Veoh ruling adds clarity to US 'safe harbor'

The Ninth Circuit Court of Appeals in the US has issued a clarifying judgment in the action brought by Universal Music Group (UMG) against Veoh. The case explores issues similar to Viacom vs. Youtube and gives further clarity to how the doctrine of "safe harbor" protection from copyright claims under section 512 of the Digital Millennium Copyright Act will be applied.

The clarification follows on from the December 2011 judgment the court gave, where it said that Veoh was protected from copyright liability, and broadly brings the Veoh decision into line with the Second Circuit’s more recent decision in YouTube.

UMG  had pushed three main arguments against Veoh’s right to qualify for safe harbor: 

1.  The appellant argued that the functions performed automatically by Veoh's software didn't fall within the plain meaning of "infringement of copyright by reason of the storage [of material] at the direction of a user." Universal had promoted the theory that the DMCA should be interpreted narrowly to apply to web hosting services, rather than more general services that including hosting capabilities. 

For the Ninth Circuit, Judge Raymond Fisher disagreed :

"UMG's theory fails to account for the reality that web hosts, like Veoh, also store user-submitted materials in order to make those materials accessible to other Internet users. The reason one has a website is so that others may view it. As amici note, 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." 

See no evil, hear no evil .....

2.  UMG also challenged the contention that Veoh was never made aware of infringing material on its network. One reason why the music giant was unsuccessful in the lawsuit at the District level was because Veoh was able to show that it had removed materials after receiving takedown notices; However Universal also pointed to other ways Veoh could had gained knowledge of infringements on the website. 

Judge Fisher noted there are music videos that could legally appear on Veoh and that it's the responsibility of the copyright holder to let the ISP know of what's not legal. 

Safe? With all those rocks?

"Requiring specific knowledge of particular infringing activity makes good sense in the context of the DMCA, which Congress enacted to foster cooperation among copyright holders and service providers in dealing with infringement on the Internet. 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". 

The ruling continues:

"We therefore hold 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 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." 

Judge Fisher added that a service provider cannot "wilfully bury its head in the sand" -- known as wilful blindness - but saw no evidence of this 

3.  Finally, Universal Music challenged whether Veoh qualified for safe harbor under the provision that entitles an ISP only if it "does not receive a financial benefit directly attributable to the infringing activity, in a case in which the service provider has the right and ability to control such activity. Here Judge Fisher seems to put the Ninth Circuit in line with the Second Circuit and the YouTube case: 

"We agree with the Second Circuit and hold that, in order to have the 'right and ability to control such activity' the service provider must 'exert substantial influence on the activities of users.' 'Substantial influence' may include, as the Second Circuit suggested, high levels of control over activities of users, as in Cybernet. Or it may include purposeful conduct as in Grokster" and Veoh's interactions with users didn't rise to that level, the judge said.

https://www.eff.org/deeplinks/2013/03/win-safe-harbors-umg-v-veoh and 
http://www.hollywoodreporter.com/thr-esq/appeals-court-hands-veoh-win-428588

Of pirates and safe harbours: UMG, Veoh get their ruling

 

Looking for a safe harbour

Yesterday in the United States the Ninth Circuit Court of Appeals handed down its decision in UMG v Veoh (which can be read in full here; briefly referred to in this blog here), a case addressing copyright liability for ISPs that host infringing works.

Veoh operates a publicly accessible website that enables users to share videos with other users. UMG is one of the world's largest recorded music and music publishing companies. In addition to producing and distributing recorded music, UMG produces music videos.

Although Veoh has implemented various procedures to prevent copyright infringement through its system, users of Veoh's service have in the past been able, without UMG's authorisation, to download videos containing songs for which UMG owns the copyright.

UMG responded by filing suit against Veoh for direct and secondary copyright infringement back in 2007. Two years later, the US District Court for the Central District of California granted summary judgment to Veoh after determining that it was protected by the DMCA "safe harbor" limiting service providers' liability for "infringement of copyright 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." 17 U.S.C. §512(c).

UMG appealed the decision and made several arguments before the Ninth Circuit, including that the district court too broadly construed the scope of §512(c).

UMG never disputed that, when Veoh became aware of allegedly infringing material as a result of the RIAA's DMCA notices, it removed the files. It claimed, however, that Veoh had knowledge or awareness of other infringing videos that it did not remove. In particular, argued UMG, the district court erred by improperly construing the knowledge requirement to unduly restrict the circumstances in which a service provider has "actual knowledge" under subsection (1) and setting too stringent a standard for "red flag" awareness based on facts or circumstances from which infringing activity is apparent.

