megaupload vs. youtube

One searching on youtube can easily find full length albums, movies, and episodes of television shows. The same albums, movies, and episodes would likely have been available on megaupload. Why is youtube mostly safe from civil and criminal liability while megaupload is the target of a massive prosecution and potentially many civil  suits?

The Digital Millenium Copyright Act contains a “safe harbor” provision limiting the liability of service providers. In order to claim protection, a service provider must not have actual knowledge of infringement or be aware of circumstances that would lead them to believe infringement is happening. 17 U.S.C.  512(c)(1)(A)(i); (ii). If the service provider becomes aware of infringing activity, it is not liable if it quickly removes or disables access to the material. 17 U.S.C. 512(c)(1)(A)(iii). The provider cannot escape liability if it profits from infringing activity that it has the right and ability to control. 17 U.S.C. 512(c)(1)(B). Finally, the provider must take down allegedly infringing activity after receiving a notice from the copyright holder. 17 U.S.C. 512(c)(1)(C).

In 2007, Viacom sued youtube for copyright infringement from numerous infringing clips of Viacom’s works.[i] Youtube argued it was immune because it had an agent who received notices from copyright holders and promptly removed the allegedly infringing material.[ii] The suit turned on the question of whether general knowledge that infringement occurred on youtube was enough to demonstrate actual knowledge of infringement.[iii]

The District Court for the Southern District of New York held that the general knowledge was not enough to remove the limitations on liability. The court held that the general knowledge standard shifted the burden from the copyright holder to the service provider.[iv] In addition, youtube promptly responded to a mass takedown notice requiring the removal of 100,000 infringing videos.[v] While there were multiple copies of some of the infringing videos, the court held that the DMCA required Viacom to list the URL of the infringing work, not just a general description.[vi]

Earlier this year, the Second Circuit partially reversed the district court’s decision. It also held that general knowledge of infringing activity is not enough to eliminate the safe harbor protection.[vii] However, there were facts that could have indicated specific knowledge. There were internal youtube emails about the presence of infringing content from Viacom debating what to do about it.[viii] There were other emails stating that youtube wanted to keep up a CNN clip until it was more popular.[ix] In addition, the evidence suggested that youtube attempted to make “a deliberate effort to avoid knowledge.”[x] Willful blindness to infringement makes a provider ineligible for the safe harbor protection.[xi]

As a file sharing service, Megaupload constituted a service provider under the DMCA.[xii] If the facts in the indictment are true, Megaupload is not immune. Megaupload profited from infringement in two ways; requiring a paid subscription for “premium” (longer than 72 minutes) content and $25 million in advertising sales.[xiii] In addition to profiting from the infringement it had the right and ability to control, megaupload had actual knowledge of infringement.[xiv]

One major difference between youtube and megaupload is over how they removed infringing works. Megaupload created a unique identifier (MD5) for each work and additional uploads of the file create a unique URL.[xv] Upon receiving a takedown notice, Megaupload only deleted the URL to the infringing file.[xvi] Megaupload kept the unique identifier in its servers for future uploads. Megaupload could have deleted the unique identifier as it had deleted the identifiers for things like child pornography.[xvii] Youtube did not have unique identifiers for each link to an infringing video.  Though both youtube and megaupload required a copyright holder to identify every URL of an infringing video, youtube at least attempted to permanently remove infringing material.[xviii]

Other file sharing services and streaming sites should proceed with caution. Though megaupload’s actions were overt, services should make sure internal communications about infringing works match with deleting the infringing material.[xix] Services should avoid creating something like Megaupload’s unique identifiers, or delete what is associated with the identifier after receiving notice of infringement. While the action against Megaupload is against an entity which clearly knew of and could stop the infringement, other providers need to ensure they don’t appear to ignore evidence of infringement.


[i] Complaint at 7-8, Viacom Int’l Inc. v. Youtube, Inc., 718 F. Supp. 2d 514 (S.D.N.Y. 2010) (No. 07 Civ. 2013).

[ii] Viacom Int’l Inc. v. Youtube, Inc., 718 F. Supp. 2d 514, 518-19 (S.D.N.Y. 2010).

[iii] Id.

[iv] Id. at 524.

[v] Id.

[vi] Id. at 528-29.

