Veoh Can Seek Costs but Not Attorney’s Fees from UMG After 9th Circuit Rehearing
The 9th U.S. Circuit Court of Appeals didn’t budge in a 61-page “superseding opinion” (http://1.usa.gov/ZQNfYN) on Universal Music Group’s copyright infringement case against video-sharing service Veoh, now owned by Israeli social-content startup Qlipso. The original ruling went to Veoh, saying the service’s “general knowledge” of infringement by users wasn’t enough to overcome its safe-harbor protection under the Digital Millennium Copyright Act, and sent the case back to trial court to consider Veoh’s request for costs. A three-judge panel reheard the case at UMG’s request, attempting to square its analysis with that of 2nd Circuit judges, whose ruling months later favoring YouTube over Viacom in their infringement case led a Warner Bros. executive to say the circuit split would confuse copyright owners.
Sign up for a free preview to unlock the rest of this article
If your job depends on informed compliance, you need International Trade Today. Delivered every business day and available any time online, only International Trade Today helps you stay current on the increasingly complex international trade regulatory environment.
UMG is wrong that the DMCA’s protection of “Web hosting services” leaves out Veoh because it makes material accessible to users other than those who upload it, the 9th Circuit panel said: “The reason one has a website is so that others may view it.” Citing friend-of-the-court briefs, the panel said “if the web host only stored information for a single user, it would be more aptly described as an online back-up service.” The law itself recognizes “that one is unlikely to infringe a copyright by merely storing material that no one could access, and so includes activities that go beyond storage,” the panel said.
Referring specifically to the 2nd Circuit reasoning in the YouTube case, the 9th Circuit clarified that it wasn’t giving carte blanche to Veoh to “willfully bury its head in the sand to avoid obtaining such specific knowledge” that would require it to remove infringing content. The split had to do with what courts have referred to as “red-flag” knowledge of infringement under the DMCA. “Even viewing the evidence in the light most favorable to UMG as we must here, however, we agree with the district court there is no evidence that Veoh acted in such a manner,” the panel said: The evidence shows “Veoh promptly removed” infringing content when it became aware of “specific instances” of infringement.
One prominent example of Veoh allegedly ignoring an infringement notice -- when Disney’s CEO emailed Veoh investor and former Disney CEO Michael Eisner to complain about a Disney movie and TV episodes illicitly on Veoh -- doesn’t count, the 9th Circuit said: “If this notification had come from a third party, such as a Veoh user, rather than from a copyright holder, it might meet the red flag test,” but Disney is “subject to notification requirements” laid out in the DMCA. The panel quoted the 2nd Circuit on the difference between “actual” and red-flag knowledge: that the former turns on whether the provider “subjectively” knew of specific infringement, and the latter, whether the provider was “subjectively aware of facts that would have made the specific infringement ‘objectively’ obvious to a reasonable person.” Regardless, UMG hasn’t created a “genuine issue of material fact” on whether Veoh had either actual or red-flag knowledge, the panel said.
Veoh was again given permission to seek costs from UMG, except for attorney’s fees, in trial court, under the 9th Circuit superseding opinion. We couldn’t reach Veoh owner Qlipso or UMG for comment.