Ashlie BeringerGibson, Dunn & Crutcher LLP

aberinger@gibsondunn.com

YOU TUBE, MYSPACE AND THE USER GENERATED CONTENT REVOLUTION:

KEY LEGAL ISSUES AND POTENTIAL LIABILITY

Overview

What is user generated content?

Legal issues• Copyright

– DMCA “Safe Harbor”

• Defamation & other torts– §230 Immunity

• Criminal statutes & governmental investigations

• Response to process– Press shield laws

What is User Generated Content (“UGC”)?

• Content produced or submitted by end users, not professional media producers (e.g. journalists, photographers, studios)

• Includes digital video, blogs, social networking profiles, podcasts, user feedback and ratings, gossip, mobile phone photography and “wikis”

• More than 82 million people created UGC in the US alone in 2008.

Examples

“Web 2.0”

Web 1.0 Web 2.0

Software Access Browser Browser; RSS reader; AJAX

Hardware Access Personal Computer PC; mobile computing

Coder Professional Everyone

Content Static Dynamic

Geeks CS majors Everyone!

Pay authors for content? Yes No

Access Pay (AOL)/Free Generally Free

Copyright Infringement and DMCA Safe Harbor

Copyright Infringement

Theory of Infringement

Standard Who? Sue?

Direct Reproducing, modifying, distributing, publicly performing or publicly displaying a copyrighted work without the copyright owner’s permission

Those who upload/download

Rarely; not economically viable target

Contributory If knowledge of the infringing activity, one who induces or materially contributes to the infringing conduct of a direct infringer

~or~

Distribution of a product used to infringe, if the product does not have substantial or commercially significant non-infringing uses

Those who facilitate the upload/download

Yes; economically viable target

Vicarious Liability If right and ability to supervise the direct infringement and a direct financial interest in the exploitation of the copyrighted work

DMCA Safe Harbors

Purpose: “[T]o facilitate the robust development and world-wide expansion of electronic commerce, communications, development, and education in the digital age” (Senate Rep. 105-90).

Safe Harbors limit infringement liability for Online Service Providers (OSPs) that:

§ 512(a): provide transitory digital network communication; § 512(b): cache information; § 512(c): store information on systems or networks at the direction

of users; and/or § 512(d) provide information location tools.

OSP = “A provider of online services or network access, or the operator of facilities therefore”

If OSP satisfies criteria for safe harbor protection against civil liability for infringement

Eligibility for § 512(c) Safe Harbor

Knowledge (§512(c)(1)(A)(i)-(iii))

• No actual knowledge

• Not aware of facts or circumstances from which infringing activity is apparent

• When made aware, must act expeditiously to remove or disable access

Control & Financial Benefit ((§512(c)(1)(B))

• If OSP has “the right and ability” to control infringing activity, the OSP must not receive “a financial benefit directly attributable to the infringing activity.”

Accommodation of “standard technical measures” (§512(i)(1)(B))

Procedures

• OSP must designate an agent for service & register the agent with the Copyright Office (§512(c)(2))

• Must maintain a policy for termination of accounts of repeat infringers & inform users of the policy (§ 512(i)(1)(A))

• Must comply with notice & takedown and counter notice & takedown procedures (§512(g))

Notice & Takedown §512(g)

Copyright owner (or its agent) must send a written notice, which must:1) identify the work and location of the copyrighted work with reasonable specificity;

2) include contact information for the complaining party;

3) include a sworn statement that the complaining party is authorized to act on behalf of the

copyright owner;

4) include a physical or electronic signature of the owner or its authorized representative;

5) statement of good faith belief that use of the material is not authorized by the copyright

owner, its agent, or the law.

Upon receipt of compliant notification OSP must take down or disable access to

material and take reasonable steps notify the user. (Perfect 10 v. CCBill, 9th Cir. 2007)

(requirement that notice be compliant construed strictly).

Good Faith §512(f)

Holden Lenz Prince

Lenz v. Universal Music Corp. (N.D. Cal. 2008)Copyright owner must consider fair use in formulating a good faith belief that the use of the material is not authorized by the owner, agent, or the law. A takedown notice sent by an owner or agent who fails to consider fair use will entitle the alleged infringer to recover damages, costs & attorneys fees.

