Informationoverlord

The Ninth Circuit Court of Appeal has vacated Mattel’s hard-won injunction on behalf of its Barbie doll, finding the remedy imposed by the District Court too broad.

In 2008, Mattel won a lawsuit claiming MGA had infringed its copyright and breached a contract because the designer of Bratz dolls was still under contract to Mattel when he developed the Bratz concept for MGA Entertainment, the makers of the rival (and currently more popular) Bratz doll range. A jury awarded Mattel $100 million.

Mattel had argued that Carter Bryant had come up with the Bratz dolls concept when he was working for Mattel. He left Mattel in or around 2000 for MGA and shortly after his move, MGA had started marketing the Bratz doll. MGA had argued that the Bryant had created the concept during a period of time when he was not working for Mattel. However, this argument fell by way side during the original case and Mattel convinced a federal jury that the employee conceived the Bratz idea whilst in its employ.

In April 2009, a federal judge upheld the jury verdict and imposed a constructive trust over all trademarks including the terms “Bratz” and “Jade,” essentially transferring the Bratz trademark portfolio to Mattel.

The Ninth Circuit has now ruled the District court erred in making this decision. “It is not equitable to transfer this billion dollar brand— the value of which is overwhelmingly the result of MGA’s legitimate efforts—because it may have started with two mis-appropriated names. The district court’s imposition of a constructive trust forcing MGA to hand over its sweat equity was an abuse of discretion and must be vacated. ” The Court pointed out that evebn the jury seemed to grasp this point when it awarded Mattel only $10 million, or about 1% of $1 billion it sought, because it found only a small portion of the Bratz dolls infringing.

The Court also took issue with the District Courts decision prior to trial, to find that Bryant’s employment agreement assigned his ideas to Mattel, and so instructed the jury. The Ninth Circuit judges however concluded that whilst the agreement could be interpreted to cover ideas, and a Mattel executive claimed during her deposition that it was common knowledge in the design industry that terms like “invention” and “design” did include employee ideas, the text doesn’t compel that reading and other Mattel employee contracts actually specified that ideas were covered.

Bryant’s 1999 employment agreement, which provides: “I agree to communicate to the Company as promptly and fully as practicable all inventions (as defined below) conceived or reduced to practice by me (alone or jointly by others) at any time during my employment by the Company. I hereby assign to the Company . . . all my right, title and interest in such inventions, and all my right, title and interest in any patents, copyrights, patent applications or copyright applications based thereon.” (Emphasis added.) The contract specifies that “the term ‘inventions’ includes, but is not limited to, all discoveries, improvements, processes, developments, designs, know-how, data computer programs and formulae, whether patentable or unpatentable.”

The court also found that the phrase “at any time during my employment” is ambiguous stating that it could easily refer to the entire calendar period Bryant worked for Mattel, including nights and weekends – or just working hours. The District court erred in deciding there was no ambiguity. It also erred in affording broad protection against substantially similar works to the original sculpt of the dolls; and whilst it didn’t err in affording the doll sketches broad copyright protection against substantially similar works, it did err in failing to filter out all the unprotectable elements of Bryant’s sketches – “Mattel can’t claim a monopoly over fashion dolls with a bratty look or attitude, or dolls sporting trendy clothing—these are all unprotectable ideas… This error was significant. Although substantial simi-
larity was the appropriate standard, a finding of substantial similarity between two works can’t be based on similarities in unprotectable elements. ”

The Court concluded ” On remand, Mattel will have to convince a jury that the agreement assigned Bryant’s preliminary sketches and sculpt, either because the agreement assigns works made outside the scope of employment or because these works weren’t made outside of Bryant’s employment. And, in order to justify a copyright injunction, Mattel will have to show that the Bratz sculpts are virtually identical to Bryant’s preliminary sculpt, or that the Bratz dolls are substantially similar to Bryant’s sketches disregarding similarities in unprotectable ideas.”

“Because several of the errors we have identified appeared in the jury instructions, it’s likely that a significant portion—if not all—of the jury verdict and damage award should be vacated, and the entire case will need to be retried.”

This has always been an interesting case and it looks like we set for several more years of it. A reading of the judgment gives hope to both sides. The court doesn’t say that Mattel has lost the case, but more that the District Court ignored too many ambiguous aspects of the case, resulting in an overbroad finding against MGA.

Well it’s the funkalistic, / the blunt I twist it - Cypress Hill - ‘I wanna get High’

It’s not often that the right to go into a ‘coffee shop’ and spark up a joint comes before the courts, but at this very moment the judges at the European court of Justice are faced with just that question.

