Williams: The Second Circuit Serves up Some Knowledge in Viacom v. YouTube

8/10/2019 Williams: The Second Circuit Serves up Some Knowledge in Viacom v. YouTube

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The Second Circuit Serves up SomeKnowledge in Viacom v. YouTube

ROBERTJ.WILLIAMS

ABSTRACT

In 2005, three former PayPal employees founded YouTube in SanMateo, California. By 2007, the media conglomerate Viacom sued the nowGoogle-owned YouTube for direct and secondary liability. The UnitedStates District Court for the Southern District of New York grantedsummary judgment in YouTubes favor for lack of specific knowledgeunder the DMCAs 512(c) safe harbor. The Court of Appeals for theSecond Circuit took the case and clarified the knowledge requirement for

eligibility under the 512(c) safe harbor before remanding most of thefactual determinations. Despite Congresss intent to clarify onlinecopyright law, ambiguities within the DMCA have led to judicialinterpretation. This Comment argues that Viacom correctly differentiatesthe knowledge standards for 512(c)(1)(A) and 512(c)(1)(B). Viacomshould be welcomed as part of the natural evolution of online copyrightlaw; and its clarifications provide greater certainty for copyright ownersand service providers. Part I of this Comment examines Title II of theDMCA, relevant Congressional Reports that led to its enactment, and caselaw leading to the decision. Part II outlines Viacoms holding. Part III.Ademonstrates that Viacomcorrectly clarified 512(c)(1)(A) by defining item-specific knowledge as the requisite knowledge standard. Part III.B asserts

that the court was correct in expressly incorporating willful blindness into 512(c)(1)(A)(ii). Part IV establishes that Viacom correctly held that 512(c)(1)(B) does not include a specific knowledge requirement and theSecond Circuits support for a substantial influence standard providesgreater certainty for providers and copyright owners.

Juris Doctor, cum laude, New England Law | Boston (2014). B.A., Political Science, cum

laude, Kent State University (2011). I would like to thank everyone on the New England Law

Review for their amazing contributions to this article and the advancement of the entire

publication. I would also like to thank my family and friends who, intentionally or

unintentionally, have greatly influenced my every decision.


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658 New England Law Review v. 48 | 657

INTRODUCTION

n Viacom Intl v. YouTube, Inc., the Court of Appeals for the Second

Circuit clarified the knowledge requirement for eligibility under Title IIof the Digital Millennium Copyright Acts (DMCA) 512(c) safeharbor.1 According to Congress, the DMCA safe harbors are designed toprovide protection for online service providers whose operationspotentially expose them to widespread copyright infringement liabilitythereby ensuring online expansion of content variety and continuedimprovement of the quality and efficiency of services.2Despite Congresssintent to clarify online copyright law, ambiguities within the DMCA haveled to varying judicial interpretation.3Before the Second Circuits decisionin Viacom, courts typically articulated the same knowledge requirementstandards for qualification under 512(c)(1)(A) and 512(c)(1)(B)specificknowledge of an actual copyright infringement.4 The Second Circuitexplicitly differentiated the knowledge standards for each of these sections,ruling that while item-specificknowledge is required for 512(c)(1)(A), 512(c)(1)(B) does not require the same specific knowledge. 5 Instead, theSecond Circuit held that the standard more closely resembled a serviceprovider exerting substantial influence on the activities of users, withoutnecessarilyor even frequentlyacquiring knowledge of specificinfringing activity.6

This Comment argues that Viacom correctly differentiates theknowledge standards for 512(c)(1)(A) and 512(c)(1)(B) after consideringthe language of the statute, interpreting Congress s intent, and looking atcase law. This Comment asserts that the decision in Viacom should bewelcomed as part of the natural evolution of online copyright law thatCongress anticipated would transpire after the DMCAs enactment.Furthermore, this Comment urges that the Second Circuit s clarificationsprovide greater certainty for copyright owners and service providersregarding copyright infringement online.

1 Viacom Intl, Inc. v. YouTube, Inc., 676 F.3d 19,25 (2d Cir. 2012).2 S.REP.NO. 105-190, at 18 (1998).3 See Edward Lee, Decoding the DMCA Safe Harbors, 32COLUM.J.L.&ARTS 233,23740

(2009) (noting how the DMCAs ambiguities produced a considerable amount of litigation

among the circuit courts).4 See, e.g.,UMG Recordings, Inc. v. Shelter Capital Partners LLC, 667 F.3d 1022, 1038, 1041

42 (9th Cir. 2011), superseded on rehg by UMG Recordings, Inc. v. Shelter Capital Partners LLC,

718 F.3d 1006 (9th Cir. 2013); Capitol Records, Inc. v. MP3tunes, LLC, 821 F. Supp. 2d 627,

64344 (S.D.N.Y. 2011).5 Viacom, 676 F.3d at 38.6 Id.

I


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2014 Second Circuit Knowledge Requirement 659

Part I examines Title II of the DMCA , the relevant House and SenateReports that led to its enactment, and case law leading up to Viacom. Part IIoutlines Viacoms holding. Part III.A demonstrates that Viacom correctly

clarified 512(c)(1)(A) by defining item-specific knowledge as the requisitestandard and expressly distinguishing 512(c)(1)(A)(ii)s red flag testawareness. Part III.B asserts that the court was correct in expresslyincorporating the common law doctrine of willful blindness into 512(c)(1)(A)(ii). Part IV establishes that Viacom correctly held that 512(c)(1)(B) does not include a specific knowledge requirement and theSecond Circuits support for a substantial influence standard providesgreater certainty for both providers and copyright owners.

