Viacom International, Inc. v. Youtube, Inc.

Filing 470

AMICUS BRIEF, on behalf of Amicus Curiae Motion Picture Association of America, Inc. (MPAA), FILED. Service date 09/27/2011 by CM/ECF.[402446] [10-3270]

10-3270
United States Court of Appeals
for the

Second Circuit
VIACOM INTERNATIONAL INC., COMEDY PARTNERS, COUNTRY
MUSIC TELEVISION, INC., PARAMOUNT PICTURES
CORPORATION, and BLACK ENTERTAINMENT TELEVISION, LLC,
Plaintiffs-Appellants,
- v. YOUTUBE, INC., YOUTUBE, LLC, and GOOGLE, INC.,
Defendants-Appellees.
____________________________
ON APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK
BRIEF FOR MOTION PICTURE ASSOCIATION OF AMERICA,
INC. AND INDEPENDENT FILM & TELEVISION ALLIANCE AS
AMICI CURIAE SUPPORTING APPELLANTS
SUSAN CLEARY
VICE PRESIDENT & GENERAL COUNSEL
INDEPENDENT FILM & TELEVISION
ALLIANCE
10850 Wilshire Boulevard
Los Angeles, California 90024
[phone]
Counsel for Amicus IFTA

KELLY M. KLAUS
MUNGER, TOLLES & OLSON LLP
355 South Grand Avenue, 35th Floor
Los Angeles, California 90071
[phone]
Counsel for Amicus MPAA

10-3342
THE FOOTBALL ASSOCIATION PREMIER LEAGUE LIMITED,
BOURNE CO., CAL IV ENTERTAINMENT, LLC, CHERRY LANE
MUSIC PUBLISHING COMPANY, INC., NATIONAL MUSIC
PUBLISHERS’ ASSOCIATION, THE RODGERS & HAMMERSTEIN
ORGANIZATION, EDWARD B. MARKS MUSIC COMPANY, FREDDY
BIENSTOCK MUSIC COMPANY, ALLEY MUSIC CORPORATION, XRAY DOG MUSIC, INC., FEDERATION FRANCAISE DE TENNIS, THE
MUSIC FORCE MEDIA GROUP LLC, SIN-DROME RECORDS, LTD.,
MURBO MUSIC PUBLISHING, INC., STAGE THREE MUSIC (US),
INC., THE MUSIC FORCE, LLC,
Plaintiffs-Appellants,
– v. –
YOUTUBE, INC., YOUTUBE, LLC and GOOGLE, INC.,
Defendants-Appellees,

BRIEF FOR MOTION PICTURE ASSOCIATION OF AMERICA,
INC. AND INDEPENDENT FILM & TELEVISION ALLIANCE AS
AMICI CURIAE SUPPORTING APPELLANTS
SUSAN CLEARY
VICE PRESIDENT & GENERAL COUNSEL
INDEPENDENT FILM & TELEVISION
ALLIANCE
10850 Wilshire Boulevard
Los Angeles, California 90024
[phone]
Counsel for Amicus IFTA

KELLY M. KLAUS
MUNGER, TOLLES & OLSON LLP
355 South Grand Avenue, 35th Floor
Los Angeles, California 90071
[phone]

Counsel for Amicus MPAA

CORPORATE DISCLOSURE STATEMENT
Pursuant to Rules 26.1 and 29(c)(1) of the Federal Rules of Appellate
Procedure:
The Motion Picture Association of America, Inc. certifies that it has
no parent or subsidiary corporations and that no publicly held company
owns 10% or more of its stock.
The Independent Film & Television Alliance® certifies that it has no
parent or subsidiary corporations and that no publicly held company owns
10% or more of its stock.

TABLE OF CONTENTS
Page
INTEREST OF AMICI CURIAE.................................................................. 1
SUMMARY OF ARGUMENT..................................................................... 3
ARGUMENT................................................................................................. 7
I.

A Service Provider That Is Liable For Inducing
Copyright Infringement By Definition Is Not Eligible For
Safe Harbor Protection.............................................................. 7
A.

B.

II.

The DMCA Protects Only Innocent Service
Providers, While Leaving Culpable Providers
Subject To Liability ........................................................ 8
A Service Provider That Induces Infringing
Activity By Definition Is Not Innocent And
Therefore Is Ineligible For Safe Harbor Protection...... 11

The District Court Erroneously Wrote The Tests For
Knowledge That Are In § 512(c)(1)(A) Out Of The
Statute...................................................................................... 20
A.

B.

The District Court’s Test For Knowledge
Encourages Willful Blindness By Service
Providers ....................................................................... 22

C.

III.

The District Court’s Test For Knowledge
Requiring Service Provider Action Impermissibly
Rewrites The Statutory Tests........................................ 20

The District Court’s Test For Knowledge
Effectively Relegates Copyright Owners To A
Notice And Takedown Regime, Which Congress
Did Not Adopt .............................................................. 25

The District Court Erroneously Wrote A Knowledge Test
Into § 512(c)(1)(B).................................................................. 28

CONCLUSION............................................................................................ 32

i

TABLE OF AUTHORITIES
Page(s)
FEDERAL CASES
A&M Records, Inc. v. Napster, Inc.,
239 F.3d 1004 (9th Cir. 2001) ................................................................18
ALS Scan, Inc. v. RemarQ Communities, Inc.,
239 F.3d 619 (4th Cir. 2001) ..................................................................11
Arista Records LLC v. Usenet.com, Inc.,
633 F. Supp. 2d 124 (S.D.N.Y. 2009) ........................................12, 15, 19
Citizens Bank of Md. v. Strumpf,
516 U.S. 16 (1995)..................................................................................27
Columbia Pictures Indus., Inc. v. Fung,
No. CV-06-5578-SVW, 2009 U.S. Dist. LEXIS 122661 (C.D. Cal.
Dec. 21, 2009)..................................................................................passim
Corley v. United States,
129 S. Ct. 1558 (2009)................................................................21, 22, 30
In re Aimster Copyright Litig.,
334 F.3d 643 (7th Cir. 2003) ............................................................12, 24
Jacobs v. New York Foundling Hospital,
577 F.3d 93 (2d Cir. 2009) .....................................................................29
Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd.,
380 F.3d 1154 (9th Cir. 2004) ..........................................................13, 16
Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd.,
454 F. Supp. 2d 966 (C.D. Cal. 2006)....................................................14
Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd.,
545 U.S. 913 (2005).........................................................................passim
Shapiro, Bernstein & Co. v. H. L. Green Co.,
316 F.2d 304 (2d Cir. 1963) ...................................................................30
Sony Corp. of America v. Universal City Studios, Inc.,
464 U.S. 417 (1984)..........................................................................13, 14
ii

