Ninth Circuit Affirms DMCA “Safe Harbor” Defense of Video-Sharing Website

The Digital Millenium Copyright Act (DMCA) contains a “safe harbor” provision that protects internet service providers that feature user-directed content from liability for copyright infringement. In UMG Recordings, Inc. v. Shelter Capital Partners, L.L.C., the Ninth Circuit Court of Appeals reviewed the requirements for “safe harbor” protection, upholding the broad interpretation that “safe harbor” has received from numerous courts in prior decisions.

Veoh is an online service, launched in 2005, that allows users to upload and share videos, view other users’ videos, and view authorized content from copyright holders. During the upload process, Veoh’s software applies various automated processes to make video files available to users via streaming in a common, accessible format. Veoh’s revenue comes from advertising, but access to all of its content remains free of charge. Users who wish to upload content must agree to Veoh’s terms of use, which prohibit uploading copyrighted content without permission. Veoh also uses filtering software to prevent uploading of infringing content.

UMG Recordings is one of the world’s largest music publishers. Its activities include music production, music distribution, and music video production. It owns an extensive catalog of copyrights. Veoh concedes that users were able to access and download content copyrighted by UMG, despite its efforts to prevent copyright infringement. Veoh has removed material alleged to be infringing on UMG copyrights, based on notices from the Recording Industry Association of America (RIAA).

Asserting that Veoh’s efforts were “too little, too late,” UMG sued Veoh in September 2007 for “direct, vicarious and contributory copyright infringement.” Veoh failed to take steps to prevent copyright infringement, the lawsuit claimed, until after users had already uploaded, viewed, and downloaded copyrighted content.

Veoh claimed protection under the DMCA’s “safe harbor” provisions as an affirmative defense. The “safe harbor” provisions shield a service provider that allows user-directed content from liability if the provider has no actual knowledge of the infringing content, does not benefit financially from the alleged infringement, and works “expeditiously” to remove content upon notice of alleged infringement. The service provider must designate an agent to receive claims of infringement, and must make this information readily available to the public. The DMCA also provides requirements for the elements of a notice of alleged infringement.

The district court granted summary judgment to Veoh, finding that it was covered by “safe harbor” protections. UMG appealed, arguing that the court applied the “safe harbor” provisions too broadly, that “safe harbor” only applied to online storage, and that the automated processes applied to uploaded content negated Veoh’s claim that the content was user-directed. The Ninth Circuit disagreed, holding that the automated processes were initiated at the users’ request and were a necessary step to facilitate the website’s purpose, the sharing of video content.

The Ninth Circuit also rejected UMG’s broad interpretation of the “actual knowledge” clause, finding that “safe harbor” provisions apply unless a claimant can prove that the service provider knew of specifically-identified infringing content and failed to remove it in a timely manner. The mere knowledge that a user could upload or access copyrighted material is not sufficient.

At the Law Offices of Salar Atrizadeh, we guide California businesses and individuals through the regulatory and transactional pitfalls of the internet, using legal knowledge and technological skill to create innovative solutions for our clients. Contact us today online or call (310) 694-3034 to set up a confidential consultation.

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