By , April 07, 2011.

The briefs for Viacom’s appeal against the District Court’s decision in its lawsuit against YouTube have been filed. Last June, the Southern District of New York granted the video hosting site’s motion for summary judgment, saying the DMCA’s safe harbor immunizes YouTube from liability for copyright infringement by its users.

The crux of the case involves the interpretation of 17 USC § 512(c)(1)(A) and §512(c)(1)(B) — whether YouTube had actual knowledge of infringing works that were uploaded and whether it had the right and ability to control the uploading of infringing videos.

Today, however, I wanted to look at one of the other, and (to me, at least) more interesting issues raised on appeal. Does YouTube even qualify as a “service provider” under the DMCA in the first place?

Title II of the DMCA, the Online Copyright Infringement Liability Limitation Act, provides “safe harbors” for online service providers that limit their liability for copyright infringement arising out of specific situations. The one YouTube and most user-generated content sites claim protection under regards “information residing on systems or networks at direction of users” and is found in §512(c). Specifically, 17 USC § 512(c)(1) provides that “A service provider shall not be liable for monetary relief, or, except as provided in subsection (j), for injunctive or other equitable relief, for infringement of copyright by reason of the storage at the direction of a user of material that resides on a system or network controlled or operated by or for the service provider”.

Viacom argues that YouTube’s activities go beyond the collateral scope of the storage functions described in §512(c). If the 2nd Circuit agrees, this means YouTube wouldn’t receive the DMCA’s harbor no matter what “knowledge” or “right and ability to control” mean — its liability would be analyzed under traditional secondary liability doctrines. And some have suggested that, absent this safe harbor, there is a likelihood that YouTube could end up liable for copyright infringement of its users — at least as far as its operation during the time that is at issue in this lawsuit. 1Trevor Cloak, The Digital Titanic: The Sinking of in the DMCA’s Safe Harbor, Note, 60 Vanderbilt Law Review 1559, 1573-78 (2007).

Under Construction

The internet looked a lot different in 1998 when Congress passed the DMCA. The amicus brief filed by the Washington Legal Foundation provides a good look at the differences:

At that time ‘service providers’ were generally thought of as the ‘doorways’ to the Internet — the means by which individual users accessed the Internet to exchange electronic mail, view websites, and download files.  Common service providers in the 1990’s were America Online, Compuserve, and individual educational and work institutions.

User content was typically located on that user’s individual web page, which was ‘hosted’ on the service provider’s computer systems.  In this manner, a user’s individual web page was made available to other Internet users around the world.  These individual web pages often contained copyrighted material belonging to others — at that time mainly photographs and music recordings.

Content owners, to protect their intellectual property, brought lawsuits against both the website owner (often an individual) for placing the content on the web page and the service provider for ‘hosting’ the web page.  Service providers were thus faced with exposure to copyright liability solely by virtue of their desire to provide to individuals the ‘doorway’ to the Internet.

The problem confronted by Congress in the 1990’s with respect to the Internet and intellectual property rights was how to strike the balance between protecting a content owner’s rights, on one hand, and encouraging service providers to continue to offer Internet access on the other.  Congress thus sought, through the DMCA, to address this problem.

As stated in the floor debates: ‘One of the things we do here is to say:  ‘If you are on-line service provider, if you are responsible for the production of all of this out to the public, you will not be held automatically responsible if someone misuses the electronic airway you provide to steal other people’s property. There is a balance here.  We want to protect property, but we do not want to deter people from making this [the Internet] widely available.  We have a problem here of making sure that intellectual property is protected, but we do not want freedom of expression impinged upon'” …

The DMCA was enacted with that balance in mind:  encouraging access to the Internet while at the same time protecting intellectual property.

It’s easy to forget how much has changed since then. According to an article on, the top 10 websites in 1997 were:

  1. Geocities
  2. Yahoo and Yahooligans, Yahoo Sports and My Yahoo
  3. Starwave Corporation – Where More People Click
  4. Excite, Magellan and City.Net
  5. PathFinder, and Time/Warner and CNN sites: Warner Bros., HBO, DC Comics, Extra TV, Babylon5, CNN , CNN Financial Network and AllPolitics
  6. AltaVista Search Engine
  7. AOL Member Home Pages
  8. CNET, Search.Com, News.Com and
  9. The New York Times on the Web
  10. Ziff Davis and HotFiles

Many of the things we take for granted on the internet today had yet to arrive back then. Wikipedia launched in 2001. Social networking sites didn’t take off until after the new millennium — Friendster launched in 2002, Myspace in 2003, Facebook in 2004. Terms like “blog” and “Web 2.0” were years away from becoming over-used. And, of course, YouTube itself didn’t launch until 2005.