TABLE OF AUTHORITIES
(continued)

Page(s)
Tiffany (NJ) Inc. v. eBay Inc.,
600 F.3d 93 (2d Cir. 2010) .....................................................................24

FEDERAL STATUTES
17 U.S.C. § 512(c) ................................................................................passim
17 U.S.C. § 512(m) ................................................................................27, 28

LEGISLATIVE MATERIALS
H.R. Rep. No. 105-551, pt. 2 (1998) .....................................................23, 24
S. Rep. No. 105-190 (1998)..................................................................passim
The Copyright Infringement Liability of Online and Internet Service
Providers: Hearing on S. 1146 Before the S. Comm. on the
Judiciary 105th Cong. (1997)...................................................................9
WIPO Copyright Treatises Implementation Act; And Online
Copyright Liability Limitation Act: Hearing on H.R. 2281 and
H.R. 2280 Before the Subcomm. on Courts and Intellectual
Property of the H. Comm. on the Judiciary, 105th Cong. (1997) ..........26
144 Cong. Rec. 25808 (1998)........................................................................9
144 Cong. Rec. 9239 (1998)..........................................................................9
144 Cong. Rec. 9242 (1998)........................................................................10

OTHER AUTHORITIES
3 Melville B. Nimmer & David Nimmer, Nimmer on Copyright
(Matthew Bender, Rev. Ed.) .............................................................26, 31

iii

INTEREST OF AMICI CURIAE
Amici curiae the Motion Picture Association of America, Inc.
(“MPAA”) and the Independent Film & Television Alliance® (IFTA®)
respectfully submit this brief in support of appellants.1
Founded in 1922, the MPAA is a trade association that serves as the
advocate for the domestic motion picture, home video and television
industries. The MPAA’s members and their affiliates include the largest
producers and distributors of motion pictures and television programs in the
United States.2 The MPAA members responsible for this brief are not
parties to this case or affiliates of those parties.
IFTA is the trade association for the independent film and television
industry worldwide, representing over 155 independent production and
distribution companies, as well as affiliated financial institutions that
provide funding for independent production. IFTA also is the owner of the
1

Pursuant to Federal Rule of Appellate Procedure 29(c)(5) and Second
Circuit Rule 29.1(b), amici state that no counsel for a party has written this
brief in whole or in part; and that no person or entity, other than the amici,
the members of each amici or counsel for those members (with respect to the
MPAA, such members do not include appellant Paramount Pictures
Corporation or any of its affiliates), has made a monetary contribution that
was intended to fund the preparation or submission of this brief.
2

The members of the MPAA are, in addition to Paramount, Sony Pictures
Entertainment Inc., Twentieth Century Fox Film Corporation, Universal City
Studios LLLP, Walt Disney Studios Motion Pictures and Warner Bros.
Entertainment Inc.

American Film Market®, the largest commercial film market in the world.
IFTA members have produced, financed and/or distributed such critically
and commercially successful films as The Hurt Locker, Crash, Slumdog
Millionaire, The Departed, Million Dollar Baby and Lord of the Rings.
Since 1984, IFTA member films have won over 64% of the Best Picture
Academy Awards®.
Amici’s members depend upon effective copyright protection in order
to protect the motion picture and television content that they invest in, create
and distribute. As a result, amici’s members have a significant interest in the
important questions that this case presents concerning the interpretation of
the Copyright Act, 17 U.S.C. §§ 101 et seq., and in particular the Digital
Millennium Copyright Act provisions codified at § 512 (the “DMCA”).
Amici are filing this brief because of their profound concerns with the
district court’s decision. If not reversed by this Court, that decision
threatens severe negative consequences for all copyright owners who suffer
the devastating harms of mass Internet piracy.

2

SUMMARY OF ARGUMENT
The district court’s summary judgment decision radically upends the
fundamental balance that Congress codified in the DMCA’s “safe harbors.”
The DMCA provides safe harbor limitations on copyright infringement
liability only for those service providers who are innocent concerning
infringing activity that as a technical matter occurs on or through their sites.
The statute retains liability for culpable service providers, including those
who know or are aware of infringing activity on their site but fail to act
expeditiously to stop it. The district court’s decision shifts the balance
decisively to provide protection for service providers who are culpable. It
removes the “strong incentives” that Congress sought to preserve for service
providers as well as copyright owners “to cooperate to detect and deal with
copyright infringements that take place in the digital networked
environment.” S. Rep. No. 105-190, at 20 (1998) (“Senate Report”). The
decision instead incentivizes service providers to willfully blind themselves
to apparent “red flags” of mass infringing activity. Congress did not enact
this system – especially not one that provides safe harbor to service
providers who (as the court here said) could reasonably be found to have
“welcomed” widespread infringing activity as a way of boosting their bottom
line. Appellants’ Special Appendix 9 (C.A. Doc. No. 64-2) (“SPA”)

3

(emphasis added). It is an inversion of the DMCA – and also fundamentally
unfair – to interpret the statute to allow service providers to induce
infringement, to reap the benefits of that infringement, and then to have no
responsibility for dealing with the infringement they have induced unless
and until copyright owners send them individual takedown notices.
The district court’s decision is flawed in multiple respects that warrant
reversal. This brief addresses three of them.
First, the district court erred in holding that a service provider who
may be liable for inducing infringement under Metro-Goldwyn-Mayer
Studios Inc. v. Grokster, Ltd., 545 U.S. 913 (2005), may as a matter of law
qualify for § 512(c)’s safe harbor protection. Notwithstanding its conclusion
that the record could support a finding that appellees “welcomed” infringing
activity during YouTube’s growth phase, the district court held that
appellees were entitled to summary judgment on their § 512(c) defense. The
district court made passing reference to Grokster but deemed the case
essentially irrelevant to a service provider’s eligibility for the safe harbor.
The culpability that establishes inducement liability, however, cannot
coexist with the innocence that a service provider must demonstrate to
qualify for the safe harbor. See Columbia Pictures Indus., Inc. v. Fung, No.
CV-06-5578-SVW, 2009 U.S. Dist. LEXIS 122661, at *67 (C.D. Cal. Dec.

