Brief Fact Summary. Viacom International, Inc. (Viacom) and other copyright holders (collectively, “plaintiffs”) (Plaintiff) alleged direct and secondary copyright infringement based on the public performance, display, and reproduction of about 79,000 audiovisual “clips” shown on the YouTube (Defendant) website, an online video sharing service. The plaintiffs (Plaintiff) argued that YouTube (Defendant) was not entitled to safe harbor protection under the Digital Millennium Copyright Act (DMCA) for airing the clips because, as plaintiffs (Plaintiff) claimed, YouTube (Defendant) was aware or chose a blind eye to the fat that these clips did indeed infringe on the plaintiffs’ (Plaintiff) copyrights.
Synopsis of Rule of Law. (1) The § 512 safe harbor of the Digital Millennium Copyright Act (DMCA) requires knowledge or awareness of specific infringing activity. (2) The common law willful blindness doctrine may be used to show knowledge or awareness of specific instances of infringement under the DMCA. (3) A service provider has the “right and ability to control” infringing activity under & sect ; 512(c)(1)(B) of the DMCA whether or not an item-specific knowledge of infringing activity exists.
Held. (Carbranes, J.) (1) Yes. The § 512 safe harbor of the Digital Millennium Copyright Act (DMCA) requires knowledge or awareness of specific infringing activity. This conclusion is compelled by the text of the statute, as the basic operation of § 512(c) requires knowledge or awareness of specific infringing activity. Under § 512(c)(1)(A), knowledge or awareness on its own does not disqualify the service provider. Rather, under § 512(c)(1)(A)(iii), the provider that gains knowledge or awareness of infringing activity retains safe-harbor protection if it “acts expeditiously to remove, or disable access to, the material.” Therefore, it can be gathered that the nature of the removal obligation itself contemplates knowledge or awareness of specific infringing material, because swift removal would not be possible if the provider did not know with specificity which items to remove. To hold otherwise would impose a generalized obligation on providers to take commercially reasonable steps to remove infringing materials. However, such a reading cannot be reconciled with the statute. Contrary to the position of the plaintiffs (Plaintiff), § 512(c)(1)(A)(ii), the so-called “red flag” knowledge provision, does not require a different conclusion. According to the Plaintiff, the use of the phrase “facts or circumstances” shows that Congress did not intend to limit the red flag provision to a certain type of knowledge, and that requiring awareness of specific infringements would render the red flag provision unnecessary as that provision would only be met when the “actual knowledge” provision is also met. This reading misconstrues the relationship between “actual” knowledge and “red flag” knowledge. That is because the phrase “actual knowledge” in § 512(c)(1)(A)(i) is being used to denote subjective belief, whereas the use of the phrase “facts or circumstances” in § 512(c)(1)(A)(ii), is being used to denote an objective reasonableness standard. The difference between actual and red flag knowledge is therefore not between specific and generalized knowledge, but rather between an objective and subjective standard. The actual knowledge provision turns on whether the provider actually or “subjectively” knew of specific infringement, whereas the red flag provision turns on whether the provider was subjectively aware of facts that would have made the specific infringement “objectively” obvious to a reasonable person. Specific instances of infringement are at issue under both provisions. The few cases interpreting the knowledge provisions of the § 512(c) safe harbor support this specificity requirement. Those cases have indicated that service providers do not have the burden of determining whether materials are actually illegal to be precluded from taking shelter in the § 512 safe harbor; they must have specific knowledge of particular infringing activity. In any event, no court has held that the red flag provision requires less specificity than the actual knowledge provision. Accordingly, the standard enunciated by the district court was correct. However, applying that standard here, the district court erred in granting summary judgment to YouTube (Defendant). Survey evidence was adduced that suggested that YouTube (Defendant) was generally aware that significant amounts of material on the You Tube (Defendant) website were infringing—estimated up to 60-85%. These estimates alone are not sufficient on their own to create a triable issue of fact regarding whether YouTube (Defendant) actually knew, or was aware of circumstances or facts that would point to the existence of certain types of infringement. However, other evidence, including Defendant emails and communications about specific clips or groups of clips, suggests that Defendant knew of certain instances of infringement. These clips were taken from multiple specific sports broadcasts, popular television shows, news broadcasts, and commercials. The communications suggest that Defendant executives knew that these particular clips were infringing indeed, or even “blatantly illegal” according to one e-mail. Notwithstanding that the executives seemed to be aware of the infringing nature of specific content, some of the executives seemed to want to keep the content on You-Tube (Defendant) as long as possible before receiving an official cease and desist takedown notification, presumably to enhance the popularity of Defendant’s site. Based on this evidence, Plaintiff may have raised a material issue of fact regarding Defendant’s knowledge or awareness of specific cases of infringement, so that a reasonable juror could conclude that Defendant had actual knowledge of specific infringing activity, or was at least aware of facts or circumstances that would make specific infringing activity obvious. Accordingly, the district court’s grant of summary judgment to Defendant was premature. Affirmed as to the district court’s holding of law as to this issue; judgment vacated and remanded as to the district court’s application of the law to the facts.
