January 03, 2012
Intellectual Property, Internet & E-Commerce Alerts

DMCA's Safe Harbor Protects Video Sharing Site From Copyright Infringement Claims
by Cyrus Wadia

The Ninth Circuit has affirmed a district court decision finding that video sharing site Veoh Networks is protected by the Digital Millennium Copyright Act’s “safe harbor” against claims by Universal Music Group that Veoh was liable for the copyright infringement of its users. UMG Recordings, Inc. v. Shelter Capital Partners LLC, __ F.3d __ (9th Cir. December 20, 2011).

Veoh operates an internet-based service that permits its users to share videos free of charge via four software functions: (1) automatically converting customers' shared videos into Flash format copies; (2) automatically breaking down the shared videos into smaller sized "chunks"; (3) allowing users to access shared videos via streaming; and (4) allowing users to access shared videos via downloading copies to Veoh's "VeohTV" software.

Universal Music Group (UMG) brought a copyright infringement action against Veoh, claiming that Veoh was liable for the posting of UMG-copyrighted material on its site by its users, and that Veoh was not entitled to the Digital Millennium Copyright Act’s (DMCA) safe harbor protections. The DMCA  precludes internet service providers’ liability for copyright infringement of its users “by reason of the storage at the direction of a user of material that resides on a system or network controlled or operated by or for the service provider."  The District Court found that the DMCA protected Veoh against UMG’s claims. UMG Recordings, Inc. v. Veoh Networks, Inc., 2008 WL 5423841 (C.D. Cal.) (see my earlier analysis of this matter here). 

The Ninth Circuit affirmed, systematically shooting down each of UMG’s arguments, and finding that Veoh made good faith efforts to comply with the notice and takedown procedures provided for in the DMCA and was thus entitled to protection from such infringement lawsuits. The Ninth Circuit rejected UMG’s argument that a service provider’s general knowledge that the site hosted infringing materials would be enough to strip the service of DMCA protection, instead affirming the DMCA’s simple requirements – that the service provider act expeditiously when it receives notice from a copyright holder of infringement on its site. Because Veoh did not have specific knowledge, and did appear to comply with the DMCA’s standard notice and takedown procedures, the Ninth Circuit affirmed the lower court’s decision.
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