Viacom is likely to ultimately prevail in its appeal of the lower Court decision in the seminal Viacom vs. Google-YouTube copyright infringement case.

  • If one only reads either the lower court’s decision or the press reports of it, without considering likely appellate arguments and the broader constitutional context of copyright protection, it is easy to missread the likely ultimate outcome here.
  • Both sides agreed to an expedited summary judgment process in the lower court, because both sides fully expected this case to ultimately be decided at the appellate level, and most likely by the U.S. Supreme Court.
  • Expect the Second Circuit Court of Appeals in New York to decide Viacom’s appeal in 2011 and the Supreme Court to likely take the case and decide it in 2012 — given how central this case is to maintaining copyright protection in the Internet age.

Why is Viacom likely to prevail on appeal?

Like Grokster Case: First, this seminal DMCA case is analogous to court process outcome of the seminal Grokster case, where the video-sharing copyright-infringer Grokster originally won in the lower court and in the Ninth Circuit Court of Appeals, before losing unanimously (9-0) in the Supreme Court in 2005.

Grokster Precedent is Highly Relevant: Second, Judge Stanton summarily dismissed any legal relevance of the 2005 Supreme Court Grokster precedent that has the effect of law, despite the fact that Google-YouTube’s video-sharing technology and behavior functionally produce the same copyright-infringing result that Grokster’s video-sharing technology and behavior did.

  • The only real difference here is the technology used. Grokster employed p-2-p software to enable user video-sharing/piracy to massively infringe copyrights, whereas Google-YouTube used standard public website software to enable user video-sharing/piracy to massively infringe copyrights.
  • By ignoring the Supreme Court’s settled law here, the lower court’s myopic logic implicitly would condone Grokster-like piracy — if it is effectively laundered or fenced via a public website that ostensibly has other legitimate purposes.
    • It is unlikely that the Supreme Court will defend constitutional copyright protections with one user-video-sharing technology and not another.
      • That would be the functional equivalent of saying that it is only burglary if the thief absconds with stolen goods through the back window, but not the front door.
    • It is also unlikely that the Supreme Court will accept the perverse logic of the lower court, which rejected the relevance of the Grokster case essentially because the p-2-p offenders were total-pirates, while Google-YouTube is only a part-time-pirate.
      • This lower court logic would effectively eviscerate the Grokster Supreme Court precedent by condoning doing wrong, as long as one is also doing good.
    • Case law is replete with findings that theft is theft, it isn’t reclassified as legal just because the entity that commits the theft has otherwise been engaged in legitimate business or activities.

Copyright is Constitutionally Protected: Third, the lower court decision effectively eviscerates constitutional copyright protections and the Copyright Act by condoning mass Internet copyright infringement by websites under the DMCA — as long as they technically pull down specific offending copyrighted works when specifically-notified under DMCA procedures.

  • Probably the core fatal flaw in the lower Court’s opinion is its narrow and myopic legal frame of the case as simply a narrow arbitration decision of technical DMCA take-down procedures and interpretations of words — in contrast to a case on the merits of alleged willful and deliberate mass-infringement of copyrights under the Copyright Act to facilitate the creation of a extremely valuable, dominant, and lasting market-leading online video enterprise.
    • To listen to Judge Stanton’s legal frame, the only thing that matters here is his ruling of whether Google had “specific” knowledge of copyright infringement, not just “general” knowledge of mass copyright infringement.
      • This is like saying those that willingly fence stolen property, or knowingly launder the ill-gotten proceeds from stolen property, are not involved in, or culpable for, an illegal conspiracy to steal property.
  • In approaching this case with an ever-narrowing legal lens, Judge Stanton’s decision spirals away from the:
    • Essential context of the case — that copyright protections are tethered directly to the U.S. Constitution; and
    • Important context of the purpose of the DMCA, which attempts to balance copyright protection with the need for liability protection for Internet Service Providers from users’ actions that they do not control.
  • It was never Congress’ intent to sanction the perverse Judge Stanton outcome of a de facto criminal safe harbor for those who are:
    • Well aware of mass copyright infringement on their platform;
    • Actively encouraging infringement for monetary gain;
    • Premeditatedly gaming the legal system to evade responsibility and accountability; and
    • Willing to steal up until the point that, and as long as, the party being stolen from does not formally complain of the theft with the “actual” serial #s of the stolen goods.
  • In putting all his legal eggs-in-one-basket, the DMCA’s specific take-down obligations, the ruling effectively converts the DMCA into universal get-out-of-jail-free card for those who effectively fence or launder copyrighted works on a massive scale.