Advocate General (AG) Bot of the European Court of Justice has proposed the full court agree that the decision of the Dutch municipality of Maastricht to prohibit the admission to ‘coffee shops’ of anyone who is not a Dutch resident is legal. No, seriously, this is a real case.

Maastrict passed rules that reserved admission to the coffee shops to residents of the Netherlands only, and when one coffee shop owner, Mr Joseman got busted a couple of times for having non-residents in his shop – partaking of his wares – he was closed down –albeit temporarily. Mr Joseman decided to appeal against the decision and the Raad van State (Council of State, the Netherlands) decided to refer the question of whether European Union law precludes rules which prohibits admission to coffee shops of persons not resident in the Netherlands to the ECJ.

Mr Joseman argued that the ban on non-dutch customers was in conflict with the guarantee under the EU treaty on the free movement of services (Article 56 TFEU). The freedom prohibits restrictions on free circulation of services within Member States. Services are defined in the negative, “they are normally provided for remuneration, in so far as they are not governed by the provisions relating to freedom of movement for goods, capital and persons.” (Art. 57 TFEU) Services include those activities of “a commercial character.”

However, aaccording the AG Bot drugs, including cannabis, are not goods like others and their sale does not benefit from the freedoms of movement guaranteed by European Union law, in as much as their sale is unlawful (though tolerated by the authorities in the Netherlands. Possession is, however, lawful). As such, he decided that the measure adopted by the municipality of Maastricht does not fall within the scope of the freedom to provide services – regardless of the fact that the coffee shop also sells coffee and cakes etc.

He also added that the Schengen Agreement between France, Germany, Belgium, Luxembourg and the Netherlands which aimed to eliminate border checks between the countries also did not preclude the measures, especially as EU law allows Member States to determine measures necessary for maintaining public order within their borders and drug tourism represents a genuine and sufficiently serious threat to public order in Maastricht, that the measure to exclude of non-residents from coffee shops is necessary to protect the residents of the municipality from trouble caused by that phenomenon.

This would be interesting if other dutch municipalities followed suit.

An Advocate General`s opinion is persuasive, but not binding on the ECJ, which will issue its judgment in due course.

There’s a stain on my notebook where your coffee cup was / And there’s ash in the pages - Squeeze ‘Coffee in Bed’

“So fuck the FCC / Fuck the FBI /Fuck the CIA / Livin in the motherfuckin USA” - Steve Earle – F the CC

The U.S. Court of Appeals for the 2nd Circuit in New York has ruled that the U.S. Federal Communications Commission’s (FCC) indecency policy is unconstitutionally vague and could create a chilling effect beyond “fleeting expletives” heard on broadcasts.

The case deals with an appeal by Fox (and several other broadcasters) against the FCC’s expansion of its rules – made in March 2004 - to deal with obscenity and indecency in Television (and the special addition of profanity as a separate category of proscribed speech under the law)

The same court, in 2005, ruled by 2-1 that that “the FCC’s new policy regarding “fleeting expletives” represents a significant departure from positions previously taken by the agency and relied on by the broadcast industry. We further find that the FCC has failed to articulate a reasoned basis for this change in policy. Accordingly, we hold that the FCC’s new policy regarding “fleeting expletives” is arbitrary and capricious under the Administrative Procedure Act. The petition for review is therefore granted, the order of the FCC is vacated, and the matter is remanded to the Commission for further proceedings consistent with this opinion”.

At that time the Court first pointed to the Supreme Court decision in Pacifica (1978) that the FCC could, consistent with the first amendment’s right to free speech, regulate indecent material, but emphasised the limited nature of the ruling saying it did not ’speak to cases involving the isolated use of a potentially offensive word in the course of a [radio] broadcast ‘

When the FCC reversed its initial decision not to sanction NBC for the broadcast of Bono saying “really fucking brilliant” at the 2003 Golden Globes the Commission it moved away from this position stating: “While prior Commission and staff have indicated that isolated or fleeting broadcasts of the “F-Word” such as that here are not indecent or would not be acted upon, consistent with our decision today we concluded that any such interpretation is no longer good law”

The 2nd Circuit argued ruled the FCC had failed to show why this was no longer good law and what had changed to warrant this new position on ’single’ fleeting expletives. The case was appealed to the Supreme Court who reversed this decision by a 5-4 margin stating that: “None of the Second Circuit’s grounds for finding the FCC’s action arbitrary and capricious is valid.
First, the FCC did not need empirical evidence proving that fleeting expletives constitute harmful “first blows” to children; it suffices to know that children mimic behaviour they observe. Second, the court of appeals’ finding that fidelity to the FCC’s “first blow” theory would require a categorical ban on all broadcasts of expletives is not responsive to the actual policy under review since the FCC has always evaluated the patent offensiveness of words and statements in relation to the context in which they were broadcast. The FCC’s decision to retain some discretion in less egregious cases does not invalidate its regulation of the broadcasts under review. Third, the FCC’s prediction that a per se exemption for fleeting expletives would lead to their increased use merits deference and makes entire sense.”

