Tuesday, April 24, 2012

Interesting Article About Mayo v. Prometheus

Last month I blogged about the Supreme Court decision in Mayo Collaborative Services v. Prometheus Laboratories, Inc.  The case involved the patentability of medical diagnostic techniques, and has potentially broader implications for other types of technologies.

My colleague Bernard Chao wrote an interesting article about the case, "Moderating Mayo," which can be downloaded on SSRN.  I agree with Bernard's view that the "point of novelty" can be a useful tool in evaluating patents.

Viewing Patent Drawings Without Context

Mike Masnick and io9 have reported about a website that collects a bunch of patent illustrations without the context of their surrounding textual explanation.  The website is called "Context-Free Patent Art."  Here's an example:

Tuesday, April 17, 2012

Twitter's Anti-Troll Innovator’s Patent Agreement

Speaking of patent trolls, today Twitter announced that it will be handling invention assignments differently than most other companies.  Usually, companies require their employees to assign inventions to the company without any restrictions or limits on what the company can do with any resulting patent.  Twitter has agreed to limit its use of any patents to defensive purposes, to try to make the patents useless for any troll that later might acquire the patent and to try to improve the patent system.  We'll see if this becomes a trend.

"Don't negotiate with terrorists"

Drew Curtis, the head of one of my favorite humor web sites, www.fark.com, gave an interesting TED talk on his experience being sued by a patent troll.  His advice won't work for everyone, but it's interesting.

Thursday, April 12, 2012

Tuesday, April 10, 2012

Friday, April 6, 2012

Viacom v. YouTube: Both Sides Declare Victory

Yesterday the Second Circuit Court of Appeals released its opinion in Viacom v. YouTube.  The Court affirmed much of the reasoning of the district court's opinion granting summary judgment in favor of YouTube, but remanded the case for certain fact-finding specific to that case.  (I previously summarized the case here and here, and discussed a related decision from the Ninth Circuit, UMG v. Veoh (Shelter Capital Partners), here.  Briefly, Viacom v. YouTube involves the liability of user-generated content (UGC) websites such as YouTube when their users post allegedly infringing content, and specifically how UGC sites can defend such liability using the "safe harbor" of the DMCA, 17 U.S.C. §512.)

Judging from the public press so far, both sides have declared victory.  According to TechCrunch, Viacom is "pleased with the decision" and its "message" that "intentionally ignoring theft is not protected by the law."  However, the same article quotes YouTube as saying that the "Second Circuit has upheld the long-standing interpretation of the DMCA and rejected Viacom's reading of the law."  Similarly, the L.A. Times reports that "Both sides found something to cheer about in the decision"; the Washington Post is similar.  The Hollywood Reporter's headline begins "Court Sides with Viacom," but then notes that "the 2nd Circuit mostly agrees with YouTube’s interpretation of the statute."  The San Francisco Chronicle somewhat bizarrely stated "YouTube loses" (a newspaper that close to Silicon Valley should know better).

Commentators such as Eric Goldman view the decision as creating difficulties for UGC websites like YouTube, but EFF, Public Knowledge, CDT and NetCoalition all seem to view the ruling as favorable to UGC sites.  Mike Masnick initially viewed the decision as mostly favorable, but tempered his views after reading Prof. Goldman's post.

I agree that the case is mostly favorable to UGC sites, particularly ones that are careful about the handling of user-generated content at the startup stage.  The key issues are as follows.

Knowledge Requirements.  The Second Circuit described the "first and most important question on appeal" as "whether the DMCA safe harbor at issue requires “actual knowledge” or “aware[ness]” of facts or circumstances indicating “specific and identifiable infringements.”  Viacom and its content industry supporters argued that general knowledge or awareness on the web site was enough to defeat the safe harbor; YouTube and its technology industry supporters argued that knowledge of specific infringing activity was required.

On this issue, the Court agreed with YouTube, and it's an important issue.  I was always troubled by Viacom's "general knowledge" theory for several reasons.  Most web sites are "generally" aware of some infringements on their web site, particularly for sites that host a great deal of user-generated material.  Viacom's theory would have unbounded implications.  Would a UGC site lose its safe harbor just upon a showing that at one time it knew of some infringements?  Would a single stray email impose liability for all works, by all copyright owners, for all time?  Could a web site never qualify for the safe harbor if it ever once had some "general knowledge"?  As I pointed out in my amicus brief for the CEA, could a content owner (or a competitor) forever disqualify a UGC site from the safe harbor simply by sending it a brief letter "notifying" the site of "general knowledge of infringements"? The problem raised by the "general knowledge" theory, and by such questions, is that there is no correlation or causal connection between the "general knowledge" and disqualification for the safe harbor for the particular works involved in a lawsuit.

