Copyright Law
Ronald W. Staudt
Class 27
December 3, 2013
Today’s plan
ISP Secondary Liability
RTC v. Netcom- pre DMCA
Viacom v. YouTube—DMCA safe harbors
MP3tunes and BitTorrent
RTC V. Netcom facts
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Erlich connects to Klemesrud's BBS using a telephone and a modem. Erlich then transmits his
messages to Klemesrud's computer, where they are automatically briefly stored. According to a
prearranged pattern established by Netcom's software, Erlich's initial act of posting a message to
the Usenet results in the automatic copying of Erlich's message from Klemesrud's computer onto
Netcom's computer and onto other computers on the Usenet. In order to ease transmission
and for the convenience of Usenet users, Usenet servers maintain postings from newsgroups for
a short period of time--eleven days for Netcom's system and three days for Klemesrud's system.
Once on Netcom's computers, messages are available to Netcom's customers and Usenet
neighbors, who may then download the messages to their own computers. Netcom's local server
makes available its postings to a group of Usenet servers, which do the same for other servers
until all Usenet sites worldwide have obtained access to the postings, which takes a matter of
hours. Francis Decl. P 5.
Unlike some other large on-line service providers, such as CompuServe, America Online, and
Prodigy, Netcom does not create or control the content of the information available to its
subscribers. It also does not monitor messages as they are posted. It has, however, suspended
the accounts of subscribers who violated its terms and conditions, such as where they had
commercial software in their posted files. Netcom admits that, although not currently configured
to do this, it may be possible to reprogram its system to screen postings containing particular
words or coming from particular individuals. Netcom, however, took no action after it was told
by plaintiffs that Erlich had posted messages through Netcom's system that violated plaintiffs'
copyrights, instead claiming that it could not shut out Erlich without shutting out all of the users
of Klemesrud's BBS.
RTC v Netcom- direct liability
The court is not persuaded by plaintiffs' argument that Netcom is directly liable
for the copies that are made and stored on its computer. Where the
infringing subscriber is clearly directly liable for the same act, it does not
make sense to adopt a rule that could lead to the liability of countless
parties whose role in the infringement is nothing more than setting up and
operating a system that is necessary for the functioning of the Internet.
Such a result is unnecessary as there is already a party directly liable for
causing the copies to be made. Plaintiffs occasionally claim that they only
seek to hold liable a party that refuses to delete infringing files after they
have been warned. However, such liability cannot be based on a theory of
direct infringement, where knowledge is irrelevant. The court does not
find workable a theory of infringement that would hold the entire
Internet liable for activities that cannot reasonably be deterred.
Billions of bits of data flow through the Internet and are necessarily stored
on servers throughout the network and it is thus practically impossible to
screen out infringing bits from noninfringing bits. Because the court cannot
see any meaningful distinction (without regard to knowledge) between
what Netcom did and what every other Usenet server does, the court finds
that Netcom cannot be held liable for direct infringement.
ISP Secondary Liability
RTC V. Netcom- pre DMCA case
Scientology document left on Usenet
newsgroup after notice from P
Contributory liability. Landlord?? But here D provides
access, storage, transmission. If D knew in time to stop
distribution, its substantial participation in public distribution
of postings is enough to establish contributory infringement.
• What is knowledge? Equivocal? Fair use? © notices?
Vicarious liability? Right and ability to control a Q
of fact despite huge volume of messages but no
proof of financial benefit tied to infringement .
Viacom v. YouTube
 Google buys YouTube for $1.65 Billion
 Denies rumor of $500 million litigation reserve
 1 Billion daily video views, 24 hours of video posted every minute
 Users register, agree to terms and upload video. YouTube makes
copies to convert to Flash format for streaming
 Film, TV networks, music, sports all sue Google claiming between
2005-8—79,000 infringing clips on YouTube
How do safe harbor provisions work?
ISP Secondary Liability
DMCA’s 512 shields online service providers
Transitory Digital Network Communication
System caching
Information Stored at Direction of Users
Knowledge, knowledge of apparent infringement
Notice and take down
No financial benefit
Designated agent
Information Location Tools
512(k) Definitions
(1) Service provider
(A) As used in subsection (a), the term “service provider”
means an entity offering the transmission, routing, or
providing of connections for digital online
communications, between or among points specified by
a user, of material of the user’s choosing, without
modification to the content of the material as sent or
received.