The Supreme Court however, refused to rule on the constitutionality of the rules, absent a ruling on that subject by the Second Circuit, so sent the case back to New York for examination of the constitutional issues. The 3 Judge panel has now done so an unanimously concluded “We now hold that the FCC’s policy violates the First Amendment because it is unconstitutionally vague, creating a chilling effect that goes far beyond the fleeting expletives at issue here”.

What is an unconstitutionally vague law/rule? According to US law something is impermissibly vague if it does not “give a person of ordinary intelligence a reasonable opportunity to know what is prohibited” In this case the broadcaster argued the FCC’s indecency test was not one that made clear what was prohibited. They pointed to the Supreme Court’s decision to cut down the Communications Decency Act in Reno v ACLU where the law was found unconstitutionally vague with its use of general undefined terms such as ‘indecent’ and ‘patently offensive’, must also apply here where the identically used terms are applied.

The Court found there was additional guidance that meant the Reno decision in and of itself didn’t mean they should find against the FCC. However it did find the indecency policy impermissibly vague, pointing out that according the FCC ‘Bullshit’ – as used in an episode of NYPD Blue is indecent because it is ‘vulgar, graphic and explicit’, but ‘dickhead’ was not indecent because it was ‘not sufficiently vulgar, explicit, or graphic.’ No explanation is provided as to why, for example multiple occurrences of variants of the word ‘Fuck’ are not indecent and profane in Saving Private Ryan, but were in musical documentary The Blues.

The Court summed its vagueness argument by pointing to the FCC’s own lawyer during oral arguments whose answer to a question on whether a discussion programme dealing with the dangers of pre-matital sex aimed at teenagers would be permitted under the FCC rules replied ‘I suspect it would’. It followed this observation by listing programmes that had not been broadcast or rebroadcast and scripts that had been changed in fear of failing foul of the FCC rules.

The court concluded: ” the absence of reliable guidance in the FCC’s standards chills a vast amount of protected speech dealing with some of the most important and universal themes in art and literature. Sex and the magnetic power of sexual attraction are surely among the most predominant themes in the study of humanity since the Trojan War. The digestive system and excretion are also important areas of human attention. By prohibiting all “patently offensive” references to sex, sexual organs, and excretion without giving adequate guidance as to what “patently offensive” means, the FCC effectively chills speech, because broadcasters have no way of knowing what the FCC will find offensive. To place any discussion of these vast topics at the broadcaster’s peril has the effect of promoting wide self-censorship of valuable material which should be completely protected under the First Amendment.”

The FCC can appeal the ruling to either the full court of the 2nd Circuit or take the case back to the Supreme Court. It could also just choose the rewrite its indecency rules, and then – in all likihood – end up starting this process again with new challenges to its constitutionality. I feel it is unlikely to do the latter until a decision is handed down in a loosely related case being played out in the 3rd Circuit court in Philadelphia over the infamous 2004 Super Bowl halftime show, in which CBS broadcast the ‘wardrobe malfunction’ which saw one of Janet Jackson’s breasts was exposed for about half a millisecond. An appeal to the full 2nd Circuit and/or Supreme Court seems more likely, although in both cases I think the broadcasters will succeed.

Porn publisher Perfect 10 has been back in court again. After failed attempts to get the courts to rule that Google, Amazon, Microsoft and others infringed their copyright by offering thumbnail copies of the images – usually uploaded or stored on other people’s websites, they have now failed in an attempt to get an injunction against German file-hosting service Rapidshare.

Perfect 10 claims by hosting copies of their content on their servers they are directly infringing their copyright, violating their distribution rights, and are additional guilty of contributory infringement.

Users of Rapidshare can upload files to the site and get an url which they can use to share access to that content with friends etc. Rapidshare does not offer a search facility or offer an index of files stored on its servers.

The District Court for Southern District of California found that as Rapidhsare did not make files available and index them in a manner that would make searching for content useful, it is not like Napster or other p2p services and is therefore not making infringing material available in the same way, and the court “declines to hold Rapidshare liable for direct infringement on a theory of deemed distribution.”

