DMCA, eCommerce and Videotape

Time-Warner recently announced that it planned to sue YouTube, a very popular site based upon user contributed videos, over copyright infringment.

EFF responded to the annoucement with a statement from senior staff attorney Fred von Lohmann, saying that YouTube should be safe from infringment due to the limitations of liability relating to material online that follows from Digital Millenium Copyright Act (DMCA), § 512, and in particular from the provisions outlined i DMCA § 512(c) (Information Residing on Systems or Networks at Direction of Users).

This is the infamous notice and takedown part of the DMCA. It was originally designed to protect commercial Internet Service Providers (ISPs), which feared they might be held responsible for the illegal material their customers placed online. EFF claims that it makes YouTube (and other online services with user created content) immune to lawsuits as long as they have adequate procedures to follow up notices about copyright infringment in place.

The core of DMCA § 512(c) is made up of three provisions, and to be immune to lawsuits, the site must meet all, i.e.:

  • (A) does not have actual knowledge that the material is infringing or removes it if it finds out that it is;
  • (B) "does not receive a financial benefit directly attributable to the infringing activity, where the service provider has the right and ability to control such activity; and"
  • (C) responds expeditiously to take down infringing material.

YouTube meets provision (A) and (C). But what about provision (B)? YouTube is funded by advertising, and by displaying advertising on its video pages, YouTube does receive a financial benefit directly attributable to the infringing activity. They also obviously have the ability to control this. For instance, they could delay the placement of revenue generating ads until the content had been vetted and found to not constitute copyright infringment.

In the EU a similar provision is found in the eCommerce Directive (2000/31/EC), article 14.

In the EU, an ISP is not liable for illegal user generated content provided that:

  • (A) "the provider does not have actual knowledge of illegal activity or information and, as regards claims for damages, is not aware of facts or circumstances from which the illegal activity or information is apparent; or"
  • (C) "the provider, upon obtaining such knowledge or awareness, acts expeditiously to remove or to disable access to the information."

There is nothing like provision (B) in the DMCA § 512(c) in the European eCommerce legal framework. In Europe, EFF's defence of YouTube should hold up. But I am not so sure about the US.