By putting YouTube in the same league as file-sharing services,...

brief. The group told the 2nd U.S. Circuit Court of Appeals -- which had heard from a broad swath of copyright owners and Microsoft in favor of Viacom (WID Dec 14 p5) -- that the copyright industries will be proven wrong again on the danger from new technology. “For example, when Britain’s Monty Python learned that fans were posting poor quality video clips of its films on YouTube, the Pythons posted better quality versions along with an amusing video asking viewers to buy their DVDs,” raising DVD sales “23,000 percent,” CEA said. YouTube is one in a long line of technology developments that copyright owners opposed at first, from the gramophone to cable TV and, most famously, the VCR, the brief said. It included what may the first legal citation of CEA President Gary Shapiro’s book on innovation, The Comeback, published this year. The feared technologies had one thing in common, CEA said: “substantial noninfringing uses.” The association encouraged the 2nd Circuit to follow the Supreme Court’s holding in the Grokster case that proof of “mere knowledge of infringing potential or of actual infringing uses” isn’t enough to show inducement to infringe. YouTube doesn’t fit the high court’s restriction of liability to “one who distributes a device with the object of promoting its use to infringe copyright, shown by clear expression or other affirmative steps taken to foster infringement,” CEA said. The group included a chart in its filing contrasting YouTube with P2P services: YouTube doesn’t let users download content, the streaming quality is often poor, the service has time and file-size limits, it promptly responds to takedown requests, and “almost none” of the content available infringes copyrights. The MPAA’s own figures demonstrate unprecedented box-office growth since YouTube’s founding, CEA said. “The music business continued to prosper,” as well, the brief said, citing a Nielsen SoundScan estimate of 1.5 billion digital music sales in 2008. Most of those were single track downloads, though, and record industry revenue remains in severe decline. “This case will set precedent that will determine the future of the Internet for decades,” CEA said. If Viacom succeeds on its theory that YouTube doesn’t qualify for a safe harbor under Section 512 of the Digital Millennium Copyright Act, “most if not all [user-generated content] sites, Internet links, and perhaps even the Internet generally would simply have to shut down” in the face of massive potential damages. Estimating that YouTube users upload 110 million videos a year, CEA said, “If only 1 percent of them infringe someone’s copyright, YouTube could be liable for 1,100,000 works per year. Assuming $10,000 in statutory damages for each of these would cost YouTube $11.1 billion per year.” A 1 percent infringement rate would put Facebook on the hook for $36 trillion a year, the brief said. “Almost all sites are at least partly” UGC sites, from Google search and newspaper sites to Amazon product reviews and Flickr photos, and all would be threatened. Holding YouTube liable for “general knowledge” of infringement on its site, as Advance Publications suggested in its brief in the case, “could result from a newspaper article, a random email, employee gossip, and the like,” CEA said. It would violate Section 512 requirements of specificity in takedown notices and could spur abuse by encouraging an online service to “entice” a content owner to send a general-knowledge takedown notice to a competitor of the instigator. Among the many problems with requiring websites to use content filtering would be “endless litigation over what is ‘commercially reasonable’ filtering” as proposed by Viacom, the brief said. “Courts would be required to perform technical and economic analyses of myriad protection technologies, including various forms of encryption, watermarking, fingerprinting, digital rights management, and others not yet invented,” for every copyright owner that complained its preferred filtering system wasn’t adopted, it said. Viacom’s interpretation of Section 512’s safe harbor as applying only to a “passive provider of storage space” would leave the entire cloud-computing industry at risk of litigation, CEA said. It said Amazon’s Simple Storage Service, known as S3, alone could be liable for $2 trillion in damages.