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Subject to Protective Order – HIGHLY CONFIDENTIAL UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK __________________________________________ ) VIACOM INTERNATIONAL INC., ) COMEDY PARTNERS, ) COUNTRY MUSIC TELEVISION, INC., ) PARAMOUNT PICTURES CORPORATION, ) and BLACK ENTERTAINMENT TELEVISION ) LLC, ) ) Plaintiffs, ) Case No. 1:07-cv-02103 (LLS) v. ) (Related Case No. 1:07-cv-03582 (LLS) ) YOUTUBE INC., YOUTUBE, LLC, and ) GOOGLE, INC., ) ) Defendants. ) ) __________________________________________) VIACOM’S MEMORANDUM OF LAW IN OPPOSITION TO DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT Stuart J. Baskin (No. SB-9936) Paul M. Smith (No. PS-2362) John Gueli (No. JG-8427) William M. Hohengarten (No. WH-5233) Kirsten Nelson Cunha (No. KN-0283) Scott B. Wilkens (pro hac vice) SHEARMAN & STERLING LLP Matthew S. Hellman (pro hac vice) 599 Lexington Avenue JENNER & BLOCK LLP New York, NY 10022 1099 New York Avenue, NW Telephone: (212) 848-4000 Washington, DC 20001 Facsimile: (212) 848-7179 Telephone: (202) 639-6000 Facsimile: (202) 639-6066 Susan J. Kohlmann (No. SK-1855) JENNER & BLOCK LLP 919 Third Avenue New York, NY 10022 Telephone: (212) 891-1690 Facsimile: (212) 891-1699 Attorneys for Plaintiffs Subject to Protective Order – HIGHLY CONFIDENTIAL TABLE OF CONTENTS PAGE TABLE OF AUTHORITIES ...................................................................................................... iii PRELIMINARY STATEMENT ..................................................................................................1 ARGUMENT..................................................................................................................................5 I. SUMMARY JUDGMENT SHOULD BE ENTERED FOR VIACOM – NOT DEFENDANTS – UNDER GROKSTER...............................................................................5 A. Defendants Ignore a Mountain of Evidence Showing Their Wrongful Intent to Use Infringement to Build YouTube’s Business.........................................................5 B. Defendants’ Legal Arguments Are Directly Contrary to the Supreme Court’s Decision in Grokster. ........................................................................................................12 1. Grokster Liability Turns on Intent to Profit from Infringement, Regardless of Whether Messages Encouraging Infringement Were Sent to Users............................................................................................................................12 2. YouTube’s Noninfringing Uses Are Not a Defense to Grokster Liability. ............16 3. Defendants Deliberately Withheld Readily Available Copyright Protection for Three Years in Order to Facilitate Infringement. .........................17 4. YouTube’s Advertising Revenue Model Is Further Evidence of Grokster Intent. ..........................................................................................................................21 II. SUMMARY JUDGMENT SHOULD BE ENTERED FOR VIACOM – NOT DEFENDANTS – ON THE DMCA DEFENSE. .................................................................24 A. Defendants Are Outside the Safe Harbor Due to Their Knowledge and Awareness of Infringement on YouTube.......................................................................24 1. Defendants Are Incorrect That They Lacked Knowledge Unless They Knew of Infringement of Specific Viacom Clips.....................................................26 2. The DMCA Does Not Place the Entire Compliance Burden on Content Owners. .......................................................................................................................30 B. Defendants Do Not Qualify for The DMCA Defense Because They Had the Right and Ability to Control Infringement and Derived a Direct Financial Benefit from It..................................................................................................................34 1. Defendants Received a Direct Financial Benefit from the Rampant Infringement on YouTube.........................................................................................34 i Subject to Protective Order – HIGHLY CONFIDENTIAL 2. Defendants Have Always Had the Right and Ability to Control the Infringement on YouTube.........................................................................................37 C. Defendants Do Not Qualify for the DMCA Defense Because Their Direct and Secondarily Infringing Conduct Is Not Limited to Storage at the Direction of Users..................................................................................................................................42 D. Defendants Have Also Failed to Show That They Have Satisfied Several Other Preconditions of the DMCA