by Lee Gesmer | Dec 28, 2013 | Copyright, DMCA/CDA
[This is the first of what will be a two-part post on Viacom v. YouTube]
[Update: Viacom v. Youtube was settled before the Second Circuit rendered its decision on the appeal discussed in this post]
It seems unlikely that the drafters of the DMCA — a law enacted in 1998, the same year Google was incorporated — anticipated how difficult the courts would find application of this complex, near-5,000-word statute. There may be no better case to illustrate this than Viacom’s long-running suit against YouTube (a company owned by Google). As of November 2013 briefs had been filed in the second appeal in Viacom v. YouTube, and the case is likely to be scheduled for oral argument before the Second Circuit sometime in the first few months of 2014.*
*[Note]: I have written about Viacom v. YouTube several times during its long history (the case was filed in 2007). See, e.g., YouTube Scores Big Victory on Remand in Viacom DMCA Copyright Case; Second Circuit to YouTube (i.e., Google): Remanded for Trial; Decision in Viacom v. YouTube: Dog Bites Man (Mark Cuban was wrong).
To say that the appeal briefs are a hard slog would be an understatement. The parties and the courts have immersed themselves in legal obscurities that will be of almost no interest to most non-lawyers, and which are likely to be incomprehensible to lawyers unwilling to bury themselves in the nuances of the DMCA. (If you are tempted to bury yourself, the EFF has collected most of the briefs here).
This being the case, I concluded that it would be best to present my observations on this case in a different format than my typical blog posts. Rather than a discussion of the legal issues, I have composed a hypothetical case example (which closely follows the facts in the actual case), to be followed by a simulated discussion between the “client” and the client’s “lawyer.” This should make the issues palatable to most readers.
This post will set the stage by presenting the hypothetical fact situation, and the second post (which is forthcoming), will present the client-lawyer discussion.
Kevin Kickstarter Creates YouPostVid
(no, this was not removed – I purposefully inserted this image)
Kevin Kickstarter has started a YouTube-like company called “YouPostVid.” YouPostVid’s business is simple – it operates a “you post, we host” web site that enables users outside the company to upload video clips. YouPostVid’s sole revenue source is click-through advertising. The business is a success, and Kevin has hired several employees.
Based on good legal advice YouPostVid plays it straight, and does nothing that could be construed to invite users to upload copyrighted videos. In addition, Kevin takes the proper steps to register with the copyright office and identify an agent to receive DMCA notices of copyright violations. The company promptly deletes video clips based on notices that comply with the DMCA “notice-and-takedown” system. It also devises and enforces a reasonable “repeat infringer” policy that bars repeat infringers from uploading to the site.
Kevin is told by his lawyer, Mr. Jaggers, that he has no legal obligation to monitor the site for copyright infringements, and that in fact the less he does the better. And, unless a DMCA notice complies with the specific requirements of the law, he doesn’t need to implement a takedown.
However, YouPostVid does implement a “community flagging” program that allows users to report videos that include pornography or any form of hate speech, and these reports are checked and often deleted by YouPostVid.
YouPostVid Begins to Encounter Problems
All is well with YouPostVid, at least at the start. However, eventually a few things occur that cause Kevin concern. First, YouPostVid starts receiving emails, not from copyright holders, but from “good samaritans,” notifying Kevin that his site is rife with infringing videos. One good samaritan informs him that the site has copies of almost every Seinfeld episode, and even identifies the shows by name. (“The Soup Nazi,” “The Contest” ….). Others report other video clips which, they claim, fall under copyright protection. Several good samaritans suggests that YouPostVid expand its community flagging program to allow users to flag clips that infringe copyrights.
However, YouPostVid takes no action with respect to these communications.
Although Kevin has told his small staff of employees not to review the site for potentially infringing uploads, one employee has sent him several emails stating, in general terms, that users are uploading vast quantities of apparently copyright-infringing clips to the site, and asking whether he should take these clips down when he comes across them. In this email the employee estimates that as many as 30% of the clips on the site are copyrighted and have been uploaded illegally. Kevin responds, instructing his employees to remain “hands off” any material they suspect infringe copyrights. Kevin tells the employees that while people may be uploading infringing clips to the site, these clips are attracting viewers, and thereby supporting the site’s advertising revenues. Kevin tells them, “we have a legal obligation to respond to formal DMCA takedown notices, period. No more, no less. We have no idea who uploaded these clips – for all we know it was done by the copyright owners themselves, or with their consent. We don’t know. And, they are good for business.”
YouPostVid Is Accused by a Large, Angry Publisher
Then, a large copyright holder demands a meeting, and informs YouPostVid that it will have its lawyer present. At the meeting, Kevin is told that despite
the takedown notices this publisher is sending YouPostVid, copyrighted clips are going up at a rate faster than the takedowns. The publisher tells Kevin that it is tired of playing this expensive, losing game of “whack-a-mole,” and it demands that Kevin install an automatic filtering system such as Audible Magic to identify and bar copyrighted videos. The publisher tells Kevin that YouPostVid is building its business based on rampant infringement of copyrighted works, and that by limiting its response to takedown notices it is intentionally, and improperly, turning a blind eye to massive infringement on the site.
