Friday, June 25

The Battle Between Viacom & Youtube

Yesterday’s summary judgment in favor of YouTube in the ongoing lawsuit against it by Viacom has ramifications for the music industry far beyond its relationship with YouTube.

Despite music industry organizations like ASCAP, BMI and SESAC filing briefs in the case supporting Viacom’s $1 billion copyright infringement claim, the music industry has largely made peace with YouTube and works with it as close partner, as the company’s involvement in the Vevo music video service illustrates.

But it’s judge Louis Stanton’s reasoning behind granting YouTube victory in the case that, if upheld, could affect the music industry’s efforts to reign in less friendly online services that use the same defense.

It all comes down how the law defines the Safe Harbor clause of the Digital Millennium Copyright Act, which states that content hosting services can’t be sued for infringement so long as they comply with any takedown requests from rights holders. Rightsholders for years have complained that this protection places all the onus on them to constantly send in takedown notices to services that they feel should be doing more to more proactively police their networks. Yesterday’s ruling upholds that burden, even in the case of services that host as high a volume of potentially infringing content as YouTube.

Critics of the ruling say such collaboration works only for larger labels and rights organizations that are well staffed and better equipped to engage with YouTube and other services at a high level. Smaller labels and independent artists may have a tougher time.

"This is a terrible result for independent artists,” says attorney Chris Castle. “Google's interpretation of the DMCA creates three classes of artists: those who have the money and time to pursue notice and takedown 24 hours a day, 7 days a week, those who have some resources to send notices some of the time, and those who give up in despair.”

While the ruling grants YouTube a victory for now, the issue is hardly resolved. Viacom has already vowed to appeal the “fundamentally flawed” ruling to the U.S. Court of Appeals for the Second Circuit. Universal Music Group, which found itself on the losing side of a summary judgment in its similar lawsuit against video-sharing service Veoh, also is pursing an appeal.

Until these cases reach a final resolution, it’s unlikely that yesterday’s ruling will have any affect on existing digital music business models. Online services who show interest in licensing music will continue to strike deals with the labels, while those that don’t will continue to be sued. Other services have tried to use the DMCA Safe Harbor defense as a shield against label lawsuits—such as music search engine SeeqPod and video sharing service Veoh—but typically run out of money before they can fight in court and simply shut down.


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