More YouTube disclosures

Another excellent piece on CNET regarding the $1.79 billion YouTube/Google history that should be of interest to all the members in the class action as well as those who have yet to see a dime from Google for the past, present or future use of their work. (And for you Veoh fans out there, this case is in the 2nd Circuit, not the Temporary Autonomous Zone.)

In “Did Viacom Find the Smoking Gun In YouTube Case?” we finally see some evidence of what was widely rumored to be happening at YouTube: YouTube—and later Google—employees “seeding” the service with illegal works for the purpose of attracting users to YouTube and enriching YouTubers such as Li’l Chad when they conned Dr. Smarty Pants and the Google board into throwing down big bucks for the company.

This “seeding” idea is nothing new—how else can you start an illegal content distribution hub without having some illegal content to attract yet more?

As expected—emails have surfaced. What’s surprising is not that there were emails, what’s surprising is that somehow they didn’t get deleted in anticipation of litigation. So what’s really surprising is that there’s any emails left. (For those of you who are reading along, that’s often called intentional spoliation of evidence—see RealDVD.) As CNET notes, “[i]f [YouTube or Google] managers possessed “actual knowledge” of copyright infringement on the site and did not quickly remove it, the company may not be entitled to protection under the Digital Millennium Copyright Act’s safe-harbor provision, according to legal experts.”

I would say that is actually the best outcome these “managers” could hope for—the denial of the safe harbor. If it turns out that the “managers” not only had “actual knowledge” but that the reason they had “actual knowledge” is that they actually knew that they were actually placing the infringing content on the service….We are in a whole new area. Yes, the Children of the Lessig God are entering the area of the Viking Pirate Kings. Mind you, that is not quite what the article says, but it would not surprise me in the least. If it goes there—which it probably won’t—but if it did, all kinds of information might surface once a federal prosecuter starts sweating the “managers.” And if the “managers” were themselves lawyers…it’s more interesting still.

CNET notes correctly that “[a]ny questions about what YouTube employees may or may not have uploaded to YouTube must also be asked of Viacom’s employees.” That’s true to be fair, although how much relevance it has remains to be seen.

It is highly unlikely, however, that all of the content at issue was uploaded by Viacom and each and every member of the class (as well as the independent artists, songwriters and film makers who can’t afford to sue or don’t know that they might be able to join the class), however much Google wants to believe it plausible enough to confuse a jury (a/k/a “true”). It still remains to be determined what did Google know and when did they know it? It is simply not credible to believe that Google thought that the reason that millions of people were watching videos on YouTube was because the technology was so dang groovy. An equally interesting question is where was the YouTube board? (Probably counting their money.)

As CNET notes, “YouTube’s counterargument has always been, how is the company supposed to know the difference between pirated and legally uploaded clips when companies like Viacom are among those uploading material?”

Easy.

Ask.

But no, no we can’t do that, now can we? And by the way—I thought that YouTube didn’t know anything. This knowledge thingy, its so tricky to keep the story straight, isn’t it? (Who ate the homework again? Oh, that’s right, the dog ate the homework.)

Now let’s see. There’s usually a chunk of a purchase price put in escrow to deal with indemnity claims. Yes, according to USA Today that’s right, “Google Inc. has set aside more than $200 million in its just-completed takeover of YouTube Inc. as a financial cushion to cover losses or possible legal bills for the frequent copyright violations on YouTube’s video-sharing site…. The reserve could signal that Google is trying to insulate itself from a possible onslaught of lawsuits aimed at the large number of pirated videos posted on YouTube, which will retain its current management and name. Since its website first began to catch on about a year ago, YouTube has relied on a mix of homemade and pirated videos to expand its audience…. Google executives also have repeatedly vowed to protect the rights of copyright holders.” (That’s not a joke–I wonder if that last line would get reported so uncritically after the Google Books disaster?)

Wow. $200 million. That much, eh?

That will probably cover the legal bills.

Oh, no, wait—they said that was for everything. Including the uncompensated rights holders waiting on the sidelines to see how the litigation turns out before they bring their cases—and who don’t think too much of Google’s “vow”? I guess so.

Ah, well. Nothing like some beach volleyball followed by a toasty bidet to take off the chill of prosecution, eh? Yes, life is good in the two Gulfstream family.

For now.

PS The latest rumor I’ve heard as of about 4 weeks ago about the YouTube reserve is that it has been increased and now almost exceeds the purchase price–which is probably still quite low. I mean–if you’re someone who thinks that a billion dollars is a lot of money. Even at the time of the sale, the USA Today story reported that “[t]he legal threats raised by the YouTube deal led to widespread Internet speculation that Google had set aside $500 million of the purchase price to pay copyright settlements.” Seems like chump change–no pun intended.