March 18, 2010
Viacom v. YouTube Summary Judgment Motions Highlights
By Eric Goldman
Who doesn’t enjoy a good old-fashioned mud-slingin' showdown? That’s exactly what we’ve got on our hands in the dueling summary judgment motions from Viacom and YouTube in the long-running copyright infringement case (see my initial post from March 2007). While we might have some voyeuristic fun watching the sparks, the latest salvos prove that the parties are both losers for not finding a way to settle this case. Only the lawyers win when two heavyweight contenders get locked into a cosmic death struggle. Everyone else would be better off if Viacom and YouTube instead had poured their millions of dollars of legal fees towards developing innovative and profitable ways to serve consumers’ interests. It’s ridiculous that they can’t find a way to do this.
Combined together, the filings tell a “Tale of Two YouTubes.” Viacom focuses on YouTube of Yore, circa 2005-06, while YouTube’s brief largely focuses on YouTube of Now. In that sense, the briefs largely talked past each other.
By focusing on the past, however, it shows that time is slowly working against Viacom in two ways. First, the legal precedent since Viacom’s filing has been largely YouTube-favorable. The three Veoh opinions (Io v. Veoh, UMG v. Veoh 1, and UMG v. Veoh 2) have filled in some key legal gaps that existed at the time of Viacom’s filing. While the Veoh cases aren’t binding on the judge, this judge now can follow in someone else’s footsteps rather than trail-blaze. Viacom does cite the Columbia v. Fung case, which helps its cause some, but I think YouTube gets the better of that exchange.
Perhaps more importantly, the intervening time has been good to YouTube as a business and as a brand. In this sense, compare Grokster to YouTube. At the time of the Grokster cases, it was still very much an open question whether Grokster would ever evolve into a tool where legitimate activity dominated. While we might still have had that same question about YouTube in 2006, by 2010 YouTube has answered that question resoundingly. YouTube’s business practices have matured, everyone has had positive legitimate experiences with YouTube (even behind-the-curve judges), and it’s clear that major legitimate players have adopted YouTube as a platform for their legitimate activities. For example, YouTube’s brief makes the point that all of the 2008 presidential candidates published YouTube videos as part of their campaign. I’m guessing no 2004 presidential candidates used Grokster for campaign purposes.
So as time goes on, YouTube solidifies a brand as a legitimate part of our information infrastructure. As we learn that the YouTube story has a happy ending, I suspect judges become less interested in punishing YouTube for past practices. For this reason (and others), I thought a lot of Viacom’s inducement arguments ran hollow because they ran counter to my brand impressions of YouTube. I would also note that Viacom appears to be giving up its litigation over activity after May 2008, so even Viacom seems to be happy with YouTube in its current form.
This raises an interesting legal point that I can’t resolve. Let’s assume for sake of argument that Viacom is right that YouTube induced infringement in 2005-06. Let’s also assume that no one is arguing that YouTube currently induces infringement (after all, Viacom isn’t contesting post-May 2008 activity). How do we determine when YouTube flipped the switch from inducing to not? And does flipping the switch cure any of the past infringement, or does it only cut off future claims? Because we have so few cases of inducement, we really don’t know how the doctrine works with a site that morphs over time.
I thought both YouTube and Viacom scored points against each other in the briefs. I’ll summarize some of those points below, but first I want to highlight a few standout points for both parties:
In YouTube’s case, I could not get over that Viacom has TWICE withdrawn clips from its complaint. I thought the first time Viacom did that was embarrassing and damaging to Viacom’s case, but then Viacom admitted that it didn’t catch all of its errors on the first withdrawal and therefore had to make a second withdrawal of clips. WTF? How hard it is for Viacom to accurately determine which clips it has not permitted to show on YouTube? Whether it intended to or not, Viacom has answered that question to its detriment: hard enough that an entire brigade of extremely expensive lawyers obligated to do factual investigations by Rule 11 can’t get the facts right the first OR SECOND time. For me, this undercuts Viacom’s credibility to its core. Rather than YouTube simply making intuition-based arguments to the judge that it’s really hard to figure out legitimate vs. illegitimate clips, Viacom’s failings have proven to the judge that it’s too hard—too hard for lawyers charging upwards of $1k an hour despite having unrestricted access to accurate information in their clients’ possession, and clearly too hard for YouTube’s slightly-above-minimum-wage customer support representatives with no such information advantages.
YouTube also scored points for its descriptions of Viacom’s stealth marketing practices. Although these facts only help YouTube’s legal posture a little, the lawsuit’s discovery process has unveiled some non-public information about Viacom’s practices that should be interesting to the FTC and state attorney generals. Viacom’s alleged stealth marketing practices are aggressive—close to the permissible line, if not over it. As a result, they might be exactly the kind of consumer misdirection and inauthentic online content that the FTC has been railing against, and we know the FTC is looking for test cases in this area. So, a lawsuit that began as Viacom v. YouTube might morph into FTC v. Viacom. This is one of the known risks of picking a fight—once started, you can’t control where it goes.
From Viacom’s brief, two references really stood out. First, Viacom found an email where Google employees characterized YouTube (pre-acquisition) as a “video Grokster.” Viacom argues that YouTube was like Grokster factually and therefore should be treated like Grokster legally. The Google email admits (in the lay sense, not the legal sense) this factual equivalence. Google can legally discredit the email's importance, but it can’t easily avoid talking out of both sides of its mouth.
Second, I was struck by the fact that Chad Hurley lost his entire email repository. I’ve had that happen to me too, so that fact standing alone isn’t damning. However, the brief goes on to say that when he was grilled about his co-founder’s email stash, Hurley developed “serial amnesia.” The combination did make me wonder about this situation.
