The Battle of Viacom v. YouTube: Is It Possible For Everyone to Win?

On March 18, 2010, both parties moved for summary judgment in the marathon-like copyright infringement case: Viacom International, Inc. v. YouTube, Inc. Viacom is the owner of Paramount Pictures and cable-TV networks, such as MTV and Comedy Central. Viacom alleged that YouTube, which is now owned by Google, knowingly infringed copyrighted works for profit and is now seeking summary judgment in the case.  Meanwhile, Google/YouTube points its finger back at Viacom by alleging Viacom had secretly uploaded copyrighted clips, which Viacom later demanded YouTube remove. In addition, Google/YouTube claims it is shielded under the Digital Millennium Copyright Act (the DMCA). DMCA provides a defense to copyright infringement for a user-generated content (UGC) host, like YouTube, who has the right and ability to control such activity, but only if the host does not receive a financial benefit directly attributable to the infringing activity.

Juicy behind-the-scene stories emerge as the case gets heated. Viacom presented evidence focusing on YouTube between 2005 and 2006, which pointed out that YouTube’s co-founder, Steve Chen, recognized that hosting copyrighted works would give rise to legal risks in the future. Viacom also argues that Google employees characterized YouTube as a “video Grokster” before it was acquired. Of course, the Supreme Court unanimously decided that online peer-to-peer services, like Grokster, that facilitate unlicensed copying of copyrighted motion picture and music files may be liable for copyright infringement.

In response, Google presented evidence focusing on the current YouTube and highlighting its current efforts to police its sites for copyrighted content. Furthermore, Google challenged Viacom’s sneaky practices for establishing infringement, which involved sending its employees off-site to places like Kinko’s to upload infringing copies to YouTube from computers untraceable to Viacom.

The case ultimately comes down to the fundamental question: What is the duty of care of UGC hosts in preventing copyright infringement? Viacom maintains that Google/YouTube falls outside the DMCA safe harbor by intentionally turning a blind eye to copyright infringement, while Google/YouTube seems to argue that making a good faith effort is enough (especially when the other party is acting in bad faith).

One district court recognized that it’s impossible to completely eliminate user-committed copyright infringement on websites similar to YouTube. Instead, so long as a defendant has a stringent DMCA policy and diligently prevents uploading of unauthorized works to its website, it will not fall out of DMCA safe harbor even if it is aware of ongoing infringement.   Although not binding on the current case, it is still very persuasive that only a good faith effort is required for UGC hosts. The DMCA does not require UGC hosts to develop and adopt the newest available techniques to battle against copyright infringement.

Google/YouTube may not be able to argue that YouTube enforced its DMCA policy in good faith at the early stage of YouTube, but the current YouTube owners can point to a much better record of policy enforcement. Although Viacom has a relatively stronger argument of YouTube’s infringement between 2005 and 2006, it’s unclear whether the court will be influenced by the fact that YouTube has a mature DMCA policy now or by Viacom’s role in secretly uploading the infringing videos itself.

This case also reflects the continuing tension between technology development and copyright protection. While technology greatly facilitates information distribution, it also creates novel and difficult problems in copyright protection. Technology companies are aggressively following the new consumer habits and seeking new ways for media distribution, while media companies aggressively attempt to stop the trend toward wide availability of free unauthorized digital works on the internet.

Moreover, this case raises the question of whether attempting to solve these cutting-edge copyright problems in the courtroom is the most efficient way for society. Copyright law aims to incent creation by protecting and compensating artists. Since this legal area is developing so fast, it would make more sense to switch from the dispute resolution-oriented mentality to the compensation-orientated mentality. For instance, media companies can provide a blanket license to YouTube so that users could use the copyrighted works, while the artists are still compensated through revenue generated by advertisements. The blanket license arrangment would generate more revenue for artists because their works will get more exposure to audiences on the internet, especially younger generations. Then those audiences, after previewing the works on YouTube, may decide to purchase the works in a traditional format, i.e. CDs, downloading, etc. Consumers also benefit from having a wider range of media format choices, as well as greater and more convenient access to media. It also drives down the cost for new and grass-root artists, who gain exposure to the world through free access to YouTube. Frequent litigation will drive up YouTube’s cost, and may later spur YouTube to charge fees for uploading videos, limiting the exposure of those new artists. From an economic standpoint, if the court rewards damages equaling the amount of royalties that could have been paid under a blanket license arrangement, it would encourage media companies and technology companies to solve the problem with a more efficient scheme.

Although the present dispute between Viacom or Google/YouTube may be resolved soon, the case poses harder questions than simply resolving the current dispute. To what extent should courts intervene in technology development while we wait for copyright protection to develop? How can artists really be protected and better compensated under the current copyright protection scheme? How can copyright protection respond more efficiently and quickly to consumer habits?