Appeals Court Gives Big Loss To Record Labels In Their Quixotic Lawsuit Against Vimeo For Lipdubs

from the let-it-go,-guys dept

While we unhesitatingly acknowledge the Copyright Office’s superior expertise on the Copyright Act, we cannot accept its reading of § 512(c). It is based in major part on a misreading of the statute. The Report’s main argument—that § 501(a) defines the words “infringement of copyright” as meaning infringement of the rights granted by the federal statute—misreads this provision. And as for the arguments based on canons of statutory construction, a subject not within the special expertise of the Copyright Office, we respectfully conclude that the pertinent canons were misunderstood and misapplied.

A literal and natural reading of the text of § 512(c) leads to the conclusion that its use of the phrase “infringement of copyright” does include infringement of state laws of copyright. One who has been found liable for infringement of copyright under state laws has indisputably been found “liable for infringement of copyright.” In this instance, Congress did not qualify the phrase “infringement of copyright” by adding, as it did in other circumstances, the words, “under this title.” See, e.g., § 106 (“Subject to sections 107 through 122, the owner of copyright under this title has the exclusive rights to do and to authorize any of the following . . . .); § 201(a) (“Copyright in a work protected under this title vests initially in the author or authors of the work.”). To interpret § 512(c)’s guarantee that service providers “shall not be liable . . . for infringement of copyright” to mean that they may nonetheless be liable for infringement of copyright under state laws would be, at the very least, a strained interpretation—one that could be justified only by concluding that Congress must have meant something different from what it said.



In contrast, there is every reason to believe that Congress meant exactly what it said. As explained above, what Congress intended in passing § 512(c) was to strike a compromise under which, in return for the obligation to take down infringing works promptly on receipt of notice of infringement from the owner, Internet service providers would be relieved of liability for user-posted infringements of which they were unaware, as well as of the obligation to scour matter posted on their services to ensure against copyright infringement. The purpose of the compromise was to make economically feasible the provision of valuable Internet services while expanding protections of the interests of copyright owners through the new notice-and-takedown provision. To construe § 512(c) as leaving service providers subject to liability under state copyright laws for postings by users of infringements of which the service providers were unaware would defeat the very purpose Congress sought to achieve in passing the statute. Service providers would be compelled either to incur heavy costs of monitoring every posting to be sure it did not contain infringing pre-1972 recordings, or incurring potentially crushing liabilities under state copyright laws. It is not as if pre-1972 sound recordings were sufficiently outdated as to render the potential liabilities insignificant. Some of the most popular recorded music of all time was recorded before 1972, including work of The Beatles, The Supremes, Elvis Presley, Aretha Franklin, Barbra Streisand, and Marvin Gaye.



Whether we confine our examination to the plain meaning of the text, or consider in addition the purpose the text was intended to achieve, we find no reason to doubt that § 512(c), as it states, protects service providers from all liability for infringement of copyright, and not merely from liability under the federal statute.

Finally, construing the safe harbor of § 512(c) as not granting protection to service providers from liability for state-law-based copyright infringements would substantially defeat the statute’s purposes. Internet service providers that allow the public to post works on their sites would either need to incur enormous expenses to monitor all postings to ensure the absence of infringing material (contravening the provision of § 512(m) excusing them from such obligation), or would incur state law-based liabilities for copyright infringement by reason of user-posted infringements of which they were unaware. The financial burdens in either case would be substantial and would likely either dissuade service providers from making large investments in the expansion of the growth and speed of the Internet (which Congress sought to encourage) or perhaps cause them to charge so much for the service as to undermine substantially the public usefulness of the service Congress undertook to promote.

The mere fact that an employee of the service provider has viewed a video posted by a user (absent specific information regarding how much of the video the employee saw or the reason for which it was viewed), and that the video contains all or nearly all of a copyrighted song that is “recognizable,” would be insufficient for many reasons to make infringement obvious to an ordinary reasonable person, who is not an expert in music or the law of copyright.

