Viacom Int'l v. YouTube, Civil Nos. 07-CV-2103 (LLS), 07-CV-3582 (LLS) (S.D.N.Y. June 23, 2010) (Excerpts) | June 23, 2010 | cbavitz

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Viacom Int'l v. YouTube, Civil Nos. 07-CV-2103 (LLS), 07-CV-3582 (LLS) (S.D.N.Y. June 23, 2010) (Excerpts)

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VIACOM INTERNATIONAL INC., COMEDY PARTNERS, COUNTRY MUSIC TELEVISION, INC., PARAMOUNT PICTURES CORPORATION, and BLACK ENTERTAINMENT TELEVISION LLC, Plaintiffs,
v.
YOUTUBE, INC., YOUTUBE, LLC, and GOOGLE, INC., Defendants,
THE FOOTBALL ASSOCIATION PREMIER LEAGUE LIMITED, et al., on behalf of themselves and all others similarly situated, Plaintiffs,
v.
YOUTUBE, INC., YOUTUBE, LLC, and GOOGLE, INC., Defendants.
Civil Nos. 07-CV-2103 (LLS), 07-CV-3582 (LLS)

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United States District Court, S.D. New York.
June 23, 2010.

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OPINION AND ORDER

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LOUIS L. STANTON, District Judge.

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Defendants move for summary judgment that they are entitled to the Digital Millennium Copyright Act’s (“DMCA”), 17 U.S.C. § 512(c), “safe harbor” protection against all of plaintiffs’ direct and secondary infringement claims, including claims for “inducement” contributory liability, because they had insufficient notice, under the DMCA, of the particular infringements in suit.

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Plaintiffs cross-move for partial summary judgment that defendants are not protected by the statutory “safe harbor” provision, but “are liable for the intentional infringement of thousands of Viacom’s copyrighted works, . . . for the vicarious infringement of those works, and for the direct infringement of those works . . . because: (1) Defendants had `actual knowledge’ and were `aware of facts and circumstances from which infringing activity [was] apparent,’ but failed to `act[] expeditiously’ to stop it; (2) Defendants `receive[d] a financial benefit directly attributable to the infringing activity’ and `had the right and ability to control such activity;’ and (3) Defendants’ infringement does not result solely from providing `storage at the direction of a user’ or any other Internet function specified in section 512.” (See the parties’ Notices of Motion).

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Resolution of the key legal issue presented on the parties’ cross-motions requires examination of the DMCA’s “safe harbor” provisions, 17 U.S.C. § 512(c), (m) and (n) which state:

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Defendant YouTube, owned by defendant Google, operates a website at http://www.youtube.com onto which users may upload video files free of charge. Uploaded files are copied and formatted by YouTube’s computer systems, and then made available for viewing on YouTube. Presently, over 24 hours of new video-viewing time is uploaded to the YouTube website every minute. As a “provider of online services or network access, or the operator of facilities therefor” as defined in 17 U.S.C. § 512(k)(1)(B), YouTube is a service provider for purposes of § 512(c).

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From plaintiffs’ submissions on the motions, a jury could find that the defendants not only were generally aware of, but welcomed, copyright-infringing material being placed on their website. Such material was attractive to users, whose increased usage enhanced defendants’ income from advertisements displayed on certain pages of the website, with no discrimination between infringing and non-infringing content.

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Plaintiffs claim that “tens of thousands of videos on YouTube, resulting in hundreds of millions of views, were taken unlawfully from Viacom’s copyrighted works without authorization” (Viacom Br., Dkt. No. 186, p. 1), and that “Defendants had `actual knowledge’ and were `aware of facts or circumstances from which infringing activity [was] apparent,’ but failed to do anything about it.” (Id. at 4) (alteration in original).

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However, defendants designated an agent, and when they received specific notice that a particular item infringed a copyright, they swiftly removed it. It is uncontroverted that all the clips in suit are off the YouTube website, most having been removed in response to DMCA takedown notices.

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Thus, the critical question is whether the statutory phrases “actual knowledge that the material or an activity using the material on the system or network is infringing,” and “facts or circumstances from which infringing activity is apparent” in § 512(c)(1)(A)(i) and (ii) mean a general awareness that there are infringements (here, claimed to be widespread and common), or rather mean actual or constructive knowledge of specific and identifiable infringements of individual items.

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1.

