Huge Loss for Google and Internet Service Providers: 2nd Circuit holds YouTube May Have Had “Red Flag” Knowledge Under DMCA in Allowing Infringing Videos on its Site

The 2nd U.S. Circuit Court of Appeals reversed a June 2010 a landmark District Court decision in favor of Internet Service Providers (“ISPs”). Viacom Inc., the English Premier League, and several movie studios and TV networks are suing Google Inc. for allowing copyrighted videos on its YouTube service without the copyright-owners’ permission and the 2nd Circuit is now allowing the case to proceed.

This decision creates a split among the 9th (west coast states) and 2nd (northeast coast states) Circuit Courts of Appeal as to what is “Red Flag” knowledge. “Red Flag” knowledge is the key factor in finding Internet Service Providers liable to copyright owners under the Digital Millennium Copyright Act (“DMCA”). 17 U.S.C. § 512, et. seq. The 9th Circuit standard currently benefits ISPs and the 2nd Circuit standard now benefits copyright owners. Most importantly, the 2nd Circuit (unlike the 9th Circuit) holds that “willful blindness” – or knowingly ignoring evidence of infringing content by an ISP’s owners or officers – could constitute “Red Flag” knowledge and subject the ISP to liability by depriving it of its DMCA safe-harbor protection. This could effectively result in more successful copyright infringement lawsuits being brought against ISPs in the 2nd Circuit.

Judge Jose Cabranes of the two-judge panel concluded that “a reasonable jury could find that YouTube had actual knowledge or awareness of specific infringing activity on its website.” The case will now return to the lower court to determine:

(A) Whether, on the current record, YouTube had knowledge or awareness of any specific
infringements (including any clips-in-suit not expressly noted in this opinion);

(B) Whether, on the current record, YouTube willfully blinded itself to specific
infringements;

(C) Whether YouTube had the “right and ability to control” infringing activity within the
meaning of § 512(c)(1)(B); and

(D) Whether any clips-in-suit were syndicated to a third party and, if so, whether such
syndication occurred “by reason of the storage at the direction of the user” within the
meaning of § 512(c)(1), so that YouTube may claim the protection of the § 512(c) safe
harbor.

See decision: Viacom International Inc et al v. YouTube Inc et al; 2nd U.S. Circuit Court of Appeals, No. 10-3270; and The Football Association Premier League Ltd et al v. YouTube Inc in the same court, No. 10-3342

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About James Boyajian

A. James Boyajian is an attorney in downtown Los Angeles practicing Intellectual Property, Corporate, and Entertainment law. He previously interned at the FCC's Office of Strategic Planning and edited for the Federal Communications Law Journal. J.D. Indiana University Maurer School of Law. Contact: James@StreamIndustry.com

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