First, the employee’s viewing might have been brief. The fact that an employee viewed enough of a video to post a brief comment, add it to a channel (such as kitten videos) or hit the “like” button, would not show that she had ascertained that its audio track contains all or virtually all of a piece of music. Second, the insufficiency of some viewing by a service provider’s employee to prove the viewer’s awareness that a video contains all or virtually all of a song is all the more true in contemplation of the many different business purposes for which the employee might have viewed the video. The purpose of the viewing might include application of technical elements of computer expertise, classification by subject matter, sampling to detect inappropriate obscenity or bigotry, and innumerable other objectives having nothing to do with recognition of infringing music in the soundtrack. Furthermore, the fact that music is “recognizable” (which, in its dictionary definition of “capable of being recognized” would seem to apply to all music that is original and thus distinguishable from other music), or even famous (which is perhaps what the district court meant by “recognizable”), is insufficient to demonstrate that the music was in fact recognized by a hypothetical ordinary individual who has no specialized knowledge of the field of music. Some ordinary people know little or nothing of music. Lovers of one style or category of music may have no familiarity with other categories. For example, 60-year-olds, 40-year-olds, and 20-year-olds, even those who are music lovers, may know and love entirely different bodies of music, so that music intimately familiar to some may be entirely unfamiliar to others.



Furthermore, employees of service providers cannot be assumed to have expertise in the laws of copyright. Even assuming awareness that a user posting contains copyrighted music, the service provider’s employee cannot be expected to know how to distinguish, for example, between infringements and parodies that may qualify as fair use. Nor can every employee of a service provider be automatically expected to know how likely or unlikely it may be that the user who posted the material had authorization to use the copyrighted music. Even an employee who was a copyright expert cannot be expected to know when use of a copyrighted song has been licensed. Additionally, the service provider is under no legal obligation to have its employees investigate to determine the answers to these questions.

This argument has no merit. While the difference between actual knowledge of infringement under § 512(c)(1)(A)(i) and red flag knowledge under § 512(c)(1)(A)(ii) may not be vast, it is nonetheless a real difference. If the facts actually known by an employee of the service provider make infringement obvious, the service provider cannot escape liability through the mechanism of the safe harbor on the ground that the person with knowledge of those facts never thought of the obvious significance of what she knew in relation to infringement. Plaintiffs further argue that this understanding of red flag knowledge reduces it to a very small category. Assuming this is so, it is of no significance. The fact that Congress was unwilling to extend the safe harbor to circumstances where the service provider did not subjectively know that the posted material infringed, but did know facts that made infringement objectively obvious, does not compel the conclusion that Congress expected this extension to cover a large number of instances. That is especially so in view of the fact that the purpose of § 512(c) was to give service providers immunity, in exchange for augmenting the arsenal of copyright owners by creating the notice and-takedown mechanism.

A significant aspect of our ruling relates to the burdens of proof on the question of the defendant’s entitlement to the safe harbor—particularly with respect to the issue of red flag knowledge. The issue is potentially confusing because of the large numbers of factual questions that can arise in connection with a claim of the safe harbor. A service provider’s entitlement to the safe harbor is properly seen as an affirmative defense, and therefore must be raised by the defendant. The defendant undoubtedly bears the burden of raising entitlement to the safe harbor and of demonstrating that it has the status of service provider, as defined, and has taken the steps necessary for eligibility. On the other hand, on the question whether the service provider should be disqualified based on the copyright owner’s accusations of misconduct—i.e., by reason of the service provider’s failure to act as the statute requires after receiving the copyright owner’s notification or otherwise acquiring actual or red flag knowledge—the burden of proof more appropriately shifts to the plaintiff. The service provider cannot reasonably be expected to prove broad negatives, providing affidavits of every person who was in its employ during the time the video was on its site, attesting that they did not know of the infringement and did not know of the innumerable facts that might make infringement obvious. And to read the statute as requiring a trial whenever the plaintiff contests the credibility of such attestations would largely destroy the benefit of the safe harbor Congress intended to create.

We see no reason why Vimeo’s voluntary undertaking to monitor videos for infringement of visual material should deprive it of the statutory privilege not to monitor for infringement of music.

Section 512(c) specifies the consequences of a service provider’s knowledge of facts that might show infringement. If the service provider knows of the infringement, or learns of facts and circumstances that make infringement obvious, it must act expeditiously to take down the infringing matter, or lose the protection of the safe harbor. But we can see no reason to construe the statute as vitiating the protection of § 512(m) and requiring investigation merely because the service provider learns facts raising a suspicion of infringement (as opposed to facts making infringement obvious). Protecting service providers from the expense of monitoring was an important part of the compromise embodied in the safe harbor. Congress’s objective was to serve the public interest by encouraging Internet service providers to make expensive investments in the expansion of the speed and capacity of the Internet by relieving them of burdensome expenses and liabilities to copyright owners, while granting to the latter compensating protections in the service providers’ takedown obligations. If service providers were compelled constantly to take stock of all information their employees may have acquired that might suggest the presence of infringements in user postings, and to undertake monitoring investigations whenever some level of suspicion was surpassed, these obligations would largely undo the value of § 512(m). We see no merit in this argument.

