subscribe to this pagePeter Fader of Wharton called the agreement between Warner Studios and YouTube, which allows Warner music videos to be played on YouTube in return for a portion of the ad revenue, the "single biggest business development deal in the history of digital media". Internet mogul and Dallas Mavericks owner Mark Cuban, on the other hand, believes that YouTube will ultimately have the same fate as Napster and be crushed by copyright lawsuits. The real answer may lie somewhere in the middle.
The article mediates a debate between naysayers, such as Cuban, and optimists, like Fader, over what the fate of YouTube will be. Cuban states that YouTube is "in the same boat as Napster". He argues that although YouTube may do a lot of good things for copyright holders, such as the promotional benefits, it will not be enough to make every single copyright holder happy. Cuban notes that it would only take one successful lawsuit against YouTube to bankrupt the company. Fader, on the other hand, suggests that the Warner deal could lay the groundwork for future deals between YouTube and other major Hollywood studios. His prediction seems to be right on the money. Since this article was published, YouTube has made agreements with CBS, the NHL, NBC, and most notably, Universal Studios, which had previously been YouTube's most outspoken critic.
Also discussed is the significance of the agreement between Warner and YouTube. Fader notes that this agreement represents a sort of paradign shift, mentioning that Warner took a completely opposite stance when it was fighting Napster in court. Also, the agreement sets a trend for other companies to follow suit. This prediction by Fader was also proven true with the new YouTube agreements mentioned earlier. Fader also predicts that these deals will allow YouTube to "call the shots" in the video industry, much the same way Google runs the search industry.
The debate in this article is the fundamental issue regarding YouTube and its legitimacy. It is important for YouTube to secure protection from copyright lawsuits, and they seem to be doing that with recent agreements and their willingness to takedown copyrighted material. However, Cuban's view does hold true that one lawsuit could cripple the company, and that lawsuit could be Tur v. YouTube. The ruling of this case and others like it may ultimately determine YouTube's future.
Brian P. Wilkner discusses in this article the effects of the Sony v. Universal and MGM v. Grokster on the newest batch of cases that will "pit mainstream, consumer-participation-oriented companies against copyright owners". The article gives background information on both the Sony and Grokster cases and talks about the contributory liability doctrine, and how the Sony decision limited the power of this doctrine by stating that Sony's VCR had significant non-infringing uses. On the other hand, it noted the Napster and Grokster cases which found each music file sharing company guilty of copyright infringement, and therefore were illegal. Napster's fatal flaw, writes Wilkner, was the fact that they had a centralized indexing system that gave the creators of Napster too much knowledge of what was actually being shared on their website. Grokster attempted to circumvent this problem by creating a decentralized index which "deprived their creators of any knowledge of infringing activity". The Supreme Court ultimately ruled against them, saying that companies that distribute a device with clear intentions of promoting copyright infringement were illegal, and that Grokster's claim that they were unable to stop copyright infringement from taking place demonstrated an "unlawful objective". One of the interesting tidbits about the Grokster case was that the court did not rule on the limits of the Sony decision, as many court observers thought they would.
Wilkner then goes on to talk about "inverse Grokster scenarios", which he says will "pit content owners against legitimate organizations seeking to capitalize on the demand for interactivity". Companies like Google, MySpace, and YouTube, he states, will not make statements or take actions to promote copyright infringement, but will maintain day-to-day operations with the knowledge that some copyright infringing content is being viewed or placed on their sites. This is in direct contrast with Grokster, which claimed ignorance by stating it was unaware of any infringement taking place on its site. The article ends with Wilkner proposing a "test" of the inverse Grokster dilemma in which the courts will have to decide whether the public benefit from these sites outweighs the property rights of copyright holders.
Tim Wu in this Slate article describes in detail the differences between YouTube and Napster and why he believes that YouTube has very solid legal footing. Wu simply says the YouTube has a safe harbor provision in the DMCA protecting them, while He also describes the "Bell lobbyists" and how their efforts set the foundation for YouTube's seemingly successful business model.
