From the time that the Internet was opened up to widespread general use, service providers were concerned regarding their potential vicarious liability for end-user copyright infringement, where the service provider had played no active role in the choice of that content. This was due to the decision in MAI Systems Corporation v Peak Computer 991 F. 2d 511 (1993) in which the United States Court of Appeals, Ninth Circuit, held that when a computer was switched on, causing the operating system to run, the reproduction of that program on the RAM was an act of reproduction within the rights of the copyright owner.
This generated concern within the US Government, then espousing the principles and visions of the Clinton/Gore sponsored A Framework for Global Electronic Commerce, that such potential for liability would act as a roadblock to the uptake of electronic commerce by making business too risky for new ISPs to enter the market. This was despite the decision in Religious Technology Center v Netcom 907 F. Supp. 1361 (N.D. Cal. 1995) where the US District Court held that ISP Netcom should not be liable for the infringing activities of its end user, concluding (at 23) that:
‘The Court is not persuaded by plaintiff’s argument that Netcom is directly liable for the copies that are made and stored on its computer. Where the infringing subscriber is clearly directly liable for the same act, it does not make sense to adopt a rule that could lead to liability of countless parties whose role in the infringement is nothing more than setting up and operating a system that is necessary for the functioning of the Internet. Such a result is unnecessary as there is already a party directly liable for causing the copies to be made.’
(A sentiment echoed fifteen years later by Cowdroy J in the Federal Court in the recent Roadshow Films v iiNet decision ) Click here for our earlier coverage of that case.
The Safe Harbo(u)r Solution
The US took these concerns to the negotiations that resulted in the WIPO Copyright Treaty (WCT) but only succeeded in having the matter of intermediary liability dealt with in the Agreed Statement to Article 8 of the WCT:
‘It is understood that the mere provision of physical facilities for enabling or making a communication does not in itself amount to communication within the meaning of this Treaty or the Berne Convention. It is further understood that nothing in Article 8 precludes a Contracting Party from applying Article 11bis(2).’
In Australia, this resulted in the insertion of Section 39B in the Copyright Act 1968 (Cth). However in the US it resulted in the introduction of the ‘safe harbor’ provisions in s 512 of the Copyright Act (US) by the Digital Millennium Copyright Act 1998. That section provides that a service provider’s liability with respect to infringing material hosted on its system or network is limited where:
- the service provider does not have actual knowledge of infringement and is not aware of facts or circumstances from which the infringement is apparent, and upon receiving such knowledge ‘acts expeditiously to remove, or disable access to, the material’;
- ‘does not receive a financial benefit directly attributable to the infringing activity, in a case in which the service provider has the right and ability to control such activity’; and
- Upon notification of infringement ‘responds expeditiously to remove, or disable access to’ that material.
As was observed by the US Senate Committee in 1998: ‘by limiting the liability of service providers, the DMCA ensures that the efficiency of the Internet will continue to improve and that the variety and quality of services on the Internet will continue to expand.’
Australia was obliged to introduce a safe harbour regime as a consequence of its entry into the Australia-United States Free Trade Agreement. This was achieved through the introduction of Division 2AA of Part V of the Copyright Act 1968 (Cth) by the US Free Trade Implementation Act 2004 (Cth) and the Copyright Legislation Amendment Act 2004 (Cth).
The existence of ‘safe harbour’ protection, limiting liability to an obligation to remove infringing content upon receiving appropriate notification of infringement, created the opportunity for the evolution of websites such as YouTube and Flickr, which host content uploaded by end users (the ubiquitous user generated content (UGC)).
Content is uploaded in such quantities that individual scrutiny of the content is impossible (according to the YouTube judgment content is currently being uploaded to YouTube at the rate of over 24 hours of video every minute). The end user licence agreements that the contributors to such sites agree to with the service provider require users to declare that such content is not infringing. The service provider will remove infringing content only upon specific notification from the copyright owner, under the provisions of the DMCA safe harbor provisions. Thus the proliferation of user-generated content directly owes its success to the introduction of the safe harbor provisions which legitimise this ‘infringe now, ask questions later’ approach.
