Category Archives: DMCA

Veoh eligible for DMCA Safe Harbor

[Brian Beckham is a contributor to Internet Cases and can be contacted at brian.beckham [at] gmail dot com.]

Io Group, Inc. v. Veoh Networks, Inc., 2008 WL 4065872 (N.D.Cal. Aug. 27, 2008)

The U.S. District Court for the Northern District of California ruled that Veoh’s hosting of user-provided content is protected by the DMCA safe harbor provision, and that it does not have a duty to police for potential copyright infringement on behalf of third-parties, but rather must act to remove infringing content when so put on notice.

IO produces adult films; Veoh hosts, inter alia, its own “Internet TV channels” and user-posted content (much like YouTube). In June 2006, IO discovered clips from ten (10) of its copyrighted films ranging from 6 seconds to 40 minutes in length hosted on Veoh. Rather than sending Veoh a “DMCA Notice & Takedown” letter, IO filed the instant copyright infringement suit. (Coincidentally, Veoh had already removed all adult content sua sponte — including IO’s prior to the suit). Had Veoh received such a notice, so the story goes, it would have removed the content, and terminated the posting individual’s account.

When a user submits a video for posting, Veoh’s system extracts certain metadata (e.g., file format and length), assigns a file number, extracts several still images (seen on the site as an icon), and converts the video to Flash. Prior to posting, Veoh’s employees randomly spot check the videos for compliance with Veoh’s policies (i.e., that the content is not infringing third-party copyrights). On at least one occasion, such a spot check revealed infringing content (an unreleased movie) which was not posted.

Veoh moved for summary judgment under the DMCA’s Safe Harbors which “provide protection from liability for: (1) transitory digital network communications; (2) system caching; (3) information residing on systems or networks at the direction of users; and (4) information location tools.” Ellison, 357 F.3d at 1076-77. Finding that Veoh is a Service Provider under the DMCA, the Court had little trouble in finding that it qualified for the Safe Harbors. IO admitted that Veoh “(a) has adopted and informed account holders of its repeat infringer policy and (b) accommodates, and does not interfere with, “standard technical measures” used to protect copyrighted works”, but took issue with the manner in which Veoh implemented its repeat infringer policy.

Veoh clearly established that it had a functioning DMCA Notice & Takedown system:

  • Veoh has identified its designated Copyright Agent to receive notification of claimed violations and included information about how and where to send notices of claimed infringement.
  • Veoh often responds to infringement notices the same day they are received.
  • When Veoh receives notice of infringement, after a first warning, the account is terminated and all content provided by that user disabled.
  • Veoh terminates access to other identical infringing files and permanently blocks them from being uploaded again.
  • Veoh has terminated over 1,000 users for copyright infringement.

The Court held that Veoh did not have a duty to investigate whether terminated users were re-appearing under pseudonyms, but that as long as it continued to effectively address alleged infringements, it continued to qualify for the DMCA Safe Harbors; moreover, it did not have to track users’ IP addresses to readily identify possibly fraudulent new user accounts.

The Court further noted that: “In essence, a service provider [Veoh] is eligible for safe harbor under section 512(c) if it (1) does not know of infringement; or (2) acts expeditiously to remove or disable access to the material when it (a) has actual knowledge, (b) is aware of facts or circumstances from which infringing activity is apparent, or (c) has received DMCA-compliant notice; and (3) either does not have the right and ability to control the infringing activity, or – if it does – that it does not receive a financial benefit directly attributable to the infringing activity.”

The Court found that (1) there was no question that Veoh did not know of the alleged infringement — since IO did not file a DMCA Notice (2) it acted expeditiously to remove user-posted infringing content, (3) it did not have actual knowledge of infringement, (4) it was not aware of infringing activity, and (5) it did not have the right and ability to control the infringing activity (the Court did not address any financial benefit).

In sum: the Court “[did] not find that the DMCA was intended to have Veoh shoulder the entire burden of policing third-party copyrights on its website (at the cost of losing its business if it cannot). Rather, the issue [was] whether Veoh [took] appropriate steps to deal with [alleged] copyright infringement.”

There is much speculation as to how, if at all, this case will affect the Viacom / YouTube case. YouTube praised the decision, Viacom noted the differences. Each case turns on its own facts, but to the extent there are similarities, this decision is wind in YouTube’s sails.