The Bell lobbyists, Wu writes, fought one of the greatest copyright struggles in history when it took on Hollywood over the liability of internet companies for copyright infringement. Wu describes the clash of these two entities as "Frazier meeting Foreman", saying that the unstoppable force that was the Hollywood lobbying team finally met an immovable object in the Bell lobbyists. Hollywood, on one side, wanted internet sites to be responsible for all content on their site, even if they were unaware of the infringing content. The Bell lobbyists insisted that this was ludacris and fought against Hollywood's lobbyists with all their political might. A stalemate insued, so a compromise was reached. Wu writes that this compromise would later become Title II of the DMCA, which states that companies are protected by a "notice and takedown" system. This means that all a site has to do to comply with copyright laws is take down infringing material at the request of the copyright holders. Therefore, YouTube only needs to quickly takedown any material after notified to avoid legal issues.
Wu does mention that this provision is not 100% "air-tight" noting that if YouTube knows there is infringing material on its site and fails to act, it may be liable in court for the infringement. Wu then describes the difference between Napster and YouTube, saying that if the Internet were a red-light district, Napster would be the "pimp" and YouTube the "hotel". He says that while Napster, like a pimp, is a means of getting illegal things and nothing else, YouTube is like the hotel in that they only "provides the space for people to do things, legal or not".
This document was posted on Mark Cuban's website blogmaverick.com. Cuban claims that this is the actual filing of the case Tur v. YouTube, and judging from the legal jargon and very deliberate format, there seems to be little reason to deny that this is the actual filing.
The document states that on December 4, 2006, the case Robert Tur v. YouTube will be heard in United States District Court of Central California. The introduction states that "there can be no doubt that serious and repetitive infringements of Tur's copyrighted works are displayed...on YouTube on a daily basis." It also states that YouTube's main defense is the Safe Harbor Act in the DMCA, which they say protects them because they immediately remove copyrighted content at the owner's request. The summary of Tur's claim states that YouTube does not qualify for the Safe Harbor provision because they make money "in the form of banner advertising directly attributable to the infringing video clips." The article then goes on to list the details of the case, which basically state that five clips copyrighted by Tur are being shown on YouTube illegally. It also states that Tur is seeking roughly $150 million in damages, or $150,000 for each illegal viewing of his clips.
The decision in this case will be absolutely essential to the future of YouTube as a legitimate business. While YouTube has helped solve many of their copyright issues with big name studios through recent revenue sharing agreements, a decision favoring Tur in this case would open the door to more lawsuits from small copyright owners. This case will also test the legitimacy of YouTube's safe harbor defense. Without the safe harbor provision, YouTube is an illegal company. If this court's decision and later decisions eventually change the validity of that provision, or convinve Congress to do so, YouTube may be completely out of luck. However, a win in this case would put YouTube on solid legal footing behind this Safe Harbor Defense.
Michael Liedtke writes in this article about the recent lawsuit brought against Google involving Google's online video service and whether or not the lawsuit is a sign of more copyright issues to come for Google's newest addition, YouTube. He writes that content owners may only be biding their time until the Google acquisition of YouTube is finalized. At that point, a number of lawsuits may be filed against YouTube by copyright holders.
Google launched its online video service this January. Since then, Liedtke writes, they have been desperately trying to catch up to YouTube, created a year earlier by two Pay Pal employees in California. However, Google has "abandoned its attempts to catch YouTube", and instead just purchased the company for a cool $1.65 billion. The issue with the acquisition, Liedtke explains, is that copyright holders can now sue YouTube with expectations of a large payout, now that they are backed by the immense capital possessed by Google. Liedtke notes that before the deal with Google, YouTube "had been subsisting on $11.5 million in venture capital". Google itself has $10.4 billion- in cash. Google itself has acknowledged the fact that it could face more copyright lawsuits because of YouTube.
Liedtke also talks about the widely circulated internet rumor which said that Google had set aside $500 million in case copyright issues came up after the purchase of YouTube. The number was later confirmed to be $200 million by Google representatives. Eric Schmidt, Google's CEO, continues to remain confident amidst the fears of lawsuits. He said that YouTube has "been on this path" referring to copyright issues, and that together they could solve these issues "more quickly".
