UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF NEW YORK

----------------------------------------X
VIACOM INTERNATIONAL INC., COMEDY
PARTNERS, COUNTRY MUSIC TELEVISION,
INC., PARAMOUNT PICTURES CORPORATION,
and BLACK ENTERTAINMENT TELEVISION LLC,

Plaintiffs, 07 Civ. 2103 (LLS)

-against-

YOUTUBE, INC., YOUTUBE, LLC, and

GOOGLE, INC.,

Defendants,
----------------------------------------X OPINION AND ORDER
THE FOOTBALL ASSOCIATION PREMIER
LEAGUE LIMITED, et al., on
behalf of themselves and all
others similarly situated,

Plaintiffs,

-against-
07 Civ. 3582 (LLS)
YOUTUBE, INC., YOUTUBE, LLC, and
GOOGLE, INC.,

Defendants.
----------------------------------------X

Defendants move for summary judgment that they are

entitled to the Digital Millennium Copyright Act’s (“DMCA”), 17

U.S.C. § 512(c), “safe harbor” protection against all of

plaintiffs’ direct and secondary infringement claims, including

claims for “inducement” contributory liability, because they had

insufficient notice, under the DMCA, of the particular

infringements in suit.
 Plaintiffs cross-move for partial summary judgment

that defendants are not protected by the statutory “safe harbor”

provision, but “are liable for the intentional infringement of

thousands of Viacom’s copyrighted works, . . . for the vicarious

infringement of those works, and for the direct infringement of

those works . . . because: (1) Defendants had ‘actual

knowledge’ and were ‘aware of facts and circumstances from which

infringing activity [was] apparent,’ but failed to ‘act[]

expeditiously’ to stop it; (2) Defendants ‘receive[d] a

financial benefit directly attributable to the infringing

activity’ and ‘had the right and ability to control such

activity;’ and (3) Defendants’ infringement does not result

solely from providing ‘storage at the direction of a user’ or

any other Internet function specified in section 512.” (See the

parties’ Notices of Motion).

Resolution of the key legal issue presented on the

parties’ cross-motions requires examination of the DMCA’s “safe

harbor” provisions, 17 U.S.C. § 512(c), (m) and (n) which state:

(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—

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 (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.

(2) Designated agent.—The limitations on liability

established in this subsection apply to a service
provider only if the service provider has designated
an agent to receive notifications of claimed
infringement described in paragraph (3), by making
available through its service, including on its
website in a location accessible to the public, and by
providing to the Copyright Office, substantially the
following information:

(A) the name, address, phone number, and

electronic mail address of the agent.

(B) Other contact information which the

Register of Copyrights may deem
appropriate.

The Register of Copyrights shall maintain a current

directory of agents available to the public for
inspection, including through the Internet, in both
electronic and hard copy formats, and may require
payment of a fee by service providers to cover the
costs of maintaining the directory.

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(3) Elements of notification.—

(A) To be effective under this subsection, a

notification of claimed infringement must be a
written communication provided to the designated
agent of a service provider that includes
substantially the following:

(i) A physical or electronic signature

of a person authorized to act on behalf of
the owner of an exclusive right that is
allegedly infringed.

(ii) Identification of the copyrighted

work claimed to have been infringed, or,
if multiple copyrighted works at a single
online site are covered by a single
notification, a representative list of
such works at that site.

(iii) Identification of the material

that is claimed to be infringing or to be
the subject of infringing activity and
that is to be removed or access to which
is to be disabled, and information
reasonably sufficient to permit the
service provider to locate the material.

(iv) Information reasonably sufficient

to permit the service provider to contact
the complaining party, such as an address,
telephone number, and, if available, an
electronic mail address at which the
complaining party may be contacted.

(v) A statement that the complaining

party has a good faith belief that use of
the material in the manner complained of
is not authorized by the copyright owner,
its agent, or the law.

(vi) A statement that the information in

the notification is accurate, and under
penalty of perjury, that the complaining
party is authorized to act on behalf of
the owner of an exclusive right that is
allegedly infringed.

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 (B)(i) Subject to clause (ii), a notification
from a copyright owner or from a person
authorized to act on behalf of the copyright
owner that fails to comply substantially with the
provisions of subparagraph (A) shall not be
considered under paragraph (1)(A) in determining
whether a service provider has actual knowledge
or is aware of facts or circumstances from which
infringing activity is apparent.

(ii) In a case in which the notification that

is provided to the service provider’s designated
agent fails to comply substantially with all the
provisions of subparagraph (A) but substantially
complies with clauses (ii), (iii), and (iv) of
subparagraph (A), clause (i) of this subparagraph
applies only if the service provider promptly
attempts to contact the person making the
notification or takes other reasonable steps to
assist in the receipt of notification that
substantially complies with all the provisions of
subparagraph (A).

