MPAA “embedding is infringement” theory rejected by court.

Judge calls on Congress to update copyright law for the online video era.

A federal appeals court has decisively rejected a legal theory that would have placed anyone who embeds a third-party video on her website in legal jeopardy. In a Thursday decision, Judge Richard Posner of the Seventh Circuit Court of Appeals ruled that the "video bookmarking" site myVidster was not liable to the gay porn producer Flava Works if users embedded copies of Flava videos on myVidster.

Judge Posner's reasoning is interesting. He argues that when you view an infringing video on a site such as YouTube, no one—not you, not YouTube, and not the guy who uploaded the infringing video—is violating copyright's reproduction or distribution rights. And since simply viewing an infringing copy of a video isn't copyright infringement, he says, myVidster can't be secondarily liable for that infringement.

Viewing an infringing video online may lead to a violation of copyright's public performance right, Posner goes on, but here the law is murky. The judge called on Congress to help clarify exactly how copyright law should apply in the age of Internet video.

And if even one of copyright's most respected jurists is confused, it's a clear sign that copyright law needs work.

Embedding is not infringement

Flava Works sued myVidster because users kept adding links to Flava videos to the myVidster site. myVidster is a "video bookmarking" site that automatically embeds bookmarked videos on its site and surrounds them with ads. To the untrained eye, it looks like myVidster itself serves up the infringing copies of the videos. Based on that perception, the trial court judge ruled that myVister was directly infringing Flava's copyrights and granted a preliminary injunction.

Of course, if embedding is direct infringement, then anyone who embeds a video without first researching its copyright status is at risk of being a direct infringer. That would put a damper on the practice of embedding, which has made the Web a more convenient and interactive place.

The Motion Picture Association of America, of course, was thrilled with this initial result. But as Google and Facebook pointed out in an amicus brief late last year, the lower court's decision was inconsistent with the relevant precedents.

Judge Posner, writing for a unanimous three-judge panel, overruled the lower court's judgment. While it might appear that videos embedded on myVidster are being distributed by myVidster, the underlying data is actually being streamed directly from third-party servers to user computers. Hence, Posner wrote, neither myVidster nor its users are guilty of direct copyright infringement.

"Viewing" is not copying

Still, myVidster could be liable for secondary copyright infringement for assisting, benefitting from, or "inducing" the infringing activities of others. But Judge Posner rejected that argument as well, and his reasoning was interesting:

As long as the [myVidster] visitor makes no copy of the copyrighted video that he is watching, he is not violating the copyright owner’s exclusive right, conferred by the Copyright Act, “to reproduce the copyrighted work in copies” and “distribute copies ... of the copyrighted work to the public.” His bypassing Flava’s pay wall by viewing the uploaded copy is equivalent to stealing a copyrighted book from a bookstore and reading it. That is a bad thing to do (in either case) but it is not copyright infringement. The infringer is the customer of Flava who copied Flava’s copyrighted video by uploading it to the Internet

So a user who streams an infringing video from a website does not violate copyright's reproduction or distribution rights. But what about the uploader—isn't myVidster contributing to his initial act of infringement? Surprisingly, Posner suggests the answer is no.

Flava contends that by providing a connection to websites that contain illegal copies of its copyrighted videos, myVidster is encouraging its subscribers to circumvent Flava’s pay wall, thus reducing Flava’s income. No doubt. But unless those visitors copy the videos they are viewing on the infringers’ websites, myVidster isn’t increasing the amount of infringement. An employee of Flava who embezzled corporate funds would be doing the same thing—reducing Flava’s income—but would not be infringing Flava’s copyrights by doing so. myVidster displays names and addresses (that’s what the thumbnails are, in effect) of videos hosted elsewhere on the Internet that may or may not be copyrighted.

In Posner's view, no matter how many people view a video on a video sharing site, there's only one violation of the reproduction and distribution right: the original uploading of the video.

The distinction between "downloading" a video and "streaming" seems tenuous to us, though. Modern Web-based video streaming software typically caches a "streamed" video so that by the end of it the user has a complete copy of the video on his computer and can re-watch it as many times as he wants. That copy may stay on the user's computer for hours if the user leaves that browser window open. Posner did not examine how long an infringing video could be stored on a user's computer before it infringed the reproduction right.

Public performance

Copyright holders also have the right to control public performances of their work, and Posner argues that argument may be more promising for Flava Works. But here the law is ambiguous:

The Copyright Act makes it unlawful “to perform the copyrighted work publicly,” defined, so far as relates to this case, as “to transmit or otherwise communicate a performance... of the work... to the public... whether the members of the public capable of receiving the performance... receive it in the same place or in separate places and at the same time or at different times.” One possible interpretation is that uploading plus bookmarking a video is a public performance because it enables a visitor to the website to receive (watch) the performance at will, and the fact that he will be watching it at a different time or in a different place from the other viewers does not affect its “publicness,” as the statute makes clear... An alternative interpretation, however... is that the performance occurs only when the work (Flava’s video) is transmitted to the viewer’s computer.

Posner says the first interpretation is "hopeless for Flava" since myVidster had nothing to do with uploading the video. He argues that the second interpretation might prove more fruitful for the plaintiff, but then said that Flava had not proven its case was strong enough to win a preliminary injunction. myVidster will be allowed to continue operating its site while Flava and myVidster deal with other issues raised by the lawsuit.

"Legislative clarification of the public-performance provision of the Copyright Act would be most welcome," Posner wrote. Given the contentiousness surrounding copyright, we're not going to hold our breaths waiting for Congress to respond.

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