Wednesday, July 8, 2009

Court in Viacom v. YouTube rules on availability of statutory damages for foreign works; why you should always read the opinion itself

If there's one thing I've learned since starting this blog, it's that one shouldn't trust mainstream press or non-lawyer blog accounts of court decisions -- especially when they don't include links to the opinions themselves. Such accounts routinely mischaracterize, misunderstand, or just plain misstate what the court said. I've found that there is simply no substitute for reading the opinion itself.

Case in point is Techdirt's post on a July 3 ruling in Viacom v. YouTube [see clarification below], headlined "Judge Tosses Out Foreign YouTube Lawsuits; Points Out Basic Copyright Law," with the snarky I-know-so-much-more-than-the-lawyers-in-this-case subhed "from the you-would-think-their-lawyers-would-notice-this dept." But virtually everything in the Techdirt post, from the headline to the last sentence, is factually and legally incorrect.

First, here's what actually happened:

Among the plaintiffs in the massive Viacom v. YouTube copyright suit are a number of foreign copyright owners, including most prominently the English Premier League soccer association. The motion on which Judge Louis Stanton just ruled concerned a narrow issue: the type of damages such owners of non-US works may recover should YouTube actually be held liable for copyright infringement. Judge Stanton's order made three separate and distinct rulings:
1) Owners of foreign works not registered in the US generally cannot recover statutory damages;

2) Certain broadcasts of live foreign events are eligible for statutory damages if the copyright owner jumps through some technical hoops; and

3) Punitive damages are not available for copyright infringement.
Number 2 is an extremely obscure issue I'm not going to delve into, and Number 3 is a relatively straightforward application of case law. Instead I'll focus on #1, which is really tricky and interesting. First, a bit of background is necessary to understand what happened here. To sue for copyright infringement, it is generally necessary to first register the work with the US Copyright office. But this requirement applies only to "United States work[s]" -- not to foreign works. 17 U.S.C. § 411(a) (emphasis added). In other words, to sue in the US on the infringement of a foreign work, it is not necessary to register that work with the US Copyright Office. Separately, in order to seek statutory damages, the work must have been registered prior to infringement, or within three months of publication. Id. § 412.

So the question for the court was this: Should owners of foreign works, who (unlike owners of US works) do not even have to register their works prior to suit, see id. § 411(a), nonetheless have to register their works if they elect to seek statutory damages, see id. § 412? I don't think the answer is obvious, and Judge Stanton didn't either; he engaged in a lengthy analysis of the statute, its legislative history, the case law, the Berne Convention, and TRIPs, before ultimately concluding that Section 412's registration requirement does apply to foreign works, even though Section 411's doesn't. (I'd have to spend many hours wading through all of this before I even decided whether I agree with his determination.)

So what's the impact of all this? Judge Stanton's opinion has no effect at all on any plaintiffs' substantive claims for liability. It simply means that the owners of foreign works will have to seek actual, as opposed to statutory, damages. Prof. Eric Goldman says he "think[s] most works will have zero actual damages from YouTube infringements." I disagree. Why can't the court award damages equal to the license fee YouTube would have had to pay to broadcast the work had it sought one? But, bigger picture, damages aren't the most significant part of this case; what truly matters is whether YouTube qualifies for the DMCA Section 512(c) safe harbor. And also, keep in mind that this opinion affects only foreign works; it has no impact whatsoever on the many thousands of US works at issue (including those owned by the lead plaintiff, Viacom.)

So what did Techdirt get wrong? Nearly everything. Really. Let's take a look:
Judge Tosses Out Foreign YouTube Lawsuits; Points Out Basic Copyright Law
Wrong. Judge Stanton didn't "toss[] out [any] lawsuits"; he merely ruled on what type of damages are available for the foreign plaintiffs. And he didn't "[p]oint[] Out Basic Copyright Law"; he made a ruling on a very tricky and obscure area that I suspect all but a tiny fraction of experienced copyright lawyers have never even encountered.
[T]here are some basics that are rather simple and straightforward: such as that you cannot sue if you haven't registered your copyrights with the US copyright office.
False, as to foreign copyrights, which are the only copyrights relevant to the motion Techdirt is discussing. As explained above, Section 411(a)'s pre-lawsuit registration requirement applies only to "United States work[s]."
So, when the Premiere Football League sued Google/YouTube for hosting some videos of matches two years ago, I assumed at the very least that it had registered its copyrights in the US.
One would assume this only if one hadn't read Section 411(a)'s registration requirement, which, again, does not apply to foreign works.
A judge has tossed out the Premier League's claim along with some other foreign claimants' for not being covered by US copyright law.
False, or, at best, highly misleading. The court did not "toss[] out" any substantive claims for relief. The decision merely said that owners of foreign works cannot obtain statutory (or punitive) damages. And the opinion doesn't address whether works are "covered by US copyright law"; it merely determines what type of damages are available. The Premiere League and other foreign plaintiffs are still fully part of this lawsuit.
You would have thought this was something the Premier League's lawyers would have noticed before filing the lawsuit.
This has nothing to do with what the lawyers "noticed." As I explained, and as Judge Stanton's opinion makes clear, this is a very obscure issue; Professor Goldman (accurately) describes it as "a pretty technical ruling interpreting some arcane aspects of copyright law." I don't know what was in the attorneys' minds before they filed this suit, but I think it's likely that they were well aware that the availability of statutory damages would be a contested issue, and decided to make their best case for them, knowing that there was no guarantee of success, and also knowing that losing on that issue would not be the end of the world. In other words, it's exactly what good lawyers do every day.

Bottom line: if you want an accurate account of a court opinion, read it yourself, or at least read an account by someone who can accurately describe both it, and the relevant law.

