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38. YouTube’s business model was
and is to create a substantial
inventory of videos, including those
with infringing content, in order to
attract users for advertising and other
monetization.

April 16, 2009 ~ Fair Disclosure Wire — Q1 2009
Google Q&A Session ~ Final (Tab 141) (Jonathan
Rosenberg: “what we're hearing from both viewers and
advertisers is that they want premium content and the
premium viewing experience.”) (p. 4)

Schmidt Tr. 109:20-21 (Tab 111) (“our policy from
acquisition was to grow the user base.”)

Dunton Ex. 4 (GO0001-00507525-32) (Tab 14) (Chen:
“concentrate all of our efforts in building up our
numbers as aggressively as we can through whatever
tactics, however evil.”) (GOO001-00507526)

Karim Ex. 9 (JK00009871-72) (Tab 60) (Karim: “Our
goal is to use funding to pursue a two-phased approach.
First we will further grow our audience and reach to
secure our position as the #1 place for personal videos
on the internet. Then we will monetize the audience we
have acquired by hosting video ads.”) (JK00009871)

C. Hurley Ex. 33 (JK00005929) (Tab 45) (Commercials
drive traffic to YouTube and prepared users for
YouTube’s eventual introduction of advertising)

King Ex. 7 (GO0001-01998280-81) (Tab 70) (“Offer
UMG the ad-inventory for the videos that we don’t have
publishing (we would have to run this by compliance)
as a way to keep them live on YT (Block embeds)”)
(GO0001-01998280)

King Ex. 2 (GO0001-01403792-93) (Tab 66) (Tony
Lee, Technical Product Manager: “Music content is a
key element to Youtube’s success. Premium music
content is the most watched genre of content on
YouTube. Thus, it is imperative that we acquire, and
allow content owners to claim, as much content as
possible to promote the growth and success of
YouTube... In addition, the ingestion of audio files will
allow us to match against audio portions of videos, thus
giving content owners the ability to claim more
content.”) (GO0001-01403792)

Chastagnol Ex. 8 (GOO001-01529251) (Tab 6) (“the
only thing I would be concerned is if we open the tool

44

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King Tr. at 151:12-24 (Tab 75) (“Do you have any idea
what that statement means, we don't have publishing for
certain videos as a way to keep them live on
YouTube’... “what this would be referring to is, at
times, for specific sound recordings where the — the
publishing has not been identified”)

King Ex. 7 (GOO001-01998280-81) (Tab 70) (“Offer
UMG the ad-inventory for the videos that we don’t have
publishing (we would have to run this by compliance)
as a way to keep them live on YT (Block embeds)”)
(GO0001-01998280)

GOO0001-00980438-39 (Tab 153) (Chastagnol: In the
risks I would add: business may not succeed having
Music Labels agreeing to provide us with music
publisher data... business may not succeed in getting a
3d party (such as Harry Fox) to collaborate with us to
clear remaining music publishing rights.”) (11/12/2007)

Levine Ex. 3 (GO0001-03424419) (Tab 83) (Levine:
“need to discuss YouTube’s protection against lawsuits
from publishers”)

GO0001-01609294-95) (Tab 158) (Chastagnol: “Music
publishing reporting: meeting notes... Priority: 1. Get
publisher data from all 4 US labels 2. Setup business
relationship with HFA. Eng should be involved to make
sure contract terms related to YT/HFA integration make
sense.”) (GO0001-01609294)

CH00050892 (Tab 147) (Attorney for Cherry Lane —
Marc Jacobson: “rather than assert a claim of
infringement in this letter, our clients asked us to
contact you with regard to developing an innovative
strategy where rights can be exploited, revenue
generated and an appropriate division of that revenue be
accomplished.”)

CH00001663-CH00001669 (Tab 144) (Follow up letter
attached disc of musical compositions owned or
controlled by Cherry Lane and another exhibit with
some exemplar URLs.)

CH00017947-48 (Tab 145) (DMCA takedown notice —
March 27, 2007)

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inventory. By selling advertising partnerships for us to obtain... “Head, torso, and top
space that is tied to key words, user content also drive YouTube's monetary success
advertising is thus targeted to the two-fold. First, more partnerships means more content,
videos being searched on YouTube, which means more user searches, Searches command
including videos that infringe the top ad CPMs (data here), and YouTube retains all
tights of Class Plaintiffs. Search revenue. Second, partnerships, especially with

attractive media brands, bolster ad sales packages and
and also create inventory for ads via their playbacks.
Advertising potential is a deal priority in every region,
particularly in EMEA and APLA.”) (GOO001-
00375065)

GO0001-00798356-57 (Tab 151) (Eun: “Preliminary
analysis suggests that: users don’t pay that much
attention to what’s in the chrome; as attractive as
potential for display and other ads are for watch pages
on YT, ads on search results can be significantly more
lucrative (so arguing over rev shares of in-display [sic]
or contextual ads with content owners is much ado
about relatively little when compared to our 100% of
search results).”) (GOO001-00798356)

Kordestani Ex. 20 (GO0001-01295801-02) (Tab 79)
(“Inventory... From a monetization perspective, the

largest opportunity for revenue resides on the YouTube
Search pages.”) (GOO001-01295802)

Kordestani Tr. 71:16-22 (Tab 81) Q. And that's
AdSense for content. There's also something called
“AdSense for search." How does that work? A It's
similar to searches on Google. So if a site has a web
search where a user is searching on a different, let's say,
Ask.com, then ads are triggered based on search terms.

GOO0001-02816985-88 (Tab 169) (Chen: “I was hoping
to do something quick to monetize that search results
page in the mean time but not at all excluding future
opportunities to further segment and target.”)
(GO0001-02816986)

Reider Ex. 11 (GO0001-00907818-19) (Tab 100)
(Reider: “we believe search will be stronger than watch
(for now)- simply because it will take such a long time
for all the watch content to be claimed and (for
inventory levels to get huge - today all watch page
inventory that can be sold is less than 20 million

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Contains Material Designated Confidential and Highly Confidential Pursuant to Protective Order

and they use it only for takedown without signing a deal
with youtube to upload some of their content. because
then just facilitate take downs.”)

