Deathmatch: DMCA and Grokster

A steel cage deathmatch in the world of copyright law is shaping up. The combatants, the DMCA and the Grokster v. MGM ruling, may soon be duking it out in a way never intended

The rules are practically nonexistent, the outcome anything but certain and the prize will be a great gem on the Web, the fate of YouTube.

Most frightening of all is that the effects of the match, should it take place, will likely have wide ranging effects for Webmasters, bloggers and others across the world.

The Combatants

The DMCA (PDF) was a law passed in 1998. Though it has many interesting and controversial parts, the one that is relevant here is the safe harbor provisions.

It was those provisions that granted prevented Web hosts from being held liable for copyright infringement by their users so long as they met certain requirements, including the expeditious removal of infringing material after notification.

Grokster v. MGM was a 2005 United States Supreme Court ruling that put forth guidelines for when the owners of a technological innovation or product could be held liable for infringement by its users.

It put forth a so-called “inducement test” that stated that they could be held liable if they distribute “a device with the object of promoting its use to infringe copyright“.

They are the two current powerhouses of U.S. Copyright Law when it comes to secondary liability and they provide two very different standards. Howver, since they’ve covered different territory, they have yet to really be put head to head.

Now, however, it appears that a collision course may be inevitable.

The Fight

Theoretically, the two sides could have lived in peace for all eternity. The DMCA applied to a very specific definition of a Web host and Grokster applied to most other products and services. The problem is that YouTube, and sites like it, are a little bit of both.

YouTube certainly has a hosting element, but it also has a software element. It converts videos into a format that can be easily streamed as well as means to embed the video into almost any kind of site.

The question, now that YouTube has started facing copyright infringement lawsuits, becomes “Which law determines their liability?”

Judging from YouTube’s strict compliance with the DMCA notice and takedown provisions, it appears that YouTube believes that it is the DMCA. Internet entrepreneur Mark Cuban, on the other hand, disagrees.

According to Cuban, the conversion of the file combined with the way it progressively downloads the file to the computer makes YouTube more than just a host. Though there’s no clause in the law itself that prevents hosts from modifying files, something Cuban indicates, it is indeed clear that the DMCA never had a host like YouTube in mind.

Grokster, on the other hand, almost certainly applies. YouTube as a service enables the downloading and sharing of files (YouTube stream downloads files to the computer), what the original Grokster case was about.

It’s easy to see how both Grokster and the DMCA could apply to YouTube very easily and, possibly, they could draw two different conclusions. In that case, one of the two would be weakened severely and the fate of YouTube, and nearly every other similar site, would be affected drastically.

Possible Outcomes

As I see it, remembering that I am I not a lawyer, there are several possible outcomes to this metaphorical deathmatch.

1. YouTube Fails DMCA Safe Harbor: The Mark Cuban’s of the world might have their prophesy fulfilled and you tube be found ineligible for safe harbor protection. If that is the case, the fight is averted as they are liable for the infringements they host. Grokster need not enter the equation.
2. YouTube Passes Safe Harbor, Passes Grokster: If you tube passes safe harbor, it may also pass Grokster. If the lawyers are unable to prove that you tube engaged in an “affirmative act” to encourage copyright infringement, Grokster will likely not apply and no conflict takes place.
3. YouTube Passes Safe Harbor, Fails Grokster: This is the nightmare scenario that pits the two against one another. If the courts decide that you tube is indeed enough of a host to pass safe harbor but enough of an application or tool to have Grokster apply and it then fails the test. There are three outcomes and the decision will likely depend on the question: Is you tube more of a host or more of a service?
   1. DMCA Gains Favor: If you tube is found to be more of a host, it will likely be found not to be liable. This would impact all Web-based services and might give way to a new kind of file sharing. It would also, very likely, prompt lawmakers to revise the DMCA.
   2. Grokster Gains Favor: If you tube is found to be more of a service (beyond just a host), YouTube might be held liable under Grokster and its related rulings. This would force similar services to move many of their functions off their servers, perhaps by having users encode their own files before upload.
   3. A Split Decision: It is possible that the courts could punt on the issue and hold YouTube liable, though not as liable as they could. The impact on this would depend largely on the amount of money involved and the wording of the decision.