* * *

(m) Protection of privacy.—Nothing in this

section shall be construed to condition the
applicability of subsections (a) through (d) on—

(1) a service provider monitoring its

service or affirmatively seeking facts
indicating infringing activity, except to
the extent consistent with a standard
technical measure complying with the
provisions of subsection (i); or

(2) a service provider gaining access to,

removing, or disabling access to material in
cases in which such conduct is prohibited by
law.

(n) Construction.—Subsections (a), (b), (c),

and (d) describe separate and distinct functions
for purposes of applying this section. Whether a

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 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.

Defendant YouTube, owned by defendant Google, operates

a website at http://www.youtube.com onto which users may upload

video files free of charge. Uploaded files are copied and

formatted by YouTube’s computer systems, and then made available

for viewing on YouTube. Presently, over 24 hours of new video-

viewing time is uploaded to the YouTube website every minute.

As a “provider of online services or network access, or the

operator of facilities therefor” as defined in 17 U.S.C. §

512(k)(1)(B), YouTube is a service provider for purposes of §

512(c).

From plaintiffs’ submissions on the motions, a jury

could find that the defendants not only were generally aware of,

but welcomed, copyright-infringing material being placed on

their website. Such material was attractive to users, whose

increased usage enhanced defendants’ income from advertisements

displayed on certain pages of the website, with no

discrimination between infringing and non-infringing content.

Plaintiffs claim that “tens of thousands of videos on

YouTube, resulting in hundreds of millions of views, were taken

unlawfully from Viacom’s copyrighted works without

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authorization” (Viacom Br., Dkt. No. 186, p. 1), and that

“Defendants had ‘actual knowledge’ and were ‘aware of facts or

circumstances from which infringing activity [was] apparent,’

but failed to do anything about it.” (Id. at 4) (alteration in

original).

However, defendants designated an agent, and when they

received specific notice that a particular item infringed a

copyright, they swiftly removed it. It is uncontroverted that

all the clips in suit are off the YouTube website, most having

been removed in response to DMCA takedown notices.

Thus, the critical question is whether the statutory

phrases “actual knowledge that the material or an activity using

the material on the system or network is infringing,” and “facts

or circumstances from which infringing activity is apparent” in

§ 512(c)(1)(A)(i) and (ii) mean a general awareness that there

are infringements (here, claimed to be widespread and common),

or rather mean actual or constructive knowledge of specific and

identifiable infringements of individual items.

1.

Legislative History

The Senate Committee on the Judiciary Report, S. Rep.

No. 105-190 (1998), gives the background at page 8:

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 Due to the ease with which digital works can be
copied and distributed worldwide virtually
instantaneously, copyright owners will hesitate to
make their works readily available on the Internet
without reasonable assurance that they will be
protected against massive piracy. Legislation
implementing the treaties provides this protection and
creates the legal platform for launching the global
digital on-line marketplace for copyrighted works. It
will facilitate making available quickly and
conveniently via the Internet the movies, music,
software, and literary works that are the fruit of
American creative genius. It will also encourage the
continued growth of the existing off-line global
marketplace for copyrighted works in digital format by
setting strong international copyright standards.
At the same time, without clarification of their
liability, service providers may hesitate to make the
necessary investment in the expansion of the speed and
capacity of the Internet. In the ordinary course of
their operations service providers must engage in all
kinds of acts that expose them to potential copyright
infringement liability. For example, service
providers must make innumerable electronic copies by
simply transmitting information over the Internet.
Certain electronic copies are made in order to host
World Wide Web sites. Many service providers engage
in directing users to sites in response to inquiries
by users or they volunteer sites that users may find
attractive. Some of these sites might contain
infringing material. In short, by limiting the
liability of service providers, the DMCA ensures that
the efficiency of the Internet will continue to
improve and that the variety and quality of services
on the Internet will continue to expand.

It elaborates:

There have been several cases relevant to service

provider liability for copyright infringement. Most
have approached the issue from the standpoint of
contributory and vicarious liability. Rather than
embarking upon a wholesale clarification of these
doctrines, the Committee decided to leave current law
in its evolving state and, instead, to create a series
of “safe harbors,” for certain common activities of

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 service providers. A service provider which qualifies
for a safe harbor, receives the benefit of limited
liability.

Id. at 19 (footnote omitted).