The Court did find that Rapidsahre had specific knowledge of direct infringement by some of its users – due to being contacted by Perfect 10, however the court found rapidshare was not contributorily liable because far from the evidence showing that rapidshare was doing nothing to address to presence of this content on its servers but that “[r]ather, the evidence suggests that RapidShare is using information provided by Plaintiff to locate and remove infringing materials, and is also taking independent steps to identify, locate, and remove infringing files.”

The Court did however say that rapidshare could not currently rely on any DCMA safe harbor protection as it yet to give the US copyright office specific information regarding its designated agent as specified in the legislation.

On Perfect 10’s claim that without injunctive relief, it will be forced into bankruptcy - an argument it used in its case against Google too, If I rememer rightly - Judge Huff responded that the evidence before her didn’t back up this claim and actually showed Perfect 10’s “apparent lack of interest in self-help measures and its delay in bringing this action.” Ouch. The motion for preliminary injunction was denied

In an interesting - and long running - trademark dilution case, the US Court of Appeal has held that the use of the name “Victor’s Little Secret” or “Victor’s Secret” by a small retail store in a mall in Elizabethtown, Kentucky, owned by Victor Moseley, that sells assorted merchandise, including “sex toys” and other sexually oriented products, because it is sex related — disparages and tends to reduce the positive associations and the “selling power” of the “Victoria’s Secret” trademark.

The case is of interest because the US Supreme Court has already reversed a previous opinion of the same Court, in this same case the first time the appeal court affirmed an injunction against “Victor’s Little Secret” issued by the District Court. The Supreme Court held that a trademark owner had to show “actual harm” rather than merely a “likelihood” of harm, and Victoria’s secret had failed to do so.

On remand to the District Court from the Supreme Court after the 2003 reversal, no new evidence was introduced, and the District Court reconsidered the case based on the same evidence but under the Trademark Dilution Revision Act of 2006 – which amended the Federal Trademark Dilution Act of 1995, on which the first case was decided.

The new act’s language – introduced as a result of this case introduced new standards for measuring trademark “dilution by tarnishment” specifically that the standard for proving a dilution claim is “likelihood of dilution” and that both dilution by blurring and dilution by tarnishment are actionable.

Using this new standard, and Congress’ implied intention to reduce the burden of proof on a trademark holder, the Appeal court stated the phrase “likely to cause dilution” used in the new statute significantly changed the meaning of the law from “causes actual harm” under the pre-existing law. Therefore it held that even without any evidence that any consumers felt that “Victor’s Little Secret” tarnished Victoria’s Secret, the law should now be should now be interpreted to create “a kind of rebuttable presumption, or at least a very strong inference, that a new mark used to sell sex-related products is likely to tarnish a famous mark if there is a clear semantic association between the two.”

In her dissent of the majority opinion, Judge Moore stated that whilst she agreed there is a clear association between the two marks, the important point was whether that association is likely to harm Victoria’s Secret’s reputation. On the evidence before the court she found that Victoria’s Secret presented no probative evidence that anyone is likely to think less of Victoria’s Secret as a result of “Victor’s Little Secret” and cannot therefore prevail on its claim of dilution by tarnishment.

I’m with Judge Moore on this one. It is hard to see how one shop – now operating under the name Cathy’s Little Secret – is going to tarnish the reputation of a global brand like Victoria’s Secret. Yes I am sure Victor was thinking what a fun play on words it would be, but seriously, taking the guy to court? That action in itself does more to harm the reputation and any positive associations I might have had with Victoria’s Secret.

Oh, and yes, god forbid that anyone would start associating Victoria’s Secret with sex …

It seem likely that the Supreme Court will once again be called upon to make the final judgement in this case, and let’s hope they throw it back where it belongs.

It’s been a while since there was any CIPA law to get my teeth into – that’s the US’s Children’s Internet Protection Act. But a State law case in Washington has once again put it and the issue of using filters to block content in public libraries in the spotlight.

Last week the Washington State Supreme Court ruled by a 6-3 majority that a local library’s policy of filtering various categories of web content and of not disabling those filter at the request of adult patrons was not a breach of Article I, section 5 of the State Constitution, which says that “[e]very person may freely speak, write and publish on all subjects, being responsible for abuse of that right.” The right is widely accepted to encompasses the freedom to read as well.

North Central Regional Library District (NCRL) is required to certify its compliance with CIPA in order to get discounted internet connection under the Library Services and Technology Act and the eRate program under the Communications Act 1996. To qualify for these discounts Libraries must install filtering software on ALL their computers to block material ‘harmful to minors’.

