The Second Circuit Court of Appeals’ reversal of the district court’s dismissal of the “YouTube” case on April 5, 2012, was a long-awaited ruling, and not just by the parties to the case and the content companies, scholars and trade groups that filed amicus briefs.  The decision promised to provide the Second Circuit’s first view on a number of important aspects of the so-called “safe harbor” provisions of the Digital Millennium Copyright Act (DMCA). The Circuit did provide some of that much needed clarity, but left open several important issues for further proceedings before the district court, where the case is now proceeding.

Full appreciation of the Second Circuit ruling requires going back a few years, to Google’s 2006 purchase of YouTube for a reported $1.65 billion dollars. The YouTube site had grown from a small start-up to the dominant “user-generated” video content site on the Internet in an extremely short time (in less than a year). Fueling its success, at least according to the plaintiffs (and many Internet commentators at the time), was the vast amount of unlicensed, “premium” content (music, sports footage, television programs and even full-length movies) that users were posting and viewing, free of charge. That content, according to the plaintiffs, was what attracted viewers to YouTube and made it the ‘go-to’ location on the Internet to post, access and enjoy desirable video content without paying a fee.

In the spring of 2007, two copyright infringement cases against YouTube and its new parent company, Google, were instituted.  The first, filed by Viacom, sought relief for a vast amount of Viacom owned content (such as the Daily Show, The Colbert Report and South Park) that appeared on YouTube without a license. The second, launched by a group of content owners led by the Football Association Premier League (UK soccer) and Bourne Music Company (a small, privately held music publisher based in New York), was filed as a putative class action, and eventually included a number of other sports leagues, music publishers and content owners.

Both cases raised essentially the same legal issues as applied to different content: namely, that YouTube (and Google) were knowingly facilitating infringement on the YouTube site and were liable for the vast number of allegedly infringing uploads made by users of content owned by the various plaintiffs.  After more than two years of disco­v­ery and non-dispositive motion practice, all parties moved for summary judgment on the threshold issue: the extent to which the safe harbor of section 512(c) of the DMCA immunizes YouTube and Google from claims for copyright infringement, when they know of extensive infringement on their site but chose to do much less than they reason­ably could to eliminate infringement of high-value works, even when those works were repeatedly the subject ot takedown notices. Within a matter of weeks after the summary judgment filings were complete, and without oral argument, the district court ruled in favor of the defendants on June 23, 2010:

• According to the district court, only “item specific” knowledge qualified as actual knowledge or awareness of infringing activity under the “knowledge prong” 0f the DMCA. The lower court did not address any of the evidence submitted to show that YouTube had actual knowledge or awareness of particular infringements on the site;

• Although  the district court observed that a jury could find: “defendants not only were generally aware of, but welcomed, copyright-infringing material being  placed on their website,” and that “Such material was attractive to users, whose increased usage enhanced defendants’ income from advertisements  displayed on certain pages of the website,” the lower court refused to find that this amounted to  anything  more than ‘general’ knowledge, which did not disqualify YouTube from safe  harbor protection;

• In  this context, the lower court also ruled that inducement liability considerations (of knowing facilitation of infringement) under Grokster had no place in a DMCA  safe harbor analysis;

• The district court also ruled that the separate “right and ability to control” prong of § 512 also hinged on proof of “item specific knowledge,” a requirement that nowhere exists in the statutory language or common law precedent on which § 512(c) was derived; and finally

• The lower court never addressed the argument that YouTube had exceeded the safe harbor limitation of storing content “at the direction of users” by “syndicat­ing” that content to other third party platforms in licensing transactions with parties like Verizon.

YouTube declared the ruling an unequivocal victory, both for its business model and the well-being of the Internet generally.  But the Second Circuit had other ideas.  After requesting post-argument briefing on the “red flag knowledge” (awareness of infringing activity growing out of ‘red flags’ of infringement that should be obvious) and “syndica­tion” issues, the Second Circuit considered the appeal for six months, and then, on April 5, 2012, reversed, vacated, and remanded on a number of grounds.

First, while it essentially endorsed the district court’s “specific” approach to both knowledge and awareness of infringing activity under the “knowledge prong,” the Second Circuit held that the lower court failed to take account of record evidence that potentially showing YouTube’s knowledge of specific infringing acts. The Circuit remanded for further consideration of the record (not limited to the examples cited by the Circuit). In this context, the appellate court also held that that such knowledge could be satisfied by proof of “willful blindness,” a theory that the district court had ignored.

