Nevertheless, many non-legal commentators fear that the Viacom Opinion will further disadvantage artists and creative industries. Even the Editorial Board of the San Francisco Chronicle now worries that the Viacom Opinion has stacked the desk too far against creators and creative industries: "[U]ltimately the decision is about who has control over content - and the power is clearly shifting away from those who create it."
Granted, the Viacom Opinion could be a disaster for artists and creative industries. It adopts the most extreme version of what I have called the takedowns-and-daiquiris interpretation of the DMCA "safe harbors" for Internet hosting and information-location services. See 17 U.S.C. § 512(c)-(d). Consequently, the problem with the Viacom Opinion is not YouTube itself. However YouTube began, Google eventually turned it into what Google Video once was—a responsible and law-abiding service that uses the latest technology to protect its users, its operators and the copyrights of creators. Like other major UGC and social-networking sites, today's YouTube is now a true Internet success story.
Rather, the problem is that the Viacom Opinion, by creating a civil "safe harbor" that would protect even criminal racketeering enterprises, has ensured that—just as the original YouTube seems to have "won" the early streaming-video market by using "ubiquitous" piracy to marginalize law-abiding competitors like Google Video—so too will future online markets for works belong to the amoral "entrepreneur" most willing to break the law in order to use "unlawfully expropriated property… as part of the start up capital for his product."
But artists, creative industries, and policymakers should not worry too much about how bad things would become were the Viacom Opinion legally correct. It isn't. In fact, it is so riddled with obvious reversible errors that it will almost certainly be overturned on appeal. As in Grokster, thoughtful appellate jurists should again reject another trial judge's claim that federal law has created a civil "safe harbor" for massive and deliberate—and thus potentially criminal—wrongdoing.
For example, consider what may be the Viacom Opinion's two most blatant flaws. Together, they prove that a court adopting the takedowns-and-daiquiris interpretation of the DMCA safe-harbors must violate both of the two central principles of federal statutory interpretation—principles so fundamental that they can fairly be said to protect both the Constitution's structural premise of separated powers and the enterprise of representative democracy .
How the Viacom Opinion created a "safe harbor" for corporations that intend to profit by inducing massive copyright piracy.
The Viacom Opinion held that because the original founders of YouTube responded to takedown notices, they were protected from monetary civil liability for copyright infringement by § 512(c) of the DMCA—even if they intentionally induced, facilitated and were willfully blind to "ubiquitous" mass piracy that they "welcomed" because it "was attractive to users, whose increased usage enhanced defendants' income from advertisements." 2010 U.S. Dist. LEXIS 62829 at *14-15, *32.
The Viacom Opinion reached this conclusion by interpreting four of the duties that the DMCA imposes upon online service providers that want the protections from civil liability provided by the so-called "safe-harbors" for hosting-services under § 512(c) and information-location services under § 512(d). Both subsections deny protections if service providers 1) fail to promptly remediate infringing uses of their services of which they have "actual knowledge," 2) fail to promptly remediate infringing uses if they should be "aware of facts and circumstances from which infringing activity is apparent," 3) derive a "direct financial benefit" from infringing uses that they have "the right and ability to control," or 4) fail to respond expeditiously to takedown notices from copyright owners. 17 U.S.C. § § 512(c)(1)(A)-(C); id. at § 512(d)(1)-(3).
In effect, the Viacom Opinion reduced these four separate duties to a single duty to respond to takedown notices. Technically, this is a slight overstatement: the Viacom Opinion does presume that a hosting service that responds to takedown notices could lose its safe-harbor protection as to a particular infringing use of its service—if it could somehow obtain through some means other than a valid or invalid takedown notice "item-specific" actual or constructive knowledge that a given posting was both infringing and that the "copyright owner or licensee objects to its posting." 2010 U.S. Dist. LEXIS 62829 at *30; see also id. at *29.