4

21, 2009). At a minimum, the district court should have held that the
existence of factual questions concerning appellees’ liability under Grokster
precluded granting them summary judgment under § 512(c).
Second, the district court erred in effectively writing out of the DMCA
the “actual knowledge” and “awareness” tests for knowledge that are
embedded in § 512(c)(1)(A). The statute requires that, if a service provider
has either “actual knowledge” of infringing activity or “awareness” of it
from “facts or circumstances” that make such activity “apparent,” the service
provider must act expeditiously to stop that activity to be eligible for the
safe harbor. 17 U.S.C. § 512(c)(1)(A). The district court, however, held
that appellees’ obligation to stop infringing conduct on YouTube existed
only insofar as they had “knowledge of specific and identifiable
infringements of individual items.” SPA 10, 18 (emphasis added). This
novel test renders superfluous critical language in the statute. If not
reversed, this test will incentivize service providers to bury their heads in the
sand and deliberately avoid information that could require them to act – even
in the face of known or apparent infringing activity. Such a result would be
directly contrary to Congress’s stated objective that service providers must
act affirmatively when they become aware of “red flags” of infringing
activity. Further, the court’s test for knowledge effectively converts

5

§ 512(c) from a statute about shared service provider-copyright owner
responsibility for “detect[ing]” as well as “deal[ing] with copyright
infringements,” Senate Report at 20, to a pure notice and takedown regime,
which Congress declined to enact.
Third, the district court erred by writing into the language of another
requirement for safe harbor protection a knowledge test that does not exist.
A service provider seeking safe harbor under § 512(c) must show (in
addition to satisfying § 512(c)(1)(A)) that it “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.” 17 U.S.C.
§ 512(c)(1)(B). The district court held that “the provider must know of the
particular case before he can control it.” SPA 29 (emphasis added). That
knowledge test is not in the statute, and indeed is antithetical to the doctrine
of vicarious copyright liability that Congress used as the model for
§ 512(c)(1)(B). The entire point of vicarious liability is to incentivize the
party with the right and ability to supervise sites and facilities to exercise
that right to uncover and remedy infringing conduct that otherwise would
inure to its financial benefit. The district court’s holding eviscerates that
incentive.

6

This case concerns evidence of appellees’ conduct during YouTube’s
start-up and growth phase, not YouTube as it exists today. That fact does
nothing to lessen the harmful policy consequences of the district court’s
decision. The district court extended safe harbor protection as a matter of
law notwithstanding the existence of factual questions about appellees’
inducement of infringement during YouTube’s early years. The decision not
only misconstrues the DMCA but provides a road map for culpable service
providers to build their businesses based on the infringement of others’
copyrighted works. Amici respectfully submits that the decision must be
reversed.
ARGUMENT
I.

A Service Provider That Is Liable For Inducing Copyright
Infringement By Definition Is Not Eligible For Safe Harbor
Protection
Appellants claimed, inter alia, that appellees were liable under

Grokster for inducing the widespread infringement of their copyrighted
works. In Grokster, the Supreme Court unanimously held that one who acts
“with the object of promoting” infringing conduct “is liable for the resulting
acts of infringement by third parties.” Grokster, 545 U.S. at 919. The
district court recognized that on the summary judgment record here, a jury
could conclude that appellees “not only were generally aware of, but

7

welcomed, copyright-infringing material being placed on their website[,]”
because that material “was attractive to users,” “increased usage,” and
“enhanced defendants’ income from advertisements displayed on certain
pages of the website[.]” SPA 9 (emphasis added).3 Despite the evidence of
inducement liability under Grokster, the district court held that appellees
were entitled to summary judgment under § 512(c) because they had no
obligation to stop any infringements until they had “knowledge of specific
and identifiable infringements of particular individual items.” Id. at 18. The
district court held that Grokster was largely irrelevant to the issue of
appellees’ eligibility for the safe harbor. Id. at 24-25. On the contrary, a
defendant who induces infringement cannot be eligible for the safe harbor.
A.

The DMCA Protects Only Innocent Service Providers,
While Leaving Culpable Providers Subject To Liability

The DMCA legislates a careful balance between limiting the liability
of service providers who are innocent with respect to liability occurring on
or through their sites, while preserving liability for providers who are not so
3

The summary judgment record contained considerably more evidence of
defendants’ intentional inducement of infringing activity than the district
court described. For example, the record showed that YouTube’s founders
welcomed infringing material on the site – and the corresponding increase in
user-base – because it enhanced the company’s value for a sale to a third
party. See, e.g., Viacom’s Statement of Undisputed Facts 36-56 (Dist. Ct.
Doc. No. 322) (“SUF”). YouTube’s founders achieved this objective when
they sold their 18-month-old company to Google for more than $1.6 billion.
SUF 16.
8

innocent. Congress recognized that, “without clarification of their liability,
service providers may hesitate to make the necessary investment in the
expansion of the speed and capacity of the Internet.” Senate Report at 8.
At the same time, Congress was acutely aware that the Internet had
the potential to “recklessly facilitate infringement,” and Congress therefore
strove for a solution that would “best combat the risk of copyright
infringement facing content providers on the Internet.” The Copyright
Infringement Liability of Online and Internet Service Providers: Hearing on
S. 1146 Before the S. Comm. on the Judiciary, 105th Cong. 1-2 (1997)
(statement of Sen. Hatch). Throughout the debate on the DMCA, members
of Congress repeatedly expressed their concerns about the mass theft of
copyrighted content and the devastating harms that such activity causes to
copyright owners and the national economy.4 Senator Thompson summed
up this concern during the floor debate on the statute:
Unscrupulous copyright violators can use the Internet to more
widely distribute copyrighted material without permission. To
maintain fair compensation to the owners of intellectual
4