The YouTube case is therefore important because it tested the legality of the business model created and facilitated by the safe harbor regime.
Viacom versus UGC (again) –
Viacom International, Inc., v. YouTube, Inc., 2010 WL 2532404 (SDNY June 23, 2010).
Viacom commenced proceedings against YouTube in March 2007 alleging that You Tube (and its parent company Google) were liable for both primary and secondary infringement of copyright. (As an aside, the involvement of Viacom in this case is interesting as Viacom, owner of several major production houses including Walt Disney, Dream Works, Comedy Central and Nickelodeon, to name but a few, was one of the earliest content owners to take on the first fan created web sites, namely Star Trek, and in doing so, created very bad publicity amongst its fan base.)
YouTube made an application for summary judgment on the basis of the safe harbor provisions, claiming that under the relevant provisions of the DMCA they had insufficient notice of the relevant infringements. Thus much of the judgment is concerned with what constitutes knowledge or awareness of infringement.
In his judgment, Judge Stanton avoids most of the vicious allegations and abuses which had been aired by the parties in their Memoranda in Support of Summary Judgment in March 2010, particularly those regarding alleged admissions by Google about how much YouTube content was likely to be infringing. Rather he focuses upon a straightforward interpretation of the notice and take down provisions, in particular, whether the statutory requirement of ‘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’ are satisfied by a general awareness of infringements or whether it requires ‘actual or constructive knowledge of specific and identifiable infringements of individual items’.
Judge Stanton undertakes an extensive consideration of the legislative history of the provisions and concludes that the provisions require ‘knowledge of specific and identifiable infringements of particular individual items. Mere knowledge of prevalence of such activity in general is not enough.’
Out of the millions of works that may be posted on the platform, the service provider cannot be expected to know which works are infringing, nor indeed which are subject to fair use or a licence arrangement. The Judge declined to shift the burden to the service provider to monitor such content and indeed he observed that each of the video clips in suit had been removed from YouTube, most in response to a DMCA takedown notice, usually within a 24 hour period. He further supports his conclusion with reference to a number of cases, including Perfect 10 Inc v CC Bill LLC 488 F. 3d 1102 (9th Cir 2007) and Tiffany (NJ) Inc v eBay 600 F. 3d 93 (2nd Cir 2010) (which concerns trade mark law and therefore does not involve DMCA considerations) and distinguishing the circumstance of peer to peer file sharing in Grokster , concluding that : ‘General knowledge that infringement is “ubiquitous” does not impose a duty on the service provider to monitor or search its service for infringements.’
Finally, the Judge dealt with a number of other points including the matter of whether the service provider receives a financial benefit directly attributable to the infringing activity, in a case where the service provider has the right and ability to control the activity. The Judge concludes that the provider must know of the particular case before it can control it.
The decision emphasises the need for the service provider to know of and respond to a specific infringement. General knowledge of infringements at large is not enough to constitute knowledge for the purposes of the section. It is not clear at this time whether the judgment will be appealed.
Outcomes: Actual Knowledge Required
This outcome is consistent with the approach taken by Cowdroy J in the iiNet decision Click here for our earlier coverage of that case.
Considering the application of the Australian safe harbour provisions, Cowdroy J concluded that iiNet did have a repeat infringer policy which would have entitled it to rely upon the safe harbour limitations had infringement been established.
Consistent with the passive approach to copyright enforcement endorsed by the YouTube decision, Cowdroy J imposed the burden of identifying and establishing infringement clearly on the copyright owners.
Relevance of US Cases?
Importantly, Cowdroy J also observed that US authorities on the safe harbour provisions ‘can provide significant assistance’ in the interpretation of the corresponding Australian provisions. It should be noted that these observations are obiter, the Court having found that there was no authorisation of copyright infringement by iiNet.
The outcomes of the YouTube case represent an endorsement of the UGC model that has been adopted so enthusiastically by web users and which now represents a vital component of Web 2.0.
Dr Melissa de Zwart is an Associate Professor in Law at the University of South Australia.
Posted by Editor 
