Monday, January 5, 2009
Judge Allows ‘Safe Harbor’ Defense in Copyright Infringement Suit
By STEVEN M. ELLIS, Staff Writer
A federal judge has rejected Universal Music Group’s attempt to prevent video-sharing website Veoh from invoking a “safe harbor” under the Digital Millennium Copyright Act against allegations of copyright infringement.
U.S. District Judge A. Howard Matz of the Central District of California ruled Tuesday that San Diego-based Veoh can argue that the act’s provision that service providers cannot be held liable for monetary relief for infringement “by reason of the storage at the direction of a user” applies to the methods by which the website delivers content to users.
Veoh, which is backed by former Walt Disney Co. Chief Executive Officer Michael Eisner, allows Internet users to share videos with others, free of charge, and like many companies that have developed such services in recent years, it describes its software as a means for democratizing the distribution of user-generated content.
Website and Investors
Recording label UMG filed suit in 2007 alleging that Veoh benefited from, and was liable for, infringement of UMG’s copyrights. The company sued both Veoh and its investors for direct, contributory, and vicarious copyright infringement, and for inducement of copyright infringement.
When Veoh asserted an affirmative defense under the Digital Millennium Copyright Act’s “safe harbor” provisions, UMG moved for partial summary judgment that Veoh was not entitled to do so under 17 U.S.C. § 512(c).
The statute precludes imposing monetary liability on a “service provider…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.”
However, the protection is available only if the service provider lacks actual knowledge of infringement, receives no direct financial benefit from infringing activity, and expeditiously removes or disables access to infringing material upon notice.
UMG argued that Veoh did not qualify for immunity because four functions performed by its software were neither “storage” nor undertaken “at the direction of a user.” Although it did not dispute that the initial storage of files was accomplished at the direction of users, UMG argued that Veoh’s use of certain formats to create subsequent copies and deliver the videos to users were ineligible for protection.
But Matz, noting that his decision had no bearing on whether Veoh satisfied the act’s other requirements, concluded that Veoh’s interpretation of the statute was correct.
Citing a 2008 decision by the U.S. District Court for the Northern District of California that Sec. 512(c) applied to one of the four software functions inasmuch as it was “a means of facilitating user access” in Io Group, Inc. v. Veoh Networks, Inc., he wrote:
“Common sense and widespread usage establish that ‘by reason of’ means ‘as a result of’ or ‘something that can be attributed to….’ So understood, when copyrighted content is displayed or distributed on Veoh it is ‘as a result of’ or ‘attributable to’ the fact that users uploaded the content to Veoh’s servers to be accessed by other means.
“If providing access could trigger liability without the possibility of DMCA immunity, service providers would be greatly deterred from performing their basic, vital and salutary function—namely, providing access to information and material for the public.”
Noting also that Sec. 512(c) also codifies the “notice and takedown” procedure Congress instituted so that service providers and copyright holders could cooperate to protect copyrights, he added:
“The ‘safe harbor’ provision would in fact be full of treacherous shoals if the copyright owner still could recover damages because the service provider remained liable for having provided access to the stored material that had been removed.”
The case is UMG Recordings, Inc. v. Veoh Networks, Inc., 07-5744.
Copyright 2009, Metropolitan News Company