Ted Entertainment, Inc. v. ByteDance, Inc.

District court denies ByteDance’s motion to dismiss YouTube content creators’ DMCA suit accusing it of scraping videos to train AI models, finding that plaintiffs plausibly alleged defendant circumvented YouTube’s technical protective measures.

YouTube content creators Ted Entertainment Inc. and Matt Fisher filed a putative class action against defendant ByteDance Inc., a Chinese company that develops generative AI products that turn text prompts into audiovisual content. Plaintiffs allege ByteDance violated Section 1201(a) of the Digital Millennium Copyright Act (DMCA), which provides that “[n]o person shall circumvent a technological measure that effectively controls access to a work protected by this title,” by scraping millions of YouTube videos to train its AI products. YouTube does not give users direct access to videos in their native form, and its terms of service prohibit scraping, unauthorized downloading and bulk extraction. The platform also uses technological protection measures to prevent such unauthorized use.

ByteDance moved to dismiss on three grounds: (1) Plaintiffs lacked Article III standing, (2) plaintiffs were not authorized to sue under the DMCA and (3) plaintiffs failed to plausibly allege a Section 1201(a) violation. The district court denied the motion in full.

To establish Article III standing, a plaintiff must demonstrate “injury in fact” that is “fairly traceable” to defendant’s conduct and likely to be redressed by a favorable decision. The court rejected ByteDance’s argument that plaintiffs lacked standing because the alleged injuries came from the downstream copying and AI training, “not the act of circumvention itself.” It first found plaintiffs plausibly alleged financial injury in the form of lost “per-view advertising revenue that YouTube’s monetization system would have otherwise generated.” The court further held that this financial injury was fairly traceable to the circumvention, reasoning that a causal chain “does not fail simply because it has several links, provided those links are not hypothetical or tenuous.”

Next, the court rejected ByteDance’s statutory standing argument that the DMCA’s private right of action applies only to YouTube as the “owner of the circumvented measure” and not to creators who post content on the platform. It relied on the plain language of Section 1203, which gives a cause of action to “[a]ny person injured by a violation,” as well as legislative history and Ninth Circuit precedent holding that Section 1201 grants copyright owners a right of enforcement. The court noted that district courts have broadly concluded that the DMCA’s zone of interests include copyright holders whose material is protected by a technological measure and that copyright owners like plaintiffs are therefore “at the very heart of the ‘zone of interests’” that Congress sought to protect.

Turning to the merits, the court rejected ByteDance’s argument that YouTube’s technological measures fell beyond the reach of Section 1201(a) because they regulated downloading and copying, not access, since YouTube’s videos are publicly viewable. It likewise rejected defendant’s contention that Section 1201(a) should be narrowly interpreted to exclude technologies that permit access to a work but restrict copying. The court credited plaintiffs’ allegations that “‘even watching a video on YouTube’ without downloading the underlying media file ‘requires satisfying technological measures’” and concluded that plaintiffs sufficiently alleged their works were protected by technological measures that control access. The court also found that plaintiffs sufficiently alleged defendant circumvented at least some of those measures to gain access to their works—pointing out that ByteDance’s employees publicly acknowledged that the company used training datasets containing references to some of plaintiffs’ YouTube videos, the use of these datasets required direct downloads from YouTube, and no plausible alternative explanation was offered to explain how the bulk download and extraction could occur without circumventing technological measures.

Summary prepared by Todd Densen and Olivia Holmes