A Big Win in the Second Circuit for Vimeo and the DMCA Safe Harbors (Post 2 of 3)

What follows is the second of three posts on Capitol Records v. Vimeo. The first post is here.

            Capitol Records' lawsuit against Vimeo, running in federal court since 2009, raised important and unsettled questions concerning the scope of safe harbors for online intermediaries under the Digital Millennium Copyright Act (17 U.S.C. § 512)—questions remaining in the wake of the Second Circuit's landmark decision in Viacom v. YouTube (2012). Three issues were in play in this case: (1) whether the safe harbors—which are a creature of federal copyright law—may be raised as a defense to allegations of infringement involving pre-1972 sound recordings, which are not within the scope of federal copyright law; (2) whether a service provider can be charged with “red flag” knowledge of infringement if its employee views a video containing all or almost all of a popular sound recording; and (3) whether Vimeo showed “willful blindness” to its users’ infringements and was thereby disqualified from the safe harbors.

(2) Establishing Proof of “Red Flag” Knowledge

            As a condition for eligibility, the safe harbors require service providers to remove material that they either actually know or should know from surrounding facts or circumstances (i.e., “red flags”) to be infringing. In Viacom, the Second Circuit interpreted red flag knowledge under the DMCA to mean a provider’s subjective awareness of facts or circumstances from which specific instances of infringement would be objectively obvious to a reasonable person. The standard is a mixed subjective/objective one that requires courts to wade into the swampy terrain of what a hypothetical reasonable person should be able to discern in light of the facts in front of her.

          District courts deciding safe harbor disputes have applied the standard for red flag knowledge in an unpredictable way. This is true in part because "reasonableness" in any area of the law is an elusive concept and in part because there has been (to my knowledge, anyway) no authoritative definition in the context of the DMCA of what a hypothetical “reasonable tech company employee" should be expected to know concerning potential instances of infringement that she might run across at work. This case helps to fill that vacuum, sensibly establishing that a reasonable person for DMCA purposes is none other than copyright law’s “ordinary person”—more specifically, one who is “not endowed with specialized knowledge or expertise concerning music or the laws of copyright.”

            Considered from the perspective of an ordinary employee of a tech company, the court held, the act of viewing some part of a user-uploaded video that contains all or virtually all of a “recognizable” song does not necessarily give rise to red flag knowledge (i.e., does not make infringement objectively obvious). The court offered several reasons why this is true: (1) the employee might not have viewed the whole video (and therefore might not have known that it contained all or virtually all of a song); (2) the employee’s reason for viewing the video might have been wholly unrelated to copyright; (3) the employee might not actually have recognized the “recognizable” song in question for a variety of reasons, including the employee’s age and taste in music; and (4) the employee might have had no expertise in copyright and could therefore not have distinguished between infringing and non-infringing content. In light of these factors, the court said, a plaintiff must do more to prove a defendant's red flag knowledge than simply offer proof that an employee to some extent viewed a video that contained all or most of a popular copyrighted song.

            Capitol Records argued that requiring plaintiffs to show more to establish the objective obviousness of an infringement would collapse red flag knowledge into actual knowledge, effectively reading red flag knowledge out of the statute as a separate basis for disqualification from safe harbor. The court disagreed, writing that “[i]f the facts actually known by an employee of the service provider make infringement obvious, the service provider cannot escape liability…on the ground that the person with knowledge of those facts never thought of the obvious significance of what she knew in relation to infringement.” To put it another way, awareness of facts that would make an infringement obvious to a reasonable person can disqualify a provider without any proof that the particular employee in question put two and two together to reach a subjective conclusion that material was infringing. As long as a reasonable person would have done the math, the plaintiff's burden is met regardless of what the provider's employee believed. By contrast, for a provider to be disqualified based on an employee’s actual knowledge, the employee must be shown to have reached a subjective conclusion that the material was infringing. Actual knowledge and red flag knowledge are thus distinct and distinguishable, with a lower burden of proof for the latter. The math in this case was just not as easy as the plaintiffs made it out to be, for the reasons the court cited. [Editorial note: Copyright math in general is hard, especially for people "not endowed with specialized knowledge" of it.]

            Even as the court rejected the plaintiffs’ argument that a holding for Vimeo would gut red flag knowledge, it acknowledged that the scope of red flag knowledge under its application of the statute is narrow. Such knowledge, it recognized, is likely to be provable in only a small number of cases. “Assuming this is so,” the court wrote, “it is of no significance.” A narrow scope for red flag knowledge, the court explained, is consistent with Congress’ primary goals for the safe harbors, which were to be accomplished primarily through the operation of the notice-and-takedown framework. That framework, after all, requires no inferences or guessing and is the true engine of the DMCA when it comes to content removal.

            Commentators unhappy with the outcome of this case are lamenting the “death of red flag knowledge,” but red flag knowledge is alive and well. It’s just not trivially easy to prove, and that’s as it should be given both the goals of the statute and the nasty consequences (i.e., potentially bankrupting statutory damages) for providers that don’t qualify for safe harbor. The Second Circuit appreciated in this case that a broad and uncertain scope for red flag knowledge would make asserting the safe harbors little more than a game of chance, which is definitely not what Congress intended.

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