Copyright Ruling Worries Hollywood

It's even triggered suggestions that Congress will have to step in if the decision isn't reversed by a higher court.

U.S. District Judge Louis L. Stanton's decision against Viacom and in favor of Google and YouTube placed the onus on copyright holders to identify specific instances of infringement and then inform websites to remove the pirated content. If the sites do so promptly, they are shielded from liability.

While the decision is raising the hackles of entertainment reps, it was a victory for YouTube, which faced a $1 billion infringement claim from Viacom, and for other sites built on user-generated content and social media -- such as eBay and Facebook.

The court's reading of the requirements placed on Web services under the Digital Millennium Copyright Act's “safe harbor" provision falls short of what even YouTube has put in place since Viacom filed its lawsuit in 2007. Since then, the company has deployed “fingerprinting" technology that makes it easier to detect pirated clips.

“This court decision basically says, 'Do nothing,' “ said Cary Sherman, president of the Recording Industry Assn. of America. “It implies that filtering is unnecessary, which is another terrible signal to be sending. It is just bad policy."

Although YouTube's “fingerprinting" has won support in Hollywood, there is fear that other sites have less incentive to work with the industry.

Eric Goldman, associate professor of law at Santa Clara University, wrote in a blog post that “this case will squelch many of those copyright owner requests to force service providers to go beyond current industry-standard practices. Of course, we have to see how the opinion fares on appeal."

Taylor Hackford, president of the Directors Guild of America, said in a statement that he was “troubled" by the ruling. He said it would allow companies to build sites using “illegal content" so long as they promise to remove the material once caught.

“This decision means that content creators and copyright holders will carry 100% of the burden of policing the Internet and pursuing takedown measures for every instance of copyright infringement that they are able to find," he said. “Every content owner will need to search the Internet constantly and forever -- a never-ending task of Sisyphean proportions."

He said directors and producers of independent and low-budget movies would be hit particularly hard because they don't have the time and resources to track down infringement.

Mark McKinnon, co-chairman of Arts+Labs -- a coalition of creative and tech companies including Viacom, Microsoft, AT&T and NBC Universal -- said the decision gives sites such as YouTube even more leverage as content companies struggle to create new business models.

“The result may work well in the short run for websites like YouTube and Google, but would never work for the creators who have had to either pay them what amounts to 'protection money' or live with widespread theft of their work over these sites," McKinnon said.

UCLA law professor Douglas Lichtman, who advised Viacom in its lawsuit, said that for the burden to fall on content owners to root out infringement is something akin to “whack-a-mole."

“The content community is never going to be fast enough to get it down to the right scale and percentage," he said.

He suggested measures much greater than the system of “notice and takedown," something that Stanton pointedly said works “efficiently." There could be a button, for example, posted next to each video that, if clicked on, would inform site owners of instances of infringement, allowing the companies to investigate the daily flood of new content entering its sites. What also has to be considered, he said, is the intent of website owners.

“It can't be that you qualify for 'safe harbor' if you have bad intent," he said. Through a trove of e-mails, Viacom tried to fashion a case showing that YouTube's founders were well aware that infringement was occurring on its site, yet built its business model around it. Though Stanton didn't cite those e-mails or Google's counter batch of documents, he said “mere knowledge of prevalence of such activity in general is not enough" to hold the sites accountable.