Case is: IO Group Inc.(Plaintiff), v. Veoh Networks, Inc. (Defendant)

Sender of DMCA takedown notice should consider fair use

Lenz v. Universal Music Corp., No. 07-3783 (N.D. Cal. August 20, 2008). [Download the opinion]

Hat tip to Joe Gratz for breaking this story.

One of the things that a person sending a takedown notice under the Digital Millennium Copyright Act (DMCA) has to swear to is that he or she “has a good faith belief that use of the material in the manner complained of is not authorized by the copyright owner, its agent, or the law.” 17 U.S.C. §512(c)(3)(A) (emphasis added). If the sender of the takedown notice makes a knowingly material misrepresentation as to whether the law authorizes the use of the material, the party whose content is taken down can sue under 17 U.S.C. §512(f). This serves as a backstop against DMCA takedown abuses.

Suppose that the complained-of work may be protected by fair use. If the sender is deliberately ignorant of that possibility, can that result in a misrepresentation that runs afoul of 512(f)? That question had not been answered before today, when the U.S. District Court for the Northern District of California said “yes.”

The case is Lenz v. Universal Music Corp., No. 07-3783. You may have heard of this case before, as it’s the one where the mom filmed her daughter dancing to Prince’s “Let’s Go Crazy” and uploaded that to YouTube, only to have it removed after a Universal DMCA takedown notice. Lenz sued under §512(f) and Universal moved to dismiss.

In its motion to dismiss, Universal contended that copyright owners cannot be required to evaluate the question of fair use prior to sending a takedown notice because fair use is merely an excused infringement of a copyright rather than a use authorized by the copyright owner or by law.

But the court disagreed. “[T]he fact remains that fair use is a lawful use of a copyright. Accordingly, in order for a copyright owner to proceed under the DMCA with ‘a good faith belief that use of the material in the manner complained of is not authorized by the copyright owner, its agent, or the law,’ the owner must evaluate whether the material makes fair use of the copyright.” The court went on to say that “[a]n allegation that a copyright owner acted in bad faith by issuing a takedown notice without proper consideration of the fair use doctrine thus is sufficient to state a misrepresentation claim pursuant to Section 512(f) of the DMCA.”

Because Lenz’s complaint contained allegations of this nature, it was detailed enough to pass Twombly muster [Bell Atlantic Corp. v. Twombly, --- U.S. ----, 127 S. Ct. 1955, 1964-65 (2007)], and the case moves forward.

The practical effect of this decision is that one sending a DMCA takedown notice without considering whether the person who posted the content is making a fair use, does so at his or her peril. Let’s be clear — the decision does not mean that sending a takedown notice in a situation where it turns out to be a fair use will automatically result in a finding of §512(f) misrepresentation. But it does add another implicit item on the checklist of the takedown notice sender.

Resale on eBay o.k. under First Sale Doctrine?

Last week the U.S. District Court in Seattle denied Defendant Autodesk’s motion to dismiss Plaintiff Vernor’s case, and held that under the circumstances, the sale of AutoCAD on eBay was protected by the First Sale Doctrine.

Vernor makes a living reselling goods on eBay. He found himself in hot water after trying to sell four copies of Autodesk’s AutoCAD on eBay, and sought a declaratory judgment from the Court that he was entitled to sell these copies of AutoCAD.

In 2005, Vernor bought a copy of AutoCAD at a garage sale. He then listed it on an eBay auction. When Autodesk found out about Vernor’s eBay auction, it sent eBay a notice and takedown request alleging that copyright infringement would occur if Vernor were allowed to sell its product. Vernor filed a counter-notice claiming his proposed sale was lawful. eBay reinstated the auction, and the sale was completed. Fast forward to 2007 when Vernor bought four copies of AutoCAD for sale on eBay. He was able to sell three copies after going through similar notice and takedown / reply correspondence as in 2005. When he tried to sell the fourth copy, eBay suspended his account for one month for alleged “repeat infringement.” He sued for a declaration that his proposed sale was lawful, and that Autodesk’s actions were unfair competition.

Vernor acquired his copies of AutoCAD from CTA who had acquired them from Autodesk as part of a settlement. Each copy contained a Software License Agreement which contained a “nonexclusive, nontransferable license to use the enclosed program … [including prohibiting] transfer … to any other person without Autodesk’s prior written consent.”