[Clarification: Viacom's and The Premier League's lawsuits are technically separate cases, though they have been consolidated for purposes of discovery. As I explained, this order only affects the foreign copyrights at issue in the Premier League suit.]

UPDATE: Techdirt has altered its post (without acknowledging precisely how) and says, "we're updating some of the points in the post to clarify." This is deeply dishonest. The Techdirt post doesn't need an "update" or "clarif[ication]." It needs multiple plain, old-fashioned corrections. And even with its "update," it still contains numerous errors, starting with the headline, and continuing through virtually every sentence of the post.

UPDATE II: Techdirt has now stricken through all of the substance of the post, tacitly (though not explicitly) acknowledging that both its original and "update[d]" or "clarif[ied]" posts were thoroughly inaccurate (though its headline and subhed remains so). It then adds:
After discussing this with a few different lawyers (as per usual -- none of them agree with each other!) it seemed best to just point people to Eric's analysis of this decision. Once again, this is what's great about using this blog as a conversation, helping us all to learn. Thanks to everyone who chimed in and contributed (whether via comments or email).
What a bunch of disingenous nonsense. Techdirt's numerous errors were not something about which reasonable lawyers would disagree. They were blatant misstatements about what the case actually said. And the cheery "this is what's great about using this blog as a conversation, helping us all to learn" is absurd in this context. Anyone who writes for the public, whether they call themselves journalists or bloggers or whatever, has a basic obligation to get his facts right. On matters of fact, it's not good enough to throw something out there, and, hey, if it's wrong, hopefully someone will tell me later. Yes, everyone makes mistakes (and I certainly don't exempt myself), but the presence of a comments section and an email address does not obviate the obligation to make best efforts at getting things right before hitting "publish."


  1. You should know already to never trust non-legal press reports on legal issues. Judge Stanton is an extremely well-regarded and thoughtful Judge and seems to have written a pretty airtight opinion. The obvious point that plaintiffs probably should have realized is that the law was going to trump Berne even if they are right that the law violates Berne.
    The big question now is how does this affect class certification. It seems to me that a class is a lot easier to certify based on statutory damages.

  2. @Anonymous 12:40:

    I'm not sure the issue of individualized damages calculations should have an effect on the issue of certifying a class as to liability. See, e.g., In re Nassau County Strip Search Cases, 461 F.3d 219 (2d Cir. 2006) (treating class cert. as to liability and damages separately).

  3. Thanks for the link.

    CNET's coverage of this wasn't much better. It is just as confused, but on other issues. And CNET at least holds itself out as a news media.

    As to the above comment, it is true that statutory damages are easier to prove than actual damages, but it is just as true that a substantial number (if not most) class actions involve causes of action for which no statutory damages are available, and those classes go forward regarding actual damages all the time. Unlike copyright plaintiffs, the rest of the world actually has to *prove* injury! ((Gasp))

  4. But to have a class of people, they have to be similarly affected and damages must either be the same or easily calculable on the same formula, as in, for every dollar of this product each person purchased, they were overcharged by 20%. So, the actual damages are all based on the same calculation, and all based on defendant's overcharge, etc. so that the plaintiff testimony isn't relevant. You probably can't have a class based on actual damages where Joe Noname and Michael Jackson are both plaintiffs.

  5. @Anonymous 1:56:

    I agree that "You probably can't have a class based on actual damages where Joe Noname and Michael Jackson are both plaintiffs." But couldn't you still have a class on the issue of liability? The predominant question -- does YouTube qualify for the 512(c) safe harbor? -- *is* the same as to both Joe Noname and Michael Jackson.

  6. Excellent post on both topics: the mischaracterization of legal issues in a lot of the media and web, as well as the analysis on the order itself.

  7. Reed Elsevier v. Muchnick is a consolidated class action where some plaintiffs are registered and some plaintiffs are not. Except this consolidated class action wouldn't suffer from the same potential jurisdictional issues.

  8. Agree with you Terry. Many thanks to Ben for such an informed and interesting analysis.

  9. Ben,

    On your last update about the approach of "throw something out there, and, hey, if it's wrong, hopefully someone will tell me later," that is of course the new model of the Internet, and unfortunately of online journalists as well as irrational bloggers. I call it the "beta" model of news, where the most important thing is instantaneous posting, and you assume errors in fact will be fixed later. An example of my former employer, CNET, doing it is here:

    Wikipedia, which some use for "news" (who just died, etc.) as well as research, notes it does not attest to accuracy, but rather it boasts of providing an avenue that can eventually reach accuracy.

    Your thorn in the side at Techdirt views his blog the same way a tech company views "beta" software. Us old-fashioned "get the facts right first" folks (for you it is your practice as an attorney, for me it is my past practice as a journalist) are being marginalized by the exobytes of opinion masquerading as fact flooding onto the Internet.

    Techdirt wins in this scenario, because it eventually approached accuracy, and you've had to consume a lot of your time correcting the record.

  10. Actually, this is not just the wave of media, this is the wave of business as it relates to IP (and to bring it to this blog's audience specifically, let's take copyrights and music). The new business model when you have a technology that increases abilities for piracy, streaming, downloads, what have you is: get the technology out there as soon as possible and build up customers regardless of the legal ramifications, which will come later, if ever. And let's be honest: it's a successfull business model--many of the mass infringers or alleged infringers out there have been bought up before they had to pay a penny in damages or were bought by/became busines partners with the very plaintiffs that sued them (see as examples of both: YouTube, Launchcast,, Kazaa, Napster (even now the Pirate bay)).
    Sadly, in business and reporting the model has been "be first," not "be right."


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