The Senate Judiciary Committee Report and the House

Committee on Commerce Report, H.R. Rep. No. 105-551, pt. 2

(1998), in almost identical language describe the DMCA’s purpose

and structure (Senate Report at 40-41, House Report at 50):

New section 512 contains limitations on service

providers’ liability for five general categories of
activity set forth in subsections (a) through (d) and
subsection (f). As provided in subsection (k),
section 512 is not intended to imply that a service
provider is or is not liable as an infringer either
for conduct that qualifies for a limitation of
liability or for conduct that fails to so qualify.
Rather, the limitations of liability apply if the
provider is found to be liable under existing
principles of law.
The limitations in subsections (a) through (d)
protect qualifying service providers from liability
for all monetary relief for direct, vicarious and
contributory infringement. Monetary relief is defined
in subsection (j)(2) as encompassing damages, costs,
attorneys’ fees, and any other form of monetary
payment. These subsections also limit injunctive
relief against qualifying service providers to the
extent specified in subsection (i). To qualify for
these protections, service providers must meet the
conditions set forth in subsection (h), and service
providers’ activities at issue must involve a function
described in subsection (a), (b), (c), (d) or (f),
respectively. The liability limitations apply to
networks “operated by or for the service provider,”
thereby protecting both service providers who offer a
service and subcontractors who may operate parts of,
or an entire, system or network for another service
provider.

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 They discuss the “applicable knowledge standard”

(Senate Report at 44-45, House Report at 53-54):

Subsection (c)(1)—In general.—Subsection (c)(1)(A)

sets forth the applicable knowledge standard. This
standard is met either by actual knowledge of
infringement or in the absence of such knowledge by
awareness of facts or circumstances from which
infringing activity is apparent. The term “activity”
is intended to mean activity using the material on the
system or network. The Committee intends such
activity to refer to wrongful activity that is
occurring at the site on the provider’s system or
network at which the material resides, regardless of
whether copyright infringement is technically deemed
to occur at that site or at the location where the
material is received. For example, the activity at an
online site offering audio or video may be
unauthorized public performance of a musical
composition, a sound recording, or an audio-visual
work, rather than (or in addition to) the creation of
an unauthorized copy of any of these works.
Subsection (c)(1)(A)(ii) can best be described as a
“red flag” test. As stated in subsection (l), a
service provider need not monitor its service or
affirmatively seek facts indicating infringing
activity (except to the extent consistent with a
standard technical measure complying with subsection
(h)), in order to claim this limitation on liability
(or, indeed any other limitation provided by the
legislation). However, if the service provider
becomes aware of a “red flag” from which infringing
activity is apparent, it will lose the limitation of
liability if it takes no action. The “red flag” test
has both a subjective and an objective element. In
determining whether the service provider was aware of
a “red flag,” the subjective awareness of the service
provider of the facts or circumstances in question
must be determined. However, in deciding whether
those facts or circumstances constitute a “red flag”—
in other words, whether infringing activity would have
been apparent to a reasonable person operating under
the same or similar circumstances—an objective
standard should be used.

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 Subsection (c)(1)(A)(iii) provides that once a
service provider obtains actual knowledge or awareness
of facts or circumstances from which infringing
material or activity on the service provider’s system
or network is apparent, the service provider does not
lose the limitation of liability set forth in
subsection (c) if it acts expeditiously to remove or
disable access to the infringing material. Because
the factual circumstances and technical parameters may
vary from case to case, it is not possible to identify
a uniform time limit for expeditious action.
Subsection (c)(1)(B) sets forth the circumstances
under which a service provider would lose the
protection of subsection (c) by virtue of its benefit
from the control over infringing activity. In
determining whether the financial benefit criterion is
satisfied, courts should take a common-sense, fact-
based approach, not a formalistic one. In general, a
service provider conducting a legitimate business
would not be considered to receive a “financial
benefit directly attributable to the infringing
activity” where the infringer makes the same kind of
payment as non-infringing users of the provider’s
service. Thus, receiving a one-time set-up fee and
flat periodic payments for service from a person
engaging in infringing activities would not constitute
receiving a “financial benefit directly attributable
to the infringing activity.” Nor is subparagraph (B)
intended to cover fees based on the length of the
message (per number of bytes, for example) or by
connect time. It would however, include any such fees
where the value of the service lies in providing
access to infringing material.

and at Senate Report 45, House Report 54:

Section 512 does not require use of the notice and

take-down procedure. A service provider wishing to
benefit from the limitation on liability under
subsection (c) must “take down” or disable access to
infringing material residing on its system or network
of which it has actual knowledge or that meets the
“red flag” test, even if the copyright owner or its
agent does not notify it of a claimed infringement.
On the other hand, the service provider is free to
refuse to “take down” the material or site, even after
receiving a notification of claimed infringement from

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 the copyright owner; in such a situation, the service
provider’s liability, if any, will be decided without
reference to section 512(c). For their part,
copyright owners are not obligated to give
notification of claimed infringement in order to
enforce their rights. However, neither actual
knowledge nor awareness of a red flag may be imputed
to a service provider based on information from a
copyright owner or its agent that does not comply with
the notification provisions of subsection (c)(3), and
the limitation of liability set forth in subsection
(c) may apply.

