Amici Curiae Brief Filed in Viacom v. YouTube Appeal

In August we reported that Viacom intended to appeal the U.S. District Court ruling in favor of YouTube and Google in the billion-dollar copyright infringement case brought by Viacom (Viacom Appeals Google/YouTube Ruling). As you may recall, the federal court decided YouTube is protected against claims of copyright infringement by the safe harbor provisions of the Digital Millennium Copyright Act. If you have not yet read the original text of the District Court decision, you can read and/or download it from Legal Bytes (Federal Court Awards YouTube Summary Judgment in Viacom Copyright Infringement Case).

Regardless of your perspective, this continues to be a closely watched legal battle, with significant implications in the determinations made by the court – not only because of the stature of the parties, but also because the issues implicate so much of the content-related activity on the Internet and the interpretation of the seminal U.S. statute that applies – the Digital Millennium Copyright Act.

Earlier this week, three academic legal scholars filed a brief in support of the Viacom entities, stating that "the central issue in this case are the legal tests for contributory and vicarious liability for copyright infringement from the use of Internet sites – in this instance, the YouTube site – to reproduce and disseminate large amounts of copyrighted material without authorization from copyright owners." The brief presents interesting and thoughtful insights into the law of copyright and protection of intellectual property rights in this age of digital information and content. If you would like to read the brief, you can download your own copy right here: Brief of Amici Curiae Stuart N. Brotman, Ronald A. Cass, and Raymond T. Nimmer In Support of Plaintiffs-Appellants.

Legal Bytes will continue to monitor developments and post significant materials that we hope will stimulate your thinking, and increase your appreciation of the complexity of the issue and the stakes in this intellectual property battle. If you would like further information, feel free to contact me, Joe Rosenbaum, or the Reed Smith attorney with whom you regularly work.

Viacom Appeals Google/YouTube Ruling

Just over a month ago, Legal Bytes reported [Federal Court Awards YouTube Summary Judgment in Viacom Copyright Infringement Case] that a federal court ruled in favor of YouTube and Google in the billion-dollar case brought by Viacom on a summary judgment motion. The court decided YouTube is protected against claims of copyright infringement by the safe harbor provisions of the Digital Millennium Copyright Act (the “DMCA”).

We also told you that we haven’t heard the last of this case, since immediately after the ruling was announced, Michael Fricklas, Viacom Executive Vice President, General Counsel & Secretary, noted, “This case has always been about whether intentional theft of copyrighted works is permitted under existing law and we always knew that the critical underlying issue would need to be addressed by courts at the appellate levels. Today's decision accelerates our opportunity to do so.”

Consistent with that announcement, Viacom has now filed its notice to appeal in the U.S. Court of Appeals for the Southern District of New York. Many legal scholars feel that in this case, the District Court opinion will be very persuasive; one never knows until the appellate court has rendered its decision. Stay tuned. If you did not read the original District Court decision, you can read and download it through the original posting on Legal Bytes: [Federal Court Awards YouTube Summary Judgment in Viacom Copyright Infringement Case].

Federal Court Awards YouTube Summary Judgment in Viacom Copyright Infringement Case

Yesterday, the federal court hearing the billion-dollar case brought by Viacom against YouTube and Google ruled in favor of Google and YouTube on a summary judgment motion, deciding that YouTube is protected against claims of copyright infringement by the safe harbor provisions of the Digital Millennium Copyright Act (the "DMCA"), since it promptly sought to comply with the DMCA by removing protected content when notified of it.

The federal court held that under the law, if service providers were required to try to determine what content is infringing, or if service providers were held liable because they know infringement is rampant in the industry, or that users routinely post infringing materials, it "would contravene the structure and operation of the DMCA." Only Congress has the power to decide to alter or reallocate the burden of copyright protection from the rights holder (i.e., the copyright owner) to the service provider. In examining that question, the court stated that where such a huge volume of works are posted by others, the service provider "cannot by inspection determine whether the use has been licensed by the owner, or whether its posting” is a "fair use" of the material, or even whether its copyright owner or licensee objects to its posting. The DMCA is explicit: it shall not be construed to condition "safe harbor" protection on "a service provider monitoring its service or affirmatively seeking facts indicating infringing activity . . . ." Under the DMCA, if one has no notice of infringement and innocently publishes infringing content, until knowledge is shown – by "take down" notice or otherwise – a passive service provider platform would generally not be liable for intellectual property infringement.

