Google CEO Eric Schmidt, leader of $140 billion market cap “most powerful Internet company (as cited by the New York Times),” confidently reported to Wall Street an “excellent” Q3 performance last Thursday in a public conference call.
His pride seemed to match his company’s oversized performance. In fact, he and his executive team were heard giddily laughing upon the conclusion of the call, much in the same way YouTube’s “Chad and Steve” are seen giddily joking around in a YouTube video celebrating their sell-out to fellow Internet “kings.”
Schmidt had a change of tone, however, when the issue of YouTube copyright infringement came up. Here is the exchange:
Question from Christa Quarles, Thomas Weisel:
Just a couple of questions on video and YouTube. First, how heavily are you relying on maybe a liberal interpretation of the Digital Millennium Copyright Act? I guess, how are you going to be responding to some of the copyright commentary out there?
we are definitely not relying on a liberal or a conservative interpretation of the DMCA. We are relying on the Digital Millennium Copyright Act as it is being imposed by law and there are not a lot of shades of gray in how it works. There's a set of procedures for take down. If you operate under this, companies have a Safe Harbor. We do our very, very best to implement it exactly as prescribed, as does everyone else in the industry. So whether people like it or not, it is the law of the land and we absolutely operate by it.
Schmidt’s concluding conference remarks included a nod towards prospective Google partners, suggesting a “focus on the legal aspects,” is not the way to approach a relationship with Google:
the partnerships are much more than just revenue partnerships. They really are a way of doing business for us going forward. For example, there are a lot of folks on the call asked questions about legal concerns over video. But the strategy with video was to partner, not to focus on the legal aspects, but to focus on the business partnership aspects.
Schmidt’s confident dismissal of “legal aspects” relating to others’ content ownership rights, coupled with a “whether people like it or not” stance, are no surprise. I heard him publicly proclaim Google’s strategic reliance on fuzzy “law of the land”—fair use, safe harbor—at the Search Engine Strategies Conference last August:
Because of our scale and because of the amounts of money that we have, Google has to be more careful with respect to launching products that may violate other people's notion of their rights. But also, frankly, we find ourselves in litigation and the litigation was expensive, and diverts the management team, etcetera, from our mission…most of the litigation in my judgment was really a business negotiation being done in a courtroom. And I hate to say that, but that is my personal opinion. And in most cases a change in our policy or a financial change would in fact address many of the issues.
Without commenting specifically on AP or AFP or the book publishers, we have to respect the copyright owners' information, and it's okay to disagree on the precise aspects of the law, but no one at Google is suggesting that we are not subject to copyright law. In the United States there is a fairly well-established doctrine of fair use. And depending on which graduate school or legal school the lawyer went to, they disagree on precise details. The ones who went to this law school agree on one thing and the ones that went to this law school went to another. And I've learned that the law is not as crisply defined in this area as you might want. So in our case, we've analyzed this pretty carefully. We believe that the library work we're doing, given that we're not, in fact, reproducing the book but rather simply a snippet and then we have a pointer to the book, is absolutely permitted by fair use. Reasonable people can disagree with that, but that is our view and we spent a lot of time on it. And I don't think we're going to change our tune on that.
Google is not going to change its tune of relying on the doctrine of safe harbor either, law also not crisply defined.
Why would it sing a different copyright song?
It has a $140 billion market cap fueled by selling ads against content it has not compensated rights holders for and that it has no explicit legal rights to use.
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