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Copyright in the Age of YouTube

By Steven Seidenberg

February 2, 2009, 4:29 am CST

Holden Lenz had just learned to walk when—on Feb. 7, 2007—he stepped into the front lines of the copyright wars. Thirteen-month-old Holden was tottering around his family’s home in rural Penn­sylvania, clutching his walker and looking cute. The toddler heard the Prince song Let’s Go Crazy coming from a CD player in the kit­chen, so he stopped walking and began bouncing up and down to the music. Then he made a face and resumed pushing his walker across the kitchen floor.

His mother, Stephanie Lenz, recorded these events in a 30-second home movie, which she posted on You­Tube the following day under the title Let’s Go Crazy #1. She had put similar clips online before so faraway family and friends could see her kids.

This clip, however, drew the ire of the world’s largest music company—Universal Music Group—whose international operations garnered more than $6.9 billion in 2007. On June 4, 2007, Universal sent YouTube a takedown notice pursuant to the Digital Millennium Copy­right Act, asserting that the home movie of Holden infringed the multinational’s copyrights in Prince’s song. YouTube removed the video from its website.

When Lenz learned what had happened, she did something unusual. Unlike the vast majority of people whose postings are the subject of DMCA takedown notices, Lenz consulted an attorney. She then sent a counternotice, asserting that her video, which contained only 20 seconds of a dimly audible song, was a protected fair use of Let’s Go Crazy and did not infringe Universal’s copyrights.

YouTube ordinarily responds to counternotifications fairly quickly, reposting the videos in a day or two. Not this time. Weeks went by and nothing happened.

On July 24, a month after she had filed the counternotification, Lenz upped the ante. She sued Universal for misrepresentation in its takedown notice. “I decided my First Amendment rights were being violated, and I decided to hit them where it hurt—let them know they couldn’t do this to people anymore.”

Two weeks after the suit was filed, YouTube put the video back online. And one year later, on Aug. 20, 2008, Lenz won a precedent-setting battle against Universal. U.S. District Judge Jeremy Fogel of the Northern Dis­trict of California held that the DMCA requires copyright owners to consider fair use before sending a take­down notice. If a copyright owner sends a takedown notice without first making a good-faith evaluation of whether the allegedly infringing work is covered by fair use, the owner could be liable for damages, according to Fogel. The judge denied UMG’s motion to dismiss the suit, enabling Lenz to attempt to prove in an upcoming trial that UMG filed the takedown notice in bad faith.

The ruling is part of a lar­g­er legal struggle over who should bear the burdens of stopping online copyright infringement. Movie companies, record companies and many other copyright owners fear that—because committing copyright infringement online is so fast and easy, and because the huge number of online infringements is skyrocketing—it is impracticable for copyright owners to stop online infringements by suing all the individual wrongdoers.

So content owners are seeking alternatives. They are trying to automate the process of removing allegedly infringing material. They are asking the courts to impose liability on YouTube and other online companies if these companies fail to vigorously police the material posted by their users. And the content owners are lobbying Congress for tougher laws against infringement.

Internet and technology companies fiercely oppose these changes, fearing they would impair innovation and drive many of them out of business. Civil rights organizations also oppose these changes, arguing they would damage an important new avenue of public communication.

“Companies that depend on user-generated content —and MySpace, Facebook, AOL, virtually every major Internet company incorporates user-generated content —they create a new and more vibrant public sphere,” says Corynne McSherry, staff attorney for the Electronic Frontier Foundation in San Francisco, who is representing Lenz in her lawsuit against UMG. “We have a whole new set of channels of communication. It’s good for con­sumers and good for citizens.”

SAFE-HARBOR BATTLE

The battle over online copyright infringement was supposed to be resolved a decade ago. The Digital Millennium Copyright Act established a carefully calibrated compromise between the rights of copyright own­ers and those of online companies.

Among other things, section 512 of the DMCA es­tablished a safe harbor for online service providers, man­dating they would not be liable for storing or trans­mit­­ting infringing material at their users’ direction, provided certain conditions were met.

This safe harbor applies only if the online company does not know or should not reasonably have known about the infringement; and once the online company learns about the infringement, it must act “expeditiously” to remove the infringing material.

Section 512 also created a notice-and-takedown regime. Copyright owners have a quick and easy way to notify online companies about infringing works. Online companies must respond to such takedown notices by expeditiously removing the allegedly infringing items from their Internet site or service. If an online company fails to do this, it loses its safe-harbor protection.

Users of online ser­vices receive some protection, too. When an online company removes allegedly infringing material that was posted by a user, that company is statutorily required to notify the user of what happened and why. The individual has a right to send a counternotification stating he or she has a “good-faith belief” the material is not infringing.

