Media Wonk

Is Google inducing infringement? Ask the studios - February 13, 2007

Could Google be the next Grokster?

I don’t mean the next peer-to-peer file-sharing network but the next online operator to find itself on the wrong end of a piracy inducement complaint from the major studios.

Inducing its users to infringe copyrights is what the Supreme Court strongly suggested Grokster was up to when it ruled 9-0 two years ago to send the studio’s direct-infringement lawsuit back to the district court for further factual findings.

Grokster argued that its P2P technology was legally no different from a VCR—that is, capable of both infringing and non-infringing uses—and therefore shielded from liability under the same analysis the court applied in the Betamax Case in 1984.

But the court wasn’t buying this time. The majority opinion argued that its business model amounted to encouraging people to swap pirated copies of movies on its network so it could sell advertising against the pool of users eager for free goods.

Grokster, in other words, was quite likely to be found guilty of actively inducing its users to commit a crime, which is itself a crime, mooting the question of whether it qualified for the Betamax defense.

Watching the studios’ growing frustration with Google over the amount of copyrighted material on its YouTube service, I’ve been wondering whether their lawyers would ever consider an inducement charge against the search-engine giant.

Not being a lawyer, I can’t say with any authority whether such a case would hold up. But you have to wonder if they’re not at least thinking about it.

According to a report in the Wall Street Journal (sub. req.) Monday, studio honchos held a conference call with Google officials last Friday to discuss the studios’ extreme dismay with Google over its accepting ads from two online services that the studios had accused of aiding, abetting and inducing piracy.

The case originated in 2005, and involved the web sites EasyDownloadCenter.com and DownloadPlace.com. The sites, which have since been taken down, advertised themselves as a source of legal downloads, but in fact merely assisted their customers in finding illegal copies on movies on various P2P networks.

The defendants in the case, Brandon Drury and Luke Sample, said in sworn statements that Google representatives offered them credit to buy ads on the search engine after noting the volume of traffic the sites generated and knew the nature of their business.

They also said the Google reps offered them keywords such as “bootleg movie download” and “download harry potter movie,” which led to increased traffic.

Citing sources familiar with the case, the Journal reported that a Google representative largely corroborated the defendants’ account in a deposition that was filed under seal.

As a result of Friday’s conference call, Google lawyers agreed to remove similar ads the studios objected to, create a list of approved advertisers and refrain from selling certain keywords used by some web sites to lure people to pirated material.

Which brings me to YouTube, whose users are indisputably lured to the site in part by the availability of copyrighted material.

YouTube argues that it falls under the safe-harbor provision of the DMCA, which shields the operator from liability so long as it promptly removes pirated material after being notified by the copyright owner.

Whether YouTube really qualifies for safe-harbor, which was designed primarily to shield ISPs, has not been tested in court. But I’ve long wondered whether the studios—if sufficiently frustrated—might think about side-stepping that tricky issue by bringing a Grokster-like inducement charge against YouTube.

Ultimately, of course, the studios all know they eventually have to make a deal with YouTube. But negotiating by litigation is a time-honored tactic in Hollywood and the greater your legal leverage the greater your bargaining power.

Would such an approach have a chance of working?

I’d love to hear from any legal minds out there who would like to take a crack at it.

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