GOOGLE/YOUTUBE V. VIACOM: SAFE HARBORS AND THE NEW POLICE.
(Author’s note: In this article, I get to use one of my favorite theories:
The Sergeant Schulz Theory. Read on. Also, I posted this initially at
By now you probably know that Google won the most recent round of its legal battle with
Viacom (which initially sued YouTube, now owned by Google). A federal district court
judge in New York issued a summary judgment opinion that dismisses the $1 billion
claim of infringement against postings on YouTube that were, in the opinion of Viacom,
infringing on their copyrights. It’s an opinion worth reading.
http://i.zdnet.com/blogs/viacom-youtube-ruling.pdf If you are a legal wonk, then you
will appreciate the succinct manner in which Judge Stanton weaves together the holdings
of previous DMCA cases. (Here’s a hint: The Coase Theorem.)
The judge bought the argument that Google made—namely, that it was protected under
the “Safe Harbor” provisions of the Digital Millennium Copyright Act from the copyright
infringement claims made by Viacom. More important, Judge Stanton said that
YouTube’s actions demonstrated that the “takedown” provisions in the DMCA actually
worked. (Those provisions enable copyright holder to require that copyrighted material
to be removed from public view.)
There are some unintended consequences (the Sergeant Schulz Theory) that may arise
from this opinion, but they are likely to be acceptable for the time being.
It is not over yet. Viacom has vowed to appeal the decision.
In a nutshell:
The burden of policing copyright infringement now
squarely sits on the shoulders of the copyright owner (or
the one with the rights).
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With a little more detail:
• The Safe Harbor Is Open. The DMCA safe harbor provisions are available
for certain types of companies if they have and actually use the takedown
provisions of the DMCA.
• You Are Your Own Policeman. If you own (or hold rights in) a copyright,
then you are responsible for policing the use of that copyright by others.
Let’s go a bit deeper in what the opinion means. The merits of the positions of either side
are not relevant here. What is relevant is what the opinion means to players in the digital
1. Companies like Google Have a Safe Harbor. Companies that post digital
content can rely on the “Safe Harbor” provisions of the DMCA when that content is
posted, provided that they are serious about taking down content that may be infringing
(more on that point below). This holding is important because there was some confusion
as to whether or not a company like Google was actually permitted entry to that harbor.
One view of the DMCA provisions holds that it applies almost exclusively to ISPs, but
this view now appears to carry little weight in the federal courts. Getting there was not
without some abstruse legal reasoning to adapt the language of a statute written before
places like YouTube existed, but it is probably solidly established by the various legal
opinions on this point.
But be careful: It is not clear what sites would have this protection. Google made the
(winning) argument that, in essence, it was just providing transmission, storage and
indexing of the content—sort of like an ISP. Another UGC site might not be so lucky.
For sites that aggregate content from other sources, this opinion may incrementally
strengthen their position, but they would have to fight holdings going the other way in
2. The Safe Harbor Has Some Rules. Judge Stanton emphasize that the takedown
procedures worked in this case. YouTube immediately responded to Viacom’s takedown
notice: Within 24 hours of receiving the notice, YouTube removed almost all of the more
than 100,000 clips that Viacom claimed were infringing.
So the implication is clear for companies posting digital content:
The Safe Harbor is available if and only if your takedown procedure
3. Red Flags and Knowledge. The opinion also turned on the “red flags” of
infringement that would be enough for YouTube to take down allegedly infringing
content. It gets complicated but Judge Stanton accepted (and essentially paraphrased)
Google’s argument in its court filings that there was no practical way to check every
posting for infringement. The opinion essentially holds that a company in the position of
Google’s YouTube basically has to have notice or actual knowledge of infringement of
specific content. Although the judge did not say it, the standard for actual knowledge
would be, say, that Eric Schmidt (head of Google) went to the YouTube site and
watched Iron Man the day after it was relased.
So the rule is:
If you receive a takedown notice about specific content or if you have a
really, really good reason to believe that it is infringing, then take it
Then you’ll probably be OK. (True, taking something down can cause other problems
but that’s outside of the scope of this article.)
4. Unintended Consequences: The Sergeant Schulz Theory. Remember
Sergeant Schulz on the TV show, Hogan’s Heroes? He knew nuhzzeen, he saw nuhzzeen
and that way he did not get in trouble with his superior. Think about it for a moment: If
the opinion says that if you don’t know about the infringement then you don’t have
liability. Therefore, if you don’t try to find out if something is infringing, then you’ll be
OK. By definition, you see nuhzzeen if you don’t look too hard. And so you won’t.
(Yes, I know there are risks with this approach, but the incentives do point in that
5. For Copyright Owners: Spend All Your Time Scouring the ‘Net. The
implication of the opinion is that copyright owners (or the rightsholders) must now police
the use of their copyrights. Their first remedy for companies sitting in the position of
Google’s YouTube is the “takedown” procedure specified in the DMCA. It’s a clunky
system, to be sure, but it is pretty much all you have. Moreover, other recent opinions are
now shifting the burden of policing the use of IP rights to those who hold such rights.
There is some hope. First, as noted above, it is not clear that all sites can avail
themselves of the Safe Harbor provisions. For example, one could argue that Facebook
would not qualify (a tall order). However, the burden of proof now probably rests with
the plaintiff and judges now have a well-reasoned (though not necessarily correct)
opinion on which to rely.
Second, the holding now opens up opportunities for companies (say, startups) to create
Internet policing services. Whether they are automated (think “watermark”), manual
(think outsourcing to foreign countries) or a combination, there is now a market
opportunity. There are already several such
services out there. They aren’t foolproof but they are good.
To close, the decision is not exactly binding on anyone except those within the district of
the New York court. Plus, Viacom’s vow of an appeal makes the permanence of the
holding somewhat uncertain. Both of these points are largely legalistic, because the
opinion, as it now stands, will be used as an important bulwark in any argument in court
by a defendant to a claim of infringement. The bottom line: Assume it applies.
James C. Roberts III is the Managing Partner of Global Capital Law
Group (www.globalcaplaw.com) and CEO of the strategic consulting firm, Global
Capital Strategic Group (www.globalcapstrat.com). He heads the international,
mergers & acquisitions and transactional practices and the industry practices
concentrating on digital, media, mobile and cleantech technologies. He is currently
involved in opening the Milan office. Mr. Roberts speaks English and French and, with
any luck, Italian in the distant future. He received his JD from the University of Chicago
Law School, his MA from Stanford University and his BS from the University of
California—Berkeley. You can reach him at firstname.lastname@example.org.
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