Tuesday, December 20, 2011

UMG v. Veoh Affirmed!

Today the Ninth Circuit affirmed UMG v. Veoh, holding that Veoh's user-generated content website is entitled to the "safe harbor" protection of 17 U.S.C. § 512.  This is great news for the Internet.  I'll update this later to provide an analysis of the opinion.

UPDATE:  I first wrote about this case back in May, when I reported on the oral argument in the case -- see that link for details.  Briefly, UMG v. Veoh is about UMG's claim that Veoh's user-generated content (UGC) web site contains copies of UMG's copyrighted music, and that Veoh should be secondarily liable when its users post allegedly infringing music on the Veoh site.  The trial court had granted summary judgment to Veoh on the grounds that it was immune from suit since it complied with the “safe harbor” notice-and-takedown procedures of the Digital Millennium Copyright Act, 17 U.S.C. § 512(c).  The case raises many of the same issues as the Viacom v. YouTube case presently pending in the Second Circuit Court of Appeals, where the trial court also granted summary judgment to YouTube's video service, which is similar in many respects to Veoh's service.

The Ninth Circuit affirmed Veoh's safe harbor under § 512 on all relevant issues:
  • "Storage at the direction of a user": "By its terms, § 512(c) presupposes that service providers will provide access to users’ stored material, and we would thus contravene the statute if we held that such access disqualified Veoh from the safe harbor."  On this issue, the Court cited EFF's amicus brief (which I co-authored): "As amici note, these access activities define web hosting — if the web host only stored information for a single user [as UMG argued], it would be more aptly described as an online back-up service."  The Court thus agreed that Veoh stored content at the direction of a user.  Storage "encompasses the access-facilitating processes that automatically occur when a user uploads a video."
  • The "knowledge" requirements: UMG argued that Veoh's general knowledge that there were music videos on its web site meant that Veoh had knowledge of alleged infringing activity.  The Court disagreed for several reasons.  First, "As an initial matter, contrary to UMG’s contentions, there are many music videos that could in fact legally appear on Veoh. . . . Copyright holders know precisely what materials they own, and are thus better able to efficiently identify infringing copies than service providers like Veoh, who cannot readily ascertain what material is copyrighted and what is not."  Thus, the Court held that "merely 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 insufficient to meet the actual knowledge requirement under § 512(c)(1)(A)(i)."  Instead, the statute requires "specific knowledge of particular infringing activity."
  • No requirement to filter: The Court declined to require that a service provider like Veoh was obligated to implement filtering technologies. The Court rejected plaintiffs' argument that "Veoh should have taken the initiative to use search and indexing tools to locate and remove from its website any other content by the artists identified in the notices."
  • The financial benefit and control requirement: The Court held that "the 'right and ability to control' under § 512(c) requires control over specific infringing activity the provider knows about."
  • The Court rejected UMG's argument that proof of vicarious liability would automatically disqualify a service from the safe harbor.
This is a big victory for service providers, user-generated content sites, the viewing public, and the Internet generally.

Other posts discussing the case include those by EFF, Techdirt, the Hollywood Reporter, the Courthouse News Service, and Gigaom.

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