Advertising Law Blog

A Magistrate Judge in the United States District Court, Northern District of California, recently rendered an important decision with potential implications for (1) any website that hosts user-supplied content; and, (2) owners of copyrighted material that is placed by others on such websites. In Io Group, Inc. v. Veoh Networks, Inc., No. C06-03926 (HRL), 2008 WL 4065872 (N.D.Cal. August 27, 2008), summary judgment was granted against a publisher of adult films on the ground that an internet television network that enables the sharing of user-provided content was protected from copyright liability by the safe harbor of the Digital Millenium Copyright Act ("DMCA"), 17 U.S.C. § 512(c). Section 512(c) of the DMCA exempts an online service provider from liability for damages for (and significantly reduces the scope of injunctive relief in connection with) the "infringement of copyright by reason of the storage at the direction of a user of material that resides on a system or network controlled or operated by or for the service provider."

Io's suit alleged that between June 1, 2006 and June 22, 2006, it found ten videos it owned posted to Veoh without its authorization. Without availing itself of the take-down remedies provided by the DMCA or making any other demand, Io filed its copyright infringement suit. Veoh had taken certain measures, typical of similar websites, so that it could claim the protection of the DMCA's user storage safe harbor by offering the statutorily-specified process for copyright holders to request that infringing matter be taken down, by adopting a repeat infringer policy, and by taking other steps required for DMCA compliance.

On cross-motions for summary judgment, the court considered the sufficiency of Veoh's policies and practices to satisfy the DMCA's requirements for safe harbor eligibility, and concluded that the DMCA does not contemplate that "Veoh should shoulder the entire burden of policing third-party copyrights on its website (at the cost of losing its business if it cannot). Rather, the issue is whether Veoh takes appropriate steps to deal with copyright infringement that takes place." The court found that Veoh did.

While online service providers eligible for the safe harbor are immune from monetary damages but may still be liable for injunctive relief, Veoh had removed all matter that infringed Io's copyrights even before learning of the lawsuit. Thus, the court deemed injunctive relief moot.

Although it has its critics, because this decision addressed many questions related to liability for user-generated content, it will be interesting to see the influence it will have on similar cases, such as the Viacom v. YouTube case pending in the Second Circuit. With respect to user-generated content sites, the issue pertaining to the extent to which those sites should be required to police their sites and stop or limit the distribution of infringing files vs. the burden of policing infringement on the copyright owners will certainly be seen again - perhaps with different results.