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No. 1] DUKE LAW & TECHNOLOGY REVIEW 71 (B) does not receive a financial benefit directly attributable to the infringing activity, in a case in which the service provider has the right and ability to control such activity; and (C) upon notification of claimed infringement... responds expeditiously to remove, or disable access to, the material that is claimed to be infringing or to be the subject of infringing activity.19 The standard for YouTube’s liability in accordance with the DMCA was established in Viacom Int’l, Inc. v. YouTube, Inc.,20 where the Second Circuit articulated that, in order for the safe harbor provision of § 512(c) to be lost, an OSP must either: (1) have actual knowledge of copyright infringement, which requires that the OSP be subjectively aware of specific instances of infringement, or (2) be willfully blind to such instances of copyright infringement.21 In that case, Viacom argued that YouTube should lose its § 512(c) protection because it hosted 79,000 infringing video clips owned by Viacom on its servers, and that these clips had received over one billion views.22 At the time of the suit, surveys showed that between seventy- five and eighty percent of all videos hosted on YouTube infringed copyright.23 Internal communications among YouTube’s staff revealed that they considered the removal of certain infringing videos; as a result, the Second Circuit held that YouTube had specific knowledge of the infringement, and remanded the case to the district court for further fact-finding.24 After responding to the Second Circuit’s instructions, the district court granted summary judgment in favor of YouTube, finding that YouTube did not have the right and ability to control the infringing activity sufficient to lose its safe harbor protections because it did not directly induce its users to upload the infringing content.25 Furthermore, the internal circulation of emails by YouTube’s staff was not found to constitute specific knowledge of the infringement because the emails did not specifically reference any particular infringing clip.26 Thus, YouTube retained its statutory safe harbor under § 512(c).

Notwithstanding its victory, YouTube was careful to avoid such substantial copyright infringement in the future by implementing Content ID. By overzealously addressing copyright infringement, YouTube

–  –  –

continues to shield itself from liability from copyright owners and preserves its safe harbor under § 512(c).

2. DMCA Notification and Counter Notification Under § 512(g) In order to qualify for the statutory safe harbor of § 512(c), YouTube must comply with the provisions of the DMCA. A properly filed DMCA notice27 from a copyright holder puts the OSP on notice of infringement and constitutes knowledge for the purposes of § 512(c).28 Upon verification by the OSP, the OSP must remove the infringing content and subsequently inform the uploader that the content has been taken down.29 The uploader may then send a counter-notice to the OSP if he feels that it was taken down erroneously.30 The OSP then notifies the claimant and must wait between ten and fourteen business days for a formal lawsuit to be filed against the uploader.31 If the claimant does not file suit, the OSP may restore the content to the website.32 Additionally, to qualify for the safe harbor, the OSP must “not receive a financial benefit directly attributable to the infringing activity.”33 At the very least, Content ID carries out its intended function by ensuring that blatantly infringing content is expeditiously removed from the website, and thus adequately protects YouTube from liability.

3. YouTube’s Appeal Process When a claim is initially filed on YouTube, the uploader may dispute it. The purported copyright holder may then decide to drop or reinstate the claim on the video.34 Upon reinstatement of the claim, the uploader may appeal.35 Only three appeals may be filed by the uploader at once.36 Once the uploader appeals, the purported copyright holder may either release the claim on the video or send a formal legal copyright 27 Typically, a boilerplate form letter is electronically submitted to the website hosting the alleged infringement. See Copyright Takedown Notice, YOUTUBE, https://www.youtube.com/yt/copyright/copyright-complaint.html (last visited Feb.

28, 2015).

28 17 U.S.C. § 512(c)(3)(A)(i)–(vi) (2012).

29 § 512(g).

30 Id.

31 Id.

32 Id.

33 See A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1023 (9th Cir. 2001) (holding that the presence of infringing material constituted a “draw” for internet traffic, and was thus a financial benefit for the purposes of determining Section 512(c) eligibility).

34 Dispute a Content ID Claim, supra note 17.

35 Id.

36 Id.

No. 1] DUKE LAW & TECHNOLOGY REVIEW 73 notification under the DMCA.37 This is the first time that the DMCA is incorporated into YouTube’s copyright infringement enforcement process.