Contrary to Autodesk’s assertion, the Court held that Vernor did make out a valid cause of action, and that there is an actual case / controversy between the parties per the Declaratory Judgment Act. Moreover, the Court also held that “If It Applies, the First Sale Doctrine Immunizes Mr. Vernor” since “[t]he first sale doctrine permits a person who owns a lawfully-made copy of a copyrighted work to sell or otherwise dispose of the copy.” The Court also cited with approval Quality King Distribs., Inc. v. L’Anza Research Int’l, Inc., 523 U.S. 135, 152 (1998) which noted that “[w]hen a copyright holder chooses to sell a copy of his work, however, he ‘exhaust[s] his exclusive statutory right to control its distribution’.” The Court noted by way of example that “the first sale doctrine permits a consumer who buys a lawfully made DVD …to resell the copy, but not to duplicate the copy.”

Autodesk claims (as would arguably all software companies) that since it licensed AutoCAD, there was no sale, and thus Vernor is not an “owner” and the First Sale Doctrine does not apply. The Court points out the key question: “whether Autodesk’s transfer of AutoCAD packages to CTA was a sale or a mere transfer of possession pursuant to a license.” If it was a sale, Autodesk would be limited to a breach of contract claim against CTA. The Court notes that there is no bright-line rule as to what constitutes a sale versus a transfer, but that “[i]n comparing the transactions found to be sales in Wise with those that were not, the critical factor is whether the transferee kept the copy acquired from the copyright holder.” (emphasis added). Thus in this case, since CTA, and subsequently Vernor kept the copies of AutoCAD, there was a sale. The Court noted in a footnote that: “[e]ven if Autodesk could revive its “exhausted” distribution rights by reclaiming title to software copies it sold, Autodesk did not reclaim title. It merely required CTA to destroy its copies.” This might mean that software vendors will amend license language to avoid this issue in the future, along with more aggressively policing possession of their software requiring licensees to return copies of software so as to avoid First Sale issues (or that they could provide limited-term renewable licenses which contain a DRM-type “auto-destroy” feature – similar to the way iTunes limits via license the number of machines its customers can upload a song to).

The Court does note a series of decisions which run counter to the reasoning in United States v. Wise, 550 F.2d 1180, 1187 (9th Cir. 1977), but ultimately follows Wise in finding that “the transfer of AutoCAD packages from Autodesk to CTA was a sale with contractual restrictions on use and transfer of the software. Mr. Vernor may thus invoke the first sale doctrine, and his resale of the AutoCAD packages is not a copyright violation.” The Court also notes that other jurisdictions may have reached a different conclusion. This case has important implications for consumers and the software industry, and given the noted Circuit split, might not ride off into the sunset just yet.

William Patry provides an informative commentary here.

Case is: CASE NO. C07-1189RAJ (U.S. Dist Court of Washington at Seattle)

Emails held sufficient to amend employment contracts in NY

[Brian Beckham is a contributor to Internet Cases and can be contacted at brian.beckham [at] gmail dot com.]

The New York Court of Appeals, 1st Division recently upheld a lower court ruling that a series of “signed” emails is a sufficient writing to modify a contract.

Plaintiff Stevens sold his business (L-S) to Defendant Publicis under two contracts: a stock-purchase agreement including an initial up-front payment, and an employment contract whereby Plaintiff would continue as Chairman and CEO of the new company (PDNY) for three years with additional contingent fees based on earnings. Shortly after the acquisition, problems arose, including loss of a major client and failure to meet revenue and profit targets. Approximately halfway into the three-year term, Plaintiff was removed as CEO and presented 3 options for continued employment. The then-acting CEO of PDNY (Bloom) exchanged a series of emails with Plaintiff. The culmination of this exchange was an email from Bloom on behalf of PDNY describing his understanding of the parties’ terms regarding Plaintiff’s new role at PDNY that Plaintiff’s time would be allocated 70% towards new business development, 20% in maintaining former L-S clients, and 10% devoted to management/operations of PDNY.

Plaintiff responded the next day by email stating: “…I want to thank you again for helping me…That being said, I accept your proposal with total enthusiasm and excitement…” Bloom for PDNY replied the same day: “I am thrilled with your decision…all of us will continue to work in the spirit of partnership to achieve our mutual goal.”

The bottom of each email had the typed name of the sender.

The lower court held, and the Court of Appeals sustained that the parties had agreed in writing (by their emails) to modify Plaintiff’s duties under his employment contract, specifically because both sides expressed their unqualified acceptance of the modification to the contract. (Bloom’s email set forth the terms of the proposed contractual modification, Plaintiff accepted those terms by his email, and Bloom’s reply memorialized that acceptance). Plaintiff also confirmed his acceptance of the modified contract terms in another email to PDNY’s COO.

