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Ninth Circuit: It’s OK to Let the Public Access User-Uploaded Content

I think by now you’ve read a few headlines about Ninth Circuit’s decision in UMG Recordings v. Shelter Capital, which is better known as the “Veoh case,” just before Christmas. Mostly, the headlines say something like: Veoh Dodges Universal Music’s Copyright Claims, or Universal Loses DMCA Lawsuit Against Veoh.

But when you read the opinion, you should be struck by two things that have nothing to do with Veoh. First, Universal Music wasn’t just trying to get some compensation from a specific video site–it was trying to put video sites out of business. There’s no other way to explain the strategic choices Universal Music made. Second, as a result, in part, of Universal Music’s choices, the Ninth Circuit has just made Viacom’s life a lot harder for its case against YouTube.

Understanding Universal’s Peculiar Legal Strategy

If you’ve been reading my blogs on the DMCA defense (mostly in connection with the Nashville lawsuit against Grooveshark), you know that, even after 12 years, there are several very basic unanswered questions about DMCA safe-harbor protection. Off the top of my head, the most significant are:

  1. What does it mean to have actual knowledge of infringement, when defective DMCA take-down notices won’t do?
  2. How much knowledge does it take to have “red flag” knowledge?
  3. Does vicarious liability deny you DMCA safe-harbor protection?
  4. What does it mean to remove material pursuant to a DMCA take-down notice “expeditiously”?
  5. And a bunch of questions about what it means to have a “repeat infringer policy.”

A normal legal strategy against a video site like Veoh would be to attack along some or all of these lines. It is in these places that the law is most unsettled and where your powerful legal team has the best chance to forge new precedent favoring your industry.

Universal did attack points 1-3, and, thanks to Universal, we know have a much better understanding of those points–especially point 3, which is no longer an open question, in my opinion (more on that in the next post).

But Universal spent more time on an issue that, frankly, no one thought was up for much debate. Of the 50 pages of argument in its opening brief, Universal spent about 18 pages on points 1 and 2 (Universal sort of mushed them together) and 12 pages on point 3. But Universal spent 20 pages not on point 4 (understandable–it’s a fussy point), or on point 5, where there are points of real vulnerability.

Instead, Universal spent the largest part of its brief on a deeply semantic argument about whether Veoh was even eligible for DCMA safe-harbor protection–on grounds that DCMA safe-harbor protection should be limited purely to the act of storing content. In other words, Universal argued that Veoh can store videos, but they can’t help the public actually view them.

‘Tis a Silly Argument (But Someone Might Get Hurt!)

On its face, this is a silly argument. After all, the statute says that it protects against infringements “by reason of the storage at the direction of the user.” The phrase by reason of implies fairly broad application: probably not as broad as related, but broader than a result of. In isolation, I think we might define the breadth here to include anything that you might reasonably expect to be done with the stored content. And taking steps to make the content publicly available would fall into that scope.

So why spend the better part of your brief making such a long-shot argument? Universal was going for a home run here. Could you imagine if Universal won with this argument? DMCA safe-harbor protection almost completely disappear, since almost all systems that store digital content* also make it available to the public. Perhaps only pure-storage services, like DropBox, would be left.

* I might make an exception for items that are pure text (and use fonts in the public domain!), since there’s no display or public performance right.

Universal wasn’t looking to be compensated by Veoh, or even to destroy Veoh. Universal was looking to destroy the entire user-uploaded-content* industry. This wasn’t a matter of trying to frighten Veoh into settling. There were stronger arguments Universal could have (and did) make, which would have threatened Veoh with destruction. And those other arguments would have been effective against others, but none so much as this one. There’s no cute workaround. If you want to do anything other than passively store content, you’re going to be liable for copyright infringement, on a large scale.

* Some might call this industry “content sharing” or “user-generated content,” depending on their point of view, but the salient features are that users upload content–either their own or someone else’s–and the public is able to at least view the content.

I’ll leave it to others to ponder how and whether Universal (and the music industry in general) would have benefited from such destruction. We’d all be spared not only infringing content (like old music videos from the 1980’s) but also non-infringing content like cute kitties doing cute things and crazy people telling us to leave Brittany the heck alone (because the copyright lawsuits would put the cute kitty purveyors out of business)–and some would argue that’d be a public service. But that’s not my business.

The Argument Isn’t Completely Crazy (But Still Craters)

The thing is, Universal’s argument wasn’t completely crazy, if by crazy you mean, “Even lawyers don’t get it.” Universal’s lawyers noticed that another statute, the Racketeer Influenced and Corrupt Organizations Act (much, much better known as “RICO”) used the same by reason of language as the DMCA safe harbor. Further, courts interpreting that phrase had interpreted it narrowly to mean “caused by.” As the court acknowledged, courts ordinarily try to interpret similar language in similar statutes to mean the same thing.

But the Ninth Circuit wasn’t buying it. There is a huge difference between the DMCA safe harbor and RICO. RICO is a criminal statute (with some private causes of action), and it’s already pretty broad in scope. Thus, the question with RICO is, “How much power should we give the government over private citizens?” If by reason of were interpreted too broadly, the government would have too much power–much more power than Congress intended–so courts have interpreted that phrase narrowly.

With the DMCA safe harbor, the opposite is true. It’s an affirmative defense, not a tool of government power. It’s there to protect you. If you want to limit the power of courts over defendants, you actually want to read by reason of expansively, not narrowly. In a funny way, to be consistent with the narrow interpretation in RICO, you have to give the phrase a broader interpretation in DMCA.

Another problem with Universal’s argument–and this one really is fatal–is that public access to stored content is assumed by the language of the DMCA safe harbor. After all, the DCMA safe harbor admonishes service providers to “disable access” to the content. In fact, if there weren’t some public access to stored materials, how would rights holders even find out their works were being infringed in the first place? The statute also talks in terms of “infringing activity,” suggesting rather more than just passive storage.

Universal tried to salvage its position by arguing that the DMCA safe harbor (or, more precisely, the one related to storing content) was designed for web hosting services. OK, I’ll admit that this argument is genuinely crazy. The point of hosting a website is … to make it publicly accessible, right? The act of visiting a website is a potentially infringing act, since the visitor’s browser makes copies of the various elements of each webpage it visits. At the level of pure technology, at least, there really isn’t much of a difference between hosting audiovisual content (which is what Veoh does) and hosting a plain old webpage (which is what web hosts do).* Also, service provider is defined very broadly. As the court pointed out, Congress was perfectly capable of limiting one of the DMCA safe harbors to a particular type of service provider.

* You can read Universal’s hair-splitting argument here.

OK, that’s enough mocking Universal’s argument. As I said, it was a calculated risk on Universal’s part. It wasn’t likely to succeed, but if it had…. No more Veoh, no more YouTube, no more dumb videos of cute kittens doing cute things. The downside was that Universal wasted a good deal of time and paper on it–resources that might have better spent elsewhere–in particular, its argument that Veoh hadn’t implemented a repeat-infringer policy.

Next time, we’ll look at the actual elements to DMCA protection addressed by the court. We’ll actually move forward in our understanding of DMCA safe-harbor protection!

Thanks for reading!

Rick Sanders

Rick is currently General Counsel for Software Freedom Conservancy. Previously, he has been practicing law as an intellectual-property litigator since 2000.