OPTIONAL (Spring 2013)
  • 1 17 U.S.C. § 512 (.pdf), read §§ 512(c), (d), (f), and (g)

  • 2 Lenz v. Universal Music Corp. 572 F. Supp. 2d 1150 (N.D. Cal. 2008) (Excerpts)

    1

    Stephanie LENZ, Plaintiff,
    v.
    UNIVERSAL MUSIC CORP., Universal Music Publishing, Inc., and Universal Music Publishing Group, Defendants.
    Case No. C 07-3783 JF.

    3

    United States District Court, N.D. California, San Jose Division.
    August 20, 2008.

    5

    JEREMY FOGEL, District Judge.

    7

    Defendants Universal Music Corp., Universal Music Publishing, Inc., and Universal Music Publishing Group (collectively, “Universal”) move to dismiss the instant case for failure to state a claim upon which relief may be granted. See Fed.R.Civ.P. 12(b)(6). The Court has read the moving papers and has considered the oral arguments of counsel. For the reasons set forth below, the motion will be DENIED.

    9

    I. BACKGROUND

    11

    On February 7, 2007, Plaintiff Stephanie Lenz (“Lenz”) videotaped her young children dancing in her family’s kitchen. The song “Let’s Go Crazy” by the artist professionally known as Prince (“Prince”) played in the background. The video is twentynine seconds in length, and “Let’s Go Crazy” can be heard for approximately twenty seconds, albeit with difficulty given the poor sound quality of the video. The audible portion of the song includes the lyrics, “C’mon baby let’s get nuts” and the song’s distinctive guitar solo. Lenz is heard asking her son, “what do you think of the music?” On February 8, 2007, Lenz titled the video “Let’s Go Crazy # 1” and uploaded it to YouTube.com (“YouTube”), a popular Internet video hosting site, for the alleged purpose of sharing her son’s dancing with friends and family.[1] YouTube provides “video sharing” or “user generated content.” The video was available to the public at http://www.youtube.com/ watch?v=N1KfJHFW1hQ.

    13

    Universal owns the copyright to “Let’s Go Crazy.” On June 4, 2007, Universal sent YouTube a takedown notice pursuant to Title II of the Digital Millennium Copyright Act (“DMCA”), 17 U.S.C. § 512 (2000). The notice was sent to YouTube’s designated address for receiving DMCA notices, “copyright@youtube.com,” and demanded that YouTube remove Lenz’s video from the site because of a copyright violation. YouTube removed the video the following day and sent Lenz an email notifying her that it had done so in response to Universal’s accusation of copyright infringement. YouTube’s email also advised Lenz of the DMCA’s counter-notification procedures and warned her that any repeated incidents of copyright infringement could lead to the deletion of her account and all of her videos. After conducting research and consulting counsel, Lenz sent YouTube a DMCA counter-notification pursuant to 17 U.S.C. § 512(g) on June 27, 2007. Lenz asserted that her video constituted fair use of “Let’s Go Crazy” and thus did not infringe Universal’s copyrights. Lenz demanded that the video be re-posted. YouTube re-posted the video on its website about six weeks later. As of the date of this order, the “Let’s Go Crazy # 1” video has been viewed on YouTube more than 593,000 times.

    15

    In September 2007, Prince spoke publicly about his efforts “to reclaim his art on the internet” and threatened to sue several internet service providers for alleged infringement of his music copyrights.[2] Lenz alleges that Universal issued the removal notice only to appease Prince because Prince “is notorious for his efforts to control all uses of his material on and off the Internet.” Lenz’s Opposition Brief at 3. In an October 2007 statement to ABC News, Universal made the following comment:

    17

    On July 24, 2007, Lenz filed suit against Universal alleging misrepresentation pursuant to 17 U.S.C. § 512(f) and tortious interference with her contract with You-Tube. She also sought a declaratory judgment of non-infringement. Universal filed a motion to dismiss, which the Court granted on April 8, 2008, 2008 WL 962102. Lenz was given leave to amend her complaint to replead her first and second claims for relief. On April 18, 2008, Lenz filed the operative SAC, alleging only a claim for misrepresentation pursuant to 17 U.S.C. § 512(f). On May 23, 2008, Universal filed the instant motion.