But perhaps nothing illustrates the evolution of the internet from the time of the DMCA to now better than this note from the Working Group on Intellectual Property Rights White Paper. Established as part of the Information Infrastructure Task Force (IITF), the Working Group was charged with examining the adequacy of IP law in the online world and recommending any changes needed. It released a preliminary draft of its report (the “Green Paper”) in 1994, and the final draft (the “White Paper”) in ’95; the DMCA was largely the end result of the IITF’s work.

The note in the White Paper explains to readers how to access copies of the Green Paper and other IITF documents online:

“The IITF Bulletin Board can be accessed through the Internet by pointing the Gopher Client to or by telnet to (log in as gopher).  The Bulletin Board is also accessible at 202-501-1920 using a personal computer and a telephone modem.” 2White Paper, pg. 4, n.11.

This comparison of the internet at the time the DMCA was passed and now illustrates the challenges courts face in interpreting its provisions. Despite being little more than a decade old, the law is called upon to deal with circumstances largely unforeseen when it was written.

Service Provider or Content Provider?

Viacom argues in its brief that “YouTube’s performance and licensing of user-uploaded copyrighted content are not the type of storage activities that the DMCA immunizes from liability.” 3The entire argument is found at pp. 49-55 of the Opening Brief for Plaintiffs-Appellants. The “storage” services protected by the safe harbor of § 512(c) were meant to cover things like “server space for a user’s web site, for a chatroom, or other forum in which material may be posted at the direction of users” — the safe harbor doesn’t “suspend liability for other [non-storage] acts in which the service provider might engage with respect to the user-posted content.”

Viacom points to several YouTube functions that it considers “non-storage acts.” (1) “YouTube transcodes user uploaded material into a standard format for display, distribution, and performance of the content on its website and third-party platforms”; (2) YouTube’s playback function, where a visitor can view a video stored by another user on a “watch” page containing an embedded video player; (3) the automatic recommendation of additional videos that YouTube displays after playback of a video has finished; and (4) YouTube’s licensing of uploaded videos to third parties, such as Verizon Wireless.

“Congress did not intend to give content-based entertainment enterprises an unfair advantage over traditional media merely because they operate on the Internet,” says Viacom, casting the safe harbor as one intended to apply to “passive providers of storage” that provide “server space for a user’s web site, for a chatroom, or other forum in which material may be posted at the direction of users.”

But YouTube, as Viacom argues, “is an integrated media business that ‘compare[es] [it]sel[f] to, say, abc/fox/whatever.'” The functions YouTube engages in are done “not to facilitate storage, but to facilitate activities that are necessary for wide public dissemination of the works” and “performed ‘as a course of its normal operation … uninstructed by the user.'”

Bruce Lehman, who chaired the previously-mentioned Working Group on Intellectual Property Rights and helped develop the DMCA, adopts a similar argument in the amicus brief filed by the International Intellectual Property Institute:

Companies who receive their value from hosting or otherwise enabling the spread of infringing content are not service providers — and they certainly are not proving a service that contributes to the ‘speed and capacity of the internet.’ … These companies provide content.

The defendant’s stated goal was to create a media business ‘just like TV.’ … It succeeded: users who upload media provided programming which the defendant licensed, controlled, and broadcasted in order to receive ad revenue. This business model is not new, unique, or worthy of a special status under the law simply because it disseminates its media over the Internet.

Lehman relies on the Working Paper to support a distinction between companies providing internet infrastructure — which are protected by the DMCA safe harbors — and “content providers.” YouTube, the brief argues, is a content provider. It calls itself a “consumer media company.” It provides “user access to its servers to upload video files” and “reformats the videos and broadcasts them over its website for its customers” in order to” create a business model which was ‘just like TV.'”

Such a model depends on advertising revenue, which depends on “attracting the greatest possible viewership”; high-value, infringing content draws a lot of traffic, giving YouTube an incentive to do as little as possible to prevent users from uploading this type of content. In short, a “content-based business model” like YouTube forecloses protection under the DMCA.

Interpreting the Statute

Viacom’s interpretation of the storage activity safe harbor was rejected by the District Court. The court relied largely on how the provision was interpreted by other courts dealing with similar situations to come to its conclusion.