But practically, this is a distinction without a difference—certainly as to any hosting service that strikes the pose of "See No Evil," the first of those three proverbial monkeys. Usually, the law treats such "willful blindness" to one's role in facilitating mass wrongdoing as proof of constructive knowledge, actual knowledge and criminal intent. See, e.g., In re Aimster Copyright Litig., 334 F.3d 643, 650 (7th Cir. 2003) ("in copyright law… as in the law generally" willful blindness to wrongdoing proves actual knowledge of it and criminal intent to facilitate it). But the Viacom Opinion repeatedly treats even willful blindness as a ticket to safe-harbor protections: "[A]wareness of pervasive copyright infringing, however flagrant and blatant, does not impose liability on the service provider." 2010 U.S. Dist. LEXIS 62829 at *32. "General knowledge that infringement is 'ubiquitous' does not impose a duty on the service provider to… search its service for infringements." Id. at *35. The Viacom Opinion thus concluded the original YouTube could claim § 512(c) safe-harbor protections even if its founders were intentionally inducing mass piracy within the meaning of Grokster, 545 U.S. 913.
To derive this conclusion, the Viacom Opinion relied on an unprecedented three-step method of statutory interpretation: (1) Judge Stanton quoted the text of Section 512, (2) he then quoted some excepts from the DMCA's legislative history, and (3) he then divined the intended meaning of the statutory text from his subjective impression of the legislative intentions implied by the unspoken "tenor" of the quoted legislative history. 2010 U.S. Dist. LEXIS 62829 at *29. The claim that the DMCA provides civil safe-harbors even to providers who intend to build businesses based upon mass piracy thus derives not from the text of the statute or its legislative history, but from one judge's divination of the implied meaning of the unspoken "tenor" of some legislative history.
For two reasons, there is little reason to believe that appellate review can or will sustain the crime-coddling conclusions derived from this odd means of statutory "interpretation."
The elephant in the mousehole: Did President Clinton and Congress really create civil "safe harbors" for corporations that they had just deemed criminal racketeering enterprises?
The first of the two central premises of federal statutory interpretation requires statutory terms and phrases to be interpreted in context: "It is a fundamental canon of statutory construction that the words of a statute must be read in context and with a view to their place in the overall statutory scheme." Davis v. Michigan Dept. of Treasury, 489 U.S. 803, 813 (1989).
This fundamental focus on context—on "the big picture"—thus has a critical corollary: "Congress, we have held, does not alter the fundamental details of a regulatory scheme in vague terms or ancillary provisions—it does not, one might say, hide elephants in mouseholes." Whitman v. American Trucking Ass'n, 531 U.S. 457, 468 (2001) (quoted in Gonzales v. Oregon, 546 U.S. 243, 267 (2006)). This corollary prevents judges from "finding" radical change lurking in mere ambiguities, vagueness or legislative history.
The Viacom Opinion violates this corollary blatantly. The Opinion hides a really huge elephant—one the size of the U.S. Criminal Code. And it hides this mastodon in a really puny mousehole—one constructed entirely from one judge's divination of the implied meaning of the unspoken "tenor" of excerpts of legislative history. Context makes the absurdity of this effort painfully clear.
Only acts that Congress and the President chose to punish with criminal sanctions violate the U.S. Criminal Code. If a business intentionally infringes copyrights, it commits one or more federal crimes. See 17 U.S.C. § 506; 18 U.S.C. § § 241, 307, 2319. If it intentionally induces others to infringe copyrights, then it is as guilty as if it had directly committed their infringements. Id. at § 2. And if a business intentionally commits or induces mass piracy, then it is a racketeering enterprise within the meaning of the Racketeer Influenced and Corrupt Organizations Act (RICO). See 18 U.S.C. § § 1961-68.
Tragically, many judges have now found that far-too-many Internet "entrepreneurs" were just would-be pirate kings intentionally building global for-profit piracy syndicates. For example, the distributors of the file-sharing program Morpheus, bragged that their "business model" gave them "no product costs to acquire music" and "the ability to get all the music." MGM Studios, Inc. v. Grokster, Ltd., 454 F. Supp. 2d 966, 981 (C.D. Cal. 2006). Justice Breyer correctly equated such conduct to "garden-variety theft." MGM Studios, Inc., v. Grokster, Ltd., 545 U.S. 913, 961 (2005) (Breyer, J., concurring). Even the Grokster Defendants themselves appear to have belatedly perceived this. Upon reaching the United States Supreme Court, they thus committed the civil-litigation equivalent of suicide: Citing their fear of "criminal investigation," they refused to let the Department of Justice review the record.
