A Legal Blog by Aaron | Sanders, PLLC

You’re No Fung Anymore: There Really Is Such Thing as Red Flag Knowledge in Copyright Law

Also, There Really Is Such Thing as Copyright Inducement

Hot on the heels of the new and improved opinion in the Veoh case (discussed last time), we also have Columbia Pictures Industries, Inc., et al. v. Gary Fung & IsoHunt Web Technologies, Inc., another important 9th Circuit decision construing the major DMCA safe harbors. We’ve actually discussed the case before because it was—and as far as I am aware—the only case in which a service provider was found to have had enough “red flag” knowledge to be deprived of the DMCA safe harbor.

The rare yellow-bellied sapsucker is a close relative of the even rarer red-flagged sapsucker. Photo by Phillippe Boissel, under Creative Commons license.

The Red-Flagged Sapsucker

I’ve said previously that “red flag” knowledge will be found only in extraordinary situations, and nothing since then has changed my mind. The problem is that “red flag” knowledge is clearly objective knowledge (in contrast to the subjective nature of actual knowledge). Lawyers are actually used to these standards, more classically stated as “knew or should have known.” In many cases, knowledge requirements are important, but even so, we don’t like to limit them to purely subjective knowledge because it becomes too easy…


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DMCA Circuit Split Averted: New Rule but the Holding Remains the Same

Also, UMG’s Home-Run Stroke Still Need Work


Last year* there were two much-anticipated, important decisions about the scope of the major DMCA safe-harbor defenses: the Ninth Circuit in UMG Recordings v. Shelter Capital (better known as the “Veoh case”), which was issued first, and then the Second Circuit in Viacom v. YouTube. They mostly agreed with each other, but diverged on a major point and on a minor point.** I blogged at length about both of them: Veoh here, here and here; and YouTube here and here.

* If by “last year” you mean “2012 plus the tail end of 2011.”

** A quick recap of the the basic mechanics of the two major DMCA safe-harbors are set out here. Remember: there are four requirements that you have to meet in order to take advantage of the safe harbors, simplified somewhat: (1) you implement a reasonable repeat-infringer policy; (2) you are genuinely unaware that content in question is infringing, whether through actual knowledge or indirect “red flag” knowledge”; (3) you don’t both benefit financially and directly from the infringement and have the right and ability to control the infringing activity; and (4) you expeditiously remove content when you receive…


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Willful Blindness, Substantial Influence and Uncertainty in the Law of DMCA Safe Harbors

Part 2 of 2: The Second Circuit Punts on Third Down

Last time, I laid out the context for the Second Circuit’s decision in the Viacom v. YouTube case–i.e., the state and open issues of the law of the DMCA safe harbors. This time, I’ll get into what the Second Circuit actually said, pointing out where the Second Circuit agrees with, and diverges from, the Ninth Circuit’s reasoning in Shelter Capital v. UMG (the “Veoh case”).

Knowledge Requirement Is Limited to Specific Knowledge

The Second Circuit agrees with the Ninth Circuit that only knowledge of specific acts of infringement may defeat the Knowledge Requirement, whether under the actual knowledge or “red-flag” prongs.

The Second Circuit goes a bit further and describes “red-flag” knowledge as “objective” knowledge, as opposed to subjective knowledge. I.e., a reasonable person would have had knowledge (without conducting an investigation!) regardless of his or her actual knowledge. If that’s the case, the scope for red-flag knowledge must be very narrow indeed, since a person with so much awareness would almost always have enough facts to constitute actual (subjective) knowledge.

As it happens, the Second Circuit found instances that arguably show actual knowledge, in the form of emails from YouTube executives that…

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YouTube Decision Muddies the Water for DMCA Safe-Harbor Law–for Now

Part 1 of 2: Second Circuit on DMCA Safe Harbor: It’s Complicated

Well, if you were hoping that the DMCA safe-harbor law would clear up with the Second Circuit’s long-awaited opinion in Viacom v. YouTube–that we’d get to the point where folks would know the contours of the safe harbor without having to consult with a lawyer–then last Thursday was, indeed, as Prof. Goldman put it, a “bummer.” There were things to criticize in last December’s Ninth-Circuit decision in Shelter Capital v. UMG (better known as the “Veoh case”), and certainly rights-holders were unhappy with it, but at least you knew where things stood. The basic lesson from Veoh was: comply with the DMCA notice-and-takedown regime, watch out for notices of infringement by non-rights holders, and things’ll probably be OK.

But YouTube muddies the waters–at least, for a while. That’s not really meant as a criticism. Simplicity and “bright line rules” are nice because it saves business folks and consumers money (fewer legal fees) and worry. But an appellate court’s job is, in this case, to interpret a statute. Sometimes the best interpretation is also a complex or “fuzzy” one. True, lawyers are the main beneficiaries, but appellate courts don’t care…

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Burning Down the Dance-Hall: UMG v. Veoh Clarifies the DMCA

One of the Great Unanswered Questions Is Answered!

This is the third post on the recent and important Ninth Circuit opinion in the “Veoh case” (actually styled, UMG Recordings v. Shelter Capital, but we’ll call it “Veoh”). In the first post, we marveled at Universal’s surprising leading argument and worried about the fate of user-created videos of cute kittens. In the last post, we analyzed Universal’s surprisingly weak argument that Veoh had “red flag” knowledge of infringing activity and wondered if Universal hadn’t made things worse for rights holders on that issue.

Universal’s third and final argument fares rather better*, although it, too, ultimately fails. It targeted the financial benefit requirement (which, remember, is really a “no financial benefit” requirement). Recall that there are two prongs to this requirement: (1) the provider not receive a “financial benefit directly attributable to the infringing activity”; and (2) the provider have “the right and ability to control” the infringing activity.

* I still think that Universal would have been better off targeting Veoh’s repeat infringer policy. There’s so much we just don’t know about this requirement. Universal would have had a much better shot at reshaping the law in rights-holders’ favor, and at…

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