From Betamax to YouTube: how Sony Corporation of America v. Universal City Studios, Inc. could still be a standard for new technology.

• Author: Corsaro, Veronica

1. INTRODUCTION II. VICARIOUS LIABILITY AND EARLY TECHNOLOGY: SONY'S ADOPTION AND DIMINISHMENT A. Common Law Secondary Liability B. The Betamax Player and Sony Corp. v. Universal City Studios, Inc C. The New Technology: Napster and Grokster III. USER-GENERATED CONTENT, ISPs, AND THE DMCA A. User-Generated Content Pre-DMCA B. The DMCA's Outline for Limited Liability C. What the DMCA Has Meant for ISPs IV. REVIVING THE SONY STANDARD FOR NEW TECHNOLOGY A. The Need for a Standard in Understanding Section 512 Exceptions B. Betamax and the World Wide Web: How Sony Could Form a Compromise in Liability V. CONCLUSION I. INTRODUCTION

   If any conclusions can be drawn from the very recent history of copyright case law and new media, among them is this: both courts and lawmakers view users of peer-to-peer network technology as nearly universally made up of copyright infringers. Such networks have evolved from those like Napster (which used a centralized index server through which users could share and search for files) (1) to the software employed by Grokster (known as "Gnutella" technology), which allowed users to communicate searches and file-sharing directly between the users' computers. (2) Contrast this with Internet websites, specifically those that exist almost entirely for the purpose of encouraging, archiving, and displaying user-generated content. Their structures include clear and centralized servers; hierarchies of web managers and maintainers; and in the case of sites such as Facebook, Google, and YouTube, a multimillion dollar industry. (3) All of these websites store and reproduce considerable amounts of copyrighted content, whether as the result of user submissions or their own practices. And yet unlike peer-to-peer networks, these sites have been affirmatively protected from copyright claims by the U.S. Congress through Section 512 (also known as the Safe Harbor provision) of the Digital Millennium Copyright Act ("DMCA"). (4) The response of lawmakers and courts to the way copyrighted material has been reproduced and distributed online has not hinged on the nature and structure of the technologies involved. Rather, online content providers have proved to be political forces to reckon with, as recently demonstrated in the recent controversy concerning the proposed Stop Online Piracy Act ("SOPA") and the PROTECT IP Act ("PIPA"). (5) SOPA and PIPA are largely concerned with curtailing access to such sites rather than the issue of infringement liability (6) and are particularly targeted toward sites based outside the United States. (7) However, these laws raised concerns about the potential for false claims of infringement, the blocking of sites with substantially noninfringing content, and the possible burden on service providers and search indexes to block certain sites. (8) The proposed laws, once considered very likely to pass, were met with such pushback from Internet services like Google and WikiPedia that their progress in the House and Senate were brought to a halt. (9) User-generated content sites and Internet search indexes quickly managed to harness an enormous amount of political and social power (10) that has not managed to save peer-to-peer file share networks, however.

   The tension between new technology and copyright ownership is not a recent development; it predates the advent of the Internet and other "new" technologies. (11) But perhaps the first real test of copyright, new technology, and not only mass distribution but also mass reproduction, was the case of Sony Corp. of America v. Universal City Studios, Inc. (12) The case of Sony and its Betamax video recording device initiated a doctrine of "substantial noninfringing use," in a decision that ultimately favored the technology and arguably widened the scope of the fair use exception. (13) The issue would be revisited with the introduction of peer-to-peer software, in which Sony would be revised and technology would come out the unambiguous loser, with the courts finding liability at an almost unprecedented scale. (14) But even before the DMCA, websites hosting user-generated content enjoyed protections under case law not afforded to peer-to-peer networks, increasing the tension between the copyright owners that wished to protect their products and the practical considerations of user-generated content sites. (13) Safe Harbor in the DMCA was a legal victory for technology, though not one without complication.

