Last week, the file-distribution site Megaupload launched a $3 million music video. It features the likes of Kanye West, Snoop Dogg, Kim Kardashian, and many others offering testimonials to Megaupload, set to a moderately catchy tune. It’s safe to say that music companies were not happy: they’ve been saying for months that Megaupload and other “cyberlockers” are blatant infringers making a mockery of copyright law. So when the video hit YouTube, UMG issued a takedown notice, and the Megaupload song promptly disappeared from YouTube.

Megaupload hit back, hard. It claimed that it owned all the copyrights in the song and video, and had the signed releases from the featured artists to prove it. That made UMG’s takedown notice baseless, so Megaupload filed a counter-notice with YouTube — and also a federal lawsuit. It relied on section 512(f) of the DMCA, which imposes damages on anyone “who knowingly materially misrepresents” that content taken down is infringing.

Universal just filed a response, which is both fascinating and unsettling. It doesn’t argue that the video is infringing or that the takedown was justified. Instead, it raises a variety of wholly procedural arguments. Of those arguments, the most fascinating and most unsettling is UMG’s claim that it can’t be liable for sending a false DMCA notice, because it never sent a DMCA notice at all. As UMG explains:

The UMG-YouTube agreement grants UMG rights to effect the removal of user-posted videos through YouTube’s Content Management System (“CMS”), based on a number of contractually specified criteria that are not limited to the infringements of copyrights owned or controlled by UMG. Dotcom speculates in his declaration that Universal must have sent a so-called “DMCA notification form,” such as the one he printed and attached at Ex. E to his declaration, to YouTube. But UMG (which interacts with YouTube) does not use that form when requesting the removal of material pursuant to UMG’s contract with YouTube. UMG uses YouTube’s automated CMS system.

Think about the implications of this position. It gives copyright owners free bites at any apples they like. They’re free to tell YouTube to take down any videos they like, even when there’s absolutely no basis in copyright law for the takedown, and they know there isn’t one. Instead of facing only the weak remedies of 512(f) (under which the courts have exonerated copyright owners who sent takedowns based on a genuine but unreasonable belief of infringement), they face no legal remedies at all. They’re playing poker without an ante: they can quietly fold whenever their bluff is called, and be none the poorer. In other words, in UMG’s view, YouTube’s CMS allows copyright owners to opt out of the parts of the DMCA they don’t like, while retaining all the benefits of the parts they do like. So much for the copyright “balance.”

But here’s the thing. YouTube has its CMS in the first place because of the relentless pressure of copyright owners. They complained that searching for infringing videos, one by one, and sending individual takedown notices, one by one, was too much work. Indeed, some of them sued YouTube, claiming that it was facilitating infringement. YouTube’s response was the CMS, and the litigious-copyright-owner consensus seems to be that some similar system is a necessary condition of compliance with the DMCA. That is: you implement an automated infringement-detection-and-notification system, or you’re liable for your users’ infringements. If that’s the test, then no user-generated-content site can long afford to be without one.

Irony abounds. Copyright owners have used the DMCA itself to press for a system that shields them from the only legal risks they could face under the DMCA. This may be only a side effect of their main goal — forcing sites to self-censor — but it is surely a welcome one for them. For those who believe that copyright owners have the limited exclusive rights given them by law and no more, not so much.

I look forward to seeing Google’s reaction to all of this. Ars Technica plans to ask Google for a copy of its content-owner terms of service, which could shed some light on whether the CMS really does opt out of 512(f). And if the judge ends up holding that a YouTube takedown notice is not a DMCA takedown notice, then Google’s should amend the terms (and if necessary the system itself) to make clear that it is. With great takedown power must come at least minimal responsibility.

Keep this in mind as you watch the continuing House markup of SOPA today, and shudder.

UPDATE: Mike Masnick at TechDirt has a fascinating and quite plausible suggestion that UMG’s claimed right to pull the video comes from its Vevo agreement with Google.

UPDATE: Timothy Lee at Ars Technica got a more detailed quote from YouTube:

Our partners do not have the right to take down videos from YouTube unless they own the rights to them or they are live performances controlled through exclusive agreements with their artists, which is why we reinstated it.

James, why is it in Google’s interests not to maintain a private takedown regime that runs in parallel, rather than coincidentally with the DMCA? If they can make agreements with all the big players, then it may relieve some of the pressure they’re getting in other contexts (GBS, search neutrality, privacy, etc.). I’ve always thought it was a feature, not a bug.

If Google is going to argue that the DMCA is a carefully crafted compromise, which shouldn’t be amended to change its obligations, then it oughtn’t go about vitiating one of the key elements of that compromise. The system we appear to be getting is an ugly mix of private ordering and public law. And just because something is in Google’s self-interest doesn’t make it right (a proposition with which I’m sure copyright owners will agree).

