YouTube's fate rests on decade-old copyright law

The law is, of course, the Digital Millennium Copyright Act, or DMCA, which made its appearance in the U.S. Congress in July 1997.

That was a year marked by the arrival of Apple's Mac OS 8, Microsoft shares increasing in price by 150 percent annually, and Amazon.com holding its initial public offering. High-speed connections that enable video sharing were a luxury, and the Internet's total population hovered around 19 million people.

Today, more than 1.1 billion people use the Internet, and a huge percentage seem to end up viewing YouTube videos at least occasionally.

In its lawsuit filed on Tuesday against YouTube and its parent company, Google, Viacom claims that more than 150,000 unauthorized clips "have been viewed an astounding 1.5 billion times."

That may be true. But whether the DMCA's wording will let Viacom win--it's asking for a permanent injunction (PDF) requiring Google and YouTube to stop enabling copyright infringement--remains a surprisingly open question.

"I'm not aware that's been tested," said Melvin Avanzado, a litigation partner at Jeffer Mangels Butler & Marmaro in Los Angeles.

Central to the question of Google's legal liability is the phrasing of a densely worded portion--Section 512--of the DMCA. It was drafted by Congress in the days when Web site hosting was a more static affair, and it doesn't clearly address a situation such as YouTube's. That didn't stop Napster from invoking Section 512, unsuccessfully, in its own legal defense.

Section 512's so-called safe harbor generally lets hosting companies off the hook for legal liability, as long as they don't turn a blind eye to copyright infringement and if they remove infringing material when notified. YouTube does the second part through a formal posted policy, and it prohibits uploads of unauthorized videos more than 10 minutes in length.

But what about the safe harbor's first requirement of not ignoring massive infringement? Viacom's complaint says, "YouTube has failed to employ reasonable measures that could substantially reduce, or eliminate, the massive amount of copyright infringement on the YouTube site from which YouTube directly profits." (For its part, Google says it's confident that YouTube has respected the legal rights of copyright holders and predicts that the courts will agree.)

Avanzado, the entertainment attorney, says he expects Viacom to argue that Section 512 doesn't protect YouTube. That's because the safe harbor applies only if the Web site does not financially benefit directly from the alleged infringing work.

"We know what financially benefits means, but every business operates to financially benefit," he said. "So then what does 'directly' mean? Does it have to be with that specific clip that they benefit from?...Those are the kind of issues, and I don't know that the act has been interpreted yet, as to what constitutes a direct financial benefit."

However, attorneys for Google said Section 512 provides more than an ample shield. The DMCA "makes very clear" that Web hosting companies like YouTube and blogging services enjoy a safe harbor, said Glenn Brown, product counsel for Google and YouTube.

"It's a straightforward legal question," Brown said. He noted that YouTube already has deals of some sort with media companies including CBS, Warner Bros., the BBC, the NBA, Universal Music Group and Sony BMG Music Entertainment.

Evidence from a decade ago suggests that politicians never meant to completely immunize a service like YouTube, which could survive without copyright infringement but nevertheless has become much more popular because of it.

A report prepared by the U.S. House of Representatives, in fact, predicted that Section 512 would mostly help copyright owners. The report said the safe harbor "preserves strong incentives for service providers and copyright owners to cooperate to detect and deal with copyright infringements that take place in the digital networked environment."

But what Congress intended to accomplish doesn't matter nearly as much as what it did accomplish--because courts interpreting Section 512 will focus on the law's actual wording rather than the murkier question of congressional intent.

Section 512 says Web site operators must not "receive a financial benefit directly attributable to the infringing activity" and that they must not be "aware of facts or circumstances from which infringing activity is apparent."

In practice, that language is sufficiently imprecise that it permits lawyers for both sides to argue that it buttresses their position.

Even the U.S. Supreme Court's decision in the Grokster file-sharing lawsuit hasn't resolved this question. The court said that someone who distributes software with the clear intention of promoting copyright infringement can be held liable-- but nobody, not even Viacom, has suggested that YouTube's executives have been as brazen as the founders of file-swapping companies years ago.

"There are just a lot of open questions about whether what they're doing is in violation of copyright law, is it really pushing the envelope," said Jeffrey Lindgren, an intellectual property attorney at Morgan Miller Blair, referring to YouTube.

One implication of Viacom's complaint is that, if the media conglomerate gets what it wants, the eventual precedent would require Web site operators to police uploads for copyright infringement. That outcome wasn't envisioned by the DMCA's creators either. They tried to establish a notice-and-takedown regime that might have worked when the Internet was much smaller. But that proves problematic when over a billion people are potential uploaders.

YouTube and Google's strategy to force notification of each infringing content "has been a huge source of frustration to copyright owners because what that does is it puts the onus of policing infringement on the copyright owner," said Carole Handler, vice chair of intellectual property litigation at the Los Angeles firm Foley & Lardner. "It's a very inadequate kind of a case by case, specific by specific remedy, which is not tailored to the seriousness of the infringement."

CNET News.com's Anne Broache contributed to this report.