Prof. Jane C. Ginsburg, Columbia University School of Law
June 18, 2012

The Second Circuit’s April 5 decision in Viacom, Inc. v. YouTube, Inc., finding YouTube covered by the DMCA host service provider safe harbor with respect to most of its hosting of repeatedly posted infringing content, now has echoes in two EU jurisdictions, in which first-instance courts in France and Germany recently reached opposite results regarding any duty on YouTube’s part to screen out repeat infringements.1  For a summary and critical discussion of the Viacom decision in “IP Issues,” see Peter S. Menell, Judicial Regulation of Digital Copyright Windfalls: Making Interpretive and Policy Sense of Viacom v. YouTube and UMG Recordings v. Shelter Capital Partners.

The European Union eCommerce Directive of 2000 was closely inspired by the DMCA’s provision on service provider non-liability.  Section 512(c) of the U.S. Copyright Act establishes a safe harbor for host service providers if, among other requisites, the service provider:

(A)(i) does not have actual knowledge that the material or an activity using the material on the system or network is infringing;
(ii) in the absence of such actual knowledge, is not aware of facts or circumstances from which infringing activity is apparent; or
(iii) upon obtaining such knowledge or awareness, acts expeditiously to remove, or disable access to, the material;
(B) does not receive a financial benefit directly attributable to the infringing activity, in a case in which the service provider has the right and ability to control such activity; and
(C) upon notification of claimed infringement as described in paragraph (3), responds expeditiously to remove, or disable access to, the material that is claimed to be infringing or to be the subject of infringing activity.

Although the host incurs a duty to remove access to infringing material upon becoming aware of apparent infringing activity or upon proper notification from the copyright holder, Section 512(m)(1) makes clear that the host has no initial duty to monitor, nor “affirmatively [to] seek[] facts indicating infringing activity”; thus, as Viacom emphasized, in general, the burden of policing UGC sites to identify infringing material, and its location on the host’s server, falls on the copyright owner.

The EU eCommerce Directive Articles 14 and 15(1) substantially track Section 512(c) and (m)(1):

Article 14

1.  Where an information society service is provided that consists of the storage of information provided by a recipient of the service, Member States shall ensure that the service provider is not liable for the information stored at the request of a recipient of the service, on condition that:

(a) the provider does not have actual knowledge of illegal activity or information and, as regards claims for damages, is not aware of facts or circumstances from which the illegal activity or information is apparent; or
(b) the provider, upon obtaining such knowledge or awareness, acts expeditiously to remove or to disable access to the information….

Article 15
No general obligation to monitor

1.  Member States shall not impose a general obligation on providers, when providing the services covered by Articles 12, 13 and 14, to monitor the information which they transmit or store, nor a general obligation actively to seek facts or circumstances indicating illegal activity.

Until the Court of Justice for the European Union authoritatively interprets “aware of facts or circumstances from which the illegal activity or information is apparent” and “general obligation to monitor” or “general obligation actively to seek facts or circumstances indicating illegal activity,” as well as the nature of the activities that characterize “host” service providers, national courts’ application of national laws implementing the Directive may lead to opposite results, as the recent French and German YouTube cases illustrate.

In the French action, brought by television broadcasters against YouTube, the court addressed a predicate question: Was YouTube a mere “host” entitled to the safe harbor if it met its conditions, or was YouTube a “publisher” whose role in the dissemination of the user-posted content was too active to warrant YouTube’s characterization as a “host”?  The “publisher/host” distinction is one French courts have struggled with since the first service provider liability cases.2  The court ruled that although YouTube provided its site with a variety of enhancements designed to facilitate users’ location of posted videos, YouTube did not “determine the content” of the posted material, and therefore was not a “publisher” disqualified from host service provider status.  The French court’s analysis recalls the Second Circuit’s ruling in Viacom that notwithstanding Section 512(c)’s liability limitation “by reason of the storage at the direction of the user…,” YouTube’s provision of services over and above “storage” nonetheless qualified for the safe harbor because the enhanced services, including the “related videos” function also at issue in the French action, were fully automated, requiring no intervention of YouTube employees, were “closely related to, and follow[] from, the storage itself,” and were “narrowly directed toward providing access to material stored at the direction of users.”