Chang Ex. 32 (GO0001-00059035) (Tab 3) (“As agreed
upon last week, we will also employ a sliding scale on
rev shares for deals in which partner does *not* sell,
with increases between 52 and 70% being based on the
following subjective criteria:... Willingness to ‘claim’
all user uploads unless they have not been cleared for
online distribution.”) (emphasis added)

Chastagnol Ex. 19 (GOO001-00103004-06) (Tab 10)
(Chastagnol writes: “I’m trying to get to the business
the hardware and maintenance cost of adding 1 hour of
video to the reference fingerprint database. The idea is
that we may bill some of the companies wanting to block
content on YT, And we would use this per hour cost for
as price tag... Assumption is 300,000 lookup daily, with
5 min long lookup videos.”) (GO0001-00103004)

Ellerson Ex. 7 (GOO001-02875707-19) (Tab 20) (“We
will *not* generate ref fingerprint upon claiming by
partner of UGC > video thru desc search. The reason we
will no longer allow this feature [is] because we are
going to open up CYC to non-partners who we do not
think [we] can trust to review the content carefully
enough. CYC should have the [same] level of
functionality for partners and non-partners.”) (GOO001-
02875707)

King Ex. 13 (12/12/08) (GOO001-01519154-55) (Tab
71) (Sathya Sen writes: “The best that I can suggest, the
same as Canal +, is 3 business days, with a cap on the
number of claims (for Canal + it was a max of 10 over 3
days) they can make. The reasons for this, even though
it is a test setup, any claims they make will have to be
processed and considered as a valid take down request.
We don't want them using the test period to take down
every piece of content they think violates copyright. We
want to minimize the number of requests.”) (GOO001-
01519154)

39. YouTube edits, reviews,
promotes and distributes its inventory
of videos across multiple media

Seth Ex. 14 (GO00001-0202761 8-02027619) (Tab 112)
(“We are being very proactive at this time and reaching
out to users - however, we have to be very cautious and

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Kordestani Tr. 68:21-69:14 (Tab 81) (“Q How exactly
does Adsense work? Can you describe the process to
me? A: It's basically a website identifies an area on
their website where they like to have ads appear, and
ads are either targeted based on keywords, if they have a
search page, or if they have content on their page, we
have a system that identifies relevant ads to the content
on that page. Q: So, for example, if you go to the last
page of this Exhibit 2 that I’ve put in front of you, in the
middle of page it says, ‘AdSense for content
automatically crawls the content of your pages and
delivers text and image ads that are relevant to your
audience and your site content.” A: Yes. Q: Is that
what you were describing, it crawls the content? A:
Yes.”

31

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liberal interpretation, which would be a PC that can
connect to a television, it would be when we started
allowing YouTube videos to be embedded in other
websites. Q: Okay. A: Or actually even just when we
launched the YouTube service ‘cause you can connect to
a PC that has a browser. Q: If we exclude PCs from the
equation — A: Okay. Q: -- and we are talking about
things like set top boxes and gaming consoles and
devices of that category. When did YouTube begin
syndicating content to partners in that space? A: I believe
the first partnership of that sort was also with Apple, and
it was around Apple TV, and it may have been the exact
same agreement that -- through which we made
YouTube service available on iPhone.”)

40. Defendants generate revenue
from the sale of advertising space on
search result pages by matching
keywords from searches with the
metadata of the videos in YouTube’s

Chang Ex. 36 (GO0001-00375061-65) (Tab 4)
(‘Revenue will be generated from ads primarily on
Search pages (40%) ... The most popular queries are
for head content -- Music, Movies, TV, Celebrities, and

Sports — whose rights holders require negotiated

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“Also, content partners are an essential part of YT
business, as they provide monetizable inventory for our
ad sales team to sell against. Given copyright concerns,
we don't monetize against user generated content. We
want to be able to close these big partnerships and
hopeful that higher rev share will ease that slightly.”)
(GOO001-01004547)

Kordestani Ex. 22 (GO0001-00237661-63) (Tab 80)
(Hoffner: “This means BOTH monetizable via partners
and user unmonetizable. (There is a third bucket down
below we need to attack aggressively as well). We need
this to get more inventory so that the search numbers
continue to go up (concept of unlimited choice rings
through here) and more watch pages occur... Another
way to get more monetizable inventory in the index is to
aggressively expand our torso efforts to online sign-
up.”) (GOO001-00237661)

Drummond Ex. 9 (GO0001-02656593-94) (Tab 12)
(“for legal reasons [...] all ads/monetization on the
watch pages for user generated content will need to
come down. This will have a tremendous impact on
inventory.”)

(GOO001-02656593)

36. Defendants sell advertising in
connection with videos, including
contents that infringe the rights of
Class Plaintiffs. Those ads are
displayed both on the pages where the
videos are viewed (“watch pages”)
and on the search pages that list the
videos generated by a user search
(“search result pages.”) The
advertising is contextually targeted to
these videos by subject, title and
other metadata associated with the
videos.

Exhibits 1-8, Declaration of Robert F. Tur (Tab 113)
(C.D. Cal. November 14, 2006) (screenshots of
YouTube watch pages displaying advertising)

Drummond Ex. 9 (GO0001-02656593-94) (Tab 12)
(“for legal reasons [...] all ads/monetization on the
watch pages for user generated content will need to
come down. This will have a tremendous impact on
inventory.”)