Counter Notification §512(g)

If user believes content is not infringing, may send a counter notice, which must:

1) Identify the material which has been removed and its location;2) Include the user’s contact information;3) Include a signed and sworn statement that the user had a good faith belief that

the material was mistakenly removed.

Owner must file suit against alleged infringer within 10-14 business days, or OSP must restore user’s material.

Knowledge § 512(c)(1)(A)

Actual

• Receipt of a DMCA notice or the filing of a lawsuit against a host does not establish actual knowledge. (Perfect 10 v. Amazon, 9th Cir. 2007)

~or~

Facts & Circumstances from which infringement is obvious (“red flag”)

• NOT a reasonableness test (Veoh v. Io, N.D. Cal. 2007); (Perfect 10 v. CCBill, 9th Cir. 2007)

• “Apparent knowledge requires evidence that a service provider ‘turned a blind eye to ‘red flags’ of obvious infringement.’” (House Rep. 105-551)

– Copyright proprietor’s trademark on video clip is not “red flag” (Io)– Videos that appear to be “professional” are not “red flags” (Io)– Violation of federal labeling laws are not “red flags” (Io)– Description of video as “illegal” or “stolen” is not “red flag” (Io)– Hosting of material from a password-protected site is not a “red flag” (CCBill)

Control & Financial Benefit – §512(c)(1)(B)

• More is required than ability to control and block access to the site (Hendricks v. eBay, C.D. Cal 2001)

• Right and ability to place financial pressure on a site is not ability to control (Perfect 10 v. VISA, 9th Cir. 2007)

• Right and ability to control infringement; not right and ability to control the network (Io v. Veoh, N.D. Cal. August 27, 2008)

– But ability to control network is a consideration: “Perhaps most importantly, there is no indication that Veoh has failed to police its system to the fullest extent permitted by its architecture.”

• “[H]undreds of thousands of videos files from users” = too many to control (Io)

• No prescreening requirement (Io)

Control & Financial Benefit § 512(c)(1)(B)

Subscription Model• Test is “whether the infringing activity constitutes a draw for subscribers, not

merely an added benefit,” but need not show that portion of income linked directly to financial activity is “substantial.” (Ellison v. Robertson [AOL], 9th Cir. 2004)

No direct financial benefit where no showing that AOL attracted or lost subscriptions based on the presence or removal of infringing

content.

• When the fee a host site charges is unrelated to the amount of infringing material, the host does not receive a financial benefit. (Perfect 10 v. CCBill, 9th Cir. 2007).

Advertising Model• Viacom v. YouTube - ??

Repeat Infringers §512(i)(1)(A)

OSP “has adopted and reasonably implemented, and informs subscribers and account holders of the service provider's system or network of, a policy that provides for the termination in appropriate circumstances of subscribers and account holders of the service provider's system or network who are repeat infringers.” §512(i)(1)(A).

• OSP “implements” policy if it (1) has a working notification system; (2) procedure for dealing with takedown notices; (3) does not prevent copyright owners from collecting information. (CCBill)

• Implementation is “reasonable” if OSP terminates infringers when “appropriate.” (Io)

Standard Technical Measures – §512(i)(1)(B)

• Standard Technical Measures (§512(i)(1)(B))– Have been developed pursuant to a broad consensus of

copyright owners and service providers in an open, fair, voluntary, multi-industry standards process

– are available to any person on reasonable and nondiscriminatory terms; and

– do not impose substantial costs on service providers or substantial burdens on their systems or networks

• Perfect 10 v. CCBill: Perfect 10 alleged that CCBill does not qualify for the DMCA safe harbor because it blocked Perfect 10’s access to sites affiliated with CCBill– Ninth Circuit remands on this issue

Viacom v. YouTube

• Google owns YouTube, $1.65B purchase price

• Viacom sued for $1B

• Google said to have set aside $200M to cover infringement defense

• Many content providers have entered licensing agreements with Google, permitting their content to be shown on YouTube.

Viacom’s Allegations

• Plaintiffs have identified more than 150,000 unauthorized clips of their copyrighted programming on YouTube, which have been viewed over 1.5 billion times.

• YouTube has unfairly shifted the burden of policing copyright violations to copyright owners.

– “[YouTube] has 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.”

• YouTube has failed to take reasonable measures to police and respond to infringement.

