But Is the Trail Worth Following?

Well, that wasn’t so hard.

As has been chronicled in this blog (here and especially here), the district court in the Viacom v. YouTube case had originally granted summary judgment to YouTube, but the Second Circuit decided that the district court was too quick to make a couple of important factual findings, had applied the wrong law in one instance and had overlooked a legal doctrine in another instance. So it punted the case back to the district court with very specific instructions about what it must do—but without giving it much in the way of actual legal guidance.

I didn’t say so explicitly, but I was concerned that, with the lack of guidance, the district court would freeze up, afraid that it’ll just get reversed and remanded again, no matter what it did. I’m glad to say that the district court was up to the challenge, and almost one year after the remand, it issued a confident, firm decision (once again in YouTube’s favor). Your mileage may vary, but at least we’ll get this kicked back up to the Second Circuit very quickly.


Pictured: the District Court Judge following the map provided by the Second Circuit.

Specifically, the Second Circuit told the district 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.

The first and last of these issues were simply instances where the district court got the law right but was too hasty in reaching its legal conclusions: more facts were needed.* More interestingly, the second and third of these issues were real changes to the law.

* With regard to the first issue, Viacom was not able to come up with any evidence of YouTube’s actual knowledge or (“red-flag”) awareness of specific instances of infringement. Undeterred, Viacom made an absolutely precious argument: it argued that, since the DMCA was technically an affirmative defense, it was really on YouTube to prove that it DIDN’T know about specific instance of infringement, at least where it had shown that YouTube had generalized knowledge about the existence of the works on its system. While it’s true that the defendants usually bear the burden of proving affirmative defenses, courts usually won’t make the defendant prove a negative. The district court, in rejecting this argument, reasoned that forcing a service provider to prove this negative defeated the purpose of the notice-and-takedown regime, since that’s the way the DMCA requires the knowledge of infringement to be transmitted to the service provider. If Viacom were correct, then a rights-holder wouldn’t need to send takedown notices; it would just sit back and watch the service provider fail at the task of proving that it did not have knowledge or awareness of the rights-holders works on its system.

Knowledge’s Red-Headed Half-Sibling

Issue (B) introduced a new, third type of “knowledge” in addition to “actual knowledge” and “red-flag knowledge”: “willful blindness. The district court had not considered this new type of knowledge, so that was issued was punted back to it, but without much assistance from the Second Circuit. It defined “willful blindness” as being “aware of a high probability of the fact in dispute and consciously avoided confirming that fact,” essentially “looking the other way.” But, the Second Circuit acknowledged, the DMCA spares service providers from monitoring or investigating activity on their systems, so whatever “willful blindness” means, it can’t include a duty to monitor. Whatever it meant, it had to be pretty extreme.

The trial court dealt with this semi-paradox by noting that “willful blindness” was still part of the knowledge prong of the DMCA, and just like its half-siblings actual knowledge and red-flag awareness, willful blindness applies only to conscious ignorance of specific instances of infringement. If the service provider were willfully blind to a fact that might cause a reasonable person to investigate further—the inquiry ends, because there is no duty to investigate.

There have been criticism of the district court’s approach (even accusations that it somehow “defied” the Second Circuit*) because it doesn’t seem to expand the knowledge requirement very much, if at all. But if you read all of the willful blindness opinions, you’ll see that it’s very rarely applied in any event. The other criticism is that the district court was wrong to import that “specific infringement” requirement into “willful blindness.” But the district court doesn’t seem obviously wrong to do so. It was asked to import a common-law doctrine into the DMCA. Surely, one would expect the DMCA to affect the application of the common-law doctrine. If “willful blindness” is part of the knowledge requirement, and the knowledge requirement is tied to specific acts of infringement, I don’t see how willful blindness can escape that limitation.

* As if you could make out the Second Circuit’s preferred approach from its opinion. How can you defy what has been hidden from you?

“One Step” Beyond…

Issue (C) had to do with the second prong of the DMCA safe-harbor: right and ability to control + direct financial benefit. The challenge here is determining what the service provider must be able to control. Any service provider can shut down its system, or ban a particular IP address, or suspend a particular account. In other words, it can control the overall activity on its system, and in doing so, obviously stop any infringement. But that would render the safe-harbor impossible to achieve, so that can’t be it.

On the other extreme, one could say that the service provider must be able to control, not just any activity, but specific instances of infringement. That was the district court’s approach, and until recently, the Ninth Circuit’s approach. But it is also a bad approach. It ends up collapsing the knowledge requirement into the control + financial benefit requirement. If you don’t have knowledge of (or have red-flag awareness of or are willfully bind to) specific instances of infringement, then you automatically lack the requisite control. We assume, believe it or not, that Congress doesn’t intend to enact superfluous provisions.

The Second Circuit recognized this problem, and told the district to try again, with some kind of middle ground. The Second Circuit described this middle ground as “something more” than generalized knowledge (but something less than specific knowledge). “The remaining—and more difficult—question is how to define the ‘something more’ that is required.” Providing almost no legal guidance, the Second Circuit basically left it to the district court to answer that “difficult question.”

The district court judge threw up his hands and decided he’s just make stuff up. No, that’s not true. But could you blame him if he did? Fortunately, the Second Circuit gave the district court a couple hints, by citing to an obscure Perfect 10 lower-court opinion (explicated here) and to Grokster. Also, fortunately, the Ninth Circuit had in the meantime (1) re-visited the issue in Veoh, having realized that its approach was unworkable; and (2) had found the requisite control in Fung.

Pulling those opinions together, the district court held that the “something more” means that the service provider know about the prevalence of infringing activity and “influence or participate in the infringement.” The district court pointed out that eBay, Amazon and Kodak lacked the requisite control, even though they provide and control a forum for activity that will foreseeably and inevitably include infringing acts.

If that’s the standard, then the rights holders are going to have a difficult time because the “something more” will be “something” that most service providers don’t do. This may well be a case where the facts on the ground influence the application of the law, rather than the other way around. Consumers, after all, like Amazon and eBay (and, now, YouTube), and it’s difficult to imagine settling a standard that would make what are now basic services illegal. But the point is to apply whatever it is that Congress enacted.

* What if content owners had sued YouTube first?

This case will be kicked upstairs again for the Second Circuit. It would seem cruel for the Second Circuit to decide that the district court got it wrong and remand the case again. If the district got it wrong, it’s only because the Second Circuit wouldn’t tell it what it had in mind.

Rick Sanders

Rick is an intellectual-property litigator. He handles lawsuits, arbitrations, emergency injunctions and temporary restraining orders, opposition and cancellation proceedings, uniform dispute resolution proceedings (UDRPs), pre-litigation counseling, litigation avoidance, and other disputes, relating to copyrights, trademarks, trade secrets, domain names, technology and intellectual-property licenses, and various privacy rights. He has taught Copyright Law at Vanderbilt University Law School. He co-founded Aaron | Sanders with Tara Aaron-Stelluto in 2011.