I. Section 512(c): The Digital Millennium Copyright Act, CongressionalReports, and the Judicial Interpretation

A. The Digital Millennium Copyright Act of 1998

1. The DMCA, OCILLA, and 512

The Digital Millennium Copyright Act of 19987 is Congresss firstattempt to update copyright law in the digital age.8 At the time ofenactment, Congress struggled to keep pace with the unimaginabletechnological advancement that is the Internet, which allowed for thecopying and disseminatingof works at speeds and over distances neverthought possible.9The DMCA was Congresss response to this seeminglyimpossible problem.10 Title II of the DMCA, the Online CopyrightInfringement Liability Limitation Act (OCILLA), contains four safeharbors,11 including the relevant provision at issue,12 which protectsInternet service providers from monetary liability under standard

copyright law.13To qualify for protection under any of OCILLAssafe harbors, a party

must first meet the threshold criteria including qualifying as a service

7 Digital Millennium Copyright Act, Pub. L. No. 105-304, 112 Stat. 2860, 2860918 (1998)

(codified as amended at 17 U.S.C. 101 (2012)).8 Lee, supranote3,at233.9 Id.10 Id.11 Id.;see also Liliana Chang, The Red Flag Test for Apparent Knowledge Under the DMCA

512(c) Safe Harbor, 28CARDOZO ARTS &ENT.L.J.195, 196 (2010) (These safe harbors protect

eligible service providers from monetary liability that may arise due to third party copyright

infringement, leaving copyright holders with limited injunctive relief.).12 17 U.S.C. 512(c) (2012).13 SeeLee, supranote3,at233;see generally 512(a)(d) (enumerating the four safe harbor

copyright provisions).


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provider, defined as a provider of online services or network access, orthe operator of facilities therefor.14After meeting the threshold criteria, aservice provider must qualify under a specific safe harbor, which the

Viacom court designated as 512(c).15

Section 512(c) covers infringementclaims that arise when a user posts material onto a providers website.16

Subsection 512(c)(1)(A) requires that providers:

[N]ot have actual knowledge that the material or an activityusing the material on the system is infringing; [and] (ii) in theabsence of such actual knowledge, [the provider] is not aware offacts or circumstances from which infringing activity is apparent;or (iii) upon obtaining such knowledge or awareness, actsexpeditiously to remove, or disable access to, the material.17

Subsection (c)(1)(B) adds that a provider must not receive a financialbenefit directly attributable to the infringing activity, in a case in which theservice provider has the right and ability to control such activity .18Lastly,

subsection (c)(1)(C) holds that upon notice of infringement, a providerresponds expeditiously to remove, or disable access to, the material that isclaimed to be infringing or to be the subject of infringing activity. 19Subsection (c)(1)(C) allows service providers to escape liability in the eventthey become aware of infringing activity, as long as they remove it in amanner the court deems expeditious.20 Therefore, if a provider receivesactual knowledge of infringing material, awareness of facts orcircumstances that make infringing activity apparent, or receipt of atakedown noticesent by a copyright owner, it must remove the infringingmaterial to maintain freedom from liability.21

B. The House and Senate Reports: Congressional Intent

There is no doubt that Internet copyright law is still young, with moregrowing pains to come.22Congress anticipated an evolution, and instead ofembarking on a wholesale clarification of service provider liability for

14 512(k)(1)(B).15 Viacom Intl, Inc. v. YouTube, Inc., 676 F.3d 19, 27 (2d Cir. 2012).16 512(c)(1).17 512(c)(1)(A)(i)(iii).18 512(c)(1)(B).19 512(c)(1)(C).20 See4MELVILLE B.NIMMER &DAVID NIMMER,NIMMER ON COPYRIGHT 12B.04[A][3]

(2013).21 Viacom Intl, Inc. v. YouTube, Inc., 676 F.3d 19, 2728 (2d Cir. 2012).22 See1 ALEXANDER LINDEY &MICHAEL LANDAU,LINDEY ON ENTERTAINMENT,PUBLISHING

AND THE ARTS 1:50.50 (3d ed. 2013) (discussing development of the DMCA and relevant case

law); Lee, supranote3,at 23334, 240 (This case law is still evolving.).


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copyright infringement, Congress left the current law in its evolving stateand created safe harbors.23 The House and Senate Reports are almostidentical and echo the same message.24 The purpose of the DMCA is to

facilitate the robust development and world-wide expansion of electroniccommerce, communications, research, development, and education in thedigital age.25 Specifically, Congress intended Title II of the DMCA toprovide certainty for copyright owners and Internet service providerswith respect to copyright infringement liability online.26 Furthermore,Title II was created to foster a safe environment for service providers who,if not protected, may be hesitant to invest in the growth of the Internet,causing an inadvertent decline in online expansion.27 Lastly, the Senateintended Title II to preserve strong incentives for service providers andcopyright owners to cooperate to detect and deal with copyrightinfringements.28

C. Judicial Interpretation

1. Specific Knowledge Under 512(c)(1)(A)

Because 512(c) is still relatively new, only a limited amount of caselaw discusses it or its knowledge requirements.29The DMCA itself is not amodel of clarity, but the general consensus among courts supports a highstandard of proof and knowledge of blatant or obvious infringement.30Copyright holders consistently attempt to persuade the courts that theawareness of facts or circumstances language in 512(c)(1)(A)(ii)alsoknown as the red flag test provisionrequires a different, lowerstandard of knowledge based on the existence of other infringing activityon a site.31

In UMG Recordings, Inc. v. Shelter Capital Partners LLC (UMG), arecent major Ninth Circuit decision, Universal Music Group sued VeohNetworks, a company with functions similar to YouTube, for direct and

23 S.REP.NO. 105-190, pt. 3, at 19 (1998).24 Id.at 40 (The limitations in subsections (a) through (d) protect qualifying service

providers from liability for all monetary relief for direct, vicarious and contributory

infringement.); H.R.REP.NO.105-551, pt. 2, at 50 (1998).25 S.REP.NO.105-190,pt. 2, at 12.26 Id. at 2.27 Id.at 8.28 Id.at 20.29 Lee, supranote3,at234.

