IP Law Daily, COPYRIGHT—S.D.N.Y.: YouTube is dismissed from lawsuit over allegedly infringing videos, (Mar 23, 2022)

By Matthew Hersh, J.D.

The video hosting service was only a passive host of the videos and took them down once informed of the allegations.

The maker of a series of documentaries about titans of American industry did not have a cause of action against YouTube for either direct or secondary copyright infringement arising out of the service’s hosting of allegedly infringing videos, the federal district court in Manhattan has held. The court, in what it characterized as a relatively straightforward application of established copyright principles, found that the complaint did not adequately claim that YouTube acted with volition or knowledge with respect to the allegedly purloined content, and indeed conceded that YouTube took down the material once notified of the alleged infringement (Business Casual Holdings, LLC v. YouTube, LLC, March 21, 2022, Koeltl, J.).

Business Casual Holdings, LLC, runs a YouTube channel that features copyrighted videos it has created about historic titans of American industry, such as Andrew Carnegie and J.P. Morgan. In some of its videos, as described by an earlier opinion of the court, the copyright owner “turn[s] two-dimensional images into three-dimensional models” through a process called “parallax.” Its videos are made with a process that, the company asserts, “transforms century-old low-resolution photographs into dramatically restored high-resolution photographs” and makes use of innovative camerawork that “moves through the scene, simulating a depth-of-field.”

The copyright owner sued YouTube as well as TV-Novosti, a Russian autonomous non-profit organization that operates the YouTube channel RT Arabic and 38 associated channels. The copyright owner alleged that the Russian entity had infringed its exclusive rights under the Copyright Act by posting original content from its J.P. Morgan video and that it had violated the Digital Millennial Copyright Act, or DMCA, by making false statements to YouTube in response to the copyright owner’s takedown notices. The copyright owner also alleged that YouTube had committed direct and secondary copyright infringement by hosting the videos.

YouTube and the Russian entity separately moved to dismiss the complaint. The court issued an opinion last week that dismissed the DMCA claim against the Russian operator of the channels, but left intact the copyright infringement claim against that entity. The court turned its attention next to YouTube’s motion to dismiss, leading to this opinion.

Direct infringement. The court dismissed all of the claims against YouTube. With respect to the direct infringement claim, the court found two reasons to do so. First, the court found, YouTube could not have acted with the volition required for a direct infringement claim because it played no “deliberate role” in the alleged infringement, but remained instead only “a passive provider of a space in which infringing activities happened to occur.” The copyright owner’s primary contention in support of volition was that YouTube failed to move quickly enough to take down the infringing videos. But even if true—and the allegations in the complaint did not support the claim in any event, the court observed—as a matter of law that “could not have caused or contributed to TV-Novosti’s decision to upload the allegedly infringing content in the first instance.” In any event, the court noted, the copyright owner expressly gave YouTube a broad license to “reproduce, distribute, prepare derivative works, display and perform” its works, thus definitively precluding a direct infringement claim. “Licensors may not sue their licensees for copyright infringement,” the court observed.

Secondary infringement. The court also dismissed the claims of contributory and vicarious infringement against YouTube. There was no allegation that YouTube knew of the Russian entity’s alleged infringement before the copyright owner lodged its takedown notices. To the contrary, the complaint acknowledged that YouTube has systems in place to detect automatically and to police copyrighted content and that the Russian channel intentionally attempted to circumvent these safeguards by doctoring the allegedly copied content. The claim for vicarious copyright liability was equally without merit. YouTube did not decline to exercise its right to stop the infringement, the court noted. To the contrary, the complaint demonstrated that YouTube promptly stopped the alleged infringement shortly after it learned of the allegations over the videos.

Commentary. Some commentary on the opinion suggests that while the court reached the right conclusion, there were several aspects to the opinion that seemed to extend beyond what was necessary to decide the issue. In particular, the suggestion that YouTube’s terms of service universally shield it against a direct infringement claim—even where, as here, the video is used in a different context in which it was originally uploaded—may raise legal as well as practical questions. As Santa Clara University Law Professor Eric Godman notes, “The court seems to be saying that a copyright owner who uploads a video to YouTube essentially waives all infringement claims against YouTube over that video–a potentially massive disincentive for copyright owners to post their works to YouTube. Extending this logic to other services, it seemingly puts copyright owners into a dilemma about where they share their works if they think other users on that service might infringe.”

The Case is No. 1:21-cv-03610-JGK.

Attorneys: Antigone Peyton (Cloudigy Law PLLC) for Business Casual Holdings, LLC. Brian Michael Willen (Wilson Sonsini Goodrich & Rosati) for YouTube, LLC, Google LLC and Alphabet Inc.

Companies: Business Casual Holdings, LLC; YouTube, LLC; Google LLC; Alphabet Inc.

Cases: Copyright TechnologyInternet NewYorkNews GCNNews