I definitely agree that it’s a mess for the public, particularly when you wrap it all up in SOPA.

About SOPA , I have read intense claims that the proposed law applies to US websites and equally intense claims that it only applies to ‘foreign’ websites , which view is correct?

The bill keeps shifting. In the latest version, it seems to apply only to foreign sites, but the definitions remain less than crystal-clear.

Am I wrong in interpreting the situation like this:

Someone owns a website. In this case, the someone is Google owning Youtube.

If this is a privately or corporately owned website, surely the website owner can decide what should and should not be posted on the site? For example, the website owner could say, “We’re only accepting short stories that we believe have good literary quality.” Or, “We take down all photos we believe are not pornographic, and we believe that every photo of a person not covered up to the neck is pornographic.” Or, “We only accept content that expresses Tea Party political views.”

Surely they are entitled to do that?

And instead of pre-screening, are they not entitled to say, “90% of readers have voted that this short story is awful and so we are taking it down?” Or “Someone pointed out that this photo shows two inches of flesh below the neck and they are offended so we are taking it down”? Or, “This essay has been removed because it advocates increasing taxes for the wealthy”?

Surely they are entitled to do all that?

It’s their website, and as far as I can tell, they are entitled to have their own criteria for what is on it. Including removing content because someone may sue over it and they don’t want the hassle.

Am I wrong? Because if I’m not, I don’t see any problem. A publisher rejects most of the manuscripts submitted, likewise website owners are entitled to remove material.

It’s a private site, not a public right.

Sorry, I meant above. “We take down all photos we believe ARE pornographic.”

Frances, that wasn’t my point. If you’re not going to respond to what I actually write, I’m not going to respond to you.

Well, it merely seems to me that YouTube is willing to take down material that copyright owners claim is infringing just to avoid numerous lawsuits, however frivolous. And that they have their own system for doing that independent of DMCA. Am I wrong here? If not, I think they have a perfect right to do that.

BTW, I think that Google has a perfect right to act in their own self-interest as long as they are not violating any laws. Here, astonishingly, it seems they are trying hard not to violate copyright law or at least, to avoid the likely consequences of doing so. As a copyright owner, I have absolutely no objection to Google being more careful.

An automated takedown system cannot be both independent of the DMCA (as UMG now claims) and necessary to comply with it (as UMG claimed in the Veoh case). Or, to take up the public/private distinction, YouTube’s system is either required by public law, in which case it doesn’t make sense to provide 512(f) immunity for copyright owners who use it, or it is a private choice by YouTube, in which case it doesn’t make sense for the absence of one to lead to a loss of the 512(c) safe harbor.

‘Less than Crystal clear’ nice.

James, I’d say that there is plenty of independent evidence that UMG is greedy, sleazy, and hypocritical. However, I don’t see that you make a good case for it in your last post. I’m probably missing something, but anyway, here’s my opinion.

An automated takedown system cannot be both independent of the DMCA (as UMG now claims) and necessary to comply with it (as UMG claimed in the Veoh case).

The linked decision, as I read it, strongly rejected UMG’s claims in this regard (and I distinctly remember this case as being one which showcased a well-known drawback in the legal system, since UMG soundly lost on legal grounds yet won from a business point of view, since Veoh became insolvent because of the costs of defending itself in court). I therefore don’t see how you can claim that UMG’s current stance is hypocritical, considering that a major goal of the judicial system (in my eyes, at least) is to correct erroneous understanding of the law. In fact, my impression was that even within the same filing, it is standard practice to propose many legal defenses which can (at least partially) contradict each other (in terms of the interpretation of the applicable law, not the facts). Something like:

1. Fact X clears us from liability by application of Law Y.
2. In the case that the court rejects argument (1) because Law Z applies, clause W of that law combined with Fact A anyway means we are not liable.
3. …

YouTube’s system is either required by public law

Perhaps it is just my background in mathematics, but I think here you miss an important philosophical distinction between something being required by law, or merely being practically required by law. In mathematics this distinction is critical (otherwise, for example, there would have been little excitement over the long-awaited proof of Fermat’s Last Theorem). To back up my claim, I cite Eldred v. Ashcroft as a legal example in which a distinction seems to be made between “unlimited” and merely “practically unlimited”.

And finally, your post addresses automated takedown systems, and the system which UMG appears to have used to take down the video is merely a backup to YouTube’s automated system. This backup system appears to be not at all automatic; in fact, UMG has brought down on itself this shower of excoriation because it appears to have taken manual steps to cause the removal of the video.