30 Id.at23435.31 SeeViacom Intl, Inc. v. YouTube, Inc., 676 F.3d 19, 3132 (2d Cir. 2012)(stating

copyright holders mistake the difference between actual and red flag knowledge and that case

law supports this view).


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secondary copyright infringement.32 UMG argued that Veohs generalknowledge of categories of copyrightable content on its site was sufficientto demonstrate knowledge of infringement.33

The Ninth Circuit disagreed, reasoning that copyright holders arebetter suited to identify their own infringed materialunlike serviceproviders who may not readily be able to differentiate.34UMGexemplifiesthe consensus among cases analyzing the knowledge standard under 512(c)(1)(A)(i) and (ii) that specific knowledge of particular infringingactivity is required and that providers have no duty to affirmatively seekout facts indicating infringing activity.35

2. The Willful Blindness Doctrine Applied to 512(c)(1)(A)(ii)

Willful blindness occurs when a party consciously avoids damagingknowledgeor there is a high probability that the person was aware of afact in dispute and consciously avoided confirming that fact.36 Prior to

Viacom, courts interpreting 512(c) did not expressly apply willfulblindness.37Instead, they implicitly used the doctrine s principles to make a 512(c)(1)(A) specific knowledge determination.38Furthermore, the DMCAdoes not mention willful blindness at all.39 However, Congress clearlyintended to limit protection under 512(c)(1)(A) to providers withoutspecific knowledge of infringement.40 And the courts interpret thiscongressional intent to include instances when a provider should haveknown or purposely avoided learning of specific instances of

32 667 F.3d 1022, 1026 (9th Cir. 2011).33 Id.at 1036.34

Id.at 1037 ([A] [service] provider could not be expected, during the course of its briefcataloguing visit to determine whether [a] photograph was still protected by copyright or was

in the public domain . . . (quoting H.R.REP.NO. 105-551, pt. 2, at 5758 (1998)).35 SeeCapitol Records, Inc. v. MP3tunes, LLC, 821 F. Supp. 2d 627, 644 (S.D.N.Y. 2011)

([I]f investigation is required to determine whether material is infringing, then those facts

and circumstances are not red flags[.]); see alsoPerfect 10, Inc. v. CCBill LLC, 488 F.3d 1102,

1114 (9th Cir. 2007).36 United States v. Aina-Marshall, 336 F.3d 167, 170 (2d Cir. 2003) (quoting United States v.

Rodriguez, 983 F.2d 455, 458 (2d Cir. 1993)).37 SeeViacom Intl, Inc. v. YouTube, Inc., 676 F.3d 19, 34 (2d Cir. 2012) (considering the

application of the common law willful blindness doctrine in the DMCA context as an issue of

first impression).38 See, e.g., Io Grp., Inc. v. Veoh Networks, Inc., 586 F. Supp. 2d 1132, 1148 (N.D. Cal. 2008)

([A]pparent knowledge requires evidence that a service provider turned a blind eye to red

flags of obvious infringement. (quoting H.R.REP.NO.105-551, pt. 2, at 57 (1998))).39 See generallyDigital Millennium Copyright Act, Pub. L. No. 105-304, 112 Stat. 2860, 2860

918 (codified as amended at 17 U.S.C. 512 (2012)).40 H.R.REP.NO.105-551, pt. 2, at 57 (1998).


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infringement.41 This type of knowledge is equated with impliedknowledge, a type of actual knowledge,42 satisfying 512(c)(1)(A)sknowledge requirement and triggering provider disqualification from the

safe harborif not removed expeditiously under 512(c)(1)(A)(iii).43

3. The Right and Ability to Control Under 512(c)(1)(B)

In addition to 512(c)(1)(A), 512(c)(1)(B) disqualifies a provider thatreceive[s] a financial benefit directly attributable to . . . infringing activity,in a case in which the service provider has the right and ability to controlsuch activity.44This requirement is denser than its seemingly simple one-sentence construction and largely open to judicial interpretation.45Copyright owners almost always argue that 512(c)(1)(B)s language isclosely related to vicarious liability.46 In actuality, courts are reluctant torelate 512(c)(1)(B)s requirements with that of standard vicarious liabilitybecause of its potentially devastating consequences to service providers.47

The courts require something more to be present to find against aprovider.48 In deciding whether a provider is disqualified, two separatecriteria must be met: the provider must (1) receive a financial benefit; and(2) have the ability to control the activity connected to the monetary gain. 49In addition to these two elements, courts apply the same culpabilitystandard for knowledge as 512(c)(1)(A).50

41 Corbis Corp. v. Amazon.com, Inc., 351 F. Supp. 2d 1090, 1108 (W.D. Wash. 2004); see also

4 NIMMER & NIMMER, supra note 20, 12B.04[A][1] ([The question is] whether the service

provider deliberately proceeded in the face of blatant factors of which it was aware.).42 David Ludwig, Shooting the Messenger: ISP Liability for Contributory Copyright

Infringement, B.C.INTELL.PROP.&TECH.F.,Nov. 7, 2006, at 1, 67, available atbciptf.org/wp-

content/uploads/2011/07/26-SHOOTING-THE-MESSENGER.pdf.43 17 U.S.C. 512(c)(1)(A)(i)(iii).44 512(c)(1)(B).45 Id.; see also 4 NIMMER &NIMMER,supranote20,12B.04[A][2][a][b] (discussing

differences in recent decisions involving 512(c)(1)(B)).46 SeeGreg Jansen, Note, Whose Burden Is it Anyway? Addressing the Needs of Content Owners

in the DMCA Safe Harbors, 62 FED.COMM.L.J.153, 157 (2010) (Courts find vicarious liability

when the defendant (a) receives a direct financial benefit from infringement and (b) has the

right and ability to control that infringement.).47 Io Grp., Inc. v. Veoh Networks, Inc., 586 F. Supp. 2d 1132, 1151 (N.D. Cal. 2008); see Lee,

supranote3,at 235(stating that viewing 512(c)(1)(B) as imposing vicarious liability exposes

providers to potentially limitless liability).