    19

    II. LEGAL STANDARD

    21

    “Dismissal under Rule 12(b)(6) is appropriate only where the complaint lacks a cognizable legal theory or sufficient facts to support a cognizable legal theory.” Mendiondo v. Centinela Hosp. Medical Center, 521 F.3d 1097, 1104 (9th Cir.2008). “While a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need detailed factual allegations, a plaintiffs obligation to provide the `grounds’ of his `entitle[ment] to relief requires more than labels and conclusions, and a formulaic recitation of the elements of a cause of action will not do.” Bell Atlantic Corp. v. Twombly, _ U.S. _, 127 S.Ct. 1955, 1964-65, 167 L.Ed.2d 929 (2007) (internal citations omitted).

    23

    III. DISCUSSION

    25

    The DMCA requires that copyright owners provide the following information in a takedown notice:

    27

    17 U.S.C. § 512(c)(3)(A) (emphasis added). Here, the parties do not dispute that Lenz used copyrighted material in her video or that Universal is the true owner of Prince’s copyrighted music. Thus the question in this case is whether 17 U.S.C. § 512(c)(3)(A)(v) requires a copyright owner to consider the fair use doctrine in formulating a good faith belief that “use of the material in the manner complained of is not authorized by the copyright owner, its agent, or the law.”

    29

    Universal contends that copyright owners cannot be required to evaluate the question of fair use prior to sending a takedown notice because fair use is merely an excused infringement of a copyright rather than a use authorized by the copyright owner or by law. Universal emphasizes that Section 512(c)(3)(A) does not even mention fair use, let alone require a good faith belief that a given use of copyrighted material is not fair use. Universal also contends that even if a copyright owner were required by the DMCA to evaluate fair use with respect to allegedly infringing material, any such duty would arise only after a copyright owner receives a counternotice and considers filing suit. See 17 U.S.C. § 512(g)(2)(C).

    31

    Lenz argues that fair use is an authorized use of copyrighted material, noting that the fair use doctrine itself is an express component of copyright law. Indeed, Section 107 of the Copyright Act of 1976 provides that ”[n]otwithstanding the provisions of sections 106 and 106A, the fair use of a copyrighted work … is not an infringement of copyright.” 17 U.S.C. § 107. Lenz asserts in essence that copyright owners cannot represent in good faith that material infringes a copyright without considering all authorized uses of the material, including fair use.

    33

    Whether fair use qualifies as a use “authorized by law” in connection with a takedown notice pursuant to the DMCA appears to be an issue of first impression. Though it has been discussed in several other actions, no published case actually has adjudicated the merits of the issue. See, e.g., Doe v. Geller, 533 F.Supp.2d 996, 1001 (N.D.Cal.2008) (granting motion to dismiss for lack of personal jurisdiction).

    35

    A. Fair Use and 17 U.S.C. § 512(c)(3)(A)(v).

    37

    When interpreting a statute, a court must begin “with the language of the statute and ask whether Congress has spoken on the subject before [it].” Norfolk and Western Ry. Co. v. American Train Dispatchers Ass’n, 499 U.S. 117, 128, 111 S.Ct. 1156, 113 L.Ed.2d 95 (1991). If “Congress has made its intent clear, [the court] must give effect to that intent.” Miller v. French, 530 U.S. 327, 336, 120 S.Ct. 2246, 147 L.Ed.2d 326 (2000) (internal quotation marks and citation omitted). Here, the Court concludes that the plain meaning of “authorized by law” is unambiguous. An activity or behavior “authorized by law” is one permitted by law or not contrary to law. Though Congress did not expressly mention the fair use doctrine in the DMCA, the Copyright Act provides explicitly that “the fair use of a copyrighted work … is not an infringement of copyright.” 17 U.S.C. § 107. Even if Universal is correct that fair use only excuses infringement, the fact remains that fair use is a lawful use of a copyright.[4] Accordingly, in order for a copyright owner to proceed under the DMCA with “a good faith belief that use of the material in the manner complained of is not authorized by the copyright owner, its agent, or the law,” the owner must evaluate whether the material makes fair use of the copyright. 17 U.S.C. § 512(c)(3)(A)(v). An allegation that a copyright owner acted in bad faith by issuing a takedown notice without proper consideration of the fair use doctrine thus is sufficient to state a misrepresentation claim pursuant to Section 512(f) of the DMCA. Such an interpretation of the DMCA furthers both the purposes of the DMCA itself and copyright law in general. In enacting the DMCA, Congress noted that the “provisions in the bill balance the need for rapid response to potential infringement with the end-users [sic] legitimate interests in not having material removed without recourse.” Sen. Rep. No. 105-190 at 21 (1998).

