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Viacom-Google battle

YouTube, owned by Google, operates a website onto which users may upload video files free of charge. Uploaded files are copied and formatted by YouTube’s computer systems, and then made available for viewing on YouTube. Plaintiffs claimed that “Defendants had ‘actual knowledge’ and were ‘aware of facts or circumstances from which infringing activity was apparent,’ but failed to do anything about it.”

Defendants designated an agent, and when they received specific notice that a particular item infringed a copyright, they swiftly removed it. It is uncontroverted that all the clips in suit are off the YouTube website, most having been removed in response to DMCA takedown notices.

Thus, the critical question was whether the statutory phrases “actual knowledge that the material or an activity using the material on the system or network is infringing,” and “facts or circumstances from which infringing activity is apparent” in §512 mean a general awareness that there are infringements, or rather mean actual or constructive knowledge of specific and identifiable infringements of individual items.

To let knowledge of a generalized practice of infringement in the industry, or of a proclivity of users to post infringing materials, impose responsibility on service providers to discover which of their users’ postings infringe a copyright would contravene the structure and operation of the DMCA. When YouTube was given the notices, it removed the material. It is thus protected “from liability for all monetary relief for direct, vicarious and contributory infringement” subject to the specific provisions of the DMCA.

Contours of the “safe harbor” provision of the DMCA

US court of appeals for the second circuit reviewed an order granting summary judgment de novo. The first and most important question on appeal was whether the DMCA safe harbor at issue requires “actual knowledge” or “awareness” of facts or circumstances indicating “specific and identifiable infringements”.

On appeal, in plaintiffs’ view, the use of the phrase “facts or circumstances” demonstrates that Congress did not intend to limit the red flag provision to a particular type of knowledge. The plaintiffs contended that requiring awareness of specific infringements in order to establish “awareness of facts or circumstances from which infringing activity is apparent”, renders the red flag provision superfluous, because that provision would be satisfied only when the “actual knowledge” provision is also satisfied. For that reason, the plaintiffs urged the Court to hold that the red flag provision “requires less specificity” than the actual knowledge provision.

In court’ opinion this argument misconstrues the relationship between “actual” knowledge and “red flag” knowledge. Construing § 512(c)(1)(A) to require actual knowledge or awareness of specific instances of infringement does not render the red flag provision superfluous. The phrase “actual knowledge” is frequently used to denote subjective belief. By contrast, courts often invoke the language of “facts or circumstances” in discussing an objective reasonableness standard.

The difference between actual and red flag knowledge is thus not between specific and generalized knowledge, but instead between a subjective and an objective standard. In other words, the actual knowledge provision turns on whether the provider actually or “subjectively” knew of specific infringement, while the red flag provision turns on whether the provider was subjectively aware of facts that would have made the specific infringement “objectively” obvious to a reasonable person. The red flag provision, because it incorporates an objective standard, is not swallowed up by the actual knowledge provision under our construction of the § 512(c) safe harbor. Both provisions do independent work, and both apply only to specific instances of infringement.

Refusing to accommodate or implement a “standard technical measure” exposes a service provider to liability; refusing to provide access to mechanisms by which a service provider affirmatively monitors its own network has no such result. In this case, the class plaintiffs made no argument that the content identification tools implemented by YouTube constitute “standard technical measures,” such that YouTube would be exposed to liability under § 512(i). For that reason, YouTube cannot be excluded from the safe harbor by dint of a decision to restrict access to its proprietary search mechanisms.

The court held that although the District Court correctly interpreted § 512(c)(1)(A), summary judgment for the defendants was premature.