The plaintiffs in the case argued that the filtering was overbroad and constituted prior restraint and an impermissible content based restriction of free speech. The Court, citing the majority in the US Supreme Court’s decision in US v ALA, said it would be a mistake to extend prior restraint to the context of public libraries, as prior restraint seeks to prohibit future speech rather than speech that has occurred and that a library’s decision to use filtering software is a collection decision, not a restraint on speech. Just as they would choose not to purchase books, journals – such as pornographic ones – for their physical collection, filters allowed them to do the same for internet content.

Libraries the court argues have no obligation to provide universal coverage of all constitutionally protected speech. Due to the vast amount of content on the internet it is entirely reasonable to ‘exclude certain categories of content, without making individualised judgement that everything they do make available has requisite and appropriate quality’. Thus the majority concluded ” NCRL’s filtering policy, when applied, is not comparable to removal of items from NCRL’s collection, but rather acquisition of materials to add to its collection. NCRL has made the only kind of realistic choice of materials that is possible without unduly and unnecessarily curtailing the information available to a bare trickle — or a few drops — of the vast river of information available on the Internet.”

On the question of overblocking the court once again cited the majority in US v ALA and said the constitutional issue is ‘dispelled’ if the material that is erroneously blocked is easily unblocked at the request of an adult, and they point to a process where a patron may email NCRL administrators to ask that the blocking of a certain page/site is manually overridden. Examples provided showed this was done within 1-3 days. Because of this the court concluded “a public library may filter internet access for all patrons without disabling the filter to allow access to web sites containing constitutionally protected speech upon request of an adult library patron.”

Whilst reading all this, whilst you might not agree with the result it is hard not to find a logic – maybe even a convincing and balance logic in the argument. However, if we actually look at CIPA and the US Supreme Court decision we start to see cracks in the Washington Court’s majority view.

First off, CIPA doesn’t deal with text – at all : as pointed out in the dissenting opinions of Judges Stevens and Souter, in US v ALA, the Act deals with ‘visual depictions’ only.

Section 1721(b) of CIPA requires public libraries that participate in the federal e-rate program to certify to the FCC that they are:
‘(i) enforcing a policy of internet safety that includes the operation of a technology protection measure with respect to computers with internet access that protects against access through such computers to visual depictions that are (I) obscene; or (II) child pornography.’

Even if it did require text to be blocked CIPA only says libraries may ‘ the technology protection measure’, not that they must; gives no time frame for this to happen and forces adult patrons to justify their ‘bona fide’ and ‘lawful’ purpose for viewing a site/content that is blocked.

As pointed out by Judge Chambers, writing the dissent in the Washington case , eight of the 12 US Supreme Court justices found the ability of a patron to disable the filter constitutionally critical to finding CIPA lawful. Two argued that if libraries failed to remove filters at an adult’s request ‘without significant delay’ a library patron could sue on constitutional grounds.

On the issue of whether filtering was akin to book buying decision the dissenting opinion of Judge Souter in US v ALA is also worth repeating. He pointed out that there is a big difference between deciding whether to buy a book, and actually buying it and then blocking access to parts of it. He suggested that the libraries in question had already made the purchasing decision to buy the computers and/or connect to the internet. He likened the subsequent censoring of the internet’s content to that of a library ‘buying an encyclopaedia and then cutting out pages with anything thought to be unsuitable for adults’.

NCRL put forward no compelling reason in this case why filters could not be disabled on request for adult patrons, and the court’s opinion misses the importance placed on this, even by a large party of the majority in US v ALA. I hope the plaintiffs in this case appeal this case further arguing that NCRL is not in compliance with its responsibilities under CIPA.

The wrappers came off Viacom’s and YouTube’s motions for summary judgment in their copyright infringement case. The motions made for interesting reading as both sides choose to selectively target the other in their arguments.

Viacom

Viacom told the court that it is only interested in infringement pre-May 2008 (the point at which YouTube deployed digital fingerprinting and filtered for Viacom, when the parties signed a content deal). Viacom is therefore saying that since they signed their deal with YouTube they are happy with YouTube’s current practices, as regards infringing copyright material, and therefore don’t believe it currently induces infringement.