    39

    Universal suggests that copyright owners may lose the ability to respond rapidly to potential infringements if they are required to evaluate fair use prior to issuing takedown notices. Universal also points out that the question of whether a particular use of copyrighted material constitutes fair use is a fact-intensive inquiry, and that it is difficult for copyright owners to predict whether a court eventually may rule in their favor. However, while these concerns are understandable, their actual impact likely is overstated. Although there may be cases in which such considerations will arise, there are likely to be few in which a copyright owner’s determination that a particular use is not fair use will meet the requisite standard of subjective bad faith required to prevail in an action for misrepresentation under 17 U.S.C. § 512(f). See Rossi v. Motion Picture Ass’n of America, Inc., 391 F.3d 1000, 1004 (9th Cir.2004) (holding that “the `good faith belief requirement in § 512(c)(3)(A)(v) encompasses a subjective, rather than objective, standard”).[5]

    41

    The Copyright Act unequivocally establishes the four factors used to determine fair use:

    43

    17 U.S.C. § 107. Undoubtedly, some evaluations of fair use will be more complicated than others. But in the majority of cases, a consideration of fair use prior to issuing a takedown notice will not be so complicated as to jeopardize a copyright owner’s ability to respond rapidly to potential infringements. The DMCA already requires copyright owners to make an initial review of the potentially infringing material prior to sending a takedown notice; indeed, it would be impossible to meet any of the requirements of Section 512(c) without doing so. A consideration of the applicability of the fair use doctrine simply is part of that initial review. As the Ninth Circuit observed in Rossi, a full investigation to verify the accuracy of a claim of infringement is not required. Rossi, 391 F.3d at 1003-04.

    45

    The purpose of Section 512(f) is to prevent the abuse of takedown notices. If copyright owners are immune from liability by virtue of ownership alone, then to a large extent Section 512(f) is superfluous. As Lenz points out, the unnecessary removal of non-infringing material causes significant injury to the public where timesensitive or controversial subjects are involved and the counter-notification remedy does not sufficiently address these harms. A good faith consideration of whether a particular use is fair use is consistent with the purpose of the statute. Requiring owners to consider fair use will help “ensure[] that the efficiency of the Internet will continue to improve and that the variety and quality of services on the Internet will expand” without compromising “the movies, music, software and literary works that are the fruit of American creative genius.” Sen. Rep. No. 105-190 at 2 (1998).

    47

    B. The Sufficiency of Lenz’s Second Amended Complaint

    49

    1. The “Prince Policy”

    51

    The operative SAC contains sufficient allegations of bad faith and deliberate ignorance of fair use to survive the instant motion to dismiss. Lenz alleges that Universal is a sophisticated corporation familiar with copyright actions, and that rather than acting in good faith, Universal acted solely to satisfy Prince. SAC ¶ 31. Lenz alleges that Prince has been outspoken on matters of copyright infringement on the Internet and has threatened multiple suits against internet service providers to protect his music. Id. at ¶ 28. Lenz also alleges that Universal acted to promote Prince’s personal agenda and that its actions “ha[ve] nothing to do with any particular [YouTube] video that uses his songs.” Id. at ¶ 30. Although the Court has considerable doubt that Lenz will be able to prove that Universal acted with the subjective bad faith required by Rossi, and following discovery her claims well may be appropriate for summary judgment, Lenz’s allegations are sufficient at the pleading stage.