[vii] Viacom Int’l, Inc. v. Youtube, Inc., 676 F.3d 19, 31-32 (2d Cir. 2012)

[viii] Id. at 33

[ix] Id.

[x] Id. at 35.

[xi] Id. The scope of what constitutes “willful blindness” has yet to be determined. It may be limited to “truly egregious” conduct or be extremely broad. David Post, Viacom v. Youtube Decision- not as Bad as All That, volokh.com, (April 6, 2012, 10:27 AM), http://www.volokh.com/2012/04/06/viacom-v-youtube-decision-not-as-bad-as-all-that/.

[xii] The DMCA’s definition of service provider includes “a provider of online services or network access, or the operator of facilities therefor,” 17 U.S.C. 512(k)(1)(B)

[xiii] Indictment at 8, United States v. Kim Dotcom, Megaupload et al, Crim 1:12CR3 (E.D. Va. 2012), available at http://www.scribd.com/doc/78786408/Mega-Indictment.

[xiv] The indictment’s list of overt acts for the conspiracy demonstrates what megaupload knew and profits from specific acts of infringement. See Id. at 28-52

[xv] Id. at 10-11

[xvi] Id. at 11, 26.

[xvii] Id.

[xviii] During the course of the lawsuit, youtube removed the clips Viacom alleged were infringing. Viacom Int’l, 718 F. Supp. 2d at 519.

[xix] There is the risk of taking down material that falls under fair use. Internal communications over whether something infringes are different from ones that acknowledge infringement and attempt to determine a course of action.

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~ by zullman on September 9, 2012.

9 Responses to “megaupload vs. youtube”

  1. It is interesting that much of the policing and removal activity currently happening on YouTube (and other service providers) is being carried out by automated agents, or so-called “copyright bots.” These agents remove access to the video without any human oversight. The bots use a database of copyrighted material and compare them to the posted bitstream. The problem with this method is that any time a video contains a copyrighted video in its bitstream, the bots flag it as infringing. This happened recently when Ustream live-streamed the Hugo awards and the stream was terminated because the award ceremony showed clips of the episode written by the winning script writer. This not only violates common sense, but completely ignores the fair use exceptions to copyright law. There are other recent examples of similar takedowns: Michelle Obama’s speech, and the footage from the Mars rover landing. Several companies are currently in the business of providing these “bot” services to content hosts: Vobile, Attributor, and Gracenote, to name a few.
    I realize that economics primarily drives the decision to use bots—the cost for a human agent to review and respond to the thousands of daily takedown requests from media companies must be enormous. What is intriguing is that companies like YouTube have chosen to go a step further than strictly necessary in removing infringing content. The court in Viacom preserved the idea that general knowledge is not enough to cause the service provider to lose the safe harbor– actual and specific knowledge was necessary. In an effort to cut costs and appear to be diligently trying to remove offending content, by using bots the providers themselves have created what amounts to a new kind of “general knowledge” standard which is more rigorous than the judicial standard. In a way, this establishes a new burden they must satisfy in future litigation. But how do we know when an automated agent has actual knowledge…?

  2. In addition to the way Megaupload removed infringing content, the differing treatment of Megaupload and YouTube boils down to the difference between encouraging and allowing the uploading of infringing material. While there is little doubt that YouTube was aware that infringing material was uploaded, Megaupload essentially paid uploaders for infringing content. As the government’s indictment explains, Megaupload created an “Uploader Rewards” Program that encouraged premium users to upload popular content to the company’s computer servers, including copyrighted works, by offering cash transfers and other financial incentives. The initial Rewards Program created a tiered payment system in which uploaders were paid $1 for every 1,000 downloads of their uploaded content with an additional bonus of between $50 to $5,000 for the top 100 “Megauploaders with the most downloads” during a three-month period, to be paid through PayPal. The rules of the program also required uploaders to have a minimum of 5,000 uploads within a three month period and allow Megaupload to list the uploaded files and description in the Top 100 List. A later version of the Rewards Program replaced the cash incentive with a reward point system that awarded uploaders 1 reward point for every uploaded file. These reward points could then be redeemed for premium services and cash to be paid through PayPal. Through this Rewards Program, Megaupload paid uploaders millions of dollars.
    YouTube may have turned a blind eye to or been slow to remove infringing content but there is no evidence to suggest that users were paid for their contribution of copyrighted material. Though it is true that Megaupload did warn uploaders participating in the Rewards Program that uploading copyrighted files would result in disqualification, uploaders accounts were rarely, if ever, terminated for contributing copyright protected content. Instead, Megaupload “affirmatively chose to financially reward specific uploaders of infringing copies of copyrighted content, including repeat offenders,” according to the government. Taking in to consideration Megaupload’s payment for content scheme, it is easy to differentiate the services offered by Pinterest, Apple, Microsoft and even YouTube.

