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Analysis of Viacom and Google evidence on YouTube piracy

By 19 March 2010 17 Comments

Viacom and Google have release their Summary Judgment Motions in the Viacom lawsuit against Google/YouTube.  The documents can be downloaded from the following links.

Before I start, I will point out that these are legal documents and that the statements within them such as the email evidence were probably gathered during discovery.  My analysis will operate under the reasonable assumption that these documents from Viacom and Google are accurate and factual.

The evidence against YouTube (pre-acquisition)

The key evidence against YouTube is that they knew that only 20% of their content was legal and one executive even resorted to uploading stolen content.  In fact, the fundamental business model of YouTube was to build up as much traffic as possible through any “tactics, however evil” according to YouTube founder Steve Chen.  The purpose of these tactics was to build enough traffic so that they could sell the company (and they eventually did for $1.65 billion).

In one email exchange on July 29, 2005 from this Viacom “Statement of Undisputed Facts” document, Chen apparently directed his co-founders to steal content.

In a July 29, 2005 email about competing video websites, YouTube co-founder Steve Chen wrote to YouTube co-founders Chad Hurley and Jawed Karim, “steal it!”, and Chad Hurley responded: “hmm, steal the movies?” Steve Chen replied: “we have to keep in mind that we need to attract traffic. how much traffic will we get from personal videos? remember, the only reason why our traffic surged was due to a video of this type . . . . viral videos will tend to be THOSE type of videos.”

While the context of this email isn’t entirely clear, it would seem to indicate at a very least that Steve Chen knew about stolen content on YouTube and at worst directed his partners to steal content.  Whether this is a case of Chen advocating theft by YouTube executives or if he was referring to someone else stealing needs to be fleshed out in court with the full context of the emails.  At the very least, it seems that YouTube no longer falls under the DMCA Safe Harbor provisions which operates under the premise that a content hosting site has no knowledge of stolen content.

In an email on July 19, 2005, Steve Chen yelled at co-founder Jawed Karim to stop posting stolen videos on YouTube.

In a July 19, 2005 email to YouTube co-founders Chad Hurley and Jawed Karim, YouTube co-founder Steve Chen wrote: “jawed, please stop putting stolen videos on the site. We’re going to have a tough time defending the fact that we’re not liable for the copyrighted material on the site because we didn’t put it up when one of the co-founders is blatantly stealing content from other sites and trying to get everyone to see it.”

So not only does YouTube know they have stolen content (apparently 80% stolen according to their own estimates in the discovered emails), and condoned and hoped for more stolen goods, one YouTube executive/founder apparently stole and uploaded copyrighted content and promoted it.  Not only does the DMCA defense go out the window, I have to wonder if there is any personal liability for Mr. Karim.

The evidence against Google

All quotations in this section came from the Statement of Undisputed Facts document.

Google apparently also knew that there were copious amounts of copyright infringement on YouTube (they determined it through random sampling of 100 files to be at least 60% “premium” copyrighted content during the YouTube valuation phase).  Google initially valued YouTube to be worth $2.7 billion based on what Google thought it could monetize on YouTube’s user base in the future.  However, Google estimated that only 10% of the premium content providers would allow Google to monetize their content in fiscal year 2007 so they offered YouTube $1.65 billion in Google stock.  However, Google fully expected to be sued and required 12.5% of the purchase price ($206 million) to be put in escrow to pay for future lawsuits against YouTube or Google.

Google executive Patrick Walker also posted a detailed list arguing against YouTube’s irresponsible behavior.

Google executive Patrick Walker an email listing the “Top 10 reasons why we shouldn’t stop screening for copyright violations,” including: “1. It crosses the threshold of Don’t be Evil to facilitate distribution of other people’s intellectual property, and possibly even allowing monetization of it by somebody who doesn’t own the copyright”; “2. Just growing any traffic is a bad idea. This policy will drive us to build a giant index of pseudo porn, lady punches, and copyrighted material. . .”; “3. We should be able to win on features, a better (user interface J technology, advertising relationships – not just policy. It’s a cop out to resort to dist-rob-ution”; and “7. It makes it more difficult to do content deals with you have an index of pirated material.”