(B) As used in this section, other than subsection (a), the
term “service provider” means a provider of online
services or network access, or the operator of facilities
therefor, and includes an entity described in
subparagraph (A).
512(i) Conditions for Eligibility
(1) Accommodation of technology.— The limitations
on liability established by this section shall apply to a
service provider only if the service provider—
(A) has adopted and reasonably implemented, and
informs subscribers and account holders of the service
provider’s system or network of, a policy that provides
for the termination in appropriate circumstances of
subscribers and account holders of the service provider’s
system or network who are repeat infringers; and
(B) accommodates and does not interfere with standard
technical measures.
512(c) Information Residing on Systems
or Networks At Direction of Users
(1) In general.— A service provider shall not be liable for monetary relief, or, except
as provided in subsection (j), for injunctive or other equitable relief, 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, if the service provider—
(A) (i) does not have actual knowledge that the material or an activity using the
material on the system or network is infringing;
(ii) in the absence of such actual knowledge, is not aware of facts or
circumstances from which infringing activity is apparent; or
(iii) upon obtaining such knowledge or awareness, acts expeditiously to
remove, or disable access to, the material;
(B) does 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 such activity; and
(C) upon notification of claimed infringement as described in paragraph (3),
responds expeditiously to remove, or disable access to, the material that is
claimed to be infringing or to be the subject of infringing activity.
512(i)(2) Definition
As used in this subsection, the term “standard technical
measures” means technical measures that are used by
copyright owners to identify or protect copyrighted
works and—
(A) have been developed pursuant to a broad
consensus of copyright owners and service providers in
an open, fair, voluntary, multi-industry standards
process;
(B) are available to any person on reasonable and
nondiscriminatory terms; and
(C) do not impose substantial costs on service providers
or substantial burdens on their systems or networks.
Viacom v. YouTube
District Court Opinion
 SJ for YouTube on all claims of direct & secondary
liability- DMCA provides safe harbor
D “welcomed” infringing material. But when notices are
received, video swiftly removed
General knowledge that infringement is ubiquitous does not
impose a duty to monitor or search for infringment- need to
know of specific infringing activity
Replication, transmittal and display fall under 512(c)(1)“storage at the direction of the user.”
Right and ability to control also requires item specific knowledge
Grokster not applicable to YouTube
Termination policy fight – Viacom loses.
Viacom v. YouTube
2012 U.S. App Lexis 6909 (2d Cir. April 5, 2012)
 NO Summary Judgment on actual knowledge or
awareness of facts and circumstances
DC correctly determined that 512 (c)(1)(A) safe harbor requires actual knowledge or
awareness of facts and circumstances of specific and identifiable instances
of infringement BUT…
“Upon a review of the record, we are persuaded that the plaintiffs may have raised
a material issue of fact regarding YouTube's knowledge or awareness of specific
instances of infringement. The foregoing Premier League e-mails request the
identification and removal of "clearly infringing, official broadcast footage." The
March 2006 report indicates Karim's awareness of specific clips that he perceived to
be "blatantly illegal." Similarly, the Bud Light and space shuttle e-mails refer to
particular clips in the context of correspondence about whether to remove infringing
material from the website. On these facts, a reasonable juror could conclude that
YouTube had actual knowledge of specific infringing activity, or was at least aware of
facts or circumstances from which specific infringing activity was apparent. See §
512(c)(1)(A)(i)-(ii). Accordingly, we hold that summary judgment to
YouTube on all clips-in-suit, especially in the absence of any detailed
examination of the extensive record on summary judgment, was
premature.”
Viacom v. YouTube
2012 U.S. App Lexis 6909 (2d Cir. April 5, 2012)
 NO Summary Judgment on willful blindness
§ 512(m) limits the willful blindness doctrine because Congress
determined that safe harbors cannot be conditioned on
affirmative monitoring by service providers, but “willful blindness”
not abrogated.