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Legislative History

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The Senate Committee on the Judiciary Report, S. Rep. No. 105-190 (1998), gives the background at page 8:

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It elaborates:

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Id. at 19 (footnote omitted).

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The Senate Judiciary Committee Report and the House Committee on Commerce Report, H.R. Rep. No. 105-551, pt. 2 (1998), in almost identical language describe the DMCA’s purpose and structure (Senate Report at 40-41, House Report at 50):

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They discuss the “applicable knowledge standard” (Senate Report at 44-45, House Report at 53-54):

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and at Senate Report 45, House Report 54:

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The reports continue (Senate Report at 46-47, House Report at 55-56):

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When discussing section 512(d) of the DMCA which deals with information location tools, the Committee Reports contain an instructive explanation of the need for specificity (Senate Report at 48-49, House Report at 57-58):

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The tenor of the foregoing provisions is that the phrases “actual knowledge that the material or an activity” is infringing, and “facts or circumstances” indicating infringing activity, describe knowledge of specific and identifiable infringements of particular individual items. Mere knowledge of prevalence of such activity in general is not enough. That is consistent with an area of the law devoted to protection of distinctive individual works, not of libraries. To let knowledge of a generalized practice of infringement in the industry, or of a proclivity of users to post infringing materials, impose responsibility on service providers to discover which of their users’ postings infringe a copyright would contravene the structure and operation of the DMCA. As stated in Perfect 10, Inc. v. CCBill LLC, 488 F.3d 1102, 1113 (9th Cir. 2007):

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That makes sense, as the infringing works in suit may be a small fraction of millions of works posted by others on the service’s platform, whose provider cannot by inspection determine whether the use has been licensed by the owner, or whether its posting is a “fair use” of the material, or even whether its copyright owner or licensee objects to its posting. The DMCA is explicit: it shall not be construed to condition “safe harbor” protection on “a service provider monitoring its service or affirmatively seeking facts indicating infringing activity . . . .” Id. § 512(m)(1); see Senate Report at 44, House Report at 53.

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Indeed, the present case shows that the DMCA notification regime works efficiently: when Viacom over a period of months accumulated some 100,000 videos and then sent one mass take-down notice on February 2, 2007, by the next business day YouTube had removed virtually all of them.

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2.

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Case Law

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In CCBill LLC, supra, the defendants provided web hosting and other services to various websites. The plaintiff argued that defendants had received notice of apparent infringement from circumstances that raised “red flags”: websites were named “illegal.net” and “stolencelebritypics.com,” and others involved “password-hacking.” 488 F.3d at 1114 (internal quotation marks omitted). As to each ground, the Ninth Circuit disagreed, stating “We do not place the burden of determining whether photographs are actually illegal on a service provider”; and “There is simply no way for a service provider to conclude that the passwords enabled infringement without trying the passwords, and verifying that they enabled illegal access to copyrighted material. We impose no such investigative duties on service providers.” Id.

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The District Court in UMG Recordings, Inc. v. Veoh Networks, Inc., 665 F. Supp. 2d 1099, 1108 (C.D. Cal. 2009), concluded that “CCBill teaches that if investigation of `facts and circumstances’ is required to identify material as infringing, then those facts and circumstances are not `red flags.’” That observation captures the reason why awareness of pervasive copyright-infringing, however flagrant and blatant, does not impose liability on the service provider. It furnishes at most a statistical estimate of the chance any particular posting is infringing — and that is not a “red flag” marking any particular work.

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In Corbis Corp. v. Amazon.com, Inc., 351 F. Supp. 2d 1090, 1108 (W.D. Wash. 2004) the court stated that “The issue is not whether Amazon had a general awareness that a particular type of item may be easily infringed. The issue is whether Amazon actually knew that specific zShops vendors were selling items that infringed Corbis copyrights.” It required a “showing that those sites contained the type of blatant infringing activity that would have sent up a red flag for Amazon.” Id. at 1109. Other evidence of “red flags” was unavailing, for it “provides no evidence from which to infer that Amazon was aware of, but chose to ignore, red flags of blatant copyright infringement on specific zShops sites.” Id.