After the Meeting …
After the meeting Kevin has a heart-to-heart with his lawyer, Mr. Jaggers, and although Kevin admits that it seems to be the case that his site has thousands of copyright-infringing videos, Kevin emphasizes that he has done nothing to encourage this. He does not want to install Audible Magic, or any other form of automatic filtering system or community flagging. He has found an inexpensive off-shore company to handle takedowns, and he wants to simply continue requiring copyright holders to provide takedown notices that comply with the DMCA, and nothing more. However, Kevin asks his lawyer to advise him on whether the copyright holders have a case against him based on any recent developments in copyright law or under the DMCA. As he puts it, “how thin is the ice on which I’m standing, Mr. Jaggers?”
Jaggers informs Kevin that a case raising the issues facing YouPostVid — Viacom v. YouTube — is pending before the Federal Court of Appeals for the Second Circuit, based in New York. Jaggers asks Kevin (who attended two years of law school before dropping out to start YouPostVid) to read the three court opinions in this case: the district court’s first decision from 2010, the opinion of the Second Circuit on the first appeal, in 2012, and the district court’s second decision in 2013 (following remand by the Second Circuit). After he does this they will meet to discuss the implications of this case for YouPostVid, and whether YouPostVid needs to take any additional steps to avoid liability for copyright-protected works posted on the site.
Click here to continue to Part 2 of this post ….
by Lee Gesmer | Dec 26, 2013 | General
“ In actual life, every great enterprise begins with and takes its first step forward in faith. ” — August Wilhelm von Schlegel
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Now that Christmas is over its time to start thinking about 2014, and that means New Year’s resolutions.
The guest post below was written by my partner Jonathan Draluck and published last month on Gesmer Updegrove LLP’s BostInno channel. Jonathan didn’t write this with New Year’s resolutions in mind, but it struck me as inspirational as we approach 2014. Maybe your New Year’s resolution will be, as he writes below, to conquer your personal fears and — “take the leap.”
* * * *
School is nice. Sometimes necessary. But no education beats the school of hard knocks. All the theory and fancy degrees in the world won’t get you anywhere unless you are willing to take what you have learned and add some elbow grease.
You may not even know what melts your butter unless you’ve had a first-hand glimpse outside the frying pan. Hot in the Boston venture capital scene two decades ago, my colleague Andy Updegrove worked on enough deals to pique his aptitude in technology. He began taking an interest in the computer standards being adopted by the government. He wrote about it and then rallied loyal readers who most assuredly had not given it much thought. He is now an expert on setting standards and represents more consortia than anyone. And my scientist friend Eric Buerger models synaptic transmission at a cutting edge biotech company which studies how alterations influence diseases of the central nervous system. Curious about the business and legal side, he offered up part of his FTE to keep colleagues sitting at the lab bench and allow himself time to consider other angles.
Then there’s the raw desire to enhance your skills. For example, educators have known forever that when you write the report or prepare the presentation, you absorb new material. So when two large pharmaceutical clients wanted to run clinical trials overseas, and medical device companies sought manufacturers, I tossed the readily-available templates and put pen to paper to come up with my own form contract. As I previously wrote, it’s amazing how targeted activities can actually help you gather intelligence.
There is also no substitute for taking on a risk. You show others that you’re hungry and you are. Indeed, “skin in the game” was one of the criteria that fellow MassChallenge judges used to assess the commitment of start-up entrepreneurs. For example, when she created SitterCycle, Helen Adeosun quit her job for the school system and decided to put her master’s degree from Harvard to the test. She kicked off a business to educate and certify nannies. Nick Dougherty, also a finalist, was fed-up with the technology available to patients at hospitals and hospices. Through bootstrapping [that is, self-funding], he developed an interactive platform for patients with aphasia, Verbal App. It puts traditional bedside call buttons to shame. And Sean Kevlahan shunned the cushy job opportunities that came knocking for his Ph.D in chemical engineering. He is now co-founder and CEO of Quad Technologies, whose product can isolate stem cells from blood, economically delivering them to researchers undamaged.
So you’ve had the exposure and desire and are perhaps ready to sacrifice a salary. But if there weren’t other ingredients, everyone would be doing it! While I don’t have the secret, I’ve witnessed the phenomenon.
