Many newspapers have reported the recent “victory” which Google scored against Viacom in a copyright infringement case. But sadly, few if any, got it right. And fewer less did notice that in deciding the case, the Judge cited another case which has little to do with copyright, but which should be more interesting with the followers of this blog, since it squarely dealt with trademarks, i.e. Tiffany v. eBay (630 F.3d 93 -2nd Cir. 2010- aff.d)
So, to make it right, let’s start from the former and work our way up to the latter.
Tiffany sued Ebay alleging that hundreds of thousands of counterfeit silver jewelry items were offered for sale on eBay’s website from 2003 to 2006. Tiffany argued that eBay should be held liable for direct and contributory trademark infringement, unfair competition, false advertising, and direct and contributory trademark dilution, since eBay facilitated and allowed these counterfeit items to be sold on its website.
Tiffany, to make its case even more powerful, argued that eBay was on notice that a problem of counterfeiting existed and, accordingly, that eBay had the obligation to investigate and control the illegal activities of sellers specifically, by preemptively refusing to post any listing offering five or more Tiffany items and by immediately suspending sellers upon learning of Tiffany’s belief that the seller had engaged in potentially harmful conduct.
EBay, undeterred replied that it was Tiffany’s burden, not eBay’s, to monitor the eBay website for counterfeits and to bring counterfeits to eBay’s attention. eBay on its part, claimed and proved that in practice, each time potentially infringing listings were reported to eBay, eBay had immediately removed the offending listings.
So at the heart of the dispute was not whether counterfeit Tiffany jewelry should flourish on eBay, but rather, who should bear the burden of policing Tiffany’s “valuable” trademarks in Internet commerce.
The Appeal Court, confirming the lower Court decision, recognized that while the rapid development of the Internet and websites like eBay have created new ways for buyers and sellers to connect each other and to expand their businesses beyond geographical limits, these new markets have also, however, given counterfeiters new opportunities to expand their reach. The Court was not unsympathetic to Tiffany and other rights owners who have invested enormous resources in developing their brands, only to see them illicitly and efficiently exploited by others on the Internet. Nevertheless, the Court stated firmly that law is clear: it is the trademark owner’s burden to police its mark, and companies like eBay cannot be held liable for trademark infringement based solely on their generalized knowledge that trademark infringement might be occurring on their websites. Tiffany says to be willing to appeal the case to the US Supreme Court, but its chances are, in my view, dim and I would not be surprised if the Supreme Court even denied certiorari.
Now let’s turn to the Viacom case.
Viacom (but also the UK Premier League, among the co-plaintiffs) had sued Youtube (which is now owned by Google) alleging that while YouTube’s website purports to be a forum for users to share their own original “user generated” video content, in reality, a vast amount of that content consists of infringing copies of Viacom’s copyrighted works. And in an argument strikenly similar to Tiffany, Viacom argued that YouTube had deliberately chosen not to take reasonable precautions to deter the rampant infringement on its site, and since YouTube directly profits from the availability of popular infringing works on its site, it had decided to shift the burden entirely onto copyright owners to monitor the YouTube site on a daily or hourly basis to detect infringing videos and send notices to YouTube demanding that it “take down” the infringing works”.
These being the facts of the case, Google decided to move for summary judgement. In US civil procedure, a motion for summary judgment means that one party asks the court to decide that the available evidence, even if taken in the light most favorable to the non-moving party (i.e. Viacom) , supports a ruling in favor of the moving party (i.e. Google). Usually, a two-part test must be met: (i) no genuine issue of material fact can be in dispute between the parties, and (ii) the moving party must be entitled to judgment as a matter of law.
Judge Stanton of United States District Court for the Southern District of New York, found for Youtube that under the safe harbor provisions of the Digital Millennium Copyright Act (DMCA). In light of the scope and rationale of the DMCA, general knowledge of copyright infringement, is not sufficient to impose liability on Youtube, and as long as Youtube, once notified of an (alleged) infringement complied with the take down request (and Youtube had implemented the take down, as also recognized by Viacom), YouTube could benefit from the safe harbour provisions.
In reaching his decision, Judge Stanton noted that “to let [mere] knowledge of a generalized practice of infringement in the industry, or of a proclivity of users to post infringing materials, impose responsibility on service providers to discover which of their users’ postings infringe a copyright would contravene the structure and operation of the DMCA”. In other words, unless it was proven that Youtube had knowledge of specific and identifiable infringements of particular individual item, which basically means to have all the means and opportunities to carry out a preventive control over the (allegedly infringing) posting, Youtube did not have any obligation to police its website also because the DMCA itself explicitly states that its provisions should not be construed to condition the enjoyment of a “safe harbour” on a “service provider monitoring its service or affirmatively seeking facts indicating infringing activity”. And citing the holding of the Tiffany case, Judge Stanton added :“although by different techniques, the DMCA applies the same principles, and its establishment of a safe harbour is clear and practical: if a service providers knows (from notice from the owner, or a “red flag”) of specific instances of infringement, the provider must promptly remove the infringing material. If not, the burden is on the owner to identify the infringement. General knowledge that infringement is “ubiquitous” does not impose a duty on the service provider to monitor or search its services for infringements”.
Like in Tiffany.