A U.S. appeals court dealt YouTube a major blow by reviving lawsuits by Viacom, the English Premier League and various other media companies over the use of copyrighted videos without permission.
The 2nd U.S. Circuit Court of Appeals has reversed a 2010 lower court ruling in favour of YouTube, which was considered a landmark in setting guidelines for websites to use content uploaded by users.
The $1-billion lawsuit filed by Viacom in 2007 to stop the posting of clips from South Park, The Daily Show with Jon Stewart, SpongeBob SquarePants and other programs addressed a crucial issue for media companies: how to win Internet viewers without ceding control of TV shows, movies and music.
It was seen as a test of the Digital Millennium Copyright Act, a 1998 federal law making it illegal to produce technology to circumvent antipiracy measures, and limiting liability of online service providers for copyright infringement by users.
The 2010 ruling said YouTube could not be liable simply for having a "general awareness" that videos might be posted illegally, and that it need not monitor for such activity.
But writing for a two-judge panel of the 2nd Circuit, Judge Jose Cabranes concluded that "a reasonable jury could find that YouTube had actual knowledge or awareness of specific infringing activity on its website."
The plaintiffs had accused YouTube of broadcasting about 79,000 copyrighted videos on its website between 2005 and 2008.
A YouTube spokeswoman 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."
Viacom said the appeals court "delivered a definitive, common sense message to YouTube: intentionally ignoring theft is not protected by the law."
Other plaintiffs also welcomed the decision.
"Needless to say, my clients are delighted," said Charles Sims, a lawyer for the Premier League, the English soccer league, and several other plaintiffs. "YouTube wilfully blinded itself to specific infringement and had ample ability to control infringing activity within the meaning of the copyright law."
Dozens of content providers supporting the plaintiffs, including the National Football League, and the musicians Garth Brooks, Sting and the Eagles.
The appeals court said it was unclear whether YouTube had "red flag awareness" of specific infringement. It said the lower court should consider whether YouTube showed "wilful blindness" in letting copyrighted videos remain on its website.
The 2nd Circuit quoted an email exchange on Aug. 9, 2005 in which co-founder Chad Hurley urged diligence about removing copyrighted content, but met resistance to taking down a CNN clip of a space shuttle. "I really don't see what will happen.
What? Someone from CNN sees it?" co-founder Steve Chen responded. "The CNN space shuttle clip, I like," co-founder Jawed Karim added. "We can remove it once we're bigger and better known."
The decision could add to the costs of online service providers to keep websites running.
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