In a surprising twist of events, the 9th Circuit Court of Appeals might re-examine the standards by which Internet Service Providers qualify for "safe harbor" from copyright infringement liability by directly addressing what happened two months ago in a different appellate court.
Last year, the 9th Circuit ruled in a dispute involving Universal Music Group's fight with video-sharing hub Veoh that the onus is on copyright holders to first identify specific infringing video before the ISP gains "actual knowledge" and becomes compelled to take down copyright infringing material on its network. The Veoh case has been hailed throughout the technology sector and seemingly gave ISPs some room from the more exacting demands of content holders to do something about purportedly rampant copyright infringement.
Then in April, the 2nd Circuit revived Viacom's lawsuit against YouTube and made its own interpretation of the Digital Millennium Copyright Act (DMCA) and the knowledge standards by which ISPs must act on copyright infringement. The YouTube decision has apparently given the 9th Circuit something to think about, and on Thursday, it ordered a briefing to consider rehearing en banc the Veoh decision in light of what's transpired in April.
In the YouTube decision, the 2nd Circuit dealt with the thorny issue of what the difference is between between the DMCA's standard on "actual knowledge" and "red flags," or awareness of facts or circumstances from which infringing activity is apparent and must be addressed before an ISP gets statutory safe harbor from liability. The justices there decided, "The difference between actual and red flag knowledge is... not between specific and generalized knowledge, but instead between a subjective and an objective standard" of what ISPs know about a claimed infringement.
Now, the 9th Circuit is taking the hand-off and running with the ball. The appellate circuit has ordered the Veoh parties to brief them on the following:
"Does the Second Circuit draw the correct distinction between actual and red flag knowledge? If so, does the distinction affect the disposition of this case?"
To be eligible for safe harbor, a service provider also must show that it lacked the "right and ability to control" the infringements. In the YouTube decision, the 2nd Circuit also dealt with the question of what this means -- whether it was a mere technical ability to delete infringing material or whether an ISP had to be aware of specific infringing material to gain such an ability. The difference means a lot in terms of the hoops that an ISP needs to jump through to gain statutory protection from copyright liability.
On this issue, the justices determined that the "right and ability to control" "requires something more than the ability to remove or block access to materials posted on a service provider's website," but left a lot of people scratching their heads by not saying what that something more was.
The 9th Circuit has decided it wants a conclusion. It has also ordered the Veoh parties to brief them on the following:
"If there is no knowledge requirement, does a copyright holder need to show that a service provider possesses 'something more than the ability to remove or block access to materials posted on a service provider's website' in order to have the right and ability to control infringement? If so, what must the copyright holder show? Should this Court adopt the Second Circuit's resolution of these questions?"
Attorneys for UMG and Veoh have 21 days to submit supplemental briefs. A hearing may occur later and if so, it's a good bet that the decision would set the new bar in copyright circles, perhaps even trumping what was determined in the YouTube appeal as defining the rules of the road for what ISPs must do with regards to copyright infringement.