Defense. .................................................................45 1. Defendants’ Implementation of YouTube’s Repeat Infringer Policy Was Not Reasonable...........................................................................................................46 2. Defendants Inadequately Responded to Takedown Notices. .................................48 III. DEFENDANTS’ MOTION RAISES IRRELEVANT MATTERS THAT DO NOT AFFECT THE LEGAL ISSUES BEFORE THE COURT................................................53 A. Viacom’s Promotional Use of YouTube Does Not Excuse Defendants’ Infringement.....................................................................................................................53 B. Viacom’s Decision Not to Send Takedown Notices During the Parties’ Licensing Negotiations is Irrelevant...............................................................................57 C. Defendants’ References To Fair Use Are Equally Irrelevant......................................62 D. Viacom’s Consideration Whether to Make a Bid for YouTube Does Not Excuse Defendants’ Infringement. .................................................................................63 CONCLUSION ............................................................................................................................63 ii Subject to Protective Order – HIGHLY CONFIDENTIAL TABLE OF AUTHORITIES CASES A & M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (9th Cir. 2001).........................31, 41, 52, 62 A&M Records, Inc. v. Napster, Inc., No. C 99-05183 MHP, 2000 WL 573136 (N.D. Cal. May 12, 2000)..........................................................................................................................48 ALS Scan, Inc. v. RemarQ Communications, Inc., 239 F.3d 619 (4th Cir. 2001) .............25, 50, 51 In re Aimster Copyright Litigation, 334 F.3d 643 (7th Cir. 2003) ............17, 23, 25, 28, 30, 31, 46 Arista Records LLC v. Usenet.com, Inc., 633 F. Supp. 2d 124 (S.D.N.Y. 2009)........10, 11, 15, 23 Columbia Pictures Indus., Inc. v. Fung, No. CV 06-5578, 2009 WL 6355911 (C.D. Cal. Dec. 21, 2009)............................................................................................14, 23, 27, 32, 34, 38 Computer Associates International, Inc. v. Simple.com, Inc., No. 02 Civ. 2748, 2006 WL 3050883 (E.D.N.Y. Oct. 23, 2006)..........................................................................................12 Costar Group Inc. v. Loopnet, Inc., 164 F. Supp. 2d 688 (D. Md. 2001), aff’d, 373 F.3d 544 (4th Cir. 2004)...................................................................................................................48 Design Options, Inc. v. BellePointe, Inc., 940 F. Supp. 86 (S.D.N.Y. 1996)................................60 Ellison v. Robertson, 357 F.3d 1072 (9th Cir. 2004).........................................................45, 46, 48 Hard Rock Cafe Licensing Corp. v. Concession Services, Inc., 955 F.2d 1143 (7th Cir. 1992) ........................................................................................................................................30 Io Group, Inc. v. Veoh Network, Inc., 586 F. Supp. 2d 1132 (N.D. Cal. 2008)...........31, 38, 41, 43 Keane Dealer Services, Inc. v. Harts, 968 F. Supp. 944 (S.D.N.Y. 1997)....................................61 Metro-Goldwyn-Mayer Studios, Inc. v. Grokster Ltd., 545 U.S. 913 (2005)...................................................................5, 13, 14, 15, 16, 17, 21, 22, 31 Metro-Goldwyn-Mayer Studios, Inc. v. Grokster Ltd., 380 F.3d 1154 (9th Cir. 2004), rev’d on other grounds, 545 U.S. 913 (2005)..........................................................................17 Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd., 454 F. Supp. 2d 966 (C.D. Cal. 2006) ........................................................................................................................5, 10, 14, 15 Neder v. United States, 527 U.S. 1 (1999).....................................................................................38 Pavlica v. Behr, 397 F. Supp. 2d 519 (S.D.N.Y. 2005).................................................................60 Perfect 10, Inc. v. Cybernet Ventures, Inc., 213 F. Supp. 2d 1146 (C.D. Cal. 2002)..............36, 51 iii Subject to Protective Order – HIGHLY CONFIDENTIAL Perfect 10, Inc. v. CCBill LLC, 488 F.3d 1102 (9th Cir. 2007).............................32, 34, 38, 47, 51 Reed Elsevier, Inc. v. Muchnick, 130 S. Ct. 1237 (2010) ..............................................................11 Shapiro, Bernstein & Co. v. H. L. Green Co., 316 F.2d 304 (2d Cir. 1963) .................................41 SHL Imaging, Inc. v. Artisan House, Inc., 117 F. Supp. 2d 301 (S.D.N.Y. 2000) ........................60 Tiffany (NJ) Inc. v. eBay Inc., No. 08-3947-CV, __ F.3d