How Google could lose the Viacom/YouTube lawsuit - Part I

My belief that Google should be held liable for copyright infringement in Viacom's $1bn YouTube lawsuit is no secret.

With the lawsuit making headlines recently, I figured it was an appropriate time to lay out in some detail why I feel the way I do in a two-part series.

In Part I today, I'll evaluate Viacom's allegations - namely that Google is liable for direct, contributory and vicarious copyright infringement.

Direct Infringement

"Anyone who, without the authorization of the copyright owner, exercises any of the exclusive rights of a copyright owner, as granted and limited by the Copyright Act, is an infringer of copyright."

To successfully prove direct infringement, a plaintiff has to prove that it owns the infringing materials and that the defendant has infringed upon at least one exclusive right afforded to copyright holders under the law.

In the case of Viacom and YouTube, Viacom will not have any problem establishing ownership of the material that it claims is infringing.

Proving that YouTube has infringed upon its rights should also not be difficult in my opinion.

In A&M Records, Inc. v. Napster, Inc., the appeals court upheld that Napster infringed upon two exclusive rights afforded to copyright holders - the right of reproduction and the right of distribution:

"We agree that plaintiffs have shown that Napster users infringe at least two of the copyright holders’ exclusive rights: the rights of reproduction, § 106(1); and distribution, § 106(3). Napster users who upload file names to the search index for others to copy violate plaintiffs’ distribution rights. Napster users who download files containing copyrighted music violate plaintiffs’ reproduction rights."

Napster unsuccessfully argued that it was protected by fair use doctrines and any attempt by Google to make such a claim would almost certainly be unsuccessful on similar grounds.

As it was with Napster, it will be hard for Google to argue that YouTube does not infringe upon Viacom's distribution and reproduction rights as YouTube and its users have not been granted any rights by Viacom to distribute and reproduce Viacom's material.

Contributory Infringement

"...one who, with knowledge of the infringing activity, induces, causes or materially contributes to the infringing conduct of another, may be held liable as a ‘contributory’ infringer."

Has Google known or had reason to know of the direct infringement allegedly taking place on YouTube?

It's hard to argue that it hasn't.

Given the ease with which copyrighted material can be located on YouTube, the number of takedown notices that it has received under the Digital Millennium Copyright Act and the discussions over the legal risk Google was taking when it acquired YouTube, it is difficult to argue that Google has been completely clueless about the extent to which YouTube has been a vehicle for wholesale copyright infringement.

One of the reasons Viacom has sought massive amounts of YouTube user data is to quantify the amount of infringement that has taken place on the service.

Obviously, if Viacom can demonstrate that the level of copyright infringement has been so great as to have been unavoidably noticeable, Google will have a 
harder time arguing a believable level of "ignorance."

Additionally, the battle over data related to YouTube employee usage of the service is relevant. If Viacom can establish that YouTube employees 
uploaded and/or viewed infringing material, it will help establish specific cases of knowledge even though Google may argue - unconvincingly - that 
the employee was unaware that the material was infringing.

In A&M Records, Inc. v. Napster, Inc., the district court found that:

"...Napster had both actual and constructive knowledge that its users exchanged copyrighted music. The district court also concluded that the law does not require knowledge of 'specific acts of infringement' and rejected Napster’s contention that because the company cannot distinguish infringing from noninfringing files, it does not 'know' of the direct infringement."

The appeals court gave Napster some benefit of the doubt and followed Sony Corp. v. Universal City Studios, Inc. (the famous Betamax case), which essentially set the precedent that just because a technology can be used to infringe copyright does not necessarily make its creator liable for copyright infringement.

However, this was a moot point for the appeals court in the final analysis:

"Regardless of the number of Napster’s infringing versus noninfringing uses, the evidentiary record here supported the district court’s finding that plaintiffs would likely prevail in establishing that Napster knew or had reason to know of its users’ infringement of plaintiffs’ copyrights."

