Thursday, April 29, 2010

UMG files Ninth Circuit brief in Veoh case

User-generated web video site Veoh has filed for bankruptcy, but its copyright litigation with Universal Music Group lives on. Last September, Judge Howard Matz granted Veoh's motion for summary judgment, finding that the site qualified for the safe harbor found at Section 512(c) of the DMCA. And now, UMG has filed its brief in the Ninth Circuit, arguing that Matz got just about everything wrong. From UMG's summary of argument:
Properly construed, the DMCA provides no protection for Veoh for several reasons. First, Veoh’s copyright infringement liability is not by reason of the “storage” of material at the direction of a user but instead arises from Veoh’s further and separate acts of reproducing, displaying, publicly performing, and distributing via downloads the material that is uploaded by its users. The District Court erred in holding to the contrary when it denied UMG’s motion for partial summary judgment.

Second, even assuming Veoh’s activities meet the threshold qualification for protection under Section 512(c), the District Court erred in granting Veoh’s motion for summary judgment that it satisfied the remaining elements of the “safe harbor.” Specifically, the District Court erred when it held that there were no genuine issues of fact that Veoh lacked actual knowledge of the infringement on its service and awareness of any facts and circumstances from which infringing activity was apparent. Further, the court below improperly found no genuine issues of fact existed as to whether Veoh obtained direct financial benefits from the infringement on its service when it had the right and ability to control such activity, including through the display of paid advertising driven by infringing content.

The District Court’s summary judgment rulings turn copyright law on its head in the context of the internet. If they are not reversed, activities that clearly give rise to liability in any other context would be permitted on the internet. The District Court’s opinion absolves Veoh of responsibility for conduct as, or arguably more, egregious than that which led to liability for prior services such as Napster, Grokster, or Kazaa. Napster, Grokster, and Kazaa offered indices that helped their users find infringing content and obtain it from other users. But they never stored the infringing files themselves nor directly engaged in the distribution of infringing content, as Veoh does.

Moreover, the District Court’s opinion upends the careful balance of interests between service providers and copyright holders that Congress sought to establish in the DMCA. Under the law as construed by the District Court, it is the responsibility of every copyright holder to constantly monitor and notify Veoh and all of the other internet sites that massively infringe copyrights and profit from such infringement – otherwise these sites can display infringing material with abandon. In the wake of the District Court’s opinion, businesses like Veoh will rationally eschew licenses from content companies and avoid implementing effective measures on their websites that can stop or limit infringement.
Corporate Counsel has additional detail on UMG's brief. And here is my earlier take on the District Court's ruling.

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