HIGHLY CONFIDENTIAL FILED UNDER SEAL UNITED STATES DISTRICT COURT SOUTHERN DISTRICT OF NEW YORK VIACOM INT’L INC., ET AL., ) ) Plaintiffs, ) v. ) ECF Case ) Civil No. 07-CV-2103 (LLS) YOUTUBE, INC., ET AL., ) ) Defendants. ) ) THE FOOTBALL ASSOCIATION ) PREMIER LEAGUE LIMITED, ET AL., ) on behalf of themselves and all others ) similarly situated, ) ) ECF Case Plaintiffs, ) Civil No. 07-CV-3582 (LLS) v. ) ) YOUTUBE, INC., ET AL., ) ) Defendants. ) ) DEFENDANTS’ OPPOSITION TO PLAINTIFFS’ MOTIONS FOR PARTIAL SUMMARY JUDGMENT David H. Kramer Andrew H. Schapiro Maura L. Rees A. John P. Mancini Michael H. Rubin Matthew D. Ingber Bart E. Volkmer Brian M. Willen WILSON SONSINI GOODRICH & ROSATI PC MAYER BROWN LLP 650 Page Mill Road 1675 Broadway Palo Alto, California 94304 New York, New York 10019 (650) 493-9300 (212) 506-2500 Attorneys for Defendants TABLE OF CONTENTS Page INTRODUCTION ......................................................................................................... 1 COUNTERSTATEMENT OF THE FACTS................................................................. 3 A. Viacom Extensively Used YouTube To Market Its Content. ..................... 4 B. YouTube’s Founding Purpose And Operations Were Legitimate.............. 6 C. YouTube’s Early Monitoring Efforts Show Its Good Faith........................ 8 D. The Founders’ Early Debates About “Stupid Videos” Do Not Reflect A Purpose To Exploit Infringing Material................................................ 12 E. The Founders Did Not Upload Or Celebrate Infringing Videos.............. 15 F. Viacom’s “Smoking Gun” Is Anything But. .............................................. 18 G. YouTube Transitioned From An Ineffective Community Flagging Process To A Robust DMCA Regime......................................................... 19 ARGUMENT............................................................................................................... 21 I. VIACOM’S MOTION ESTABLISHES NO ACTUAL INFRINGEMENTS...... 21 A. Viacom’s Motion Does Not Allow The Court To Make A Proper Infringement Determination..................................................................... 21 B. Viacom’s Failure Of Proof Is Not A Technicality. .................................... 23 II. YOUTUBE IS ENTITLED TO DMCA SAFE-HARBOR PROTECTION ........ 25 A. Plaintiffs’ Claims Involve “Storage At The Direction Of A User.”........... 27 1. Plaintiffs’ Storage Argument Has No Support In The Case Law. ................................................................................................... 27 2. Plaintiffs’ Storage Argument Is Contrary To The DMCA’s Text And Purpose.............................................................................. 28 B. YouTube Did Not Have Disqualifying Knowledge Of The Alleged Infringing Activity. .................................................................................... 31 1. Plaintiffs Equate DMCA Compliance With “Willful Blindness.”......................................................................................... 32 2. The DMCA Requires Particularized Knowledge, Not Viacom’s Amorphous “Inquire-Further” Standard.......................................... 36 3. DMCA Takedown Notices Require Service Providers To Remove Identified Material, Not Search For Unidentified Material............................................................................................. 39 4. The Absence Of A Separately Negotiated Licensing Agreement Does Not Establish Knowledge Of Infringement. ........ 41 i TABLE OF CONTENTS (continued) Page a. The DMCA does not require service providers to engage in rights-clearing on its users’ behalf. ..................................... 41 b. YouTube does not “ignore” information about publishing rights......................................................................................... 43 C. YouTube Did Not Have Control Coupled With A Financial Benefit Directly Attributable To The Infringing Activity..................................... 46 1. The DMCA’s “Control” And “Financial Benefits” Tests Do Not Codify The Common Law Of Vicarious Liability............................. 46 2. As A Matter Of Law, Plaintiffs’ Allegations Of “Control” And “Financial Benefit” Cannot Close The Safe Harbor. ....................... 48 a. The ability to remove material is not “control.” ...................... 48 b. The DMCA does not require service providers to affirmatively police their users’ conduct. ................................ 49 c. Moving from user flagging to reliance on the DMCA is not a failure to “control” infringing activity. ........................... 51 d. The DMCA rejects the “draw” test for financial benefit. ........ 53 III. YOUTUBE IS NOT LIABLE FOR DIRECT INFRINGEMENT...................... 