Copyhype

In the world of current lawsuits dealing with the future of the DMCA, the Viacom and YouTube appeal in the 2nd Circuit may win a popularity contest, but the UMG and Veoh appeal in the 9th will cross the finish line first.

The similarities between the two cases are striking. Like YouTube, Veoh had operated a site allowing users to upload and share videos. Like Viacom, UMG sued the site for failing to do enough to prevent infringing content from appearing in its system. And like the Southern District Court of New York, the Central District Court of California granted summary judgment in favor of the defendant after determining that the safe harbor provisions of the DMCA immunized the site from liability for its users’ actions.

Because of these similarities, the 9th Circuit’s eventual decision may serve as a precursor to the ultimate outcome of Viacom v. YouTube.

Background and Oral Argument

The original court ruling was released September 11, 2009 and can be found at UMG Recordings v. Veoh Networks, 665 F. Supp. 2d 1099 (CD Cali 2009).)) Ben Sheffner offers his thoughts on the District Court’s holding.

The appellate briefs of both parties are available online: Brief of Appellee Veoh Networks, Brief of Appellant UMG Recordings.

Last Friday, May 6th, oral arguments for the appeal were heard by the 9th Circuit. You can listen to audio of the hearing here. Attorney Michael Barclay attended the hearings in person and offers his observations at IPDuck.

The appeal actually consolidates three separate actions. Besides the DMCA ruling, Veoh is appealing the court’s denial of attorneys’ fees, and UMG is appealing the court’s dismissal of infringement claims against Veoh’s investors. If you’re interested in those aspects of the case, Eric Goldman has analysis of the court’s attorney fees decision, and Ray Dowd offers his response to Goldman’s analysis. Check out “Capital” Punishment: Evaluating an Investor’s Secondary Copyright Infringement Liability After Veoh, by James L. Proctor, Jr., ¹6 Washington Journal of Law, Technology & Arts 217 (2011). for discussion on the latter.

Barclay estimates that the court’s opinion will likely take 2-6 months to issue; the 9th Circuit’s own website pegs the time frame at 3-12 months.

Scope of the Storage Safe Harbor

In Is YouTube a Service Provider or Content Provider?, I looked at one of the periphery issues raised on appeal by Viacom — whether, as a threshold matter, YouTube’s actions take it outside the scope of the §512(c) safe harbor, which immunizes online service providers from liability 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.” That issue plays a much larger role in UMG’s arguments, however, and took center stage at Friday’s hearing.

Because of this, it is likely that the 9th Circuit will be the first appellate court to consider the scope of what service providers can do with material stored on their systems at the direction of a user and still remain protected by the DMCA’s safe harbor. ²The closest is CoStar Group v. LoopNet, a 2004 case from the 4th Circuit.

The key statutory language here is the phrase “by reason of.” Does it imply a broad “but for” causal relationship between a user’s act of storing material on a service and the infringing activities that are shielded from liability? Or does it imply a narrow proximate causation?

The former standard means that once a user has uploaded content, it becomes fair game for a service provider to transform and distribute as it pleases, and it is the standard the district court adopted in an earlier ruling. “Common sense and widespread usage establish that ‘by reason of’ means ‘as a result of’ or ‘something that can be attributed to ….'” ³UMG Recordings v. Veoh Networks, 620 F. Supp. 2d 1081, 1089 (CD Cali 2008). Combine this with the broad readings of the other requirements for safe harbor protection made by the court, and the law is left to state that a service provider can operate a full-fledged, unlicensed content providing service so long as it essentially “launders” the content through its users — and experience shows that users need little encouragement to upload massive amounts of unlicensed and infringing content.

The latter standard is the one UMG argues the 9th Circuit should adopt. It provides legislative history that supports such an interpretation of the language. In addition, it calls upon the notion that when Congress uses specific language in a statute that is similar to language in other statutes, courts should presume that Congress intended for that specific language to be interpreted in the same way that courts have interpreted the similar language in the past. ⁴See Cannon v. Univ. of Chicago, 441 US 677, 696-98 (1979). In this instance, the Supreme Court has, in the past, interpreted “by reason of” language in other statutes as incorporating a proximate causation standard. ⁵Holmes v. Securities Investor Protection Corp, 503 US 258, 267-68 (1992).

Judge Berzon prodded Veoh’s attorney on whether its, and the district court’s, interpretation of “by reason of” stood up to scrutiny. At one point, she asked directly, “What’s the stopping point?” While all parties agreed generally that the safe harbor contemplates some form of “access” to the stored material, she wondered if, based on the language and legislative history, there was a distinction between access through normal means — a third-party viewing the stored material through a web browser — and providing access and distribution through a service provider’s own system. If the DMCA was intended primarily to shield passive services that provide infrastructure and “backbone” services, like web hosts, BBS’s, and message boards, that would mean only the first falls within the scope of the §512(c) safe harbor. A broader reading of the statute makes such a distinction irrelevant.

Too Little, Too Late?

UMG admittedly faces an uphill battle with this argument. The district court’s interpretation of the scope of the §512(c) safe harbor is consistent with the interpretation of a number of other district courts, including the court in Viacom v. YouTube. Considering the rapid development of the internet since the DMCA was passed over a decade ago, the 9th Circuit may be hesitant to upend how the law has been interpreted in practice.

I think Wikipedia presents a good example of what I mean by how the law has been interpreted in practice. I think it would be difficult to make a case that Wikipedia is protected by the §512(c) safe harbor — users are only “storing” their contributions to articles in the strictest technical sense.

Yet, most operate under the assumption that Wikipedia is protected under the statute. The Wikimedia Foundation has a registered DMCA agent to respond to takedown notices for infringing material uploaded by users. And, though rare, Wikipedia has received and responded to takedown notices. ⁶See here, for example. According to Shun-Ling Chen’s article, Self-Governing Online Communities in Web 2.0: Privacy, Anonymity and Accountability in Wikipedia, the Wikimedia Foundation receives two takedown notices a year. I do want to point out that whether or not Wikipedia actually qualifies under the safe harbor makes much difference — the DMCA only removes liability for certain activities but otherwise plays no role in the ultimate question of whether a specific service provider is liable for copyright infringement directly or indirectly. Wikipedia receives so few notices in part because it has a strong copyright policy that is actively enforced by its users. I find it highly unlikely that any court would hold the site liable even absent safe harbor protection.

Wikipedia is just one example of many that shows how common practice seems to have stretched the meaning of §512(c) beyond what Congress may have initially intended for it. It will be interesting to see how the 9th Circuit approaches the question of the scope of the storage safe harbor.