The Ninth Circuit has affirmed the trial court’s summary dismissal of UMG copyright claims against Veoh on the basis of §512(c) – the ‘hosting’ safe harbour. UMG argued 3 reasons why §512(c) did not apply:
First, UMG argues that the alleged infringingactivities do not fall within the plain meaning of “infringe-ment of copyright by reason of the storage [of material] at thedirection of a user,” a threshold requirement under§ 512(c)(1). Second, UMG argues that genuine issues of factremain about whether Veoh had actual knowledge of infringe-ment, or was “aware of facts or circumstances from whichinfringing activity [wa]s apparent” under § 512(c)(1)(A).Finally, UMG argues that it presented sufficient evidence thatVeoh “receive[d] a financial benefit directly attributable to. . . infringing activity” that it had the right and ability to control under § 512(c)(1)(B). We disagree on each count, andaccordingly we affirm the district court.
Each of these requirements has a counterpart in our US Free Trade Agreement ‘inspired’ – see s 116AH items 1 and 4 and therefore should repay consideration.
On the knowledge / awareness point:
At , Judge Fisher noted that UMG had not notified Veoh of any infringing material under the DMCA before commencing proceedings. After noting at  that Congress placed the burden of policing infringements on copyright holders, Judge Fisher continued at :
 UMG asks us to change course with regard to§ 512(c)(1)(A) by adopting a broad conception of the knowl-edge requirement. We see no principled basis for doing so.We therefore hold that merely hosting a category of copy-rightable content, such as music videos, with the generalknowledge that one’s services could be used to share infring-ing material, is insufficient to meet the actual knowledgerequirement under § 512(c)(1)(A)(i).
Then at , Judge Fisher rejected UMG’s arguments that Veoh should be held to have sufficient awareness of infringing activity:
…. For the same reasons, we hold that Veoh’s general knowledge that it hosted copyright-able material and that its services could be used for infringe-ment is insufficient to constitute a red flag.
In Section 2, Judge Fisher dismissed UMG’s other evidence of awareness. One point of interest was that an email from Michael Eisner CEO of Disney would have been sufficient if from a third party, but was rejected since it was from a copyright holder and did not follow the DMCA process.
The 1709 blog has a good summary and links here.
As Techdirt points out, however, the costs of the litigation drove Veoh out of business.
Next up, presumably, the Ninth Circuit’s decision in the appeal from Viacom v Youtube.
Although, as noted above, the decision has potential ramifications for the corresponding Australian provision, I am not convinced it has much to say on Roadshow v iiNet (which concerned Category A activity, not Category C anyway) where the AFACT Notices seemed to provide specific notice (once properly explained).
UMG Recording Inc v Shelter Capital Partners LLC., Case: 09-55902, 9th Cir. December 20, 2011