48 Io Grp., Inc., 586 F. Supp. 2d at 1151.49 17 U.S.C. 512(c)(1)(B) (2012); see also4 NIMMER &NIMMER,supranote20,

12B.04[A][2][a][b].50 See, e.g., Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146, 1174 (9th Cir. 2007).


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Although the courts generally require specific knowledge of aninfringement to meet the ability to controlelement, actual knowledge haslittle influence on the courtsdecisions beyond this initial determination.51

Instead, determining what exactly is necessary under 512(c)(1)(B) mostlyfocuses on the third partys infringing activity and the providers resultingfinancial benefit.52For example, if costs for membership to a certain type ofsite are usually $10 per set time period and a service that primarilyprovides access to similar bootleg material charges $500 for the sametime period, then a court may find the provider s financial benefit wasdirectly related to the infringing activity.53 Section 512(m) expresslyprovides that 512(c)s safe harbor cannot be conditioned on a serviceprovider monitoring its service or affirmatively seeking facts indicatinginfringing activity.54Congress intended for the courts to take a common-sense, fact-based approach in determining whether a service providerreceived additional payment from its infringing users.55

II. The ViacomDecision

In 2005, above a pizzeria and Japanese restaurant in San Mateo,California, three former PayPal employees founded what would becomethe media giant YouTube.56 On February 14, 2005, the trio activated thedomain name YouTube.com, and by April 2006, the start-up alreadyexperienced a surge in popularity and an injection of over $11 million incapital.57YouTube operates as a website where users can upload videos,free of charge, and videos are then copied, formatted, and stored byYouTubes computer systems for display by other users on the website. 58This allows users to easily upload various types of content as long as theyare formatted as a video.59 By November 2006, YouTube eclipsed its

51 See Io Grp., Inc., 586 F. Supp. 2d at 1152 (focusing on whether the provider could control

what content users choose to upload); Perfect 10, Inc. v. Cybernet Ventures, Inc., 213 F. Supp.

2d 1146, 118182 (C.D. Cal. 2002) (holding that a provider that prescreens sites, gives

customers extensive advice, and prohibits the proliferation of identical sites, exercises the

necessary control for disqualification).52 See Lee, supranote3,at24647.53 4 NIMMER &NIMMER,supranote20,12B.04[A][2][b].54 512(m)(1).55 H.R.REP.NO.105-551, pt. 2, at 54 (1998).56See Sara Kehaulani Goo, Ready for its Close-Up, WASH.POST, Oct. 7, 2006, at D01, available

at 2006 WLNR 26031063;see generallyJefferson Graham, Video Websites Pop Up, Invite Postings,

USATODAY,Nov. 22, 2005, at 03B, available at WLNR 18871741.

57Franky Branckaute, The History of YouTube, THE BLOG HERALD(Nov. 2, 2010, 4:38 PM),

http://www.blogherald.com/2010/11/02/the-youtube-story/.58LINDEY &LANDAU,supranote22,1:50.50.59 See About YouTube, YOUTUBE, http://www.youtube.com/yt/about/ (last visited July 4,


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A. The Specific Knowledge Standard Applied to 512(c)(1)(A) andApplication of the Willful Blindness Doctrine

1. The Specific Knowledge Standard Applied to 512(c)(1)(A)

The Second Circuit believed the most important question on appealwas whether 512(c)(1)(A) required item-specific knowledge.69However,after analyzing this admittedly important matter, the court largely left thespecificity requirement (at least under 512(c)(1)(A)) unchanged.70 In itsevaluation, the Second Circuit examined the difference between 512(c)(1)(A)(i)s actual knowledge of infringementand knowledge offacts or circumstances that make infringement apparent under 512(c)(1)(A)(ii)s red flag test.71 More importantly, the court providedclarity in rejecting Viacoms argument that generalized awareness ofinfringing activity is sufficient to eliminate a provider from the safe harbor

because of 512(c)(1)(A)(ii)s language.72In Viacom, the distinction between 512(c)(1)(A)(i) actual knowledge

and 512(c)(1)(A)(ii) red flag knowledge is a subjective and objectivestandard respectively.73 For a provider to have actual knowledge it mustknow of a specific instance of infringement.74But a provider mayhave redflag knowledge (equaling the necessary actual knowledge) of aninfringement if the provider is aware of facts that would have made theexistence of specific infringement objectively obvious to a reasonableperson.75

After affirming the district courts requirement of specific knowledgeunder 512(c)(1)(A), the Second Circuit held that summary judgment forYouTube was premature because Viacom raised material issues of fact

regarding YouTubes red flag knowledge.76

This included evidence thatYouTube employees conducted website surveys estimating that 7580% ofall YouTube streams contained copyrighted material and evidence ofemails between Google and YouTube executives discussing employeessearches leading to the discovery of copyrighted material.77There was also

69 Viacom, 676 F.3d at 30.70 Id.71 Id.at 3031.72 Jack C. Schecter, Is it Safe? The Digital Millennium Copyright Acts Safe Harbor in the

Wake of Viacom v. YouTube,59FED.LAW.16, 1617 (2012).73 Viacom, 676 F.3d at 31; Schecter, supranote72.