In Io Group v. Veoh Networks, the plaintiff argued that a video-hosting site very similar to YouTube was engaged in acts beyond the storage activities protected by the DMCA. But the court disagreed based on the “structure and language” of the safe harbor provisions:

The statute itself is structured in a way that distinguishes between so-called “conduit only” functions under Section 512(a) and those functions addressed by Section 512(c) (and other subsections as well). Perhaps most notably, OCILLA contains two definitions of “service provider.” 17 U.S.C. § 512(k). The narrower definition, which pertains only to service providers falling under Section 512(a), “means an entity offering the transmission, routing, or providing of connections for digital online communications, between or among points specified by a user, of material of the user’s choosing, without modification to the content of the materials as sent or received.”

By contrast, no such limitation as to the modification of material is included in the broader definition of “service provider,” which the parties agree applies to Veoh. Instead, “the term ‘service provider’ means a provider of online services or network access, or the operator of facilities therefor, and includes an entity described in subparagraph (A).” Had Congress intended to include a limitation as to a service provider’s modification of user-submitted information, it would have said so expressly and unambiguously. (Citations removed.) 4586 F.Supp.2d 1132 (ND Cali 2008).

A different court came to the same conclusion in UMG Recordings’ lawsuit against Veoh:

Under UMG’s interpretation, § 512(c) would apply only to operational features that provide or constitute storage—and nothing more. But there is no language in § 512(c) that so limits its applicability. Congress did not provide merely that “a service provider shall not be liable for storing material at the direction of the user” or that “a service provider’s liability shall be limited only for conduct that is storage.” Instead, as the language makes clear, the statute extends to functions other than mere storage; it applies to “infringement of copyright by reason of the storage at the direction of a user ….” In short, the narrow construction of the statute that UMG advocates is not the one Congress enacted. (Citation removed.) 5UMG Recordings v Veoh Networks, 620 F.Supp.2d 1081, 1089 (CD Cali 2008).

The court in UMG Recordings also accepted Veoh’s argument that the “by reason of the storage” language in § 512(c) is “broad causal language that is clearly meant to cover more than mere electronic storage lockers.” Its reasoning was adopted wholesale by the Viacom court to reach its conclusion. Said UMG Recordings:

Common sense and widespread usage establish that “by reason of” means “as a result of” or “something that can be attributed to ….” So understood, when copyrighted content is displayed or distributed on Veoh it is “as a result of” or “attributable to” the fact that users uploaded the content to Veoh’s servers to be accessed by other means. If providing access could trigger liability without the possibility of DMCA immunity, service providers would be greatly deterred from performing their basic, vital and salutary function—namely, providing access to information and material for the public.

The Viacom court described those acts “attributable” to a user uploading content as within the “collateral scope of ‘storage’ and allied functions.” Anything outside that collateral scope would fall outside the protection of the safe harbor and have to be analyzed under traditional doctrines of secondary liability, but in this case, YouTube’s “replication, transmittal, and display of videos” are within the provision’s scope.

The Issue on Appeal

The case law doesn’t seem to give Viacom much room to argue on this point, but keep in mind that the above-cited cases are only district court cases. Viacom argues that the lower court’s broad interpretation of the “by reason of” language goes against Supreme Court precedent that interprets the same language in other contexts as implying some form of proximate causation rather than the mere “but for” causation embraced by the lower court.

Moreover, YouTube notably doesn’t address the fact that it actually licensed user content to third parties in its reply brief; if anything would fall outside the collateral scope of storage functioning, I would think this type of act would.

We may get a preview of how successful Viacom ultimately is on this issue before the 2nd Circuit issues its ruling. The 9th Circuit is currently hearing UMG Recordings appeal in the case discussed in the previous section. UMG advances the same argument in its brief. Considering the similarities between the two cases, and the fact that the UMG appeal began months before Viacom’s appeal, the 9th Circuit’s eventual holding could forecast the willingness of appellate courts in narrowing the currently accepted scope of § 512(c) at the district court level.

Left unsaid at the district court level is any sense of the “outer bounds” of what service providers can do with material stored at the direction of users and remain within the DMCA’s safe harbor. Each part of the statutory language has been given its broadest meaning. A service provider obviously has to meet the other requirements of the DMCA to be immune from liability — but considering how broadly the Viacom court read the “knowledge” and “right and ability to control” requirements, the DMCA seems to be stretched far beyond what Congress had intended in 1998.

Is YouTube a service provider or a content provider? Should this distinction play a role in whether it qualifies for safe harbor? And, in the broader sense, is the DMCA as a whole, considering the evolution of online communications since it passed, still capable of striking the balance between innovation and protecting that content that gives value to that innovation?



