fourth software function, involving the third party syndication of videos uploaded to
YouTube.^2687
The court first noted that the structure of the two alternative definitions of “service
provider” suggest that the safe harbors of Section 512(c) do not exclude all activity that involves
modification of user posted content. Specifically, although the definition of “service provider”
that applies to the Section 512(a) safe harbor requires that there be no modification of content of
the material being transmitted by the service provider, the definition of “service provider”
applicable to Section 512(c) does not contain that limitation. Accordingly, the court found it
apparent that the Section 512(c) safe harbor was intended to cover more than mere electronic
storage lockers. Instead, the court pointed to various previously decided safe harbor cases as
establishing that the safe harbor extends to software functions performed for the purpose of
facilitating access to user stored material. One of those cases had expressly considered two of
the software functions challenged here – automatic transcoding and playback – and found
liability arising from those functions to have occurred “by reason of the storage at the direction
of a user.” The Second Circuit therefore ruled that the district court had correctly found that to
exclude those automated functions from the safe harbor would eviscerate the protection afforded
by Section 512(c).^2688
A similar analysis applied to the “related videos” function, by which a YouTube
computer algorithm identified and displayed thumbnails of clips that were related to the video
selected by the user. The court rejected the plaintiffs’ argument that this practice constituted
content promotion, not “access” to stored content. The record established that the related videos
algorithm was fully automated and operated solely in response to user input without the active
involvement of YouTube employees. The related videos function served to help YouTube users
locate and gain access to material stored at the direction of other users. Because the algorithm
was closely related to, and followed from, the storage itself, and was narrowly directed toward
providing access to material stored at the direction of users, the Second Circuit concluded that
the related videos function was protected by the Section 512(c) safe harbor.^2689
The court then considered the syndication function, under which YouTube had
transcoded a select number of videos into a format compatible with mobile devices and
syndicated or licensed the videos to Verizon Wireless and other companies. The plaintiffs
argued – with some force, the court noted – that business transactions do not occur at the
“direction of a user” when they involve the manual selection of copyrighted material for
licensing to a third party. The parties did not dispute, however, that none of the clips in suit were
among the approximately 2,000 videos provided to Verizon Wireless. The court therefore held
that, in order to avoid rendering an advisory opinion on the outer boundaries of the storage
(^2687) Id. at 38-39.
(^2688) Id. at 39.
(^2689) Id. at 39-40.