Investors also seem to be unfazed by copyright concerns over YouTube. Liedtke points to the fact that Google has a lot of experience in copyright cases and has yet to been dealt a serious blow. Google's stock has risen nearly 15% since the purchase of YouTube.
This is a copy of the lawsuit Universal filed against MySpace on November 17, 2006, in the United States District Court of Central California. In the suit, Universal claims that MySpace is guilty of copyright infringement. Universal claims that the songs and music videos shown on MySpace are done so illegally and without permission from copyright holders. Universal uses Jay-Z as an example in their case against MySpace, saying that songs from his new CD, "Kingdom Come", are available on MySpace even though, at the time the suit was filed, the record had not been released. Universal says that MySpace is well aware of the copyright laws that it is breaking and continues to support the "user-stolen"content distributed on the site. They also say that MySpace knows that they don't have a liscense from the copyright holders of the songs and videos it distributes. The proof, says Universal, lies in the agreement each MySpace user makes with the site that gives MySpace control over what can be done with the content. Universal says that MySpace knows that these are not the real copyright holders, and yet continues to show infringing content without permission.
This case is extremely relevant to the YouTube copyright discussion. First off, it could convince MySpace and other similar sites to follow YouTube's lead and strike revenue sharing deals with major studios. The YouTube business model would then be seen as a blue print for similar companies, and this in turn would help shield YouTube and other sites from future lawsuits. However, this case could end up hurting YouTube. Universal claims that since MySpace edits and posts much of the content on the site, they are knowingly infringing upon the copyrights of the videos and songs available on their site. Although YouTube's users do much of the posting and editing, YouTube itself still edits user content. If the courts buy Universal's arguments, YouTube could be in grave danger of future lawsuits.
Amanda Bronstad in this article writes about the differences between the copyright infringement cases that ultimately doomed music file sharing sites like Napster and Grokster and the current batch of cases involving video sharing sites like YouTube. On one side of the argument, video sharing sites say that a major percentage of their content is perfectly legitimate and legal. Also, these sites, especially YouTube, point out that they remove content considered to be copyright infringing immediately after they are notified by the copyright holder. This did not happen with music file sharing sites. However, lawyers for Hollywood's major studios say that their case is bolstered by the fact that they now have a precedent in MGM v. Grokster. They argue that web sites know they make money off of this infringing material, and therefore are liable for induced infringement. They also say that video sharing sites may be considered direct infringers because of the role these sites take in editing user content.
Bronstad also notes that while the recent agreements between YouTube and major studios such as Universal, Warner, and CBS does help legitimize the site, the agreements aren't necessarily "suit proof". She says that many experts in the field see a major gray area that could be exploited by an ambitious company or law firm. She says that the debate will ultimately come down to the DMCA's "safe harbor provision", and whether or not these video sites have put in place and enforced rules to protect themselves from future legal issues. She says that the strongest safe harbor these companies have is the ability to remove copyright infringing material from their sites. If sites continue to consistently remove copyright infringing content, as YouTube has done over the last few months, then these companies will have a strong legal foundation for their business models.
This article from the New York Times describes in detail the legal issues that Google deals with on a regular basis. Katie Hafner, who wrote the article, notes that any company that is large, successful, and has deep pockets, all qualities of the search engine giant, will attract lawsuits. Yet she says that Google "invites" lawsuits because of the company's "rush to create innovative new services. Professor Jonathan Zittrain of Oxford University is quoted in this article as saying that Google's strategy seems to be "just do it, and consult the lawyers as you go". He sees this as an offshoot of the late 90's internet boom culture which promoted new ideas and technology at the expense of possible legal trouble.
With Google's recent purchase of YouTube, many believe that the company is "exposing itself to a new spate of lawsuits". Hafner points out the fact that much of the content on YouTube is copyrighted material just copied and illegally posted, as well as the lawsuit filed against YouTube by Robert Tur, which Google will now have to deal with. However, Google has plenty of experience in copyright fights, and seems ready for the challenge.
