Weekly Update

Viacom Goes It Alone

One of the most overlooked aspects of Viacom’s copyright litigation against YouTube and its successor, Google, is who was not party to the case.

Viacom picked up a few co-plaintiffs, such as the English Premier League, after filing the suit in 2007, but no other major studio, nor the Motion Picture Association of America, formally joined the litigation. The other studios signed onto amicus briefs in support of Viacom’s position, but that’s a far cry from becoming named plaintiffs in the case and sharing in the costs of the litigation.

Even the reactions by other studios to the case being dismissed on summary judgment have been muted. A pro forma statement deploring the ruling was issued by Arts + Labs, a semi-obscure think tank and lobbying group based in Washington, DC and largely funded by the studios. The Directors Guild of America condemned the case, but individual studios, apart from Viacom, have said little. Even the MPAA is yet to issue a formal press release on last week’s ruling.

The silence is telling. After all, it’s not as if the likes of News Corp., Time Warner or NBC Universal have been gun-shy in the past about bringing copyright infringement actions. The fact that they sat this one out, both individually and collectively through the MPAA, suggests division within the ranks as to the wisdom of bringing the case and over how best to deal with the likes of YouTube.

That division is likely based as much on business considerations as legal ones. Unlike Viacom, most of the other studios have agreed to cooperate with YouTube, providing reference files for its Content ID filtering system and developing business rules around the use of their content on the site. They may not love it, but they’ve judged they have more to gain (or at least less to lose) by cutting a deal with YouTube than from going to court.

Viacom disagrees. It argued in a statement following the ruling that YouTube only began filtering its site after it was sued for infringement, and that in any case, a studio should not first have to sign a licensing deal with YouTube and agree to cooperate before the web site will apply its filter to the studio’s content.

If it’s ultimately a question of leverage, however, the outcome has only made things worse for Viacom. The YouTube case now joins a string of cases in which courts have refused to impose filtering or other procedural requirements on online service providers beyond those spelled out in the safe harbor provisions of the DMCA. The string began with Perfect 10 v. CCBill in 2007 and continued through Io Group v. Veoh (2008) and UMG v. Veoh(2009). And with each successive ruling, content creators’ leverage with online distributors grows weaker.

One big question going forward is how much support Viacom will get from the other studios as it appeals last week’s ruling to the Second Circuit Court of Appeals. The ruling greatly reduces an online service provider’s incentive to filter copyrighted content from its site. Under the logic of the ruling, and those that preceded it, the less direct knowledge a service provider has of the content on its web site or network, the lower its liability.

As even Cary Sherman, president of the Recording Industry Association of America (which also sat out the suit) acknowledged to the Hollywood Reporter, “At a time where there is more talk about service providers becoming proactive in the course of their normal routines, this opinion comes along and says you can be willfully blind.”

Another unfavorable ruling, from the powerful Second Circuit, would only compound the damage.

It’s unlikely, of course, that YouTube would abandon its filtering system at this point. It’s too keen to get more premium content on its site to risk alienating the studios. But once again, that’s a business issue, not a legal one. As it should be.

Question of the week

Do you agree with the court’s ruling in Viacom vs. Google?