Second, and perhaps most significantly, the Circuit held that the ‘right and ability to control” prong of the DMCA was not qualified by a knowledge of specific infringement requirement, and reversed on that ground. Although it did not adopt any specific approach to finding that such “right and ability” exists, it endorsed (as at least one way of establishing control) the approach taken in the Cybernet case, which suggested that some­thing more” than the ability to remove infringing content must be shown, and could be shown by pre-screening.  The Circuit also indicated that Grokster-type inducement considerations could play a role in establishing “right and ability to control.”

Finally, with respect to the “syndication” issue, the Second Circuit acknowledged that a forceful argument had been made that YouTube’s licensing of user (infringing) content to third party platforms could exceed the threshold limitation that the safe harbor activities be confined to storage ‘at the direct of a user,’ and remanded for further find­ings concern­ing YouTube’s activities in connection with third party syndication deals.

The Second Circuit also offered that guided discovery could be taken on the “right and ability to control” and “syndication” issues, as a précis to any further briefing on these issues.

The case is now back in the District Court and the parties are addressing the scope and schedule for further proceedings, discovery and motion practice.

Proskauer Rose and Bernstein Litowitz represent the class plaintiffs. Chuck Sims, from Proskauer, argued the appeal on their behalf.

Jenner & Block, Gibson Dunn and Shearman and Sterling represent Viacom. Paul Smith, from Jenner, argued the appeal on behalf of Viacom.

Got Your 6, which is military parlance for “I’ve got your back,” is the entertainment industry’s response to the White House’s Joining Forces initiative. Spearheaded by First Lady Michelle Obama and Second Lady Dr. Jill Biden, Joining Forces encourages all sectors of our society to actively support our US military families, ensuring they have the opportunities they deserve.

The Got Your 6 campaign seeks to spark conversation in America about the important role our veterans and military families play in our society.  Through a multimedia publicity effort spanning television, print, radio, outdoor and social media, the campaign will focus on six “pillars of reintegration”: jobs, education, health, housing, family and leadership.  Teaming up with partners including Goodwill, The Pat Tillman Foundation, U.S. Chamber of Commerce, Iraq and Afghanistan Veterans of America and many more, the campaign is designed to spark a dialogue in our country about the important role our veterans and military families play as well as actively assist veterans and their families as they transition to civilian life.

From independent filmmakers who fundraise to make a film that raises awareness of and support for homeless veterans to recording artists who create a compilation album exclusively for troops as a way to say “we’re thinking about you, we haven’t forgotten about you”  the Got Your 6 campaign is another example of how the creative community continues to use its talents and resources to support and stand with our veterans and military families.

Learn more about the Got Your 6 campaign and its partners at www.gotyour6.org

Strong copyright enforcement proves to encourage creative and cultural development in all economies – both established and developing – as it provides the individual creator an opportunity to profit for a limited time from his creative works, through licensing, royalties, or other sales.

Working with artists all around our country, I see on a regular basis how mom and pop shops, sole-proprietors, and individual creators produce works that excite and move us and our communities. Through ownership of works, they additionally develop an identity that allows local economies to thrive, grow, and prosper.

Mark Schultz, Associate Professor and Director of Faculty Development Southern Illinois University School of Law, in his paper “Nashville in Africa” analyzes the growth of the country music scene in Nashville – transforming what was once an economically challenged city to the vibrant “Music City USA” – and then asks the question, “Why are there no ‘African Nashvilles’ despite the rich traditions of popular music in many regions of Africa?”

Through interviews with artists and others within the music business, he and his colleague found that there is much frustration over the inability to enforce property rights or collect royalties. Those involved in the creative industries believe that the failure to enforce legal means that support artists is killing the African music industry and stifling creativity.

The vibrant “Nollywood” film community in Nigeria, which has become the world’s most prolific film industry, illustrates the need for copyright protections to allow creative communities the opportunity to grow.  In another study , Schultz reveals that though Nigerian filmmakers can and do produce films for as little as $8,000, the ability to produce higher budget films is stifled due to piracy.

As we see how the creation and dissemination of creative works helps small communities throughout the US thrive, let us not forget that the legal protection for creative works in small and developing communities around the world is as equally important for artistic survival.

Though easy to forget given its ubiquitous presence on child-sized bookshelves in homes, libraries and schools across the world, Sendak’s most famous work, “Where the Wild Things Are,” was initially met with opposition upon publication in 1963 by parents and others who felt it was unsuitable for children.  The book went on to win the Caldecott Medal – the top honor for illustrated books for children – in 1964 and in the over 50 years since, has never been out of print and has sold more than 17 million copies.