“The District Court cited § 512(m) for the proposition that safe harbor
protection does not require affirmative monitoring, Viacom, 718 F. Supp.
2d at 524, but did not expressly address the principle of willful blindness or
its relationship to the DMCA safe harbors. As a result, whether the
defendants made a "deliberate effort to avoid guilty knowledge," In
re Aimster, 334 F.3d at 650, remains a fact question for the District Court to
consider in the first instance on remand.”
Viacom v. YouTube
2012 U.S. App Lexis 6909 (2d Cir. April 5, 2012)
 Reversed and remanded to reexamine “Control and
Benefit” under 512(c)(1)(B)
“Apart from the foregoing knowledge provisions, the § 512(c) safe harbor 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 such activity." 17 U.S.C. § 512(c)(1)(B). The District Court
addressed this issue in a single paragraph, quoting from § 512(c)(1)(B), the socalled "control and benefit" provision, and concluding that "[t]he 'right and ability to
control' the activity requires knowledge of it, which must be [*42] item-specific."
Viacom, 718 F. Supp. 2d at 527. For the reasons that follow, we hold that the
District Court erred by importing a specific knowledge requirement into the control
and benefit provision, and we therefore remand for further fact-finding on the issue
of control.”
Requiring item-specific knowledge makes “B” duplicative of “A”- so DC &
Defendant are wrong in this interpretation
Plaintiff’s view is also wrong that ability to block and remove = right & ability
to control- otherwise ability to do takedown under A would disqualify
under B—”something more” required—remand to figure this out….
Viacom v. YouTube
2012 U.S. App Lexis 6909 (2d Cir. April 5, 2012)
 “By reason of storage at the direction of the user…”
Two types of “service providers”
Transcoding- ok
Playback--ok
Related videos--ok
Syndication of 2000 videos to Verizon??? Remand!
 Repeat infringer policy
 Grokster theory
Capital v. MP3tunes
Facts
MP3tunes – sells independent artists songs
Locker storage, Lockersync, deduplication,
Sideload…Sideload Plug in…. Index, track
details
Take down notices- removes links but no
removal from users lockers.
512 (i) repeat offenders
Capital v. MP3tunes
 Take down notices
Specified songs- indexes & users lockers
 Red flags
If investigation is required to determine if material is infringing
then not red flags
 Benefit and control
Lockers same price for infringing and not
Users selected link sites- liability would sweep up Google and
Yahoo
 Contributory liability for songs in notices that are still in
lockers but no direct liability based on de-duplication
Columbia Pictures
Industries v. Fung
Facts: film studios accuse Fung sites of inducing
infringement (Grokster liability)
DC agrees and denies 512 safe harbors
Client server and peer to peer networks
Centralized p2p- Napster and eDonkey
Hybrid p2p using supernodes- FastTrack used by Grokster
BitTorrent innovations- dot-torrent files –metadata,
publishers, trackers, seeders, leechers
Fung’s role- isohunt improves trackers adding
backup, forum, top searches,…
Columbia Pictures
Industries v. Fung
DC
Fung liable for contributory infringement- inducing
and no 512 a, c or d safe harbors apply
Inducement elements
1 Distribution of a device or product, 2 infringement,
3 object to promote infringement, 4 causation
Fung argues Grokster not applicable because he did
not write or distribute BitTorrent or distribute a
device or productheld -- Perfect 10 cases apply Grokster inducement to
a service so P wins on first element of Grokster test
Columbia Pictures
Industries v. Fung
Acts of infringement, object of promoting use to
infringe and causation
96% confirmed or highly likely infringing
Invites illegal uploads, urges downloads by messages
and posts & no filtering and ad revenue base
Causation caveats– when did D have unlawful
purpose…multiple actors unlike Sony and Grokster
512 safe harbors- not impossible here
Columbia Pictures
Industries v. Fung
512 safe harbors
Fung is not a service provider or conduit
under “a”- Fung not users specifies
connections
As to 512(c) and (d), even if Fung’s inducing
actions don’t automatically invalidate this safe
harbor, Fung had “red flag” knowledge
without regard to P’s notice AND financial
benefit and control
Review Session
Wednesday, Dec. 4
Come with your questions