The reports continue (Senate Report at 46-47, House

Report at 55-56):

Subsection (c)(3)(A)(iii) requires that the

copyright owner or its authorized agent provide the
service provider with information reasonably
sufficient to permit the service provider to identify
and locate the allegedly infringing material. An
example of such sufficient information would be a copy
or description of the allegedly infringing material
and the URL address of the location (web page) which
is alleged to contain the infringing material. The
goal of this provision is to provide the service
provider with adequate information to find and address
the allegedly infringing material expeditiously.

* * *

Subsection (c)(3)(B) addresses the effect of

notifications that do not substantially comply with
the requirements of subsection (c)(3). Under this
subsection, the court shall not consider such
notifications as evidence of whether the service
provider has actual knowledge, is aware of facts or
circumstances, or has received a notification for
purposes of subsection (c)(1)(A). However, a
defective notice provided to the designated agent may
be considered in evaluating the service provider’s
knowledge or awareness of facts and circumstances, if
(i) the complaining party has provided the requisite
information concerning the identification of the

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 copyrighted work, identification of the allegedly
infringing material, and information sufficient for
the service provider to contact the complaining party,
and (ii) the service provider does not promptly
attempt to contact the person making the notification
or take other reasonable steps to assist in the
receipt of notification that substantially complies
with paragraph (3)(A). If the service provider
subsequently receives a substantially compliant
notice, the provisions of paragraph (1)(C) would then
apply upon receipt of the notice.

When discussing section 512(d) of the DMCA which deals

with information location tools, the Committee Reports contain

an instructive explanation of the need for specificity (Senate

Report at 48-49, House Report at 57-58):

Like the information storage safe harbor in section

512(c), a service provider would qualify for this safe
harbor if, among other requirements, it “does not have
actual knowledge that the material or activity is
infringing” or, in the absence of such actual
knowledge, it is “not aware of facts or circumstances
from which infringing activity is apparent.” Under
this standard, a service provider would have no
obligation to seek out copyright infringement, but it
would not qualify for the safe harbor if it had turned
a blind eye to “red flags” of obvious infringement.
For instance, the copyright owner could show that
the provider was aware of facts from which infringing
activity was apparent if the copyright owner could
prove that the location was clearly, at the time the
directory provider viewed it, a “pirate” site of the
type described below, where sound recordings,
software, movies or books were available for
unauthorized downloading, public performance or public
display. Absent such “red flags” or actual knowledge,
a directory provider would not be similarly aware
merely because it saw one or more well known
photographs of a celebrity at a site devoted to that
person. The provider could not be expected, during
the course of its brief cataloguing visit, to
determine whether the photograph was still protected
by copyright or was in the public domain; if the

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photograph was still protected by copyright, whether
the use was licensed; and if the use was not licensed,
whether it was permitted under the fair use doctrine.
The important intended objective of this standard is
to exclude sophisticated “pirate” directories—which
refer Internet users to other selected Internet sites
where pirate software, books, movies, and music can be
downloaded or transmitted—from the safe harbor. Such
pirate directories refer Internet users to sites that
are obviously infringing because they typically use
words such as “pirate,” “bootleg,” or slang terms in
their uniform resource locator (URL) and header
information to make their illegal purpose obvious to
the pirate directories and other Internet users.
Because the infringing nature of such sites would be
apparent from even a brief and casual viewing, safe
harbor status for a provider that views such a site
and then establishes a link to it would not be
appropriate. Pirate directories do not follow the
routine business practices of legitimate service
providers preparing directories, and thus evidence
that they have viewed the infringing site may be all
that is available for copyright owners to rebut their
claim to a safe harbor.
In this way, the “red flag” test in section 512(d)
strikes the right balance. The common-sense result of
this “red flag” test is that online editors and
catalogers would not be required to make
discriminating judgments about potential copyright
infringement. If, however, an Internet site is
obviously pirate, then seeing it may be all that is
needed for the service provider to encounter a “red
flag.” A provider proceeding in the face of such a
red flag must do so without the benefit of a safe
harbor.
Information location tools are essential to the
operation of the Internet; without them, users would
not be able to find the information they need.
Directories are particularly helpful in conducting
effective searches by filtering out irrelevant and
offensive material. The Yahoo! Directory, for
example, currently categorizes over 800,000 online
locations and serves as a “card catalogue” to the
World Wide Web, which over 35,000,000 different users
visit each month. Directories such as Yahoo!’s
usually are created by people visiting sites to
categorize them. It is precisely the human judgment