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A similar recent decision of the Second Circuit involved analogous claims of trademark infringement (and therefore did not involve the DMCA) by sales of counterfeit Tiffany merchandise on eBay, Inc.’s website. In Tiffany (NJ) Inc. v. eBay Inc., 600 F.3d 93 (2d Cir. April 1, 2010) the Court of Appeals affirmed the dismissal of trademark infringement and dilution claims against eBay’s advertising and listing practices. The sellers on eBay offered Tiffany sterling silver jewelry of which a significant portion (perhaps up to 75%) were counterfeit, although a substantial number of Tiffany goods sold on eBay were authentic. (Id. at 97-98). The particular issue was “whether eBay is liable for contributory trademark infringement — i.e., for culpably facilitating the infringing conduct of the counterfeiting vendors” (id. at 103) because “eBay continued to supply its services to the sellers of counterfeit Tiffany goods while knowing or having reason to know that such sellers were infringing Tiffany’s mark.” (Id. at 106). Tiffany alleged that eBay knew, or had reason to know, that counterfeit Tiffany goods were being sold “ubiquitously” on eBay, and the District Court had found that eBay indeed “had generalized notice that some portion of the Tiffany goods sold on its website might be counterfeit” (id.; emphasis in original). Nevertheless, the District Court (Sullivan, J.) dismissed, holding that such generalized knowledge was insufficient to impose upon eBay an affirmative duty to remedy the problem. It held that “for Tiffany to establish eBay’s contributory liability, Tiffany would have to show that eBay `knew or had reason to know of specific instances of actual infringement’ beyond those that it addressed upon learning of them.” (Id. at 107).

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The Court of Appeals held (Id.):

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And at p. 110:

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Although by a different technique, the DMCA applies the same principle, and its establishment of a safe harbor is clear and practical: if a service provider knows (from notice from the owner, or a “red flag”) of specific instances of infringement, the provider must promptly remove the infringing material. If not, the burden is on the owner to identify the infringement. General knowledge that infringement is “ubiquitous” does not impose a duty on the service provider to monitor or search its service for infringements.

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3.

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The Grokster Case

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Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913 (2005) and its progeny Arista Records LLC v. Usenet.com, Inc., 633 F. Supp. 2d 124 (S.D.N.Y. 2009) (dismissing DMCA defense as sanction for spoliation and evasive discovery tactics), Columbia Pictures Industries, Inc. v. Fung, No. 06 Civ. 5578, 2009 U.S. Dist. LEXIS 122661 (C.D. Cal. Dec. 21, 2009), and Arista Records LLC v. Lime Group LLC, No. 06 Civ. 5936 (KMW), _ F. Supp. 2d _, 2010 WL 2291485 (S.D.N.Y. May 25, 2010), which furnish core principles heavily relied on by plaintiffs and their supporting amici, have little application here. Grokster, Fung, and Lime Group involved peer-to-peer file-sharing networks which are not covered by the safe harbor provisions of DMCA § 512(c). The Grokster and Lime Group opinions do not even mention the DMCA. 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 the websites” (2009 U.S. Dist. LEXIS 122661, at *56).

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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. In a setting of distribution of software products that allowed computer-to-computer exchanges of infringing material, with the expressed intent of succeeding to the business of the notoriously infringing Napster (see 545 U.S. at 923-26) the Grokster Court held (id. at 919, 936-37):

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On these cross-motions for summary judgment I make no findings of fact as between the parties, but I note that plaintiff Viacom’s General Counsel said in a 2006 e-mail that ”. . . the difference between YouTube’s behavior and Grokster’s is staggering.” Ex. 173 to Schapiro Opp. Affid., Dkt. No. 306, Att. 4. Defendants asserted in their brief supporting their motion (Dkt. No. 188, p.60) and Viacom’s response does not controvert (Dkt. No. 296, p.29, ¶ 1.80) that:

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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 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. To such a provider, the DMCA gives a safe harbor, even if otherwise 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” subject to the specific provisions of the DMCA. Senate Report at 40, House Report at 50.

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4.

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Other Points

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(a)

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Plaintiffs claim that the replication, transmittal and display of videos on YouTube fall outside the protection § 512(c)(1) of the DMCA gives to “infringement of copyright by reason of the storage at the direction of a user of material” on a service provider’s system or network. That confines the word “storage” too narrowly to meet the statute’s purpose.

