YouTube Litigation in Italy - The RTI v. YouTube case before the Rome Tribunal

(...sorry definitely more than 200 words for me too!)

Italy has had its Viacom too. And even though, unlike in Germany, a decision has not yet been issued on the merits, a summary judgment and an injunctive order have been granted to the plaintiff against YouTube, anticipating a likely different outcome from the one endorsed by the S.D.N.Y. in the U.S..

A closer look at the Italian case may be interesting in order to draw a basic comparison between the approaches taken by the two Courts when dealing with substantially the same issues sorrounding the current ISP liability debate and, maybe not surprisingly, with substantially the same arguments and defenses raised by the parties.

In fact, although some issues are specific to the European (and Italian) legislative framework, the liability rules are substantially similar (and indeed modeled onto) to those framed by the US DMCA, and so are the fundamental considerations that have to be made with respect to the policy choices currently available to face the challenges of the Web 2.0-3.0 environment.

The case we are talking about is the RTI v. YouTube case which was brought before the Rome Tribunal in late 2008 and so far resulted in two Court Orders of December 16, 2009 and February 11, 2010.

The suit was filed by the Italian media giant RTI, a company which owns three national tv channels and has multiple interests in the content producing and broadcasting industry.

RTI alleged that hundreds of clips and video-excerpts of its proprietary or exclusively licensed broadcasts had been made available online on a daily basis by YouTube without any authorization. Interestingly, the clips specifically in dispute were excerpts of the “Big Brother” reality show episodes which were at the time being televised on both national and satellite tv channels as well as stream-casted 24/7 on a pay-per-view basis through the RTI website.

RTI sued YouTube for copyright infringement based on the Italian Copyright Act, arguing that the safe-harbor provisions enacted in Italy to the benefit of ISPs in compliance with the EC e-Commerce Directive n. 31/2000 (namely, Articles 14 to 17 of the Italian e-Commerce Act) were inapplicable to the facts and circumstances of the case.

A brief note about the EC Directive and its Italian implementation: unlike the DMCA, the Directive is silent about "notice and take-down" procedures started by the content owner's notification of infringement, leaving to the single Member States the decision to implement such prcedures. And the Italian legislator decided not to implement a specific “take-down” procedure and failed to identify the necessary elements for a notification capable to trigger the ISP’s “actual knowledge” of the infringement, thus leaving to the Courts the task of assessing it on a case by case basis.

Under the current statutory system, some Courts in Italy have proved comfortable in holding that a mere notification by a private party (such as, for example, the copyright holder) may not be deemed sufficient to establish a duty to activate on part of the ISP, that instead should be prompt to respond only to a specific Court order eventually obtained by the party seeking the content’s removal. Such interpretation has been mainly supported by the constitutional concerns related to the possibility that a private entity would de facto make a final determination about infringement in the absence of due process and in violation of the freedom of speech. Still, in other cases various types of notifications (with a varying degree of detail required from each case to another) were indeed accepted as triggers to liability.

In this perspective the RTI lawsuit is particularly interesting because the Rome Tribunal expressly chose to re-discuss thoroughly the issue.

Significantly, the plaintiff’s core argument in this Italian lawsuit was built around the very same fundamental assertions made by Viacom in the U.S. case: YouTube could not qualify for the safe-harbors because its activity is not limited to the mere passive “hosting” of the videos uploaded by the users, because it filters, organizes, streams the content for commercial purposes; even qualifying for the coverage of Article 16, YouTube had failed to activate notwithstanding its actual knowledge of the ongoing infringement, due to the massive number of notifications that RTI had sent out with respect to the specific content in dispute; and, at the very minimum, YouTube had the reason to know about the infringement because it was alerted by several “red flags”, that is to say that the infringing activities or the illegality of the content was patently apparent for excusing a failure to activate on the part of the ISP.