Even though Mr. Walker’s ethical arguments made a lot of sense, Google apparently decided to “be evil” anyways and moved away from the existing Google Video policy.

Google did not apply Google Video’s earlier policy of proactively reviewing for copyright infringement to YouTube; instead, Google adopted YouTube’s policy of allowing substantially all infringing video to remain freely available on YouTube until a copyright owner could detect it and send a takedown notice.

Furthermore, it appears that Google employees directly knew of copyrighted Viacom content even after the acquisition.  So much for the DMCA defense.

In a March 9, 2007 email to YouTube employees, a Google employee provided a link to a “Funny south park” video on YouTube.

It also appears that Google in 2007 was having trouble finding worthy content that wasn’t copyrighted.

In a March 15, 2007 instant message conversation YouTube product manager Virginia Wang (IM user name missveeandchip) discussed her attempts to find videos on YouTube to put in a “cute video” category and stated that “it was hard to find anything I thought was vote worthy. . . that we could use. . . since so much of it involves copywritten stuff.” In an email the same day, Wang stated, “we’re running into issues finding enough videos because they have so many copyright violations.”

By February 2007, Google had already deployed a very effective technical means of identifying illegal content using the Audible Magic digital audio fingerprinting product.  Since nearly all video contains audio, the technology is extremely accurate and effective for identifying copyrighted video content when deployed by a content hosting company since they have easy access to non-encrypted content.  Content providers merely need to send “reference fingerprints” to Audible Magic’s database (these digital fingerprints are very small files) and the Audible Magic system can quickly identify infringing content that matches the reference fingerprints.

However, Google only applied this copyright identification system to content partners who entered into a revenue deal with Google and they used the threat of piracy to pressure the content providers into giving YouTube premium content for free.  Google senior vice president Jonathan Rosenberg wrote:

“Pressure premium content providers to change their model towards free . . . Threaten a change in copyright policy” and “use threat to get deal sign-up.”

While this part gets into a bit of legal grey area, it certainly doesn’t look good for Google to be using the threat of piracy – which they know full well that there is plenty of – to twist the arms of content owners.  Google basically threatened non-partners with the prospect of having to go through a costly and lengthy manual discovery and notification process while Google hosts pirated material which they clearly know of and can readily identify through automated means.  Google doesn’t even have to do anything to update the reference fingerprints because they already have access to the Audible Magic database which is updated by the content providers.  While it might be reasonable for Google to ask content providers to fund the operation of their filtering system, demanding free content with the threat of piracy while hiding behind DMCA Safe Harbor seems to be stepping way over the line especially when Google is clearly operating outside of Safe Harbor.

[UPDATE 8:13PM - Nate Anderson reported that Google was demanding a $590 million deal with Viacom if Viacom wanted Google to identify pirated Viacom content with Audible Magic technology.  Without that deal, Google refused to filter the content.  This type of extortionist behavior certainly seems to "cross the threshold" of being evil since Google's old policy at Google Video to proactively review content and remove pirated material.]

The Google Defense – Viacom secretly uploaded content to YouTube

Google’s main defense is that Viacom hired marketing firms to secretly upload Viacom content to YouTube, that they “roughed up” the videos to make them look stolen or leaked, and that Viacom executives felt “very strongly” that clips from “The Daily Show” and “The Colbert Report” should remain on YouTube.  But for this defense to work, it needs to address some key questions.