The evidence cited to us by Plaintiffs, consisting of a handful of sporadic instances (amongst the millions of posted videos) in which Vimeo employees inappropriately encouraged users to post videos that infringed music cannot support a finding of the sort of generalized encouragement of infringement supposed by their legal theory. It therefore cannot suffice to justify stripping Vimeo completely of the protection of § 512(m).

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The record labels basically will find no innovation that's not worth suing, and so back in 2013 they sued the online video hosting/streaming site Vimeo, in part because the site had created a popular genre of videos known as "lipdubs" where people would lip sync to a song in a video. In the fall of 2013, the district court rejected most, but not all, of the record labels' arguments about the DMCA. The labels had argued that Vimeo lost its DMCA safe harbors for a variety of reasons, including not having a reasonable repeat infringer policy (and by "reasonable" the labels claimed it had to be the same as YouTube's), red flag knowledge, and the fact that because Vimeo lets people download videos there's no safe harbor. The court rejected basically all of those arguments -- but did leave open thethat red flag knowledge might apply if Vimeo employees had watched some of the videos at play in the case. There was also one very problematic part of the ruling, which is that the court said that pre-1972 sound recordingsqualify for the DMCA's safe harbors because of the weird quirk of copyright law history by which pre-1972 sound recordings are not actually covered by federal copyright law (but, instead, various state laws and common law).It's taken quite some time, but on appeal the 2nd Circuit has finally released a ruling that trashes every single of of the record labels' arguments and sides with Vimeo across the board. That is, it upholds all of the stuff the district court had about Vimeo not losing its safe harborsgoes one step further in overturning the lower court's ruling concerning pre-1972 music. The decision was written by Judge Pierre Leval, who tends to be awesome on copyright issues.In overturning the district court on whether or not the DMCA applies to pre-1972 recordings, the ruling is pretty clear, even going against the Copyright Office's views that argued against the DMCA covering such works.To get to this conclusion, the court justLater the court doubles down on the idea that pretending the DMCA's safe harbors don't apply to pre-1972 sound recordings would basically undermine the entire DMCA:On the infamous question of "red flag knowledge" the court notes that the Viacom v. YouTube case settled this a while ago. And this includes the fact that employees of Vimeo may have seen copyright-covered music on Vimeo, so the lower court wasto say that just because an employee watched a video, the "red flag" knowledge question could go to trial:This is a useful point. Over and over again we see people who support the current copyright system (or who want it expanded) insist that it's "obvious" to everyone when there's infringement happening. We've tried to explain repeatedly why that's not necessarily the case. There are all sorts of factors that make it difficult -- from the fact that the songs may be authorized to questions around fair use to a variety of other issues. So it's good to see the court make such a clear statement on this point and to overturn the lower court ruling that would have made life difficult for a number of platform companies. The court clearly understands this issue that so many copyright maximalists miss:The court does allow that, during discovery, a copyright plaintiff may work to establish that employees who did view the videos were able to understand that it was infringing, but merely having employees view a video isevidence of red flag knowledge. The court also rejects the idea -- as many copyright maximalists insist -- that this interpretation of red flag knowledge writes it out of the statute. Not so, the court points out:The court goes into detail about the different burdens that each party needs to carry in trying to establish red flag knowledge:Finally the court is fine with the lower court rejecting the argument of "willful blindness." The court points out that the law is clear that services have no proactive duty to monitor sites for infringement, no matter how many times copyright holders insist they must. And this holds true even if they monitor for other stuff:The court also rejects the related claim that once Vimeo had some info suggesting some music may be infringing, it had a duty to further investigate -- and the failure to do that was willful blindness. Not so, says the court:Finally, the labels had tried to argue that Vimeo employees encouraging users to create lipdubs constituted a form of willful blindness because they then refused to recognize that this encouraged infringement. The court isn't buying it:In short, just because some employees may have encouraged lipdub videos it most certainly does not remove all of Vimeo's safe harbors.This ruling is a complete and total victory for Vimeo against the labels -- and an important win for the safe harbors of the DMCA (and for the ability for websites that create useful services for the public to protect themselves). I'm sure the labels will try to challenge this decision, but it's a very strong and useful ruling as it stands.

Filed Under: copyright, dmca, dmca 512, dmca safe harbors, lipdubs, pierre leval, pre-1972 sound recordings, red flag knowledge, safe harbors, willful blindness

Companies: riaa, vimeo