Sendak’s authored work veered from the typical children’s book fare with which he first gained success and accolades as an illustrator (including the much loved “Little Bear” series), covering subjects like temper tantrums, runaways (see Max, King of the Wild Things), kidnapping and childhood homelessness, subjects he said plagued his own life from an early age.  Given their subjects, it is not surprising that “Where the Wild Things Are” was not Sendak’s only book that generated controversy.   His 1970 work “In the Night Kitchen,” received a Caldecott honor, but is also on the list of the “Most Frequently Challenged Books of 1990-1999,” with many a librarian going so far as to draw diapers on the famously naked Mickey.

In challenging the status quo of the placid world of children’s books, Sendak’s works achieved commercial and critical success.  In addition to the Caldecott Medal, Sendak received the Hans Christian Andersen Award for Illustration, the Laura Ingles Wilder Award, a National Book Award and the National Medal of the Arts, presented to the author in 1996 by then-President Clinton.  Over twenty of Sendak’s books have been named best illustrated book of the year by the New York Times.

Sendak embodied what all artists and creators strive for:  a unique voice and a unique perspective that can transcend generations.  His work spoke to me as a child, and now connects parents of my generation to their children.   The creative community will deeply miss Maurice Sendak.  Or as the Wild Things said to Max, “Oh please don’t go – we’ll eat you up – we love you so.”

First, fair use is a core part of copyright law.  It is a doctrine all artists and creators depend on daily, and something that we should celebrate and practice as an integral part of World IP Day.  For too long, those who celebrate copyright and those who are skeptical about its benefits have each looked at the institution of copyright from opposite sides of a fun house mirror.  Copyright advocates too often overlook the value of fair use, or fear that it will be misapplied in ways never intended.   Copyright skeptics apparently look at fair use as something separate from the tapestry of copyright law, and are happy to celebrate it while dismissing the value of copyright generally. While I am glad to see a unique celebration of “fair use, creativity, and remix culture,”  I hope the organizers will recognize that without the “creativity” and “culture” of the underlying work, there is nothing to  remix.  And on the flip side, that we will recognize that when remixers respect the underlying works and apply fair use to comment on them, they tell us something about our society and our culture that we may not otherwise hear.  Perhaps we should find a way to celebrate together?

Second, FUD is a really terrible acronym, but ironically fitting when one considers the debates around copyright issues.  First used with its current meaning in the 1970s in the computer hardware industry, in the marketing world FUD stands for “fear, uncertainty and doubt”  — something there is too much of surrounding copyright issues generally.

From Wikipedia, the free encyclopedia:

Fear, uncertainty and doubt, frequently abbreviated as FUD, is a tactic used in sales, marketing, public relations,[1][2]politics and propaganda.

FUD is generally a strategic attempt to influence perception by disseminating negative and dubious or false information. . .

…FUD is a manifestation of the appeal to fear.

Enough said.

So, in an effort to move away from all the FUD and celebrate fair use as an integral part of copyright law, here are a couple of examples of fair use I personally have benefitted from in the past week.

• Celebrating World IP Day with fair use of a clip of Donnie Darko.  Last week, I was able to enjoy a presentation by noted cinematographer Steven Poster.  During his talk he screened a short clip from the cult classic Donnie Darko, for which he was the cinematographer.  The clip was used to illustrate his work on the film, and to describe the technical details of how the work was imagined, rehearsed and shot.  Although the clip was illustrating Poster’s own cinematographic work, he is not the copyright owner, and relied on the fair use exception for criticism and commentary to demonstrate his craft to our audience.

• Waking up with Morning Edition.  News reporting is a deadline and facts driven business, which means that it is often impractical to seek permissions to quote or otherwise reference other news sources when one is assembling a program like NPR’s Morning Edition.  NPR and other news outlets depend on fair use to bring us their programming daily.  In its ethics guide for reporters NPR notes that they take copyright issues seriously when it comes to their own work, and asks reporters and producers to consider the following key question when it comes to the work of others:

Would we consider it fair use of our work?

While there is no hard-and-fast rule on how much material we can fairly excerpt or quote from another organization’s work, we are guided by how we would feel if our work was being cited by others. We would welcome references to an important NPR story, or the use by others of a few key quotes from our report. But we’d want them to refrain from quoting so much that it feels like most or all of our story has been repeated elsewhere. And we hold ourselves to that same standard when referencing the work of others.

• Pretty much everything I found funny last week.  Whether online or in shows like the Daily Show  or Saturday Night Live, many of the things we find funny consist of social      commentary or parodies of underlying copyrighted works.  In most cases these parodies don’t take away the underlying value of the original work, and clearance of every      reference to another source for a current affairs driven comedy sketch is just as impractical as clearance of every clip for news reporting.  Much of what I laughed at last week was  possible because the production teams reviewing the scripts relied on the doctrine of fair use.