See, e.g., 144 Cong. Rec. 9239 (1998) (statement of Sen. Ashcroft)
(“Billions of dollars in pirated material is lost every year and [a]n impact is
felt directly to our national bottom line.”); 144 Cong. Rec. 25808 (1998)
(statement of Rep. Dreier) (“[A]s we look at the problems that we face as a
Nation, and as we move rapidly towards this global economy, it is difficult
to imagine an issue that is much more important than theft of intellectual
property.”).
9

property, a regime for copyright protection in the digital age
must be created.
144 Cong. Rec. 9242 (1998) (statement of Sen. Thompson).
Section 512 embodies the careful balance that Congress intended
under the DMCA. The statute establishes “limitations on liability” – or
“safe harbors” – for four defined categories of online activity. 17 U.S.C.
§ 512(a)-(d). The safe harbor at issue in this case is § 512(c)’s limitation on
a service provider’s liability for infringement occurring “by reason of the
storage at the direction of a user” of infringing material on the service
provider’s system or network. 17 U.S.C. § 512(c). To claim a limitation on
its liability under this safe harbor, a service provider must satisfy each of a
number of statutory requirements. Congress expressly designed these
requirements for safe-harbor protection to “preserve[] strong incentives for
service providers and copyright owners to cooperate to detect and deal with
copyright infringements that take place in the digital networked
environment.” Senate Report at 20 (emphasis added).
The requirements for the § 512(c) safe harbor start with the service
provider’s obligation to act expeditiously to stop infringing activity
occurring on its site as soon as the provider has “actual knowledge” or

10

“awareness” of such activity.5 As the Fourth Circuit explained, these
requirements ensure that only those service providers who are innocent with
respect to infringing activity may be eligible for the statute’s protections:
The DMCA’s protection of an innocent service provider
disappears at the moment the service provider loses its
innocence, i.e., at the moment it becomes aware that a third
party is using its system to infringe. At that point, the Act shifts
responsibility to the service provider to disable the infringing
matter, preserving the strong incentives for service providers
and copyright owners to cooperate to detect and deal with
copyright infringements that take place in the digital networked
environment.
ALS Scan, Inc. v. RemarQ Communities, Inc., 239 F.3d 619, 625 (4th Cir.
2001) (quotations and alterations omitted) (emphasis added).
B.

A Service Provider That Induces Infringing Activity By
Definition Is Not Innocent And Therefore Is Ineligible For
Safe Harbor Protection

The district court dismissed Grokster’s relevance to the question
whether appellees had the requisite innocence for the § 512(c) safe harbor.

5

The independent and additional requirements for protection also include,
among others, that the service provider “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,” 17 U.S.C.
§ 512(c)(1)(B); that the provider “respond[] expeditiously” to notices of
claimed infringement sent by copyright owners, id. § 512(c)(1)(C); and that
the provider “adopt[] and reasonably implement[] … a policy that provides
for the termination in appropriate circumstances of subscribers … who are
repeat infringers[.]” Id. § 512(i)(1)(A). These requirements (and others in
§ 512) are cumulative, i.e., the service provider must satisfy each one
independently in order to be eligible for safe harbor protection.
11

The court said that Grokster’s relevance was “strained,” because the
Supreme Court dealt merely with the “general law of contributory liability
for copyright infringement,” and because the “Grokster model does not
comport” with a service provider that responds to takedown notices. SPA
24-26. This was error. As other courts have recognized, there is a direct and
obvious relationship between the mental state required for inducement
liability and the issue of a service provider’s eligibility for safe harbor under
§ 512(c): a service provider that induces infringement by definition cannot
qualify for the safe harbor. See Fung, 2009 U.S. Dist. LEXIS 122661, at
*67 (“inducement liability and the Digital Millennium Copyright Act safe
harbors are inherently contradictory”); Arista Records LLC v. Usenet.com,
Inc., 633 F. Supp. 2d 124, 142 (S.D.N.Y. 2009) (“if Defendants were aware
of … red flags, or worse yet, if they encouraged or fostered such
infringement, they would be ineligible for the DMCA’s safe harbor
provisions”) (emphasis added). Cf. In re Aimster Copyright Litig., 334 F.3d
643, 655 (7th Cir. 2003) (rejecting safe harbor defense because “[t]he
common element of [the statute’s] safe harbors is that the service provider
must do what it can reasonably be asked to do to prevent the use of its
service by ‘repeat infringers,’” and the defendant, inter alia, had “invited”
repeat infringers to infringe plaintiffs’ copyrights). The courts’ recognition

12

of Grokster’s relevance to the question of safe harbor eligibility is sound and
their analysis should apply in this case.
The Grokster defendants operated peer-to-peer services that were
breeding grounds for copyright infringement. Grokster, 545 U.S. at 923.
Notwithstanding the abundant evidence of defendants’ infringementinducing objectives, the Ninth Circuit held the defendants did not have the
requisite mental state for secondary copyright liability. In particular, the
Ninth Circuit accepted the defendants’ argument that, because they did not
know which specific works were being infringed at particular times, the
defendants had no “reasonable knowledge of specific infringement to satisfy
the threshold knowledge requirement.” Metro-Goldwyn-Mayer Studios Inc.
v. Grokster, Ltd., 380 F.3d 1154, 1162 (9th Cir. 2004). In reaching this
conclusion, the Ninth Circuit relied heavily on Sony Corp. of America v.
Universal City Studios, Inc., 464 U.S. 417 (1984) (“Sony-Betamax”), and in
particular, the Court’s holding there that the defendant (the maker of
videocassette recorders) could not have knowledge of infringing uses
imputed to it because the devices were “capable of commercially significant
noninfringing uses.” Id. at 442.
The Supreme Court unanimously rejected the Ninth Circuit’s
knowledge standard, and indeed, its entire framework for analyzing the