56 A. Direct Infringement Requires Volitional Conduct. .................................. 56 B. YouTube Has Engaged In No Relevant Volitional Conduct. ................... 58 1. YouTube’s Processes For Storing, Formatting, And Displaying User-Submitted Videos Are Automated And Non-Volitional.......... 58 2. Liability For Direct Infringement Cannot Rest On Functions Unrelated To Plaintiffs’ Actual Infringement Claims..................... 60 IV. YOUTUBE IS NOT LIABLE FOR VICARIOUS INFRINGEMENT............... 62 A. YouTube Did Not Have The Ability To Effectively Supervise The Activities of Its Users. ............................................................................... 63 1. The Availability Of Various Forms Of Human Review Does Not Constitute The Practical Ability To Prevent Infringement. .................................................................................... 64 2. Plaintiffs’ Selective-Fingerprinting Allegations Are Baseless. ....... 68 a. YouTube never withheld Audible Magic’s technology based on a copyright owner’s unwillingness to license content....................................................................................... 68 ii TABLE OF CONTENTS (continued) Page b. YouTube did not refuse to cooperate with the MPAA............. 73 c. Class plaintiffs’ claims about filtering are untrue and irrelevant. ................................................................................. 75 d. Viacom’s claim that YouTube withheld its video- fingerprinting technology until May 2008 is false. ................. 78 B. YouTube Did Not Have An Obvious And Direct Financial Interest In The Alleged Infringing Activity............................................................ 80 V. VIACOM’S INDUCEMENT CLAIM FAILS AS A MATTER OF LAW. .......... 82 A. Viacom’s Effort To Rewrite The Grokster Standard For Promoting Infringement Is Unsustainable................................................................. 82 B. Viacom Cannot Satisfy The Actual Grokster Standard. .......................... 84 1. YouTube Did Not Take Active Steps With The Object Of Promoting Infringement. .................................................................. 86 2. Google Did Not Take Active Steps With The Object Of Promoting Infringement. .................................................................. 89 3. The Supplemental Indications Of Inducement Relied On In Grokster Point In The Opposite Direction Here. ............................. 92 a. YouTube has an overwhelming array of non-infringing uses............................................................................................ 93 b. YouTube has taken many steps to combat copyright abuse. ........................................................................................ 97 c. YouTube’s advertising practices are legitimate. ..................... 97 CONCLUSION............................................................................................................ 99 iii TABLE OF AUTHORITIES Page(s) CASES A&M Records, Inc. v. Napster, 239 F.3d 1004 (9th Cir. 2001) .........................................................................passim ALS Scan, Inc. v. RemarQ Communities, Inc., 239 F.3d 619 (4th Cir. 2001) ............................................................................ 37, 40 Arista Records LLC v. Usenet.com, Inc., 633 F. Supp. 2d 124 (S.D.N.Y. 2009) ......................................................... 85, 86, 96 Bourne v. Walt Disney Co., 68 F.3d 621 (2d Cir. 1995)...................................................................................... 24 Brotherhood of R.R. Trainmen v. Baltimore & Ohio R.R. Co., 331 U.S. 519 (1947) ................................................................................................ 51 Cartoon Network LP, LLP v. CSC Holdings, Inc., 536 F.3d 121 (2d Cir. 2008).................................................................. 56, 57, 58, 60 Columbia Pictures Industries, Inc. v. Fung, 06-cv-5578, U.S. Dist. LEXIS 122661 (N.D. Cal. Dec. 21, 2009)........ 85, 86, 96, 98 Corbis Corp. v. Amazon.com, Inc., 351 F. Supp. 2d 1090 (W.D. Wash. 2004).................................................. 27, 37, 48 Costar Group Inc. v. Loopnet, Inc., 164 F. Supp. 2d 688 (D. Md. 2001) ........................................................................ 27 CoStar Group, Inc. v. LoopNet, Inc., 373 F.3d 544 (4th Cir. 2004) ................................................................ 47, 57, 58, 62 Davis v. Blige, 505 F.3d 90 (2d Cir 2007)....................................................................................... 42 Ellison v. Robertson, 357 F.3d 1072 (9th Cir. 2004) .......................................................................... 80, 82 FASA Corp. v. Playmates Toys, Inc., 869