Today, there are now far too many cases involving far too many other garden-variety thieves who intended to facilitate mass Internet piracy. See, e.g., Arista Records, LLC, v. Lime Group, 2010 U.S. Dist. LEXIS 46638 (S.D.N.Y. 2010); Arista Records, LLC, v. Usenet.com, 633 F. Supp. 2d 124, (S.D.N.Y. 2009); Columbia Pictures Indus., Inc. v. Fung, 2009 U.S. Dist. LEXIS 122661 (C.D. Cal. 2009); Disney Enters., Inc. v. Delane, 446 F. Supp. 2d 442 (D. Md. 2006); In re Aimster Copyright Litig., 334 F.3d 643 (7th Cir. 2003). Similar holdings from other countries include Sweden's criminal prosecution of The Pirate Bay and Australia's KaZaA litigation.
As a result, inducement cases like Grokster, Fung, and Lime Group have now repeatedly held that any reasonable person reviewing evidence under a preponderance standard would conclude that internet enterprises had engaged in behavior that—if proven beyond a reasonable doubt—almost certainly constitutes both criminal conduct and criminal racketeering under existing U.S. law. See, e.g., In re Aimster Copyright Litig., 334 F.3d 643, 651 (7th Cir. 2003) (calling aiding-and-abetting "the criminal counterpart to contributory infringement").
Hence the elephant: The Criminal Code imposes severe penalties to deter very antisocial conduct. It is thus inherently implausible to imagine that any federal law would effectively encourage criminal wrongdoing by giving potential criminals a safe harbor from civil liability for their crimes—particularly if their crimes targeted private federal civil rights generally enforced except through civil litigation. That does something worse than just "alter the fundamental details of a regulatory scheme…." It sets the law at war with itself in a way that is sure to erode federal civil rights, encourage criminal wrongdoing, and disadvantage law-abiding commerce.
That is why, in Grokster, the Supreme Court unanimously reversed lower courts that had "interpreted" the Supreme Court to have protected from civil liability the intentional inducement of mass piracy, (a.k.a. "criminal racketeering"), through the deliberately vague capacity-for-commercially-significant-noninfringing-use defense created by the 5-4 majority opinion in Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417, 442 (1984) (declining to answer "the question of how much use is commercially significant"). While the Grokster Court split 3-3-3 on the question of what this Sony-defense might mean, the Justices unanimously rejected claims that it protected intentional wrongdoers—no Justice found an elephant hiding in Sony's deliberate ambiguities.
Nevertheless, in his Viacom Opinion, Judge Stanton distinguished Grokster, by "finding" the same old elephant—the same sort of just-unanimously-rejected safe harbor for inducement—hidden implicitly in the "tenor" of the legislative history of the DMCA:
Grokster, Fung, and Lime Group involved peer-to-peer file sharing networks which are not covered by the safe-harbor provisions of the DMCA § 512(c)…. Fung was an admitted copyright thief whose DMCA defense under § 512(d) was denied on undisputed evidence of "'purposeful, culpable expression and conduct' aimed at promoting infringing uses of [his] websites."
Grokster addressed the more general law of contributory liability for copyright infringement, and its application to the particular subset of service providers protected by the DMCA is strained….
The Grokster model does not comport with that of a service provider who furnishes a platform on which its users post and access all sorts of materials as they which, while the provider is unaware of its content, but identifies an agent to receive complaints of infringement, and removes identified material when he learns it infringes. To such a provider, the DMCA gives a [civil] safe harbor, even if he would be held as a contributory infringer under the general law. In this case, it is uncontroverted that when YouTube was given the notices, it removed the material. It is thus protected "from liability for all monetary relief for direct, vicarious and contributory infringement…." Senate Report at 40, House Report at 50.
2010 U.S. DIST. LEXIS 62829 at *36-38. There are three fatal flaws in this illogic.
First, neither the text of § 512(c) of the DMCA nor the text of its legislative history provide any explicit support for claims that entities can intentionally induce mass piracy and remain eligible for the § 512(c) safe harbor. Indeed, on its face, the text of the DMCA forecloses protection for intentional wrongdoers by expressly denying protections even to less culpable entities possessing mere actual or constructive knowledge of infringements. See 17 U.S.C. § 512(c)(1)(A)(i)-(ii). Nor does the DMCA's legislative history cite any example in which its "harbors" would protect any OSP from liability for its own intentional wrongdoing. Consequently, the only remaining source for such protection is the divination of the implicit meaning of the unspoken "tenor" of the excerpts of legislative history quoted in the Viacom Opinion. See 2010 U.S. Dist. LEXIS 62829, at *29. That is a ridiculously "vague" and "ancillary" source for the inherently daft notion of civil protection for intentional and criminal wrongdoing. See, e.g., Whitman v. American Trucking Ass'n, 531 U.S. 457, 468 (2001).