Hafner spends the rest of the article detailing the reason's behind Google's aggressive policies toward fighting litigation and some of the most well known copyright and trademark cases involving YouTube. She first notes that Google now has a team of over 100 lawyers, stationed both overseas and in the United States, many of which are experts on intellectual property law. This team works tirelessly to fight nearly every single lawsuit filed against Google. They do this because, one, Google wants to set a good legal foundation for itself, and winning cases certainly does this. Also, any lawsuit that gets to the pre-trial fact finding phase, writes Hafner, would "pose the danger of revealing too much about Google's propriety technology"
The rest of the article deals with Hafner describing the Geico case against Google, in which the courts ruled in Google's favor, and the lawsuits brought up by the French and Belgian press. The Belgian case is extremely relevant to copyright law, with Google claiming that headlines are not copyrightable, while the Belgian media thinks otherwise. A Belgian court ruled in favor of the media outlet in September, yet it remains to be seen whether or not this ruling will have an effect on Google in the United States.
This article is important in the YouTube discussion because it points out one of Google's great advantages when dealing with copyright issues- Google has tons of experience in this area. Google's executives and lawyers both know what to expect in the upcoming lawsuits, and they firmly believe that they have a solid defense. Google would not have purchased YouTube if they had not been confident in the company's legality.
Stephen Speicher discusses YouTube's place in the fair use discussion, and how the debate over YouTube could help and answer the "age-old question: What is fair use?". He first comments on YouTube's amazing rise to stardom, becoming the number one internet video service just a year after its conception. Speicher explains that YouTube's success stems mostly from its ability to allow users to post videos and view them. He also points out that while much of YouTube's traffic comes from views of homemade, legal, amateur content, a large bulk of the videos posted on the site are copyright infringers and, therefore, illegal.
While many of these videos containing copyrighted content are direct copies and obviously illegal, many of the videos show short news clips from cable television, sitcom or clips of sporting events and other public gatherings. These "tightly-edited clips", argues Speicher, can be seen as reporting or educational, and therefore within the limits of fair use. He uses the example of someone blogging about the officiating in the NBA playoffs, saying that while it would be possible to describe each play in detail and then give the thumbs up or down on the refs call, it would be much more practical just to show the clip of the play itself to illustrate your point. He also mentions the fact that YouTube is positioning itself to be at the heart of this debate by "distancing themselves" from complete works (The ten minute limit on clips is a good example of this).
This fair use argument, while it isn't YouTube's major defense mechanism (that would be the Safe Harbor provision in the DMCA), can help bolster the case for YouTube as a legitimate company. If YouTube can convince the courts that these clips are fair use, it would eliminate a significant portion of the clips now considered illegal on the site. With more legal videos, YouTube can make the Sony argument, saying that their company has substantial non-infringing uses. This precedent has been in place for twenty years and would put YouTube on very solid legal ground.
Cox describes the deal struck between Warner and YouTube. Warner agreed to post its entire catalog of music videos on the site, while YouTube agreed to share any ad revenues gained from these videos, as well as the "65,000 daily submissions which incorporate Warner music." The CEO of Warner is quoted in this article as saying basically that technology is changing and that Warner needs to adapt to these changes. The article also brings up some of YouTube's arguments on why their business model is legal, while Napster's was not. YouTube's founders argue that, unlike Napster, the site knows exactly what material is being posted and that they are willing to take down any material that infringes upon copyright. The article also notes that YouTube is a great place to publicize videos, TV shows, songs, and other forms of entertainment. Cox points to the example of "Lazy Sunday", a Saturday Night Live skit that became immensely popular because of YouTube and led to a resurgence in Saturday Night Live's ratings.
One of the interesting things about this article is that, although it was only written about two months ago, it is already very outdated. It talks about the problems companies encounter when suing YouTube, noting that the company doesn't really have millions in capital to sue for. That is no longer the case after Google's $1.6 billion aquisition of YouTube. It also quotes a Universal representative as saying that YouTube infringes on copyright and is an illegal site. This is no longer Universal's position, being that they, like Warner, recently reached a revenue sharing agreement with YouTube. This article demonstrates how quickly YouTube is moving in its attempts to be seen as a legitimate, legal business.