Remember the procedural posture
The parties have filed separate cross-motions for summary judgment. They will each get the chance to file briefs in opposition to the other side's opening brief, and then reply briefs in support of their motions. In other words, though it's tempting to view the two briefs unsealed last week as arguments against each other, they really aren't. In fact, they were filed simultaneously, so they couldn't respond to each other. Both sides made lots of factual accusations and legal arguments. But we have not yet seen direct responses from the other side to any of them. For that, we will need to wait until about May 10, when opposition briefs will be unsealed. Just remember: arguments usually sound their best before the other side has had the chance to tear into them.
It all comes down to specificity
If there's one legal issue that I believe will determine the outcome of the case, it's this: How specific must YouTube's knowledge of infringement be in order for it to fall outside the safe harbor provided by Section 512(c) of the DMCA? In its motion, Viacom provided overwhelming evidence that YouTube knew about infringing videos on its site. Some of this knowledge was general. As YouTube co-founder Steve Chen said in a now-infamous 2005 email to a VC at Sequoia Capital, "you can find truckloads of ... copyrighted content" on YouTube. Viacom Motion at 7. Or, as Chad Hurley emailed, "aaahhh, the site is starting to get out of control with copyrighted material." Id. at 8. But Viacom has evidence of YouTube's knowledge of specific infringements as well. See id. at 25 n. 15 (citing Statement of Undisputed Facts Paras. 32, 59, 69, 105, 110, 116-17, 122, 130, 132, 165). After all, where does one get knowledge of "truckloads" of infringements if not from knowledge of (lots of) specific infringing videos? (YouTube flatly denies that it had knowledge of specific infringing videos. See YouTube Motion at 32.)
So what's the law on specificity of knowledge? Start with the statute. I think there's a common misconception that the DMCA is only about takedown notices, and the knowledge of infringement they impart to the host. That's wrong. Section 512(c) of the DMCA actually identifies two triggers for the obligation of the host to remove the subject material (if it wants to maintain the safe harbor). First is actual knowledge of infringement (which can be obtained through receipt of a facially valid takedown notice pursuant to Section 512(c)(3)). Id. § 512(c)(1)(A)(i). Second is where the host becomes "aware of facts or circumstances from which infringing activity is apparent." Id. § 512(c)(1)(A)(ii). This latter situation is known as "red flag" infringement; the idea is that the host can't claim the safe harbor if red flags are being waved in its face, suggesting the obvious presence of infringing activity. Viacom argues that YouTube had red flag infringement -- in spades:
As the undisputed facts set out above make clear, to say there were red flags everywhere on YouTube is a gross understatement. Defendants were not merely aware of red flags signaling rampant infringement; they rallied around them. Their own documents are contemporaneous admissions that they knew infringing videos generated 54 to 80 percent of the traffic on YouTube that YouTube's business plan intentionally rested on such infringement-driven traffic. This is exactly the kind of intentional guilt the Supreme Court condemned in Grokster. And Grokster liability inherently defeats the DMCA:Viacom Motion at 50-51.
inducement liability [under Grokster] and the Digital Millennium Copyright Act safe harbors are inherently contradictory. Inducement liability is based on active bad faith conduct aimed at promoting inhngement; the statutory safe harbors are based on passive good faith conduct aimed at operating a legitimate internet business. Here, as discussed supra, Defendants are liable for inducement [under Grokster]. There is no safe harbor for such conduct.
Fung, slip op. at 43; accord Usenet, 633 F. Supp. 2d at 142 ("if Defendants . . . encouraged or fostered . . . infringement, they would be ineligible for the DMCA's safe harbor provisions").
YouTube's argument to the contrary is at 32-38 of its brief. And it bolsters its case with its contention that Viacom's "widespread use use YouTube to market and promote [its] content...defeats any notion that the presence of their material on YouTube creates a fact or circumstance from which infringing activity is apparent." YouTube Motion at 39. Very few cases have probed the boundaries of red flag knowledge of infringement; as far as I'm aware, Columbia v. Fung is the only case where a court has actually found that red flag knowledge existed. On this point, YouTube relies heavily on UMG v. Veoh. Both cases are from the Central District of California; neither is binding on Judge Stanton. Viacom also bolsters its case with reference to Grokster, which it cites for the proposition that the Ninth Circuit's requirement of "specific knowledge of infringement" for inducement liability to attach was "error." Viacom motion at 24-25.
The concession that might win the case for Viacom
For some time, I've been telling anyone who asked me about this case that the biggest obstacle for Viacom isn't the statute or the caselaw. Rather, it's the fact that YouTube has become so wildly popular, and such an established part of the entertainment, social, and political landscape. And relatedly, there are no doubt millions of perfectly non-infringing videos on the site. Given those facts on the ground, it's difficult to imagine any federal district judge saying, in essence, "YouTube is illegal. And I hereby order you to shut it down."
But Viacom gave Judge Stanton an easy out in footnote 1 of its brief. In that footnote, Viacom says it is not pursuing any claim based on YouTube's activities after May 2008, when, according to Viacom, YouTube began filtering for Viacom content without requiring Viacom to license its videos. While Viacom is careful not to formally concede that YouTube's post-May 2008 activities are not infringing, it's effectively letting YouTube off the hook as of that date. I think this was a very smart move on Viacom's part. Given Viacom's concession/limitation of claims, Judge Stanton can now write an opinion that says something like this:
YouTube was once a very bad actor. It had 'truckloads' -- YouTube's word -- of infringing videos on its site. And those trucks flew red flags as they drove right by YouTube's top execs. YouTube knew that its users came to the site largely to view infringing videos. And Google bought YouTube knowing full well about all the infringement, and in fact hoped to profit from it. Therefore, YouTube cannot find safe harbor in Section 512(c) of the DMCA, and must now pay Viacom $734,916,732.18 (which I'm sure Sergey and Larry can find hiding between the cushions of their respective couches).That way Judge Stanton could make clear that YouTube may not profit by tolerating infringement, without killing a hugely popular site that has plenty of legitimate uses.
However, Viacom effectively concedes in footnote 1 of its motion that YouTube cleaned up its act by May 2008, and has indeed taken affirmative steps to cleanse itself of infringements. Therefore, I decline to impose damages for any infringements that occurred after that date, and decline to issue any injunction against YouTube.