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Veoh Wins Again…

Another battle in the war between file-sharing websites and the the music and film studios. Veoh Networks, owner and operator of the ‘Veoh’ media-hosting website, has won its latest battle against Universal Music Group.  Universal had filed suit for copyright infringement claiming that the Veoh website – on which users can post video and music clips – contained infringing material, and that Veoh had stored the infringing clips.  Veoh denied the claims arguing that it had complied with the requirements for ‘safe harbor’ protection given to internet providers and websites under the Digital Millennium Copyright Act (DMCA) because it acted quickly to remove material when an allegation of infringement was received, and that it did not have ‘actual knowledge’ that the materials in question were infringing.

Finding that Veoh Networks was entitled to the protection afforded by the ‘safe harbor’ provisions of the Digital Millennium Copyright Act (DMCA), the Ninth Circuit Court of Appeals sided with Veoh.  Judge Raymond C. Fisher for the Court stated that “merely hosting a category of copyrightable content, such as music videos, with the general knowledge that one’s services could be used to share infringing material, is insufficient” to establish liability for copyright infringement on the part of the website.  As such, Veoh did not have the “substantial influence on the activities of users” for a finding of liability.

The case is UMG Recordings Inc. v. Veoh Networks Inc., 10- 0955902, U.S. Court of Appeals for the Ninth Circuit, and can be viewed at: http://cdn.ca9.uscourts.gov/datastore/opinions/2013/03/14/09-55902.pdf

 

Anchors Away! No More Safe Harbors for Pre-1972 Sound Recordings!

Ahoy! Calling owners of copyrights in sound recordings fixed prior to February 15, 1972! According to the New York Supreme Court, Appellate Division in its April 23, 2013 decision (UMG Recordings, Inc. v. Escape Media Group, Inc.), it’s going to be hard for infringers of these works to stay Afloat using the DMCA Safe Harbor provisions.

Grooveshark to Apple and Google: We're legal, licensed, and ready to disrupt, a photo by joe.ross on Flickr,  used under a Creative Commons Attribution-ShareAlike license http://creativecommons.org/licenses/by-sa/2.0/In 2012, Universal Music Group (UMG) sued Escape Media Group, Inc. (parent company of Grooveshark, an Internet-based music streaming service), for the common law copyright infringement of UMG’s pre-1972 sound recordings which had been uploaded to Grooveshark. Escape’s defense was that as an ISP, it is shielded from liability for infringement by the section 512(c) of the DMCA (safe harbors). UMG’s primary argument was that the DMCA’s safe harbors didn’t apply to pre-1972 sound recordings, because those recordings are not covered by the Copyright Act (which was amended in 1971 to include sound recordings fixed before February 15, 1972).

On July 12, 2012, New York State Supreme Court Judge Barbara R. Kapnick took a bite out of UMG’s argument, relying on Capitol Records, Inc. v. MP3tunes, LLC, 821 F. Supp. 2d 627 (SDNY 2011), in which the Federal District Court found the DMCA did in fact embrace sound recordings fixed before February 15, 1972, stating that “there is no indication in the text of the DMCA that Congress intended to limit the reach of the safe harbors provided by the statute to just post–1972 recordings.”

Refusing to Walk the Plank, UMG appealed and, as of Tuesday, it appears that the Appellate Division has Jumped Ship, Capsizing the decision of the trial court. In its opinion, the court accepted UMG’s argument that if the DMCA were to apply as Escape argued, it would directly violate section 301 (C) of the Copyright Act, which expressly extended federal copyright protection only to recordings fixed AFTER February 15, 1972 – “[w]ith respect to sound recordings fixed before February 15, 1972, any rights or remedies under the common law or statutes of any State shall not be annulled or limited by this Title until 2067″. If the DMCA were to apply to a pre-1972 sound recording, the owner would no longer be able to sue under the common law or statutes of any State; the only remedy available would be service of a takedown notice on the infringer – i.e. a LIMITATION on the owner’s remedies.

For the court to find in favor of Escape, it would have to conclude that Congress intended to modify section 301(c) when it enacted the DMCA. However, as the court stated, statutes are not deemed to repeal earlier ones without express words of repeal, and the DMCA could not be held to repeal section 301(c) of the Copyright Act, especially in light of the fact that the statutes can reasonably co-exist. Congress explicitly separated the universe of sound recordings into two categories – one for works “fixed” after February 15, 1972, to which it granted federal copyright protection, and one for those fixed before that date, to which it did not. Accordingly, absent anything in the Copyright Act itself, or its legislative history, it was clear to the court that Congress meant to apply the DMCA to the former category, but not to the latter.

Reading the Copyright Act as a whole, as is required, the court interpreted the DMCA’s references to “copyright” and “copyright infringer” to specifically refer to those works that are covered by the DMCA – i.e. post-1972 works.

In rejecting Escape’s argument that the very purpose of the DMCA – to promote efficiency in Internet operations – will be thwarted if it is deemed not to apply to pre-1972 recordings because Grooveshark and similar ISPs would be forced to proactively research the history of every work before permitting it to be posted, the court pointed out that there are, in fact, two explicit Congressional priorities in the statutory language:

To promote the existence of Intellectual Property on the Internet; and
To insulate pre-1972 sounds recordings from federal regulation.
In the final line of the decision, the court Baited Congress to clarify its intent: “[u]nder such circumstances, it would be far more appropriate for Congress, if necessary, to amend the DMCA to clarify its intent, than for this Court to do so by fiat”.

Looks like it’s a Pirates’ Life for Escape… New York State has thrown a Line out to all pre-1972 copyright holders, and the implications may really keep common law copyright infringement claims Flooding in. But the real question is whether it will be All Hands on Deck in Congress to re-Navigate the murky wording of the DMCA.

In other “Maritime” news… Fleet week in New York has been cancelled this year. It appears that this concrete jungle is really Weighing Anchor and washing anything left in the Harbors out to Sea.

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