Today’s blog is about a recent legal dispute with a content provider. Veoh is a website similar to YouTube, as it allows users to freely upload video content. Often times, users upload material that is copyright protected property of another individual or entity. Some examples could be background music in a video or clips of a television show. Recently, Universal Music Group brought a lawsuit against Veoh alleging Veoh is liable for copyright infringement as a facilitator of user uploaded videos. The legal principle Universal sought to invoke is what we call “secondary liability.” This arises when an individual or entity contributes, facilitates, induces, or is directly responsible for the copyright infringement actions carried out by another. If this “inducement” or “facilitation” is proven, the individual or entity can be liable to another for copyright infringement even though they are not the direct infringer.

Think about Grokster, also known as the Kazaa network. Grokster was a peer to peer file sharing network a decade ago which outwardly advertised itself as “the new Napster,” i.e. a previous entity/activity that facilitated and induced infringement activities. When brought to court by the major record labels, Grokster ultimately lost under a secondary liability theory.  Since that time, all the peer to peer, bit torrent, and ‘uploaded content’ websites have been very careful in their marketing, design, and other advertising not to tip the scales as to become a ‘facilitator’ of infringement and open themselves up to liability under a secondary liability theory.

So why did Universal bring suit against Veoh knowing that Veoh’s marketing would not be its downfall as it was Groksters? Universal sought to challenge a provision of the Digital Millennium Copyright Act (“DMCA”), known as the “safe harbor provision.” This provision very simply states that a service provider who responds expeditiously to a notice of copyright infringement can avoid liability under the copyright laws. Think about this practically. Someone uploads a Katy Perry music video to Veoh and Ms. Perry (sorry Russel), or more likely her record label, finds out. Ms. Perry’s label subsequently contacts Veoh concerning the infringing upload, and Veoh ‘expeditiously’ removes the video from their site. Veoh has gained safe harbor status and Ms. Perry or the record label has no claim of copyright infringement against Veoh.

Back to Universal. They argue that the safe harbor provisions of the DMCA do not apply to web providers who display or distribute copyright works, instead of storing it, and that web providers need to police their own websites for copyright infringers rather than sit back and do nothing unless contacted by a copyright holder. This is an aggressive legal position for Universal to take and if successful, would be an enormous win as Veoh and other like websites would have an enormous administrative headache in ‘policing’ their own site. However, the Court thought Universal’s arguments lacked merit, as a unanimous decision roughly stated that a web provider’s activities of displaying, distributing, and storing information all define web hosting and all fall under the safe harbor provisions of the DMCA. More importantly, the Court ruled that the obligation is on a copyright holder to identify infringing material and only if a web provider does not remove the content after notice, does a claim for copyright secondary liability emerge.

This is a major win for web providers as the practical ruling of this matter is that web providers do not have to worry about any copyrighted material their users upload. A web provider only has an obligation to take material down if noticed and only can be found secondarily liable if that does not occur.

Bradley Legal Group, P.A. are Intellectual Property lawyers, Entertainment lawyers and Music lawyers servicing clients in Miami, Fort Lauderdale, Boca Raton, West Palm Beach, Orlando, and Nashville. We also affiliate with entertainment lawyers licensed in New York and Washington, D.C. © 2012 Bradley Legal Group, P.A.