It's unlikely you have heard the end of this lawsuit. In a statement posted yesterday by Michael Fricklas, Viacom Executive Vice President, General Counsel & Secretary, Viacom noted that, "This case has always been about whether intentional theft of copyrighted works is permitted under existing law and we always knew that the critical underlying issue would need to be addressed by courts at the appellate levels. Today's decision accelerates our opportunity to do so."

You can read and download the court's entire decision right here.

Veoh Vindicated; Vivendi Vanquished. DMCA Rules.

Veoh Networks, which makes both professionally created programming content and entertainment, as well as user-generated content, available through its website, has often lived in the shadow of Google, YouTube, and Apple’s iTunes. Earlier this week, Veoh got a bit of sunshine.

Two years ago, Universal Music Group (a company owned by Vivendi SA), sued Veoh for copyright infringement. The suit alleged that Veoh’s business was essentially based on the infringing use of copyrighted works of others, notably from Universal’s viewpoint, musical groups and artists.

Veoh countered with the fact that it used filtering technology to detect and remove protected content and, in the words of Judge Matz, writing for the U.S. District Court for the Central District of California, when Veoh “did acquire knowledge of allegedly infringing material . . . . it expeditiously removed such material . . .,” vindicating Veoh supporters who have consistently maintained Veoh is protected by the provisions of the Digital Millennium Copyright Act (DMCA). This is the second time the legal sun has shone on Veoh. A similar lawsuit brought by Io Group, an adult entertainment company, was also decided in favor of Veoh last year.

Legal Bytes has previously reported the criteria necessary to comply with the DMCA (you did read that, right?), thus you know that a key requirement for insulation from liability for copyright infringement under the DMCA is the question of whether, when a company becomes aware of infringing content, it promptly removes it from use and display. The California Court rules that Veoh had done just that, and consequently the safe harbor provisions of the DMCA served to protect Veoh from liability in this case. Judge Matz’ order notes: "The DMCA does not place the burden of ferreting out infringement on the service provider". You can read the full text of the Summary Judgment Order of the California Court.

Universal is expected to appeal, claiming the Judge’s order fails to adequately take into account Universal’s claim that everyone connected with Veoh must have known about rampant infringement and that alone should sustain the ‘knowledge’ which would remove the shield from their entire business model – a shield otherwise available to web hosting companies. However, it may well be an uphill battle since the Court specifically addressed this issue, noting “If such general awareness were enough to raise a 'red flag,' the DMCA safe harbor would not serve its purpose".

If you are concerned you don’t know enough about digital rights management; compliance with the provisions of the DMCA; about liability applicable to website owners and operators or the rights available to content owners, the Advertising Technology & Media group at Reed Smith is for you. Try us. You might like us. Feel free to call me or, if you are already a client, call the Reed Smith attorney with whom you regularly work. 

Facebook Adds Personalization & a (Brand) New Dimension?

On Tuesday, June 9, the popular social networking website, Facebook, announced that on Saturday, June 13 at 12:01 a.m. U.S. EDT, it will allow its registered users, subject to certain criteria and qualifications, to create personalized URLs for profiles and pages on Facebook (e.g., http://www.Facebook.com/insertyournamehere.   Currently, a user’s Facebook URL consists of the Facebook.com URL followed by numbers (e.g., http://www.facebook.com/profiles.Php?349485).

Allowing users to register personalized names on the web raises, among other things, infringement issues under federal and state trademark and related intellectual property laws, particularly for owners of well-known brands. Any registration process creates fears of cyber squatting and other attempts to hijack trademarks and brand names. Sometimes these fears are well founded; other times they are not. You may have already received bulletins from law firms and bloggers eager to alert you to the fact that Facebook has also announced it has created an online submission form that allows owners of registered trademarks to notify them of their IP rights. Ostensibly, Facebook intends to use the information submitted to preclude others from attempting to use registered marks in personalizing their URLs on Facebook.

While we applaud advising clients and friends of this development, we believe the matter is considerably more complicated than previous briefs and hasty reports may indicate. As is so often the case, the devil is in the detail, and the information below will give you a deeper look at the issues before racing to submit notifications of your IP rights to Facebook.