Judge Ignored the Facts: Fourth, Judge Stanton basically ignored most all the facts of the case.

  • While admitting in his opinion and order that: “a jury could find that the defendants not only were generally aware of, but welcomed copyright-infringing material being placed on their website“… the Judge basically ignored all of Viacom’s evidence of Copyright Act abuses by narrowly absolving Google of all copyright infringement responsibility because Google immediately pulled down any infringing videos once formally notified under the DMCA safe harbor take down procedures.
  • Judge Stanton is totally ignoring the undisputed facts of the case that:
    • YouTube was facilitating rapid growth of YouTube by encouraging mass uploads of copyrighted works right after the Supreme Court’s unanimous Grokster decision;
    • Google was well aware that they were adopting a risky copyright infringement strategy in acquiring YouTube and adopting their infringement strategy to leverage its first mover market position; and
    • Viacom and Google were in active negotiations with Google-YouTube on a licensing deal for Viacom’s infringed content for well over a year before they collapsed and Viacom filed DMCA takedown notices with Google-YouTube.
  • By totally ignoring the facts and the context of the case, the Judge’s ruling is basically declaring “open season” on copyright holders.
    • Judge Stanton effectively has absolved bad actors of any need to respect copyright, by encouraging them to infringe first, engage in and slow roll negotiations with copyright owners, and then take down the copyrighted works only if and when asked — and after the bad actor has built up a user base and a business around the infringing behavior.
  • This legal frame is the functional equivalent of a reverse statute of limitations and no Copyright Act, where a copyright owner has no protections until they comb the Internet, discover, and specifically file a formal and specific DMCA takedown notice.
  • For Judge Stanton’s ruling to withstand appeal, the Second Circuit Court of Appeals and/or the Supreme Court would have to effectively rule that the DMCA trumps/supercedes the Copyright Act and the U.S. Constitutional protections of copyright. That is not likely.

In sum, Viacom is likely to win on appeal because of the import and relevance of the Supreme Court’s Grokster precedent, and because Judge Stanton essentially ignored the Copyright Act, the Constitution, and the facts of the case.

 

For anyone wanting to better understand the big picture threat to our Nation’s communications and media infrastructure/business models, please don’t miss Randy May’s outstanding post: “Not Mao Zedong or a communist… but a Socialist.”

Building on the great foundation of work laid down by Adam Theirer of the Progress and Freedom Foundation in this area, Randy adds another laser spotlight on how there are powerful ideological forces championed by FreePress’ leader Robert McChesney that seek ultimate government control of both the media and the communications infrastructure.

The disturbing common thread here that deserves much more attention from freedom-loving people everywhere, is the deeply (and scarily successful) anti-free-enterprise, anti-property, anti-individual-freedom efforts by FreePress in promoting a de facto government takeover of both the media and broadband communications infrastructure.

Look no further than the FCC’s proposal to turn the competitive free enterprise of the broadband sector into a de facto public utility over the objections of a majority of members of Congress.

If you want to learn and appreciate what is really going on ideologically here, don’t miss reading Randy’s and Adam’s important work on this. They are spot on.

Clearly proponents of net neutrality and public-utility regulation of broadband, have learned how to manipulate language and metaphors to mask and move their agenda; what they haven’t learned is that the language and metaphors used to promote policy changes must be true in order to make legitimate, successful, and lasting public policy.

  • The communications plan for the FCC’s proposed broadband regulation of the Internet is full of fiction, fantasy and misdirection.
  • What’s increasingly obvious is that proponents of preemptive proscriptive broadband regulation think people are stupid, that they don’t know what words mean, and that they will gullibly swallow whatever is said without thought or question.
  • Broadband regulation proponents are fantastically claiming that:
    • An obviously heavy-handed regulatory approach is really a “light touch;”
    • The FCC’s most extreme and sweeping regulatory proposal ever is really just a “middle ground” compromise;

    • A more government-controlled Internet is actually a more “open” Internet; and
    • Agreement among the fringe somehow constitutes broad “consensus.”