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 and editorial discretion exercised by these
cataloguers which makes directories valuable.
This provision is intended to promote the
development of information location tools generally,
and Internet directories such as Yahoo!’s in
particular, by establishing a safe-harbor from
copyright infringement liability for information
location tool providers if they comply with the notice
and takedown procedures and other requirements of
subsection (d). The knowledge or awareness standard
should not be applied in a manner which would create a
disincentive to the development of directories which
involve human intervention. Absent actual knowledge,
awareness of infringement as provided in subsection
(d) should typically be imputed to a directory
provider only with respect to pirate sites or in
similarly obvious and conspicuous circumstances, and
not simply because the provider viewed an infringing
site during the course of assembling the directory.

The tenor of the foregoing provisions is that the

phrases “actual knowledge that the material or an activity” is

infringing, and “facts or circumstances” indicating infringing

activity, describe knowledge of specific and identifiable

infringements of particular individual items. Mere knowledge of

prevalence of such activity in general is not enough. That is

consistent with an area of the law devoted to protection of

distinctive individual works, not of libraries. To let

knowledge of a generalized practice of infringement in the

industry, or of a proclivity of users to post infringing

materials, impose responsibility on service providers to

discover which of their users’ postings infringe a copyright

would contravene the structure and operation of the DMCA. As

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stated in Perfect 10, Inc. v. CCBill LLC, 488 F.3d 1102, 1113

(9th Cir. 2007):

The DMCA notification procedures place the burden of

policing copyright infringement—identifying the
potentially infringing material and adequately
documenting infringement—squarely on the owners of the
copyright. We decline to shift a substantial burden
from the copyright owner to the provider . . . .

That makes sense, as the infringing works in suit may

be a small fraction of millions of works posted by others on the

service’s platform, whose provider cannot by inspection

determine whether the use has been licensed by the owner, or

whether its posting is a “fair use” of the material, or even

whether its copyright owner or licensee objects to its posting.

The DMCA is explicit: it shall not be construed to condition

“safe harbor” protection on “a service provider monitoring its

service or affirmatively seeking facts indicating infringing

activity . . . .” Id. § 512(m)(1); see Senate Report at 44,

House Report at 53.

Indeed, the present case shows that the DMCA

notification regime works efficiently: when Viacom over a

period of months accumulated some 100,000 videos and then sent

one mass take-down notice on February 2, 2007, by the next

business day YouTube had removed virtually all of them.

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 2.

Case Law

In CCBill LLC, supra, the defendants provided web

hosting and other services to various websites. The plaintiff

argued that defendants had received notice of apparent

infringement from circumstances that raised “red flags”:

websites were named “illegal.net” and “stolencelebritypics.com,”

and others involved “password-hacking.” 488 F.3d at 1114

(internal quotation marks omitted). As to each ground, the

Ninth Circuit disagreed, stating “We do not place the burden of

determining whether photographs are actually illegal on a

service provider”; and “There is simply no way for a service

provider to conclude that the passwords enabled infringement

without trying the passwords, and verifying that they enabled

illegal access to copyrighted material. We impose no such

investigative duties on service providers.” Id.

The District Court in UMG Recordings, Inc. v. Veoh

Networks, Inc., 665 F. Supp. 2d 1099, 1108 (C.D. Cal. 2009),

concluded that “CCBill teaches that if investigation of ‘facts

and circumstances’ is required to identify material as

infringing, then those facts and circumstances are not ‘red

flags.’” That observation captures the reason why awareness of

pervasive copyright-infringing, however flagrant and blatant,

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does not impose liability on the service provider. It furnishes

at most a statistical estimate of the chance any particular

posting is infringing — and that is not a “red flag” marking any

particular work.

In Corbis Corp. v. Amazon.com, Inc., 351 F. Supp. 2d

1090, 1108 (W.D. Wash. 2004) the court stated that “The issue is

not whether Amazon had a general awareness that a particular

type of item may be easily infringed. The issue is whether

Amazon actually knew that specific zShops vendors were selling

items that infringed Corbis copyrights.” It required a “showing

that those sites contained the type of blatant infringing

activity that would have sent up a red flag for Amazon.” Id. at

1109. Other evidence of “red flags” was unavailing, for it

“provides no evidence from which to infer that Amazon was aware

of, but chose to ignore, red flags of blatant copyright

infringement on specific zShops sites.” Id.

