The 2nd Circuit just decided round 2 of the Viacom v. YouTube intellectual property infringement lawsuit, and the results are not so good for the user generated content (UGC) community.
First thing’s first: Viacom succeeded in reinstating its intellectual property infringement case against YouTube which was dismissed by the SDNY back in June 2010. The case was dismissed on the basis of DMCA Section 512(c) immunity. As I wrote back then:
The most interesting aspect of this case is the Court’s decision that YouTube’s general knowledge that users tend to upload infringing content (like music videos) does not raise sufficient “red flags” to count as being “aware of the facts and circumstances from which infringing activity is apparent.”
Evidently, the 2nd Circuit thought this was interesting too and decided that Viacom had raised sufficient evidence to show that YouTube may have had sufficient knowledge of intellectual property infringement to disqualify it from Section 512(c) immunity. Thus, on this point Viacom v. YouTube goes back to the SDNY to decide whether the evidence raised by Viacom ought to disqualify YouTube.
Secondly, and I discussed this last week, the 2nd Circuit called into question YouTube’s policy of syndication. The Court asked to what extent YouTube’s practice of syndicating user content sufficiently involved YouTube in any potential infringement process such that Section 512(c) would not even cover YouTube’s actions.
As I noted last week, a negative decision on this issue could have an enormous impact on the UGC community by forcing such stat-up websites to either code technical safeguards against syndicating infringing content or otherwise eschew the syndication model altogether — either one would lay a hefty burden on any UGC business model.
While the 2nd Circuit decision does not flatly rule in Viacom’s favor (in fact, as Eric Goldman points out, it soundly rebuked many of Viacom’s “extreme and ridiculous” arguments), the end-result is that UGC businesses who do not have Google’s deep pockets may find themselves bankrupt trying to assert Section 512(c) immunity is certain cases.
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