The U.S. Court of Appeals for the Ninth Circuit has upheld Digital Millenium Copyright Act “safe harbor” protection for video-sharing service Veoh, revisiting a case initially decided in 2011 in light of the Second Circuit’s decision in Viacom v. YouTube. The statutory provision at issue is Section 512(c) of the DMCA. That section insulates service providers’ from liability for infringement resulting from the “storage at the direction of a user” of copyrighted content on their website.
In the opinion, plaintiff Universal Music Group made two unsuccessful arguments. First, it asserted that the safe harbor provision only applies to “storage” sites, not including websites that allow other hosting activities. The court rejected this theory, pointing out that sites that allow users to store content, like Veoh, do so to allow others to access that content. In the words of a brief filed by the Electronic Frontier Foundation, Universal’s idea of a site that falls under Section 512(c) protection is nothing more than an “online back-up service.” If this were Congress’ intent, the provision would be useless for most service providers.
Second, Universal argued that, regardless of take-down notices, Veoh should have seen “red flags” that copyright infringement was occurring on its site. Courts have been reluctant to buy the Section 512(c)(1)(A)(ii) “red flag” argument, particularly in lieu of actual take-down notices. Here, the court noted that copyright holders were better positioned to detect infringement and report it than Veoh, a start-up that since has gone defunct defending this case, in which Universal also unsuccessfully sought to sue the firm’s Hollywood-insider investors.
In the Viacom case, the question of whether YouTube is liable for infringement merely because it had knowledge of infringing content on its site was remanded by the Second Circuit Court, overturning a U.S. District Court’s grant of summary judgment on the issue. The court there relied on YouTube’s internal emails, showing knowledge of infringing material on their site and a passive response. That case has yet to go before a jury but practitioners and service providers will be watching it closely.