Analysis of Viacom and Google evidence on YouTube piracy
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.
- Viacom – Summary Judgment Motion
- Viacom – Statement of Undisputed Facts
- Google – Summary Judgment Motion
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.