1 Trevor Cloak, The Digital Titanic: The Sinking of in the DMCA’s Safe Harbor, Note, 60 Vanderbilt Law Review 1559, 1573-78 (2007).
2 White Paper, pg. 4, n.11.
3 The entire argument is found at pp. 49-55 of the Opening Brief for Plaintiffs-Appellants.
4 586 F.Supp.2d 1132 (ND Cali 2008).
5 UMG Recordings v Veoh Networks, 620 F.Supp.2d 1081, 1089 (CD Cali 2008).



    We are blogging about this piece today. Very good article Terry.

    Google clearly is a Content Provider and always has intended on being such.

    Something brought to light in this piece and in the new book out about Google is that Google has long term plans that conflict with public disclosures even to legal entities. They aren’t randomly coming up with ideas to suddenly do something like becoming a content provider. It’s been there all along.

    Even within their earlier public incarnations Google nearly mimicked traditional distribution companies like say the Associated Press. Aggregate original content from massive army of writers then massively redistribute it for all sorts of reuse.

    The AP makes it’s income via licensing and surely spends quite a bit through licensing as well.

    Google took that concept and applied to a new army it created of writers via it’s own Blogger platform and dangled the pay day carrot of their own ads as the payoff. That effectively gave Google free license to original content and unlimited redistribution rights. YouTube followed the same formula but with video.

    You can argue that bloggers and independent video producers got off easy compared to others. Look at independent publishers who do create commercially viable works, maintain their own website and aren’t directly feeding Google cash crazed monster. Google freely spiders and repurposes their content without asking (automatic opt-in), Google freely provides search links to pirates stealing their goods and monetizes the transactions for the pirates via AdSense, thus Google itself again profiting.

    What’s a company of unoriginal ideas of uninspired folks do for content when it’s too lazy or cheap to create it’s own? It’s does the Google Dance and steals as much as they can, creates mashed up mucks with the content to disguise it as original or value added and charges mere tokens to advertise against the entire library of the world’s information (which they in fact stole with malicious intent).

    • I would argue that Google is providing services.

      Yes, there is content, but there is also someone on the other end creating it, not for Google but for themselves at a fraction of what it would cost to get server space, bandwidth, and a multitude of other things by themselves.

      You say that Google is a Content creator but that doesn’t really make much sense. In all circumstances, Google seems to provide the platform for others to use at their discretion. To say they should lose their safe harbors because they aren’t responding to notices at the speed of the copyright holder doesn’t really hold in that context. I would probably prefer a notice-notice type system that allows the supposed infringer to respond to allegations of infringement which would actually be more fair than the openID system.

      With your last two paragraphs, you should take notice of what’s going on. Enter the NY Paywall or even the Daily iPad app. People use a source less, the more it’s locked up. How that’s supposedly Google’s fault is beyond me.

  2. First off, great article and a bang on analysis of the issues here. This is one of those copyright topics that’s a great way to start a fistfight and you handled it beautifully.

    It seems to me, that the problem is this. As you pointed out, the 96-98 Web looked very different than the one we have today and the phrasing of the DMCA doesn’t apply neatly to the services we have today. Geocities is no YouTube, for example.

    In response to this, I’ve always gotten the distinct impression that judges, when ruling on safe harbor cases, are working backwards. Not asking the question “Does this service qualify for safe harbor?” and instead asking “Why does it or doesn’t it quality for safe harbor?”

    On an emotional level, I usually agree with these rulings. I like YouTube and I want to see it do well (I’d miss my memes), but giving it a blanket safe harbor means, unfortunately, ignoring or overcoming several potential problems with their safe harbor status as written in the law, licensing being a big one.

    There needs to be a greater and more objective debate about what does and does not qualify for safe harbor protection. Otherwise, we risk a “fair use” style situation where there is almost no clarity as to who is on what side of the law and that defeats much of the purpose of safe harbor, which was supposed to provide certainty and safety to those acting in good faith.

    I’m hoping that the Appeals Courts, regardless of the rulings, address these issues and brings greater clarity to this subject. It’s be nice to feel like we have some meaningful guidance other than taking a purely expansive view as to what is and is not covered.

  3. Great article Terry. There was some mention in the news a few months back of finally updating the dinosaur that is the DMCA. Let’s hope it happens this year as it is definitely needed.

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  5. As usual,
    Another well written, thought provoking article.

