U.S. Court of Appeal redefines DMCA safe harbor’s conditions (Viacom v. YouTube)

On 5 April 2012 the U.S. Court of Appeal for the 2nd circuit issued an important decision which redefined the conditions of liability of Online Service Providers (OSP) for third party content.

In this case, the plaintiffs – including Viacom International, the Football Association Premier League and various film studios and television networks – had brought an action against YouTube for the unauthorized reproduction and display on YouTube’s website of approximately 79,000 audiovisual clips, between 2005 and 2008 (specifically, before YouTube’s implementation by of its “Content ID” feature).

In a very much commented decision issued on June 2010, the United States District Court for the Southern District of New York had granted summary judgment to YouTube, holding that it was entitled to DMCA safe harbor, primarily because it was not found to have sufficient knowledge of specific and identifiable infringement of particular items.

On appeal, the 2nd circuit found that although the District Court had interpreted correctly the knowledge standard (as requiring knowledge or at least sufficient awareness of specific infringing activity), the Court had erred in several instances.

(1)        Knowledge standard: further jury consideration

First, the Court found, from the circumstances of the facts, that a reasonable jury might find that YouTube had actual knowledge, sufficient awareness or alternatively had made a “deliberate effort to avoid knowledge” (willful blindness) of specific infringing activity, making it liable for such activity.

To reach this conclusion, the Court relied notably on internal communications and reports exchanged between some YouTube’s executives referring to specific copyrighted material that was not subsequently taken down.

(2) “Control” is different from “knowledge”

The Court further held that the District Court had erred in interpreting the “control” standard (also triggering OSPs’ liability under the DMCA) as requiring “item-specific knowledge”.

For the 2nd circuit, the exercise, notably, of a substantial influence on the activities of users – without necessarily acquiring knowledge of specific infringing activity – should be sufficient to trigger the liability of a service provider for the users over which such level of control was exercised. The Court thus reversed the order and remanded to the District Court for further findings on this point

(3)      YouTube might not qualify as a “host” for all its activities

Finally, the 9th circuit clarified that while three of the functions for which YouTube’s liability was searched (namely replication, playback and trans-coding) unquestionably fell under the “hosting” safe harbor (since they indeed occurred “by reason of a storage”), YouTube might not qualify as a “hosting provider” when selecting and licensing specific copyrighted material to a third party (“third party syndication” function). The Court thus remanded the case to the District Court for further consideration of these key aspects of the case.

The decision of the District Court on remand, if the parties decided to pursue their judicial battle, might have decisive consequences on the activities and conditions of the liability of third party content platforms. [Béatrice Martinet Farano]