(GO0001-02656593)

Chang Ex. 36 (GOO0001-00375061-65) (Tab 4) (“User
uploads, which make up >95% of the playbacks, are ad-
free in order to maintain our DMCA safe harbor.”)
(GOO001-00375065)

Chang Ex. 37 (GO0001-01004547-49) (Tab 5) (Chang:
“Given copyright concerns, we don’t monetize against
user generated content.”) (GO0001-01004547)

CH00117359 (Tab 35) (Watch page for “Thank God

42

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is the video, which is still digital fingerprint technology.
Q: So the question is, did YouTube ever tell Premier
League that the video fingerprinting technology would
only be available to Premier League if Premier League
licensed content to YouTube? A: Yes.”) (emphasis
added)

Hauprich (9/24/09) Ex. 6 (GOO-CH-0001-07) (Tab 33)
(YouTube emailed a draft “Content ID & Management
Agreement” with instructions to sign and return it to
YouTube.)

Hauprich (9/24/09) Ex. 7 (GOO-CH-0008-09) (Tab 34)
(After finally receiving a draft Content Identification &
Management Agreement in February 2008 (three
months after his initial inquiry), Mr. Hauprich submitted
questions and comments on the draft in April 2008.)

Hauprich (9/24/09) 95:3-13 (Tab 37) Q. When did
Cherry Lane first become aware of YouTube's
fingerprinting technology? A. I believe I found
something that I submitted my interest in the form of an
E-mail or a click here, maybe in October of 2007. It i
was a link I found that said click here for your -- you
know, if you are interested in video identification
services on YouTube.

Hauprich (9/24/09) Tr. 107:19-108:3 (Tab 38) — Q: Did
YouTube ever tell that is was non-negotiable? A:
Pursuant to their actions of ignoring my letter dated
April 23 until January of 2009, by their failure to
negotiate this with me in good faith for more than two
years, their performance has certainly told me it is non-
negotiable. i

Drummond Ex. 31 (GOO001-01511226-27) (Tab 13)
(February 15, 2007 - “Our CYC tools are now live as
well and are only offered to partners who enter into a
revenue deal with us... “The new CYC system has... 3)
Advanced text search tool. Enables partners to enter in
any number of search terms or strings, Partners can send
these terms to YouTube in an XML feed or enter them
manually. Searches can be narrowed or broadened and
all searches can be saved. YouTube will ‘push’ search
results to the partner in the form of a daily email
showing and matches. Partner gets a nice admin

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1290 Avenue of the Americas

New York, New York 10104

Phone (212) 468-8158

Facsimile (212) 468-7900

Attorneys for the National Music Publishers’
Association, Rodgers & Hammerstein
Organization, Stage Three Music (US), Inc.,
Edward B. Marks Music Company, Freddy
Bienstock Music Company d/b/a Bienstock
Publishing Company, and Alley Music
Corporation

Christopher Lovell

Christopher M. McGrath

LOVELL STEWART HALEBIAN LLP
61 Broadway, Suite 501

New York, New York 10110

Telephone: (212) 608-1900

Facsimile: (212) 719-4677

-and-

Jeffrey L. Graubart

LAW OFFICES OF JEFFREY L.
GRAUBART

350 West Colorado Boulevard, Suite 200
Pasadena, California 91105-1855
Telephone: (626) 304-2800

Facsimile: (626) 304-2807

-and-

Steve D’Onofrio

5335 Wisconsin Avenue, N.W. Suite 950
Washington, D.C. 20015

Telephone: (202) 686-2872

Facsimile: (202) 686-2875

Attorneys for The Music Force Media Group
LLC, The Music Force LLC, and Sin-Drome
Records, Ltd.

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GO0001-01179621 (Tab 157) (“more publisher
questions... We will most definitely receive conflicting
information about the same song from various sources. I
think the best way to manage this is to ‘add’ rather than
to ‘update’ information as it comes in. Much of the data
ends up serving reporting needs so as long as you give
people back the same garbage they provided, it is ok to
have discrepancies... Multiple policies for the same
song. I assume that a label could set policy on a song to
be ‘rev share’ and then a publisher could upload info
about this song and set policy to ‘block’ in which case,
the policy for the song will just become block.
Unfortunately, it only takes one block to screw up
everyone else’s rev share, but we should still keep the
info we got from everyone in case we can convince the
one blocking partner to change their mind.”) (emphasis
added)

King Ex. 6 (GO0001-01517864) (Tab 68) (“actually we
don’t want to turn on fingerprint matching for music

partners [in April 2007], because we don’t have clear

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I’m a Country Boy” with advertising)

Screenshots of Search Pages from YouTube generated
on March 3, 2010 (Tab 183-187) (Search terms are
associated with the named Class Plaintiffs.)

37. YouTube concluded that tying
advertisements to the videos on.
search result pages is the most
profitable because users are drawn to
YouTube in the first instance to
search for so-called “premium”
content .

Eun Ex. 27 (GOO001-00238624-25) (Tab 25)

(June 26, 2007: “Our preliminary analysis indicates that
anywhere from ~40% to as high as ~70% of search
queries may involve premium terms. While the
playbacks evidence a far smaller percentage of premium
clips (as far as we can tell without digging too much
under the hood), it seems that premium content/brands
are an important element to bringing people into the YT
house. My guess is that once they’re in, they decide to
stay a while, I’ve asked to see if there’s a difference in
total views for people who come in through search vs.
browsing vs. links in email; and whether there’s a
difference for those who have searched for premium
terms.”) (GO0001-00238624) (emphasis added)

Kordestani Ex. 20 (GOO001-01295801-02) (Tab 79)
(“Inventory... From a monetization perspective, the
largest opportunity for revenue resides on the YouTube
Search pages.”) (GOO001-01295802)

Reider Ex. 11 (GOO001-00907818-19) (Tab 100)
(Reider: “we believe search will be stronger than watch
(for now)- simply because it will take such a long time
for all the watch content to be claimed and (for
inventory levels to get huge - today all watch page
inventory that can be sold is less than 20 million
impressions/month so even at a $10 cpm that is
$200,000 - split 70/30 among all partners.”) (GOO001-
00907818)

Gillette Ex. 9 (GOO001-0095 1481-83) (Tab 29)
(Michelle Schlachta to YouTube —All: “In many cases,
the very existence of YouTube is the reason why users
are creating their content in the first place. Many people
admittedly started using YouTube just to watch some of
the copyrighted stuff, but were very drawn into the
community aspect - and that’s what makes them want to
stic= [sic] around as dedicated Tubers today. When
asked what keeps them here, this = s [sic] what some
users told us.”) (GOO001-00951482)

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holders to register their works so we know what known
content is. We take these measurements, and then we
put these measurements into a database. Then with our
customers, the UGC sites, we give them software to
take measurements of unknown content, and when --
after they take these measurements, then we can
compare it to our database of known references and
identify and match the content. The way we provide
services to the Web 2,0 customers is, they do have
software. Users may upload content to these sites, and
they use our services to -- to identify the -- the -- the
copyrighted content using our services.”).

