ENTERTAINMENT LITIGATION: MEDIA WARS — YOUTUBE VS. VIACOM

HOW THE DIGITAL MILLENNIUM COPYRIGHT ACT (DMCA) PITS WEBSITES AGAINST TRADITIONAL MEDIA COMPANIES

The growing power and influence of the internet presents a different kind of challenge to traditional media companies. Social networking websites like YouTube and MySpace were once viewed as novelties with limited reach. Now visited by millions of users 24 hours a day, these user-friendly websites present a legitimate threat to traditional media companies and the manner in which people obtain information and spend their free time.

The battle between the new media and traditional media turned ugly last March when Viacom filed a billion dollar suit against YouTube for copyright infringement.

THE DMCA

The YouTube/Viacom litigation revolves around the interpretation of the Digital Millennium Copyright Act (DMCA). The DMCA provides a safe harbor which generally shields websites from liability for copyright infringement for information users submit on their websites. To come within that safe harbor, “service providers” like YouTube and MySpace need to implement procedures to block and remove allegedly infringing material upon receipt of a “takedown notice” from a copyright holder. Service providers also cannot “financially benefit” directly from the infringement. The safe harbor also does not apply If a service provider has actual knowledge of infringing uses.

YOUTUBE/VIACOM

YouTube, MySpace and Facebook are among the wildly successful internet “social” sites where members can gather and exchange information at all hours of the day and night. Both allow members to upload pictures and videos for others to view.

Viacom filed suit last March against YouTube (and its parent company, Google) as a result of allegedly infringing content uploaded by users on to YouTube. When the litigation was filed last March, I was asked to comment on the issues raised by the case in this article on Cnet.com.

When it was filed, I initially thought that the lawsuit was a prelude to a content deal between Viacom and YouTube. Viacom’s one-time subsidiary, CBS, has such an arrangement with YouTube. And independent studio, Lionsgate, recently announced that it too would establish a YouTube “channel” and provide the site with content. Through such agreements, these content providers seek to capitalize on the growing audience that seem inclined to view content on the site. So, as the litigation is now well into its second year, it is clear that this litigation does not appear close to being over.

Viacom is intent on proving that YouTube makes much of its revenue based upon content which YouTube has reason to know infringes upon Viacom’s copyrights. Viacom contends that YouTube cannot rely upon the DMCA’s safe harbor since it profits directly from the users uploading infringing content. The principal issue in the case will be whether ad revenue, which may not be able to be linked to specific videos, but which is received by YouTube and Google through its advertising programs, precludes Google/YouTube from asserting the “safe harbor” defense under the DMCA. Through this ad revenue, does Google “financially benefit” directly from the supposedly infringing content?

The resolution of this question would be news enough. However, as I will write about in other posts, the case is poised to set legal precedent concerning what has been thought to be confidential user information as well as electronic discovery. These rulings could affect millions of users.

Stay tuned.