Appeals panel reverses key decision in copyright infringement fight

Viacom won a victory in its $1 billion suit against YouTube, after a federal appeals court ruled that a jury should be allowed to hear whether the online video site should be held liable for tens of thousands of clips from “The Daily Show,” Paramount movies and other Viacom properties posted on its site.

YouTube and its parent, Google, claim that it is protected by the Digital Millennium Copyright Act’s “safe harbor” provision, which shields sites from liability for infringing content if they don’t have actual knowledge of infringing activity. That is a key point for user-generated sites, who are responsible for taking down copyrighted material upon notice from a content owner.

The 2nd Circuit Court of Appeals, in a ruling issued on Thursday, said that U.S. District Judge Louis Stanton “correctly held” that liability “requires knowledge or awareness of specific infringing activity,” but they said that a jury should decide whether YouTube had “actual knowledge or awareness of specific infringing activity on its website.”

In 2010, Stanton granted summary judgment to YouTube in a decisive ruling that Viacom and other media congloms said put an undue burden on copyright owners to traffic the Internet to spot pirated clips.

Viacom claimed that YouTube had liability because it had knowledge that infringing activity was taking place on its site, particularly in the time before Google acquired them for $1.76 billion in 2006.

The appellate court also held that Stanton, in deciding YouTube’s liability, erred by interpreting the “right and ability to control” infringing activity to require “item-specific knowledge.”

A spokesman for Viacom said in a statement, “We are pleased with the decision by the U.S. Court of Appeals. The Court delivered a definitive, common sense message — intentionally ignoring theft is not protected by the law.

But a spokeswoman for YouTube said that the 2nd 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 world.”

The decision was issued by circuit judges Jose Cabranes and Debra Ann Livingston. Judge Roger Miner also was assigned to the panel, but died in February.

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