K. Walker Tr. 71:23-72:16 (Tab 114) (“There’s another
distinction as well, which is, music content is perhaps
uniquely legally complex because of the number of
overlapping and sometimes inconsistent rights
associated with it. There are a wide number of different
rights that are owned by the performer, the creator, the -
- the publishers, the labels, the collecting societies in
Europe, et cetera, and each of those entities can own
toultiple rights, which sometimes align and sometimes
do not. As a result of that, there are complexities
associated with that, which I believe the Audible Magic
system had been optimized for, both in terms of the
technological operation of the system and the assembly
of a database, which was designed to track all of the --
the complex music rights associated with it. As the
name Audible Magic itself suggests, it was a music tool,
at least that was my understanding.”

Chastagnol Ex. 9 (GOO001-00174229-30) (Tab 7)
(Discussion of Audible Magic, Gracenote and Shazam
as fingerprinting services) (GOO001-00174229-30)

Oliver Weingarten (12/16/09) Tr. 246:1-247:2 (Tab
124) (“Q”: Did you understand that -- let me ask it this
way: Did YouTube tell Premier League that, in order to
participate in the trial of the video fingerprinting
technology, that it would need to license content to
YouTube?... A: They did at a meeting prior to this date.
Q: They said what? A: They said that the technology
was being offered to those who they had commercial
partnerships with... Q: I am talking specifically about
the YouTube video fingerprinting technology that was
the subject of some of these e-mails?... A: That, to me,

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impressions/month so even at a $10 cpm that is
$200,000 - split 70/30 among all partners.”) (GOO001-
00907818)

GO0001-07165570-7165572 (Tab 174) (Matthew Liu:
“Here at YT we have a very high priority in monetizing
YT search pages. YT search is fundamentally different
from Google.com, in that keywords are not always the
best proxy for what a user may be interested in (it’s less
of a seek for information/products as a looser browse
experience in many cases). Throw in some additional
business/legal policy, we decided to roll forward with
targeting search verticals instead of keywords.
Basically, we wanted to have a keyword to vertical
mapping system to bucket search queries into
marketable categories that advertisers can purchase.”)
(GOO001-07165570)

GO0001-02816985-2816988 (Tab 169) (Byme: “We
bundle inventory (site-wide category-targeted video ads
/ banners) or approve Category targeting in Search ... I
believe we can figure out a way to do this without
violating safe harbor... Chad’s idea of using how the
individual videos on the results page are categorized to
project a Category for the entire Search Results page
makes the most sense to me... (I have a hard time
understanding how we can target by Category on Watch
Pages, but not in Search)”) (GOO001-02816985)

GO0001-02737286-87 (Tab 168) (Walk: “If Partner
Monetization is the focus should we work less on
monetizing the site for ourselves (search page
monetization) and focus those efforts on making money
for partners? Take that 300x250 slot and put it below
the promoted videos?”) (GOO001-02737286)

Chang Ex. 29 (GO0001-00500181-85) (Tab 2) (“The
one caveat I would issue is that if we are able to open up
watch pages to monetization through video
fingerprinting and user-partner type programs, the
monetization potential of watch changes significantly.
Ultimately I think we will solve these problems, but
these projections stand under current conditions.”)
(GOO001-00500181)

Reider Ex. 9 (“YouTube Video Ads”) (Tab 99)

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other people’s property”, with the presentation notes
indicating that “ASCAP, BMI and SESAC are excellent
resources for identifying the copyright holder for a
particular piece of musice [sic].”) (GOO001-01027036)

Levine Ex. 3 (GOO001-03424419) (Tab 83) (Levine:
“need to discuss YouTube’s protection against lawsuits
from publishers”)

GO0001-01609294-95) (Tab 158) (Chastagnol: “Music
publishing reporting: meeting notes... Priority: 1. Get
publisher data from all 4 US labels 2. Setup business
relationship with HFA. Eng should be involved to make
sure contract terms related to YT/HFA integration make
sense.”) (GOO001-01609294)

King Tr. 215:24:-217:7 (Tab 76) (King: “publisher data
was publicly accessible through a variety of websites.”)

GOO0001-01609294-95 (Tab 158) (Chastagnol:
“Publisher aggregators: who are they? - HFA is one
(Harry Fox) -any other”; setup business relationship
with HFA. Eng should be involved to make sure that
contract terms related to YT/HFA integration make
sense.”) (GOO001-01609294) (10/29/2007)

GO0001-00053573-74 (Tab 150) (“Where is the |
universal database of all the copyrights and trickled |
down ownership splits? should someone in the industry :
create/ allow self-population of such a universal i
database. and then maybe someone even serve as a i
third-party clearinghouse... should ‘we’ i
(google/youtube) do it?”) (GOO001-00053573)

GO0001-00980438-39 (Tab 153) (Chastagnol: In the i
risks I would add: business may not succeed having i
Music Labels agreeing to provide us with music
publisher data... bueins may not succeed in getting a 3d
party (such as Harry Fox) to collaborate with us to clear
remaining music publishing rights.”) (11/12/2007)

Levine Tr. 19:6-12 (Tab 88) [Levine believed the Harry
Fox “represented... somewhere between 65 and 75
percent [of the market.”)

