Appeals Court Upholds DMCA Protection For Veoh, Sidestepping YouTube
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The Ninth Circuit Court of Appeals today upheld its 2011 decision rejectingUniversal Music Group‘s lawsuit accusing Veoh of copyright infringement. The appeals court rejected UMG’s request for a rehearing, holding that the Digital Millenium Copyright Act protects web hosting firms like Veoh from lawsuits if they take down infringing material when they discover it.
The 61-page decision came too late for Veoh, which was backed by Time-Warner and former Disney Chief Michael Eisner but has been in financial limbo since filing for bankruptcy in 2010. It also artfully sidesteps a 2012 decision by an appeals court in New York that allowed Viacom‘s similar lawsuit against YouTube to proceed.
The main implication of the decision is it better spells out what companies must do and not do to remain within the broad protection of DMCA, saidGlenn Kulick of Kulik Gottesman & Siegel in Los Angeles, who represented Veoh investors that were also sued by UMG.
“It spells out how proactive they have to be in searching it out,” Kulick said of infringing material.
Veoh was entitled to protection under DMCA’s safe-harbor provisions because it used software to monitor uploads for infringing music and would shut off access to all copies of videos as soon as it discovered, or was notified, of copyright violations, the Ninth Circuit said. UMG, a unit of France‘sVivendi, had argued the DMCA didn’t apply because viewers could access copies of infringing material that users had stored, but the court said that would disqualify virtually every video site.
As Veoh’s backers including the Electronic Frontier Foundation noted, the court said, “these access activities define web hosting– if the web host only stored information for a single user, it would be more aptly described as an online back-up service.”
The court first ruled in favor of Veoh in December 2011, upholding a lower court decision. Then the Second Circuit Court of Appeals allowed Viacom’s case to proceed against YouTube in April. That court held that a jury might decide YouTube lost its DMCA protection because it made money from uploaded videos and had the “right and ability to control such activity.”
The statute also requires websites to have “specific knowledge” of infringing material. UMG sued Veoh before notifying it of any allegedly infringing videos, the Ninth Circuit said, undermining the goal of DMCA in fostering cooperation between copyright owners and website operators.
“Of course a service provider cannot willfully bury its head in the sand to avoid obtaining such specific knowledge,” the Ninth Circuit went on, however, citing the Second Circuit’s decision favorably. ”There is no evidence that Veoh acted in such a manner.”
Kulick said the Ninth Circuit wanted to rewrite its December 2011 opinion to incorporate specific arguments UMG made. But otherwise, “this is just reaffirming what they’d already won.”
