Last week a federal judge in New York granted judgment to defendants Google and YouTube in the billion dollar Viacom copyright infringement case. At stake was whether YouTube could be liable for monetary damages for its publication of infringing material posted by YouTube users on that website, or whether YouTube was shielded from such liability under the “safe harbor” provisions of the Digital Millennium Copyright Act (DMCA). Generally speaking, those provisions can serve to protect web site operators from liability for copyrighted material posted by their users so long as web site operators remove the material when contacted by the actual copyright owner.

In its ruling, the court rejected Viacom’s central argument that YouTube had “actual knowledge” of the copyright infringement committed by YouTube users. The opinion has positive implications for all internet providers that host third party content, as the court stressed that the DMCA places the burden for policing copyright infringement on the individual copyright holders, and not on entities like YouTube that host user content. It is anticipated that the ruling will be appealed.

Under the DMCA, an internet provider hosting infringing content cannot avoid liability if it is aware of the infringement, or if it is aware of “red flag” facts that indicate infringement, and it does not act expeditiously to remove the material. Therefore, the central issue in this case was whether YouTube’s general knowledge that some of its users post infringing content on the YouTube website can be considered either “actual knowledge that the material or an activity . . . is infringing” or awareness “of facts and circumstances from which infringing activity is readily apparent.” (DMCA 17 U.S.C. § 512 (c)(1)(A)(i)-(ii)). Viacom argued that YouTube was aware of its users’ infringement and even welcomed such activity as the infringing material made the website increasingly attractive to users and thus enhanced the income received from advertisements on the website.

This argument was rejected by the court. The court found that the legislative history of the DMCA clearly contemplated knowledge of—or facts that should give rise to awareness of—specific acts of infringement in order for there to be liability. YouTube’s general awareness of infringing activities on its website did not disqualify it from safe harbor protection. Without knowledge of infringement, or knowledge of “red flag” facts strongly indicating infringement, the court ruled that YouTube has no affirmative obligation to determine whether users’ individual postings are infringing.

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Should you have any questions concerning this decision, do not hesitate to contact Lee Eulgen (312-269-8465) or another member of Neal Gerber & Eisenberg’s Intellectual Property Group.

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