While all of the decisions are certainly within the realm of possibility, and none are particularly pleasant, one stands out to me personally as the most likely.

Prediction

Keeping in mind, again, that this is just my on-lawyer input and that it could be completely wrong, especially once high-priced lawyers get a hold of the case, I do have something of a prediction.

First, I do think that YouTube is covered unde the DMCA. There is no requirement in the DMCA for a host to not manipulate the files uploaded to it, just that they have no advance knowledge of the infringement, remove infringing works when notified, not profit directly from the infringement and provide “storage at the direction of a user”.

The weakest link in the DMCA argument appears to not be the encoding or downloading of the content, but their monetization of it. However, if YouTube is held liable for that so could Myspace or any other free host that uses ads. A paid host wouldn’t benefit from the infringement, but the sign up of the account.

If they do pass the DMCA test and the Grokster statute is applied, they will likely pass the Grokster test. They are aided by their marketing, (Being named Youtube and having the slogan “Broadcast Yourself”) and the fact that the majority of YouTube videos do not violate copyright. Furthermore, many of those do use copyrighted material raise possible fair use issues as they are so short.

It would seem to be very hard to prove that YouTube made an Affirmative Act to induce infringement. The one wild card is YouTube’s business model, something that bloggers and the mainstream media have been guessing about for months now. Though it might not play a role in a Grokster “inducement” case, it might play a role in a vicarious liability one. However, even that is a long shot since it requires that one shows YouTube had the ability to supervise and control the infringement.

If it does come down to a conflict, in YouTube’s case, it seems likely that they would be classified as a host because the hosting is the critical element of their service. However, it will be a tough case as many will wonder just how useful YouTube would be without its conversion and streaming tools.

Is this a slam dunk? Not by a long shot. Things change and my interpretation of the law isn’t the one that is important here. It’s just what I see and think based upon what both sides have said and what I’ve read in the law. Many smart people disagree with me and have good reason to. It may very well come down to exactly how good YouTube’s lawyers really are.

Personally, I wouldn’t bet against YouTube. But I wouldn’t spend over one and a half billion to buy them out either. Even if YouTube wins, its business will likely be hampered greatly.

Implications

The reason that all of this is important to the rest of us is because the fallout it has will likely affect everyday Webmasters beyond just those that use YouTube.

• Any similar service, including any other Web host that also provides conversion or other automated tools to make content more accessible, will be affected as well. This might result, in the long run, in some hosts putting more of their services on the user’s computer.
• If the situation is not resolved favorably to the powers that be, new legislation may be forthcoming. If the major copyright holders don’t feel their rights are being protected, they will push for revisions to the DMCA that may drastically affect how everyone protects their content.
• Since the Web is becoming more service and widget oriented, the status of these new services in the eyes of the law will be crucial.
• If the DMCA is significantly broadened or weakened, it will directly impact all copyright holders, especially since Grokster doesn’t put forth any hard rules for notice and takedown, just the possibility for liability.
• Depending on the outcome, it may make Web hosts less likely to proactively search for infringing material as doing so may hurt their standing the DMCA. To them, complete ignorance might be the only defense.
• Public opinion surrounding whatever decisions are made will likely spill over to affect all content creators trying to protect their content. As the battles with the RIAA have shown, many do not make a distinction between a record label stomping on file sharers and a lone blogger dealing with a plagiarist – both are trying to protect the same thing, copyright.

In short, the outcome of this potential showdown could determine the fate of much of the Web for years to come. It’s something that every content creator needs to follow as, just like in a regular war, the collateral damage is often the worst.

Conclusions

This is a war to watch, not just because it’s close and potentially exciting, at least as exciting as any legal duel can be, but also because it will likely touch all of us in some way.

If you create content or use it, you need to be aware of copyright law and the things that affect it. This is clearly on the list.

 

Tags: Content Theft, Copyright, Copyright Infringement, Copyright Law, DMCA, Plagiarism, Youtube, Grokster