74 Viacom, 676 F.3d at 31.75 Id.76 Id.at 32.77 Id.at 3233 (including episodes of well-known shows that remained on the site such as


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evidence that YouTube executives knew that some of the content wasblatantly illegal.78 Because YouTube executives had referred to thematerial as blatantly illegal,a reasonable juror could have concluded that

YouTube knew the located clips were infringing and subsequently failed toremove the content expeditiously, therefore exposing the company topotential liability.79

2. The Application of Willful Blindness to 512(c)(1)(A)(ii)

The ViacomCourt further ruled that the district court erred in grantingsummary judgment to YouTube because the company was potentiallywillfully blindto specific infringing activity.80Viacomwas the first case inwhich the willful blindness doctrine is expressly applied in the DMCAcontext.81 After holding that the DMCA does not abrogate willfulblindness, the court held that a copyright owner could cite willfulblindness to prove knowledge or awareness of specific instances of

infringement.82The Second Circuit emphasized that the doctrine does notattempt to impose an additional duty on the provider.83Willful blindnessonly stops a provider from purposefully avoiding knowledge of specificinstances of infringement.84On remand, the district court must determinewhether YouTube made a deliberate effort to avoid guilty knowledge.85

B. Rejection of the Specific Knowledge Requirement and Support ofSubstantial Control Applied to 512(c)(1)(B)

After determining that 512(c)(1)(A) requires item-specific knowledge,the court analyzed whether 512(c)(1)(B) requires the same. 86 Unlike itspredecessor, and contrary to the Ninth Circuits recent case, UMG, whichadopted a specific knowledge requirement,87 the Second Circuit

determined that the knowledge requirement for 512(c)(1)(B) was not the

Family Guy, South Park, and the Daily Show).78 Id.at 33.79 Id.80 Viacom, 676 F.3d at 32, 34.81 1LINDEY &LANDAU,supranote22,1:50.50, at 1-356.951-356.96.82 Viacom, 676 F.3d at 35.83 Id.84 Schecter,supranote72,at17.85 Viacom, 676 F.3d at 35 (quoting In reAimster Copyright Litig., 334 F.3d 643, 650 (7th Cir.

2003)).86 See id.at 36.87 See UMG Recordings, Inc. v. Shelter Capital Partners LLC, 667 F.3d 1022, 104142 (9th

Cir. 2011), superseded on rehg by UMG Recordings, Inc. v. Shelter Capital Partners LLC, 718

F.3d 1006 (9th Cir. 2013).


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same as 512(c)(1)(A) because that would render the safe harborsknowledge requirements superfluous.88

Furthermore, the court expressed that precedent dealing with the right

and ability to control infringing activity under 512(c)(1)(B) premisedliability on the substantial influence on the activities of users, withoutnecessarilyor even frequentlyacquiring knowledge of specificinfringing activity.89 The court reasoned that to incorporate a specificknowledge requirement would render the statute internally inconsistentbecause 512(c)(1)(A) already requires a provider to remove infringingmaterial after it receives notice of the infringement to qualify for safeharbor eligibility.90 Therefore, if a provider has specific knowledge of itsright and ability to control the activity connected to the financial benefitand properly removes infringing material in accordance with 512(c)(1)(A)(iii)it would be inadvertently admitting that it had therequisite knowledge for control under 512(c)(1)(B) and, in turn, would be

disqualified from the safe harbor.91

Instead the Second Circuit held, consistent with emerging case law,that the right and ability to control activity under 512(c)(1)(B) requiressomething more than the ability to remove or block access to materialsposted on a service providers website.92While some view the holding asa punt,93 the Second Circuit left the lower court with a standard ofsubstantial influence.94Substantial influence may be exerted over a user ifthe provider affirmatively monitors user activity or exercises purposeful,culpable expression and conduct over a user.95

88 Viacom, 676 F.3d at 36; Schecter, supra note 72, at 17,23.89 Viacom, 676 F.3d at 38.90 Id.at 37.91 Id.92 Id.at 38(quoting Capitol Records, Inc., v. MP3tunes, LLC, 821 F. Supp. 2d 627, 645

(S.D.N.Y. 2011)); see alsoIo Grp., Inc. v. Veoh Networks, Inc., 586 F. Supp. 2d 1132, 1151 (N.D.

Cal. 2008).

93 See Schecter, supranote72, at 17 (asserting that the court failed to answer the more

difficult question of what something more is).94 See Viacom, 676 F.3d at 38.95 Id.


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ANALYSIS

III. The Court Correctly Applied the Specific Knowledge Requirement

and the Willful Blindness Doctrine to 512(c)(1)(A) After Analyzingthe Language of the DMCA, Congresss Intent, and Case Law

A. The Specific Knowledge Requirement

After looking to the DMCAs language and relevant congressionalreports, it is apparent that the safe harbors threshold knowledgerequirement should strictly apply to providers that knowinglyandwrongfullyallow copyright infringement to happen.96One may view thisas Congress taking sides, opting for a requirement that favors theproviders.97But Congresss explicit protection of providers is appropriatebecause copyrightable material is both easily disseminated and accessedonline today.98

Congresss intent to apply a heightened knowledge standard should beconsidered more than just a win for providers.99 This standard surelyboosts providers confidence, as Congress intended, creating greaterpredictability for investors, which facilitates the expansion of technologiesand overall online growth.100The individual listening to his or her favoriteartist on Sound Cloud and the artist or copyright owner developing anonline audience should both appreciate Congresss decision to requireactual knowledge of infringement.101 A different knowledge standardwould likely find providers excessively liable.102 Furthermore, Congressexplicitly designed the safe harbors to protect providers involved inactivity that under normal copyright law would be actionable againstthem.103

