of material of the user’s choosing, without modification to the content of the materials as sent or received.”

By contrast, no such limitation as to the modification of material is included in the broader definition of “service provider,” which the parties agree applies to Veoh. Instead, “the term ‘service provider’ means a provider of online services or network access, or the operator of facilities therefor, and includes an entity described in subparagraph (A).” Had Congress intended to include a limitation as to a service provider’s modification of user-submitted information, it would have said so expressly and unambiguously. (Citations removed.) ⁴586 F.Supp.2d 1132 (ND Cali 2008).

A different court came to the same conclusion in UMG Recordings’ lawsuit against Veoh:

Under UMG’s interpretation, § 512(c) would apply only to operational features that provide or constitute storage—and nothing more. But there is no language in § 512(c) that so limits its applicability. Congress did not provide merely that “a service provider shall not be liable for storing material at the direction of the user” or that “a service provider’s liability shall be limited only for conduct that is storage.” Instead, as the language makes clear, the statute extends to functions other than mere storage; it applies to “infringement of copyright by reason of the storage at the direction of a user ….” In short, the narrow construction of the statute that UMG advocates is not the one Congress enacted. (Citation removed.) ⁵UMG Recordings v Veoh Networks, 620 F.Supp.2d 1081, 1089 (CD Cali 2008).

The court in UMG Recordings also accepted Veoh’s argument that the “by reason of the storage” language in § 512(c) is “broad causal language that is clearly meant to cover more than mere electronic storage lockers.” Its reasoning was adopted wholesale by the Viacom court to reach its conclusion. Said UMG Recordings:

Common sense and widespread usage establish that “by reason of” means “as a result of” or “something that can be attributed to ….” So understood, when copyrighted content is displayed or distributed on Veoh it is “as a result of” or “attributable to” the fact that users uploaded the content to Veoh’s servers to be accessed by other means. If providing access could trigger liability without the possibility of DMCA immunity, service providers would be greatly deterred from performing their basic, vital and salutary function—namely, providing access to information and material for the public.

The Viacom court described those acts “attributable” to a user uploading content as within the “collateral scope of ‘storage’ and allied functions.” Anything outside that collateral scope would fall outside the protection of the safe harbor and have to be analyzed under traditional doctrines of secondary liability, but in this case, YouTube’s “replication, transmittal, and display of videos” are within the provision’s scope.

The Issue on Appeal

The case law doesn’t seem to give Viacom much room to argue on this point, but keep in mind that the above-cited cases are only district court cases. Viacom argues that the lower court’s broad interpretation of the “by reason of” language goes against Supreme Court precedent that interprets the same language in other contexts as implying some form of proximate causation rather than the mere “but for” causation embraced by the lower court.

Moreover, YouTube notably doesn’t address the fact that it actually licensed user content to third parties in its reply brief; if anything would fall outside the collateral scope of storage functioning, I would think this type of act would.

We may get a preview of how successful Viacom ultimately is on this issue before the 2nd Circuit issues its ruling. The 9th Circuit is currently hearing UMG Recordings appeal in the case discussed in the previous section. UMG advances the same argument in its brief. Considering the similarities between the two cases, and the fact that the UMG appeal began months before Viacom’s appeal, the 9th Circuit’s eventual holding could forecast the willingness of appellate courts in narrowing the currently accepted scope of § 512(c) at the district court level.

Left unsaid at the district court level is any sense of the “outer bounds” of what service providers can do with material stored at the direction of users and remain within the DMCA’s safe harbor. Each part of the statutory language has been given its broadest meaning. A service provider obviously has to meet the other requirements of the DMCA to be immune from liability — but considering how broadly the Viacom court read the “knowledge” and “right and ability to control” requirements, the DMCA seems to be stretched far beyond what Congress had intended in 1998.

Is YouTube a service provider or a content provider? Should this distinction play a role in whether it qualifies for safe harbor? And, in the broader sense, is the DMCA as a whole, considering the evolution of online communications since it passed, still capable of striking the balance between innovation and protecting that content that gives value to that innovation?