What Viacom Has to Show for Seven Years of Pursuing YouTube (Analysis)

Viacom HQ Sign - H 2013
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Viacom HQ Sign - H 2013

In a Manhattan courtroom on Monday, an attorney for one of the nation's biggest copyright holders delivered closing arguments in a trial meant to determine whether one Internet service provider built its business on the back of stolen copyrighted work.

This might have been the courtroom scene that Viacom imagined when it first decided to sue YouTube in 2007. It's not. Instead, it's Capitol Records v. MP3Tunes, which could deliver a verdict very soon.

As for Viacom v. YouTube, that dispute ended with something of a whimper on Tuesday morning after seven years of heated legal action. The case explored a great deal of ground at the birth of a generation of user-generated websites. For example, why did Google pay $1.65 billion to acquire YouTube when the website had virtually no revenue? According to deposition testimony of CEO Eric Schmidt, it was because there was "a premium for moving quickly and making sure that we could participate in the user success in YouTube."

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In legal circles, what the case will be remembered for is the discussion of Section 512(c) of the Digital Millennium Copyright Act -- otherwise known as the "safe harbor" provisions. ISPs have a duty upon knowledge to expeditiously remove copyright infringing materials, and first a district court judge and later the 2nd Circuit Court of Appeals attempted to clarify the requisite knowledge compelling an ISP like YouTube to act.

"I think there is no question that this case was an important one," says Corynne McSherry, intellectual property director at the Electronic Frontier Foundation. "Service providers have benefited from Google's willingness to fight the battle."

Since Google prevailed twice on summary judgment motions, which gave the web giant an upper hand going into a now-aborted second showdown at the 2nd Circuit, it's natural to assume that Viacom didn't get much, if any, money in return for ending the lawsuit. Certainly, Viacom didn't get the billions of dollars that it was pursuing in damages. Viacom also spent millions of dollars in legal fees too.

So what has Viacom to show for seven years of doggedly pursuing YouTube?

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For one thing, the case arguably pushed YouTube and others online towards copyright detection technology. "The world has changed quite a bit since the lawsuit was filed," says McSherry. "YouTube's practices have changed quite a bit in adopting Content ID."

That's not all.

Arguably as a result of the high-profile case, ISPs like YouTube are taking takedown notices from content owners more seriously. Google largely won its point that content owners are in the best position to direct ISPs to copyright infringing works, and that in most instances, only "actual knowledge" can trigger legal obligations to remove copyright infringing works uploaded by users. But what then? Turn no further than Google's freak-out over an appellate judge's decision last month determining that an actress could assert a copyright interest in her performance in a movie. Google is now warning that if movie extras and background singers file takedown notices, its "only choice would be to roll the dice with an infringement suit or remove the video."

Time will tell if that fear is over the top, but it's also a long ways away from a June 15, 2005 email from YouTube co-founder Chad Hurley stating, "So, a way to avoid the copyright bastards might be to remove the 'No copyrighted or obscene material' lìne and let the users moderate the videos themselves. legally, this wì1 probably be better for us."

STORY: YouTube Again Beats Viacom's Massive Copyright Infringement Lawsuit

Chris Castle, an attorney who has fiercely stood up for copyright holders and is an ardent critic of Google, thinks that the opinions of U.S. District Judge Louis Stanton in the case were "extraordinary unhelpful in clarifying the law" and a message to the industry that its only remedy for copyright infringements online was the transmission of takedown notices. He believes Viacom's lawsuit against YouTube might incite legislative action.

"I got to tell you if you watched the House Judiciary hearing on red flag knowledge and (the topic of) whack-a-mole last week, you get the impression that the majority is not buying YouTube's arguments anymore," he says. "It's good for Congress to see confusion in courts. It sets the table for further discussions with Congress."

Even with the end of Viacom v. YouTube, the controversies over copyright are not going away anytime soon. There will be plenty of grist for future debate including what the 2nd Circuit really meant by the vague words "something more" in addressing the issue of vicarious liability.

And for those who harbor doubt that Viacom's seven years of fighting is but a building block in the still-developing realm of copyright law, go ahead and read what the judge had to say in the MP3Tunes case last May. After largely exonerating an ISP and its founder of massive copyright infringement, the judge reconsidered his grant of summary judgment and, pointing to what the 2nd Circuit had to say in Viacom v. YouTube, paved the way for a trial that is now in a jury's hands. Viacom isn't in this particular courtroom and has suffered big legal bills and bad press in pursuing YouTube, but it has at least paid for something.

E-mail: Eriq.Gardner@THR.com
Twitter: @eriqgardner