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In § 512(k)(1)(B) a “service provider” is defined as “a provider of online services or network access, or the operator of facilities therefor,” and includes “an entity offering the transmission, routing, or providing of connections for digital online communications.” Surely the provision of such services, access, and operation of facilities are within the safe harbor when they flow from the material’s placement on the provider’s system or network: it is inconceivable that they are left exposed to be claimed as unprotected infringements. As the Senate Report states (p. 8):

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As stated in Io Group, Inc. v. Veoh Networks, Inc., 586 F. Supp. 2d 1132, 1148 (N.D. Cal. 2008), such “means of facilitating user access to material on its website” do not cost the service provider its safe harbor. See also UMG Recordings, Inc. v. Veoh Networks, Inc., 620 F. Supp. 2d 1081, 1089 (C.D. Cal. 2008):

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To the extent defendants’ activities go beyond what can fairly be characterized as meeting the above-described collateral scope of “storage” and allied functions, and present the elements of infringements under existing principles of copyright law, they are not facially protected by § 512(c). Such activities simply fall beyond the bounds of the safe harbor and liability for conducting them must be judged according to the general law of copyright infringement. That follows from the language of § 512(c)(1) that “A service provider shall not be liable . . . for infringement of copyright by reason of the storage . . . .” However, such instances have no bearing on the coverage of the safe harbor in all other respects.

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(b)

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The safe harbor requires that the service provider “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 . . . .” § 512(c)(1)(B). The “right and ability to control” the activity requires knowledge of it, which must be item-specific. (See Parts 1 and 2 above.) There may be arguments whether revenues from advertising, applied equally to space regardless of whether its contents are or are not infringing, are “directly attributable to” infringements, but in any event the provider must know of the particular case before he can control it. As shown by the discussion in Parts 1 and 2 above, the provider need not monitor or seek out facts indicating such activity. If “red flags” identify infringing material with sufficient particularity, it must be taken down.

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(c)

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Three minor arguments do not singly or cumulatively affect YouTube’s safe harbor coverage.

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(1) YouTube has implemented a policy of terminating a user after warnings from YouTube (stimulated by its receipt of DMCA notices) that the user has uploaded infringing matter (a “three strikes” repeat-infringer policy). That YouTube counts as only one strike against a user both (1) a single DMCA take-down notice identifying multiple videos uploaded by the user, and (2) multiple take-down notices identifying videos uploaded by the user received by YouTube within a two-hour period, does not mean that the policy was not “reasonably implemented” as required by § 512(i)(1)(A). In Corbis Corp. v. Amazon.com, Inc., 351 F. Supp. 2d 1090, 1105 (W.D. Wash. 2004), in evaluating whether Amazon complied with § 512(i), the Court stated that even DMCA-compliant notices “did not, in themselves, provide evidence of blatant copyright infringement.” In UMG Recordings, Inc. v. Veoh Networks, Inc., 665 F. Supp. 2d 1099, 1116, 1118 (C.D. Cal. 2009), the Court upheld Veoh’s policy of terminating users after a second warning, even if the first warning resulted from a take-down notice listing multiple infringements. It stated:

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Id. at 1118. (alteration and omission in original).

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(2) In its “Claim Your Content” system, YouTube used Audible Magic, a fingerprinting tool which removed an offending video automatically if it matched some portion of a reference video submitted by a copyright owner who had designated this service. It also removed a video if the rights-holder operated a manual function after viewing the infringing video. YouTube assigned strikes only when the rights-holder manually requested the video to be removed. Requiring the rights-holder to take that position does not violate § 512(i)(1)(A). See UMG Recordings, 665 F. Supp. 2d at 1116-18 (automated Audible Magic filter “does not meet the standard of reliability and verifiability required by the Ninth Circuit in order to justify terminating a user’s account”); see also Perfect 10, Inc. v. CCBill LLC, 488 F.3d 1102, 1112 (9th Cir. 2007) (“We therefore do not require a service provider to start potentially invasive proceedings if the complainant is unwilling to state under penalty of perjury that he is an authorized representative of the copyright owner, and that he has a good-faith belief that the material is unlicensed.”).

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YouTube’s initial hesitation in counting such rights-holder requests as strikes was reasonable: the six month delay was needed to monitor the system’s use by rights-holders, and for engineering work to assure that strikes would be assigned accurately.