13

mental-state issue. The Court held that the Ninth Circuit erred in
“converting” Sony-Betamax from a case “about liability resting on imputed
intent to one about liability on any theory.” Grokster, 545 U.S. at 934. The
Court found that the Grokster defendants were not simply aware that their
services could be used for infringing conduct, but that the defendants
consciously induced widespread infringement to further their bottom lines.
The Court highlighted the facts that each defendant “showed itself to be
aiming to satisfy a known source of demand for copyright infringement[;]”
that no defendant “attempted to develop filtering tools or other mechanisms
to diminish the infringing activity using their software[;]” and that “the
commercial sense of [defendants’] enterprise turns on high-volume use,
which the record shows is infringing.” Id. at 939-40. Based on the record
evidence, the Court concluded that the defendants’ “unlawful objective is
unmistakable[,]” that it was error to grant them summary judgment, and that
the district court on remand had to reconsider the plaintiffs’ motion for
summary judgment. Id. at 940-41.6
The district court did not discuss any of the history underlying the
Grokster case or the Supreme Court’s articulation of the mental-state
6

On remand, the district court granted summary judgment to the plaintiffs.
Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 454 F. Supp. 2d 966
(C.D. Cal. 2006).
14

standard. The court instead said that Grokster was essentially irrelevant to
the DMCA issues in this case. SPA 24-26. The district court was wrong for
at least four reasons.
First, a defendant who has the degree of culpability required for
inducement liability cannot be the type of innocent service provider that
Congress meant to protect through § 512. The courts that have addressed
this issue have recognized correctly that a defendant cannot be liable under
Grokster and simultaneously be eligible for the DMCA safe harbor. See
Fung, 2009 U.S. Dist. LEXIS 122661, at *67; Usenet.com, 633 F. Supp. 2d
at 142. The district court here concluded that the summary judgment record
could support a finding that appellees not only knew about infringing
activity but “welcomed” it in order to enrich themselves. See SPA 9. In
light of that conclusion, the district court at a minimum should have held
that appellees were not entitled to the § 512(c) safe harbor at summary
judgment. The district court’s failure to do so is reversible error.
Second, the court’s decision extends safe harbor protection to
deliberate unlawful conduct – inducement of infringement – that is well
outside the scope of the statute’s protection. Section 512(c) limits a service
provider’s exposure to infringement liability “by reason of the storage at the
direction of a user” of infringing material on the service provider’s system or

15

network. 17 U.S.C. § 512(c). Grokster liability is predicated on statements
or actions directed to promoting infringing activity. Grokster, 545 U.S. at
919. Such purposeful conduct is distinct and far removed from the
performance of functions related to storing material at a user’s direction.
Section 512(c) provides no shelter for such unlawful conduct. Fung, 2009
U.S. Dist. LEXIS 122661, at *67-*68 (“Inducement liability is based on
active bad faith conduct aimed at promoting infringement; the statutory safe
harbors are based on passive good faith conduct aimed at operating a
legitimate internet business.”).
Third, the district court erred by disregarding Grokster’s directive that
culpability is determined not just with reference to the nature of the
defendant’s technology but by what the defendant knows and intends. As
demonstrated above, the Ninth Circuit adopted a standard of “reasonable
knowledge of specific infringement” that was effectively impossible to
satisfy; that court did so based on the mistaken belief that the potential
noninfringing uses of the defendants’ technology trumped all evidence of
their intent to foster widespread infringing conduct. Grokster, 380 F.3d at
1162. The district court’s decision here follows a similar mode of analysis:
The Grokster model does not comport with that of a
service provider who furnishes a platform on which its users
post and access all sorts of materials as they wish, while the
provider is unaware of its contents, but identifies an agent to
16

receive complaints of infringement, and removes identified
material when he learns it infringes.
SPA 25-26.
This analysis suffers from the same illogic underlying the Ninth
Circuit’s analysis of the Grokster defendants’ liability. The district court
assumed that because the YouTube platform could be used for noninfringing
as well as infringing uses of copyright, the evidence of whether appellees
“welcomed” or actively induced the latter as a general matter was irrelevant,
so long as appellees removed the particular instances of infringing conduct
of which they were notified. That cannot be squared with Grokster. What
the Supreme Court held in Grokster – and what the Ninth Circuit in that case
and the district court here fundamentally failed to recognize – is that those
who disseminate technology that can be put to lawful, noninfringing use
may be culpable and liable if they induce the use of that technology for
unlawful infringement. See Grokster, 545 U.S. at 929-37.
Fourth, the district court’s stated reasons for rejecting Grokster
would, if applied generally, have negative policy ramifications. Specifically,
the district court suggested that Grokster was concerned with one type of
defendant, whereas the DMCA safe harbor deals with a different class of
defendant. As to the former, the court referred to a “Grokster model,” which
it described as a defendant “with the expressed intent of succeeding” on a
17

model like that of “the notoriously infringing Napster.” SPA 25. The
district court contrasted that “model” with YouTube, and said “the DMCA
gives a safe harbor” to the latter type of provider, “even if otherwise he
would be held as a contributory infringer under the general law.” Id. at 26.
That analysis cannot be correct. If it were, then numerous entities that
(even according to the district court) indisputably should be held liable
would attempt to claim safe harbor protection under the DMCA. Whether
those defendants could succeed with such a defense would depend upon
their ability to come within the various statutory requirements. But that
would not stop such companies from trying and pointing to their notice and
takedown policies as proof of their entitlement to safe harbor protection.
Indeed, companies that the district court itself described as following a
“Grokster model” – starting with Napster itself – have maintained notice and
takedown policies and have cited the same as grounds for coming within one
of § 512’s safe harbors. See A&M Records, Inc. v. Napster, Inc., 239 F.3d
1004, 1025 (9th Cir. 2001) (reserving for trial the issue of Napster’s
entitlement to safe harbor protection under the DMCA); Fung, 2009 U.S.
Dist. LEXIS 122661, at *56-*68 (considering and rejecting reliance on safe
harbor defense based on notice and takedown policy); Usenet, 633 F. Supp.