Viacom’s argument is that it is clear that the YouTube founders: Chad Hurley, Steve Chen and Jawed Karim, made a deliberate decision in 2005 to build a business based on piracy. They cite emails exchanges between the founders admitting early on the site is full of copyrighted material but that they needed to keep it up on the site to build traffic. They pointed in particular to exchanges between Hurley, still YouTube’s CEO, and Karim. During discovered Hurley informed the prosecution that he had lost his entire email repository. When then presented with copies of those emails retrieved from Karim, which showed all three were aware that 80% of their hosted content was infringing copyrighted material and that they wanted to “concentrate all our efforts in building up our numbers as aggressively as we can through whatever tactics however evil”, Viacom claims Hurley developed “serial amnesia” about any of those conversations.

Even more damning a memorandum personally distributed to YouTube’s entire board of directors by Karim just 6 months before the sale to Google stated: ” As of today episodes and clips of the following well-known shows can still be found: Family Guy, South Park, MTV Cribs, Daily Show, Reno 91 1, Dave Chapelle. This content is an easy target for critics who claim that copyrighted content is entirely responsible for YouTube’s popularity. Although YouTube is not legally required to monitor content (as we have explained in the press) and complies with DMCA takedown requests, we would benefit from preemptivelv removing content that is blatantly illegal and likely to attract criticism. ”

Viacom then turns to Google – who it commends for running a totally legal rival video hosting service, Google Video, before its purchase of YouTube for $1.8 billion in October 2006. It points to internal Google documents where Google identified YouTube as “a rogue enabler of content theft”; “business model is completely sustained by pirated content”, and “it’s a video Grokster”.

It seems Hurley was not the only person to have difficulty finding and remembering what happened in the early days. When asked to produce any relevant documents including emails that dealt with the acquisition of YouTube, Google CEO Eric Scmidt managed to find just 19. He explained this by stating it had “been my practice for 30 years to not retain emails unless asked specifically” – this from a company that launched Gmail in 2004 so people would never have to delete an email again. Viacom also point to the testimony of Larry Page who apparently could not even remember whether he was in favour of Google buying YouTube or not.

Next Viacom point to the fact that YouTube had the ability to deploy fingerprinting and filtering technology – they has a licence for Audible Magic from early 2006 – but either choose not to at all, or only agreed to do so with media organisation who agreed content licences with them. Viacom claims YouTube withheld applying these technologies to their content until May 2008 when the parties signed a content licencing agreement.

It continues to say that YouTube continued to be aware that much of the content on the site was infringing and yet took no action to do anything about it. They argue they could quite easily have removed obviously infringing material.

When it comes to the law, Viacom argues that as in Grokster, YouTube is guilty of inducement and is not entitled to any of the affirmative defences, available under s512(C) of the Digital Millenium Copyright Act (DMCA), to protect it from copyright infringement liability. In particular, it states that service providers will not be liable “for infringement of copyright by reason of the storage at the direction of a user of material that resides on a system or network controlled or operated by or for the service provider.” This protection is available only if the service provider satisfies a number of statutory requirements. For example, the service provider must not have actual knowledge that the material or an activity using the material on the relevant system is infringing, must not receive a direct financial benefit from infringing activity, and must expeditiously remove or disable access to material if it is notified that the material is infringing or is the subject of infringing activity.

Viacom contended that YouTube does not qualify for § 512(c) immunity because YouTube had actual knowledge and was aware of infringing activity on their site and did not act to stop it; it had the ability to control infringing activety and remove any content – as they do frequently with adult material - but chose not to; turned a blind eye to acts of infringement for the sake of profit from web traffic and ad revenues; and that it did not store video clips “at the direction of a user.”, as it actively creates “Flash-formatted” copies of video files uploaded by users and allows streaming of those clips, making it a direct infringer of copyright because its copyright infringement is not from web hosting but from broadcasting videos.
This final line of argument seems a little odd, as YouTube still creates version of uploaded conetnt in this way post May 2008 where Viacom apparently has no issues with the site.

Viacom also point to the fact that YouTube has signed licencing deals to distribute their service and the infringing content over third party platforms – such as the iPhone – an action that it clearly not storage, and so is not protected by DCMA.

YouTube

Google/YouTube, perhaps unsurprisingly, choose to ignore the sites beginnings and the initial days of the Google take over and instead concentrate on what the site has become. It argues that whilst it can’t control what its user upload it has taken numerous steps to keep illegal material off the site: it’s T&Cs; copyright tips; 10 minute limit; registered a DCMA agent; removes infringing materials as result of DCMA request; terminates and blocks accounts of users suspects of being repeat infringers; and employs team to help copyright owners remove unauthorised material.