Zahavah Levine Tr, 13-14, 18 (Tab 87) (Levine’s prior

24

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King Ex. 21 (12/12/08) (GO0001-01613336-38) (Tab
73) (Kyle Harrison to King: “The purpose of this project
is to explore opportunities to open Video Identification
API to third party UGC sites... Why would third party
UGC sites use such a service? The problems this
service could solve for them include: Identification. We
could identify copyrighted content across their site and
within new uploads... Basic Requirements and
Timing... To offer the core service of Identification, the
following items in place: Fingerprint Generator.
Partners need to be able to generate fingerprints of their
content to deliver to YouTube. We cannot expect to
require them to give us their original content.”)
(GOO001-01613336-37)

David King (12/12/08) Tr. 229:17- 231:5 (Tab 77) (“Q:
Okay. Before we get into this document in any depth,
Mr. King, are you aware of discussions internally at
YouTube/Google to turn any of the content
identification systems or technology into products that
YouTube/Google licensed to third party websites?”)
MR. HART: Could license to third parties.... THE
WITNESS: J think our video identification platform is a
-- is a platform that we’re proud of, and we have
considered making it available to third-party
websites. ”) (emphasis added)

Ikezoye Ex. 10 (AM000836-844) (Tab 50) (Chastagnol:
“By owner I meant which media company represents the
artist (Warner, Sony, Viacom,...). Initially, we will ask
you to populate the reference fingerprint DB with the
catalog of only one of those companies. (BTW, I assume
this is something you can do, correct?) But as we sign
new contracts, we will add catalogs from other
companies. So from fingerprint match API response, we
would need a way to tell if it is a match for a Warner
item, a Sony item, etc...”) (AM000836-837)

Ikezoye Tr. 81:7-24 (Tab 53) (Q. “So your
understanding of the arrangement -- is it your
understanding of the arrangement that as YouTube
signed new contracts with content owners, YouTube
would then request that that content owners’ fingerprints
be put into the YouTube custom database?.., A: That was
my understanding, and yes. Q: Okay. Is that -- is that

35



Contains Material Designated Confidential and Highly Confidential Pursuant to Protective Order

interface showing all the matches. Partner is responsible
for reviewing the matches and per the DMCA
identifying their content. If the partner identifies content
they are given the choice to either license or block the
content. Any content the partner identifies is
automatically audio fingerprinted and placed in the
Audible Magic database so the entire process gets
smarter over time.”) (GOO001-0151 1226-27)

King Ex. 13 (12/12/08) (GOO001-01519154-55) (Tab
71) (Sathya Sen writes: The best that I can suggest, the
same as Canal +, is 3 business days, with a cap on the
number of claims (for Canal + it was a max of 10 over 3
days) they can make... We don't want them using the
test period to take down every piece of content they
think violates copyright. We want to minimize the
number of requests. If they want to use our tools to help
them monitor copyright content and claim them, they
will have to work with us as a partner.”) (emphasis
added) (GO0001-01519154)

30. Rather than avail itself of
existing third party technology,
Google’s strategy was to develop its
own proprietary fingerprinting
technology to create a product it
could license to third parties, even
though that both limited and delayed
copyright protection tools for content
owners.

Chastagnol Ex. 9 (GOO001-00174229-30) (Tab 7)
(oig: “I think this is core technology we need to build
and control ourselves. So the current approach is to only
use AM as little as possible and proceed with building
our own database at the same time. This would require
us either getting all the source files (preferred) or
distributing fingerprinting tools which content providers
use.”) (GOO0001-00174229)

King Ex. 23 (12/12/08) (GOO0001-02191925-27) (Tab
74) (King: “our position has been that we first want to
have a pilot with [GJoogle video fingerprinting” and
that by “remaining ignorant of the intricacies of industry
solutions,” [Defendants could] “proceed untainted by
others IP.”) (GOO001-02191925)

King Ex. 2 (12/12/08) (GOO001-01403792-93) (Tab
66) (Tony Lee, Technical Product Manager: “Audio
Fingerprinting is the YouTube’s next step in allowing
music copyright owners to claim and monetize content.
Currently, Audible Magic, a 3rd party matching service,
allows YouTube to conduct audio matching of content.
However, this service is imprecise, and YouTube has to
pay a fee to use the service. Thus it is vital that YouTube
develop its own audio matching service, along with the
requisite reference database.”) (GOO001-01403792)

34



Contains Material Designated Confidential and Highly Confidential Pursuant to Protective Order

TO:

Andrew H. Schapiro, Esq.
A. John P. Mancini, Esq.
Matthew D. Ingber, Esq.
MAYER BROWN LLP
1675 Broadway

New York, NY 10019-5820
Telephone (212) 506 2500
Facsimile (212) 262 1910

David H, Kramer, Esq.

Michael H Rubin, Esq.

Bart E. Volkmer, Esq.

WILSON SONSINI GOODRICH & ROSATI
650 Page Mill Road

Palo Alto, CA 94304

Telephone (650) 493 9300

Facsimile (650) 493-6811

Attorneys for Defendants

56


Contains Material Designated Confidential and Highly Confidential Pursuant to Protective Order

licenses for them (publisher issue).”)

GO0001-01053199-205 (Tab 155) (“met up with EMI
to explain our ID service, and the option of using
Audible Magic within our platform. Also walked them
through our needs of licensing information, and
particular need for music pubisher information to fully
clear their catalog. This was our chance to talk to the
technical leadership of EMI, and make our case.
Hopefully this unlocks their catalog.”)
(GO0001-01053201)

Chastagnol Ex. 12 (GO0001-01676559-62) (Tab 9)
(“(Audible Magic) “suggested we check [fingerprints]
against their entire reference database and then have
flags for the Warner content (ignore other matches).
This is not only a hassle but probably violates DMCA
safe harbors.”) (GOO001-01676559)

Ikezoye Ex. 16 (AM001620-22) (Tab 51) (“would you
be able to populate the live DB but ‘wire-off’ matches
for Sony and Universal ? because I’m thinking another
strategy would be to populate the DB with Warner+
Sony+Universal. At launch, return matches only on
Warner content. Then at some point in time wire-on
Universal content, then Sony.... please for now only
include Warner catalog.”) (AM001620)

GOO0001-02910519-02910523 (Tab 182) (Maxcy: “I
thought we weren’t allowing co’s to use UGC as
reference material... King: the guidelines are, only give
the feature to partners that ask for it (we can toggle the
feature off in admin).”)

