Focus LOS ANGELES DAILY JOURNAL WEDNESDAY, OCTOBER 4, 2006 PAGE 9

Common Sense Can Help File-Sharing Sites Protect ThemselvesBy Perry Viscounty and Monica Awadalla

Today, young teenagers, col-lege junkies and business professionals alike know

precisely where to turn to receive their daily dose of addictive imag-ery: YouTube.com. Formed in 2005, YouTube has emerged quickly as the most successful video site on

the Internet, c o m m a n d i n g 100 million video viewings per day. In fact, according to Alexa.com, it is the 10th-most-popular Web site on the Internet.

YouTube is an online repository of videos, person-

al skits, short fi lms, news footage, TV clips and much more, providing a virtual playground in which users can upload and download whatever whets their appetites. However, in spite of its rapid success and growing popularity, YouTube soon may fi nd itself in hot legal waters because of a recent complaint fi led by California resident Robert Tur.

As co-owner of Los Angeles News Service, an accredited news reporting organization, Tur is most famous for capturing key news mo-ments. His most famous footage includes the 1994 O.J. Simpson Bronco chase and the infamous Reginald Denny beating during the 1992 L.A. riots. In a complaint fi led in U.S. District Court for the Cen-tral District of California on July 14, Tur alleges that YouTube is guilty of massive copyright infringement by allowing users to upload and download copyrighted material to and from YouTube’s servers with-out gaining prior consent from the copyright owners.

Specifi cally, Tur alleges that his fi lming of the Reginald Denny beat-

ing, a copyrightable expression, has been infringed in excess of 5,000 times by YouTube users.

Tur’s complaint relies heavily on a landmark decision issued by the United States Supreme Court in June 2005 in MGM v. Grokster, 545 U.S. 913 (2005). In a resounding victory for copyright holders, the court held that defendants Grokster and StreamCast could be sued for copyright infringement for encour-aging users to engage in illegal fi le-sharing. So, relying on the theory of copyright infringement espoused in Grokster, just how successful is Tur likely to be in his suit against YouTube?

Notably, the Grokster court barely discussed the technical distinctions among the forms of fi le-sharing. Rather, the opinion focused pri-marily on the defendants’ culpable intent and the steps that were taken to actively encourage copyright infringement through various marketing schemes. The main rule posited by the court was that mere knowledge that some users are us-ing one’s product in contravention of copyright law is insuffi cient to impute liability on the product de-signer. Instead, the plaintiff must show that the defendant took active steps to facilitate the infringement.

Justice David Souter noted that, in its advertising materials, Stream-Cast boasted that its “goal [was] to get in trouble with the law and get sued” and that it served as “the number one alternative to Napster,” the infamous fi le-sharing site that was sued successfully in 2001. Such proclamations left little doubt that StreamCast consciously sought to enlist the support of illegal users through its promotional efforts.

Although judging the merits of Tur’s complaint is premature, YouTube may be able to avoid the very pitfalls that led to Grokster and StreamCast’s downfall. Apart from merely prohibiting users from submitting copyrighted mate-rial in its “Terms of Use” statement, YouTube has adhered to its policy of removing unlawful material on being notifi ed of infringing activity. For instance, following Tur’s July 14 complaint, YouTube promptly com-plied with Tur’s demand to remove his copyrighted video footage and stated that it had not received a re-quest to remove the material before the lawsuit.

Earlier this year, YouTube also

responded promptly to a cease-and-desist letter from NBC executives, who asked YouTube to remove clips from its Saturday Night Live music video “Lazy Sunday.” Interestingly enough, in a move that likely will pay huge promotional dividends for both companies, NBC has since formed an alliance with YouTube, which allows the video-sharing site

to feature an NBC channel that of-fers previews of NBC’s fall lineup. In addition, over the next year, NBC says it plans to upload some of its prime-time and late-night programs on YouTube’s site, including “Satur-day Night Live,” “The Tonight Show with Jay Leno,” and “The Offi ce.”

Although courts have not cre-ated a bright-line rule that places an independent duty to monitor user activity on fi le-sharing sites, entities like YouTube can take sev-eral common-sense steps to protect themselves from copyright liability.

First and perhaps most obviously, fi le-sharing sites should never en-courage copyright infringement by making representations that their

software can be used for illegal pur-poses. The Grokster court pointed out that StreamCast’s advertising methods made it evident that its conscious objective was to capture the market share that was once commanded by Napster — a market share which largely consisted of us-ers who were clearly contemptuous of copyright law. File-sharing sites

should abandon use of any adver-tising materials that actively or impliedly invites users to upload or download copyrighted material.

