Viacom, YouTube lawsuit heats up

New documents raise issues in legal tangle

With the release of a trove of candid and even cringe-worthy emails and documents, Viacom on Thursday claimed that YouTube knew full well that much of its content violated copyright but instead turned the other way, seeking to boost traffic on its site and the value of its company.

But in defending itself in Viacom’s $1 billion federal copyright infringement suit, YouTube countered that Viacom sought to benefit from the user-upload site’s promotional value, posting its own clips on the site even as it complained of pirated material.

And in some cases, YouTube says, Viacom’s marketers secretly deployed third parties to post videos from Paramount and other subsidiaries in an effort to make it look as if its content was gaining grassroots popularity. Moreover, YouTube points to documents that showed that Viacom wanted to buy YouTube or to enter into a content partnership, only to file suit when no agreement was struck. Google bought the company for almost $1.8 billion in 2006.

Undoubtedly, both sides would have preferred to keep some of this material private. However, when both sides filed for summary judgment, U.S. District Judge Louis Stanton ordered that the documents had to be released, as they would be cited in the filings.

Viacom’s suit, filed in 2007 in a New York federal court, highlights the extent to which, just a few years ago, old media grappled with how to embrace new media and at the same time ensure that its content could be protected.

The heat on YouTube, however, has diminished in recent years as the site has deployed more sophisticated technology to identify copyright abuses.

In seeking damages from YouTube, Viacom is attempting to show how its founders, almost from it start in 2005, recognized the potential liability for posting pirated content yet largely disregarded those concerns, knowing that the site depended on premium videos — as opposed to the homegrown content featuring favorite pets or curious stunts — for traffic.

In a March 5 motion for partial summary judgment, Viacom said the YouTube founders saw that its success hinged on building a business “based on piracy,” and that they “cast a blind eye to and did not block the huge number of unauthorized copyrighted works posted on the site.”

Moreover, they say Google was aware of the perils of featuring pirated content on its own video site before it bought YouTube, but “abandoned its scruples in order to continue growing the YouTube user base until well into 2008.” It also said YouTube had its own fingerprinting and filtering technologies to block pirated works, but “engaged in a form of high tech extortion” by refusing to apply the technology to protect Viacom content unless Viacom first agreed to license its clips to the site. “If you were not willing to give them your content for nothing, they were going to keep stealing,” Michael Fricklas, Viacom’s executive vice president and general counsel, told Daily Variety on Thursday.

Viacom points to a wealth of emails it says shows that YouTube’s founders were aware of the “knowledge of and intent to benefit from massive copyright infringement on YouTube.”

In a July 29, 2005, email about competing video websites, YouTube co-founder Steve Chen wrote to co-founders Chad Hurley and Jawed Karim, “steal it!” Hurley responded: “hmm, steal the movies?” Chen replied: “we have to keep in mind that we need to attract traffic. how much traffic will we get from personal videos? remember, the only reason why our traffic surged was due to a video of this type. . . .viral videos will tend to be THOSE type of videos.”

In another email, Chen warns Karim to stop posting videos himself on their site over fears that they could be held liable. Chen wrote to Karim, “jawed (sic), please stop putting stolen videos on the site. We’re going to have a tough time defending the fact that we’re not liable for the copyrighted material on the site because we didn’t put it up when one of the co-founders is blatantly stealing content from other sites and trying to get everyone to see it.”

YouTube says the email referred to a viral video about aviation, and that Viacom took it out of context to bolster their case.

YouTube claims it was well within the “safe harbor” provisions of Digital Millennium Copyright Act, where service providers must remove pirated material when notified of their existence and location on their site. In its own motion for summary judgment, YouTube said the “safe harbor” was intended to give “copyright holders a quick and efficient way to stop any misuse of their content, while protecting service providers against the fear of crushing liability that

could stifle technological innovation and free speech.”

In a blog post, YouTube’s chief general counsel, Zahavah Levine, said Viacom sought to benefit from YouTube’s popularity by posting its own content on the site, “even while publicly complaining about its presence there.” Some of the most frequent clips posted include content from Comedy Central shows like “South Park” and “The Daily Show With Jon Stewart.”

YouTube cited evidence gathered in the suit’s discovery process, including email in which a Paramount marketing executive gives instructions for the uploading video for “Disturbia” that “should definitely not be associated with the studio” and “should appear as if a fan created and posted it.”

Levine wrote that Viacom “deliberately ‘roughed up’ the videos to make them look stolen or leaked. It opened YouTube accounts using phony email addresses. It even sent employees to Kinko’s to upload clips from computers that couldn’t be traced to Viacom. And in an effort to promote its own shows, as a matter of company policy Viacom routinely left up clips from shows that had been uploaded to YouTube from ordinary users.”

He added, “Given Viacom’s own actions, there is no way YouTube could ever have known which Viacom content was and was not authorized to be on the site.”

In fact, YouTube’s filing characterizes Viacom’s policies as ever-changing when it came to seeking whether to order unauthorized clips be taken down or left as they were, to benefit from the exposure.

“The legal rule that Viacom seeks would require YouTube — and every Web platform — to investigate and police all content users upload, and would subject those web sites to crushing liability if they get it wrong,” Levine wrote.

Fricklis, however, challenged those assertions, contending that the Viacom-uploaded clips are a “few hundred clips out of 63,000,” and have been removed from those at the crux of the suit. He called YouTube’s argument a “smokescreen which has nothing to do with the case,” noting that the Kinko’s incident was “one case where a video was uploaded out of 63,000.”

Since the suit was filed, YouTube has put in place more advanced filtering technology called Content ID, which scans copyrighted video that can then be matched against clips on its site as a way of detecting infringing content. The filtering has gained studio acceptance, and YouTube has signed numerous revenue-sharing deals with other media outlets.

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