Second, broader context further exacerbates the inherent absurdity of any such claim. The only thing more implausible than a civil safe-harbor for criminal wrongdoing implicitly hidden in the Supreme Court's deliberately vague Sony decision from the mid-1980s would be a civil safe-harbor for criminal wrongdoing implicitly hidden in the "tenor" of the legislative history of a statute enacted by President Clinton and Congress in the mid-1990s. In 1994, President Clinton and Congress committed to criminalize precisely what Judge Stanton found to be ubiquitous on the original YouTube: "copyright piracy on a commercial scale." See Agreement on Trade-Related Aspects of Intellectual Property Rights, art. 61, Apr. 15, 1994, 33 I.L.M. 81 (1994). In 1996, the increasing threat of computerized piracy and counterfeiting led President Clinton and Congress to designate willful trademark counterfeiting and copyright piracy as predicate acts of criminal racketeering under RICO. See Anticounterfeiting Consumer Protection Act of 1996, 104 P.L. 153, 110 Stat. 1386. In 1997, President Clinton and Congress again responded to threats arising from burgeoning Internet piracy by criminalizing even noncommercial Internet piracy. See No Electronic Theft Act of 1997, 105 P.L. 147, 111 Stat. 2678.
Yet the Viacom Opinion infers that in 1998—less than two years after President Clinton and Congress concluded that corporations intentionally inducing mass piracy were criminal racketeering enterprises—President Clinton and Congress created civil-safe-harbors that encourage corporations to build criminal racketeering enterprises based on intentional mass piracy. Something less "vague" than a guess at the implied meaning of the unspoken "tenor" of bits of legislative history would be required to sustain that bizarre conclusion.
Third, the Viacom Opinion's attempt to distinguish Grokster and its progeny is itself so "strained" that every assertion made is either wrong or misleading. Collectively, these errors leave the Viacom Opinion willful blind to its own implications: Quite literally, it holds that if the Internet's worst willfully-blind architects of the largest global copyright-piracy syndicates in history had just responded to takedown notices, then federal law would have let all of them sit safely in a civil safe-harbor, drinking daiquiris and profiting from piracy by intentionally inducing—that is, encouraging or duping—unprotected American consumers, students, and children into doing all of the strict-liability-generating dirty work required to let corporate racketeering enterprises profit from mass piracy.
To reach this conclusion, the Opinion first claims that some disconnect or "strain" exists between Grokster's inducement test and the DMCA's safe harbors. 2010 U.S. Dist. LEXIS 62829 at *36. Wrong: Fung refutes that claim and no reported case reveals even an overlap, much less a "strain" between inducement liability and §512(c). The Viacom Opinion concedes that § 512(c) limits civil liability only when the alleged liability-triggering act is mere "'storage' and allied functions…," and that liability for all other acts "must be judged according to the general law of copyright infringement." 2010 U.S. Dist. LEXIS 62829, at *40. There is thus no "strain": The sort of generally innocuous acts that the DMCA safe-harbors can protect—acts like mere "'storage' and allied functions" done "at the direction of a user"—have never triggered inducement liability under Grokster.
Grokster imposes inducement liability if a person or entity (1) intended to induce infringement, and (2) acted affirmatively in order to effectuate that intent. In no reported inducement case—including Viacom v. YouTube—has anyone held or argued that mere "'storage' and allied functions" either evinced intent to induce infringement or were the affirmative acts that effectuated an intent to induce infringement. For example, the Viacom Opinion concedes that the original YouTube founders intended to "welcome" even "flagrant," "pervasive," and "ubiquitous" infringing uses of their site because they attracted users and increased profits. Here are examples of some of the non-storage-related affirmative acts through which Viacom argued that these founders effectuated their intent to "welcome," induce and profit from such massive piracy:
- Disabling community flagging for infringement because its unexpectedly effective was generating too much willful-blindness-piercing actual knowledge of particular infringements.
- Carefully calculating which classes of infringing works should be taken down and which should be kept up in order to generate a faÃ§ade of respect for copyrights while perpetuating aspects of the mass piracy that were attracting users.
- Creating "groups" to attract users to infringing videos.