– You Tube offers filtering technology only to those who enter into a license– Does not block slightly altered copies of infringing videos that are removed – Does not block repeat infringers from signing up with a new account – Does not permit copyright owners to view content users designate as viewable only by

“friends”

Google’s Answer

• Google asserts DMCA safe harbor– Took down potentially infringing material upon DMCA notices

– Policy for repeat infringers

– Limits clips to 10 minutes

• Viacom claims that Google is ineligible, because– YouTube must have had knowledge of infringing material.

– YouTube receives considerable advertising revenue from infringing material.

– YouTube has the technological capacity to control infringement and can

cancel user subscriptions and take down infringing content.

Status

Currently in discovery Viacom focusing on what Google knew when about infringing videos

Interim order (S.D.N.Y. 2007)

• Google does not have to produce its search engine source code or the code it uses to identify potentially infringing videos

• Google does have to produce copies of all removed videos and an anonymous log of users who accessed the infringing videos.

Viacom hired BayTSP to search for potentially infringing content on YouTube and other sites

Discovery order (N.D. Cal. Jan. 2009)

• BayTSP must produce information regarding its infringement monitoring, YouTube’s responsiveness to DMCA notices & the responsiveness of other online sites.

Predictions?

• Knowledge?

– Io, CCBill: not a reasonableness test; trademarks in videos, file names indicative of infringing content might not indicate knowledge.

• Right & Ability to Control?

– Io: no pre-screening requirement, no requirement that Veoh change its business to reduce infringement

– Io: “there is no indication that Veoh has failed to police its system to the fullest extent permitted by its architecture.”

• Has You Tube?

• Viacom’s Complaint: YouTube uses its filtering and copyright protection measures only when it obtains a license from the copyright owner.

• Financial Benefit?

– Advertising Model

DMCA Safe Harbor Not Available If Discovery Misconduct

Arista Records LLC v. Usenet.com, Inc., June 30, 2009 (S.D.N.Y.)

• Usenet.com found liable for direct and secondary infringement, due to active management of server and customer relationships

• §512(c) safe harbor unavailable due to “egregious” discovery misconduct

Defamation & Other Torts

Communications Decency Act §230

Immunity under Communications Decency Act, 47 U.S.C. §230(c)(1):

“No provider or user of an interactive computer service shall be treated as the publisher or speaker of any information provided by another informationcontent provider.”

OSP is a mere conduit not a publisher (strict liability) or distributor (knew/should have known)

No procedural requirements (cf. DMCA)

Statutory Exceptions

1. Federal criminal laws

2. Intellectual property laws: “Nothing in this section shall be construed to limit or expand any law relating to intellectual property.” §230(e)(2)

• 9th Cir: Section 230 does provide immunity for state IP claims; “intellectual property” refers only to federal law

• D. N.H.; S.D.N.Y.: Section 230 does not provide immunity for state or federal IP claims

3. Electronic Communications Privacy Act (ECPA) or “similar laws”

4. State laws that are consistent with Section 230

Application of Section 230

Zeran v. America Online (4th Cir. 1997)• Anonymous subscriber posted defamatory statements about plaintiff Zeran to AOL

bulletin board, leading to numerous hostile phone calls and death threats to Zeran.

• Zeran sued AOL for failure to remove the bulletins promptly after being notified and for failure to prevent further messages from posting

• Is AOL a “distributor”?

– NO. Court interpreted Section 230 broadly, finding Congressional purpose in enacting Section 230 was to protect interactive computer service providers from tort liability and guard against the chilling effect of such liability on free speech interests of subscribers

– Found that under Section 230, “distributor” liability is a subset of “publisher” liability

– AOL not liable either as a publisher (for initial posts) or as a distributor (for failure to remove after receiving notice of defamatory content).

Zeran Applied Broadly to Tort, Statutory and Contract Claims

• Federal civil rights laws. Noah v. AOL (4th Cir. 2004) (Title II, discrimination in places of public accommodation, for racist comments in AOL chat room)

• Invasion of privacy, right of publicity, negligence. Carafano v. Metrosplash (9th Cir. 2003)

• Common law negligence. Green v. America Online (3d Cir. 2003)

• California unfair competition and Autographed Sports Memorabilia laws. Gentry v. eBay (Ca. Ct. App. 2002)

• California unfair trade practices act. Stoner v. eBay (Ca. Super. Ct. 2000) (sale of bootleg musical recordings on auction site)

• Breach of contract. Barnes v. Yahoo! (D. Or. 2005) (failure to honor promise to remove content)

• Breach of contract, negligent misrepresentation, tortious interference. Schenider v. Amazon.com (Wash. Ct. App. 2001) (negative reviews)

Who is an “information content provider”?

