Having just spent some quality time with the opening summary-judgment briefs in Viacom Int'l Inc. v. YouTube Inc., ("Viacom"), I wanted to post a few preliminary reactions. First, the procedure that the Court and parties are using (simultaneous filing of cross-motions for summary judgment) tends to have real benefits, particularly in complex, high-profile cases, but because lawyers usually avoid anticipating their opponent's arguments, it can produce a first round of opening briefs that seem to be arguing the merits of utterly unrelated lawsuits.
Nevertheless, in a well-argued case, (and this one is), you can usually scrutinize these seemingly discordant briefs and discover that both are mostly telling the truth--or, rather, different parts of a larger truth.
Such are the opening briefs of the Viacom Plaintiffs and Defendants. The Defendants' Brief focuses on whether YouTube actually knew that particular videos were infringing and the copyright-respecting and responsible online service provider that YouTube is today. The Plaintiffs' brief focuses on intent to profit from pervasive infringement, vicarious liability, what YouTube was when it began, and what inspired Google to purchase this "video Grokster" from founders who compared it to "napster," and "kazaa."
These differing focuses mean that neither opening brief fully engages the other's strongest arguments, but they also make one important point: Plaintiffs' claims center on what YouTube was in the past, not what it has become today--indeed, Plaintiffs sought summary judgment only as to conduct occurring before May 2008. That said, some of that earlier conduct is deeply troubling--and even Google may not have been fully aware of how troubling until recently.
In particular, the Plaintiffs' Brief does an excellent job of quoting from emails and internal documents in which the original founders of YouTube seem to be trying to sound more immoral, petty, vindictive, calculating, and lawless than the worst defendants in prior digital piracy cases--including Aimster, Napster, Fung, the KaZaA litigation in Australia, and even the criminal-investigation-fearing Defendants in MGM Studios v. Grokster, Ltd., 545 U.S. 519 (2005).
In short, Viacom and the class-action plaintiffs conclude that they have not merely strong infringement claims, but also a genuine, Grokster-style inducement claim. That is potentially significant.
I know a bit about inducement claims, mostly because my work on the Inducing Infringement of Copyrights Act (the "INDUCE Act") gave me a several-month head-start in thinking about their implications. Inducement is simply a form of indirect liability predicated on the defendant's intent to encourage or dupe others into infringing copyrights. But an inducement claim under Grokster differs significantly from most other sorts of direct or indirect liability for copyright infringement.
Before the INDUCE Act and Grokster, the idea of inducement liability for copyright infringement was familiar, but moribund: no one brought inducement claims, and their reasons for not doing so can be summarized in one word, "causation." In other words, no one brought inducement claims because it would usually be too hard to prove whether a particular inducing act caused, (i.e., "materially contributed to"), a particular infringement. For example, suppose a device distributor ran the most blatant inducing advertisement conceivable: "I intend for you to use my device to get music, movies, and TV shows for free by infringing Viacom's copyrights!" The intent is unmistakable, but even so, it would be difficult for even such a directly targeted copyright owner to prove that the advertisement materially contributed to a given infringing use of the advertised device.
In Grokster, the Supreme Court remedied this once-fatal defect rather dramatically: "It is not only that encouraging a particular consumer to infringe a copyright can give rise to secondary liability for the infringement that results. Inducement liability goes beyond that, and the distribution of a product can itself give rise to liability where evidence shows that the distributor intended and encouraged the product to be used to infringe. In such a case, the culpable act is not merely the encouragement of infringement but also the distribution of the tool intended for infringing use." 545 U.S. at 940 n.13. In short, inducement liability under Grokster imposes liability for all infringing uses of the device "intended for infringing use."
Moreover, the Grokster Court knew what that change meant. It had already remarked about the extraordinary volume of infringement caused by the Defendants' programs. It had already found such "clear," "overwhelming," and "replete" evidence of Defendants' intent to induce that it had all but directed the district court to grant summary judgment for the Plaintiffs upon remand--as noted by the district court on remand. 454 F. Supp. 2d 966, 992. The Court thus knew that inducement liability under Grokster would tend to impose huge civil liabilities upon distributors that intended to induce widespread infringing uses of their devices or services. As for why the Grokster Court did so unanimously, Justice Kennedy may have put it best during oral argument:
JUSTICE KENNEDY: ... [W]hat you want to do is to say that unlawfully expropriated property can be used by the owner of the [technology] as part of the startup capital for his product.