- Choosing to keep distributing obviously infringing content in order to profit from piracy until the infringement was detected (by others), and a notice was generated, sent and received.
- Surveying the most popular videos on YouTube to see what how many contained copyrighted content, concluding that 70% did, and leaving them up.
As these examples suggest, Grokster and § 512 neither "strain" nor even overlap because the acts that the § 512(c) "harbor" protects—storing data "at the direction of a user"—are just not the sort of acts that either to evince intent to induce infringement or to effectuate a defendant's intent to induce infringement. Indeed, no subsection of § 512 protects any service provider from any of its own intentional acts.
The Opinion then says that "peer-to-peer file sharing networks… are not covered by the safe-harbor provisions of the DMCA § 512(c)…." That is probably wrong and clearly misleading: Napster, Fung and reality all suggest that distributors of peer-to-peer file-sharing programs can seek protection under the DMCA's § 512(d) safe-harbor for information-location services—if they obey constraints substantively indistinguishable from the § 512(c) constraints gutted in the Viacom Opinion.
The Viacom Opinion then fails to distinguish Fung by claiming that "Fung was an admitted copyright thief whose DMCA defense under § 512(d) was denied on undisputed evidence of "'purposeful, culpable expression and conduct' aimed at promoting infringing uses of [his] websites." Wrong: Fung never admitted that he was a "copyright thief" and he still denies that he intended for his Isohunt website to induce mass piracy—the district court just ruled that no reasonable person could believe him, even though Isohunt did respond to takedown notices as required by § 512(d)(3). Columbia Pictures Indus., Inc. v. Fung, 2009 U.S. Dist. LEXIS 122661, *61 n.27 (C.D. Cal. 2009). Consequently, the Viacom Opinion errs again when it claims that an inducement case like Fung can have "little application" when a service provider has "furnishe[d] a platform on which its users post and access all sorts of materials as they wish, while the provider is unaware of its content, but identifies an agent to receive complaints of infringement, and removes identified material when he learns it infringes" via a valid takedown notice. Viacom Opinion, 2010 U.S. Dist. LEXIS 62829, at *37. That sentence did not distinguish Fung; it merely summarized its facts.
The truth is thus clear: The Viacom Opinion implicitly held that Fung was wrongly decided. Compare Columbia Pictures Indus., Inc. v. Fung, 2009 U.S. Dist. LEXIS 122661, *68 ("inducement liability and the [DMCA] safe harbors are inherently contradictory"); Viacom Opinion, 2010 U.S. Dist. LEXIS 62829, at *36-38 (holding that Grokster addressed "the general law of contributory liability for copyright infringement" and that the DMCA protects a service provider responding to takedown notices "even if otherwise he would be held as a contributory infringer under the general law"). Consequently, the "logic" of the Viacom Opinion would thus assert that all of the Internet's most notorious architects of intentional mass piracy—including Napster, Aimster, Grokster, Morpheus, LimeWire, KaZaA, UseNet, Isohunt and The Pirate Bay—might have been criminal racketeering enterprises, but if they had just responded to takedown notices while affecting willful blindness, then they all could have kept on intentionally inducing mass piracy while enjoying the protections of the civil safe-harbor provisions of § 512(c) or § 512(d) of the DMCA.
For example, if the distributors of the LimeWire file-sharing program had just responded to takedown notices, then the Viacom Opinion would hold that the § 512(d) safe-harbor would have protected even their decade of mass piracy intentionally induced by distributors affecting willful blindness to the fact that 98.8% of the files that LimeWire users selected for downloading were highly likely to be infringing. See Arista Records, LLC, v. Lime Group, 2010 U.S. Dist. LEXIS 46638, *15 (S.D.N.Y. 2010). The Viacom Opinion would hold that even this 98.8% "statistical estimate of the chance that any particular posting is infringing… is not a 'red flag' marking any particular work." See Viacom Opinion, 2010 U.S. Dist. LEXIS 62829, at *32; but see Fung, 2009 U.S. Dist. LEXIS 122661 *66 (citing "Defendants own statistics" to show that "Defendants were certainly 'aware of a "red flag" from which infringing activity is apparent'").
That is absurd: An entire herd of rogue elephants like Aimster, Grokster, KaZaA, Morpheus, Isohunt, LimeWire and the Pirate Bay cannot hide in a mousehole consisting of the implicit, unspoken "tenor" of some excerpts of legislative history.