A similar recent decision of the Second Circuit

involved analogous claims of trademark infringement (and

therefore did not involve the DMCA) by sales of counterfeit

Tiffany merchandise on eBay, Inc.’s website. In Tiffany (NJ)

Inc. v. eBay Inc., 600 F.3d 93 (2d Cir. April 1, 2010) the Court

of Appeals affirmed the dismissal of trademark infringement and

dilution claims against eBay’s advertising and listing

practices. The sellers on eBay offered Tiffany sterling silver

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jewelry of which a significant portion (perhaps up to 75%) were

counterfeit, although a substantial number of Tiffany goods sold

on eBay were authentic. (Id. at 97-98). The particular issue

was “whether eBay is liable for contributory trademark

infringement — i.e., for culpably facilitating the infringing

conduct of the counterfeiting vendors” (id. at 103) because

“eBay continued to supply its services to the sellers of

counterfeit Tiffany goods while knowing or having reason to know

that such sellers were infringing Tiffany’s mark.” (Id. at

106). Tiffany alleged that eBay knew, or had reason to know,

that counterfeit Tiffany goods were being sold “ubiquitously” on

eBay, and the District Court had found that eBay indeed “had

generalized notice that some portion of the Tiffany goods sold

on its website might be counterfeit” (id.; emphasis in

original). Nevertheless, the District Court (Sullivan, J.)

dismissed, holding that such generalized knowledge was

insufficient to impose upon eBay an affirmative duty to remedy

the problem. It held that “for Tiffany to establish eBay’s

contributory liability, Tiffany would have to show that eBay

‘knew or had reason to know of specific instances of actual

infringement’ beyond those that it addressed upon learning of

them.” (Id. at 107).

The Court of Appeals held (Id.):

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 We agree with the district court. For
contributory trademark infringement liability to lie,
a service provider must have more than a general
knowledge or reason to know that its service is being
used to sell counterfeit goods. Some contemporary
knowledge of which particular listings are infringing
or will infringe in the future is necessary.

And at p. 110:

eBay appears to concede that it knew as a general

matter that counterfeit Tiffany products were listed
and sold through its website. Tiffany, 576 F.Supp.2d
at 514. Without more, however, this knowledge is
insufficient to trigger liability under Inwood.[1]

Although by a different technique, the DMCA applies

the same principle, and its establishment of a safe harbor is

clear and practical: if a service provider knows (from notice

from the owner, or a “red flag”) of specific instances of

infringement, the provider must promptly remove the infringing

material. If not, the burden is on the owner to identify the

infringement. General knowledge that infringement is

“ubiquitous” does not impose a duty on the service provider to

monitor or search its service for infringements.

1
See Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 102
S. Ct. 2182 (1982).

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 3.

The Grokster Case

Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd.,

545 U.S. 913 (2005) and its progeny Arista Records LLC v.

Usenet.com, Inc., 633 F. Supp. 2d 124 (S.D.N.Y. 2009)

(dismissing DMCA defense as sanction for spoliation and evasive

discovery tactics), Columbia Pictures Industries, Inc. v. Fung,

No. 06 Civ. 5578, 2009 U.S. Dist. LEXIS 122661 (C.D. Cal. Dec.

21, 2009), and Arista Records LLC v. Lime Group LLC, No. 06 Civ.

5936 (KMW), ___ F. Supp. 2d ___, 2010 WL 2291485 (S.D.N.Y. May

25, 2010), which furnish core principles heavily relied on by

plaintiffs and their supporting amici, have little application

here. Grokster, Fung, and Lime Group involved peer-to-peer

file-sharing networks which are not covered by the safe harbor

provisions of DMCA § 512(c). The Grokster and Lime Group

opinions do not even mention the DMCA. Fung was an admitted

copyright thief whose DMCA defense under § 512(d) was denied on

undisputed evidence of “‘purposeful, culpable expression and

conduct’ aimed at promoting infringing uses of the websites”

(2009 U.S. Dist. LEXIS 122661, at *56).

Grokster addressed the more general law of

contributory liability for copyright infringement, and its

application to the particular subset of service providers

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protected by the DMCA is strained. In a setting of distribution

of software products that allowed computer-to-computer exchanges

of infringing material, with the expressed intent of succeeding

to the business of the notoriously infringing Napster (see 545

U.S. at 923-26) the Grokster Court held (id. at 919, 936-37):

. . . that one who distributes a device with the

object of promoting its use to infringe copyright, as
shown by clear expression or other affirmative steps
taken to foster infringement, is liable for the
resulting acts of infringement by third parties.

