eBay, Facebook, Yahoo, and Ask.com owner IAC/Interactive may compete with Google for users, views and ad clicks, but the four know which side their bread is buttered on when it comes to digital copyright law. That's why they've rushed to Google's side this week to defend their rival in a massive copyright infringement lawsuit launched by Viacom.
Viacom's interpretation of the Digital Millennium Copyright Act (DMCA) "would slow development of the Internet by making the hosting of user generated content an activity fraught with legal peril," eBay et al warned the court hearing the case in an amici brief. "The threat of ruinous liability would mean that other companies and services might never get off the ground in the first place."
And that, in turn, would "retard the development of the Internet and electronic commerce and inhibit the growth and development of user-centric online models that, day after day, make the Internet and the world more democratic."
Blatant disregard
So now the future of global democracy is tied up in this case—plus a billion bucks. That's the sum for which Viacom is suing Google as it charges the search engine giant with "blatant disregard for the intellectual property laws" contained in the DMCA.
The media company has found 150,000 Viacom content clips on Google's YouTube service, it says, and they just keep popping up despite repeated takedown notices. Plus YouTube has an extortionist's history of refusing to implement filtering technologies, Viacom insists, unless content companies sign licensing agreements favorable to Google.
Nonsense, Google lawyers respond, "For years, Viacom continuously and secretly uploaded its content to YouTube, even while publicly complaining about its presence there," they charge. "It hired no fewer than 18 different marketing agencies to upload its content to the site. It deliberately 'roughed up' the videos to make them look stolen or leaked. It opened YouTube accounts using phony email addresses."
Discourse between the litigants has gotten pretty nasty of late, with public document dumps that one side or the other says are taken massively out of context, and, recently, internal e-mails that win the Ars Technica Corporate Potty Talk prize, hands down.
Multiplications
But various public interest groups and Web companies are nervously watching this case, fearful that the United States Southern District Court of New York could side with Viacom's contention that the DMCA and its "safe harbor" provisions offer Google few protections. This, in turn, could expose a host of sites to "statutory damages—multiplied by thousands of works" demanded by media companies in lawsuits, say eBay and others.
eBay and the gang are particularly worried about arguments suggesting that when a service provider sets up an automated process to make content uploadable to a site, the offering of those tools excludes the site from any protections under the DMCA. Viacom contends that YouTube's activities go way beyond "storage"—thus exempting it from the safe harbor law.
These companies disagree. Congress clearly intended the DMCA to cover sites that do more than simply store data—"Internet access, e-mail, chat room and Web page hosting services" were mentioned at one Senate hearing discussing the legislation, they note.
These Google defenders also want the court to interpret the DMCA's "red flag" awareness provisions as narrowly as possible. Section 512(c) of the law stipulates that it doesn't protect service providers who have "actual knowledge that the material or an activity using the material on the system or network is infringing" or are "aware of facts or circumstances from which infringing activity is apparent."
There's huge back-and-forth between Google and Viacom over whether the former had this sort of red flag knowledge or not.
But the eBay and Facebook crowd contend that, whatever the situation actually was at YouTube, Congress targeted these red flag provisions at "sophisticated 'pirate' directories—which refer Internet users to other selected Internet sites where pirate software, books, movies, and music can be downloaded or transmitted."
Lawmakers wanted the DMCA's "knowledge disqualifiers" to apply "only in the most extreme of situations," they write. "Mere generalized awareness of infringement on a site is not enough."
That was then
And if keeping track of infringement was tough in 1998 when Congress passed the DMCA, consider the challenge now, the amici brief notes:
If service providers lacked the practical ability to determine which of their users' materials were infringing in 1998, that is all the more true for amici and other service providers today. More than half of Facebook's 400 million users log in on any given day, and the average user creates 70 pieces of content every month. At any given moment, there are more than 200 million listings available for sale on eBay. IAC-owned Vimeo hosts over 10 million videos at any given time and receives an average of 15,000 new video uploads per day.
The "widespread use of amici's services, as well as those of other service providers, is the foundation of the democratizing virtues of the Internet," they add. If Viacom's arguments prevail, service providers would be exposed to lawsuits, "even where they lack particularized knowledge regarding what material is infringing and should be removed."
Financial benefits
The eBay filing also takes on what is perhaps the most dicey question in this case, whether Google received "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." Under those circumstances, DMCA safe harbor protections disappear.
But Google's allies contend that Congress never intended this "financial benefit" language for companies that engage in legit activities and marketing practices. In support of that position, they extract this prose from a Congressional hearing:
"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'."
No predictions from us as to what the Southern District Court will make of this logic. Viacom's reaction was easier to obtain:
"The courts have been clear that creating and building a Web-based business on the intellectual property of others is illegal," a Viacom spokesperson told us. "That is exactly what YouTube did in its formative years. Nothing in this case threatens the principles of the DMCA or the ability of legitimate Internet-based businesses to flourish. At its core, the DMCA seeks to protect both the work of content creators and lawful online businesses for the benefit of all consumers."
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