29, When financially beneficial to
Defendants in relationships with
favored, select counterparties, the
Defendants offer certain content
owners technical measures,
commonly known as “fingerprinting,”
to match sound or video reference
files with copyrighted content on
YouTube.

Ikezoye Tr. 15:10-16:11 (Tab 52) (“Q: We'll obviously
be talking more about this as the day goes on, but can
you describe, in a very general sense, what it is Audible
Magic does for its digital media customers when you’ve
said ‘identify copyrighted content’? A: We use a
technology called fingerprinting, and what
fingerprinting is, is a mechanism to uniquely identify a
piece of copyrighted content. There are -- these
fingerprints are measurements of the content that
become unique to a sound recording or to a soundtrack
or to a -- an image, and so we work with copyright

31



Contains Material Designated Confidential and Highly Confidential Pursuant to Protective Order

platforms.

make sure that users in this program know about
copyright laws and obey them to the fullest extent
possible. That is the tricky part. We provide online
training, as well as use technology (Video Identification)
and some human review.”)

YouTube Help Center ‘Uploading... Promoting
Videos... (“‘Tag definition’... Tags are keywords that
describe videos. For example, a surfing video might be
tagged with ‘surfing,’ ‘water,’ and ‘waves.’ Users who
enjoy watching surfing videos can then search for any of
those terms and the video associated with these tags will
show up in their search results. Tags help you label
videos you upload so that other people can find them
more easily... “Spotlight Videos”... YouTube's
members rate videos they like, and we pluck out some
highly-rated and recent videos for consideration in the
“Spotlight Videos” section of the home page and the
spotlight videos on the “Categories” page. In addition,
our programming team takes suggestions from users

at editor@youtube.com and is always on the lookout for
videos of interest.”) (Tab 143)

Dunton Tr. 29:23-30:6 (Tab 17): Q: Okay. And I’m
asking what the people — what were the duties of the
people who you referred to as ‘content editors’? A:
They were responsible for interacting with the
community. They were generally the voice to the
community. They were also responsible for choosing
videos that would be featured on the YouTube.com
Homepage.

Dunton Tr. 94:9-14 (Tab 19): (A: Featured videos are
videos on the YouTube.com Homepage that are selected
from our -- from our base of videos. Q: Selected for
what purpose? A: To highlight, to show entertaining,
relevance, content for our community.”)

Patterson Tr. 15:6-9 (Tab 95) (“Q: One category of
partners to whom YouTube syndicates content are
wireless carriers and mobile handset device
manufacturers, right? A: That’s correct.”)

Patterson Tr. 18:18-19:4 (Tab 96) (“When did YouTube
first begin syndicating content to partners in the devices
that connect to televisions space? A: So in the most

46



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GO0001-01332719-01332722 (Tab 179) (Chan: “Even
if the intent/explanation doesn't hold true - there are
certain DMCA limitations which don't allow us to
monetize against certain keywords (e.g., if we find out
South Park is heavily searched, we wouldn't necessarily
be able to monetize that keyword in search)”).

GOO001-07220441 (Tab 180) (“A new ad tag (e.g.
you.results/blacklistterm) will be used so that the
frequency of blacklisted terms can be tracked.”)

41. Defendants sold advertisements | Reider Ex. 13 (Tab 101) (“English Premier League
that appear on search result pages that | 2008” results)
display and link users to unauthorized | Reider Ex. 14 (Tab 102) (“manchester united” results

copyrighted content of the named with suggestions)
Class Plaintiffs. Reider Ex. 15 (Tab 103) (“English Premier League
2008” results)

Screenshots of Search Pages from YouTube generated
on March 3, 2010 (Tab 183-187) (Search terms are
associated with the named Class Plaintiffs.)

Dated: New York, New York
March 15, 2010
Respectfully submitted,

fall hewn

Louis M. Solomon

William M. Hart

Hal S. Shaftel

Noah Siskind Gitterman
Elizabeth Anne Figueira
PROSKAUER ROSE LLP
1585 Broadway

New York, NY 10036
Telephone: (212) 969-3000

52



Contains Material Designated Confidential and Highly Confidential Pursuant to Protective Order

Defendants exploit without
authorization on YouTube.

YouTube designed systems and
databases, including Claim Your
Content (“CYC”), to monitor,
manage, and monetize infringing
content, but only made these tools
available to favored, select
counterparties.

proactively on the site.)

Ellerson Ex. 10 (GO0001-02519867-73) (Tab 22)

Eun Ex. 25 (GO0001-00986823-26; GOO001-
00986825-997) (Tab 24)

27



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CH00035504-08 (Tab 146) (DMCA takedown notice —
May 17, 2007)

33. YouTube indexes its inventory
of videos by, among other things, a
title and certain descriptives provided
by users (“metadata”), and uses that
metadata a variety of purposes,
including associating advertising with
particular videos.

Defendants’ Highly Confidential Responses and
Objections to Plaintiffs Second Set of Interrogatories,
No. 5 (1/11/10): “... in addition to the information
YouTube collects from its users upon registration and at
various other times and places during their use of the
YouTube service, YouTube has collected the following
unverified information from general registered users
upon the upload of videos... keywords... title...
description... 1-3 video categories (e.g. ‘autos,’ “how
tos”)... private”) (Tab 140)



Contains Material Designated Confidential and Highly Confidential Pursuant to Protective Order

acknowledged that providing a tool
that would alert a copyright owner
that an uploaded video contained a
specified keyword associated with the
copyright owner “isn’t hard” to
provide, but “hate[d] making it
easier” for copyright owners.

