LEGAL
Since the inception of the Internet, copyright holders and service providers have been at odds over the issue of liability for infringement by a website's users.
In 1998, the Digital Millennium Copyright Act (DMCA), a comprehensive set of amendments to the Copyright Act of 1976, was enacted. The DMCA, among many other things, created a "safe harbor" provision that shields an Internet service provider from liability for the copyright infringing content uploaded by its users.
Although there are specific conditions that a service provider must meet to qualify for this limitation of liability, generally speaking, the safe harbor provision shifts the burden of policing copyright infringement on the copyright owners, rather than on the service providers themselves.
Since the DMCA's safe harbor requires that copyright holders must provide "sufficient" notice to service providers of specific infringing material on a provider's website in order to have it removed, policing online copyright infringement is often a cumbersome task.
This likely explains why copyright holders have been constantly seeking to shift as much of that burden as possible to service providers.
Well-known legislative examples of this are the Stop Online Piracy Act (SOPA) and the Protection Intellectual Property Act (PIPA), which, if passed, would have imposed harsh penalties on websites that hosted infringing content or links to infringing content, even unknowingly.
Although both bills were defeated, copyright holders have also been laboring on another front: the courts.
In this arena, the case that has grabbed the most headlines is Viacom v. YouTube, in which media giant Viacom sued YouTube and its parent Google for copyright infringement for allowing users to upload video content – some of which was infringing – for free viewing by the public.
The ruling largely came down in favor of YouTube, holding that the service provider was eligible for the DMCA's safe harbor provision.
Strictly speaking, though, the Viacom decision is only a legally binding precedent in the Second Circuit. As such, copyright holders have not stopped their litigation efforts in other circuits.
Some copyright holders have even been using the same arguments that were used by Viacom in its own suit. UMG Recordings v. Shelter Capital Partners, decided on March 14, 2013, is such an example.
In what is a significant development for online copyright law, the court ruled against UMG, the copyright owner behind the suit.
In what is perhaps an even more significant development, the UMG court – a panel of judges from the Ninth Circuit Court of Appeals – went to great lengths to align its ruling with the Second Circuit's Viacom ruling.
The facts are even strikingly similar between the two cases.
In UMG, like Viacom, a major copyright owner (UMG) sued a service provider of user-generated video content (Veoh). Also like Viacom, UMG argued that the video service provider did not qualify for the DMCA's safe harbor provision.
UMG had three arguments as part of this assertion. The first was that a narrow definition should apply to the insulation from liability for a service provider "for infringement of copyright by reason of the storage." UMG specifically argued that "by reason of the storage" should not include "the automatic processes undertaken to facilitate public access to user uploaded videos."
In short, UMG claimed that the safe harbor exception was only meant to apply to copyright infringement that occurred through the storage of content alone – not the sharing of content that is stored.
The court was unpersuaded, finding that other parts of the safe harbor provision were written under the assumption that stored user content was going to be shared by service providers.
UMG's second argument was that a broad reading should apply to another section of the safe harbor provision that requires that service providers "not [be] aware of facts or circumstances from which infringing activity is apparent." Here, UMG argued that Veoh hosted an entire category of copyrightable content – music – for which it had no license. Therefore, Veoh must have known that this content was unauthorized, and thus was "aware of facts of circumstances from which infringing activity is apparent."
The court, again, rejected UMG's argument, however, finding that Veoh, in fact, did have licenses for the majority of its music video content, and further, that it promptly removed infringing content after such was brought to its attention.
Finally, UMG argued for a broadened definition of "right and ability" to control the infringing activity, under which Veoh would not qualify for the safe harbor. The court rejected this contention, finding that Veoh's level of "control" over the infringing activity was more akin to being a "supervisor" than a "controller" – a distinction made by the court based on varying levels of direct involvement.
In sum, the UMG opinion comes down in favor of Internet service providers – perhaps even more strongly than Viacom.
The implications of the ruling are certainly significant because the Ninth Circuit followed the Second Circuit's example; there is now a much greater chance that future cases in the other circuits will chart a similar course.
But the fact that such a ruling was made by the Ninth Circuit – home to some of the largest copyright owners and Internet service providers – is also significant, since the ruling created binding precedent for future disputes over the DMCA safe harbor provision.
Although the case law in this area continues to evolve along with the technology at the heart of such litigation, UMG seems to indicate that courts will continue to side with service providers.
Jeremy Byellin is a practicing attorney in the state of Minnesota and a writer for the Westlaw Insider blog. His articles for the blog cover a wide range of legal topics, with a specific focus on major legal developments and cyberlaw.
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