A federal appeals court has given Viacom a second chance to prove its copyright infringement claims against Google's YouTube, reviving a high-stakes battle between entertainment companies and Internet entrepreneurs over "user-generated content" sites. The decision Thursday by the 2nd Circuit Court of Appeals was a partial win for both sides, but it left a few important issues unsettled as it tried to strike the right balance between competing interests.
Viacom — a giant entertainment conglomerate whose assets include Paramount Pictures and Comedy Central — alleged that YouTube made more than 60,000 snippets of its content available for free, damaging the market for its movies and TV shows. As with so many disputes between copyright holders and tech companies, Viacom's lawsuit against YouTube hinges on the question of how much the website's employees knew or should have known about the files that users were uploading. The 1998 Digital Millennium Copyright Act shields online companies from liability if they don't have actual knowledge of copyright infringements and aren't aware of "facts or circumstances" that make infringements apparent. But copyright holders and tech companies have fought strenuously over how broad those safe harbors should be.
Viacom and its allies in the case, including sports leagues, record companies and movie studios, point to internal YouTube e-mails and other evidence showing that company executives knew about pirated material on the site but didn't act promptly to block or remove it. But a U.S. District Judge threw out Viacom's claims almost five years ago, finding that YouTube qualified for the 1998 law's safe harbors because it promptly removed the files that Viacom specifically identified as infringing.