Rizzo explained that setting up that tool “isn’t hard” and
would only “take another day or w/e [weekend].” But
Dunton said “[I] hate this feature. I hate making it
easier for these aholes” — referring to copyright owners
—and directed the engineer “to forget about this.” As
she explained, “we’re just trying to cover our asses so
we don’t get sued.”)

(GOO001-00829704)

35. Defendants refer to videos on
YouTube as “inventory” for purpose
of selling to advertisers and otherwise
monetizing.

King Ex. 4 (GO0001-01404022) (Tab 67) (YouTube
wanted more “sports content to monetize... From a
copyright perspective, clearing music inventory is our
most important initiative...”.)

Reider Ex. 3 (GO0001-00305115-52) (Tab 97)
(“Advertising with YouTube” Presentation, March
2007)... Professional inventory available across
YouTube content categories.” (GOO001-00305135)
“Premium UGC inventory meets acceptability standards
and contains no potentially infringing content”
(3051356)

“YouTube Premium content inventory increases daily as
new partners create channels and upload videos”
(305137)

“Advertisers can purchase inventory run-of or by
category (premium content not sold by-brand or partner
name)” (GO0Q001-00305137)

July 16, 2009 — Fair Disclosure Wire — Q2 2009 Google
Earnings Conference Call — Final (Tab 142) “(HEATH
TERRY: And in terms of being able to monetize the
non-professional side of that inventory? ERIC
SCHMIDT: It has not been our focus. It is probably
possible to do so, but the fact of the matter is that the
majority of the non-professional content has a relatively
small number of viewers. It is difficult to target it
accurately. There is too much variation and so forth,
whereas the professional here, and remember,
professional here just doesn't mean big studios. It also
means smaller studios, new entrants, startups who are
professional quality, and you can tell a professional
quality video from a user-generated one. It is easy
enough. You can tell the difference between the two.”)

(p. 10)
Chang Ex. 37 (GOO001-01004547-49) (Tab 5) (Chang:

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information by publisher and # of views.”) (GOO001-
01403792)

25. Defendants refused to negotiate
and secure licenses from music rights
owners whose works appear on
YouTube without authorization, in
situations where the specific content
owner represents only a “small
market share.”

Hauprich Tr. 274:24-275:12 (Tab 36) (Chris Maxcy
informed Cherry Lane’s Vice President of Business
Affairs Keith Hauprich that YouTube would not enter
into license negotiations because Cherry Lane
represented a “small market share”.)

GO0001-00021120 (Tab 149) (“So the Cherry Lane
thing sucks. Had we been in touch and they still sued?
I’m just wondering if we should be devoting the entire
team’s time to just publishers (and big indies) to try to
stem litigation?”)

26. By their own analysis of
content, including infringing content,
on YouTube, Defendants recognized
professionally produced news and
other programming as among the
array of content attracting substantial
viewership.

B. Hurley Ex. 7 (GOO001-00629095) (Tab 40) (Brent
Hurley: “music videos and news programs are fine to
approve.”) (“take down XXX stuff. everything else keep
including sports, commercials, news, etc.”)

C. Hurley Ex. 38 (GO0001-01424047-48) (Tab 46)
(Karim “Re: monitoring videos. ..let’s keep short news
clips for now. we can become stricter over times, just
[sic] not overnight.”) (GOO001-01424047)

Karim Ex. 25 (JK00009933-34) (Tab 62) (referencing
news content)

27. Movies and TV shows are other
examples of premium content that

Schaffer Ex. 8 (GOO001-00840004-06) (Tab 106)
(YouTube chart for tracking entertainment content



Contains Material Designated Confidential and Highly Confidential Pursuant to Protective Order

“Benefits... * Search and Category pages present
content related to user interests at the moment of
relevance, creating an attractive, contextually-relevant
placement...

+ Target placements on Search pages by selecting from
among YouTube’s hundreds of content categories,
triggered by relevant user keyword queries”

Armstrong Ex. 18 (GO0001-00906824-52) (Tab 1)
(Category-Based Sales Approach — Targeting...
Music... Sports) (GOO001-00906837)

GO0001-01644802-03 (Tab 159) (“YT Custom
Taxonomy/Mapping* - Continuing efforts with Santa
Monica office to create a new taxonomy and automated
classification of search query terms and videos -
Interested parties are core product for community and
ads targeting for monetization - joint effort - New YT
categories/subcategories to defined by next meeting”)
(GOO001-01644803)

GO0001-06510250-06510252 (Tab 181) (Liu:
“Updating Targeting Methodology for YouTube
Search... YouTube will take the search query and ping
the CAT2 vertical server to return an ad vertical (e.g.
‘nba’ query maps to Sports/Basketball' vertical”)

Reider Tr. 33:7-17 (Tab 104) (“Q: And does YouTube
still engage with remnant networks today, or is that
something that YouTube only did in the past? A:
Today we have one. I believe one network, and that's
the AdSense network. Q: What is AdSense? A:
AdSense is — it’s a Google -- it's a Google product. It’s
—it’s a - I don’t even know how to describe what it is.
Q: What does it do? A It serves ads.”)

P. Walker Tr. 200:8-22 (Tab 120) (“Is AdSense applied
to designating which ads appear on YouTube content?
A: AdSense is an advertising system where text ads,
currently text ads, might appear against certain types of
content. Q: It’s applicable to YouTube? A: We do
use AdSense on YouTube. Q: Is there any other
system or technology that’s used for matching ads with
the YouTube content?... AdSense provides ads
currently in text form against certain types of content.
We also have in-video ads. It’s a different system.”)

