The Social Media revolution is built on two legal foundations – the Digital Millennium Copyright Act (“DMCA”) which generally protects websites that host user generated content from copyright claims, and the Communications Decency Act, which generally protects such websites from claims based on the publication of defamatory or other illegal content. The Second Circuit sent shockwaves through one of those foundations – the DMCA – by issuing a decision yesterday that reinstated copyright claims made against YouTube based upon videos posted on the YouTube site by users. While the direct implications of this suit for YouTube may be minimal — YouTube has stated that the suit on remand only involves a handful of videos that were eliminated many years ago — the decision should be taken as a warning by any website hosting user generated content.

In March 2007 Viacom International Inc. (“Viacom”) filed suit against YouTube, Inc. alleging copyright infringement of the content of the company’s television programs and movies which were displayed on YouTube’s popular website. Many other copyright owners joined the suit. Following a long line of decisions that have insulated website operators from copyright suits based on content posted on the site by users, District Judge Stanton dismissed the complaint, citing the protections offered by the DMCA. Yesterday, April 5, 2012 the Second Circuit upheld most of Judge Stanton’s decision but remanded specific issues for trial.

The Second Circuit’s decision minimizes the level of protection service providers recently enjoyed under the DCMA against copyright claims. In the earlier decision of this matter, the district court was presented evidence that surveys by YouTube employees showed that many of the videos on the site might be the result of potential copyright infringement. The court, however, found that such knowledge constituted only generalized knowledge of possible infringement and not specific type that fell outside of the protection of the DMCA. However, Judge Stanton did not consider the willful blindness doctrine, which would assess whether YouTube made a “deliberate effort to avoid guilty knowledge” of specific infringing activity on its website.

In reversing part of the district court’s decision, the Second Circuit ruled that a trier of fact may apply this doctrine “to demonstrate knowledge or awareness of specific instances of infringement under the DCMA” in order to determine whether YouTube should receive protection under the act.

The good news for a host of user generated content is that the Second Circuit affirmed that the DMCA does provide broad protection for hosts of user generated content. Specifically, the Second Circuit affirmed the following protections provided by the DMCA:

  • The website operator still must have knowledge or awareness of “specific and identifiable infringements.”
  • A host of user generated content has no duty to moderate the site or seek out specific infringing activity.
  • A host of user generated content is not subject to liability under vicarious infringement principals merely because it has the ability to block content.

The following activities by the host of user generate content were specifically found to be protected by the DMCA: “transcoding content” (converting it to another format); playing back content at user’s requests; and providing for the automated indexing of content.

But in reinstating part of the case for trial, and by directing the district court to make factual findings on specific issues, the Second Circuit identified conduct that could place any host of user generated content at risk of losing the safe harbor protection of the DMCA:

  • Communications by employees which suggest awareness that specific content posted by users is infringing.
  • Activities which a jury might view as attempts to avoid knowledge that content posted by users is infringing.
  • Syndicating or licensing user generated content to third parties.

While the DMCA remains alive and well after the Second Circuit’s Viacom decision, the hosts of user generated content should not assume that they are insulated from liability just because they are complying with the formal procedures established by the DMCA for the removal of infringing user generated content from websites. The host of any user generated content should review their practices and procedures in light of the “issue of fact” identified by the Second Circuit’s Viacom decision, to ensure that they are minimizing the risk of copyright liability for the acts of others.

Authorship credit: Gerald Ferguson & Peter Brown