YouTube of course claimed to benefit from the full shield of the safe-harbors because it plainly qualifies as a hosting provider under Article 16 and, on the specific occasion, it did not have any knowledge of the infringing activity or content (due to the insufficiency of the notifications received by the plaintiff); the defendant also asserted that it does not have any right or technical ability to control the content uploaded from its users and accordingly did not have any duty to monitor and to activate for preventing the infringements or removing the files. Importantly, as it did in the U.S. YouTube also raised - as a sort of “last resort” defense - a “fair use” defense under the very narrow Italian fair use doctrine (under Article 70 of the Copyright Act), arguing that the allegedly infringing videos were not made available in their entirety and for a commercial purpose, thus trumping the very existence of the users’ direct infringement and, consequently, any secondary liability claim against the ISP.

The Court found for the plaintiff and issued an injunctive order requiring YouTube to take-down the videos.
Here's the Tribunal’s legal analysis on the question of the applicability of the safe-harbors.
First of all, the Court endorsed the plaintiff’s view according to which YouTube acts over the internet as a “sui generis” ISP whose activity does not fit with the statutory definition of the “hosting providers” as identified by the Directive and the Italian e-Commerce Act.
The Court specifically held that YouTube “didn’t limit its activities to providing the users the mere availability of server space where they could independently upload and organize content onto” . Rather, the Court found “undeniable” that the ISP acted as a “digital broadcaster” operating in direct competition with the RTI tv channels and with RTI proprietary website, given the provider’s evident efforts devoted to the indexing, the aggregation and the organization of the uploaded material which granted the users the possibility to access to the content through a quick search of the title of the work, of the specific episode and the original “on air” date .
The Court indeed noted that YouTube business model was based on the very “programming of the content for the fruition of the users”, activity which was undertaken for patent commercial purposes, being the indexing, aggregation and organization of the content strictly functional to the triggering of key-word-based advertisement revenues.

Interestingly the Tribunal went on holding that the content uploaded by the users was to be deemed in fact "owned and controlled" by YouTube since the ISP “predisposed a system for the control of the data flow at many levels”, binding the users and the viewers to Terms of Use and Service which plainly gave it the full right and ability to filter and remove it to its absolute discretion, either before and after the upload.

In the view of the Court, such degree of involvement of the ISP with the content carried was not the degree of involvement the European and Italian legislators meant to shield from liability claims.

Indeed, even assuming that YouTube was a “hosting provider” qualifying under Article 16, it could not be excused since it had sufficient knowledge of the ongoing infringement.
In fact, in the Court’s interpretation, the knowledge standard required by Article 16 is met when an ISP receives any kind notification from the content owner which is sufficient to reasonably establish the ownership of the content and reasonably identify the allegedly infringing material, the law certainly not requiring an URL-specific notification.
Under the facts of the case, RTI had sent YouTube a massive number of cease-and-desist letters properly identifying the material with the title of the works - which was embedded in almost all the titles and the search tags connected to the uploaded videos – and yet the ISP did not activate in any way to verify the “suspect content” or even to cooperate with the owner to verify the alleged infringement, a situation that persisted also after the filing the lawsuit. According to the Tribunal, based on these facts YouTube had at least reason to suspect that an infringing activity was going on and that apparently illegal content was present on its servers and its website.

Therefore the Court found it was “totally unreasonable” to hold YouTube to be extraneous to the infringement and exempted from any duty of diligent activation. The Tribunal recalled that no duty of active prevention is owed by a truly neutral ISP, but all ISPs are legally bound to effectively activate post-factum, diligently and expeditiously, to remove the cause of harm; in the view of the Court, a different solution "would overburden the content owners", which do not have any right or technical ability to disable the access to the content made available online.

The take-away of the case? Also in Italy Courts are struggling with the qualification of typical Web 2.0 ISPs within the statutorily defined categories which were built in the Web 1.0. reality and are putting into question the current effectiveness of that "outdated" legal framework.
It seems that the very business model carried on by YouTube is being delegitimated.
But who has the solution? And is it really the cure better than the disease?