Thursday, July 15, 2010

Viacom v. YouTube, Part III - Limitations of Liability

The final part of the Viacom v. YouTube trilogy focuses on the DMCA limitations of liability in Section 512.

A copyright includes a certain bundle of exclusive rights such as distribution, reproduction, public display, and the right to make derivative works. See 17 U.S.C. § 106. Under the DMCA, Section 512 provides the limitations for liability for online materials specifically for online service providers.

Under the statutory scheme of Section 512, there are several subsections for different liabilities. For example, 512(a) is a safe harbor for “infringement of copyright by reason of the provider’s transmitting, routing, or providing connections for, material through a system or network controlled or operated by or for the service provider, or by reason of the intermediate and transient storage of that material in the course of such transmitting, routing, or providing connections…” This is followed by specific conditions:
  1. the transmission of the material was initiated by or at the direction of a person other than the service provider;
  2. the transmission, routing, provision of connections, or storage is carried out through an automatic technical process without selection of the material by the service provider;
  3. the service provider does not select the recipients of the material except as an automatic response to the request of another person;
  4. no copy of the material made by the service provider in the course of such intermediate or transient storage is maintained on the system or network in a manner ordinarily accessible to anyone other than anticipated recipients, and no such copy is maintained on the system or network in a manner ordinarily accessible to such anticipated recipients for a longer period than is reasonably necessary for the transmission, routing, or provision of connections; and
  5. the material is transmitted through the system or network without modification its content.
Section 512 (b) is for storage for system caching with specific conditions and 512 (d) is for infringement by reason of reference or linking to an online location with infringing materials or activity.

In YouTube, the Court granted summary judgment for Defendants under the safe harbor provision of Section 512(c) which excepts Internet Service Providers from liability for “infringement of copyright by reason of the storage at the direction of a user of material that resides on a system or network controlled or operated by or for the service provider…,” provided certain conditions are met.

Viacom argued that there cannot be a safe harbor under 512(c) for infringements made by virtue of replicating, transmitting and displaying videos. The safe harbor, according to Viacom, was for storage only. However, the Court decided that Viacom gave “storage” too narrow a meaning, and it must include activities which flow from the material’s placement on the provider’s system or network.(See Page 24.)

However, even if granted a broad interpretation, the Court has taken “storage” way too far. If each exclusive right (such as distribution (transmission) and reproduction (storage)) in a copyright are independent, then the exceptions for liability under 512 must be treated similarly.

If Section 512(c) is for storage and 512(d) is for linking or referring to infringing pages, they must be analyzed separately, as each is a separate right being infringed. Clearly the liability under 512(a) is specifically for “transmission, routing and providing connections,” should have likewise received separate treatment. Instead, the Court relied on 512(c) as the safe harbor from liability. (I think quite possibly, the Court could not escape the title for subsection (c) for Information Residing on Systems or Networks at Direction of Users for storage ignoring that there is a specific 512(a) exception for transmitting, routing and providing connections.)

While the Court painstakingly sifted through the details of the legislative history and the statute during the course of the opinion, Section 512(n) was glaringly omitted. In 512(n), Congress provided specific instructions under the DMCA for construction of the limitations of liability under 512(a)-(d):
Subsections (a), (b), (c), and (d) describe separate and distinct functions for purposes of applying this section. Whether a service provider qualifies for the limitation on liability in any one of those subsections shall be based solely on the criteria in that subsection, and shall not affect a determination of whether that service provider qualifies for the limitations on liability under any other such subsection.
This makes sense because there are certain conditions under each subsection for a safe harbor from liability. YouTube clearly transmits and provides connections for the videos uploaded. This could not be considered “storage” under the circumstances where the videos were uploaded and formatted to be viewed by the public at large on the YouTube website.

To claim that the video feeds streamed to hundreds of thousands if not millions of users qualifies as storage is not only far-fetched, but runs counter to Congressional intent – not from the legislative history but directly from the statute itself.

The Court cites to the Veoh case for support. UMG Recordings, Inc. v.Veoh Networks, Inc., 620 F. Supp. 2d 1081, 1089 (C.D. Cal. 2008). In that case, the court found that it would be troublesome for service providers if liability could be triggered for display and distribution attributable to uploading content on servers (i.e. storage) without the possibility of DMCA immunity. Therefore, the Court found no liability under Section 512(c). See Pages 24-25 of the YouTube opinion. This interpretation ignores the remainder of the statute.

DMCA immunity would still be provided. However, it is not Section 512(c) that should apply, but Section 512(a). Each individual subsection has separate and distinct functions – this is why there are different tests and conditions under each factor. The YouTube Court should have examined 512(a) and its conditions to determine liability for YouTube’s transmission, routing, and providing connections for the videos uploaded. At a minimum, given the state of the proceeding, the Court should have denied summary judgment and found that there are genuine issues of fact for a trial.

Some may ask if there was no liability for the storage under 512(c), what conditions would change that would make YouTube liable under 512(a)?

First, 512(a) does not have a knowledge or financial benefit requirement. Second, 512(a) has a limitation on the maintenance of the material on an ISP’s its system for anticipated recipients only -- not the public at large. (This is likely to mitigate the damage that may be caused if everyone obtained a copy or reproduction or transmission of the work.)

A final example ties into the first two postings: 512(a)(2) requires:
the transmission, routing, provision of connections, or storage is carried out through an automatic technical process without selection of the material by the service provider
in order to avoid liability. There are some serious questions in YouTube’s case regarding whether or not there was any selection on YouTube’s part. See Part I & Part II of my Viacom v. YouTube discussion.

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