  • Did Viacom break any laws?  We need to first consider the purpose of YouTube which is “broadcast yourself”.  In this case, Viacom chose to “broadcast itself” using its own content on YouTube under the terms provided by YouTube.  Viacom was not obligated to use its own Internet infrastructure to upload content to YouTube nor was it obligated to use official Viacom email channels.  Viacom has the right to delegate these duties to third parties like marketing firms.  Ultimately, Viacom was not in violation of the law.
  • Does the fact that Viacom uploaded some of its own content to YouTube give others the right to upload the same content or additional Viacom content to YouTube?  Absolutely not.  The UFC for example puts full length events on Spike TV for free.  Would that entitle Spike TV to broadcast other UFC Pay Per View (PPV) events without permission?
  • Does the fact that Viacom uploaded some of its own content to YouTube nullify its complaint against YouTube?  Possibly, but only if all of the pirated Viacom content on YouTube was uploaded by Viacom or delegates of Viacom.  This is a very easy question to answer and all the marketing firms that worked for Viacom could be subpoenaed for a record of their upload activities.  I would guess that it’s safe to say when all of the evidence is collected, it will reveal that unauthorized parties uploaded Viacom content.
  • Does the fact that Viacom uploaded Viacom content damage Viacom’s case?  It certainly adds confusion because Viacom apparently lost track of the files its marketing firms uploaded and then demanded that YouTube block them only to ask that they be reinstated at a later time.  This is clearly very embarrassing because it gives the appearance that Viacom is trying to manufacture evidence against YouTube.  But given the amount of readily available illegal uploads, I think it is unlikely that Viacom was trying to manufacture evidence and that it was more a case of incompetence where their left hand (the lawyers) didn’t know what the right hand (the marketing firms) were doing.
  • [UPDATE 8:16 PM - Viacom's response was "This whole exercise is a red herring. First, none of the infringing clips at issue in this lawsuit were uploaded to YouTube by Viacom or its authorized agents. Second, the number of uploads to YouTube that Viacom did authorize (for which Viacom is not suing for infringement) was very limited compared to the 63,000 unauthorized infringing clips claimed by Viacom in this litigation. Third, of that small number of authorized clips, virtually all were uploaded to YouTube using official Viacom account names, and YouTube was fully aware of this fact."
  • [Update 3/22/2010 - I posted an updated analysis on the Viacom uploads on DailyTech.  Google is insinuating that Viacom is suing Google over clips it uploaded itself, but Viacom specifically denies this.  The only way to rectify these seemingly contracting positions is that Google is saying that some of the illicit content (uploaded by unauthorized accounts not related to Viacom) were the same content freely uploaded by Viacom, and that this makes it impossible for Google to know what’s illicit and what’s not.  But Viacom says that Google was fully aware of the specific Viacom authorized accounts and that nearly all of the Viacom uploaded video used these known accounts.  So this would make it a very weak defense for the 63,000 illicit clips named in the lawsuit.]

Google is also arguing that Viacom tried to acquire YouTube, but this doesn’t really excuse any alleged illegal behavior on the part of YouTube or Google.  An acquisition offer from Viacom is no different than an offer to settle out of court in exchange for money or something else of value.  If this was an actual defense, then any plaintiff that ever tries to settle with a defendant would lose their right to go to trial.

17 Comments »

  • Quote Of The Day | Bob Parks: Black & Right 2010 said:

    [...] (Google) personnel must have fun telling some of their users that they’ve committed theft of copyrighted content and risk [...]

  • cayble said:

    The fact that Viacom tried to acquire You Tube certainly dosnt excuse illegal behavior on its own. But, if in fact a judge found the primary purpose for Viacoms pursuit of this law suit was out of an actual desire to acquire You Tube, the question of damages might be in order for a close review. If Viacom recognizes You Tube as a service important to various aspects of their industry and a service they in fact feel they need to use it changes the face of the litigation to a large degree.

    In such a circumstance the question might become; “what are we really dealing with here?”

    Is it exactly what it seems to be? A company has copyright protected content that has illegally made its way onto a website, and the said company dosnt mind certain protected content on the site but the company wants to exercise its rights of control over which protected content goes on the website.

