IP Law Daily, COPYRIGHT—S.D. Fla.: Notice and ‘take-down’ prevails over notice and ‘stay-down’, (May 19, 2023)

By Matthew Hersh, J.D.

A Florida magistrate judge reiterates that YouTube is not required to actively monitor its network for infringing material.

YouTube was protected by the Digital Millennium Copyright Act against a claim that it contributed to infringement by its users even though it had available, but did not use, content identification technology capable of detecting infringing content, a magistrate judge in Miami has found. The federal magistrate, in a report and recommendation that remains subject to further review by the judge overseeing the case, emphasized in his opinion that the copyright owner’s complaint “runs headlong against a brick wall erected by the DMCA” (Athos Overseas Limited Corp. v. Youtube, Inc., May 16, 2023, Torres, E.).

The lawsuit was brought by a movie producer who owns, through a Panamanian entity that he controls, the rights to hundreds of classic Spanish language films that have been uploaded and displayed on YouTube without his prior authorization. When the producer complained, YouTube offered to deploy on his behalf a technology called Content ID that would be capable of automatically detecting pirated movies and then either sharing the revenues with him or, if he preferred, simply taking those movies down. However, YouTube refused to deploy this service unless he agreed to waive all liability for past claims of piracy. When the producer declined the offer, he lost the option of Content ID and was instead forced to use YouTube’s “self-monitoring” procedure—a burdensome process, he alleged, that requires hiring third parties to monitor YouTube for piracy and send takedown notices one by one.

The producer brought a complaint against YouTube that alleged, in a wide array of counts, various claims of copyright infringement, DMCA violations, and antitrust violations. In a March 2022 ruling, the court dismissed the antitrust claims. YouTube then moved for summary judgment on the copyright infringement claims based on the DMCA safe harbor provision, leading to this recommendation.

Actual or red flag knowledge. The magistrate recommended that the motion for summary judgment be granted. Under the DMCA, the magistrate noted, the safe harbor does not apply to ISPs who have actual knowledge of infringement or knowledge “of facts or circumstances from which the infringing activity is apparent,” or so-called “red-flag knowledge.” The producer contended that YouTube should be charged with knowledge of each and every infringing upload because it has automated software capable of detecting those uploads. But that argument failed, the magistrate concluded.

The argument failed, the magistrate explained, because persuasive authority from both the Second and Ninth Circuits made clear that the term “knowledge,” as used in the DMCA, applied only to “knowledge of specific and identifiable infringements.” In this case, the magistrate noted, every time YouTube was presented with a specific claim of infringement, it moved expeditiously to take the infringing work down. The producer argued that YouTube was required to use its filtering system not only to take down those works, but to use its filtering system to prevent them from being later uploaded. But the producer “runs headlong against a brick wall erected by the DMCA that plainly does not require YouTube to do so,” the magistrate noted. Whatever the merits of such a rule, the magistrate explained, Congress made “calculated choices” in the DMCA’s enacted text not to put such a burden on content host. Thus, “while Plaintiff would like for this court to substitute the existing DMCA ‘notice and take-down’ regime for an amorphous ‘notice and stay-down’ mandate,” the magistrate found, “we cannot do this just because it makes sense from a copyright holder’s perspective.”

With the content ID system taken out of the equation, the magistrate emphasized, the producer’s claim of knowledge failed on an evidentiary basis. The record was “entirely devoid of evidence establishing that YouTube acquired knowledge of infringement relative to any of the particular clips-in-suit here,” the magistrate noted. The producer argued that once YouTube had taken a particular video down in response to a DMCA claim, it effectively had knowledge, through its Content ID software of the infringing nature of that clip from the moment it was reuploaded. But all the software was capable of doing was identifying suspected infringement as opposed to certain infringement, the magistrate noted, which was “why users, not YouTube, are required to make all determinations as to the infringing nature of software selected matches.” Moreover, the magistrate noted, there was nothing in the record suggesting that any YouTube employee had specific interaction with the clips involved in this lawsuit. Thus, the producer’s claim based on the knowledge prong of the DMCA failed.

Financial benefit and ability to control. The magistrate also rejected the producer’s argument that YouTube was ineligible for the safe harbor because of its ability to control its users’ infringing activity. Under the safe harbor provision, the magistrate noted, an eligible service provider “must 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.” But the producer could not defeat the safe harbor ground on this ground either, the magistrate noted.

The fundamental flaw in the producer’s argument, the magistrate found, was that it conflated the common law concept of vicarious liability with the higher threshold established by the DMCA. Under common law vicarious liability doctrine, the magistrate noted, a service provider’s ability to terminate users after they engaged in infringing behavior could be enough to meet the “right and ability to control” prong. But such a rule would be “inconsistent with the text and purpose of the DMCA,” the magistrate observed, as the purpose of the Act was to provide service providers with a safe harbor that went above and beyond common law protections. Nor did it matter, the magistrate found, that the service provider had available but did not implement content identification technology. “Congress did not intend for companies such as [YouTube] to be penalized when they engage in voluntary efforts to combat piracy over the Internet,” the magistrate noted.

Nor had the producer managed to create a genuine dispute over whether YouTube received a financial benefit that was “distinctly attributable to the infringing material at issue,” the magistrate held. To be sure, YouTube earned revenue from some infringing material on its website—as with many other uploads. But of the clips involved in the lawsuit, the evidence showed, 91% of them generated no advertising revenue. Moreover, the magistrate noted, there was “no evidence that YouTube encourages infringement on its website, or that YouTube promotes advertising by relying on infringing material.” This challenge to the safe harbor therefore also failed.

The Case is No. 1:21-cv-21698-DPG.

Attorneys: Natalie A. Ferral (Dorta & Ortega PA) for Athos Overseas Ltd., Corp. David T. Coulter (Stearns Weaver Miller Weissler Alhadeff, Sitterson, P.A.) for YouTube, Inc.

Companies: Athos Overseas Ltd., Corp.; YouTube, Inc.

Cases: Copyright TechnologyInternet FloridaNews GCNNews