Veoh wins one ... for YouTube?
A federal judge ruled in favor of online video service Veoh Wednesday in a copyright infringement case similar to Viacom's billion-dollar lawsuit against YouTube. U.S. Magistrate Judge Howard R. Lloyd of San Jose granted Veoh's request for summary judgment, rejecting the infringement claims brought by gay porn distributor IO Group. (Download a PDF of the decision here.) In what appears to be the first ruling on the legal status of user-generated video sites, Lloyd found that Veoh qualified for one of the safe harbors Congress created for online services in the 1998 Digital Millennium Copyright Act. The ruling isn't binding on the federal court in New York that's hearing Viacom's lawsuit, but Lloyd's reasoning could influence his counterpart in that case, U.S. District Judge Louis L. Stanton.
The heart of the battle between Veoh and IO Group, as in Viacom's claims against YouTube, is whether the video site qualifies for the safe harbor the DMCA provides for services that host content at their users' direction. Veoh and YouTube allow users to upload video files, which the sites then reformat, organize and index to make them easier to find and view. Mirroring one of Viacom's arguments against YouTube, IO Group contended that Veoh became a direct infringer when it copied users' unauthorized files into a new format and stored them on its site. As a consequence, IO Group argued, Veoh didn't qualify for the safe harbor. In his 33-page ruling, however, Lloyd held that automatically transcoding and organizing the files does not make Veoh directly responsible for any infringement or disqualify it from the safe harbor. Nor was Veoh aware of the infringing material on its service, which also would have disqualified it. According to Lloyd, IO Group didn't notify Veoh of the infringing files before filing suit, and there was nothing about the files themselves that should have tipped off Veoh to the fact that they weren't authorized.
The knowledge question may produce a different answer in the YouTube case, because Viacom sent copious take-down notices to YouTube before suing. According to Viacom, YouTube may have removed some of the infringing copies of each file from its system, but not all of them. Lloyd offered some thoughts on this issue, though, that may prove helpful to YouTube. Citing the 9th Circuit's ruling in the first Napster appeal, Lloyd held that a user-generated content company's duty to police its network is limited by the capabilities of its software. It can't turn a blind eye to "detectable acts of infringement," he wrote, but it can't be forced to change the way its system is designed just to enable better tracking and detection. Again, the 9th Circuit's holdings don't bind Judge Stanton in New York, but they could influence him.
-- Jon Healey