A federal appeals court ruled Thursday that service providers such as video-sharing sites like Vimeo are protected by the Digital Millennium Copyright Act for pre-1972 musical recordings uploaded by their users.

The record labels had sued the YouTube-like site and successfully convinced a district court judge that, because pre-1972 recordings fell under state laws and not federal copyright law, the DMCA didn't apply. The 2nd US Circuit Court of Appeals reversed that decision and also overturned the lower court that ruled the DMCA didn't grant so-called safe-harbor passage to service providers whose employees saw infringements on their platforms uploaded by their users.

The decision once again affirms that the DMCA extends immunity to a service provider for the infringement of their customers if the service provider removes material at the request of the right holder. The decision was akin to an earlier and popular decision called Viacom v. YouTube, which the record labels said was off base in the case against Vimeo.

In the case decided Thursday, the court ruled that a "showing by plaintiffs of no more than that some employee of Vimeo had some contact with a user-posted video that played all, or nearly all, of a recognizable song is not sufficient to satisfy plaintiffs’ burden of proof that Vimeo forfeited the safe harbor by reason of red flag knowledge with respect to that video." The ruling added that a "service provider's personnel are under no duty to 'affirmatively seek' indications of infringement."

Regarding the pre-1972 recordings, the court ruled:

To construe § 512(c) as leaving service providers subject to liability under state copyright laws for postings by users of infringements of which the service providers were unaware would defeat the very purpose Congress sought to achieve in passing the statute. Service providers would be compelled either to incur heavy costs of monitoring every posting to be sure it did not contain infringing pre-1972 recordings, or incurring potentially crushing liabilities under state copyright laws. It is not as if pre-1972 sound recordings were sufficiently outdated as to render the potential liabilities insignificant.

"Today's ruling by the Second Circuit is a significant win for not just Vimeo, but all online platforms that empower creators to share content with the world," said Michael Cheah, Vimeo's general counsel. The case was brought in 2009 by Capitol Records and Sony, which did not immediately respond for comment.

The Electronic Frontier Foundation applauded the ruling.

"The Court held that (1) there was no duty to monitor for infringement, (2) that suspicion of infringement wasn’t enough unless infringement was obvious, and (3) a few sporadic videos out of millions where Vimeo employees “inappropriately” encouraged users to post infringing videos was insufficient to remove the DMCA safe harbor protections," the group said.