“Light” or “Blight” Touch?

Very few believe that reversing the existing well-known status quo of “light touch” regulation (i.e. after-the-fact, case-by-case broadband enforcement), with new preemptive and proscriptive common carrier public utility regulation of broadband prices, terms and conditions, can be characterized as “light touch” regulation.

  • What makes regulation “light touch” is that the Government only intervenes when there is a real proven problem and targets the solution at the narrowly-determined problem.
  • What makes the proposed FCC approach obviously heavy-handed is that it:
    • Sweepingly regulates an entire sector that has a near perfect record over the last 6 years of not engaging in the anti-competitive behavior that the FCC says it seeks to prevent;
    • Forces an industry to change from responding quickly and innovatively to market developments, to seeking months-long, “Mother may I?” permission from the FCC to compete and do business differently;
    • Punishes a couple thousand companies that have done nothing wrong, and have had no allegations of doing anything wrong, to stiff, preemptive, and punitive regulation; and
    • Forces a competitive industry to endure economic regulation designed for monopolies that these competitors do not have.

 

 

The FCC’s planned approach would more appropriately be characterized as a “blight touch,” because the dictionary definition of “blight” is: “something that impairs growth, withers hopes and ambitions, or impedes progress and prosperity.


“Middle ground or Muddle ground?”

 Very few are falling for the obvious straw man political argument of the FCC’s “Third Way.” The fake “straw man” is that the FCC theoretically could do something much more horrible and destructive that most everyone would oppose — i.e. complete Title II common carrier regulation. This straw man enables the FCC to claim that by not applying all of Title II regulations they could pile on the sector, they are being magnanimous and merciful — and hence are offering a “middle ground” compromise… at least in their minds.

  • People are not stupid, they understand that this is like telling innocent people that they should be happy and grateful that the death penalty has been mercifully taken off the table for them, and that they should be thankful for only getting life imprisonment without parole for doing nothing wrong!
  • And what “ground” could be possibly more muddled, mixed up and confusing than choosing a regulation approach that requires the FCC to make very strong public and legal arguments for both adding and subtracting regulation at the very same time!?
  • Generally when people argue polar opposite positions — like more regulation is essential, but less regulation/forbearance is essential too — at the exact same time, they are talking out of both sides of their mouths.
    • People are not stupid, they get that this “muddle ground” is all politics and spin, not serious regulatory or legal analysis.


Re-imagining Openness as regulation?

The whole concept of an “open Internet” as a “platform of Innovation, opportunity and prosperity” has been turned on its head by the FCC’s proposed Title II broadband Internet regulation.

  • Miriam-Webster’s Dictionary of Law defines an “open market as “a freely competitive market in which any buyer and seller may trade and in which prices are set by competition.”
  • How can the FCC still maintain it advocates the “open market” of “innovation, opportunity and prosperity,” that the FCC indicates an “open Internet” means, when it is proposing to regulate which buyers and sellers may buy and sell what, and when it is asserting the FCC’s authority to effectively set prices, terms and conditions, not competititon.
  • To be honest and consistent with the meaning of the term, the FCC either has to give up its desire for an “open Internet” where competition rules, or it has to give up its desire for a Title II regulated broadband Internet, because they are logically and semantically opposite and mutually-exclusive goals.


Re-imagining “consensus”

If the FCC’s proposal was truly based on broad “consensus” views, why would there be such widespread, deep, and vocal opposition?

  • Everyone involved with Internet policy over the last fifteen years knows that there is no broad “consensus” in support for the FCC declaring broadband a telephone common carrier service, because the longstanding overwhelming bipartisan consensus has been to not tax or price regulate the Internet (see the latest overwhelming bipartisan Congressional vote in 2007 for an Internet Tax Moratorium through 2014, and see the bipartisan majority of Congress who wrote the FCC last month in opposition to the FCC’s broadband regulation plans.)
  • No amount of spin and word abuse can mask the widespread opposition to the FCC’s proposed Title II broadband regulations.

In sum, the FCC’s choice of language strongly suggests they assume people are stupid, uninformed, and easily manipulated.

  • The FCC’s purported “light touch,” is more like the “blight touch” of decay.
  • The FCC’s claimed “middle ground” is no such thing, it is confusing “muddled ground.”
  • The FCC’s concept of openness is the exact opposite of the dictionary meaning of the term in this context.
  • And finally, there is no consensus for the FCC’s proposed regulations, there is bipartisan consensus against them.