The Court of Appeals held that Plaintiff’s (and Bloom’s) emails “constitute ‘signed writings’ within the meaning of the statute of frauds, since plaintiff’s name at the end of his e-mail signified his intent to authenticate the contents.” Moreover, the signed writings (the emails) satisfied a requirement of the original employment contract that any modifications must be signed by all parties, i.e., the several emails served as counter-signatures. The same result may not have been reached in a different state, but at least in NY, “signed” emails can be valid for contract purposes.

Case is: Stevens v. Publicis, S.A., 602716/03.

The vexing linkage between access and protection in DMCA anticircumvention analysis

A couple of days ago David Donoghue wrote about the recent case of Nordstrom Consulting, Inc. v. M&S Technologies, Inc., No. 06-3234, 2008 WL 623660 (N.D. Ill. March 4, 2008). Dave’s post gives a very thorough treatment of all aspects of the case, which involve primarily allegations of infringement of the copyright in software.

The case also involved a claim of circumvention under the Digital Millennium Copyright Act, at 17 U.S.C. 1201(a). The court granted the defendants’ summary judgment motion on this claim.

The dispute arose from a rather typical set of facts. The parties had collaborated on the development of some software. Along the way the principal author of the software became dissatisfied and parted ways. Litigation ensued over the parties’ ownership and use of the source code.

Before plaintiff Nordstrom officially severed ties, he went on vacation. While he was gone, one of the defendant’s employees (Butler) sent Nordstrom an email saying that Butler needed access to the source code which was stored on a computer there in the office, in order to help out a customer. Nordstrom didn’t respond for several days, and in the meantime, Butler disabled the BIOS password for the computer.

Nordstrom sued under Section 1201 over this disabling of the password. The court relied heavily on the Federal Circuit’s decision in Chamberlain Group, Inc. v. Skylink Technologies, Inc., 381 F.3d 1178 (Fed. Cir. 2004) to conclude that there was no violation of Section 1201′s anticircumvention provisions.

The Chamberlain case draws a necessary connection between circumvention and infringement. And the presence of this connection is the vexing part of the analysis. A quick reading of Section 1201 does not reveal the link.

But the Chamberlain court held that Section 1201′s prohibition on circumvention does not give rise to a new property interest, only a new cause of action, one that goes after circumvention of methods controlling access to protected works. One can’t pursue a defendant just for circumvention in a vacuum, so to speak. The circumvention has to bear some “reasonable relationship to the protections that the Copyright Act otherwise affords copyright owners.” Chamberlain, 381 F.3d at 1202. In other words, without infringement or the facilitation of infringement arising from the cirumvention, a cause of action under 1201 does not arise. The linkage is one between access and protection.

The holding of the Nordstrom case as to the DMCA claim picks up on this link between access and protection. Summary judgment on the circumvention claim was proper because the plaintiff could not show that Butler’s disabling of the BIOS password protection on the computer storing the source code enabled any infringement. The evidence before the court was that Butler accessed the code to fix a problem on behalf of an authorized licensee of the software. Because of the license, there could be no infringement. Without any connection to infringement, under the teaching of Chamberlain, a cause of action for circumvention could not be sustained.

Beaded jewelry website tussle turns into lawsuit alleging bogus DMCA takedown notice

Does a hosting provider breach the contract with its customer when it responds to a DMCA takedown notice concerning its customer’s content? The plaintiff in this case would have you believe that. [Download the Complaint]

Jades Creations, LLC v. White, No. 07-50225 (N.D. Ill., Filed November 16, 2007)

Rockford, Illinois-based Jades Creations, LLC has filed suit in federal court against its competitor in the beaded jewelry industry over what Jades claims were unmeritorious takedown notices sent to Earthlink under the Digital Millennium Copyright Act.

Back in October, SW Creations sent a DMCA takedown notice to Earthlink, the host of Jades Creations’ Web site, claiming that material located thereupon infringed SW Creations’ copyright and trademark rights. (Never mind the DMCA does not apply to trademarks.) Jades, of course, disputed the fact that there was infringing content on its site, and successfully had access to its site restored after sending Earthlink a counternotification.

But Jades didn’t stop there. Obviously perturbed by what it believed to be an unwarranted takedown notice that caused it to lose business, it filed a lawsuit in the Northern District of Illinois, asking for a declaration of non-infringement and asserting various tort claims for the takedown notice.

