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When in 2006 YouTube, then a young website, shot out of nowhere it did not seem like a good business, but a heap of trouble. By making it easy to watch and upload videos it rapidly became the leading video portal by the number of visitors.

Yet, much of its content is illegal. Millions of fans around the globe upload videos pirated from large media companies. In a way, YouTube is built on stolen content. Copyright owners, led by Viacom, are suing.

Now, three years after the beginning of the legal battle, the plaintiff claims that piracy, fitful but systemic, is an important part of the business strategy of the video leviathan.

When Google bought YouTube, Viacom says, ‘it made a calculated decision to profit from copyright infringement’ - the internet giant uses the threat of stealing content to force the rights owners into giving away their materials on Google's terms.

The outcome of the legal wrangle will go beyond YouTube, itself a phenomenon. At stake is the way we see the future of the Internet - the web of the crowd where sites are built up by thousands or even millions of disparate participants.

The law seems to favour Internet companies: the US Online Copyright Liability Limitation Act and similar laws in most European countries shield them against liability for copyright infringements done by users.

The rules - so called ‘safe harbour’ - were designed to allow such companies not to monitor the activity of every user, which is impractical and probably unrealistic to do. They do not need to prevent pro-actively the misuse of their services, and when notified that they happen to host stolen material, they must remove it 'expeditiously'.

If it were not for the safe harbour rule there would probably be no YouTube, no Blogger, no Wikipedia, no Flickr, no Facebook, no MySpace - and maybe not even Google. No investor would want to be near them.

It is curious, then, that there are no the safe harbour rules in Russia. Here, the web is no different from a bookshop: internet companies that carry pirated content, knowingly or not, can be called to account. The rights owners rule.

This is how the Rambler case was resolved. In February the Appellate Court found Rambler, a search engine and web portal, liable for the violation of exclusive rights on a music video, though the pirated clip was uploaded by some unidentified user.

There is, however, an interesting twist in how the law, unequivocal and clear, is being interpreted by the judiciary. Recently, a court in St. Petersburg ruled that a social networking site is not responsible for the actions of its members. Plaintiffs, a group of media companies, lost a straightforward copyright infringement case.

Though this might look like a deviation from the general practice, it is more of a trend. In the famous Masterhost case the Supreme Arbitrazhniy Court stated that to be liable the service provider must be aware that it stores illegal content.

The courts, then, are applying the ‘safe harbour’ rule – a good international practice, yet, strictly speaking, not part of Russian law.

Though it is too early to declare a winner, the rights owners or the web companies, for the moment it appears that judges like the internet. Yet they also like making the law.

 

April 26, 2010
text: E. Istomina
picture: NatalyArt - Fotolia.com

 

 

SECONDARY COPYRIGHT INFRINGEMENT IS STILL TERRA INCOGNITA
TEXT: Mikhail Tretyak, associate, Baker & McKenzie
The confusion over Russian court decisions in recent secondary copyright infringement cases is nothing to be afraid of. It is part of the natural process of development of court practice. Secondary copyright infringement is still terra incognita for most Russian courts, and it is natural that in the formation of applicable precedents judges will have differing views on similar cases, and issue conflicting decisions.

It can even be said, with certain reservations, that Russia is following the US route of developing court practice in this field. Similarly to Russian law, US law does not implement any statutory provisions on treatment of secondary copyright infringement; however, since US courts began applying the concept of secondary infringement – taken from patent law – to copyright infringement cases, secondary copyright infringement cases in the US have formed a standalone case category of their own.

There are two reservations regarding how this practice is developing in Russia though. The first reservation is that Russian courts are formalistic to the extreme in their approach, and tend to apply “straight” copyright law to secondary copyright infringement cases. This “no direct infringement equals no infringement” approach, which is very similar to the approach used in Russian domain name dispute practice (a sad tale of its own), is flawed. Basically, in applying this approach judges do not see the secondary infringement from the angle they should, which may eventually lead to the development of flawed practice.

The second reservation is that, in contrast to the US law, Russian law does not have “safe harbor” rules for online service providers (OSPs) that would regulate at least the pre-trial process of amicable resolution of conflicts between right holders and OSPs in case of copyright infringement. Why the provisions of working acts such as the DMCA were not “ported” to Russian law upon codification of Russian IP law into Part IV of the Civil Code (effective January 1, 2008), and, more importantly, why they still are not ported in view of the developing secondary copyright infringement practice, remains a secret known only to a handful of Part IV’s developers.

 

 

Judges like Internet business
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