96 SeeS. REP.NO. 105-190, pt. 5, at 4556 (1998);H.R.REP.NO.105-551, pt. 2, at 57 (1998);

Chang,supranote11, at199201.97 Kevin C. Hormann, Comment, The Death of the DMCA? How Viacom v. YouTube May

Define the Future of Digital Content, 46 HOUS.L.REV. 1345, 1369 (2009).98 S.REP.NO. 105-190, pt. 3, at 8 (Due to the ease with which digital works can be copied

and distributed worldwide virtually instantaneously . . . .).99 But seeHormann, supra note97,at 1348 ([T]he DMCA safe harbor provisions has [sic]

shown a clear pattern of deference to the online service providers.).100 S.REP.NO. 105-190, pt. 2, at 2; seeJansen, supranote46,at 15456.101 See Chang, supra note 11, at 196; Cf. Eugene C. Kim, Note, YouTube: Testing the Safe

Harbors of Digital Copyright Law, 17 S.CAL.INTERDISC.L.J.139,140(2007) (explaining the five

major capabilities of YouTube, revolving around individuals sharing with others).102 SeeMark A. Lemley, Rationalizing Internet Safe Harbors, 6 J.TELECOMM.&HIGH TECH.L.

101, 10102 (2007).103 Seeid.


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This certainly puts copyright owners at a disadvantage. 104 As theirmaterial is being infringed upon, they are fighting an uphill battle in thecourts.105The burden of proving infringement is on the copyright holder, as

is providing evidence that the provider had knowledge of the specificinstance of infringement at issue (in order to disqualify the provider).106Congressional intent and case law point to a strong presumption in favorof service providers.107 While Congress intended the DMCA to provideclarity, greater certainty, and to foster cooperation between owners andproviders, its terms are fairly ambiguous.108 Viacom successfully trudgesthrough this thick doctrine, leaving a clearer path for those who follow inits footsteps.109

Because 512(c)(1)(A) has a knowingly and wrongfully element, theSecond Circuit rightfully held that item-specific knowledge of infringementis required and remanded the case to the district court. 110Viacoms specificknowledge explanation helps clarify the parameters of 512(c)(1)(A).111The

Second Circuit, by remanding the district courts grant of the summaryjudgment in YouTubes favor,took a step in the right direction by properlyapplying the specific knowledge requirement and creating a fairerenvironment for copyright owners.112

While YouTube knew of infringing material in the past, its knowledgewas not instantly wrongful.113 A providers specific knowledge under 512(c)(1)(A)(i)(ii) does not instantly disqualify the provider.114The safeharbors protection no longer extends to a provider that allows the conduct

104 See Chang, supranote11, at 203.105 See, e.g., Viacom Intl, Inc. v. YouTube, Inc., 676 F.3d 19, 3435 (2d Cir. 2012)

(highlighting that although plaintiff put forth facts establishing that 75-80% of YouTubes

streams contained copyrighted material, this was not enough to prove that YouTube had

actual knowledge rising to copyright infringement).106 See, e.g., id.at 3235.107 Cf. Chang, supranote11,at203.108 CompareS.REP.NO. 105-190, pt. 3, at 20 (1998), with Chang, supranote11,at203.109 CompareS. REP.NO. 105-190, pt. 3, at 20, with Chang, supranote11,at 203,andViacom,

676 F.3d at 2526.110 Viacom, 676 F.3d at 34; see also17 U.S.C. 512(c)(1)(A)(iii) (2012).111 Cf.Chang, supranote11,at 19798(discussing apparent knowledge within the context

of the red flag test).112 See Jansen, supranote46,at 170 (stating that while there is no evidence that YouTube

failed to respond expeditiously to notices of infringement, its alleged propensity for rampant

infringement has received attention).113 SeeStephen A. Hess, Minesweeping the Digital Millennium Copyright Act Safe Harbors,

COLO. LAW., Oct. 2004, at 95, 98 (stating that a provider can claim protection if it removes

infringing material expeditiously).114 See 512(c)(1)(C)(iii).


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to become wrongful by disregarding 512(c)(1)(A)(iii) s expeditiousremoval requirement.115 In order for its conduct to be wrongful, YouTubemust have failed to act[] expeditiously to remove, or disable access to, the

material.116

Therefore, deciding when the provider has the requisitespecific knowledge is key.117

The difficulty in determining when a provider is disqualified from 512(c)s safe harbor lies in the awareness of infringement prong, alsoknown as the red flag test.118 Courts place a high burden of proof onplaintiffs establishing this prong,119and correctly so, but Viacommore fairlyinterprets 512(c)(1)(A).120Prior to Viacom, it was seemingly impossible fora copyright owner to assert liability because courts were reluctant to findapparent knowledge under the red flag test.121Viacomclearly differentiatesspecific knowledge as requiring both a subjective and objective knowledgeanalysis under 512(c)(1)(A)(ii), as opposed to specific knowledge under 512(c)(1)(A)(i) and general knowledge under 512(c)(1)(A)(ii).122 By

dismissing Viacoms general knowledge argument, the court maintains thehigh standard of specific proof required in the past. 123 Therefore, inexplicitly incorporating the objective knowledge analysis, Viacomdefogs awindow of opportunity for copyright owners.124

The 512(c)(1)(A)(ii) objective test asks whether the provider wassubjectively aware of facts that would have made the specific infringementobjectivelyobvious to a reasonable person.125This prong is the differencebetween 512(c)(1)(A)(ii) and 512(c)(1)(A)(i), which only analyzeswhether the provider subjectively knew of a specific infringementnotwhether the provider should have known.126 Because the tests work

115 See id.116 512(c)(1)(A)(i)(iii).117 Most of the struggle occurs when a provider on its own without notification of

infringementdiscovers infringing material or facts that make it obvious that infringing

material is present. See 4 NIMMER &NIMMER,supranote20, 12B.04[A][1]; Lee, supranote3,at