18

2d at 141-42 (defendant service claimed safe harbor protection by virtue of
its notice and takedown policy).
Nothing in Grokster or the law generally discriminates between
“models” of defendants as the district court suggested. The law adjudges
defendants based on their mental state and conduct. A defendant may
engage in otherwise lawful activities but nevertheless be liable for acts that
violate the law, including acts that induce copyright infringement. Whether
appellees as a matter of undisputed fact had the mental culpability to be
liable under Grokster was not resolved by the district court. The important
point here is that neither their liability nor that of any other service provider
claiming safe harbor protection can be resolved simply by asking if the
provider had a notice and takedown policy or knew of specific and
identifiable instances of infringing acts. All of the relevant facts and
circumstances of appellees’ awareness of infringing activity or intent to
facilitate such activity must be considered. The district court’s grant of
summary judgment must be reversed.

19

II.

The District Court Erroneously Wrote The Tests For Knowledge
That Are In § 512(c)(1)(A) Out Of The Statute
In addition to its errors regarding Grokster, the district court

fundamentally and erroneously rewrote critical requirements for the § 512(c)
safe harbor. First, the district court effectively wrote out of § 512(c)(1)(A)
the tests for knowledge that actually are embedded into the statute. Second,
and as discussed in Section III, infra, the district court wrote into
§ 512(c)(1)(B) a knowledge test where none exists.
A.

The District Court’s Test For Knowledge Requiring Service
Provider Action Impermissibly Rewrites The Statutory
Tests

As discussed, the district court held that appellees’ obligation to stop
infringing activity did not arise until they had “knowledge of specific and
identifiable infringements of particular individual items.” SPA 18
(emphasis added). This test rewrites the text of § 512(c) and undermines
Congress’s objectives in enacting it. The text does not refer to “specific and
identifiable infringements of particular individual items.” The text makes
clear that a provider has knowledge requiring action if the provider has
either “actual knowledge” of “material or an activity . . . [that] is infringing,”
or “aware[ness] of facts or circumstances from which infringing activity is
apparent.” 17 U.S.C. § 512(c)(1)(A)(i)-(ii). Adding a “specific and

20

identifiable” test into the statute, as the district court did, rewrites both
prongs of § 512(c)(1)(A).
Subsection (A)(i) encompasses actual knowledge of infringing
“activity,” not just infringing “material.” The district court, however, held
that a service provider has actual knowledge only when it knows of a
“specific and identifiable infringement[] of [a] particular individual item[].”
SPA 18. That reading renders infringing “activity” in subsection (A)(i)
superfluous, since it leaves no circumstance in which a service provider
actually knows about infringing activity without knowing of the specifically
infringing material. That is an unreasonable and impermissible reading of
the statute. See, e.g., Corley v. United States, 129 S. Ct. 1558, 1566 (2009)
(“one of the most basic interpretive canons” is “that a statute should be
construed so that effect is given to all its provisions, so that no part will be
inoperative or superfluous, void or insignificant”) (internal quotations and
alterations omitted).
Even if subsection (A)(i) could be construed to bear the district
court’s interpretation, subsection (A)(ii) clearly is not susceptible to that
construction. Section 512(c)(1)(A) is phrased in the disjunctive: a service
provider that has knowledge under either (A)(i) or (A)(ii) has the obligation
to act. The two subsections cannot mean the same thing. The statutory

21

language makes it clear they do not. Subsection (A)(ii) says that a service
provider has the requisite knowledge when it is “aware of facts or
circumstances from which infringing activity is apparent.” “Aware[ness] of
“facts and circumstances” that make “infringing activity” “apparent” must
mean something different – and more encompassing – than knowledge of
“specific and identifiable infringements of particular individual items.” If a
service provider obtains knowledge of a specific and identifiable
infringement of an individual item, then no additional “facts and
circumstances” are necessary to make the service provider “aware” of the
infringing activity. Construing both subsection (A)(i) and (A)(ii) to require
knowledge of “specific and identifiable infringements of particular
individual items” renders subsection (A)(ii) superfluous – again, an
impermissible reading of the statute. Corley, 129 S. Ct. at 1566.
B.

The District Court’s Test For Knowledge Encourages
Willful Blindness By Service Providers

The district court’s test for knowledge not only is inconsistent with
the statutory language, but undermines Congress’s clearly expressed intent
in enacting the DMCA. First, that test incentivizes service providers to
refrain from investigating and putting a stop to infringing activity of which
they are aware. Service providers wanting to limit their liability under the
district court’s test would never take such action on their own – because
22

doing so could lead to their “identify[ing] infringing material with sufficient
particularity,” and thereby trigger their obligation to take that material down.
SPA 29. The summary judgment record, in fact, contained significant
evidence that appellees refrained from investigating and remedying known
infringing activity unless and until copyright owners sent them takedown
notices.7
By rewarding appellees’ strategy with the grant of summary
judgment, the district court’s decision inverts Congress’s clear objectives
that service providers act expeditiously to stop infringing activity of which
they are “aware.” 17 U.S.C. § 512(c)(1)(A)(ii). The legislative history
confirms that Congress intended for subsection (A)(ii) to create a “red flag”
test: “[I]f the service provider becomes aware of a ‘red flag’ from which
infringing activity is apparent, it will lose the limitation of liability if it takes
no action.” Senate Report at 44; H.R. Rep. No. 105-551, pt. 2, at 53 (1998)
(“House Report”). Congress’s conception of “red flag” knowledge has clear
7