The Second Circuit got this right.  It consistently focused on specific knowledge requirements, and in particular used phrases such as "specific infringing activity" or "specific infringements" over 40 times (even excluding the section analyzing the "control and benefit" issue discussed below).  The Court said it was "persuaded that the basic operation of § 512(c) requires knowledge or awareness of specific infringing activity."  The opinion then did one of the best jobs I've seen of rebutting Viacom's argument that the alternate showing of "red flag" knowledge could be satisfied by "general" red flag knowledge, and pointed out that "actual knowledge" and "red flag knowledge" both require knowledge of specific infringements:
The difference between actual and red flag knowledge is thus not between specific and generalized knowledge, but instead between a subjective and an objective standard. In other words, the actual knowledge provision turns on whether the provider actually or “subjectively” knew of specific infringement, while the red flag provision turns on whether the provider was subjectively aware of facts that would have made the specific infringement “objectively” obvious to a reasonable person.  . . . Both provisions do independent work, and both apply only to specific instances of infringement.
Later, the court discussed "willful blindness" as an alternative to actual knowledge.   (The opinion described this as meaning that a "person is “willfully blind” or engages in “conscious avoidance” amounting to knowledge where the person “‘was aware of a high probability of the fact in dispute and consciously avoided confirming that fact.’”)  The court first rejected the concept that "willful blindness" imposes any duty of a UGC site to affirmatively monitor its site -- that was one of the main arguments by Viacom and its supporters.  While the court did allow this doctrine to be used, it again limited it to specific infringing activity: "the willful blindness doctrine may be applied, in appropriate circumstances, to demonstrate knowledge or awareness of specific instances of infringement under the DMCA."

The result of the above discussion was to send the case back to the trial court, but not for judgment in Viacom's favor, or even necessarily for a trial.  Rather, the court merely told the trial court to examine the record more carefully to see if YouTube had specific knowledge of "particular clips or groups of clips," and then reconsider summary judgment.  This means that, at worse, YouTube might have some liability only for some specific clips, not all of them as the plaintiffs contended.  And for UGC sites in general, if they avoid the behavior shown in some of YouTube's early emails, they can fully comply with the "actual knowledge" requirement of the statute.

"By Reason of Storage":  As had UMG in the Veoh case, Viacom argued that YouTube didn't qualify for the safe harbor because the videos weren't stored at the direction of the users.  Like the Ninth Circuit, the Second Circuit rejected this argument for all but a small quantity of YouTube's videos.  For example, Viacom argued the safe harbor only applied when users stored videos, but not when they were played back -- in other words, that the Internet is a black hole that can only swallow information.  The court rejected this argument, as well as Viacom's arguments that YouTube's conversion of user videos for later viewing and its display of "related videos" were outside the statute.

YouTube did one additional thing: it selected certain videos for syndication for Verizon mobile devices.  The court held that this manual selection wasn't at the "direction of a user" and might not qualify for the safe harbor.  However, the court limited any exposure (again) only to those particular videos, and told the trial court to see if any of those videos were actually the subject of Viacom's claims.

"Right and Ability to Control":  As Eric Goldman and Mike Masnick point out, the primary unfortunate part of the opinion deals with the issue of whether the UGC site has the "right and ability to control" infringing activity, where the site receives a financial benefit directly attributable to the infringing activity.  YouTube argued that this factor also is limited to knowledge of specific infringing items; the trial court had agreed, as had the Ninth Circuit in the Veoh case.   Viacom and its supporters argued that "control" means the mere ability to take down infringing works.

The Second Circuit rejected both of these views, but didn't give much guidance.  It agreed that "something more" is required than the mere ability to remove or block access to the UGC materials.  Rather than say what that "something more" actually is, it gave two examples where the service provider exerts "substantial influence" on the activities of users.  In one example, the service provider gave its users detailed instructions and requirements of what to do and not to do.  The other example involved inducing infringement under the Grokster case.

While we don't know what "substantial influence" means, it would appear to mean a lot more than merely letting users upload content, as sites such as YouTube, Veoh, Facebook and others have done.  As long as the web site doesn't get substantially involved in telling users what to do, it probably will pass this test.  An analogous and possibly helpful case is the Roommates.com decision from a few years ago.  In that case, Roommates.com lost its immunity under Section 230 of the CDA because it forced its subscribers to answer certain questions that allegedly were discriminatory (which the court ironically found later were not discriminatory, but that's another issue).  And the Grokster standard arguably requires the plaintiff to show: (1) that the defendant acted with the specific objective of promoting the use of its product to infringe; (2) that the defendant furthered that objective by affirmative measures taken to foster infringement; and (3) that the infringement at issue actually resulted from the defendant’s inducing conduct.  Most UGC sites don't require or tell their users to upload infringing content, so they hopefully will be safe under that standard.

So while the Second Circuit decision wasn't the total victory for YouTube that the trial court decision was, at a minimum it greatly limits YouTube's potential exposure, and is vastly better than what Viacom sought.  And it seems like something that careful UGC sites can live with going forward.

Update: I went back to check YouTube's brief.  What do you know, the Second Circuit's above discussion of "red flag" knowledge largely tracks pages 31-34 of YouTube's brief.  Good job.

Sunday, April 1, 2012

Of Course, You Know What Today Is

Yesterday was Bunsen Burner Day.  But you all know what today is.  It's the day where nothing is what it seems, especially on the web.  You can't do normal web searches anymore, popular sporting events are much different today, the U.S. political system has gotten very strange, public interest groups have unusual newsletters, lawsuits have gotten out of hand, as have science fair experiments, and apparently some people have lost their sense of humor.  
Some people have even made lists of how this day is different.   For some people, it might even be the end of the world, but don't worry, they're just kidding.