Once this counternotification is received, the online company must put the disputed material back online within 14 business days, unless the company receives notice from the copyright owner that it has filed an infringement suit against the person who posted the material.

SITES FLOURISHING

Section 512 has been, in some ways, an astounding success. Its statutory safe harbor has enabled many new online businesses to flower. YouTube, MySpace, Flickr and many other user-generated content sites have become household names with millions of users communicating and sharing information and other types of content.

Such online communication would be impossible without sec­tion 512’s safe harbor, many experts assert. The UGC sites depend on this to protect them from copyright liability. “Without this safe harbor, no one could provide the services that You­Tube and Flickr provide,” says Joseph Gratz, a San Francisco-based attorney and past chair of the ABA’s Section of Intellectual Property Law’s Special Committee on the Digital Millennium Copy­right Act. “There would simply be too much risk.”

Congress, however, enacted section 512 at a time when technology was simpler. “The DMCA … was written when people were worried about bulletin board and Usenet operators who ran services for the uploading and downloading of content,” says New York City attorney Jeffrey Neuburger. The law’s drafters had no inkling that UGC sites would develop, much less that these sites would become wildly popular.

Section 512’s system doesn’t fit these new sites well, according to some experts. “The system is working on a scale that Congress never intended, with millions of postings every day,” says Paul Goldstein, who teaches copyright law at Stanford Law School. Policing these postings and sending out takedown notices has become a time-consuming and costly process for copyright owners. “It puts a burden on small companies and individual authors that I don’t think Congress considered when it enacted these provisions,” Goldstein says.

FLURRY OF TAKEDOWN NOTICES

Copyright owners have tried mightily to work with­in the existing law. They have sent out hundreds of thousands of section 512 takedown notices. That’s far too many notices, according to some attorneys, who assert that copyright owners often do not bother to check whether an online item is truly infringing. Automated programs search for titles of copyrighted works and fragments of copyrighted songs or videos. If anything is found, the work is hit with a takedown notice—frequently without any real examination of the allegedly infringing item.

This might be why Universal ordered YouTube to remove the homemade video of little Holden dancing in his family’s kitchen. If an attorney for Uni­versal had examined the video, says Gratz, counsel would have recognized that the snippet of a Prince song in the video was almost certainly not infringement, but fair use.

The automated nature of many takedown notices also may explain why the International Olympic Committee ordered YouTube last August to take down a video titled Beijing Olympics Opening Ceremony. The title certainly suggested the video contained material copyrighted by the IOC, but a cursory look at the video would have demonstrated otherwise. The video, made by Students for a Free Tibet, showed a protest outside the Chinese Consul­ate in New York City. (After the takedown notice was made public, the IOC was hit with a firestorm of bad publicity and withdrew its request.)

These are not isolated examples of copyright owners being overly vigilant. “There’s no question that takedown notices get overused,” says Jessica Litman, who teaches copyright law at the University of Mich­igan Law School.

“We’ve seen instance after instance where videos on YouTube, perfectly legal and perfectly fine … get taken down,” McSherry says. “Copyright owners are not doing due diligence on these takedown requests.”

Lenz v. Universal Music Corp. could change that.

The court held, in a ruling of first impression, that because the copyright act protects the fair use of copyrighted works, section 512(c) “requires a copyright owner to consider the fair-use doctrine in formulating a good-faith belief that ‘use of the material … is not authorized by … the law.’ ” Issuing a takedown notice “without proper consideration of the fair-use doctrine” exposes the copyright owner to liability for misrepresentation under section 512(f) of the DMCA, the court concluded.

“Lenz is saying something modest, but important,” Gratz says. “Copyright owners must think about fair use and make up their minds about whether it protects an online clip. They can’t just assume any video with the name of their song in the title is infringing.”

The court stated its decision was needed “to prevent the abuse of takedown notices,” and the resulting burden on copyright owners was relatively light. A copyright owner does not need to correctly decide whether a video is protected by fair use. Section 512 merely requires the owner to subjectively believe, in good faith, that the item in question is not so protected, Judge Fogel held.

Nevertheless, the ruling may pose serious problems for copyright owners, forcing many to spend significant time and money on legal analyses of large numbers of potentially infringing online items.

“What the court is asking doesn’t sound like much, but … determining whether something is a fair use can take a goodly amount of time,” Goldstein says. “When you pick a doctrine as protean and indeterminate as fair use, asking people to make snap judgments often isn’t feasible.”

A GAME OF WHAC-A-MOLE

Even without the burden of doing fair-use analyses, copyright owners are having a tough time policing UGC sites; the volume of posts is overwhelming. Ten hours of video content are put online every minute of every day—more than 250,000 clips per day—and that is just on YouTube.