What Brand Owners Need to Know

The online form created by Facebook for submissions by registered trademark owners allows submission of only one trademark registration at a time, and it is not clear whether your notification will protect only the exact registered mark or variations (subtle, phonetic or otherwise). While URLs are not case-sensitive, trademark owners are painfully aware that "case" is not the most frequent problem encountered when protecting one's brand names and intellectual property rights.

Facebook is limiting the "initial" URL registration period, beginning June 13, (a) to individual users who already had a user profile page prior to the June 9 announcement and (b) to administrators of Facebook Pages (i.e., Facebook pages owned by businesses, public figures, brands and artists) that were live prior to May 31, 2009 and that had at least 1,000 fans at that time. If your Facebook account does not meet these requirements, you have to wait until June 28 to register a personalized URL.

The submission form appears to apply only to registered trademarks, and the owner (or the owner’s authorized representative) is asked to include the registration number on the submission form. While state and foreign registrations are not addressed (either on the form or in the FAQs provided by Facebook), presumably any bona fide registration number in the field could suffice—but that is neither clear nor certain.

Facebook has given trademark owners a very short window of opportunity to provide advance notification to Facebook of their IP rights. If a trademark owner has not done so by end of the day Friday, June 12, presumably any qualified user can register a personalized Facebook URL using a brand owner's mark. Facebook also has indicated that personalized user/page URLs will not be transferable and can be removed or reclaimed by Facebook at any time—further measures Facebook can take to prevent abuse. These mechanisms, procedures and buzz aside, owners give up no legal rights by not submitting forms to Facebook in advance, and Facebook already has a form to use to report infringements after an alleged violation occurs, even if one hasn’t provided advance notification. FYI, allegations of copyright infringement can be dealt with by submitting another form provided by Facebook that applies to "take down" notices under the Digital Millennium Copyright Act (DMCA).

The $64,000 Question

If you are a trademark owner, should you submit forms and notify Facebook of your rights, or wait to assert claims if and when infringements occur? This is not an easy question to answer.

First, you are under no obligation to do anything, nor does this feature mean that if you do nothing, you are somehow giving up your legal rights. By failing to notify Facebook, a trademark owner does not waive any rights to its intellectual property otherwise provided by law. It simply means that a trademark owner may have to do what intellectual property rights-owners do all the time—enforce its intellectual property rights after an infringement has occurred.

Second, while the notification form doesn’t indicate that the submitter is agreeing to any terms and conditions, nor does it require being a registered user to submit a  notification form—either before or after—one might conjure up a legal argument that by voluntarily submitting a form (where one has no legal obligation to do so), one is agreeing to use the procedures and accept the terms and conditions that apply—at least insofar as one’s dealing with Facebook in connection with handling these matters and enforcing one’s rights (e.g., if the owner has an issue with Facebook in dealing with brand name and trademark issues).

Take one example: What if Facebook simply does nothing with your notification? After all, there is no legal obligation imposed on Facebook to police your marks. What if one year from now, Facebook opts to impose a charge for maintaining or registering personalized URLs? Facebook's terms of use (referred to by Facebook as the "Statement of Rights and Responsibilities") provide exclusive venue for claims or disputes against Facebook in the courts in Santa Clara County, Calif. Could an argument be made that you may now have consent to that jurisdiction exclusively? If you don't have to face such an argument, a trademark owner is clearly free to proceed in virtually any competent jurisdiction in the United States, including the trademark owner’s home state. Whether that is an advantage or not is debatable, but it—like many other issues that arise from such voluntary submissions—is an unresolved issue. Bottom line, you have no duty to act, nor does failing to act deprive you of any of your legal rights. But if you do act, some lawyers may be able to claim that your actions have implications and consequences. 

On the other hand, if a brand owner or its authorized licensee currently has a Facebook Page, it is already subject to Facebook’s terms and conditions. Under such circumstances, notifying Facebook of your rights using the form may be the easiest way to avoiding a needless intellectual property battle that will most certainly cost more than the time spent completing a form.

The Evolution of Brands into Social Networks and Media

Facebook is adding another dimension to social networking—allowing personalization of pages while seeking to develop mechanisms to deal with brands and brand owners. Facebook users interact with brands as well as people. The personalized URL launch is another example of the convergence of interactive advertising, social networks and intellectual property protection. While Facebook’s latest offering may be the next evolutionary step forward, it may also be a passing fad. Time will tell. But one thing is certain:

If you are a brand owner with trademark registrations, you need to consider all of the issues before blindly jumping on anything that appears simple and easy, but that may have unforeseen consequences (and costs).