251.118 Lee, supranote3,at251.119 Id.120 Seeid.at25358;cf.Viacom Intl, Inc. v. YouTube Inc., 676 F.3d 19, 3132 (2d Cir. 2012);

Chang, supranote11,at19798.121 SeeChang,supranote11,at19698.122 See Viacom, 676 F.3d at 32.123 Seeid. at 3031.124 Id. at 31. The Senate Report explicitly refers to the objective and subjective standards of

subsection (c)(1)(A)(ii), but courts consistently focus on the subjective knowledge of a

provider. S.REP.NO. 105-190, pt. 5, at 44 (1998).125 Viacom,676 F.3d at 31;see S.REP.NO. 105-190, pt. 5, at 4849.126 See 17 U.S.C. 512(c)(1)(A)(ii) (2012).


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independently of each other, the copyright owner can argue that theservice provider knew of a specific instance of infringement or that theprovider should have been aware of specific infringement.127Past case law

struggled to articulate this differentiation.128

Congress intended theevolution of copyright law to continue after the DMCAs enactment and itspurpose was to facilitate these changes.129 Viacom advances onlinecopyright law only after taking into consideration Congresss intentions.130Although the DMCA and 512 will continue to take shape after Viacom,establishing a more accessible standard for the red flag test was necessaryto achieve the DMCAs purpose.131

In identifying the type of activity that could disqualify a providerunder the 512(c)(1)(A)(ii) red flag test, the court identified some ofYouTubes potentially culpable actions.132 Under Viacom, the court statedthat the following could lead to disqualification under 512(c)(1)(A)(ii):email requests identifying specific instances of infringement; a 2006 report

indicating an awareness of clips perceived to be blatantly illegal; and e-mails between executives asking about removing infringing material fromthe website.133This analysis provides greater clarity to awarenessunder 512(c)(1)(A)(ii).134 Additionally, there is still no duty for a provider tosearch out the material, but if the provider becomes aware of an actualinfringement, the material is wrongfully on its site and the provider mustremove it expeditiouslyas if a copyright owner had actually informed itof the specific infringement.135 This aligns with the dual subjective andobjective standard Congress formulated and is similar to precedent that

127 Viacom, 676 F.3d at 3132 (Both provisions do independent work.).128 See, e.g., UMG Recordings, Inc. v. Shelter Capital Partners LLC, 667 F.3d 1022, 104142

(9th Cir. 2011) (stating requisite awareness under 512(c)(1)(A)(ii) requires specificknowledge), superseded on rehg by UMG Recordings, Inc. v. Shelter Capital Partners LLC, 718

F.3d 1006 (9th Cir. 2013); see alsoChang, supranote11,at203.129 See S.REP.NO. 105-190, pt. 1, at 12.130 See, e.g.,Viacom, 676 F.3d at 31, 37.131 See Chang, supranote 11, at198 (arguing that establishing an accessible standard for

the red flag test is necessary to achieve the purpose of the DMCA).132 Viacom, 676 F.3d at 3234.133 Id.134 See id.; see also Chang, supra note 11, at 20305 (providing information on the Ninth

Circuits struggle in applying the subjective prong of the red flag test in Perfect 10, Inc. v.

CCBill LLC and the District Court for the Northern District of Californias similar struggle in Io

Group, Inc. v. Veoh Networks, Inc.); Perfect 10 Inc. v. CCBill LLC, 488 F.3d 1102, 1114 (9th Cir.

2007) (discussing the difficulty of deciding whether awareness existed under the subjective

prong); Io Grp., Inc. v. Veoh Networks, Inc., 586 F. Supp. 2d 1132, 1148 49 (N.D. Cal. 2008)

(highlighting the difficulty in applying the subjective prong where the court conflated

apparent knowledge with actual knowledge).135 See Viacom, 676 F.3d at 3234.


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correctly applied 512(c)(1)(A)(ii).136Clarifying the knowledge distinctionsbetween 512(c)(1)(A)(i) and (ii) ultimately will allow for greatercooperation, even if forced upon copyright owners and providers, which is

one of the primary purposes of the DMCA.137

B. The Incorporation of Willful Blindness

The Second Circuit incorporated the common law willful blindnessdoctrine into 512(c)(1)(A)(ii).138 This incorporation is important becausewith its application, a provider cannot consciously avoid specific instancesof infringement that it would otherwise be aware of, nor can they attemptto elude knowledge.139 By requiring specific knowledge for the red flagawareness test and emphasizing the subjective and objective componentsof the analysis, the willful blindness doctrine adds even more depth to 512(c)(1)(A)(ii).140Without this doctrine, a provider in YouTubes positioncould still attempt to escape liability by avoiding conduct that would lead

to the discovery of infringing activity.141While safe harbor protection doesnot require affirmative monitoring,142willful blindness requires the court toanalyze whether a provider made a deliberate effort[] to avoid guiltyknowledgeof specific infringement;143meaning the provider allowed theinfringing material to remain wrongfully on the site by not expeditiouslyremoving the material.144

Some argue the addition of willful blindness to 512(c)(1)(A) lowersthe level of knowledge required to disqualify a provider. 145In any case, theflag must be brightly red indeedand be waving blatantly in theproviders faceto serve the statutory goal of making infringing

136 See Corbis Corp. v. Amazon.com, Inc., 351 F. Supp. 2d 1090, 1108 (W.D. Wash. 2004)

(stating that the question under 512(c)(1)(A)(ii) is whether a service provider deliberately

proceeded in the face or turned a blind eye to red flags of blatant factors of obvious

infringement); S.REP.NO. 105-190, pt. 5, at 44 (1998).137 Cf.Chang, supranote11,at21920.138 See Viacom, 676 F.3d at 35 (finding that a reasonable juror could at least conclude that

YouTube was aware of facts or circumstance).139 SeeUMG Recordings, Inc. v. Veoh Networks, Inc., 665 F. Supp. 2d 1099, 1108 (C.D. Cal.