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(3) Plaintiffs complain that YouTube removes only the specific clips identified in DMCA notices, and not other clips which infringe the same works. They point to the provision in § 512(c)(3)(A)(ii) that a notification must include “Identification of the copyrighted work claimed to have been infringed, or, if multiple copyrighted works at a single online site are covered by a single notification, a representative list of such works at that site.” This “representative list” reference would eviscerate the required specificity of notice (see discussion in Parts 1 and 2 above) if it were construed to mean a merely generic description (“all works by Gershwin”) without also giving the works’ locations at the site, and would put the provider to the factual search forbidden by § 512(m). Although the statute states that the “works” may be described representatively, 512(c)(3)(A)(ii), the subsection which immediately follows requires that the identification of the infringing material that is to be removed must be accompanied by “information reasonably sufficient to permit the service provider to locate the material.” 512(c)(3)(A)(iii). See House Report at 55; Senate Report at 46: “An example of such sufficient information would be a copy or description of the allegedly infringing material and the so-called “uniform resource locator” (URL) (i.e., web site address) which allegedly contains the infringing material.” See also UMG Recordings, 665 F. Supp. 2d at 1109-10 (DMCA notices which demanded removal of unspecified clips of video recordings by certain artists did not provide ”`information reasonably sufficient to permit the service provider to locate [such] material.’”) (alteration in original).

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4.

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Conclusion

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Defendants are granted summary judgment that they qualify for the protection of 17 U.S.C § 512(c), as expounded above, against all of plaintiffs’ claims for direct and secondary copyright infringment. Plaintiffs’ motions for judgment are denied.

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The parties shall meet and confer about any issues requiring judicial attention remaining in these cases, and submit a report (jointly, if possible) by July 14, 2010.

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So ordered.

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STIPULATION AND ORDER

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WHEREAS on March 5, 2010, this Court issued a Memorandum Endorsement in the action Viacom International, Inc., et al. v. YouTube, Inc., et al., Civil No. 07-CV-2103 (LLS) directing the parties to comply with the protocol set forth therein with respect to the filing of materials relating to the parties’ summary judgment motions under seal;

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WHEREAS the parties in the related action The Football Association Premier League Limited, et al. v. YouTube, Inc. et al., Civil No. 07-CV-3582 have agreed to proceed in accordance with the memorandum Endorsement and any related agreements reached by the parties in the Viacom action;

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WHEREAS, pursuant to the Memorandum Endoresment, the parties and relevant third parties have objected to those portions of the filings they contend should remain under seal;

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WHEREAS, pursuant to the Memorandum Endorsement, those portions not identified by parties as those should remain under seal shall promptly be unsealed;

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WHEREAS, on March 17, 2010, an don May 21, 2010, the Court SO ORDERED stipulations (“March 17, 2010 and May 21, 2010 Stipulations and Orders”) regarding the implementation of the unsealing of the materials relation to the parties’ summary judgment motions in the above referenced actions.

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NOW THEREFORE IT IS HEREBY STIPULATED AND AGREED by and between the undersigned counsel of record, for the parties hereto, that, consistent with the March 17, 2010 and May 21, 2010 Stipulations and Orders, the unsealing of materials relating to the parties’ replies to summary judgment motions and certain documents form their motions for summary judgment in the above referenced actions shall be implemented as follows:

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1. To the extent practicable and with the express exception of exhibits in a format that cannot be filed via ECF and overly voluminous exhibits (e.g., large Excel spreadsheets), the parties intend ti file all materials related to the parties’ summary judgment motions via simulataneous ECF submissions on Friday, June 25, 2010 at 1pm EDT with those portions of the materials the parties contend should remain under seal redacted;

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2. To the extend any ECF “filing event” that occurs pursuant to paragraph 1 would exceed 15MB, the parties will, unless they are unable to, break it into subparts with subsequent parts clearly identified. Those materials shall remain on the ECF system to allow continued public access.

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3. To the extend the parties are unsealing certain additional documents from their summary judgment motions because redactions were approved by the Court or have been withdrawn, the parties shall only file those additional documents.

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4. So as to further facilitate public access to the parties’ summary judgment submissions, the parties shall also file a complete set of all material related to the parties’ summary judgment motions being filed via ECF on June 25, 2010, with those portions of the materials the parties contend should remain under seal redacted, manually with the Clerk of the Court in hard copy to the extent possible and CD/DVD as necessary, promptly after this Stipulation and Order is so-ordered by the Court, but in no event earlier than the filing in Paragraph 1;

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5. The Original materials filed under seal in connection with the parties’ summary judgment motions shall remain under seal unless the Clerk of the Court is otherwise directed by the Court.

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[1] See Inwood Labs., Inc. v. Ives Labs., Inc., 456 U.S. 844, 102 S. Ct. 2182 (1982).

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