If you need to know more or if you have any questions, contact me through my website page, by email, or by following me on Twitter, or contact Keri Bruce at kbruce@reedsmith.com, Douglas Wood at dwood@reedsmith.com, Carl Pierce at cpierce@reedsmith.com, Adam Snukal at asnukal@reedsmith.com, Greg Shatan at gshatan@reedsmith.com or Tracy Zurzolo Quinn at tquinn@reedsmith.com. Of course, if they aren't among the names above, you can always contact your favorite Reed Smith attorney who will be more than happy to help you.

Parallel Universe Spawns Parallel Legal Woes

You knew it had to happen, but are still surprised when it does. In what may be a first-ever, a lawsuit has been filed against a defendant that doesn’t really exist, over a non-existent furniture line. Yes, you guessed it, a bed with special embedded animations that allow participants in Second Life, the virtual reality world established by Linden Labs, to essentially recreate an adult film with their virtual persona—avatars.

For the past few years, Second Life’s approach to IP protection has been to allow players to keep rights to programs, animations and objects they create—although many of the tools (programming scripts, etc.) are Linden’s and are provided to enable players to build things in this virtual world. Much like user-generated content in the world of multimedia audio-visual works, creativity and innovation is creating virtual content by the boatload and creating virtual objects and businesses is not simply a recreational pastime, but also a source of entrepreneurial glee and money for many. Clothing, real estate, automobiles, virtually (pardon the pun) anything, becomes the object of virtual purchases, sales and licensing.

Well, the law has caught up with reality. One player, whose avatar is selling virtual items under the brand “SexGen” bed, is suing another avatar for selling fakes for less—undermining the business. Since you have no obligation to disclose your true identity in Second Life, who do you sue? Well, first you try to get information from Linden, presumably because their computers house the underlying registration and information that would disclose who is behind the knock-offs. But, if the alleged infringer has not registered a real name, credit card or other “real world” items to enable identification, you might only get an IP address.

So we’ll keep you posted on developments, but who knows where this will go. Will a court entertain the case? Will they discover the identity of the alleged infringer? Will copyright infringement principles apply in a virtual world? Perhaps the plaintiff will try to enjoin Linden from allowing or enabling the fake products, or send them a virtual Digital Millennium Copyright Act (“DMCA”) “take-down” notice.

Strange But True Courtroom Tales--Google Loses Round 1

Move aside file-sharing, user-generated content, and DMCA “take down” notices for copyright infringement; here come the trademark and brand protection lawyers taking on Google again. Just this month, a Federal Court in the Northern District of California refused to dismiss charges brought by American Blind & Wallpaper Factory (yes, they sell window blinds) that Google is illegally selling American Blind’s trademark as a keyword that consequently triggers sponsored links to competitors’ ads when they do a “Google” search. As you know, selling keywords is a huge source of revenue for Google, and the judges’ refusal to grant Google a summary judgment dismissing the case breathes some new trademark life into an old story. Google had argued its AdWords program is not a “use” of trademarks of others in “commerce” within the meaning of the federal law that regulates trademarks—the Lanham Act. In asking the court to dismiss the case, Google relied on two federal cases in the Southern District of New York.

In one case, the court held that unless the trademark was placed on the goods or their packaging or in advertisements, if the search word was invisible to the public—it wasn’t being “used” in the trademark sense and therefore wasn’t infringement. In the second case, Merck claimed that an online pharmacy infringed Merck’s trademark: it bought the keyword “Zocor”—a drug manufactured by Merck—and was using it to generate advertising and sponsored links to the online pharmacy’s generic version of that drug. The court analogized the use of a keyword to private thoughts or mental categorization, and upheld the pharmacy’s right to buy the word from Google for search purposes.

The court in California distinguished these cases from those decided in New Jersey and some unreported decisions emanating from Delaware and Minnesota, where search engines were considered to be infringing when they sold trademark keywords to competitors, noting that these transactions were trading on the value of a company’s trademarks—thus prohibited. Stay tuned. Round 2 is coming up.