The "ordinary-meaning rule" forecloses any claim that Congress intended for the DMCA to mean the opposite of what informed legislators should have understood it to say.
The second of the two central premises of federal statutory interpretation is also just a corollary of the first. In effect, it says that when Congress writes laws, in English, to govern the citizens of a mostly English-speaking nation, courts cannot use their power of interpretation to conclude that Congress spoke in tongues to enact laws that do not mean what informed readers of English would think.
Indeed, the Supreme Court just re-confirmed yet again that courts must prevent such results by giving all undefined statutory terms their "ordinary meanings": "In patent law, as in all statutory construction, 'unless otherwise defined, "words will be interpreted as taking their ordinary, contemporary meaning.''" Bilski v. Kappos, 2010 U.S. LEXIS 5521, *15 (June 28, 2010) (citations omitted).
This ordinary-meaning rule's prescriptions are simple: if undefined statutory terms derive from legal "terms of art" that had developed specialized meanings under prior law, then they retain their specialized meanings; otherwise, undefined terms have their ordinary, dictionary-definition meanings. See, e.g., Neder v. United States, 527 U.S. 1, 21 (1999) (specialized meaning); Ardestani v. INS, 502 U.S. 129, 135-36 (1991) (dictionary-definition meaning). The ordinary-meaning rule protects representative democracy by giving statutes the meaning that should have been expected by any well-informed Representative, Senator, or President reading the proposed text against the background of related existing laws.
Nevertheless, while the Viacom Opinion never acknowledges that the ordinary-meaning rule exists, it does violate it ceaselessly. At its worst, it actually reverses the rule in order to conclude that statutory text was intended to mean the opposite of what any informed reader should have suspected.
For example, § 512(c)(1)(B) of the DMCA denies safe-harbor protections to any hosting site that "has the right and ability to control" infringement from which it derives a direct "financial benefit." Citing no authority, the Viacom Opinion decrees, "The 'right and ability to control' the activity requires knowledge of it, which must be item-specific." Viacom Opinion, 2010 U.S. DIST. LEXIS 62829, at *40-41.
But the DMCA was not enacted on Opposite Day. Consequently, no judge can conclude that Congress used language that judges had developed to convey the lack of any knowledge requirement in order to tell judges that Congress intended to impose an item-specific knowledge requirement. That is absurd; it is the definition of "speaking in tongues;" and this unprecedented interpretation of §512(c)(1)(B) is thus foreclosed by decades of binding Supreme-Court and Second-Circuit precedents.
All other courts concede that the text of § 512(c)(1)(B) adopts the language of the familiar judge-made test for "vicarious copyright liability." E.g., Perfect 10, Inc. v. CCBill, LLC, 488 F.3d 1102, (9th Cir. 2007). "When Congress codifies a judicially defined concept, it is presumed, absent an express statement to the contrary, that Congress intended to adopt the interpretation placed on that concept by the courts." Davis v. Michigan Dept. of Treasury, 489 U.S. 803, 813 (1989). Consequently, when Congress enacted in § 512(c)(1)(B) terms that judges had developed over decades, it obviously meant for those terms to retain their specialized, judge-developed meanings.
That refutes the Viacom Opinion's claim that "the 'right and ability to control' the activity requires knowledge of it, which must be item-specific." For nearly fifty years, binding Second-Circuit and Supreme-Court precedents have rejected that claim. See, e.g., Gershwin Publishing Corp. v. Columbia Artists Management, Inc., 443 F.2d 1159, 1162 (2d Cir. 1971) (holding that a defendant who had "the right and ability to supervise infringing activity" would be vicariously liable even though he "has no actual knowledge" of infringement); see MGM Studios, Inc. v. Grokster, Ltd., 545 U.S. 913, 930 n.9 (2005) ("vicarious liability… allows the imposition of liability… even when the defendant initially lacks knowledge of it") (citing Shapiro, Bernstein & Co. v. H. L. Green Co., 316 F.2d 304, 308 (2d Cir. 1963) (imposing vicarious liability "in the absence of intention to infringe or knowledge of infringement" in order to prevent businesses from "shielding their own eyes from the possibility of copyright infringement, thus creating a buffer against liability while reaping the proceeds of infringement")).
The Viacom Opinion's up-means-down interpretation of § 512(c)(1)(B) thus defies both common sense and decades of binding precedent.