You have to take the leap. A year ago, I wrote about unflappable curiosity and persistence among Israeli entrepreneurs who somehow muster the moxie against odds to shake down an industry or find a cure for the uncurable. Spreading your wings could also require chemical intervention. As my law professor warned, you are green until it’s high noon in the courtroom and you’re facing down your opponent. From this I’ve deduced that part of the equation for getting good may be adrenaline. I’ve unwittingly deployed it negotiating for the little guy against Goliath and in answering questions posed by the Syrian police about my Israel affinity. Of course, you may not happen upon it unless you’ve pre-positioned yourself (in my case, objecting to a one-sided contract proposal or being in Damascus in the first place). But each person knows where she might approach her comfort edge. Like the brilliant scientist who gets stage fright when speaking in public. Getting himself ready to compete with a pitch or, more importantly, attract an investor, may constitute the required jump.
I guess this is the long way to confirm what our parents already told us. You can achieve what you set out to do. But you now have tools that you didn’t have growing up – the exposure to figure it out and the maturity and drive to take it to the next level.
by Lee Gesmer | Dec 11, 2013 | Patents
I can’t resist quoting Dennis Crouch, quoting Don Chisum, on the the Supreme Court’s pending review of the CLS Bank case:
The Supreme Court often intervenes to resolve splits among the various courts of appeal. Here a split exists within a circuit that the circuit itself is unable to resolve. The circuit judges’ varying interpretations of a body of recent and not-so-recent Supreme Court precedent riddled with fuzzy language and inconsistent results caused the split. Now, the Court has the opportunity (and the obligation) to clean up a mess that is, to a major extent, of its own making.
by Lee Gesmer | Dec 10, 2013 | Copyright
On November 26th I published a post titled “Oracle v. Google: How Google Could Lose on Appeal.”
Oral argument before the Court of Appeals for the Federal Circuit was held on December 4, 2013, and a recording of the oral argument has been released.
Based on comments and questions from the bench, the hearing went poorly for Google. The very points I raised in my post were raised by the judges in questions to the attorneys for the parties.
As I commented in my post, District Court Judge Alsup’s order ruling that the Java declaring code copied by Google was not copyrightable was vulnerable because Judge Alsup seemed to rely on factors and cases relevant to copyright fair use (specifically interoperability) to justify a finding that the Java declaring code was not protected by copyright. And never, the CAFC judges rightly observed, may the two mix. It is quite correct to say (as Oracle has argued) that a finding that a work is not protected by copyright must stand on grounds independent from a finding that copying was permitted by fair use.
The Federal Circuit seemed eager to seize on this confusion in Judge Alsup’s decision. To wit (comments from the CAFC judges):
“As I read the trial judge’s opinion I’m confused about how he viewed fair use because it seems to me he was merging it with the question of copyrightability.”
“I specifically agree with you that the district court imported fair use principles into the upfront portion of the analysis, which was wrong.”
“So why shouldn’t we relegate those discussions — I’m not saying they’re not relevant factors — why shouldn’t they be considered in the context of fair use rather than crammed into the copyrightability [analysis]”
“What is the expectation standard? . . . You’re supposed to make the determination of copyrightability at the time that the creative act occurs, correct? Does copyrightability get lost because it becomes popular?
Comments by the CAFC judges suggested that Google’s best argument (perhaps its only viable argument) was based on the First Circuit’s 
decision in Lotus v. Borland. In fact, the CAFC hearing in 2013 bore an uncanny similarity to the Supreme Court 1995 hearing in Lotus v. Borland – in both cases the judges tried to find a standard the courts can use to separate functional computer code not entitled to copyright protection from expressive code that is entitled to protection. The Supreme Court Justices voted 4-4 in that case (one justice abstaining), leaving Lotus as the law in the First Circuit, but nowhere outside the First Circuit. However, the CAFC is not bound by this case (it must apply Ninth Circuit law), and it seems a thin reed for Google to rely upon in its attempt to preserve Judge Alsup’s order.
In addition, the appeals court judges were very interested (surprisingly) in trying to find a way they could avoid requiring the district court to retry the case on fair use (a defense the jury hung on at the first trial). This interest seemed to take Google’s lawyer by surprise, and indicates that the court is leaning in the direction of limiting a retrial to the issue of damages (if it finds no fair use as a matter of law) or dismissal altogether (if it finds fair use as a matter of law). A “snatching victory from the jaws of defeat” outcome for Google could be that the Java declaring code is copyrightable, but that Google did not infringe by reason of fair use.
However, this aspect of the argument didn’t give a clear impression of which way the judges were leaning.
It is true that Google’s counsel was on the defensive during much of his argument, while Oracle’s counsel seemed to be cruising. However, any attempt to “read the bench” in a case like this is little more than reading tea leaves. Misdirection from judges is an everyday occurrence; recall how the country misinterpreted questions from the Supreme Court bench during oral argument for the Affordable Care Act (ObamaCare).
Nevertheless, if I had to make a prediction today, based on nothing more than the oral argument, it would be that this case is heading back to the district court for further proceedings. Exactly what those will be, I’m not sure.
