YouTube Founders: Own Nothing, Have Everything!!

“Welcome back my friends to the show that never ends…
Step inside! Hello! We’ve the most amazing show,
you’ll enjoy it all we know, Step inside! Step inside!
We’ve got thrills and shocks, supersonic fighting cocks…

Roll up! Roll up! Roll up!See the show!”

“Welcome Back My Friends to the Show that Never Ends”
written and performed by Emerson Lake & Palmer
From Pictures at an Exhibition
Copyright 1972 Warner Bros. Records

Skippy is BACK and he’s B-A-D!! If the Google rumor is true, the “hate copyright first” crowd at Google are about to make YouTube founders rich beyond their dreams. Well…maybe just rich. And what do Google stockholders get out of it? Traffic? Maybe, but I think Google may be getting something more. Besides the copyright infringement lawsuit of all time.

It seems entirely plausible that YouTube is copying–in what may well be direct and willful copyright infringement–the videos that are uploaded to their “service” so that they can be transcoded into flash. That would suggest that YouTube is keeping a copy of the works somewhere on their servers–that is, a copy that was made by YouTube. I want to hear the wailing of the EFFluviati on this one. Fair use server copies, I’m sure!

Making copies of infringing works on your servers is different than Napster, or Grokster, or Morpheus, or Kazaa. Even the infamous Pirate Bay isn’t that flippant. None of those companies (all losers in their respective litigation) made or maintained copies of the works that were infringed. These were all secondary liability cases. Direct infringement was stipulated, not proven, because the defendants had not plausibly committed direct infringement.

The problem that Google has is the same problem that a lot of people have who don’t understand that Professor Lessig lives in a fantasy world. These acolytes of the Nutty Professor don’t get that there is a law out there. Every time, and I mean every time, Lessig has tilted at that law he has resoundingly lost. But he goes on and his clients who believed his drivel are left to pick up the pieces of their lives after relying on his bizarre legal theories. I don’t know that Lessig is advising Google on this acquisition, and I don’t know that he is even qualified to advise as to the Sarbanes Oxley compliance elements of buying company dedicated to profiting from copyright infringement. But–I don’t know of any other person who would give an opinion that there wasn’t at least the very strong potential for a determination of massive and probably willful copyright infringement occuring every second of every day on YouTube. We know that there is at least a close financial relationship between Lessig entities and Google at the Stanford madrassah, so it is not entirely crazy to speculate that Lessig or other members of the EFFluviati are advising Google with more of the novel ideas that are now lying on the ash heap of history.

It is hard to comprehend how Google could possibly think that they could acquire YouTube without dealing with the copyright infringement issue. And yet the issue is so obvious that I can’t see why it doesn’t make YouTube radioactive.

We’ve already had the spectacle of public companies treading extraordinarily close to the line in copyright infringment. Remember dancing cows chanting “rip mix burn”? But Apple is now the solidest of solid citizens in our quest to legitimize the online music space.

However–none of these public companies were stupid enough to buy a copyright infringement machine. Even Mittelhoff didn’t buy Napster. This is what comes of letting Yahoo! get what is apparently a pass on their Webjay acquisition, a company that is Napster on a playlist. If you don’t have a zero tolerance policy for copyright infringement, the Lessig-ists will think you’ve gone soft. Make no mistake–this is war. They want to obliterate us. And now they have brought their Ajax to the battle in the form of Google. If we blink, we’re done.

I would also point out that if there is some idea that YouTube could wash away their bad behavior in a “prepack” bankruptcy or some similar artifice, they should think again. There are several recent court decisions directly on point that would prevent a company from washing its sins in the bankruptcy waters, and the law seems very clear to me that an individual can simply forget using bankruptcy as a way to avoid liability for copyright infringement (or any other IP infringement).

I am of the camp that believes that at least certain record companies will go after officers and directors of YouTube on a theory of personal liability in very short order, so if I were those folk I would make sure that I had some kind of figleaf and a litigation fund. It’s likely, if not a certainty, that directors and officers insurance will not only deny coverage for the claims but also for the legal defense, so the directors and officers will be on their own. I hope the YouTube founders remember Lessig fondly when they’re taking out a third mortgage on their houses to pay their legal fees.

If it’s true that YouTube makes copies of the infringing works before making them available–which it probably does–then if Google buys YouTube, Google gets copies of all those videos. As I noted in another post about Google’s “Final Library” project that includes Google Books, “…[t]aken in the larger context of Google’s oligopolistic rise in search, one can see how it is to Google’s advantage to limit the rights that the creative community can assert against them, including the ability of celebrities (or private citizens) to keep their children’s medical records out of public view—forever. For after books comes every piece of information in the world. And if you think that’s paranoid, realize that the Library Project is inspired by The Final Encyclopedia by Gordon Dickson, a science fiction book about a database that was exactly that comprehensive. I know how sk8r boys love their sci fi, but sometimes sci fi is best left as just that–fiction. ”

If Google buys YouTube, then they would gain overnight a library of all kinds of content, user generated or otherwise. Now what might Professor Lessig have advised the Berkman Center acolytes at Google that they could do with that?

So here’s a thought about user generated content sites…why should YouTube make all the money? Why shouldn’t they share it with everyone who’s posted? And have a pool for everyone they’ve ripped off? A big pool. Maybe 99.99% of the purchase price?

Of course that’s actually called “damages”. Just ask Michael Robertson.

And this isn’t even addressing the rights that music publishers will have against YouTube for infringement of the rights in the songs. It is entirely possible that YouTube’s counsel and Google’s counsel don’t understand that music publishers have co-equal rights under copyrights in the songs that are in these videos and that the videos may not ever have been cleared for third party exploitation. Meaning that the record companies don’t control all the rights for the 9,000th time.

And by the way–this is all just in the US. We haven’t even talked about neighboring rights, moral rights, and other goodies that mommy got for Chaddy.

This entire enterprise is a joke. I would LOVE to see the Sarbanes Oxley materials on this acquisition. I can’t even begin to comprehend where you would start to unpack it, the flaws are so immense. And all the stockholder class action lawyers have got to be licking their chops. It’s very simple. YouTube are pirates. If Google buys YouTube, Google is a pirate. YouTube are defiant and fly their pirate flag high and proudly.

YouTube is not asking for quarter. Fine. None will be given.

So welcome back my friends to the show that never ends.