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February 9, 2009

UMG Loses Summary Judgment Motion on Safe Harbor Application

A case that may have some impact on the Viacom-Google litigation has some dim news for copyright holders.  The litigation is between UMG Recordings, Inc., and Veoh Networks.  UMG sued Veoh, for what else, copyright violation due to some UMG content showing up on Veoh.  The Veoh service is similar to YouTube, though its users can download videos from the site in a variety of ways.

UMG argued in a summary judgment motion that Veoh did not qualify for the DMCA safe harbor protection because it does not simply act as storage at the direction of the user.  Veoh converts uploaded video to Flash and a few other formats in certain circumstances and, gasp, makes them available.  The Court shot this argument down saying that the automated conversion process for videos does not pre-empt safe harbor provisions given that Congress did not intend such a narrow reading of the law.

UMG cited five videos for copyright violation, but did not bring them to the attention to Veoh through the take-down notice system established by the statute.  The Court also noted that once a defendant such as Veoh became independently aware of infringing material it had a duty to disable access or remove the infringing content.  Veoh did follow through on these videos by removing access to them once it became aware of their status.

The Court described the notice system Congress created as "cooperative."  Content owners are upset that the Internet is exempt from infringing liability when other distribution channels are not.  The Court here so noted but said that is the scheme Congress created for the Internet, and Veoh qualifies for safe harbor protection.  As the Court stated in footnote 6 of the opinion:

UMG argues that under Veoh's analysis of the statute “acts that would never be permissible outside the online context would be somehow immunized from liability as long as they were done with a computer.”Motion at 15-16. How-ever, in enacting the definition of “service pro-vider” for purposes of § 512(c) that is set forth in § 512(k)(1)(B), Congress explicitly noted that “A broadcaster or cable television system or satellite television service would not qualify, except to the extent it performs functions covered by [section 512(c) ].”H.R. Rep. 105-551(II)at p.64.

This is the system Congress set up when the act was passed.  Internet sites are treated differently from other distribution channels due to the volume and interactive nature of the medium.  A satellite or cable provider does not let the general public upload video to the system for general distribution.  Even public access shows are scrutinized to some extent to eliminate copyright and obscenity issues, though sometimes this kind of materials sneak through.  Content owners should get used to the idea that this is the methodology that they must follow to police their copyrights.  If they don't like the model, they should get Congress to change the law.

The case is UMG Recordings v. Veoh Networks, Inc. (C.D. Cal. Dec. 29, 2008), 2008 WL 5423841.

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