Veoh Still Not Dead Enough For Universal Music; Asks Court To Rehear Case Yet Again

from the again? dept

The new opinion effectively rewrites the DMCA to provide different rules for copyright infringement on the internet. It improperly shifts the burden of online copyright enforcement to content owners whose businesses depend on payment for the use of their works, while broadly shielding internet service providers ("ISPs") who use and reap financial benefits from those works (without compensating their owners) even when they have the right and ability to police their sites. The Opinion upends the carefully-crafted balance embodied in Section 512 of the Copyright Act. And, as explained below, the Opinion fails to clarify the limits or scope of the DMCA's "safe harbors."

first, the holding that section 512(c)'s safe harbor for infringement "by reason of the storage at the direction of a user" actually encompasses all "access-facilitating processes that automatically occur when a user" uploads, streams or downloads infringing material eviscerates both the language and structure of the DMCA. Congress created four discrete safe harbors, each addressing different activities. After the Opinion, Section 512(c), now applicable to "access-facilitating processes," swallows several of the other supposedly different and discrete safe harbors whole.

Second, the Opinion ignores longstanding copyright law to hold that an ISP does not have either actual or red flag knowledge of infringement unless it has received information identifying "specific instances of infringement." Section 512(c)(1)(A) requires no such thing. As a result, content owners must now incur the expense of continuously scouring hundreds of thousands (or indeed millions) of constantly changing internet websites, to attempt to locate copies of their works and then send take-down notices or otherwise advise ISPs of these "specific instances of infringement" on their sites. The Opinion requires a world wide web game of "Whack-A-Mole" to police infringement.

Third, as a consequence of the Opinion's interpretation of Section 512(c)(1)(B), websites like Veoh, which (a) copy, perform, and distribute (by offering digital downloads), tens of thousands of infringing works, (b) receive a direct financial benefit from the infringement in the form of advertising revenues that directly increase with each view of an infringing video by a user, and (c) have the "right and ability to control" the infringement as those terms have historically been understood in copyright law, nevertheless get a free pass under the DMCA unless they also engage in an undefined "something more" -which apparently must be akin to inducing infringement. If the Opinion is left standing, ISPs like Veoh will have no obligation either to affirmatively police their site (indeed, they are disincentivized from doing so lest they find an infringing file which would give them "actual" or red flag knowledge), to adopt readily available technical solutions to mitigate infringement, or to obtain authorization from content owners.

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I sometimes wonder about the lawyers representing the major labels, and their ability to continually bill those supposedly struggling labels top dollar in quixotic attempts to fight any and all innovation. We've written plenty of times about Universal Music Group's legal crusade against online video site Veoh. Veoh was a site not unlike YouTube, but Universal Music sued it years back, eventually losing badly , as the court made it clear that Veoh was protected by the DMCA's safe harbors. UMG appealed and, even though Veoh had won the case, the company itself shut down , later admitting that the legal bills from the UMG case were too much. On appeal, UMG lost again as the appeals court once again pointed to the DMCA's safe harbors. Not able to accept a loss, UMG asked the court to rehear the case, which it did. End result? another big loss for UMG.Apparently, no one at UMG is getting the hint. The company has now filed, yet again, asking the court to rehear the case . UMG argues that the rulings against it, arguing that the court misinterpreted parts of the DMCA's safe harbor. As in the Viacom v. YouTube case , we see Universal Music here trying to completely rewrite the DMCA -- pretending that it means something that it clearly doesn't, and which many courts have rejected. I can't see how that's a wise use of UMG's money.Specifically, it argues that the DMCA has always intended the burden for copyright enforcement to fall on service providers.Almost nothing there is true. The ruling is entirely consistent with other rulings on the DMCA. The entire point of having safe harbors in the first place is because the burdenbe on the copyright holder, since the service provider is never in the position to know that a work is definitely infringing, since the work may actually be authorized. Basically, this is a case where Universal Music's lawyers are presenting their wishful thinking of what the DMCA should be, even though that has been rejected by the courts over and over again. There are three key points that Universal Music is making -- all of them laughable.First, it's arguing that Veoh doesn't qualify for safe harbors because the safe harborsapply to storage, and that anything else (such as the display of the work) is not covered.This would basically disregard all of the caselaw surrounding the DMCA since its inception, and pretend that the key safe harborsapply to web backup/storage. Any service provider (such as a webhost) that allows users to display the content they store wouldn't be eligible under this interpretation. And, of course, that's crazy. Anyone who was around for the original fight that brought about the DMCA's safe harbors knows that it was the telcos who fought for those safe harbors. To think that they were only fighting to protect web backup services is laughable. There is simply no support for this argument, and no court has agreed.They also argue that this ruling "eviscerates" the "red flag knowledge" part of the DMCA.Again, this argument is wishful thinking. The whole reason why red flags only concern, as outlined in multiple other cases, is because "general knowledge" that there is some infringing works on a site doesn't do anything useful, as the site would have no meaningful way of dealing with it at that stage, not knowing what is actually infringing.Finally, UMG tries to pretend (despite tons upon tons of caselaw to the contrary) that the DMCA's safe harbors cannot apply to a service provider like Veoh, because of its own total misreading of one of the safe harbor clauses (which the court read properly).First of all, Veoh's dead, so it's not like it will have anything to do, but that's a separate point. More importantly, UMG's interpretation of almost every key point is questionable here. Veoh qualifies for the safe harbors because it's a service provider. It does not "receive a direct financial benefit from the infringement" because it is receiving financial benefit the exact same way no matter whether the content is infringing or not. Veoh received financial benefit fromof hosting videos. That has nothing to do with whether or not it financially benefits directly from infringement. But, most importantly UMG is pretty blatant in arguing that the DMCA somehow requires service providers to "affirmatively police their site." The law has never said that and no court has ever agreed with that argument either. UMG is simply trying to rewrite the DMCA the way itit was written and hoping a court might agree, even after it's lost time and time again with the nearly identical arguments.It will come as little surprise that the arguments here mirror those made by Viacom against YouTube, but both have been pretty big losers so far. They're basically trying to insist that the DMCA must mean what they always wanted it to mean, even though it's clear from the language, the legislative history and the caselaw surrounding the law, that it was never meant to be interpreted this way.In the meantime, though, Veoh is still dead. And all this is doing is throwing more UMG money to lawyers who have no problem presenting silly arguments like this one so long as they keep getting paid.

Filed Under: copyright, dmca, red flag knowledge, safe harbors

Companies: universal music, veoh