YouTube states the problem with Viacom’s case is that the actual actions of Viacom undermine its own case. Firstly, it points to Viacom’s own failed attempt to buy YouTube in 2006. If Viacom saw it as a video Grokster, why did they want to buy it, and why were they already negotiating a possible content licencing agreement before Google acquired the site? It also states that it was Viacom, not YouTube that scuppered a deal between to two in 2007 by requesting more money than any other content partner– although YouTube are quiet on the allegation of withholding fingerprint technology for only those who signed content licencing deals.

It states that in February 2007 the two companies agreed that Viacom would present a super takedown notice. YouTube says that within 24 hours ‘virtually all’ the videos had been removed. The following month Viacom launch this legal action, demanding one billion dollars.

YouTube produced its own email evidence that from early 2006 onward Viacom employees and its agent BayTSP were actively uploading clips to the site, infact they even had a documented policy to ensure that some content stayed up on the site. In November 2006, just after Google took charge 316 infringing South Park clips were found on the site, and yet Viacom only requested the removal of one.

YouTube accuses Viacom of using stealth marketing to get fake accounts set up to promote uploaded viral videos from Viacom from the ‘grassroots’. A number of commentators have expressed the view that the FTC might be interested in this evidence.

In relation to the 63,497 clips in this case (which includes one from the FA Premier league of ONE second duration) YouTube stated most were the subject of DCMA notices and taken down in response. However, YouTube claims its discover in the case shows that many of these clips were posted at Viacom’s direction. This is an accusation that seems to have been backed up by Viacom twice having to ask the court to remove clips from the list - 241 clips in October 2009, after realizing that many had actually been uploaded by Viacom employees, and this week a further 6 clips that were mistakenly included back in October in addition to removing another 187 clips ‘ in order to streamline the issues in this case’.

YouTube argues that if Viacom is still only just discovering what was a legitimate authorised copy of its content in the site as opposed to an unauthorised one three years after starting the case how was YouTube supposed to identify this ‘obvious infringing activity’ within hours or days. Whilst the courts had found that service providers must remove material on their own where infringement would be apparent form a brief and casual viewing, YouTube argues that Viacom has shown that even it is incapable of doing this successfully. Additionally, if Viacom deliberately refrained from sending takedown notices for certain clips, how could YouTube be obligated to remove those same videos on sight.

YouTube also points to the recent decisions in cases featuring fellow video sharing site Veoh (v UMG and v Io Group) in which against UMG a request for summary judgment was refused and against lo Group the case was dismissed. In the Veoh case in particular the court agreed that the created on flash videos and associated actions by the site fell within the scope of § 512(c), because all of them are narrowly directed toward providing access to material stored at the direction of users. YouTube argues it does the same, so should be equally protected.

Both motions make compelling reading when read alone. It seems likely however that both motions will be dismissed and the case will head to the courtroom.

Eric Goldman, Associate Professor of Law at Santa Clara University School, asks the interesting question. If Viacom is right that YouTube induced infringement in 2005-06, but doesn’t currently induces infringement (after all, Viacom isn’t contesting post-May 2008 activity) How the courts determine when YouTube flipped the switch from inducing to not? And does flipping the switch cure any of the past infringement, or does it only cut off future claims?

Keep watching this one.

An Italian court has found three executives guilty of breaching Italian privacy laws, in relation to a video clip posted on the Google Video site.

The case centred on a mobile video clip of an Italian child with Down’s syndrome being bullied and hit by four school boys, which was posted on Google Video in September 2006 (just as Google was buying YouTube) and removed by Google about a month later following complaints.
Italian prosecutors then decided to file charges against four Google executives: chief legal officer David Drummond, chief privacy officer Peter Fleischer, video executive Arvind Desikan (who was cleared of all charges), and chief financial officer George Reyes. The four were charged with criminal defamation and a failure to comply with the Italian privacy code.

Google denied the charges pointing out that they had taken down the video after being notified by the Italian police, and worked with the police to help identify the person responsible for uploading it (she was subsequently sentenced to 10 months community service), as were several other classmates who were also involved.

Despite this the Italian authorities still felt that it was Google who needed to pay for the ‘crime’. According to the court it was Google’s duty to ensure consent from the person(s) filmed had been obtained, a logic that would clearly end the functioning of just about every video and photosharing site on the web and mean that they and every social networking site, such as Facebook would need to vet EVERY item submitted by their users and individually clear or reject each time before allowing it on their sites. Google themselves commenting on the decision state:. “[If] sites like Blogger, YouTube and indeed every social network and any community bulletin board, are held responsible for vetting every single piece of content that is uploaded to them — every piece of text, every photo, every file, every video — then the Web as we know it will cease to exist, and many of the economic, social, political and technological benefits it brings could disappear.”