  3. It is understandable to me that the entertainment industry would initially push back on platforms like YouTube and Megaupload. I don’t know any of the statistics, but I’m assuming the whole industry took a huge hit when people started listening to songs and watching shows and movies illegally online. However, I have been impressed by the various artists and companies that have embraced this new technology era. When I used to miss an episode, or a couple episodes, of my favorite show, I’d give up on the series. I’d wait until it came out on DVD, or more likely, forget about the show and never watch it again. But now I can log onto ABC.com and watch a show (with their own commercials) at my leisure. I can see my what songs my Facebook friends are listening to right this second and listen to it myself. I don’t have to watch MTV for two hours waiting to see a music video I might like, I can go straight to Taylor Swift’s official channel on YouTube and watch exactly what I want after a short 30 second commercial. While I’m the artists are losing money because of YouTube and Megaupload, I think their efforts might be better directed at coming up with new and better ways of dealing with the current times we live in.

    • I agree whole-heartedly with Nicole O. in the fact that new technology must be embraced by the entertainment industry. While it is clear that sites like Youtube and Megaupload can be and are used in ways that are harmful to the entertainment industry, intentionally and for the profit of a single person or corporate entity, these sites are also responsible for gaining and keeping viewers. As Nicole O. pointed out, missing an episode or two of a show no longer leaves a person with two options, give up on the show or wait for the DVD.

      In addition to helping maintain viewers, sites like YouTube help to gain new viewers and fans. Many of the clips that are found on YouTube are short but enticing. There are many people who click on a link sent to them or posted on Facebook or recommended to them by a coworker and become lifetime fans. They find a new show or a new performer or some other new piece of entertainment to follow. There is a difference between a link that only requires a simple click in order to see an enticing clip and a message that tells you to tune in to a certain channel on a certain day and at a specific time to see something funny or interesting.

      It is important that file sharing sites like YouTube and Megaupload take steps to help fight copyright infringement, however, if the entertainment industry abandoned their us verse them approach a better outcome might be achieved for all involved. There are a number of options that would create a mutually beneficial relationship while also embracing the current technology and society’s need for instant gratification. One example would be to allow short enticing clips but require that they are not manipulated in any why and have a link to the copyright owner’s web page.

  4. If youtube uses these autobots to locate copyright infringing material, why could it not run such a bot during the upload phase of video and then put a hold on the video subject to a user’s appeal. This would effectively put the company on a more aggressive stance in managing copyright infringement and it is a more efficient position from which to do so.
    However, this would probably cause user pushback as it is fathomable that there would be many false positives and thus would frustrate the user. I do not believe youtube desires to be a copyright police force and will only do the bare minimum the law demands, much like megaupload was doing, however they tipped the balance somewhat in an unfortunate rewards system structure.

  5. These days there are many websites that are being slammed for copyright infringement, regardless of the protections the DMCA may provide to OSPs.

    Similarly to Megaupload, Grooveshark has also been having problems finding protection under the DMCA and the Safe Harbor provisions. Although Grooveshark does not receive financial benefit from the music it streams like Megaupload does with its paid subscription service, Grooveshark does receive financial compensation from the banner ads on its website. Moreover, Grooveshark, like Megaupload has been alleged to remove copyright infringing material only for temporary period of time. Copyright holders have complained that regardless of how many times they notify Grooveshark of the infringement, either the material remains on the website or it is taken down only to reappear within a few minutes. In regards to the “no knowledge” (but more than general knowledge) requirement, it could be argued that Grooveshark had clear knowledge. Emails between company officials have been discovered, which insinuate that the officials knew they were streaming music without entering into licensing agreements with music labels and without permission from other copyright holders.

