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July 1, 2010 / screwvala

Safe Harbor Saves Google

Relying on the “safe harbor” provision of the Digital Millenium Copyright Act, Judge Louis Stanton of the United States District Court for the Southern District of New York turned down a suit by Viacom claiming massive infringement by Google on YouTube. The “safe harbor” provision was inserted in the DMCA as a means of protecting on-line service providers, like YouTube, from claims of infringement based upon infringing conduct by users of the service.

The “safe harbor” protection is found at 17 U.S.C. §512(c)(1)(A), et seq. and provides for limited liability if the service provider:

(i) does not have actual knowledge that the material or an activity using the material on the system or network is infringing;

(ii) in the absence of such actual knowledge, is not aware of facts or circumstances from which infringing activity is apparent; or

(iii) upon obtaining such knowledge or awareness, acts expeditiously to remove, or disable access to, the material;

In addition to the above requirements, the service provider must not receive a financial benefit directly attributable to the infringing conduct and must also designate an agent to receive notifications of infringing conduct and provide that information to the Copyright Office which maintains a directory of such agents.

On competing motions for summary judgment, Judge Stanton found that Viacom had presented sufficient proof that a jury could find that YouTube not only knew but welcomed infringing material on its website. Therefore, the threshold inquiry is whether “actual knowledge” in §512(c)(1)(A)(i) can be proved by broad knowledge of infringing conduct or whether the statute requires actual knowledge of specific acts of infringement. Second, is general knowledge sufficient, under §512(c)(1)(A)(ii) to show knowledge of “facts or circumstances from which infringing activity is apparent.”

Judge Stanton resolved the question by looking at the legislative history of §512. Canvassing the House and Senate reports on the DMCA, Judge Stanton concluded that the actual knowledge requirement in §512(c)(1)(A)(i) requires knowledge of specific acts. A more relaxed standard of general knowledge, by contrast, would contravene the purpose of the DMCA by placing on service providers a burden to discover infringing material posted on their websites. This is particularly so in the case of YouTube where users upload 24 hours of content each minute.

But what about the “facts or circumstances” standard of §512(c)(1)(A)(ii)? Evidence that Google welcomed infringing material on YouTube would seemingly be the kind of “red flag” that §512(c)(1)(A)(ii) contemplates. Not so, held Judge Stanton. Even under the “red flag” standard, Judge Stanton held that general knowledge is insufficient to place a duty on Google to investigate potential infringing activity on YouTube.  See also, Corbis Corp. v. Amazon.com, Inc., 351 F. Supp.2d 1090, 1108 (W.D. Wash. 2oo4) relied upon by Judge Stanton.

The impact of this decision is two-fold. First, it seems apparent that if service providers designate an agent and diligently remove infringing material upon receipt of a valid take-down notice, it will be virtually impossible to impose liability. Second, copyright owners, like trademark owners, have the burden to police potential infringing conduct and take the necessary steps to have the material removed.

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