Judge Raymond Fisher, in an unanimous decision, referred to Congress' express intention that the DMCA "facilitate making available quickly and conveniently via the Internet ... movies, music, software and literary works". Being this the service Veoh provides, the Court did not find UMG's narrow interpretation of §512(c) be plausible. In fact, if merely hosting material which falls within a category of content capable of copyright protection, with the general knowledge that one's services could be used to share unauthorised copies of copyright-protected material, was sufficient to impute knowledge to service providers, the §512(c) safe harbor would be rendered a dead letter.

The onus to first identify infringing materials is on rights owners. Indeed, said the Court, 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 protected by copyright and what is not. These considerations are reflected in Congress' decision that DMCA notification procedures place the burden of policing copyright infringement on copyright holders, as well as in the "exclusionary rule" which prohibits consideration of substantially deficient §512(c)(3)(A) notices for purposes of "determining whether a service provider has actual knowledge or is aware of facts and circumstances from which infringing activity is apparent."

In the light of these and other considerations, the Court affirmed the district court's determination on summary judgment that Veoh is entitled to §512(c) safe harbor protection.

As our readers will know, many of these issues are at the centre of another case currently pending before the Second Circuit, this being Viacom v YouTube. We'll see what happens there, as well as how the debate around the SOPA develops in parallel with case law.

More on UMG v Veoh on The Hollywood Reporter here.

Veoh victory a blow to Viacom action?

Universal Music have lost a US legal challenge against Veoh, the YouTube rival who, Universal argued, were infringing copyrights by allowing users to upload content without the permission of content owners. Veoh’s defence was the now fairly familiar refrain that they would remove (‘take down’) any copyright infringing content if and when they were alerted to its presence on their system and that, by so doing, they were protected by the so called 'safe harbour' provisions in USA's Digital Millennium Copyright Act.

Now U.S. District Judge A. Howard Matz has granted Veoh's motion for summary judgment, and ruled that the company is protected against such claims saying

"On August 27, 2008, Magistrate Judge Howard R. Lloyd, sitting in the Northern District of California, wrote that the court does not find that the DMCA was intended to have Veoh shoulder the entire burden of policing third-party copyrights on its Web site (at the cost of losing its business if it cannot)”,

adding

"Rather, the issue is whether Veoh takes appropriate steps to deal with copyright infringement that takes place. The record presented demonstrates that, far from encouraging copyright infringement, Veoh has a strong DMCA policy, takes active steps to limit incidents of infringement on its Web site, and works diligently to keep unauthorized works off its Web site. In sum, Veoh has met its burden in establishing its entitlement to safe harbor for the alleged infringements here."

Universal has understandably vowed to appeal the ruling saying

"The ruling today is wrong because it runs counter to established precedent and legislative intent, and to the express language of the DMCA. Because of this and our commitment to protecting the rights of our artists and songwriters who deserve to be compensated for the use of their music, we will appeal this ruling immediately. The balance between copyright holders and technology that Congress sought in enacting the DMCA has been upended by this decision".

Apart from Universal’s setback, the decision might well be a problem for Viacom (owners of MTV) in their 2007 copyright action against YouTube on similar grounds. It is perhaps prudent to note that YouTube have been implementing measures to improve their ‘take down’ system and US commentators have noted that YouTube’s system, with ongoing filter system, is superior to Veoh’s system - which has now attracted safe harbour protection. YouTube has been developing new technical systems that automatically spots content previously banned by a content owner whilst it is being uploaded by a user, so YouTube can, in theory prevent such material ever going live and without receiving a specific take down notice from a content owner and these added ‘enhancements’ to YouTube’s system might well prove to be a major spanner in the works for Viacom’s $1 billion claim. Zahavah Levine, YouTube's chief counsel said.

"With the DMCA, Congress intended to foster online platforms like YouTube, which empower users, offer new distribution channels for content owners, and respect copyright".

Fred von Lohmann, senior attorney for the Electronic Frontier Foundation said "Veoh's policies are very similar to YouTube's," adding

"The judge gave Veoh a clean bill of health. I think the court in New York (where the Viacom-YouTube case is being heard) is going to take this ruling very seriously. The facts are very, very close".

But Viacom’s general counsel Michael Fricklas was not so sure saying

"Our case is in a different forum, not bound by the Veoh case ….we remain confident that we will prevail on the law and the facts. Today's decision contradicts the consensus that sites and copyright owners share the responsibility to use readily available tools to minimize copyright infringements".

http://news.cnet.com/8301-1023_3-10352183-93.html