Veoh Networks may no longer be in business, but its name will live on in the annals of intellectual property law for solidifying Digital Millennium Copyright Act (DMCA) safe harbor protections for the online community.
Thursday, the Ninth Circuit Court of Appeals ruled in Veoh’s favor once again in a multi-year battle between the defunct video sharing site and Universal Music Group (UMG), according to The Hollywood Reporter. In doing so, the appellate court found that “red flags” of infringement weren’t sufficient to void the safe harbor.
Veoh Networks (Veoh) operated a publicly-accessible website that enabled users to share videos with other users. UMG, one of the world's largest record and music publishing companies, sued Veoh for copyright infringement after Veoh users, without UMG's authorization, downloaded videos containing UMG-copyrighted songs.
UMG claimed that Veoh had not done enough to stop its users from sharing copyrighted music videos through the website. Veoh countered that it had done everything necessary to qualify for DMCA protection.
The DMCA safe harbor is available to service providers that meet the "conditions of eligibility," which include the adoption and reasonable implementation of a "repeat infringer" policy that sets for a plan for terminating repeat infringers accounts. A qualifying service provider must also accommodate "standard technical measures" that are "used by copyright owners to identify or protect copyrighted works."
A service provider with actual knowledge of infringing material, awareness of facts or circumstances that make infringing activity apparent, or receipt of a takedown notice has an obligation to expeditiously remove the infringing material. If a service provider doesn't act quickly to take down the copyright-protected content, it cannot receive safe harbor protection.
Here, UMG argued:
- The safe harbor provision should only include sites that are exclusively in the business of "storage," not in other hosting activities.
- Even in the absence of formal DMCA takedown notices, Veoh should have been aware of red flags that indicated copyright infringement was taking place on its site.
- Veoh didn't qualify for the safe harbor because it received a financial benefit directly attributable to the infringing activity.
The Ninth Circuit rejected UMG's arguments. Judge Raymond Fisher, writing for the court advised that a service provider can't "willfully bury its head in the sand", but noted:
Hosting a category of copyrightable content, such as music videos, with the general knowledge that one's services could be used to share infringing material, is insufficent to meet the actual knowledge requirements....We reach the same conclusion with regard to the [DMCA provision's] inquiry into whether a service provider is 'aware of facts or circumstances from which infringing activity is apparent...We hold that Veoh's general knowledge that it hosted copyrightable material and that its services could be used for infringement is insufficient to constitute a red flag."
The Electronic Frontier Foundation applauded the decision, saying "It's a good ruling, and it puts yet more weight behind the idea that a robust safe harbor is not just beneficial but necessary for user-generated content sites to thrive on the Internet."
- UMG Recordings v. Shelter Capital Partners (FindLaw's CaseLaw)
- Ninth Cir to Reconsider Veoh Based on Viacom-YouTube Litigation? (FindLaw's Ninth Circuit Blog)
- Lawsuits Make Strange Bedfellows: MPAA, Porn, and Infringement (FindLaw's Seventh Circuit Blog)