    No, YouTube isn’t a “service provider” as per the standard definition. They aren’t laying cable or connecting phone lines, or in any way enabling access to the internet. They host other’s content.

    Not saying i want YouTube to go away, but if they can filter out porn and other content they don’t want hosted, i don’t see it as being trouble to respect creators’ rights. Of course….as mentioned, they make alot of money by NOT taking stuff down… or at least draggin their feet in doing so…

    ~Keep up the informative, fact based reporting! Thanks again Terry.

    • …?

      That sounds like quite a daunting task of trying to police the content of an untold number of creators.

      This also seems rather shortsighted in figuring out fair use rights, transformative uses, derivative uses, among a number of other ways that content can be used.

      But it should be fair to meed the man who put in the 230 harbors. His idea for it was protect people from “the smothering hand of government and litigation”.

      I think that applies to any third party vendor, not just specific vendors.

  6. If you wanted to have an honest discussion about whether or not You Tube is a “service provider” or not under the DMCA, you would think that you would at least provide the definition under the statute:

    7 USC § 512 (k) – Definitions.
    (1) Service provider.
    (A) As used in subsection (a), the term “service provider” means an entity offering the transmission, routing, or providing of connections for digital online communications, between or among points specified by a user, of material of the user’s choosing, without modification to the content of the material as sent or received.

    So how does Youtube modify the “content” of the material it hosts exactly? Converting files to a “standard format” does not change the underlying “content”. If you display a .mov file of “Night of the Living Dead” next to a Quick Time file of “Night of the Living Dead”, all rational people would describe both files as containing the same “content”. Only a lawyer would be dumb enough to try and argue otherwise.

    Even if Youtube licenses clips, how does that change the analysis under 512 (k)? Nobody has accused Youtube of modifying the underlying content of what is licensed – so it seems straightforward that its protections under 512(k) still apply.

    It does not matter if it partakes in additional actions beyond “offering the transmission, routing, or providing of connections for digital online communications, between or among points specified by a user” – provided that it utilizes “material of the user’s choosing”, and “without modification to the content of the material as sent or received”. As long as there is no modification to the creative substance of the utilized material, then the broad definition of “content provider” will still apply.

    Really Terry – you seem so obsessive about providing citations in your posts (even for points which have nothing to do with binding precedent and thus don’t require them), that I find it hard to believe that your omission of the very definition of a “service provider” under the DMCA was somehow a mistake. It seems obvious that you are trying to pull a cute lawyer trick by avoiding the central question and relying on other’s ignorance of the statute in order to try and prevail in the argument.

    The moment you wrote : “Today, however, I wanted to look at one of the other, and (to me, at least) more interesting issues raised on appeal. Does YouTube even qualify as a “service provider” under the DMCA in the first place?” The most obvious thing to do would be to immediately follow that with the definition of “service provider” under the statute so that everyone will be able to read it and decide for themselves when interpreting the language of the statute. But rather than cite the definition found under 512(k), you instead cloud the issue with an irrelevant point by citing the language of 512(c), figuring that people would interpret that section as defining what a “service provider” is in this context.

    Very bad form in my opinion. If you want to raise the level of discussion here, try a little honesty first.

    • If you wanted to have an honest discussion about whether or not You Tube is a “service provider” or not under the DMCA, you would think that you would at least provide the definition under the statute:

      I didn’t provide the definition because it’s irrelevant.

      First of all, you quoted the wrong definition. 512(k)(1)(A) only defines service providers in regards to those seeking immunity under 512(a), “transitory digital network communications.” YouTube and other UGC sites seek immunity under 512(c). Those service providers are defined in 512(k)(1)(B), which includes the definition of (A) but adds “provider[s] of online services or network access, or the operator[s] of facilities therefor.” YouTube obviously is a service provider under this definition — as is every website in existence.

      But this definition only differentiates online service providers from off-line service providers, like, say, a nail salon or a car wash. Your mention of “512(k) protections” is nonsensical — 512(k) merely defines the term for the rest of the statute.

      And the rest of the statute provides four specific activities under which service providers can be shielded from immunity. The one relevant to YouTube is 512(c), “Information Residing on Systems or Networks At Direction of Users.” Whether YouTube’s actions fall within the scope of this clause has been raised on appeal by Viacom, as well as by UMG Recordings in its similar suit against Veoh.

      I find the issue interesting and worth writing a blog post about. No “cute lawyer trick” or dishonesty here.

  7. The cite for defining “service provider” should naturally read “17 USC § 512 (k)” (not “7 USC” – I don’t know how the “1” got cut off).

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