As I read the brief, I made some brief notes about points of particular interest. Those notes:
I thought both briefs were well-written and generally effective. However, the YouTube brief successfully struck a conversational tone—a nice balance between formality and accessibility.
[note: my references are to the PDF’s page numbering, not the brief’s page number at the page bottom]
PDF Page 21: Viacom sent a bulk takedown request covering about 100,000 clips on February 2, 2007, but this purge didn’t reduce YouTube traffic or increase Viacom’s traffic.
PDF Page 24: plaintiffs are suing over at least one clip of 1 second. 1 second???
PDF page 34: YouTube has terminated 400,000+ user accounts for infringement out of its 250M accounts. Although that’s a low percentage, that’s a surprisingly high absolute number.
PDF page 40 (FN 9): some litigated clips never got a takedown notice at all.
PDF page 45: YouTube says it did lacked “red flags” knowledge of infringing activity because, in some cases, the copyrights were obscure.
PDF page 47: No red flags because copyright owners routinely voluntarily upload lots of copyrighted material to YouTube, and copyright owners try to cover their tracks. Copyright owners do this because YouTube marketing works. Copyright owners’ embrace of “viral marketing”/“stealth marketing” eliminates any potential red flags.
PDF page 49-50: Details of Viacom’s stealth marketing efforts:
* It uses an “army” of third party marketing agents (at least 18 firms)
* Account names don’t indicate a Viacom relationship
* Email addresses aren’t linked to Viacom
* Clips are deliberately uploaded from networks not tied to Viacom, such as Kinko’s
* Clips are deliberately altered videos to make them look stolen. I thought this was the most damning fact. It’s disingenuous to rail against piracy and yet try to take advantage of the marketing benefits of seemingly unauthorized copying.
PDF page 50: Viacom has released clips with the intent that users spread them virally.
PDF page 53: Viacom has a deliberate and complex strategy for leaving up clips. This part of the brief was confusing so I didn’t fully follow the timeline. Here’s what I understood about Viacom’s “leave-up” policy. Through Oct. 2006: leave up clips less than 5 minutes. Oct 2006: Viacom tells BayTSP to leave up all clips shorter than 2.5 minutes [or is it 3 minutes?]. Then, Viacom expanded the leave-up policy to include every clip shorter than a full episode; and in some cases, even full episodes were expressly left up.
PDF page 54-55: Viacom found 316 clips of South Park and took down only 1.
PDF page 56: “If Viacom deliberately refrained from sending takedown notices for certain videos, how could it be that YouTube was obligated to remove those same videos on sight—without any request from Viacom?”
PDF page 59-60: No red flags because some copyright owners granted licenses that permitted YouTube uploading. Also, some clips may be subject to joint ownership, and YouTube can’t tell if one of the joint owners had consented.
PDF page 61: no red flags because of fair use/de minimis use. I was surprised that the Lenz case wasn’t explored.
PDF page 73: Viacom had complex whitelists of YouTube accounts that wouldn’t be challenged.
PDF page 75: Viacom sued over clips it had authorized for posting.
PDF page 99: less than 1% of YouTube clips have been subject to a takedown notice. Again, I am surprised that this was appropriately rounded to 1%; I would have expected an even smaller fraction.
PDF page 105: Viacom spent over $1M advertising on YouTube from 2006-08. All of which (and more) YouTube has reinvested in its litigation against Viacom.
PDF page 9 (FN 1): This was a confusing footnote, but a crucial one. It appears that Viacom is only interested in infringement pre-May 2008 (before YouTube deployed digital fingerprinting for Viacom). The way I read it, Viacom isn’t going to pursue any claims for activity post-May 2008. Thus, Viacom apparently is acquiescing to—or even happy with—YouTube’s current practices. Consistent with the Tale of Two YouTubes, Viacom reinforces that it’s really only interested in the past, not the present.
Viacom complains that it took too long for YouTube to deploy the digital fingerprinting for it. It says that YouTube withheld the tool as part of a quid-pro-quo to require content owners to sign a license and revenue share deal.
PDF page 14: YouTube founder Karim uploaded infringing content himself.
PDF page 14-15: YouTube was a junkie for traffic to infringing content—it wanted and needed the traffic. They felt they would lose 80% of their traffic if they did a crackdown of obviously infringing clips.
PDF page 17: YouTube tried and then removed the ability for every user to flag clips for copyright infringement. I personally think Viacom overemphasized this point. Service providers are trapped in a dilemma. If they do more screening than 512 requires, copyright owners say that evidences their right and ability to control (indeed, Viacom itself makes that argument in its brief). But if they don’t do more, copyright owners complain that they could have done more. Good grief. With respect to user flagging of copyright infringement, users are a terrible source of credible information about what constitutes copyright infringement (at least, when it’s not their works involved), so the user flagging tool inevitably would generate too many false positives. Requiring 512(c)(3) notices is a logical way to avoid the deluge of false positives.
PDF page 17: Dunton surveyed top clips on YouTube and thought 70%+ were copyrighted. Later, Dunton said 75-80% of clip views were from copyrighted content.
PDF page 19: Karim says in a board meeting that the site would benefit from preemptive takedowns of blatantly illegal content, but no changes were made.
PDF Page 22: pre-acquisition, a Google employee referred to YouTube as a “video Grokster” and a “rogue enabler of content theft.”
PDF Page 22: Google’s investment banker Credit Suisse reported to Google that 60%+ of YouTube’s views were of “premium” content, of which only 10% was authorized.
PDF Page 29-30: Hurley lost all of his emails, and Schmidt deletes all emails after he reads them (guess he doesn’t use Gmail’s “archive” feature). Hurley developed “serial amnesia” when confronted with Karim’s emails.
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