See, e.g., SUF 57 (YouTube founder Steve Chen: “the copyright
infringement stuff. i mean, we can presumably claim that we don’t know
who owns the rights to that video and by uploading, the user is claiming that
they own that video. we’re protected by DMCA for that. [W]e’ll take it
down if we get a ‘cease and desist’”); SUF 64 (YouTube founder Chad
Hurley: “can we remove the flagging link for ‘copyrighted’ today? we are
starting to see complaints for this and basically if we don’t remove them we
could be held liable for being served a notice. it’s actually better if we don’t
have the link there at all because then the copyright holder is responsible for
serving us notice of the material and not the users.”).
23

and direct parallels to the common law doctrine of “willful blindness.”
Under that doctrine, a defendant that turns its face away from apparent
illegal activity in order to avoid obtaining culpable knowledge nevertheless
will be deemed to have such knowledge. As Judge Posner described the
doctrine, “a deliberate effort to avoid guilty knowledge is all that the law
requires to establish a guilty state of mind[,]” and “[w]illful blindness is
knowledge, in copyright law … as it is in the law generally.” Aimster, 334
F.3d at 650. See also Tiffany (NJ) Inc. v. eBay Inc., 600 F.3d 93, 109-10 (2d
Cir. 2010) (service provider that willfully blinds itself to counterfeit goods
on its website has requisite knowledge for secondary liability under
trademark law).
Congress further made it clear that a service provider can acquire “red
flag” knowledge regardless of whether the copyright owner has notified the
provider of the infringing material:
A service provider wishing to benefit from the limitation on
liability under subsection (c) must “take down” or disable
access to infringing material residing on its system or network
of which it has actual knowledge or that meets the “red flag”
test, even if the copyright owner or its agent does not notify it of
a claimed infringement.
Senate Report at 45 (emphasis added); House Report at 54 (same).
The “red flag” standard of (A)(ii) reflects and enforces the Congress’s
considered decision that service providers who become “aware” of
24

“apparent” infringing activity must act expeditiously to stop that activity if
they want to enjoy the statute’s benefits. The district court’s decision
reverses the incentives that Congress clearly intended to provide with the
“red flag” standard. The decision cannot stand.
C.

The District Court’s Test For Knowledge Effectively
Relegates Copyright Owners To A Notice And Takedown
Regime, Which Congress Did Not Adopt

The district court’s knowledge test further is inconsistent with
Congress’s intent because it effectively transforms the DMCA into a notice
and takedown statute. As discussed, the summary judgment record showed
that appellees refrained from acting unless and until notified about specific
infringements in takedown notices. See n.7, supra. The district court’s
knowledge test validates that strategy, and as a practical matter guarantees
that service providers will not “cooperate to detect and deal with copyright
infringements,” Senate Report at 20 (emphasis added), but instead will only
react to takedown notices.
The notice and takedown regime that the district court’s test embodies
is one that Congress considered and rejected. A leading commentator on
copyright law recounted the structure that the service providers urged
Congress to adopt:
In broad strokes, copyright owners aggrieved over the illicit
usage of their content over the Internet could serve notice on
25

ISPs that afforded access to that content; in response, the ISPs
would take down the content, or otherwise disable access to it.
3 Melville B. Nimmer & David Nimmer, Nimmer on Copyright
§ 12B.01[B][2], at 12B-22 (Matthew Bender, Rev. Ed.).
However, a broad range of copyright owners – not only those from the
entertainment industries but from the computer software industries and
others – argued forcefully that such a regime was unworkable and unjust.
As one representative of the computer software industry summed it up:
“Notice and take-down” is simply an unworkable model
because it reduces the incentive for service providers to take
action when they discover obvious infringements, and imposes
the full burden for protecting copyright on software companies.
Moreover, when conducting anti-piracy work, and given [the]
nature of works in electronic form, making notice a
precondition for suit would simply constitute an invitation for
the pirate to destroy the evidence of his infringement.
WIPO Copyright Treatises Implementation Act; And Online Copyright
Liability Limitation Act: Hearing on H.R. 2281 and H.R. 2280 Before the
Subcomm. on Courts and Intellectual Property of the H. Comm. on the
Judiciary, 105th Cong. 121 (1997) (statement of Ken Wasch, President,
Software Publishers Ass’n).
In the end, Congress did not adopt the pure “notice and takedown”
regime for which service providers had advocated. One requirement for safe
harbor protection under § 512(c) is that the service provider must “respond[]

26

expeditiously” to notices of claimed infringement sent by copyright owners.
17 U.S.C. § 512(c)(1)(C). But the statute provides additional requirements
that the service provider must satisfy to come within the safe harbor,
including the knowledge provisions of § 512(c)(1)(A). Congress could not
have meant, and did not mean, for the notice and takedown requirements to
supplant or be coterminous with the statute’s knowledge elements.
The district court indicated that its test was supported by § 512(m)(1),
which says that the statute does not “condition the applicability of” the safe
harbor on “a service provider monitoring its service or affirmatively seeking
facts indicating infringing activity[.]” Id. § 512(m)(1). See SPA 19. That
statement appears in a section of the statute entitled “Protection of Privacy.”
See also Senate Report at 55 (stating that this provision was “designed to
protect the privacy of Internet users”). The provision simply means that
there is no stand-alone requirement that a service provider monitor its
service or affirmatively seek out information regarding its users’ conduct in
order to be eligible for safe harbor protection. The provision cannot
reasonably be read to render nugatory the obligations that may arise by
virtue of the operation of other provisions of the same statute, including
§ 512(c)(1)(A). See Citizens Bank of Md. v. Strumpf, 516 U.S. 16, 20 (1995)
(“It is an elementary rule of construction that the act cannot be held to

27

destroy itself.”) (quotations omitted). If a service provider has either type of
knowledge enumerated in § 512(c)(1)(A), then the provider is obligated to
investigate and take action to stop it. Nothing in § 512(m)(1) eliminates that
requirement.
*

*

*

The district court’s interpretation of § 512(c)(1)(A) fails under every
available canon of statutory construction. The decision must be reversed.
III.

