Media professionals want to know: what’s fair use of copyrighted video?

Viacom-YouTube lawsuit, breakthrough insurance product for docemantarians shine spotlight on media liability

Media liability has taken center stage as the result of two recent developments, one a lawsuit by a media conglomerate challenging a new media company’s use of copyrighted video clips and the other, an insurance product that provides protection for documentary filmmakers who rely on “fair use” of copyrighted materials.

While the lawsuit could turn into a major clash of new versus old media if it’s not settled out of court, the insurance scheme for documentary filmmakers shows promise of keeping copyright disputes between artists and owners from even reaching the lawsuit stage.

In the lawsuit, giant Viacom Inc., is suing the video-sharing site YouTube for $1 billion, claiming that YouTube had built a business by using the Internet to “willfully infringe copyrights on a huge scale.”

The YouTube site relies upon visitors to post video clips. Several media companies agreed to supply YouTube with clips, including CBS Corp., General Electric Co.’s NBC Universal and the British Broadcasting Corp., but many others remain reluctant to deal with the Web site because of copyright concerns.

YouTube’s soaring popularity — it reported attracting 133.5 million visitors in January — especially among younger people who are increasingly tuning out traditional media, has broadcasters frightened of losing viewers and advertising dollars.

Last month, Viacom demanded that YouTube remove more than 100,000 unauthorized clips from its site, Viacom spokesman Jeremy Zweig said. YouTube has aired clips from Viacom programs including Comedy Central’s “The Daily Show with Jon Stewart” and Nickelodeon’s “SpongeBob SquarePants” cartoon.

In the lawsuit, filed in U.S. District Court in New York, Viacom says YouTube “harnessed technology to willfully infringe copyrights on a huge scale” and had “brazen disregard” of intellectual property laws.

YouTube says it cooperates with all copyright holders and removes programming as soon as it is notified. But Viacom argues that approach lets YouTube avoid taking the initiative to curtail copyright infringement, instead shifting the burden of monitoring the site onto copyright holders.

Alexander Macgillivray, associate general counsel for products and intellectual property at Google, which bought YouTube last year, said YouTube was protected under the 1998 Digital Millennium Copyright Act, which gives online service providers protection from copyright lawsuits so long as they comply with requests to remove unauthorized material.

“We’re saying that the DMCA protects what we’re doing,” Macgillivray told The Associated Press. On the other hand, he said, “The DMCA is silent on what we have to do if we don’t get a notice” to remove material.

Bruce Sunstein, co-founder of intellectual property law firm Bromberg & Sunstein in Boston, said YouTube was still in the early stages of what was likely to be a “very long working-out of arrangements” with the owners of broadcast copyrights.

“Finding a way of peaceful coexistence is quite a struggle,” Sunstein said.

Now that Viacom has thrown the first punch, other media companies may join the fray, Standard & Poor’s analyst Scott Kessler warned in a research note.

A major lawsuit against YouTube has been widely anticipated because so much of the online video pioneer’s success has been driven by access to copyright clips shared by its users.

American Technology Research analyst Rob Sanderson believes Viacom filed the lawsuit to pressure Google into setting clear ground rules and fees for the usage of copyrighted content.

“This is all about a media company trying to protect its future,” Sanderson said. “It’s not about them trying to get damages for the past sins of YouTube.”

Documentarians’ ‘fair use’
While Viacom and YouTube duke it out, documentary filmmakers who use copyrighted materials and the owners of those copyrighted materials may have a workable solution to their conflicts.

Media and entertainment liability coverage specialist, Media/Professional Insurance, a division of Aon Corp., has teamed up with intellectual property lawyers and the Stanford Law School Fair Use Project to enable filmmakers to insure against claims arising out of “fair use” of copyrighted material.

Media/Professional Insurance, which is based in Kansas City, Mo., has developed a policy endorsement that explicitly allows documentarians to rely on “fair use” without jeopardizing coverage.

Insurers and film distributors typically require producers to obtain specific permission for use of copyrighted material in a film. Licensing copyrighted material, however, can be prohibitively expensive, or impossible, for new or independent filmmakers — an economic barrier that they say seriously hinders freedom of expression.

The Fair Use Doctrine provides that use for the purposes of criticism, comment, news reporting, teaching, scholarship or research is not an infringement of copyright. The Fair Use Doctrine, developed in case law, permits limited use of excerpts from films, or of video clips, if that use meets the “fair use” guidelines. U.S. courts have assessed whether the reproduction of excerpts is “fair” based on broadly defined factors such as the purpose and character of the use, for example in criticism or commentary; the nature of the copyrighted original; the amount of the portion used in relation to the copyrighted work as a whole; and the effect of the use on the market or value for the original work.

“Documentary films are an important source of education, commentary and criticism. Rigidly requiring licenses or releases in all cases does not give filmmakers the flexibility to take advantage of ‘fair use’ in appropriate situations,” said Leib Dodell, president of Media/Professional Insurance. “This initiative makes ‘fair use’ work in the real world of independent filmmakers.”

The initiative was suggested by Michael Donaldson, an intellectual property lawyer who is also general counsel for Film Independent and past president of the International Documentary Association: “Fair use has been accepted legally for more than a century, because free expression is one of our most important values. Creativity, critical analysis, and cultural critiques are fostered, and sometimes only possible, when filmmakers can use otherwise copyrighted material. We’re not pushing the envelope legally — fair use is always limited and provides protection for copyright holders.”

“Documentary filmmakers who use copyrighted materials in their work under the ‘fair use’ doctrine of copyright law have come under tremendous pressure in the face of demands for huge licensing fees from copyright holders and overly-aggressive enforcement of copyrights,” according to Lawrence Lessig, founder and director of the Center for Internet and Society and the C. Wendell and Edith M. Carlsmith Professor of Law at Stanford Law School.

“The mere threat of a lawsuit can keep an important film on the shelf for years,” Lessig said. “This has been a tremendous problem for documentarians because their films depend on the inclusion of copyrighted material they seek to comment on, discuss, and contextualize.”

Some documentaries that have used copyrighted material include: “This Film Is Not Yet Rated,” a critique of the MPAA movie rating system; “Smoke and Mirrors: A History of Denial,” a look at the tobacco industry; and “Who Killed the Electric Car?” which examined industry opposition to electric cars. In each of these, filmmakers criticized powerful interests, who were unlikely to give permission for the use of copyrighted excerpts.

The Fair Use Project at Stanford said it will provide pro bono legal representation to certain filmmakers who comply with the Documentary Filmmakers’ Statement of Best Practices in Fair Use published by the Center for Social Media at American University (www.centerforsocialmedia.org/fairuse). Those who comply will have counsel in place prior to the release of the film should the filmmaker face claims of copyright infringement. Media/Professional, in turn, will provide insurance coverage against copyright infringement liability in the event the filmmaker is unsuccessful in defending the claim.

If Fair Use Project is not in a position to promise pro bono representation, Donaldson and other attorneys will be available. Either way, the filmmaker will have counsel in place and protection from liability via insurance.

The arrangement is winning applause from filmmakers who see it as freeing them to pursue their work without fear of lawsuits. “This is an extraordinary breakthrough for documentary filmmakers,” said Davis Guggenheim, director of the Academy Award-winning film An Inconvenient Truth. “We have a clear map to guide our practice and lawyers to defend our work. Media/Professional has set an important example for other insurance companies. I am very hopeful this will change the way documentary films get made.”

Some reporting by The Associated Press was included in this story.