USDC N.D. California, January 14, 2009

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The court accepted YouTube’s argument that documents from third-party BayTSP, a company hired by Viacom and other content owners to identify clients’ content on the Internet and send DMCA takedown notices, are relevant to YouTube’s defense and that producing such documents does not create an undue burden on BayTSP, and granted YouTube’s motion to compel BayTSP to produce the requested documents.

In the underlying action pending in the SDNY, Viacom has alleged direct, contributory and vicarious copyright infringement claims against YouTube. In its defense, YouTube has asserted that the DMCA immunizes intermediary service providers from copyright liability as long as service providers timely respond to notifications from content owners of alleged infringement. YouTube noted that the Ninth Circuit has recently held that, under the DMCA, the burden of policing copyright infringement rests squarely on copyright owners. YouTube claims that it has taken steps to assist copyright owners stop the unauthorized posting and viewing of copyrighted content, and YouTube claims it has been “extremely responsive” to takedown notices from copyright holders.

BayTSP describes itself as “a service company retained by copyright owners to identify individuals who are making their copyrighted works available for download on the Internet.” Sending infringement notices on behalf of clients and monitoring for compliance are among the services offered by BayTSP. Prior to filing the lawsuit, Viacom and other copyright owners engaged third party BayTSP to police, document and notify YouTube when potentially infringing material was located on its website.

YouTube requested, among other things, the following general categories of documents from BayTSP:

(1) All documents and communications concerning YouTube, including those reflecting use of YouTube by BayTSP and its clients, monitoring of YouTube by BayTSP and its clients, and comparisons of the responsiveness of YouTube to other online services;

(2) All documents and communications regarding BayTSP’s relationship with Viacom, including documents regarding copyrights Viacom claims to own and the litigations in New York;

(3) All documents and communications regarding the nature of BayTSP’s monitoring and identification processes, its training of monitors, and its effectiveness or lack thereof with respect to identification of allegedly infringing materials online.

Under Federal Rule of Civil Procedure 26, a court must limit the frequency or extent of discovery if it determines any of the following:

(i) the discovery sought is unreasonably cumulative or duplicative, or can be obtained from some other source that is more convenient, less burdensome, or less expensive;

(ii) the party seeking discovery has had ample opportunity to obtain the information by discovery in the action; or

(iii) the burden or expense of the proposed discovery outweighs its likely benefit, considering the needs of the case, the amount in controversy, the parties’ resources, the importance of the issues at stake in the action, and the importance of the discovery in resolving the issues.

The court considered whether the documents requested by YouTube were relevant and whether producing the documents would be an undue burden on BayTSP.

The court found that the requested documents are relevant because they might support YouTube’s arguments in its defense. Specifically, the documents may (1) refute plaintiffs’ assertions that their burden for policing the website is too high; (2) may show that BayTSP made errors when issuing DMCA takedown notices which undercuts plaintiffs’ argument that YouTube had constructive knowledge of ongoing infringement; and (3) may refute plaintiffs’ claims that YouTube hinders content owners’ efforts to comply with the DMCA.

The court allowed YouTube to request these documents from BayTSP that relate to Viacom entities as well as non-Viacom entities, although YouTube must pay for production of the documents relating to non-Viacom entities. Since Viacom is reimbursing BayTSP for its costs in the litigation, YouTube is not required to pay for production of BayTSP’s documents that relate to Viacom entities.

The court also sided with YouTube who complained that BayTSP was limiting YouTube’s ability to view documents to certain times of day and in a way that allows BayTSP to keep track of what documents YouTube is looking at and printing. The court said such limits were unreasonable and ordered the parties to meet and develop a format for producing the documents.