Given the huge amount of content posted to UGC sites, it is not surprising that copyright owners are trying to automate the process of identifying infringing content and sending out takedown notices.

However, sending takedown notices to some UGC sites is often akin to playing a frustrating game of Whac-­a-Mole.

“Once these things are legitimately taken down, often other users will put the same or very similar material up on the same website within minutes,” says Kim Jessum, an attorney in Philadelphia and chair of the ABA’s Special Committee on Online Copyright Issues.

Some copyright owners have tried to sidestep these difficulties by attacking the UGC sites themselves—not the vast number of infringing clips nor the throngs of people who post this infringing content.

In 2007 Viacom sued YouTube under this theory, claiming that some 150,000 unauthorized clips of Via­com programs were posted to the video website, and that YouTube didn’t do enough to stop this massive infringement. Claiming YouTube is liable for direct and sec­ondary copyright infringement, Viacom is seeking a minimum of $1 billion in damages plus an injunction requiring YouTube to employ technological measures to stop or limit future infringements.

YouTube (and its corporate parent, Google) counters that the UGC site is protected from liability by the DMCA’s safe harbor. Some experts see the ongoing legal battle as a clear attempt by Viacom to undermine section 512. “It is a direct attack on the viability of the safe-harbor rule of the DMCA,” says Lawrence Iser, an IP attorney in Santa Monica, Calif.

If Viacom succeeds, lots of UGC sites and other online service providers will be driven out of business, according to many experts. And the users of these sites will suffer, too, losing an important new way of communicating with one another.

“There’s been a great flowering of user-generated content,” Gratz says. “It is enabling people to use the Internet, indeed the media, in ways they have never been able to do before. … And their ability to do that depends on section 512 meaning what it says.”

INTERMEDIARY LIABILITY

Although Viacom international Inc. v. YouTube inc. has garnered massive media attention, the lesser-known Io Group Inc. v. Veoh Networks Inc. raised the same issues of intermediary liability for copyright infringement and, ultimately, reaffirms the DMCA’s safe-harbor protection for online companies.

Io Group makes and sells adult entertainment products, including movies. Veoh Networks, like YouTube, allows users to upload and view videos online. Io alleged that clips from some of its movies were uploaded and viewed on Veoh, and that Veoh should be held liable for direct and secondary copyright infringement. Veoh argued that it was protected from liability by section 512(c).

Io noted that section 512(c)’s safe harbor applies only to infringing material that third parties have put onto a defendant’s system. In this case, Veoh took the clips uploaded by users, automatically copied them into a different format (suitable for online viewing), and put these infringing copies onto its website. Thus, Io argued, section 512(c) did not immunize Veoh against liability for the copies that the company had itself made and posted on its site.

The U.S. District Court for the Northern District of California disagreed. Because Veoh had no volitional control over its automatic copying and posting of uploaded material, the court said, the company could not be held responsible for these actions. Veoh’s users, not Veoh, were the ones responsible for copying the clips and putting them onto Veoh’s website. Thus, section 512(c) protected Veoh against copyright liability for those clips.

Io offered another argument: A service provider loses the protection of the section 512(c) safe harbor if the provider has the right and ability to control the infringing activity, and receives a financial benefit directly attributable to such activity. Io claimed that Veoh had the right and the ability to control the infringing activity on its website, and that Veoh profited from its users posting and viewing the infringing clips.

The court rejected this argument, too. Judge Howard R. Lloyd held that although Veoh had the ability to control its own system, it did not have the ability to control the infringing activity. He concluded that the DMCA protects online companies like Veoh that work in good faith to limit copyright infringements committed by their users.

Many online companies have cheered Io. But it is unclear how much this will help YouTube and other service providers because Io provides no clear guidelines for determining when copyright infringements are beyond a service provider’s control.

How hard must a service provider work to stop infringements, in order to prove the provider is unable to control any infringing material that is put on its service by users? On one hand, Io appears to indicate that a good-faith effort to stop infringement may be enough:

“The court does not find that the DMCA was intended to have Veoh shoulder the entire burden of policing third-party copyrights on its web­site (at the cost of losing its business if it cannot). Rather, the issue is wheth­er Veoh takes appropriate steps to deal with copyright infringement that takes place. The record presented demonstrates that, far from encouraging copyright infringement, Veoh has a strong DMCA policy, takes active steps to limit incidents of infringement on its website, and works diligently to keep unauthorized works off its website. In sum, Veoh has met its burden in establishing its entitlement to safe harbor for the alleged infringements here.” [Emphasis added.]

On the other hand, Io contains language suggesting that a service provider must do everything it reasonably can to stop infringements: “Perhaps most importantly, there is no indication that Veoh has failed to police its system to the fullest extent permitted by its architecture.”