(2) Yes. The common law willful blindness doctrine may be used to show knowledge or awareness of specific instances of infringement under the DMCA. This is an issue of first impression. The inquiry is whether the DMCA abrogates the common law doctrine of willful blindness, which equates willful blindness with knowledge. A person is “willfully blind” or engages in “conscious avoidance” amounting to knowledge where the person is aware of a high probability of the fact in dispute and consciously avoids confirming that fact. A statute abrogates the common law where the statute directly speaks to the issue addressed by the common law. Although the DMCA does not mention willful blindness, § 512(c) provides that safe harbor protection cannot be conditioned on affirmative monitoring by a service provider. Therefore, the DMCA is incompatible with a broad monitoring duty. However, willful blindness cannot be defined as an affirmative duty to monitor, so the DMCA cannot be said to abrogate the willful blindness doctrine, even though it may limit it. The district court did not address the willful blindness issue, and, on remand, it must consider whether You-Tube (Defendant) made a “deliberate effort to avoid guilty knowledge.” Remanded as to this issue.
(3) No. A service provider has the “right and ability to control” infringing activity under § 512(c)(1)(B) of the DMCA whether or not an item-specific knowledge of infringing activity exists. Section 512(c)(1)(B), the so-called “control and benefit” provision, provides that an eligible service provider must “not 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 the activity requires item-specific knowledge requirement into § 512(c)(1)(B) renders the control provision a duplicate of § 512(c)(1)(A). Any service provider that has item-specific knowledge of infringing activity and so obtains financial benefit would already be excluded from the safe harbor under § 512(c)(1)(A) for having specific knowledge of infringing material and failing to effect expeditious removal. Because statutory interpretations that render language superfluous are disfavored, this construction must be rejected. An alternative construction, promoted by the plaintiffs (Plaintiff), is that the control provision codifies the common law doctrine of vicarious copyright liability. This interpretation must also be rejected because it would render § 512(c) internally inconsistent. Section 512(c) presumes that service providers have the ability to block access to infringing material. By blocking or removing infringing content, the service provider would be admitting the “right and ability to control” the infringing material under a vicarious copyright liability standard. Therefore, the prerequisite to safe harbor protection under §§ 512(c)(1)(A)(iii) & (C) would at the same time be a disqualifier under § 512(c)(1)(B). In addition, if Congress had intended § 512(c)(1)(B) to be coextensive with vicarious liability, it could have accomplished that result in a more direct manner. Accordingly, the “right and ability to control” infringing activity under § 512(c)(1)(B) requires something more than the ability to remove or block access to materials posted on a service provider’s website. The few courts that have considered what makes for that additional element have found sufficient control where the service provider exerted substantial influence on the activities of users without necessarily—or even frequently—acquiring knowledge of specific infringing activity. Accordingly, on remand, the district court should consider whether the plaintiffs (Plaintiff) have adduced enough evidence to allow a reasonable jury to conclude that YouTube (Defendant) had the right and ability to control the infringing activity and received a financial benefit directly as a result of that activity. Finally, the district court held that Defendant’s software functions fell within the safe harbor for infringements that occur “by reason of” user storage. That holding is affirmed with respect to three of the challenged software functions: (1) the conversion (or transcoding”) of videos into a standard display format (2) the playback of videos on “watch” pages, and (3) the “related videos” function. As to the fourth software function, involving the third-party syndication of videos uploaded to YouTube (Defendant), the issue is remanded to the district court for further fact finding. As to the issue of item-specific knowledge under § 512(c)(1)(B) reversed and remanded; as to the three software functions affirmed; as to the fourth software function remanded.
This DMCA case is important because it will likely be looked to as precedent in the future. The court addressed many points of DMCA law, which points out the many factors a service provider must meet under the DMCA to qualify for safe harbor protection under § 512. This aspect of the DMCA has been criticized as a deficiency of structure, because even if a service provider meets all but one of these many factors, the provider will not be entitled to safe harbor protection. Therefore, there has been a call for Congress to streamline the act. Here, if YouTube (Defendant) fails to satisfy even one of these elements on remand, it will have lost all safe harbor protection and will be exposed to significant liability. One of the court’s straightforward, direct rulings in this case was that the DMCA § 512 (c) safe harbor applies to all affirmative claims of relief, whether or not the infringement is claimed to be direct or secondary, therefore settling that issue, at least in the Second Circuit. Therefore, if YouTube (Defendant) loses safe harbor protection on remand, its liability will be for both direct and secondary copyright infringement. The case may be important enough for it to be accepted on certiorari by the United States Supreme Court, especially because it diverges from the Ninth Circuit on the “control” provision. In this case, the court held that item-specific knowledge of infringing activity is not required for a service provider to have control over infringing activity, whereas the Ninth Circuit, in UMG Recordings, Inc. v. Shelter Capital Partners LLC, 667 F.3d 1022, 1041 (9th Cir. 2011), held that until the service provider becomes aware of specific unauthorized material, it cannot exercise its power or authority over the specific infringing item, and that, in practical terms, it does not have the kind of ability to control infringing activity the statute contemplates. The Supreme Court may want to resolve this split among the circuits.