One of the claims is for tortious interference with the contract between Jades and her hosting provider Earthlink. This is intriguing, but it looks like there could be a bit of a hurdle here.

Under Illinois law, a successful plaintiff in a tortious interference with contract action has to prove, among other things, that an actual breach of contract occurred because of the defendant’s conduct. Belden Corp. v. InterNorth, Inc., 413 N.E.2d 98 (Ill. App. 1st Dist. 1980). Did Earthlink breach the contract with its hosting customer when it obeyed the demands of a third party DMCA takedown notice?

Jades alleges that this was a breach (see paragraph 60 of the complaint). Do you agree?

Earthlink’s terms of service can be found here. And remember, 17 U.S.C. 512(g) provides that “a service provider shall not be liable to any person for any claim based on the service provider’s good faith disabling of access to, or removal of, material or activity claimed to be infringing or based on facts or circumstances from which infringing activity is apparent, regardless of whether the material or activity is ultimately determined to be infringing.”

Court finds CAPTCHA likely protectible under DMCA

Ticketmaster L.L.C. v. RMG Technologies, Inc., — F.Supp.2d —-, 2007 WL 2988403 (C. D. Cal. Oct. 15, 2007)

RMG Technologies developed an application that allowed its users to automatically access Ticketmaster.com to search for tickets and buy them up by the dozens. Ticketmaster sued RMG, alleging, among other things, copyright infringement, breach of contract, and violation of the anticircumvention provisions of the Digital Millennium Copyright Act found at 17 U.S.C. 1201.

Ticketmaster moved for preliminary injunction on several of the counts in the complaint, and the court granted the motion. It held that Ticketmaster was likely to succeed on its claims of copyright infringement, in that RMG’s access to the Ticketmaster website exceeded the scope of the license to do so granted by the site’s browsewrap agreement. The court also held that under Grokster, Ticketmaster was also likely to succeed in showing that RMG was indirectly liable for inducing infringement through the promotion of the application.

On the DMCA claim, Ticketmaster claimed that by providing the ability for users to get around the CAPTCHAs that have to be solved in order to purchase tickets, RMG trafficked in technology that circumvents a technological measure used to prevent access to a work protected by copyright. (CAPTCHAs are the little challenge-response tests that appear frequently on websites requiring login or authentication, used to help ensure that it’s really a human and not a bot trying to access the website.)

One of RMG’s primary arguments against the preliminary injunction on DMCA grounds was that the CAPTCHAs were not “technological measures” used to circumvent the access protection, but were merely images. The court rejected this argument, looking to the language of the DMCA which provides, in relevant part, that “a technological measure ‘effectively controls access to a work’ if the measure, in the ordinary course of its operation, requires the application of information, or a process or a treatment, with the authority of the copyright owner, to gain access to the work.”

In this case, the court found that CAPTCHAS meet these criteria, because in their ordinary course of operation, they require the application of information before access to the work being protected is allowed.

Opinion appears below, or click through if it’s not showing up in the RSS feed:

Internet Archive malfunction leads to interesting DMCA and infringement case

Healthcare Advocates, Inc. v. Harding, Earley, Follmer & Frailey, — F.Supp.2d —-, 2007 WL 2085358 (E.D. Pa., July 20, 2007). [Download the opinion]

(This case has been pretty well covered already in the legal blogosphere, including here and here, but this is my $0.02 anyway.)

Plaintiff Healthcare Advocates sued defendant law firm Harding, Earley Follmer & Frailey, as well as a number of attorneys and staff at the firm for copyright infringement and violation of the anticircumvention provisions of the Digital Millennium Copyright Act (“DMCA”). The defendants moved for summary judgment, asserting that the alleged infringement was excused under the doctrine of fair use, and that the alleged conduct under the DMCA did not constitute a “circumvention” as contemplated under the statute. The court granted the defendants’ motion for summary judgment.

The dispute between the parties arose from a novel factual scenario. The defendants used the Internet Archive’s Wayback Machine to access cached versions of the plaintiff’s website. A few days earlier, the plaintiffs had configured a robots.txt file to be used in connection with their site, which should have – in the normal course of operations – prevented the web pages from showing up in the Internet Archive. [More on robots.txt files] But as it turns out, the Internet Archive’s servers were malfunctioning when the defendants conducted their searches, so the pages that should have been excluded under the instructions in the robots.txt file showed up anyway.