So happy Fair Use Day to all – let’s each work to embrace the entirety of copyright and to get beyond the FUD

This year, the World Press Freedom Day conference, held by UNESCO (United Nations Educational, Scientific and Cultural Organization) in Tunis, focused on the theme of New Voices: Media Freedom helping to transform societies.  Topics included the power of new voices and new media to facilitate change, as well as the necessity of access to quality information and legal protections for those new voices operating online.  The conference culminated in the awarding of the UNESCO/Guillermo Cano World Press Freedom Prize to Eynulla Fatullayev, a journalist and human rights activist in Azerbaijan.

As new media platforms expand and enhance our ability to communicate beyond traditional barriers, more people across the globe are able to access and share information freely than ever before.  But as the world has seen, all too often, the brave new voices that are using these platforms for good are doing so at their peril; governments who oppose free speech are continuing to take draconian measures to silence their critics, including bullying, cyber-attacks, restricting access and even imprisonment.   The silencing of voices, whether by bullying or coercion, is an ongoing and troubling phenomenon that we see every day when people take what may be considered an unpopular stand, and it is counterintuitive to the goals of a free and fair internet.

As an organization that works daily to promote creative expression, the Copyright Alliance believes firmly in the values of free speech and a free media.  The open and free flow of information that has been incalculably enhanced by the expansion of digital media platforms is an asset to the promotion of free expression and one we wholeheartedly stand behind.

Read more at The Trichordist.

The Statement suggests that advertisers include conditions in their contracts and insertion orders that prevents their advertising from appearing on sites that are dedicated to the infringement of intellectual property, and that any ad networks or other intermediaries have in place effective processes for removing ads that appear on rogue sites.

The Statement also makes clear that in no way are these guidelines intended to hamper advertising in legitimate, online marketplaces, but instead is a commitment by the ANA, 4A’s and their members to the belief that legitimate businesses “should not knowingly allow [their] businesses and brands to supply financial life-blood or lend a veneer of legitimacy to fundamentally illicit business models that threaten the jobs of millions of Americans in the creative industries.”

Advertisers, like other creative professionals depend on strong first amendment freedoms coupled with the vibrant social networking and communications tools enabled by the Internet to practice their craft.  It is fitting that ANA and 4A’s have found a way to balance these interests – which are shared by all creators – with a principled stance that marketers and advertisers can and should take certain steps to avoid placing legitimate advertising on sites that are dedicated to the infringement of IP rights of creators and artists.

Visit the Association of National Advertisers for the full Statement of Best Practices

While this report confirms that the creative community continues to face steep challenges both in terms of copyright enforcement and market access, it also demonstrates that the ongoing work by Ambassador Kirk and others throughout the Administration to engage with foreign trading partners to urge them to open markets and to promote respect for intellectual property rights is having positive effects. Both Spain and Malaysia were removed from the Special 301 Lists. We thank Ambassador Kirk, and all those involved in the interagency efforts to work with these countries, as well for their continued support of the creative community.

For more information about the Report, please visit the USTR

Below is a sampling of the reaction to today’s report from our members:

“This report highlights content theft and barriers in foreign markets that pose threats to the continued growth of U.S. creative industries and the U.S. economy. Strong copyright protection and enforcement are vital to our industry’s ability to create U.S. jobs, grow our own economy, and expand U.S. exports. We thank Ambassador Ron Kirk, the USTR and their colleagues across the interagency team who work tirelessly to enhance the protection of U.S. intellectual property rights overseas.”

-Senator Chris Dodd, Chairman and CEO of the Motion Picture Association of America (MPAA)

“Strong copyright protection and enforcement, in combination with open markets, remain critical to the ability of U.S. creators to continue to substantially contribute to the U.S. economy, generate many skilled or professional U.S. jobs, and further expand exports.  By seeking concrete solutions to piracy and barriers to market entry in those markets most affected by these distortions, USTR’s Report signals strongly the Administration’s commitment to protect one of our nation’s most valuable assets.  We thank senior officials at USTR, Commerce, State, USPTO, the Copyright Office, the Office of the IP Enforcement Coordinator, the IPR Center, and other agencies, along with their staffs, for continuing to engage bilaterally and regionally, encouraging and ensuring that our trading partners make concrete progress toward more open markets where intellectual property rights are respected.”

- Steven J. Metalitz, counsel to International Intellectual Property Alliance (IIPA)

“This report is an essential contribution to the ongoing efforts to better protect the rights of the global creative community…  Through its commendable efforts, USTR helps raise awareness about the need for critical reforms that enhance our culture and promote economic development and employment.”

- Neil Turkewitz, Executive Vice President, International, Recording Industry Association of America (RIAA)