Merely providing administrative support or organized searching relating to content posted by others not likely to cause a UGC service to be deemed a “content provider”

• Carafano v. Metrosplash, 339 F.3d 1119 (9th Cir. 2003): Online dating service not content provider with respect to profile provided by member, despite having collected information in response to specific questions and classifying user information into categories

• Batzel v. Smith, 333 F.3d 1018 (9th Cir. 2003): Minor editorial changes to email messages posted by users does not cause web site moderator of LISTSERV e-mail to be deemed a content provider

**BUT**

Structuring the UGC may make an OSP the “information content provider,” precluding Section 230 immunity.

Structuring User Content

Roommates.com (9th Cir. 2008) (en banc):

Questions & answers in pull down menu “Roommates created the questions and choice of answers” so is “undoubtedly the ‘information content provider’ and can claim no immunity.”

See also HyCite Corp v.Badbusinessbureau.com (D. Ariz. Dec. 2005); MCW v. bad business bureau.com, LLC (N.D. Tex. 2004); and Whitney Information Network v. Xcentric Ventures (M.D. Fla., reversed and remanded (11th Cir. 2006) (website facilitating consumer complaints not protected by Section 230)

Examples of Structured Content

Ninth Circuit:

“We interpret the term ‘development’ as referring not merely to augmenting the content generally, but to materially contributing to its alleged unlawfulness. In other words, a website helps to develop unlawful content, and thus falls within the exception to section 230, if it contributes materially to the alleged illegality of the conduct.” Roomates.com.

What is a material contribution? – OSP provides search query box, user searches for “white roommate”

no material contribution, query tool is “neutral”

– Dating website that requires users to enter sex/religion/race/marital status through structured answers

has not contributed to illegal discrimination

– OSP that edits user-submitted content for length, obscenity

no material contribution if OSP edits are “unrelated to the illegality”

if edits are material, Section 230 does not protect the OSP

Unstructured User Content

Roommates.com (9th Cir. 2008) (en banc): User-submitted narrative: site does not encourage users to submit discriminatory information and does not edit immunity applies because Roommate did not develop or edit the content

Same outcome in Chicago Lawyers’ Committee for Civil Rights Under Law v.

Craigslist (7th Cir. 2008): User-submitted classified ads with text: “NO MINORITIES”; “Requirements: Clean Godly Christian Male”; “No children” 230 immunity applies because Craigslist is not the publisher

See also GW Equity LLC v. Xcentric Ventures LLC (N.D. TX 2009):

Creating “tags” (such as “con artist” and “financial consulting”) in pull down menu that users could incorporate into “rip off reports” did not waive Section 230 immunity, where tags are not per se defamatory or illegal

Solicitation of User Content

Woodhull v. Meinel (N.M. App. Ct. Oct 24, 2008):• Defendant solicited allegedly defamatory information from a school newspaper

staffer. The staffer e-mailed the material to the defendant, who posted it on her blog.

• Court refuses to dismiss case under Section 230. – Defendant requested potentially defamatory material for the express

purpose of making fun of plaintiff distinguishable from editing third-party e-mail.

– “Therefore, Defendant’s actions could reasonably be viewed as going beyond what is protected by the CDA, exposing Defendant to potential liability as an original ‘information content provider.’”

See also MCW v. Badbusinessbureau.com (N.D. Tex. 2004) • By encouraging users to submit photos, content and “rip off reports”, BBB

became information content provider

“First Party” Content – Marketing Representations

OSPs have no immunity against their own statements Mazur v. eBay (N.D. Cal. 2008)• Plaintiff asserts marketing misrepresentations by eBay are false in view of shill

bidding practices:

– eBay: “Bidding on eBay Live Auctions is very safe. All live auctions are run by reputable international auction houses, which are carefully screened by eBay before being authorized to sell to you.”

• No Section 230 immunity for eBay’s statement

– "eBay’s statement regarding safety affects creates an expectation regarding the procedures and manner in which the auction is conducted and consequently goes beyond traditional editorial discretion."