"The record supports the district court’s finding that Napster has actual knowledge that specific infringing material is available using its system, that it could block access to the system by suppliers of the infringing material, and that it failed to remove the material."

While Google will argue that it takes down infringing material when notified as required under the Digital Millennium Copyright Act, it is worth noting that one still has no difficulty finding Viacom material on YouTube.

When it comes to Google's material contribution to copyright infringement, the appeals court in A&M Records, Inc. v. Napster, Inc. applied Fonovisa, Inc. v. Cherry Auction, Inc. and found that “[w]ithout the support services defendant provides, Napster users could not find and download the music they want with the ease of which defendant boasts."

YouTube is arguably even more involved in infringement than Napster. Not only does it provide a means to find and view infringing material, it actually prepares the infringing material for viewing.

When a video file is uploaded to YouTube, YouTube's servers apply a physical process to the file to transcode it into the Flash video format so that it can be displayed in YouTube's Flash video player. This transcoding is an integral part of the YouTube service and one could argue that without this, the wholesale distribution of infringing content on such a service cannot take place.

As such, it seems entirely probable that the court will find that Google had the requisite level of knowledge about the infringing activity taking place on YouTube and materially contributed to it.

Vicarious Infringement

"Vicarious infringement occurs where someone has a direct financial interest in the infringing actions being committed by another and has the ability to control it, even if they do not know that the infringement is taking place and do not directly take part in it."

Google clearly seeks to benefit financially from YouTube. After all, its acquisition of YouTube for $1.65bn was not an act of charity.

While monetization has been an issue, YouTube is still reportedly set to generate around $200m, in revenues this year according to the Wall Street Journal.

It is hard to argue that copyrighted material has not been a major contributor to YouTube's popularity and Viacom's access to the YouTube user data will likely quantify this quite compellingly.

That is problematic for Google because in Fonovisa, Inc. v. Cherry Auction, Inc., the court found that financial benefit does exist "where infringing performances enhance the attractiveness of a venue."

Thus, if Viacom is able to show, as I expect it will, that the infringing material has enhanced the "attractiveness" of the YouTube as an online "venue," Google will be considered to have benefited financially.

When it comes to Google's ability to "control" infringing activity, the appeals court in A&M Records, Inc. v. Napster, Inc. noted that:

"To escape imposition of vicarious liability, the reserved right to police must be exercised to its fullest extent. Turning a blind eye to detectable acts of infringement for the sake of profit gives rise to liability."

While the appeals court agreed that Napster's ability to "control" infringing activity did have its limits, it also found that "the file name indices, therefore, are within the 'premises' that Napster has the ability to police."

Even though one might argue that file names could be incorrect or relate to noninfringing material, the court noted that the "file names must reasonably or roughly correspond to the material contained in the files, otherwise no user could ever locate any desired music."

In the case of YouTube, it is not difficult to use the service's search index to locate clips from The Daily Show, South Park and The Colbert Report.

When search terms related to these Viacom programs are used, YouTube even suggests other related search terms which amounts to assistance in the location of infringing material.

As such, it appears that the court could easily find that Google is not policing its system to the "fullest extent" possible.

While Google may argue that it has implemented and is working on technologies that will help it identify infringing materials, the truth is that a significant amount of harm to Viacom could easily be avoided without complex technologies by:

• Blocking outright certain search terms that reasonably correspond with Viacom material.
  
• Using YouTube's search index to more effectively police the service.
  

Given this, I think it's questionable that Google will be able to defend against Viacom's vicarious copyright infringement claim.

Conclusion

From my perspective, Viacom has a compelling case that Google is liable for direct, contributory and vicarious copyright infringement.

Google has clearly violated Viacom's copyrights, has materially contributed to the infringement of Viacom's copyrights and has profited from the infringement of Viacom's copyrights all the while failing to exercise the power it has to police YouTube.

Tomorrow, I'll look at Google's greatest defense - the Safe Harbor provisions of the Digital Millennium Copyright Act.

Add to Del.icio.us  |  Digg this  |  Add to reddit  |  Add to Y! MyWeb