On these cross-motions for summary judgment I make no

findings of fact as between the parties, but I note that

plaintiff Viacom’s General Counsel said in a 2006 e-mail that “.

. . the difference between YouTube’s behavior and Grokster’s is

staggering.” Ex. 173 to Schapiro Opp. Affid., Dkt. No. 306,

Att. 4. Defendants asserted in their brief supporting their

motion (Dkt. No. 188, p.60) and Viacom’s response does not

controvert (Dkt. No. 296, p.29, ¶ 1.80) that:

It is not remotely the case that YouTube exists

“solely to provide the site and facilities for
copyright infringement.” . . . Even the plaintiffs do
not (and could not) suggest as much. Indeed, they
have repeatedly acknowledged the contrary.

The Grokster model does not comport with that of a

service provider who furnishes a platform on which its users

post and access all sorts of materials as they wish, while the

provider is unaware of its content, but identifies an agent to

receive complaints of infringement, and removes identified

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material when he learns it infringes. To such a provider, the

DMCA gives a safe harbor, even if otherwise he would be held as

a contributory infringer under the general law. In this case,

it is uncontroverted that when YouTube was given the notices, it

removed the material. It is thus protected “from liability for

all monetary relief for direct, vicarious and contributory

infringement” subject to the specific provisions of the DMCA.

Senate Report at 40, House Report at 50.

4.

Other Points

(a)

Plaintiffs claim that the replication, transmittal and

display of videos on YouTube fall outside the protection §

512(c)(1) of the DMCA gives to “infringement of copyright by

reason of the storage at the direction of a user of material” on

a service provider’s system or network. That confines the word

“storage” too narrowly to meet the statute’s purpose.

In § 512(k)(1)(B) a “service provider” is defined as

“a provider of online services or network access, or the

operator of facilities therefor,” and includes “an entity

offering the transmission, routing, or providing of connections

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for digital online communications.” Surely the provision of

such services, access, and operation of facilities are within

the safe harbor when they flow from the material’s placement on

the provider’s system or network: it is inconceivable that they

are left exposed to be claimed as unprotected infringements. As

the Senate Report states (p. 8):

In the ordinary course of their operations service

providers must engage in all kinds of acts that expose
them to potential copyright infringement liability. .
. . In short, by limiting the liability of service
providers, the DMCA ensures that the efficiency of the
Internet will continue to improve and that the variety
and quality of services on the Internet will continue
to expand.

As stated in Io Group, Inc. v. Veoh Networks, Inc.,

586 F. Supp. 2d 1132, 1148 (N.D. Cal. 2008), such “means of

facilitating user access to material on its website” do not cost

the service provider its safe harbor. See also UMG Recordings,

Inc. v. Veoh Networks, Inc., 620 F. Supp. 2d 1081, 1089 (C.D.

Cal. 2008):

Although Veoh correctly observes that the

language of § 512(c) is “broad,” it does not venture
to define its outermost limits. It is unnecessary for
this Court to do so either, because the critical
statutory language really is pretty clear. Common
sense and widespread usage establish that “by reason
of” means “as a result of” or “something that can be
attributed to . . . .” So understood, when
copyrighted content is displayed or distributed on
Veoh it is “as a result of” or “attributable to” the
fact that users uploaded the content to Veoh’s servers
to be accessed by other means. If providing access
could trigger liability without the possibility of
DMCA immunity, service providers would be greatly

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 deterred from performing their basic, vital and
salutary function—namely, providing access to
information and material for the public.

To the extent defendants’ activities go beyond what

can fairly be characterized as meeting the above-described

collateral scope of “storage” and allied functions, and present

the elements of infringements under existing principles of

copyright law, they are not facially protected by § 512(c).

Such activities simply fall beyond the bounds of the safe harbor

and liability for conducting them must be judged according to

the general law of copyright infringement. That follows from

the language of § 512(c)(1) that “A service provider shall not

be liable . . . for infringement of copyright by reason of the

storage . . . .” However, such instances have no bearing on the

coverage of the safe harbor in all other respects.

(b)

The safe harbor requires that the service provider

“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 . . . .” §

512(c)(1)(B). The “right and ability to control” the activity

requires knowledge of it, which must be item-specific. (See

Parts 1 and 2 above.) There may be arguments whether revenues

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from advertising, applied equally to space regardless of whether

its contents are or are not infringing, are “directly

attributable to” infringements, but in any event the provider

must know of the particular case before he can control it. As

shown by the discussion in Parts 1 and 2 above, the provider

need not monitor or seek out facts indicating such activity. If

“red flags” identify infringing material with sufficient

particularity, it must be taken down.