• But Section 230 immunity applies to statements made by the third party auction houses and to claims that auction houses are “carefully screened” because that is an editorial function

Contract Claims and Section 230

Barnes v. Yahoo (9th Cir. 2009)

• Plaintiff sues Yahoo after it promised to remove nude pictures posted by her ex, but failed to do so

Ninth Circuit:

• Section 230 immunity applies to contract claim, because it treats Yahoo as a publisher (i.e. relates directly to function as an editor)

• Section 230 does NOT immunize Yahoo from promissory estoppel claim

– “Insofar as Barnes alleges a breach of contract claim under the theory of promissory estoppel, subsection 230(c)(1) of the Act does not preclude her cause of action.”

Child Protection Statutes

Children’s Online Privacy Protection Act (“COPPA), 15 U.S.C. §6501

• Websites must obtain “verifiable parental consent” before collecting, disclosing, or using the personal information of children under 13

• After collecting information, websites must keep it secure and give parents access

• Xanga fined $1M by FTC for allowing children under 13 to join without parental consent

States (Illinois, North Carolina, Georgia, New Jersey) have taken action to:

• Extend their state statute to include all “social networking sites,” as opposed to only child-oriented websites

• Increase the relevant age to 17

• Prohibit online adult/child interaction

• Proposals in NC & GA did not pass and are pending in IL and NJ

Attorney General Actions

Investigations Lead to Settlements Requiring Enhanced Policing

• 2007: NY AG civil investigation asserting Facebook failed to live up to its claim that it is safe for minors leads to settlement in which Facebook agrees to enhanced response to complaints

• 2008: My Space entered an agreement with 49 AGs to go beyond COPPA requirements

• Craigslist settles with 40 state AG’s and agrees to monitor postings

• But Criagslist successfully files DJ action seeking TRO when South Carolina AG threatens criminal charges in May 2009, citing Section 230 and unconstitutional prior restraint

• Texas was the first state to bring a COPPA enforcement action, which resulted in a settlement and civil penalty against thedollplace.com and Gamesradar.com

OSP Obligation to Produce User Information

Generally, OSP must furnish information re users in response to subpoenas• See, e.g., 17 U.S.C. §512(h) – Subpoenas to identify infringers

Application of press shield laws to UGC sites• See, e.g., O’Grady v. The Superior Court of Santa Clara County (Apple Computer)

(Cal Ct. App. 2006): – California Constitution protects any “publisher, editor, reporter, or other person connected with or employed

with a newspaper, magazine, or other periodical publication” from disclosing being held in contempt for refusing to disclose confidential source

– Held that operator of a public website is a “publisher” and a news-oriented website is “like” a newspaper or magazine”

– Legislature intended phrase “periodical publication” to include “all ongoing, recurring news publications while excluding non-recurring publications such as books, pamphlets, flyers and monographs”

“It is at least arguable that PowerPage and AppleInsider, by virtue of their multiple staff members and other factors, are less properly considered blogs than they are ‘emagazines,’ ‘ezines,’ or ‘webzines.’ Citing Wickipedia: ‘A distinguishing characteristic from blogs is that webzines bypass the strict

adherence to the reverse chronological format; the front page is mostly clickable headlines and is laid out either manually on a period basis, or automatically based on the story type.’ However, the meanings

ultimately to be given these neologisms, as well as their prospects for survival, remain unsettled.”

– Refused to discuss application of statute to “blogs” due to its “rapidly evolving and currently amorphous meaning”

OSP Obligation to Provide User Information

● Courts differ on whether anonymous commenters on blogs, forums, or news sites must be disclosed:

• One Illinois court upheld a grand jury subpoena, noting that the comments were not “sources” as they were written after the story was posed

• One Oregon court protected the commenter’s IP address in a libel suit, clarifying that the protection attached only when comments were relevant to the article

• Montana court quashed similar subpoena

• Legislation has been introduced in New York and other states to extend shield laws to bloggers who are the functional equivalent of journalists

• No federal reporters shield that could protect anonymous sources

Contact:

Ashlie BeringerGibson, Dunn & Crutcher LLP

1881 Page Mill RoadPalo Alto, CA 94304-1211

(650) 849-5219aberinger@gibsondunn.com