    More troubling, Grooveshark officials, including its executive officers, have been charged with uploading thousands of pirated music themselves. This would completely disqualify Grooveshark from any kind of protection under the DMCA since the Safe Harbor provisions only protect OSPs from liability when their users are violating copyright laws. If Grooveshark is indeed found to have uploaded pirated material itself, through its employees, then it will be held fully liable for each copyright infringement. As of now, they are facing a $17.1 billion suit from Universal Music Group, a $150,000 penalty for each instance of copyright infringement (i.e., each song).

    Hopefully current and future music networking sites will be more open to negotiation with music labels and copyright holders in order to avoid this kind of legal problem. If not, they should certainly be diligent, in the way YouTube is, about taking down copyright infringing material as soon as they are notified of its existence.

  6. Pinterest is a social networking site that has grown exponentially in popularity in recent years. The site contains thumbnail images of everything, ranging from objects to food to people to pets. The members of Pinterest may “repin” these thumbnail images to their personal bulletin boards that are then to be shared with other users. A photo that one member pins can essentially go viral as other members repin the same image that is subsequently available to all the members following the first repinner. If a member clicks on a particular pin they are able to view a larger version of the picture and the url from which the picture came. Once a photo is repinned the member may add his or her own comments to the picture. The copyright issues that Megaupload and Youtube faced seem to be issues of which Pinterest should be wary.

    It is likely that infringement issues will arise when copyrighted images are pinned without the artist’s approval. According to federal law, copyrighted images can only be reproduced without the artist’s knowledge if the person using the image is “criticizing it, commenting on it, reporting on it, teaching about it, or conducting research”. http://www.businessinsider.com/pinterest-copyright-issues-lawyer-2012-2. Members of Pinterest rarely qualify for immunity from liability. Similar to Youtube, Pinterest may be protected by the Safe Harbor statutes so long as Pinterest only has general, and not actual, knowledge of infringement. What would be most startling to users, however, is that Pinterest has taken steps in an attempt to protect itself against such liability, should legal action arise. In Pinterest’s terms of use the site specifically states that members are expected to indemnify Pinterest in the event of legal action, including attorney’s fees or other legal fees that are incurred by Pinterest. If Pinterest is not protected by the Safe Harbor statutes then both the users and Pinterest could be subject to liability for copyright infringement, and the users would ultimately be the ones to suffer.

    There is some hope in the fact that Pinterest uses thumbnail sized images of the copied work. This is not a complete protection, however, because while the images are initially a thumbnail size, a larger version is generally available upon clicking on the thumbnail. Additionally, thumbnails are protected if they only copy a a necessary portion of the work. Pinterest copies the entire work, but shrinks it down to a thumbnail size. This will likely not be protected in the way that other thumbnails were protected. It would behoove Pinterest, not to mention the users who potentially face heavy financial burdens in the form of legal fees, to follow Youtube’s lead and initiate a policy for removing infringing works.

  7. I agree with Kristen, the key distinction between Megaupload and other more legitimate file sharing websites is that Megaupload actively encouraged posting of infringing content. Megaupload held itself out to be a cyberlocker providing a solution to the problem of dispersing large files across the internet. However, when Megaupload instituted a reward policy that compensated users based on the number of views uploaded content received, it changed into something different altogether. By compensating the users who upload the most popular content without requiring ownership in that content Megaupload turned copyright infringement into a cottage industry. To receive a reward you had to upload popular content, but let’s be honest you are not going to find ten million people to watch the video from your 5th birthday party. This led to users posting the most popular and invariably copyrighted files in order to receive the rewards.

    The reward system instituted by Megaupload was not the only part of their enterprise that showed an incentive to allow infringing material. Only a small amount of Megaupload’s revenue came from the sale of digital storage space. This is not typical of other cyberlockers. In fact a majority of Meagloads income was received from advertising revenue that was generated when files were viewed. Therefore, when the highest rated content is infringing content it was in Meagaupload’s interest to not remove the infringing material.

  8. You people act like YouTube isn’t rewarding users for uploading. The YouTube partner program now pays every uploader based on amount of views. Type in S01 E01 in youtube and just see how well their BOTs remove copyright material.

    YouTube = Google
    Google = Billions
    Billions = Law in your pocket

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