12:29pm PT by Eriq Gardner
Jury Trial to Weigh Disney World Misadventures, Dropped iPhones and Other Viral Videos
Twelve unsuspecting citizens of California are about to hit the jury-duty jackpot. On March 1, these lucky individuals will be treated to videos showing "Disney World Surprise Gone Wrong," "Groom Drops Bride," "Insane Dodge Ball Kill!," "Dog Thinks Terrace Door Is Closed" and much, much more. Their jury service won't just constitute a few chuckles. They will also have a front-row seat to the first major copyright trial of the viral-video era, get to contemplate the difference between parody and satire and ultimately render a verdict with the potential of generating a lot of discussion for those who care about the future of entertainment.
One of the main players at this trial is Jukin Media, a company that's backed financially by Disney's Maker Studios, Bertelsmann Digital Media and others. Jukin makes revenue-sharing agreements with the creators of viral videos and then licenses their clips to NBC, Fox, CNN, TBS, BBC, the Weather Channel and other distributors. But it has no licensing agreement with a company called Equals Three.
Equals Three is a YouTube channel run by Ray William Johnson featuring humorous programs where viral videos are shown and hosts remark about the events and people presented in the clips. When Johnson's programs began using Jukin videos, Jukin registered a takedown pursuant to the Digital Millennium Copyright Act (DMCA).
In November 2014, Equals Three sued Jukin Media, seeking a judgment that its exploitation of Jukin's videos is "fair use," and that Jukin acted in bad faith by telling YouTube of infringements without first considering whether its videos added something original. The two sides have a major disagreement about the nature of Johnson's YouTube channel. Equals Three believes it is parodying Jukin videos, while Jukin asserts that at most, what's shown is a satire of society or some other subject in general. Parodies are protected. Satires are not.
It's not often when a judge gets to write something like, "The Court finds Equals Three's episodes (except Sheep to Balls) highly transformative," but that's exactly what happened this past October when Jukin asked for summary judgment on its copyright infringement counterclaims.
U.S. District Court Judge Stephen V. Wilson considered the Jukin videos, including the one of a groom dropping his bride — and how Johnson's show commented, "Shit, he literally body-slammed his new bride" with some extra talk of how this is an example of why you shouldn't wait to have sex until marriage because you get "way too excited."
In coming to a fair-use conclusion, Wilson explained, "Whether or not Equals Three’s episodes criticize Jukin’s videos, the events depicted in Jukin’s videos are the butt of Equals Three’s jokes. Thus, the jokes, narration, graphics, editing and other elements that Equals Three adds to Jukin’s videos add something new to Jukin’s videos with a different purpose or character."
Equals Three wasn't entirely successful. Wilson noted a Jukin video featuring the first person to buy an iPhone 6. That person dropped it amid a throng of reporters. Equals Three tried to argue it was making two points — "don't be first at shit" and Apple's method of packaging iPhones at the top of the box is absurd — but Wilson said these "general, broad points" not directly aimed at criticizing or commenting on the video didn't give Equals Three a pass from copyright liability. The judge decided it "is akin to using news footage without adding anything transformative to what made the footage valuable."
When the decision came out, many observers were perhaps a little too quick to hail this as a big decision: "YouTube Content Creator Can Use Viral Video Without License," blared one headline. "The court all but resolves the underlying fair use claims," wrote tech attorney Venkat Balasubramani.
Not so fast.
In January, Wilson clarified that he was only ruling that Jukin couldn't prevail on its summary judgment motion and that the issue of whether the videos constitute fair use would go to trial. So it's now up to those 12 prospective jurors to factor the purpose and character of the YouTube shows, the nature of Jukin's viral videos, the amount and substantiality of what was taken and the effect of the use upon the potential market.
Jukin, represented by Tamany Bentz and other attorneys at Venable, will be looking to show that Equals Three willfully infringed and that Johnson's company turned down licensing opportunities. The company also will put its executives on the witness stand to showcase its business, how it acquires content, how it generates revenue from YouTube and media licensors, how lost viewership impacts what it does and its practices dealing with infringements.
That last part will be quite important.
This trial will be not only about whether Equals Three's use of viral videos is akin to, say, The Daily Show's use of Fox News clips — Johnson will be testifying, too — but also Jukin's considerations before alerting YouTube to infringement. Last September, the 9th Circuit Court of Appeals came out with an important decision in a case involving a video clip of a toddler dancing to the 1994 Prince hit "Let's Go Crazy." It was held that a copyright owner had to do more than pay lip service to fair use before registering a takedown, but that a subjective good faith belief about a lack of fair use could immunize a copyright holder from a claim of misrepresentation under the DMCA.
That ongoing case — Stephanie Lenz v. Universal Music — has gotten worldwide attention and has spent nearly nine years being litigated. This new case — Equals Three v. Jukin Media — is making it to trial much sooner and will give a jury a grand opportunity to put aggressive copyright actions under the microscope. Equals Three, represented by attorneys Thomas Vidal and Kelsey Schulz, is meeting Jukin's contentions of having its business damaged by asking the jury to consider its own loss of advertising revenue from YouTube.
In short, Disney World misadventures and dropped iPhones might seem silly, but the massive business that's been built upon these crazy viral videos is about to be presented with its future at stake. Next week, it all begins with jury selection and the voir dire question, "Are you familiar with the term 'viral video'?"