One of Viacom’s allegations is that YouTube is not policing its system as thoroughly as it can. According to Viacom’s complaint, YouTube has filtering technology that can identify and possibly remove copyrighted material, but this technology is used to protect only works that are licensed to appear on YouTube—such as music videos of Sony BMG artists, clips from HBO shows and segments from MGM movies. Unlicensed works don’t benefit from this technology, and their copyright owners thus face a flood of infringing posts.

“Viacom’s claim is that YouTube is not policing its system to the fullest extent permitted by its architecture, and in fact is holding some tools back as a bargaining chip [to force copyright owners to license their works to YouTube],” Bruce Boyden, a professor of IP law at Marquette University, has written in his blog. “To the extent Io and other decisions are holding that, to preserve its DMCA immunity, an ISP has to police its system to the best of its abilities, YouTube may be in trouble.”

If the courts eventually determine that the DMCA’s safe harbor protects most service pro­viders against liability for their users’ posts of infringing works, online companies and their users would benefit. Copyright owners, however, would find themselves in a difficult position. They would be forced to continue their Whac-a-Mole efforts to curb online infringements, and could bring infringement suits only against those people who upload or download the infringing works.

“That would be terrible … because the damages you can get from individuals can never repay the costs of going after those individuals,” Goldstein says. “If intermediaries can immunize themselves, there is no one effectively for copyright owners to collect from.”

THE NEWEST FRONTIER

There is another major front in the online copyright wars. Copyright owners have been pushing Con-­ gress to revise the Copyright Act, and they won a significant legislative victory in October when President Bush signed the Pro-IP Act into law.

The Prioritizing Resources and Organization for In­tellectual Property Act of 2008, S.3325, shifts some of the burden for copyright enforcement from copyright owners to the government. The law increases funds for local, state and federal law enforcement agencies to investigate criminal copyright and trademark infringements. It also creates the Cabinet-level position of an intellectual property enforcement coordinator with responsibility for coordinating the federal government’s efforts to crack down on infringements.

In addition, the law clarifies when civil forfeiture can be used against those allegedly involved in copyright infringement. It empowers U.S. attorneys to get ex parte orders from courts to seize “any property used, or intended to be used, in any manner or part to commit or facilitate” criminal copyright infringement.

This poses new risks for YouTube, ISPs and other online intermediaries. “Prosecutors could use this provision to seize servers of Internet companies, or threaten to seize them, in order to get these companies to cooperate,” says Jonathan Band, a Washington, D.C., attorney who represents NetCoalition, an advocacy group for major Internet companies, including Google, Yahoo and CNet.

“This is a very powerful remedy,” Band says. “A pros­ecutor needs to show only probable cause in order to seize the property. To recover the property, the accused must go to court. The burden is on him to show, by preponderance of the evidence, he is innocent.”

That could be a very difficult burden for online companies to bear. “If a company took all reasonable measures to stop infringement, it can get its property back,” Band says. “But what are reasonable measures? Should the company have done greater filtering of content supplied by users? It opens up a whole can of worms.”

The Pro-IP Act is just the latest instance of copyright owners’ efforts on Capitol Hill. “They are constantly trying to increase the remedies for infringement—increase criminal sanctions, increase civil forfeiture, increase statutory damages,” Band says. “Every year they are trying to do something on the remedies front.”

That’s probably because copyright owners have had only limited success in stopping online infringements, despite sending a blizzard of takedown notices and filing thousands of infringement suits. Over the last five years, for instance, the recording industry has filed more than 30,000 lawsuits against individuals who allegedly shared copyrighted songs on peer-to-peer networks, but file-sharing remains a major problem.

So copyright owners are looking for more effective ways to enforce their rights in the online world. They are pressing Congress to enact tougher laws against infringement and pushing courts to hold online intermediaries—such as YouTube—liable for their customers’ infringements.

Such efforts, however, may be misguided, says Band. “The entertainment industry wants to change the law to protect their existing business models,” he says, “rather than change their business models to adapt to new technology.”

Protectionist behavior by copyright owners is nothing new. “There’s a recurrent pattern whenever a new technology crops up,” Litman says. “Existing content industries insist that the new technology must play by the old copyright rules. … The new companies say that the old rules fit your technology and business models, but they don’t fit our technology and business models. Some­times the older companies impose restrictions that try to stop the new technology, but in the end, the old and new companies reach some compromise.”

This time, however, copyright owners may need to compromise with more than just the new online businesses. Content owners may need to reach an understanding with tens of millions of U.S. Internet users.

“History tells us that unless the [copyright] rules will accommodate their interests, there will be no stability,” Litman says. “If the public does not see the rules as legitimate, they won’t obey them.”

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Steven Seidenberg is a lawyer and freelance journalist in Fanwood, N.J., who contributes regularly to the ABA Journal.