If a notification is exercised, the uploader receives a copyright “strike” on his account.38 Once the user accumulates three of these strikes, regardless of whether these strikes are legitimate, his entire channel is automatically deleted. The claimant may file an unlimited number of copyright claims, legitimate or illegitimate.39 The uploader’s only recourse after receiving a strike is to wait six months for the copyright strike to expire, allow the copyright owner to retract his claim, or submit a formal counternotification.40 The counter-notification is filed pursuant to § 512(g) of the DMCA.41 Upon receipt of this counter-notification, the claimant must notify YouTube within ten to fourteen days that he will be seeking an injunction.42 If this is not done, the video is finally evaluated by YouTube and, if found to have been removed from the website erroneously, YouTube will remove the copyright strike from the uploader’s account and reinstate the video to the website.43 The contest between copyright holder and uploader can continue for months, while the uploader may only appeal three copyright infringement cases at once.44 The longer the process takes, the longer the uploader is losing actual revenue from his work due to the revenue freeze imparted by the purported copyright holder. Even assuming relinquishment of the copyright infringement claim by the purported holder, the best-caseId.

38 Copyright Strike Basics, GOOGLE, https://support.google.com/youtube/answer /2814000?hl=en (last visited Feb. 28, 2015).

39 Id.

40 See 17 U.S.C. § 512(g) (2012) (describing counter-notifications).

41 Id.

42 Guide to YouTube Removals, FAIR USE TUBE, http://fairusetube.org/guide-toyoutube-removals (last visited Feb. 28, 2015).

43 This assumes that YouTube has no contract with the purported copyright holder.

Recent events have suggested that YouTube has incorporated a clause into its enduser agreement that allows it to deny, at its discretion, the restoration of content back onto the website, despite a properly filed Section 512(g) counter notification.

This clause is a result of bargaining between companies like Universal Music Group and YouTube for exclusivity of content. Thus, not only are derivative works not allowed, but, as a result of the contract, effectively neither is fair use. See Patrick McKay, YouTube Refuses to Honor DMCA Counter-Notices, FAIR USE TUBE (Apr. 4, 2013), http://fairusetube.org/articles/27-youtube-refuses-counternotices.

44 Youtube Copyright Disaster, supra note 1.

74 THE DEATH OF FAIR USE IN CYBERSPACE [Vol. 13 scenario is not so bright: a claim resolved in the uploader’s favor fails to yield back-pay of frozen revenue.45 C. The Doctrine of Fair Use: §107 of the Copyright Act In pertinent part, §107 of the Copyright Act sets out the principles for fair use, which are designed to foster creativity and the encouragement of content creation, even if the content is derived from the work of another:46 [T]he fair use of a copyrighted work... for purposes such as criticism, comment... is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include – (1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;

(2) the nature of the copyrighted work;

(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work.47 In Campbell v. Acuff-Rose Music, Inc., the Supreme Court explained that fair use is not a bright-line test and that there is no presumption for or against the fair use of a work.48 Fair use functions as a defense to an action for copyright infringement.49 By its own policy, YouTube avoids determining fair use and defers to the courts if the issue arises.50 Similarly, YouTube cannot determine ownership of copyright without deferring to the courts.51 The purpose and character of the use under the first prong of the fair use analysis depends upon two elements: (1) whether the use is transformative, and (2) whether the use is commercial.52 In Campbell, the Supreme Court held that use of a copyrighted work is transformative if it 45 Telephone Interview with Jacob Baldino, Creator, Host & Producer, BecauseVideogames (Jan. 18, 2014).

46 Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 577 (1994).

47 17 U.S.C. § 107 (2012).

48 See Campbell, 510 U.S. at 584.

49 Id. at 580.

50 YouTube establishes the aforementioned four factors as a convenience and articulates that it cannot make determinations of fair use. What Is Fair Use?, YOUTUBE, http://www.youtube.com/yt/copyright/fair-use.html (last visited Feb. 28, 2015).

