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The Law of Content Sharing: YouTube and Beyond

The following is the introduction to my article, “The Law of Content Sharing: YouTube and Beyond,” published last year, available through the Institute of Continuing Legal Education (or just contact me and I’ll send you a copy):

With the advent and popularity of websites such as YouTube, Flickr, MySpace, and most recently Microsoft’s Soapbox, more and more entrepreneurs are looking to develop their own social, content-sharing websites with dreams of vast advertising revenue or, better yet, Google-sized buyouts. But, while this emerging online industry has many notable success stories, and a growing legion of followers, it has also caught the attention of content owners who claim that these websites permit and facilitate massive infringement of their copyrighted works.

Even so, the large media companies have largely refrained from launching all-out litigation war against these websites. In the case of Google, owner of YouTube, the company has successfully struck deals with several major media companies, sharing advertising revenue in exchange for licensing agreements. In other instances, media companies may purposefully look the other way, since these sites provide free and valuable exposure for their content, which in turn generates a larger audience, and, in the case of video content, more advertising revenue for their commercial broadcasts.

Google was unable to strike deals with all of the major studios, however, and on March 13, 2007, after negotiations between the companies ended, Viacom filed a lawsuit against Google and YouTube, seeking damages and an injunction to stop alleged infringement of Viacom’s video content. In the suit, Viacom accuses YouTube of using its technology to “willfully infringe copyrights on a huge scale…and profiting from the illegal conduct of others as well.”

YouTube and other content-sharing websites have consistently claimed that they qualify for protection from liability because they remove copyrighted content from their sites immediately upon the request of copyright holders. YouTube is relying on the so-called “notice-and-takedown” procedures in the Digital Millennium Copyright Act of 1998 (the “DMCA”), an important part of the Act’s “safe-harbor” provisions, which were designed to protect access providers, search engines, web-hosting services and others from liability for copyright claims, if they qualify.

But do sites such as YouTube in fact qualify for protection under the DMCA’s safe-harbor provisions? The DMCA is highly technical and was drafted in a much earlier age of the Internet, primarily to protect Internet service providers like AOL. Viacom and other content owners claim that it is inappropriate to apply the safe-harbor provisions of the DMCA to companies like YouTube, since they derive a substantial economic benefit from pirated content on their systems, and because they are in a better position than large Internet service providers to police or filter out such content. On the other hand, if YouTube and similar websites do not qualify for protection under the DMCA, they are almost certainly liable for copyright infringement under theories of secondary liability, particularly vicarious liability, expanded by courts in the recent line of music-file-swapping cases, most notably the Napster , Aimster , and Grokster cases. If so, much of this social, content-sharing ecosystem may well disappear.

Assuming Viacom’s lawsuit is not merely an attempt to improve its bargaining position with Google, this could be the first major case to test the DMCA’s safe harbor provisions. Content-sharing websites and their legal counsel should watch closely. In the meantime, legal counsel should advise clients carefully in the art of complying with the DMCA in order to take advantage of its protections, for as long as they may last.

UPDATE: Viacom’s lawsuit is still ongoing. In July of this year, Viacom won a ruling that ordered Google to hand over sensitive data regarding the video-watching habits of YouTube users, igniting privacy concerns.