Social Networking Stirs Napster Memories in Digital Movie Era

Napster. The brand name stirs memories of a Digital Rights Management (DRM) frenzy that had copyright holders up in arms over the once-illegal file-sharing service.

Of course, Napster has cleaned up its act and Apple’s iTunes Music Store has helped transition digital music downloaders to the right side of the law, but DRM issues are still making headlines in the next digital frontier: downloadable video.

The latest chapter in the DRM saga centers on, a consumer media company that lets people watch and share original videos on the Web. Launched in February 2005, YouTube boasts more than 70 million videos downloaded every day and 60,000 new videos added daily. It is the 17th most trafficked Web site in the world. It is also the Recording Industry Association of America’s (RIAA) latest target.

Making Amends

Known for filing lawsuits against alleged infringers, the RIAA is taking copyright enforcement action against YouTube. Many of its users have recently been the recipients of cease-and-desist orders. At issue is the alleged illegal posting of copyrighted material. NBC, Universal and CBS demanded that the site dump illegally acquired footage earlier this year.

YouTube has recently made amends with NBC and even struck a deal with the broadcaster to advertise its fall lineup on its popular online video site. The RIAA, however, is not satisfied. RIAA executives could not immediately be reached for comment, but legal industry analysts are weighing in on what could eventually become a RIAA v. YouTube battle that the young Internet company may not be ready to face.

Aiming at a Centralized Source

The RIAA’s pursuit of these amateur video creators who use copyrighted music in their creations is a sign of the times. The cease-and-desist letters are a demonstration of how emerging and increasingly popular digital technologies are putting a strain on copyright holders’ ability to control the use of their works in a digital age, according to Eric W. Bass, intellectual property litigator with Farella Braun & Martel in San Francisco.

“Since many of the videos make extensive use of sound recordings without obtaining the rights for them, the RIAA presumably has a relatively strong legal case against the individual creators of the videos,” Bass told TechNewsWorld.

Bass added, however, that the strength of the RIAA’s legal case might not be the most important factor in determining whether it can keep a lid on this kind of behavior. That’s because today’s consumers have the increasing ability — and desire — to manipulate and publish digital content with a few clicks of the mouse.

The RIAA’s cease-and-desist efforts, then, could run into both cost effectiveness and public relations obstacles that outweigh the apparent legal strength of its case. In other words, the public could revolt if the RIAA tries to turn off YouTube.

Bass noted yet a second enforcement challenge in the RIAA’s path: “Unlike the RIAA’s pursuit of peer-to-peer fire sharing services, in which the uploading of musical content is sometimes centralized enough that pursuit of the high-traffic offenders is a plausible enforcement strategy, there may be no centralized source of these videos for the RIAA to pursue.”

YouTube Users Exposed

Centralized source or no, Christopher Norgaard, intellectual property attorney and partner in the Los Angeles office of Ropers Majeski Kohn & Bentley, believes YouTube and its users face a significant risk of exposure to secondary liability for copyright infringement. Secondary liability can be either contributory (inducement of infringement) or vicarious (profiting from infringement while failing to exercise a right to stop it).

Under the Supreme Court’s “Grokster” decision in the Metro-Goldwyn-Mayer Studios Inc. v. Grokster Ltd. case, it was determined that secondary liability can arise from statements or actions directed to promoting infringement, or even from uncommunicated intent to promote infringement. That puts YouTube in the line of legal fire.

“YouTube users likewise face exposure to liability for copyright infringement, to the extent that they distribute copyrighted works to YouTube or other users by ‘digital phonorecord delivery,’ which the Copyright Act defines as an individual delivery which results in a reproduction of a phonorecord by or for any transmission recipient,” Norgaard told TechNewsWorld.

Examining YouTube’s Liability

YouTube’s potential liability is based on several factors. First, copyrighted material is easily available on the YouTube site. In this respect, YouTube and other such sites are a return to the old Napster model, as opposed to the decentralized P2P software utilized by Grokster, et al.

The YouTube site is sophisticated, has a number of features and is easy to manipulate. A user can, for example, click on “Beatles” or “McCartney” to pull up related content, or perform their own searches to bring up videos containing copyrighted sound recordings. The user can then forward the video to other people, and store it under playlists or favorites.

What Constitutes Fair Use?

Part of the question is what constitutes fair use. Copyright law exempts fair use of copyrighted works from infringement liability. Fair use includes comment and criticism.

“A determination of fair use is based on, among other things, the amount of the work copied in relation to the work as a whole, and the effect of the use on the potential market for or value of the copyrighted work,” Norgaard explained.

Given that a substantial portion of the videos on YouTube, Google Video, Yahoo Video and other such sites are made or produced by amateur individuals who are often lip synching copyrighted works or using them as background, Norgaard said some appear ready to argue for a “fair use” defense.

In his view, however, a substantial number of these videos cross the fair use line and are infringing. They contain high-quality copying of copyrighted sound recordings — either a substantial part or the entirety of one or more songs.

“Some are slick enough to be attractive as videos, and at the very least, a user can ignore the video component and simply use the copy in place of an authorized, paid download or song purchase,” Norgaard noted.

Not-So-Funny Infringement

This rise of viral videos featuring parodies or performances of copyrighted musical performances has indeed created genuine concerns for copyright owners, according to Michael R. Graham, intellectual property attorney and partner with Marshall Gerstein & Borun LLP, an IP-specialty firm based in Chicago.

“Yes, the Romanian dance song performance is hilarious; yes, the Chinese roommates have turned their moment of dorm room karaoke silliness to commercial success; and yes, the armies of tape recording music fans now have space for bootleg videos of concerts and festivals,” Graham told TechNewsWorld.

“But every performance of a copyrighted work which appears does infringe copyright in the music, lyrics and musical performances,” Graham argued. “And because these transmissions are digital, they hold the possibility of flawless reproduction and distribution. This should be of concern.”

YouTube: The New Napster?

The bottom legal line is this: although YouTube may contain less infringing content than the “old Napster” with its centralized servers, it nevertheless appears that YouTube’s business model depends on copyrighted works either directly copied or used in homemade videos.

“YouTube also appears, based on my use of several of these sites, to permit the user to locate copyrighted material more readily and easily than, for example, Google and Yahoo,” Norgaard remarked. “It is also true, however, that YouTube enjoys a good reputation for quickly taking down copyrighted works when notified of them.”

YouTube is showing concern for the rights of digital property owners. NBC recently applauded the viral video purveyor for its willingness to remove unauthorized NBC content and protect its copyrighted material.

“Although RIAA has initiated challenges to copyrighted music appearing in viral videos, the interests of both free transformative speech and of the copyright owners themselves will be considered in the coming days,” Graham predicted. “YouTube’s notice and takedown policy is admirable and should be an example to the industry of how to deal with these conflicting interests.”

Leveraging YouTube

If YouTube were to eliminate the ready access by name to mainstream artists, titles and labels, or to go another step further and block search requests for them, it would go a long way to removing itself from any potential liability, legal experts agreed.

On the other hand, with the sales of CDs seriously depressed, these new promotional outlets may be a boon to the copyright owners, if they develop strategies and policies to deal with them. That’s what NBC has done. It’s also what E! has done, partnering to with YouTube to bring a new broadband offering to the Internet called “Cybersmack.”

Try as it might, the RIAA may not be able to stop YouTube’s momentum with NBC, E!, MTV2, Dimension films, and a list of others embracing the concept. For its part, YouTube — and its community of users — must tread lightly to avoid a Napster-level scandal that robs the free flow of video trading that has made the site so popular.

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