Mr. Masnick of techdirt fame is putting his head in the sand, just like an ostrich does, in hopes that the danger of “search neutrality” will somehow go away as long as he manages to not see or hear anything about it.

  • Mr. Masnick’s head-in-the-sand stance is in full public view in his latest full-throated defense of Google:
    • There Is No Such Thing As Search Neutrality, Because The Whole Point Of Search Is To Recommend What’s Best
  • Since Mr. Masnick’s mind is obviously made up, let me present some information and evidence for those who remain open-minded to what is actually happening in the marketplace — concerning the lack of Google search neutrality.

First, none other than Google’s founders railed against advertising causing “insidious” bias in search results — in their famous Stanford paper on search engines — see Appendix A.

  • “The advertising business model do not always correspond to providing quality search results to users…”
  • “Advertising income often provides an incentive to provide poor quality search results.”
  • “We believe the issue of advertising causes enough mixed incentives that it is crucial to have a competitive search engine that is transparent.”
    • …But listen to Udi Manber, Google VP for Search Quality: “For something that is used so often by so many people, surprisingly little is known about ranking at Google. This is entirely our fault, and it is by design. We are, to be honest, quite secretive about what we do.”
  • So the Google evidence shows that Google’s founders don’t share Mr. Masnick’s view that the notion of search neutrality is “ridiculous,” “bizarre and misguided.”
  • They were on record of warning about its dangers from the beginning.
    • And they are upfront about being secretive even though the founders fully appreciate the dangers to the public of no transparency in search.

Second, Mr. Masnick’s blanket assertion: “The whole point of search is to be biased” completely contradicts Google’s public representations.

  • Google’s website claims: “We never manipulate rankings to put our partners higher in our search results and no one can buy better PageRank.”

The search neutrality problem arises with Google because there is mounting compelling evidence that Google does in fact manipulate search results anti-competitively and in contradiction to their public representations, by favoring its own Google-owned content and disadvantaging competitors’ content.

Surely Mr. Masnick is not suggesting that documented charges of fraud, mis-representation, anti-competitive behavior are “ridiculous” and not worthy of attention or investigation?

Third, concern over search neutrality is well founded because Google:

With all due respect, Mr. Masnick’s head-in-the-sand views on search neutrality are not well thought out, argued, or documented.

  • Google’s lack of search neutrality is a very real issue that will only grow in importance and only gain more attention from law enforcement authorities.
 
 
With due credit to Ripley’s Believe it or Not!®,” so much odd and bizarre is happening at the FCC in the “name” of “broadband” that the topic calls for its own collection of: Believe it or Not!®” oddities.

The FCC insists that its Title II reclassification effort to regulate broadband networks is not “regulating the Internet,” when the law, the Supreme Court and the FCC all define the Internet to include broadband networks!

The FCC, certain that the D.C. Circuit Court decision on Comcast vs. the FCC was incorrect, decided not to appeal to the Supreme Court!

The FCC, an administrative agency created, funded, and overseen by Congress, completely ignored a majority of Members of Congress who wrote the FCC opposing FCC reclassification of broadband as a common carrier!

 
The FCC plans to justify new broadband Title II regulation with some regulatory forbearance by arguing that the market facts simultaneously warrant both more, and less, broadband regulation — at the very same time!

The FCC claims the “soundest legal foundation” for broadband is the opposite of what the DC Circuit Court, Congress, legal experts and industry think is sound!

 
The FCC justified pursuing its Title II reclassification effort by characterizing it as the “broad consensus” view, but the non-partisan Association of State Legislatures and a bi-partisan majority of Members of Congress opposed the FCC in writing!

The FCC claims it has an open mind in approaching the Notice of Inquiry, but a majority of FCC votes, are on record already supporting new broadband regulation!

The FCC claims ‘immmaculate mis-conception’ to explain how data transport, i.e. a “telecommunications service,” can only occur on local fiber networks, but never on a backbone or other fiber networks!

Despite Senator Stevens being widely ridiculed for unofficially describing the Internet as a “series of tubes,” the FCC appears intent on officially declaring the Internet a series of telephone lines!

Strange but true.

“Believe it or Not!®”