the infringing material. Thus, the prerequisite to safe harbor protection under Sections
512(c)(1)(A)(iii) & (C) would at the same time be a disqualifier under Section 512(c)(1)(B).^2680
In view of this predicament, the Second Circuit concluded that the control provision
dictates a departure from the common law vicarious liability standard, and ruled that the right
and ability to control infringing activity under Section 512(c)(1)(B) requires something more
than the ability to remove or block access to materials posted on a service provider’s web site.
The court refused to elaborate, however, on what that “something more” might be, choosing
instead simply to recite two examples of “something more” that would satisfy the control
provision. First, the court cited the only court decision that as of the time had found a service
provider had the right and ability to control infringing activity.^2681 In Perfect 10, Inc. v. Cybernet
Ventures, Inc.,^2682 the district court found control where the service provider instituted a
monitoring program by which user web sites received detailed instructions regarding issues of
layout, appearance, and content. The service provider also forbad certain types of content and
refused access to users who failed to comply with its instructions.^2683
As a second example, the Second Circuit noted that inducement of copyright
infringement as enunciated in the Supreme Court’s Grokster decision, which premises liability
on purposeful, culpable expression and conduct, might also rise to the level of control under
Section 512(c)(1)(B).^2684 The court noted that both of its examples involve a service provider
“exerting substantial influence on the activities of users, without necessarily – or even frequently
- acquiring knowledge of specific infringing activity.”^2685 In view of its holding that the control
requirement does not include a specific knowledge requirement, the Second Circuit remanded to
the district court to consider in the first instance whether the plaintiffs had adduced sufficient
evidence to allow a reasonable jury to conclude that YouTube had the right and ability to control
the infringing activity and received a financial benefit directly attributable to that activity.^2686
The Second Circuit next turned to an analysis of what activities fall within Section
512(c)’s safe harbor for infringement “by reason of the storage at the direction of a user” of
material residing on the service provider’s system or network. The Second Circuit affirmed the
district court’s holding with respect to three of the challenged software functions at issue – the
transcoding of videos into a standard display format, the playback of videos on “watch” pages,
and the “related videos” function. The court remanded for further fact finding with respect to a
(^2680) Viacom, 676 F.3d at 37.
(^2681) Id. at 37-38.
(^2682) 213 F. Supp. 2d 1146 (C.D. Cal. 2002).
(^2683) Id. at 1173.
(^2684) Viacom, 676 F.3d at 38.
(^2685) Id.
(^2686) Id.