    Or is there more then meets the eye? The website is providing an invaluable service to the said company by providing a place to view the companies content on demand. The company has recognized the enormous value in this, but their interests are not perfectly served because they see much of their content on the site provides little to no profit for them. The company finds themselves in a predicament because they are better off with the status quo then to not have any of their content on the website, but they are worse off then if they had the kind of control they would like to have. The brilliant solution is to fully acquire the website and run it their way. The brilliant method of doing that and avoid having all their content dropped due to confrontation with the website owners is to sue the website owners for copyright infringement and hopefully collapse its value to them and then grab it for themselves.

    This creates the question about damages. Has the said company been disingenuous in their dealings with the website because on the one hand they don’t want to lose all access because it is so valuable to them, where that total loss of access would have completely addressed their copyright concerns? Have they in fact suffered no real damages in the over all scope of what the website has done for them and are they in fact simply trying to use the courts to acquire what they otherwise could not have? Could Viacom have just told You Tube “remove all our content and continue to do so?”

    Could You Tube have done that and saved this whole mess? Is that something Viacom absolutely did not want to happen? Is Viacom looking to have the best of both worlds by having found a way to hogtie You Tube just enough to have the grounds to litigate their way to the ownership of You Tube? How damaged is Viacom in the end?

    I’m no huge fan of all that Google does by any means. Not at all. But, on the other hand I am far less a fan of the big media companies who are still seeking to crush all that stands in their way of maintaining the kind of control over their content like the old days before they decided that digitization was the way to go. I am not a fan of companies who seek to use the courts as a “side door left” method of acquiring what they could not otherwise properly have. I feel that way primarily because it seems abundantly clear those tactics and policies will do nothing in the long run to solve what the media companies see as their problem. The kind of issues that You Tube and all kinds of file sharing create for media companies are not currently solvable at all in a traditional sense.

    It would be like trying to claim an airplane should be paying road tolls because they go right over the parts of roadways that require tolls from travelers going in that direction. Of course that sounds like lunacy but thats because we recognize that once airplanes came along that form of travel when it was used created a completely different playing field for travelers. What the media companies cannot seem to get through their head is that once we went digital that too changed everything and like it or not they themselves created this new playing field and trying to erect toll booths in the sky just isnt going to work. Its an old fashioned solution that will never work for a new problem thats never going to go away.

  • George Ou (author) said:

    Like I said Cayble, offering a buy out is no different than offering a settlement. I don’t think this affects the damage calculations just because a plaintiff offered a settlement deal.

  • Shaun Spalding said:

    Good article, but one big mistake…

    Google’s “main” defense is their DMCA defense (as evidenced by it being the first argument in their motion for summary judgment) , which is actually airtight under the current law / precedent. Viacom really only has a case if the judge decides to deviate from the current DMCA precedents.

    So saying things like “At the very least, it seems that YouTube no longer falls under the DMCA Safe Harbor provisions” and “So much for the DMCA defense” are really misleading.

    Viacom needs to prove “Actual Knowledge” of the infringement of the “Specific” videos alleged in the complaint (not just general knowledge of infringement) to kick Google out of the safe harbor provisions.

  • George Ou (author) said:

    Shaun,

    There was *very* specific evidence of specific videos that YouTube Executives were talking of, and specific knowledge demonstrated by Google employees. In fact, Chen and fellow co-founders were debating whether to remove specific copyrighted videos and decided to leave it up a little longer until the owners notified them. Google employees specifically forwarded links to copyrighted videos to each other. Google employees were asking their managers if certain videos should be removed, and they were told to leave all the music videos and news clippings.

    If these aren’t specific enough, I don’t know what is. So the DMCA safe harbor “see/hear no evil” defense is indeed out the window.

  • Digital Society » Blog Archive » YouTube Exposed: The Viacom Papers said:

    [...] the documents, including revealing internal YouTube e-mails, to its Web site. Digital Society is reviewing the documents for insights into YouTube’s business practices and its attitudes about copyright law and [...]

