The five-year battle between YouTube and Viacom began anew today when the U.S. Circuit Court of Appeals rejected part of a lower court decision on the issue.
The court reversed a June 2010 New York District Court decision that found YouTube is protected by the safe harbor of the Digital Millennium Copyright Act (DMCA).
"A reasonable jury could find that YouTube had actual knowledge or awareness of specific infringing activity on its website," Circuit Judge Jose A. Cabranes wrote in today's decision. "We further hold that the District Court erred by interpreting the 'right and ability to control' provision to require 'item-specific' knowledge."
The court upheld the lower court's ruling regarding three of YouTube's software functions, but ordered further fact-finding regarding a fourth.
The court pointed to evidence presented by Viacom that suggested that YouTube was aware of the fact that infringing content was available on its site - from Premier League soccer footage and episodes of South Park to space shuttle footage and BudLight commercials.
"These approximations suggest that the defendants were conscious that significant quantities of material on the YouTube website were infringing," the court found. "We are persuaded that [Viacom] may have raised a material issue of fact regarding YouTube's knowledge or awareness of specific instances of infringement."
As a result, last year's ruling was "premature," the court said.
"We are pleased with the decision by the U.S. Court of Appeals. The Court delivered a definitive, common sense message – intentionally ignoring theft is not protected by the law," Viacom said in a statement.
YouTube focused on the part of the case the Circuit Court didn't strike down.
"The Second Circuit has upheld the long-standing interpretation of the DMCA and rejected Viacom's reading of the law," a YouTube spokesperson said. "All that is left of the Viacom lawsuit that began as a wholesale attack on YouTube is a dispute over a tiny percentage of videos long ago removed from YouTube. Nothing in this decision impacts the way YouTube is operating. YouTube will continue to be a vibrant forum for free expression around the world."
The case dates back to 2007, when Viacom sued YouTube for $1 billion. Viacom argued that YouTube facilitated the posting of copyrighted material. YouTube said it was not responsible provided YouTube complied with DMCA takedown notices, which it said it did. Last year, a judge agreed and said YouTube has been compliant.
Viacom swiftly appealed and the Circuit Court today ruled in the company's favor.
"It is and should be illegal for companies to build their businesses with creative material they have stolen from others," Viacom said at the time.
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