Viacom Int’l, Inc. v. YouTube

Facts

Viacom International, Inc. (Viacom) and other copyright holders (collectively, “plaintiffs”) (Plaintiff) alleged direct and secondary copyright infringement based on the public performance, display, and reproduction of about 79,000 audiovisual “clips” shown on the YouTube (Defendant) website, an online video sharing service, over the course of three years. The plaintiffs sued YouTube (Defendant) related entities (collectively, “You-Tube” (Defendant) seeking, inter alia, statutory damages pursuant to 17 U.S.C. & sect; 504(c) or, in the alternative, actual damages from the alleged infringement, as well as declaratory and injunctive relief. The YouTube (Defendant) website permits users to “upload” and view video clips free of charge. Before uploading a video to YouTube (Defendant), a user is required to register and create an account with the website. The registration process requires the user to accept Defendant’s Terms of Use agreement, which provides, inter alia, that the user “will not submit material that is copyrighted … unless [he is] the owner of such rights or ha[s] permission from their rightful owner to post the material and to grant YouTube all of the license rights granted herein.” During the upload process, Defendant makes one or more exact duplicates of the video in its original file format. Defendant also makes one or mare additional copies of the video in “Flash” format, a process known as “transcoding.” The transcoding process ensures that Defendant videos are available for viewing y most users upon request. YouTube (Defendant) allows users to gain access to video content b “streaming” the video to the user’s computer in response to a playback request, and it uses a computer algorithm to identify clips that are “related” to a video the user watches and display links to the “related” clips. At the time of the litigation, the Defendant website had in excess of 1 billion video views daily, with more than 24 hours of new video uploaded to the site every minute. Defendant claimed safe harbor protection under § 512 of the Digital Millennium Copyright Act (DMCA). The DMCA made several safe harbors for service providers who transmit potentially infringing material over their networks. To qualify for any of these, a service provider is required to meet several threshold criteria, including that the provider actually meets the definition of being a service provider; that the provider has adopted and reasonably implemented certain policies; and that the provider can accommodate “standard technical measures” that copyright owners use to identify or protect copyrighted works. Beyond the threshold criteria, a service provider must satisfy the requirements of a particular safe harbor. Here, the safe harbor at issue was § 512(c), which covers infringement claims that arise “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.” Section 512(c) specifies that actual knowledge of infringing material, awareness of facts or circumstances that make infringing activity apparent, or receipt of a takedown notice from a copyright holder will each trigger an obligation to expeditiously remove the infringing material. The district court determined that YouTube (Defendant) came within the § 512 safe harbor, primarily as it had insufficient notice of the particular infringements in suit as required by the statute. The district court held that the replication, transmittal, and display of videos on YouTube (Defendant) constituted activity by reason of the storage at the direction of a user” within the meaning of § 512(c)(1). In construing § 512, the district court concluded that the “actual knowledge” or “aware[ness] of facts or circumstances” that would disqualify an online service provider from safe harbor protection under § 512(c)(1)(A) refer to “knowledge of specific and identifiable infringements.” The district court also held that item-specific knowledge of infringing activity is required for a service provider to have the “right and ability to control” infringing activity under § 512(c)(1)(B). The court of appeals granted review.