    53

    2. Damages

    55

    Universal also contends that the SAC fails to allege a compensable loss under the DMCA. Universal Brief at 2. The SAC provides that:

    57

    SAC ¶ 38. Universal nonetheless claims that Lenz has not alleged a compensable loss because: (1) Universal is a private entity and thus not subject to First Amendment actions; (2) Lenz did not suffer any actual injury as a result of the notice; (3) Universal is not liable for damages for intimidation; and (4) Section 512 does not provide for injunctive relief.

    59

    At oral argument, counsel for Lenz indicated that while the damages incurred in preparing Lenz’s counter-notice cannot be elaborated upon for reasons of privilege, Lenz did incur actual damages in reviewing counter-notice procedures, seeking the assistance of an attorney, and responding to the takedown notice. See Transcript of Law & Motion Hearing, July 18, 2008, p. 5:15-25. Though damages may be nominal and their exact nature is yet to be determined, the Court concludes that Lenz adequately has alleged cognizable injury under the DMCA.

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    IV. ORDER

    63

    Good cause therefor appearing, IT IS HEREBY ORDERED that the motion to dismiss is DENIED. Universal shall file its answer within twenty (20) days of the date of this order.

    65

    [1] Lenz has posted other home videos on You-Tube, allegedly for the same purpose. These additional videos are not at issue in this action.

    67

    [2] See, e.g., M. Collett-White, Prince to Sue YouTube, eBay Over Music Use, REUTERS, Sept. 13, 2007, http://www.reuters.com/article/ internetNew/idUSL1364328420070914? feedtype=.RSS&feedName_InternetNews& rpc=22&sp=true (last visited July 23, 2008).

    69

    [3] Lenz has dubbed this alleged pattern of activity the “Prince Policy.”

    71

    [4] The Supreme Court also has held consistently that fair use is not infringement of a copyright. See e.g., Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417, 433, 104 S.Ct. 774, 78 L.Ed.2d 574 (1984) (”[a]nyone … who makes a fair use of the work is not an infringer of the copyright with respect to such use.”).

    73

    [5] One might imagine a case in which an alleged infringer uses copyrighted material in a manner that unequivocally qualifies as fair use, and in addition there is evidence that the copyright owner deliberately has invoked the DMCA not to protect its copyright but to prevent such use. See, e.g., Online Policy Group v. Diebold, Inc., 337 F.Supp.2d 1195, 1204-05 (N.D.Cal.2004) (suggesting that the copyright owner sought to use the DMCA “as a sword to suppress publication of embarrassing content rather than as a shield to protect its intellectual property”).

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

    1

    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)

    3

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

    5

    OPINION AND ORDER

    7

    LOUIS L. STANTON, District Judge.

    9

    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.

    11

    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).

    13

    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:

    15

    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).

    17

    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.

    19

    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).

    21

    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.

    23

    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.

    25

    1.

    27

    Legislative History

    29

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

    31

    It elaborates:

    33

    Id. at 19 (footnote omitted).

    35

    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):

    37

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

    39

    and at Senate Report 45, House Report 54:

    41

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

    43

    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):

    45

    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):

    47

    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.

    49

    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.

    51

    2.

    53

    Case Law

    55

    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.

    57

    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.

    59

    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.

    61

    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).

    63

    The Court of Appeals held (Id.):

    65

    And at p. 110:

    67

    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.

    69

    3.

    71

    The Grokster Case

    73

    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).

    75

    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):

    77

    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:

    79

    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.

    81

    4.

    83

    Other Points

    85

    (a)

    87

    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.

    89

    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):

    91

    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):

    93

    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.

    95

    (b)

    97

    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.

    99

    (c)

    101

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

    103

    (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:

    105

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

    107

    (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.”).

    109

    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.

    111

    (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).

    113

    4.

    115

    Conclusion

    117

    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.

    119

    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.

    121

    So ordered.

    123

    STIPULATION AND ORDER

    125

    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;

    127

    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;

    129

    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;

    131

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

    133

    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.

    135

    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:

    137

    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;

    139

    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.

    141

    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.

    143

    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;

    145

    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.

    147

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