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Ninth Circuit Upholds DMCA Safe Harbor for Online Video-Sharing Site Veoh
Practical Law Legal Update 5-517-0198 (Approx. 5 pages)
Ninth Circuit Upholds DMCA Safe Harbor for Online Video-Sharing Site Veoh
by PLC Intellectual Property & Technology
| Published on 28 Dec 2011 • USA (National/Federal) |
In UMG Recordings, Inc. v. Shelter Capital Partners, Inc., the Ninth Circuit Court of Appeals affirmed the district court's summary judgment ruling that Section 512(c) of the Digital Millennium Copyright Act (DMCA) (the system storage safe harbor) insulated Veoh Networks from copyright liability resulting from acts of its users.
Key Litigated Issues
In UMG Recordings, Inc. v. Shelter Capital Partners Inc., the key issue was whether Veoh Networks, which operated an online video-sharing website on which users posted infringing content, could rely on Section 512(c) of the Digital Millennium Copyright Act (DMCA), which limits service provider liability for copyright infringement by reason of the storage at the direction of a user (17 U.S.C. §512(c)).
UMG, the holder of various copyrights infringed by users on Veoh's site, claimed that Veoh was ineligible for Section 512(c) safe harbor protection because Veoh:
- Used automated software processes that modified the size and format of uploaded videos to facilitate user access, so the alleged infringements were not caused "by reason of the storage at the direction of a user" but by this other activity (see 17 U.S.C. §512(c)(1)).
- Had actual knowledge of the infringement or was aware of facts and circumstances under which infringing activity was apparent (red flag knowledge) (see (17 U.S.C. §512(c)(1)(A)).
- Received financial benefit directly attributable to infringing activity that it had the right and ability to control (see 17 U.S.C. §512(c)(1)(B)).
Background
Veoh's website allows users to post and share videos through streaming and download. To post a video, Veoh requires users to agree to its terms and conditions of use, which prohibit the posting of any infringing content and give Veoh a license to display and distribute the uploaded video through its online service. When a user uploads a video, certain automated software processes take place to make the video accessible to others, including breaking down the video into smaller-size "chunks" and converting the video into certain formats.
Veoh had in place filtering software that sought to flag infringing content for removal. Veoh had also adopted a policy of terminating users that repeatedly uploaded infringing material and terminated thousands of user accounts.
Despite Veoh's efforts to prevent copyright infringement on its site, some users downloaded unauthorized videos containing songs for which UMG owned the copyright. UMG sued Veoh for direct and contributory copyright infringement and for inducement of infringement. Before UMG filed its complaint, the only notices Veoh received concerning alleged infringement of UMG works were sent by the Recording Industry Association of America (RIAA). UMG did not dispute that Veoh removed the material located at the links identified in the RIAA notices.
The district court granted summary judgment in favor of Veoh, finding that it met the Section 512(c) safe harbor requirements. UMG appealed.
Outcome
The majority's December 20, 2011, decision affirms the district court's ruling that Veoh met Section 512(c)'s safe harbor requirements. The Ninth Circuit held that:
- Section 512(c)'s threshold requirement that the infringement occur "by reason of the storage of the copyrighted material at the direction of a user" encompasses the access-facilitating processes that automatically occur when a user uploads a video to Veoh's site.
- Veoh's mere hosting of a category of copyrightable content with the general knowledge that its services could be used to share infringing material was not enough to show actual knowledge or red flag knowledge required to disqualify Veoh from protection. Also insufficient to show the requisite knowledge were Veoh's:
- tagging of videos as "music videos;"
- purchase of Google AdWords that included the names of UMG artists;
- removal of unauthorized content in response to notices from other copyright owners; and
- deficient notices from other copyright owners.
- Veoh's general right and ability to remove materials from its services did not rise to the "right and ability to control" the infringing activity required to disqualify it from the safe harbor. The court held that this limitation requires control over specific infringing activity the service provider knows about.
The Ninth Circuit also emphasized its previous decisions finding that Section 512(c)'s safe harbor is not conditioned on a service provider monitoring or investigating its service for infringing activity. Rather, copyright owners have the burden of policing online copyright infringement.
Practical Implications
The Ninth Circuit decision provides a victory for online service providers that store and host user content by holding that a service provider's general knowledge that its services could be used to share copyright-infringing material alone is not enough to eliminate DMCA safe harbor protection.
Similar DMCA safe harbor issues are the subject of a pending appeal in the US Court of Appeals for the Second Circuit in Viacom Int'l, Inc. v. YouTube, Inc., which the Second Circuit is expected to decide shortly. At the district court level, the Southern District of New York ruled in favor of YouTube, finding that general knowledge of infringement occurring on the site was insufficient for purposes of the DMCA (718 F. Supp. 2d 514 (S.D.N.Y. 2010)).
For a sample DMCA takedown notice, see Standard Document, DMCA Complaint (Takedown Notice). For a sample DMCA website policy, see Standard Document, Website Copyright/DMCA Policy.