Google plans to appeal and continues to argue that the European E-Commerce Directive (implemented in Italy by Legislative Decree n. 70 (“D.Lgs. 70/2003” or “Decree”) ) provides them with safe habour protection.

Article 14 of the Directive provides –
1. Where an information society service is provided that consists of the storage of information provided by a recipient of the service, Member States shall ensure that the service provider is not liable for the information stored at the request of a recipient of the service, on condition that:
1. the provider does not have actual knowledge of illegal activity or information and, as regards claims for damages, is not aware of facts or circumstances from which the illegal activity or information is apparent; or
2. the provider, upon obtaining such knowledge or awareness, acts expeditiously to remove or to disable access to the information

The Directive and the Italian Legislative Decree also state that there is no general obligation to monitor the information which providers transmit or store, nor a general obligation actively to seek facts or circumstances indicating illegal activity.

One of the main questions in this case is whether or not Google Video was an ‘information society service.’ It would seem that the Court in this case has decided Google – thorough Google Video – was a content provider – no different from an online newspaper, for example, with direct responsibility for all content posted.

This is described in Article 1(2) of the Technical Standards and Regulations Directive (Directive 98/34/EC) as amended by Article 1(2)(a) of Directive 98/48/EC as “any service normally provided for remuneration, at a distance, by electronic means and at the individual request of a recipient of services.”

But what does that include? According to the Council of Europe’s Convention on information and legal co-operation concerning “Information Society Services” This covers a wide range of on-line activities amongst which : on-line information services (newspapers, magazines, libraries, electronic databases, research engines etc.); electronic commerce; on-line agencies (of advertising, marketing, teleshopping, tourism, real estate, etc.); professional services provided by electronic means (by consultants, translators, designers, computer experts, etc.); on-line validation services (certification of electronic signatures, authentication, recording, dating, etc.); on-line services to consumers (interactive teleshopping, information on products and assets, purchase tests, research and evaluation of promotional offers); on-line tourist services (information; flight, train, hotel, car, show reservations; virtual visits to museums, monuments and sites); on-line entertainment services; new telecommunications services on demand (videoconference, Internet access, electronic mail, discussion forums), etc.

To most people it would frankly seem clear that Google was providing (in part) an “information society service” by offering Google Video; and that the service provided by Google Video certainly amounted to “hosting.” The question then would be if it had “actual knowledge” of this video – the Italian procesuters said it was top of the watched video’s list for a couple of weeks before the request was made to Google to remove it.

Indeed the prosecutors who brought the case we understandably delighted with the outcome “We are very satisfied because by means of this trial we have posed a serious problem: that is to say, the protection of human beings, which must prevail over corporate interests.” they said in a statement. A sentiment I’d certainly agree with if the decision actually did anything of the sort. Instead it made the rest of the world think Italy doesn’t understand how the internet works or the very basics of law. The guilty parties here were those who took part in, filmed and uploaded the video. They were dealt with - with the HELP of google. That should have been end of story.

If I was any operator of any sort of social network site in Italy now I would be serious considering blocking access to any Italian based users for fear that I could be next.

2330. As to alleged misrepresentations as to resources made prior to the selection of EDS and the Letter of Intent: the Greater Resources Representation was not made by EDS and Sky have not established that EDS made a misrepresentation in relation to the Lesser Resources Representation or the Ready to Start Representation. Accordingly, EDS are not liable to Sky for misrepresentation as to resources.

2336. In relation to the allegations of misrepresentations prior to the Letter of Agreement, the statements made by EDS did amount to a representation that they had developed an achievable plan, which had been the product of proper analysis and re-planning.

The always insightful Eric Goldman comments on jurisdiction in a case between Daniel Miller, the creator of online flash game ‘Boomshine’ and Facebook. Miller – a Facebook user – has gone after Facebook - in addition to Yao Wei Yeo who he accuses of producing a game / Facebook app ChainRxn, that violates his “look and feel” copyright in Boomshine - for its role in providing access to the app.

Miller wanted the case heard in Georgia, the Court instead agreed to Facebook’s request that it be heard in California, as asserted under the terms and conditions of the Facebook user agreement.
As Goldman points out, what makes this interesting is that the Judge decided that Miller’s complaint about another app – which is nothing to do with his use of the service - is covered by Facebook’s general forum selection clause, which purports to govern “any dispute about or involving the Web site and/or the Service.” As Goldman says, “Read literally, this court seems to be saying that all 350M Facebook users are required to sue Facebook in Facebook’s home court for any claim they may have that relates to Facebook.com.”