In addition, sites should consult with intellectual-property attorneys to ensure that their Terms of Use statements and advertising materi-als are free of language that could be construed as encouraging or in any way condoning illegal activity.

Second, fi le-sharing sites should implement a system of controls and mechanisms to fi lter out the use of any copyrighted material. In Grokster, the court found that the defendants’ unlawful objective also could be demonstrated by the fact that neither party developed a

fi ltering mechanism to prevent or stop infringing activity. Thus, fi le-sharing sites would do well to follow YouTube’s example by encouraging users to report unlawful uploading of copyrighted works, responding to such notifi cations by promptly removing infringing material and issuing warnings to infringing us-ers that continued violations will bar them from uploading material in the future.

In contrast to YouTube, Stream-Cast not only declined another company’s offer to monitor

user infringement but also went so far as to block the Web addresses of entities that were monitoring potentially illegal activity. Thus, the Supreme Court reasoned that StreamCast had gone too far in taking active steps to camoufl age indications that copyright violations were taking place. File-sharing sites should leave no doubt that they have made good-faith efforts to implement a monitoring system that prevents and helps diminish the dissemination of copyrighted material.

Third, fi le-sharing sites may seek to reduce their exposure to liability for copyright infringement by complying with the Digital Mil-lennium Copyright Act. Under the act, Congress created certain safe harbors that relieve Internet ser-vice providers from liability for un-knowingly hosting or distributing infringing content. Many believe these safe harbors also extend to protect other service providers that host or permit users to post third-party content on their Web sites. This protection is provided through the Online Copyright Infringement Liability Limitation Act, which is known as the DMCA “takedown” provision.

Under the online infringement act, Internet service providers are given a safe harbor against copyright infringement claims if they act immediately to remove or block access to allegedly infringing content on notifi cation.

Finally, fi le-sharing sites should consider obtaining a license di-rectly from the copyright holder. As the NBC-YouTube deal suggests, such strategic alliances can provide a reciprocal exchange of benefi ts to both the copyright holder and the fi le-sharing site. NBC clearly recognized the advantage of ad-

vertising on one of the most-visited sites on the Internet, while YouTube stated in a June press release, “This partnership provides greater vis-ibility and access to both NBC and YouTube’s audiences, providing both companies with new outlets for growth and opportunity.”

Similarly, on Sept. 18, YouTube announced that it soon will host a library of Warner Music Group’s music videos, behind-the-scenes footage and artist interviews. In exchange for this vast new con-tent, Warner will receive a cut of YouTube’s advertising revenues. This cutting-edge deal is the fi rst of its kind and may signal a paradigm shift in the way global media com-panies view such user-generated sites.

In addition, CBS, which also had requested that YouTube remove clips from one of its programs, recently stated, “Our inclination now is, the more exposure we get from clips like that, the better it is for CBS News.” Although CBS has yet to strike a formal deal with YouTube, we can expect to see more copyright holders following NBC and Warner Music Group’s lead as YouTube continues to dominate the video-sharing market.

The Grokster decision suggests that fi le-sharing sites should refrain from promoting illicit uses of their software, seek to implement fi lter-ing systems that help diminish dis-semination of copyrighted material, comply with the Digital Millennium Copyright Act and strive to forge alliances with copyright holders by obtaining licenses to distribute their protected works.

In contrast to its predecessor en-tities, YouTube has acted prudently in heeding the admonitions of the Grokster court. And while nothing is foolproof until courts provide clear guidelines on a fi le-sharing site’s duty to monitor user activity, the suggestions outlined above will go a long way in demonstrating that a site has taken reasonable steps to avoid liability under the Grokster standard.

Perry Viscounty is a litigation partner in the Orange County offi ce of Latham & Watkins, and Monica Awadalla is a litigation associate in the fi rm’s New Jersey offi ce. Sum-mer associate Abid Qureshi contrib-uted to the article.

Intellectual Property

Write to UsThe Daily Journal welcomes your comments. Please send letters to the editor by e-mail to letters@dailyjournal.com or by mail to Eric Berkowitz, Legal Editor, the Daily Journal, 915 E. First Street, Los Angeles, CA 90012. Please include your name, city and a phone number where you can be reached.

Although judging the merits of Robert Tur’s complaint is premature, YouTube may be able to avoid the very pitfalls that led to Grokster and StreamCast’s downfall.

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