[COUNSEL FOR GROKSTER]: I -- well -
JUSTICE KENNEDY: And I -- just from an economic standpoint and a legal standpoint, that sounds wrong to me....
That should sound wrong to anyone--from a legal, economic, or moral standpoint. But that is what Viacom argues that the original founders of YouTube intended to do: Viacom argues that their "dirty little secret" was that they intended to use unlawfully expropriated property as the startup capital that would attract a huge user base, hamstring law-abiding competitors like Google Video, and then "sell out quickly" to someone else--who would be stuck holding the bag if their liability-bomb detonated. Unfortunately, if that was their plan, it may have succeeded.
If nothing else, this account of the origins of YouTube explains why this case (which I had long expected to settle) has not. Viacom and the class-action plaintiffs seem to conclude that they have very serious, very high-value Grokster-like inducement claims.
Google, on the other hand, appears to disagree, and it must also find this case the latest of far too many expensive frustrations in the streaming-video market. Google Video started out doing things right, only to be swamped in the market by a start-up competitor who played "faster and looser" with the federal civil rights of others. Viacom argues that Google's philosophy of "Don't be evil" clashed with the YouTube founders' philosophy of "whatever tactics, however evil," and the latter won.
Google then acquired the more successful YouTube. And while Viacom argues that Google did so under circumstances indicating significant awareness of YouTube's questionable practices and business model--Google would not, if I read the documents correctly, have known about the Karim emails that would have suggested just how bad those practices might be.
Moreover, after this potentially risky acquisition, hopes of profiting by playing "faster and looser" soon vanish. Google realized, (to its credit), that it could not, as the original YouTube did, sell ads associated with potentially illegal content. That once-profitable content thus became an unmonetized financial drain that generated costs without revenues. Google and the "new" YouTube then worked hard to create the infrastructure for a copyright-and-user respecting YouTube: they developed licensing, and they developed sophisticated filtering technologies. As a result, the sort of efforts that Google and YouTube have pursued in parallel with sites like MySpace, Daily Motion and other participants in the Copyright Principles for UGC Services have turned these sites into success stories for both copyrights and technology. Of course, that also means that Google/YouTube is now right back where Google Video was in 2005: it is screening for infringement, paying artists, and respecting copyrights while today's generation of pirate sites willfully undermine the vitality of all such law-abiding businesses.
And then, the Karim emails surface and are unsealed. Suddenly, yesterday's YouTube really does begin to look like a "video Grokster" that must now argue for aggressive interpretations of the narrow scope of inducement liability and the broad scope of the Section 512(c). But it must do so in a case whose facts highlight the critical flaw in such arguments: interpretations of the scope of inducement liability and Section 512(c) that would provide a "safe harbor" to the early YouTube depicted by Viacom would only ensure that tomorrow, when the next new distribution technology beckons, tomorrow's law-abiding, property-respecting entrepreneurs--the descendents of Google Video--will again be outpaced and outmatched by the reckless and lawless who treat the unlawfully appropriated property of others as if it were their very own "startup capital."
These are but a few of the many issues raised in the Opening Briefs of Viacom and YouTube, but for now, further discussion of most of these issues can await the unsealing of the next round of briefs, when the parties should have more fully engaged other's strongest arguments. For now, three final points should suffice.
First, Viacom v. YouTube will be a case worth watching. It could well result in important rulings on both the scope of inducement liability and the meaning of both the contributory-liability and vicarious-liability limitations on the Section 512(c) safe harbor. All could have important, lasting effects.
Second, both the Viacom litigation itself and Google's own efforts to clean up YouTube provide another proof of a truth that seems to be ever more broadly recognized among technology industries: Internet piracy is bad for copyright owners, but it is also deterring and endangering legitimate technologists trying to build the sort of law-abiding businesses that can generate sustained revenues, sustained economic growth and stable jobs. Piracy harms more than just artists and creative industries when it deters the growth of lawful internet commerce. It is time to begin thinking far more seriously about how, and against whom, we want creators to enforce copyrights on the Internet.
Third, and finally, while the Viacom case could be important and contentious, it should not obscure an equally important truth: During the last two years, copyright owners, (including Viacom), and the operators of social-networking sites and user-generated content sites, (including YouTube), have made impressive, sustained and innovative efforts to provide Internet users with safe, creative environments that preserve the proven generative potential of both copyrights and Internet technologies. That is a great development and Viacom, YouTube and many others deserve to share credit for it.
Policymakers should thus continue to commend and encourage this sort of inter-industry cooperation--it is the best way to reduce the need for any future litigation.