Should Websites Be Penalized for Embedding a Copyrighted Video Hosted Illegally by Another Site?

The Seventh Circuit Court of Appeals is hearing a case involving a porn site that has big names such as Google, Facebook and the Motion Picture Association of America weighing in in favor of and against its far reaching implications.

Ars Technica explains in July 2011, a federal judge ruled in Flava Works Inc. vs. Gunter that simply embedding copyrighted videos is considered an infringement and therefore illegal -- even if the embedder did not upload the copyrighted material to the Internet in the first place. A website called MyVidster, owned by Marques Gunter, began embedding videos from the adult content company Flava Works, to which the latter issued takedown notices. Ars Technica reports MyVidster was not hosting the embedded videos, third-party sites were, but was still asked to remove them anyway. MyVidster says it complied with this request but Flava Works still took them to court for copyright violation.

The initial ruling that found Gunter in violation for not "[warning ] his users about copyright infringement" and taking action to terminate accounts of repeat uploaders of copyrighted content.

As this case now makes its way through appeals court, MPAA is asking that the original ruling be upheld, while Google and Facebook brought to the court's attention late last year that previous cases have maintained a legal distinction between embedding and hosting videos online. A portion of their statement said:

"In order to be liable as a direct infringer of the exclusive right of public performance, one must transmit or otherwise communicate the copyrighted work in question."

Google, Facebook and other advocates for a free Internet stated it was the third-party sites communicating with the copyrighted work, not MyVidster.

The Guardian clarifies the crux of the issue is how much responsibility should lie with sites like MyVidster, which are just embedding content they found elsewhere:

Should they merely act when notified of copyright infringements, or should they take a more proactive role in policing their websites?

Here's what MPAA had to say (via Ars Technica):

"Although there is nothing inherently insidious about embedded links, this technique is very commonly used to operate infringing internet video sites," the organization writes. "Pirate sites can offer extensive libraries of popular copyrighted content without any hosting costs to store content, bandwidth costs to deliver the content, and of course licensing costs to legitimately acquire the content." The MPAA also notes that embedding can enable sites to monetize infringing content by surrounding it with ads.

[...]

In the MPAA's view, then, anyone who serves a website with an embedded link to infringing content "displays" that content to users, directly infringing copyright in the process.

With regard to terminating repeat offenders, in Nov. 2011 the Electronic Freedom Frontier and Public Knowledge told the court in a brief that the Digital Millennium Copyright Act, in which Gunter sought his defense, does not specify when or how the provider should terminate "repeat infringers." Torrent Freak also points out that the law does not define exactly what a "repeat infringer' is. With DMCA as his defense, Gunter had said "most of the content are embeds which are hosted on external websites, [and] I would suggest contacting the websites that are hosting your content to help stop the future bookmarking of it on myVidster." He also told the court he would warn and eventually terminate repeat offenders.

If the appeals court does not overturn the decision, here is what Ars Technica foresees as further reaching implications:

Numerous websites embed content from third parties they have not personally inspected. Under the theory articulated by Grady, and supported by the MPAA, these websites would be responsible for this content, exactly as if they had stored it on their own servers. This could create a serious disincentive for sites to allow users to post embedded content, hampering the convenience and user-friendliness of the Web.

Of course, as Google and Facebook stress in their brief, sites like myVidster could still be liable under the secondary infringement rules that felled Napster and Grokster. So the argument that myVidster's users are not a direct infringer isn't an argument that "link sites" that profit from infringement should get a free pass.

Secondary infringement is more difficult to prove than direct infringement, however, and the penalties are lower. That's as it should be. Sites that host content should bear greater responsibility for that content than sites that merely link to content hosted by third parties.

Torrent Freak reports that Flava Works is going to the third-party host sites and suing them as well for failing to remove the copyrighted content after several notices.

The Guardian reports constitutional law professor Lawrence Tribe from Harvard as saying in an email, "Legal regimes imposing obligations on bookmarking sites to police the content they host threaten to chill free speech to a dangerous degree. They ought to be subject to very strict standards of constitutional review, lest the open character of the internet as a platform advancing the freedom of speech be unduly compromised."

Gizmodo simplifies this further, pondering if in 5, 15, 20 years, such a ruling being upheld, would mean we "forbidden from embedding old music videos and awesome movie clips?"