The District Court Erroneously Wrote A Knowledge Test Into
§ 512(c)(1)(B)
The district court’s erroneous re-writing of the DMCA went beyond

writing out the knowledge tests that actually are in § 512(c)(1)(A). The
district court further erred by writing into § 512(c)(1)(B) a knowledge test
where none exists.
Section 512(c)(1)(B) states that the service provider seeking safe
harbor protection must demonstrate that it
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.
17 U.S.C. § 512(c)(1)(B).
The district court considered appellees’ ability to satisfy
§ 512(c)(1)(B) in a single paragraph. SPA 28-29. Without deciding the
question of appellees’ receipt of financial benefit, the court held that
28

appellees could not have “the right and ability to control” infringing activity
unless they had particularized knowledge of specific “cases” of
infringement. In particular, the court held that “the provider must know of
the particular case before he can control it.” Id. at 29 (emphasis added).
The court thus imported into § 512(c)(1)(B) the same knowledge test the
court had adopted for § 512(c)(1)(A). This was error.
The text of § 512(c)(1)(B) does not include a knowledge test. Given
that Congress included knowledge tests in § 512(c)(1)(A) but omitted any
such test in § 512(c)(1)(B), it was error for the district court to write such a
test into the latter provision. See, e.g., Jacobs v. New York Foundling
Hospital, 577 F.3d 93, 100 (2d Cir. 2009) (“The ancient maxim expressio
unius est exclusio alterius (mention of one impliedly excludes others)
cautions us against engrafting an additional exception to what is an already
complex [statute].”) (quotation omitted).
The district court’s addition of a knowledge test not only disregards
the expressio unius maxim, but further renders § 512(c)(1)(B) superfluous.
If a service provider knows of particular infringing activity, then (even under
the district court’s construction of § 512(c)(1)(A)) the provider must act
expeditiously to stop that activity, or else lose any claim for safe harbor

29

protection.8 The service provider’s obligations under § 512(c)(1)(A) exist
whether or not the service provider receives a financial benefit that is
directly attributable to the infringing activity. Hence, if the district court’s
construction of § 512(c)(1)(B) were correct, then that section would be
unnecessary and superfluous in light of § 512(c)(1)(A). Again, that is an
unreasonable reading of the statute. Corley, 129 S. Ct. at 1566.
The district court’s importation of a knowledge test has no support in
the legislative history. It also has no support in the common law doctrine of
vicarious copyright liability, which obviously informed Congress’s drafting
of § 512(c)(1)(B). See Shapiro, Bernstein & Co. v. H. L. Green Co., 316
F.2d 304, 307 (2d Cir. 1963). The common law formulation provides that
vicarious liability may attach “[w]hen the right and ability to supervise
coalesce with an obvious and direct financial interest in the exploitation of
copyrighted materials[.]” Id. The common law test does not have a
knowledge component. Indeed, this Court has long held that vicarious
liability may attach “even in the absence of actual knowledge that the
copyright monopoly is being impaired[.]” Id. See id. at 308 (“courts have
consistently refused to honor the defense of absence of knowledge or
8

As demonstrated above, knowledge of a particular instance of infringing
activity is not the only type of knowledge that triggers the service provider’s
obligation to act under § 512(c)(1)(A).
30

intention”); 3 Nimmer on Copyright § 12.04[A][2], at 12-77 & n.51 (“Lack
of knowledge that the primary actor is actually engaged in infringing
conduct is not a defense” to vicarious liability) (collecting cases). The fact
that the common law test excludes a knowledge test further underscores the
absence of support for the district court’s construction.
Finally, the district court’s importation of a knowledge test into
§ 512(c)(1)(B) also is insupportable as a matter of sound policy. As with its
interpretation of § 512(c)(1)(A), the district court’s construction of
§ 512(c)(1)(B) encourages service providers to be deliberately ignorant of
infringing activity occurring on their sites. Providing such incentives to
those service providers who not only receive a direct financial benefit
attributable to the infringing activity but also have the right and ability to
control it undermines the statute’s language and Congress’s objectives in
enacting the DMCA. For all of these reasons, the district court’s decision
must be reversed.

31

CONCLUSION
Amici respectfully submit that the district court’s judgment should be
reversed.

DATED: December 10, 2010

Respectfully submitted,
/s/ Kelly M. Klaus
KELLY M. KLAUS

Susan Cleary
Vice President & General Counsel
Independent Film & Television Alliance
10850 Wilshire Boulevard
Los Angeles, California 90024
[phone]

Kelly M. Klaus
Munger, Tolles & Olson LLP
355 South Grand Avenue, 35th Floor
Los Angeles, California 90071
[phone]

Counsel for Amicus IFTA

Counsel for Amicus MPAA

32

CERTIFICATE OF COMPLIANCE WITH FEDERAL RULE OF
APPELLATE PROCEDURE 32
Pursuant to Rule 32 of the Federal Rules of Appellate Procedure, I certify
that:
1.

This brief complies with the type-volume limitation of Rule

32(a)(7)(B) of the Federal Rules of Appellate Procedure because this brief contains
6,803 words, excluding the parts of the brief exempted by Rule 32(a)(7)(B)(iii);
and
2.

This brief complies with the typeface requirements of Rule 32(a)(5)

and the type style requirements of Rule 32(a)(6) because this brief has been
prepared in a proportionally spaced typeface using Microsoft Word 2003 in 14
point Times New Roman.

Dated: December 10, 2010
/s/ Kelly M. Klaus
KELLY M. KLAUS
Counsel for Amicus MPAA

CERTIFICATE OF SERVICE
I hereby certify that on this 10th day of December, 2010, a true and correct
copy of the foregoing Brief for Motion Picture Association of America, Inc. and
Independent Film & Television Alliance as Amici Curiae Supporting Appellants
was served on all counsel of record in this appeal via CM/ECF pursuant to Second
Circuit Rule 25.1(h)(1)-(2).
Dated: December 10, 2010
/s/ Kelly M. Klaus
KELLY M. KLAUS