   The purpose of this Note is to use the history of vicarious liability claims to examine whether this is a prudent standard for assessing secondary copyright liability with regard to the distribution of content on the Internet. If the language of Section 512 does not amount to

   a loophole in immunity, this Note will explore whether a clear alternate standard could be developed that both addresses the concerns of Congress as manifested in the language of the Section 512 provisions, while also providing a level of immunity greater than that afforded by common law secondary liability. The current methods of addressing infringement on user-generated content sites available to copyright owners have arguably limited effectiveness, (16) as they place the burden of enforcement on copyright owners, who themselves must monitor and report infringement. With no real preventative options, copyright owners often have no means of stopping infringing material from being uploaded to the site once more. (17) At the same time, practical considerations for the running of such sites limit the extent that a site can be held liable for its content. Forcing a site to monitor every submission may make that site generally unusable, and holding it liable if it does monitor submissions may simply dissuade such services from monitoring their submissions at all, leaving them open to hosting not only infringing material but also other undesirable content. (18)

   Some compromise, based on the financial benefit exception to Section 512, may require a higher standard than typical secondary liability. (19) The issue of Section 512 exceptions and the potential for a vicarious liability "loophole" has become an open question, (20) with some commentators interpreting the DMCA as having raised the standard for actionable vicarious liability against Internet Service Providers ("ISPs"), including user-generated content sites, (21) as well as affording greater protection for copyright owners. (22) However, this Note will emphasize that the determination concerning the Betamax VCR in Sony is a possible alternative standard. Though the Supreme Court has since moved away from Sony, such as in the case of peer-to-peer networks like Grokster, its example is an identifiable and sensible means of balancing the interests of copyright owners against those who manage Internet sites.

   This Note will focus on the history of secondary copyright liability, its application to new technology, and how it has been subsequently applied following the passage of the DMCA. Part II of this Note will deal with common law vicarious liability and how it has applied to new technology. This Part will begin with assessing how secondary liability and, in particular, vicarious liability has been applied to copyright infringement cases using the well-known case of Fonovisa v. Cherry Auction. (23) Fonovisa applies the doctrine of vicarious liability to what may be considered a more "traditional" copyright infringement case--the production and sale of counterfeit copies of copyright-protected music records. (24)

   Part II of this Note will also outline the Sony case, a development in copyright case law that applied the standards of infringement to a technological possibility that had not previously existed (25)--the availability of recording and "time-shifting" programs, which would be the Supreme Court's focus in developing the doctrine of "substantial noninfringing use" and the application of fair use to certain copying and viewing practices. This Part will go on to assess the subsequent cases and technologies of A&M Records, Inc. v. Napster, Inc. (27) and MGM Studios, Inc. v. Grokster, Ltd., (28) including their impact on both the Sony standard and on previous understandings of vicarious copyright liabilities and their illustration of the response to technologies that have not been found to be ISPs for the purposes of DMCA.

   Part III of this Note will analyze Section 512 of the DMCA and what it has meant for ISPs and user-generated content. This discussion will begin with an assessment of the treatment of ISPs, and, in particular, websites that hosted user-generated content prior to the passing of the DMCA, illustrating courts' inclinations toward limited liability even before it was codified into law. (29) It will review the language of the Section 512 Safe Harbor provisions and the similarity of this language to common law vicarious liability. Additionally, this Part will analyze courts' mixed responses to Section 512's comparisons to vicarious liability. While courts have both accepted (30) and rejected (31) this standard, they have consistently applied a higher standard of liability, even when using common law language. (32)

   Finally, Part IV of this Note will propose a return to the Sony standard in assessing vicarious liability issues concerning ISPs, particularly in the form of websites that host user-generated content. This Note will assert that the current system is inadequate to protect copyright owners from infringement, but that, at the same time, the practical realities of ISPs and user-generated content sites limit what can be done to prevent infringement. As a compromise, this Note will propose an interpretation of the Section 512 exceptions based on the Sony standard of substantial noninfringing use. This Note proposes that liability can only be claimed if the copyright owner can show that a web service provides no substantial noninfringing use, that it deals with no substantial...