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work experience at Real Networks)

Zahavah Levine Ex. 1 (GOO001-01040767-70) (Tab
82) (Resume: “Managed all aspects of domestic and
international digital music licensing for all company
music products and services, including Rhapsody
Subscription Service RadioPass (webcasting service),
SuperPass (video content Subscription service),
RealPlayer Music Store (download store) and Music
Videos... Negotiated all major label agreements &
managed negotiation of indie label agreements...
Negotiated all publishing agreements and managed
relations with Harry Fox Agency, ASCAP, BMI &
SESAC.” (GO0001-01040767)

Karim Ex. 22 (JK00004969) (Tab 61) (Chen: “for these
mixed videos with music backgrounds, will we get in
trouble for them because the music is copyrighted?”)

GO0001-1315683-85 (Tab 175) (Shiva Rajaraman:
“There should be no zero rate house ads on Partner
Watch. Only zero rate blockers should be Music
Partners inventory on the regions we cannot monetize
due to music publisher agreements that need to be
negotiated.”) (GOO001-01315685)

King Ex. 2 (GO0001-01403792-93) (Tab 66) (Tony
Lee, Technical Product Manager: “Thus, it is imperative
that we acquire, and allow content owners to claim, as
much content as possible to promote the growth and
success of YouTube... YouTube cannot monetize
content that does not have publisher data, as we have no
way to report to and pay publishers, who share
ownership of songs with music labels; currently, only
music label data is available to us. By opening up our
systems to ingest publisher data as well as label data per
song, content on YouTube can then be claimed and
monetized. In addition, the ingestion of audio files will
allow us to match against audio portions of videos, thus
giving content owners the ability to claim more
content... Reporting / Collection societies (Owner) need
to report to the collection societies # of views for songs,
and the collection societies will handle payment to the
publishers (EMEA) / Publisher (Owner) will get
information on # of views, and will be paid directly
Aggregator Labels (Owner) will get reporting

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Contains Material Designated Confidential and Highly Confidential Pursuant to Protective Order

Email: lsolomon@proskauer.com

Max W. Berger

John C. Browne

BERNSTEIN LITOWITZ BERGER &
GROSSMANN LLP

1285 Avenue of the Americas

New York, NY 10019

Telephone: (212) 554-1400

Email: mwb@bibglaw.com

Attorneys For Lead And Named Plaintiffs And
Interim Class Counsel For The Prospective
Class

Daniel Girard

Aaron Sheanin

Christina Connolly Sharp

GIRARD GIBBS LLP

601 California Street, 14th Floor

San Francisco, CA 94108

-and-

Gerald E. Martin

Laurel Johnston

BARRETT JOHNSTON & PARSLEY
217 Second Avenue North

Nashville, TN 37201

-and-

Kevin Doherty

BURR & FORMAN LLP

700 Two American Center

3102 West End Avenue

Nashville, TN 37203

Attorneys for Cal IV Entertainment LLC

David S. Stellings

Annika K. Martin

LIEFF CABRASER HEIMANN &
BERNSTEIN, LLP

250 Hudson Street, 8th Floor
New York, NY 10017-2024
Tel. (212) 355-9500

Fax. (212) 355-9592

-and-

Jacqueline Charlesworth
James E. Hough
MORRISON & FOERSTER

53

i
|
1

sm


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hypothetical, or is that actually what happened, if you
know?...A: J know, in general, that the database was a
subset. I don’t know if every piece of content in there
was related to a company that had a licensing
agreement.”) (emphasis added)

Chastagnol Ex. 11 (AM002946-53) (Tab 8) (Jim
Schrempp of Audible Magic to Chastagnol: “you will
remember that the business side of YouTube wanted an
extremely cheap — really, really, really cheap — deal
from us. They were willing to cut out all kinds of
features to get the price lower.”) (AM002946)

King (1/13/10) Ex. 6 (GOO001-00981006-10) (Tab 69)
(Jim Schrempp of Audible Magic: “For your
application a reference fingerprint should come from an
offset of 0 and a duration of 60. You may remember that
we had discussed doing a more expensive search of the
YT database, but that was decided to be out of scope.”)
(GOO001-00981008)

ni em

31. In situations where it advances
their financial interests, Defendants
have a practice of offering licenses to
favored, selected licensors of content,
both in the United States and in other
territories.

SonyATV (GO0001-09684819-850) (Tab 170)

EMI Music Marketing (GOO001-01907142-7190) (Tab
161)

Universal (GO0001-02241782-1835) (Tab 164)
Warner (GOO001-03424742-78) (Tab 171)

SESAC (GO0001-02245062-02245067) (Tab 166)

MCPS-PRS (GOO001-02242093-02242149) (Tab 165)
(2.1 Grant of Licence: Subject to and conditional upon
compliance with the terms... MCPS grants the Licencee
a non-exclusive licence during the Term, to reproduce
(including by way of synchronization) Repertoire
Works... for the sole purpose of transmitting the same
to Users... in the UK by means of the Licensed
Services.”)

GEMA (GO0001-02240224-36) (Tab 163) (2.1
Licensor grants Licensee and its Affiliates a license to
(a) reproduce Repertoire Works... including by way of
synchronization, (b) communicate Repertoire Works...
to the public in particular by transmitting or making
available to the public and to authorise to transmit or
make available to the Public Repertoire Works.”)

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Drummond Ex. 31 (GO0001-01511226-27) (Tab 13)
(February 15, 2007 — “The new CYC system has... 3)
Advanced text search tool. Enables partners to enter in
any number of search terms or strings. Partners can
send these terms to YouTube in an XML feed or enter
them manually. Searches can be narrowed or broadened
and all searches can be saved. YouTube will ‘push’
search results to the partner in the form of a daily email
showing and matches. Partner gets a nice admin
interface showing all the matches. Partner is
responsible for reviewing the matches and per the
DMCA identifying their content. If the partner identifies
content they are given the choice to either license or
block the content. Any content the partner identifies is
automatically audio fingerprinted and placed in the
Audible Magic database so the entire process gets
smarter over time.”)

34. YouTube internally

Dunton Ex. 21 (GOO001-00829702-18) (Tab 16) (Matt

40