By the same token, the French court rejected plaintiffs’ argument that YouTube’s placement of advertisements should recast it as a “publisher”: So long as the advertisements do not determine the content, nothing prohibits a host service provider from deriving revenue from advertising.  While the eCommerce Directive does not address financial benefit, the French court’s analysis is consistent with Section 512(c)(1)(B) of the U.S. Copyright Act, which disqualifies host service providers who derive a direct financial benefit; advertising not specifically directed to particular content confers too general a financial benefit to disqualify the service provider from the safe harbor.

Turning to the issue of YouTube’s knowledge of user-posted infringements, the court stressed that, given the preclusion of a general duty to monitor,3 YouTube’s knowledge of infringements would derive only from notification by the copyright owner or by a third party who alerted YouTube to the unauthorized content.  In this case, the broadcasters notified YouTube of the infringing postings, which YouTube took down only five days later.  The court deemed this period too long, stating that, once notified, YouTube had an obligation to block the content as soon as possible.  Nonetheless, the court held that YouTube incurred no liability because, under the terms of the French Copyright Act, the rights of the television transmission entities covered the communication to the public “in return for payment of an entry fee.”  Since YouTube does not charge users for access to the posted videos, the broadcasters had no claim against it, the court ruled.

Apart from the court’s surprising interpretation of “entry fee” as a limitation on broadcasters’ right of communication to the public,4 the decision is in some tension with prior decisions of the same court, which had held that a UGC service had no general or anticipatory duty to monitor, but would be deemed “aware of facts or circumstances from which the illegal activity or information is apparent” once the service had received an initial notice regarding specific content which the same or another user subsequently reposted.5  The current decision appears to elude the law’s constructive knowledge provision entirely.  To that extent, it brings to mind the Viacom decision, which also may have given too little weight – or as Peter Menell has contended, “distort[ed] the statute’s plain meaning” – with respect to the identical language in Section 512(c).

By contrast, in the German action, GEMA, the German performing rights society (akin to ASCAP and BMI) succeeded in holding YouTube liable for repeat postings of content previously identified as infringing and previously blocked by YouTube, but which nonetheless reappeared in subsequent user postings.  Like the French court, the Hamburg court ruled that YouTube “did not exercise any editorial control of the videos uploaded to its servers,” and that YouTube’s various “structuring services,” “solely based on automated probability calculations,” did not implicate YouTube in the content sufficiently to engage its liability.  Similarly, the economic benefit from advertising was too attenuated with respect to specific infringements.

While the court thus declined to find YouTube directly liable for infringement, it held YouTube liable under general tort principles: “[A]nyone who creates a hazard source within his or her sphere of responsibility or allows it to continue must undertake the measures and provisions that can be reasonably expected of him or her necessary to avert the resulting hazards.”  To the objection that a duty to avert hazards would violate the exclusion of a general duty to monitor, the court emphasized:

The Plaintiff is not demanding preventative control of all video clips uploaded to the platform with regard to its entire repertoire.  The Plaintiff is referring to the concrete musical works in dispute regarding which it has already reported concrete infringements….  However, the Defendant is (only) required to use the content ID program after gaining knowledge of concrete rights infringement with regard to future uploads.  The Defendant is not obligated to search through its entire database using the content ID program.  The obligation for precautionary measures so that there are no further infringements to the extent possible applies for the future.  The auditing and controlling obligations of a party against whom claims have been made as a “Störer” [contributory tortfeasor (literally, “disturber”)] do not begin until notification of a concrete rights infringement.  Rights owners themselves in particular can check the inventory of videos on the Defendant’s platform. To do so, they can use the search function accessible to everyone on the platform or even use the content verification system offered by the Defendant.  Therefore, it is not reasonable for the Defendant to take over searching the data inventory, which is already available, on the Plaintiff’s behalf.  Thus, a retrospective search for videos in the inventory already available is not owed.

Similarly, the court emphasized that YouTube could not be held liable for failing to pre-filter postings made prior to its receipt of GEMA’s notifications.  The obligation to filter was not a general one, but applied prospectively to specific content, once notice was delivered.  Failure thereafter to block the noticed content would engage YouTube’s liability as a contributory tortfeasor.

Because both the French and German decisions are from courts of first instance, one may expect appeals and perhaps ultimately references to the CJEU to determine the nature and level of knowledge that triggers a host provider’s obligation to prevent repeat postings of infringing content.