The plaintiff claimed that by viewing the archived pages on their office computers without authorization (such lack of permission stemming from the exclusion instructions in the robots.txt file), the defendants violated the plaintiff’s exclusive right under 17 U.S.C. §106 to publicly display their copyrighted works, thereby committing infringement. And by accessing the cached versions in spite of the robots.txt file, the plaintiff argued, the defendants circumvented a technological measure used to prevent access to a copyrighted work, in violation of 17 U.S.C. §1201.

The court agreed that the plaintiffs established the two necessary elements of copyright infringement, namely, (1) ownership of valid copyrights in the web pages, and (2) that the defendants, by viewing the web pages on their office computers, violated the exclusive display right under §106. But the court went on to determine that there was no infringement, because the use made by the defendants was a protected fair use.

On the fair use question, the most significant factor in the court’s analysis was the “purpose and character” of the subsequent use that the defendants had made. The defendants had viewed the archived web pages in connection with their work in defending their client against allegations of infringement in another case brought by Healthcare Advocates. In holding that this investigation of the plaintiff’s online materials was a permissible fair use, the court stated that “[i]t would be an absurd result if an attorney defending a client against charges of trademark and copyright infringement was not allowed to view and copy publicly available material, especially mater that his client was alleged to have infringed.”

As for the DMCA anticircumvention claims, the court held that because the malfunctioning of the Internet Archive servers made it such that the exclusion instructions in the robots.txt file were not present, there was no protective measure in place to be circumvented. Plaintiffs had argued that even though the protective measure was not in place, defendants should have known that they did not have permission to view the cached pages, as some of the requests were met with messages that the page was blocked by the website owner. The court rejected this argument, and, nodding to the case of I.M.S. Inquiry Mgmt. Sys., Ltd. v. Bershire Info. Sys., Inc., 307 F.Supp.2d 521 (S.D.N.Y. 2004), held that a lack of permission is not circumvention under the DMCA.

More evidence needed for YouTube’s DMCA defense

Viacom’s lawsuit against YouTube has gotten quite a bit of attention, but it wasn’t the first case of its kind filed. Almost a year ago, helicopter pilot and journalist Robert Tur sued YouTube for infringement of some well-known video he shot during the Rodney King Riots.

Both parties filed motions for summary judgment, and last week the court denied both motions. The rulings shed some light on how the safe harbor provisions of the Digital Millennium Copyright Act (“DMCA”) may play out in future lawsuits over user-generated content.

YouTube argued in its motion that it qualified for safe harbor protection “based on what it purport[ed] to be its definitive ability to satisfy all of the requirements of the statutory scheme.” The court neatly parsed seven requirements from 17 U.S.C. §512 that a service provider must meet to sail into the safe harbor:

(1) adoption and reasonable implementation of a termination policy for subscribers and account holders who are repeat infringers;

(2) accommodation and non-interference with “standard technical measures” that copyright owners use to protect their works;

(3) infringement is “by reason of the storage at the direction of a user of material that resides on a system or network controlled or operated by or for the service provider”;

(4) lack of actual knowledge of the infringing material or no awareness of facts or circumstances from which infringing activity is apparent on the system or network, and expeditious action to remove or disable access to material upon obtaining such knowledge or awareness;

(5) no “financial benefit” directly attributable to the infringing activity,” if it had “the right and ability to control such activity”;

(6) expeditious response to remove or disable access to infringing material upon notification from the copyright owner; and

(7) proper designation of an agent to receive such notification.

The difficulty arose for YouTube under the fifth point, namely, in connection with its argument that it gained no “financial benefit” directly attributable to the infringing activity,” and did not have “the right and ability to control such activity.”

Citing to the recent 9th Circuit case of Perfect 10 v. CCBill, the court observed that this point is actually two requirements in one: a provider’s receipt of a financial benefit is only implicated where it also has the right and ability to control the infringing activity. So if YouTube did not have the right and ability to control the alleged infringing activity, there was no reason to engage in the “financial benefit” analysis.

The court held that there was insufficient evidence to allow it to determine whether YouTube had the right and ability to control the infringing activity. The court’s comments on this point are intriguing, and foreshadow what might be some interesting issues in discovery. “There is clearly a significant amount of maintenance and management that YouTube exerts over its website, but the nature and extent of that management is unclear.” The court went on to note the lack of evidence as to “the process undertaken by YouTube from the time a user submits a video clip to the point of display on the YouTube website.”

Tur v. YouTube, Inc., No. 06-4436, (C.D.Cal. June 20, 2007)