51 What Is Copyright?, YOUTUBE, http://www.youtube.com/yt/copyright/what-iscopyright.html (last visited Feb. 28, 2015).

52 Campbell, 510 U.S. at 579.

No. 1] DUKE LAW & TECHNOLOGY REVIEW 75 “adds something new, with a further purpose or different character, altering the first [work] with new expression, meaning or message.”53 In Bill Graham Archives v. Dorling Kindersley Ltd.,54 the Second Circuit affirmed a holding of fair use of images for the publishers of a biography of the famous music group the Grateful Dead.55 The court held that the application of fair use was especially apt in this case because the biography fulfilled “a purpose separate and distinct from the original artistic and promotional purpose for which the images were created.”56 The court noted that works incorporating criticism and commentary are often given fair use protection.57 In evaluating the commerciality of a work, the question is “whether the user stands to profit from exploitation of the copyrighted material without paying the customary price.”58 There is no presumption that the commercial use of a work necessarily renders a defendant undeserving of the protections of fair use.59 Under the second prong of the analysis (“nature of the copyrighted work”), creative works are afforded less protection, while factual works are given a greater scope of protection.60 The Second Circuit has articulated that “the doctrine [of fair use] has some application to communicating information pertinent to consumer choices.”61 In New Era Publications, the Second Circuit held that the use of quoted works dealing with the life of Scientology founder L. Ron Hubbard were protected by fair use because his biographies had been published and the work in dispute was one of criticism.62 The court wrote that a published work is afforded a broader scope of fair use protection than one that is unpublished.63 This is because the author has already been given the chance of the right of first publication, which “encompasses not only the choice 53 Id.

54 Bill Graham Archives v. Dorling Kindersley Ltd., 448 F.3d 605, 607 (2d Cir.


55 Id.

56 Id. at 610.

57 Id.

58 Harper & Row, Publishers, Inc. v. Nation Enters., 471 U.S. 539, 562 (1985).

59 Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 584 (1994).

60 Consumers Union of U.S., Inc. v. Gen. Signal Corp., 724 F.2d 1044, 1049 (2d Cir. 1983).

61 Id.

62 New Era Publ’ns Int’l, ApS v. Carol Publ’g Grp., 904 F.2d 152, 157 (2d Cir.


63 Id.

76 THE DEATH OF FAIR USE IN CYBERSPACE [Vol. 13 whether to publish at all, but also the choices of when, where, and in what form first to publish a work.”64 The third prong of the fair use analysis asks “whether the amount and substantiality of the portion used in relation to the copyrighted work as a whole... [is] reasonable in relation to the purpose of the copying.”65 Quantity, as well as quality and importance of the material used is factored into the analysis, as well as if they “go to the ‘heart’” of the original.”66 In New Era Publishing, the Second Circuit noted that the L. Ron Hubbard biography that was protected by fair use used as much as “8% or more of 11 [copyrighted] works.”67 The court found that the borrowed quotations did not go qualitatively to the heart of the original copyrighted work because the quotes were set separately apart from the text at the beginning of a chapter in order to create an effective tone for the reader.68 The fourth and final prong of the fair use analysis is “the effect of the use upon the potential market for or value of the copyrighted work.”69 The Supreme Court has said that the purpose of this prong is to evaluate the effect of market substitution for the markets that the “creators of original works would in general develop or license others to develop.”70 For example, in Authors Guild, Inc. v. Google, Inc.,71 the court held that Google’s appropriation of millions of digitally reproduced copies of copyrighted books was protected by fair use against a class-action claim of copyright infringement. The court found that fair use of a copyright can not only not harm a work’s market – but can also enhance its market by generating increased visibility and awareness of its presence.72 64 Harper & Row, Publishers, Inc. v. Nation Enters., 471 U.S. 539, 564 (1985).

65 Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 586 (1994) (quoting Folsom v. Marsh, 9 F. Cas. 342, 348 (C.C.D. Mass. 1841)).

66 Id. at 587–88.

67 New Era Publ’ns Int’l, ApS, 904 F.2d at 158.

68 Id. (citing New Era Publ’ns Int’l, ApS v. Carol Publ’g Grp., 729 F. Supp 992, 1000 (S.D.N.Y., 1990)).

69 17 U.S.C. § 107 (2012).

70 Campbell, 510 U.S. at 592–93.

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