  • Lawrence D’Oliveiro said:

    It appears Viacom uploaded a whole lot of stuff in ways that could not (easily) be traced back to it, and tried to impose complex and ever-changing rules about what is and isn’t infringing on sites like YouTube. Basically it is trying to argue that the DMCA requires proactive filtering, which it specifically does not.

    You can find more details about this, including the context of the “steal it” quote, starting here.

  • George Ou (author) said:

    No Lawrence, virtually all of the content was uploaded by a handful of Viacom accounts that Google was aware of. It doesn’t matter if you uploaded it from Kinkos if you used the same account.

  • Shaun Spalding said:

    Hi George,
    Fair enough, but the DMCA does NOT require content providers to actively police copyright violations.

    Lawrence nailed that point when he said: “Basically [Viacom] is trying to argue that the DMCA requires proactive filtering, which it specifically does not.”

    The DMCA “Knowledge” requirement is not the same thing as what a normal person would think refer to “knowledge” with the common sense definition of the term.

    To violate the DMCA, a specific take-down notice must be issued. A take-down notice is the ONLY thing that can give the service provider “knowledge.” Then the only way that a service provider falls out of DMCA protection is when the provider ignores that takedown notice.

    The DMCA safe harbor “see/hear no evil” defense (as case law exist right now) is indeed still entirely valid.

    What Viacom is asking the court to do is change the meaning of knowledge and therefore make a change in the law.

  • George Ou (author) said:

    No Shaun, Viacom is not asking for active policing in their lawsuit. What Viacom is saying (and proving) is that YouTube and Google knew of large scale and specific cases of piracy but chose not to do anything about it until the content owner actively contacted them. YouTube’s cited reasoning was that they need the pirated content to drive traffic to make a big profit on the sale of YouTube.

    The law has a lot of leeway for website owners in not requiring them to actively police content even though it’s very practical for large websites to do so, and Google Video did so, but to deliberately overlook known cases of piracy is not something that the law forgives. The legal system is even less forgiving when a business is built on piracy and they have consistently punished companies like Napster for their acknowledgement that they were facilitating piracy.

  • Shaun Spalding said:

    “YouTube and Google knew of large scale and specific cases of piracy but chose not to do anything about it until the content owner actively contacted them.”

    Exactly, and that’s what DMCA protects. Youtube and Google can “know” about infringement in the common-sense definition of the term, but until a content owner actively contacts them they can’t have “knowledge” under the current interpretation of the statute.

    http://digital-law-online.info/lpdi1.0/treatise34.html

    Once that content owner contacts, the only way to have knowledgeable infringement is to ignore that content owner’s notice.

    There’s even a case where Perfect 10 (an adult website) sent 1,000s of letters describing infringing images on a content provider’s system, and the content provider didn’t do anything about it. The court held that the content provider still didn’t have knowledge because the notices weren’t proper DMCA takedown notices. Even though the service got these letters describing 1000s of infringing images, they didn’t have “knowledge” because even though they ignored the letters, they didn’t ignore proper DMCA notices.

    Viacom only has a case if they can convince the court to have a more liberal definition of knowledge in this case.

    I know this isn’t necessarily something you will believe. You are the author and I’m an anonymous internet commenter, however I would encourage you as well as the readers to talk to another lawyer who can tell you a little bit more about this.

    thanks for the discussion,
    Shaun Spalding

  • Stuff Channel » Blog Archive » LimeWire Probably Doomed After Court Decision said:

    [...] platform by using copyright violating materials, and items submitted to the court shows that YouTube founders were apparently aware of this and may even have encouraged it to grow the site. The use of clips of popular TV shows like [...]

  • SiliconANGLE — Blog — Why Viacom and others are justified in blocking Google TV said:

    [...] other hardware makers trying to get free access to YouTube.  The other noteworthy fact is that Google deliberately threatened Viacom with the possibility of overlooking piracy of Viacom content on YouTube despite having the hardware [...]

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