Moreover, such violations of the ordinary-meaning rule pervade the Viacom Opinion. For example, it also holds that by denying safe-harbor protections to hosting-site operators having "actual" or constructive knowledge of infringing activity, Congress meant to signal its intent to protect hosting services that actually know that infringing uses of their services are "pervasive," "flagrant," and "ubiquitous,"—at least so long as they avoid knowing which uses infringe. The Viacom Opinion thus asserts, "awareness of pervasive copyright-infringing, however flagrant and blatant… furnishes at most a statistical estimate of the chance that any particular posting is infringing—and that is not a 'red flag'…." 2010 U.S. DIST. LEXIS 62829, at *32.
Yet again, "up" thus means "down": In both U.S. copyright law and U.S. law generally, actual and constructive knowledge are familiar terms of art that equate willful blindness to wrongdoing with both actual and constructive knowledge of particular instances of it. See, e.g., In re Aimster Copyright Litig., 334 F.3d 643, 650 (7th Cir. 2003) ("Willful blindness is knowledge, in copyright law… as in the law generally.") (quoted in Arista Records LLC, v. Doe 3, 604 F.3d 110, 118 (2d Cir. 2010); compare Tiffany (NJ) Inc., v. eBay, Inc., 600 F.3d 93, 109-110 (2d Cir. 2010) ("A service provider is not, we think, permitted willful blindness" that is "equivalent to actual knowledge for purposes of [indirect liability for trademark infringement]"), with Sony, 464 U.S. at 439 n.19 (noting that indirect liability for trademark infringement is narrower than indirect liability for copyright infringement); see also Gucci America, Inc. v. Frontline Processing Corp., 2010 U.S. Dist. LEXIS 62654, *41-46 (S.D.N.Y. 2010) (holding that willfully-blind credit-card processors can be contributorily liable for providing payment services to an Internet distributor of counterfeit handbags).
And again—with apologies to singer Katy Perry—nothing in either the text or the legislative history of the DMCA states that in this particular context, Congress intended for "in" to mean "out" or "up" to mean "down" or "actual knowledge" to mean "protect the sort of willful blindness that the law has always equated with 'actual knowledge' and 'criminal intent.'" The Viacom Opinion must have again conjured this "case of a [law] bipolar" from the unspoken "tenor" of legislative history.
Finally, applying the ordinary-meaning rule to § 512(c) creates no conflict with § 512(m), which states, "Protection of privacy. Nothing in this section shall be construed to condition the applicability of [ § 512(c)] on… a service provider monitoring its service or affirmatively seeking facts indicating infringing activity…." The Second Circuit just held that laws intended to protect privacy do not protect piracy. See Arista Records LLC, v. Doe 3, 604 F.3d 110 (2d Cir. 2010). Indeed, § 512(m) just confirms explicitly what the ordinary meaning of § 512(c) already implies: hosting-site operators can monitor their sites for infringement, but they do not have to do so to avoid violating the three constraints imposed by § 512(c)(1)(A)-(B). Even if willful blindness creates actual and constructive knowledge, ongoing monitoring is not required to avoid either actual or constructive knowledge of infringing use. Nor is monitoring required to avoid vicarious liability—the lack of either a "right and ability to control" infringement or a "direct financial benefit" from infringement will suffice. See also, e.g., Shapiro, Bernstein & Co. v. H. L. Green Co., 316 F.2d 304, 309 (2d Cir. 1963) (noting other ways that businesses can manage vicarious liability without "a fairly constant system of surveillance").
In conclusion, the preceding analysis is hardly exhaustive: it just summarizes the two most glaring of the many reversible errors of fact and law that litter the Viacom Opinion. As a result, artists and creative industries can fairly presume that the Viacom Opinion will be probably be reversed on appeal by the Second Circuit or, if necessary, by the Supreme Court. Federal statutes do not hide elephants in mouseholes—or safe harbors for criminal racketeering enterprises in ordinary-meaning-defying judicial speculation about implied meaning of the unspoken "tenor" of bits of legislative history.
Judges who remember this will promote the development of lawful internet commerce and reduce the risks of copyright enforcement against consumers by ensuring that as new online-markets for works arise, federal law will reward those service providers who adopt analogs of the commendably law-abiding, copyright-respecting approach that Google and Google Video brought to the early streaming-video market, and, eventually, even to YouTube itself.