2009) ([I]t takes willful ignorance of readily apparent infringement to finda red flag.).140 Cf.Hormann, supranote97, at 136667.141 SeeKim, supranote101,at16162.142 17 U.S.C. 512(m)(1) (2012).143 Schecter, supranote72,at 17.144 See id.145 SeeJonathan Stempel & Yinka Adegoke, Viacom Wins Reversal in Landmark YouTube Case

Viacom Intl v. YouTube, WESTLAWJ.INTELL.PROP.2, Apr. 18, 2012, at *1, *2,available at 2012

WL 1344704 (stating that even start-ups will remove more content in fear of being held liable

by content providers).


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IV. The Second Circuit Was Correct in Rejecting the Specific Knowledge

Requirement and Applying Substantial Control to 512(c)(1)(B)Because it Brings Needed Clarity to the 512(c) Safe Harbor

A. The 512(c)(1)(B) Substantial Control Standard Brings GreaterClarity to 512(c) Because it Provides Greater Certainty forCopyright Owners and Service Providers

The Second Circuits decision to adopt a different standard for 512(c)(1)(B)one that does not necessarily concern a providersknowledge of specific instances of infringementbrings further clarity tothe 512(c) safe harbor.157Before the Second Circuits decision, the rightand ability to controlanalysis could mistakenly be intertwined with thespecific knowledge requirement of 512(c)(1)(A).158 This led to a dilutedanalysis under 512(c)(1)(B).159 Instead of focusing on whether theprovider exercised the right and ability to control infringing activity, the

courts focused on whether requisite knowledge of specific infringementexisted.160 Viacom eliminates this distraction by removing the specificknowledge requirement from the 512(c)(1)(B) analysis.161 With specificknowledge restricted to 512(c)(1)(A), courts can focus on whether aprovider offered a service directly tied to infringing activity that resulted inmonetary gain.162 The proper test the Second Circuit articulated turns onwhether the provider exercised substantial control over the service oractivity, not whether the provider knew of any specific instances ofinfringement.163 Section 512(c)(1)(A) already excludes providers that areaware of specific instances of infringementwhether or not they are

157 See4 NIMMER &NIMMER,supranote20,12B.04[A], [A][2][C].158 UMG Recordings, Inc. v. Shelter Capital Partners LLC, 667 F.3d 1022, 1041 (9th Cir.

2011) ([U]ntil [the provider] becomes aware of specific unauthorized material it cannot

exercise its power of authority over the specific infringing item.), superseded on rehg by

UMG Recordings, Inc. v. Shelter Capital Partners LLC, 718 F.3d 1006 (9th Cir. 2013); Viacom I,

718 F. Supp. 2d at 527 ([T]he provider must know of the particular case before he can control

it.).159 See UMG, 667 F.3d at 1042.160 See id. at 104142; Hendrickson v. Amazon.com, Inc., 298 F. Supp. 2d 914, 91718 (C.D.

Cal. 2003).161 Schecter, supranote72,at 1617.162 See 4 NIMMER &NIMMER,supranote20,12B.04[A][2][c]([T]he same statute elsewhere

affirmatively requires a service provider to remove or block access to materials posted on its

system when it receives notice of claimed infringement.).163 SeeLee, supranote3,at24546(discussing the relationship between the financial benefit

directly attributable to infringing activity and the right and ability to control that activity).


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knowing about each users infringement.175 In explicitly stating that 512(c)(1)(B) does not require specific knowledge of an infringement,Viacomtakes a leap forward in developing the protections and boundaries

of the 512(c) safe harbor.176

CONCLUSION

It is hard to believe that at the time of the DMCA s creation, legislatorscould have imagined the importance of the Internet today. Similarly, it ishard to imagine that when YouTube launched, its creators anticipated abillion-dollar Google buyout or lengthy legal battles with media giants likeViacom. Copyright owners, on the other hand, have always attempted toprotect their work from emerging types of infringement. The courtsprovide the battleground for providers and copyright owners. Congressintended the DMCA and 512(c) to be a starting pointnotcomprehensive. The Second Circuits decision in Viacom better balancesprotection of artistic endeavors and the progress of innovation, creating afairer playing field. Navigating the ambiguity of 512(c), the courtcorrectly addressed 512(c)(1)(A) by continuing to require specificknowledge of actual infringement, clarifying the 512(c)(1)(A)(ii) red flagtests objective knowledge standard, and expressly incorporating thewillful blindness doctrine. With these clarifications, and by remanding theissue of YouTubes knowledge culpability to the district court, the SecondCircuit ensures that a provider cannot claim safe harbor when avoidingobvious infringement. Furthermore, in eliminating the specific knowledgerequirement from 512(c)(1)(B), and instead focusing on the providersability to substantially control user activity, the court further clarified theboundaries of the safe harbor and the providers role in allowing access to

material and copyright owners ability to assert infringement.

175 4 NIMMER &NIMMER,supranote20,12B.04[A][2][c] (stating that it is necessary to look

beyond formal indicia of control to all relevant aspects of the relationship).176 Brett White, Viacom v. YouTube: A Proving Ground for DMCA Safe Harbors Against

Secondary Liability, 24 ST.JOHNSJ.LEGAL COMMENT. 811, 817 (2010) (Although no element of

knowledge is required to find vicarious liability, some courts imply that this knowledge is

imputed to an infringer that exerts control over and profits from the direct infringement.)

(emphasis added).

Documents

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