A mixed ruling from the Second Circuit Court of Appeals has reversed in part a June, 2010, judgment in favor of YouTube in a lawsuit filed by Viacom. That lower court decision had been appealed by Viacom International Inc, The Football Association Premier League Ltd. and an array of television networks, movie studios, sports leagues and music publishers after YouTube Inc., YouTube LLC, and Google, Inc. prevailed in 2010 and the full decision in the latest twist in the case can be read here.

In 2010, a federal district court in New York heard arguments regarding claims of direct and secondary copyright infringement, based on the display, public performance and reproduction of 79,000 clips on YouTube put up between 2005 and 2008.  In its June 23 ruling, the district court granted summary judgment on all claims, finding the defendants had safe harbor protection under the Digital Millennium Copyright Act (DMCA), 17 U.S.C. § 512.

The appellate judge were asked to clarify the contours of the DCMA’s “safe harbor,” especially limits on the liability of online service providers (OSPs) for copyright infringement, occurring “by reason of the storage at the direction of a user of material that resides on a system or network controlled or operated by or for the service provider.” 17 U.S.C. § 512(c). Plaintiffs had sought statutory damages under 17 U.S.C. § 504(c), or in the alternative, actual damages from the claimed infringement, as well as declaratory and injunctive relief.

On April 4, the appellate court:

(1)  Affirmed.  The district court’s interpretation that, rather than the red flag “objective” knowledge provision, it is the “subjective” actual knowledge or awareness of facts or circumstances that indicate specific and identifiable instances of infringement that will disqualify a service provider from “safe harbor,” under 17 U.S.C. §512(c)(1)(A).

(2)  Vacated and Remanded.  The June, 2010, summary judgment for YouTube was deemed premature because a reasonable jury could conclude YouTube had actual knowledge of specific infringing activity or was at least aware of facts or circumstances from which infringing activity was apparent, under §512(c)(1)(A)(i)-(ii).  As a result, especially absent detailed examination of the extensive record, the lower court was instructed now to determine if YouTube had knowledge or awareness of any specific instances of infringement corresponding to the clips in suit.

(3)  Remanded.  The lower court was instructed now to consider, in appropriate circumstances, applicability of the common law “willful blindness” doctrine, specifically, whether the defendants made a “deliberate effort to avoid guilty knowledge” to demonstrate knowledge or awareness of specific instances of infringement, under §512(c)(1)(A).

(4)  Reversed and Remanded.  The district court was told it erred in its view of “item-specific” knowledge of infringement in its interpretation of the “right and ability to control” infringing activity, under 17 U.S.C. §512(c)(1)(B), insofar as it rests on that erred construction of the statute.  The lower court was told, instead, to consider further fact-finding on the issues about the control provision, which departs from the common law vicarious liability standard, as well as the financial benefit directly attributable to the infringing activity.

(5)  Affirmed and Remanded.  The district court was upheld in ruling that three of the challenged YouTube software functions — replication, playback and the related video feature — occurred “by reason of storage at the direction of a user” within the meaning of 17 U.S.C. §512(c)(1). But the lower court was instructed to consider further fact-finding about the software function involving syndication of YouTube videos to third parties.

Viacom’s response, HollywoodReporter.com reports was: “We are pleased that the U.S. Court of Appeals has vacated and remanded the district Court’s ruling … This balanced decision provides a thoughtful way to distinguish legitimate service providers from those that build their businesses on infringement.  The court delivered a definitive, common sense message to YouTube — intentionally ignoring theft is not protected by the law.  We are confident we will prevail when the merits of our case are heard.”

YouTube issued an emailed statement, The1709blog.blogspot.com reports, saying: “The Second Circuit has upheld the long-standing interpretation of the DMCA and rejected Viacom’s reading of the law.  All that is left of the Viacom lawsuit that began as a wholesale attack on YouTube is a dispute over a tiny percentage of videos long ago removed from YouTube.  Nothing in this decision impacts the way YouTube is operating.  YouTube will continue to be a vibrant forum for free expression around the word.”