(c)

Three minor arguments do not singly or cumulatively

affect YouTube’s safe harbor coverage.

(1) YouTube has implemented a policy of terminating a

user after warnings from YouTube (stimulated by its receipt of

DMCA notices) that the user has uploaded infringing matter (a

“three strikes” repeat-infringer policy). That YouTube counts

as only one strike against a user both (1) a single DMCA take-

down notice identifying multiple videos uploaded by the user,

and (2) multiple take-down notices identifying videos uploaded

by the user received by YouTube within a two-hour period, does

not mean that the policy was not “reasonably implemented” as

required by § 512(i)(1)(A). In Corbis Corp. v. Amazon.com,

Inc., 351 F. Supp. 2d 1090, 1105 (W.D. Wash. 2004), in

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evaluating whether Amazon complied with § 512(i), the Court

stated that even DMCA-compliant notices “did not, in themselves,

provide evidence of blatant copyright infringement.” In UMG

Recordings, Inc. v. Veoh Networks, Inc., 665 F. Supp. 2d 1099,

1116, 1118 (C.D. Cal. 2009), the Court upheld Veoh’s policy of

terminating users after a second warning, even if the first

warning resulted from a take-down notice listing multiple

infringements. It stated:

As the Corbis court noted, “[t]he key term, ‘repeat

infringer,’ is not defined. . . . The fact that
Congress chose not to adopt such specific provisions
when defining a user policy indicates its intent to
leave the policy requirements, and the subsequent
obligations of the service providers, loosely
defined.” Corbis, 351 F.Supp.2d at 1100-01. This
Court finds that Veoh’s policy satisfies Congress’s
intent that “those who repeatedly or flagrantly abuse
their access to the Internet through disrespect for
the intellectual property rights of others should know
that there is a realistic threat of losing that
access.” H.R. Rep. 105-551(II), at 61.

Id. at 1118. (alteration and omission in original).

(2) In its “Claim Your Content” system, YouTube used

Audible Magic, a fingerprinting tool which removed an offending

video automatically if it matched some portion of a reference

video submitted by a copyright owner who had designated this

service. It also removed a video if the rights-holder operated

a manual function after viewing the infringing video. YouTube

assigned strikes only when the rights-holder manually requested

the video to be removed. Requiring the rights-holder to take

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that position does not violate § 512(i)(1)(A). See UMG

Recordings, 665 F. Supp. 2d at 1116-18 (automated Audible Magic

filter “does not meet the standard of reliability and

verifiability required by the Ninth Circuit in order to justify

terminating a user’s account”); see also Perfect 10, Inc. v.

CCBill LLC, 488 F.3d 1102, 1112 (9th Cir. 2007) (“We therefore

do not require a service provider to start potentially invasive

proceedings if the complainant is unwilling to state under

penalty of perjury that he is an authorized representative of

the copyright owner, and that he has a good-faith belief that

the material is unlicensed.”).

YouTube’s initial hesitation in counting such rights-

holder requests as strikes was reasonable: the six month delay

was needed to monitor the system’s use by rights-holders, and

for engineering work to assure that strikes would be assigned

accurately.

(3) Plaintiffs complain that YouTube removes only the

specific clips identified in DMCA notices, and not other clips

which infringe the same works. They point to the provision in §

512(c)(3)(A)(ii) that a notification must include

“Identification of the copyrighted work claimed to have been

infringed, or, if multiple copyrighted works at a single online

site are covered by a single notification, a representative list

of such works at that site.” This “representative list”

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reference would eviscerate the required specificity of notice

(see discussion in Parts 1 and 2 above) if it were construed to

mean a merely generic description (“all works by Gershwin”)

without also giving the works’ locations at the site, and would

put the provider to the factual search forbidden by § 512(m).

Although the statute states that the “works” may be described

representatively, 512(c)(3)(A)(ii), the subsection which

immediately follows requires that the identification of the

infringing material that is to be removed must be accompanied by

“information reasonably sufficient to permit the service

provider to locate the material.” 512(c)(3)(A)(iii). See House

Report at 55; Senate Report at 46: “An example of such

sufficient information would be a copy or description of the

allegedly infringing material and the so-called “uniform

resource locator” (URL) (i.e., web site address) which allegedly

contains the infringing material.” See also UMG Recordings, 665

F. Supp. 2d at 1109-10 (DMCA notices which demanded removal of

unspecified clips of video recordings by certain artists did not

provide “‘information reasonably sufficient to permit the

service provider to locate [such] material.’”) (alteration in

original).

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