Run DMC(A): No Safe Harbor for Vimeo against EMI?

It started with a simple equation: “Vimeo is video + you.” Yet this formula and model for the new “user-generated content”-fueled Internet has morphed into a case that could very well test the limits of the protection afforded to “service providers” under the Digital Millennium Copyright Act (DMCA).

This past week, a federal judge found that a particular “safe harbor provision” of the DMCA, which has been invoked successfully by user-generated content providers like YouTube and Veoh in their respective quests to protect and insulate themselves from their user’s alleged infringement, may not be available to Vimeo in its case, Capitol Records, LLC, et al. v. Vimeo LLC d/b/a Vimeo.com, et al., No. 09 Civ. 10101, in the Southern District of New York. The court denied summary judgment on 55 allegedly infringing works that resided at one point or another on Vimeo’s website, setting the stage for a trial that could change the interpretation of the DMCA as we know it.

Since 2005, Vimeo, the online platform that emerged from its creators at Connected Ventures LLC, has “enable[d] users to upload, share and view original videos.” But unlike the YouTubes and Veohs of the world, the Vimeo business model has always been readily distinguishable from other video-uploading services “by requiring that those who upload a video” to the Vimeo website to “have created, or at least participated in the creation of, the video.”  Vimeo started out with 20 employees and now has 74 (as of July of this year), and in the process has become one of the top 130 most-visited websites in the world, with 12.3 million registered users. The website affords its users streaming and downloading capabilities of its (and their own) videos (depending on the particular user’s subscription), but also has a strict set of “Community Guidelines” and Terms of Service regarding content restrictions and its copyright policy to which users must agree.

Of course, while agreement by Vimeo’s editorial staff is necessary to proceed to the next step, uploading, the user maintains “the technical ability to upload any video content whether or not it complies with the terms of the Community Guidelines” (and Vimeo does not pre-screen content). A “Community Team,” which aids in the takedown of suspect videos (content, copyright infringement, or otherwise), has taken down thousands of videos found to be in violation of the Terms of Service of Community Guidelines.

Vimeo’s takedown procedures and Community Guidelines allow for greater interaction between the editorial staff and the users of the site—procedures that differ from the more simplified takedown procedures of its uploading brethren, like YouTube.  Unhappy with these takedown procedures, Capitol and EMI sued Vimeo in 2009 alleging direct, contributory, and vicarious infringement regarding 199 different videos on the Vimeo website, videos allegedly incorporated works from the Beatles, the Beach Boys, and the Jackson 5, among others. In September 2012, Vimeo moved for summary judgment, asserting that it was entitled to “safe harbor protection under the [DMCA].”

On summary judgment, the court had no issue siding with Vimeo regarding whether, like other websites storing user-generated content à la YouTube, Vimeo met the threshold inquiry and should be regarded as a “service provider” under the DMCA.  But, the inquiry does not end there.  The DMCA established “a series of four ‘safe harbors’ that allow qualifying service providers to limit their liability” — indeed, completely limit liability and shield from claims for monetary relief — on infringement claims.  Despite Vimeo’s argument that it fell within § 512 (c)(1), the safe harbor provision often used by content providers like Vimeo in contributory infringement cases, which allows service providers to argue they have no actual knowledge of the infringing activity and that the storage of the infringing material was at the direction of the user, the Court denied summary judgment on 55 of the 199 alleged infringements and found that two specific questions of fact existed that are unique to Vimeo’s aforementioned business model.

First, 10 of the 199 allegedly infringing videos were uploaded by Vimeo users who eventually became employees at the company. Thus, the court said, a question of fact existed as to whether the employees stored these videos as “independent ‘users’” or “on behalf of the company as Vimeo staff” — Capitol argued successfully that there was a degree of “editorial control” over the videos Vimeo staff chose to “like” on the website itself — and whether these actions were, eventually, within the scope of their employment.

Second, and perhaps more importantly because of the number of alleged infringements and possible damages, the Court found a triable question of fact existed as to whether Vimeo, as a service provider, had actual knowledge of the user-generated content allegedly infringing EMI works.  The key to walking the line between safe harbor and contributory infringement is knowledge (or lack there of)—i.e. whether the service provider has knowledge of the infringing activity taking place on the particular website.  If it does not, it can claim it’s a passive conduit, and often find safe harbor under the DMCA.  Indeed, here the Court found that a reasonable jury could conclude that Vimeo’s editorial staff had active knowledge of the infringement, as it often “interacted” with users, by the aforementioned “liking” of the allegedly infringing videos, commenting on the web pages (on Vimeo) of some of the allegedly infringing videos and “burying” the allegedly infringing videos by preventing them from appearing on the website’s discovery tab. This wasn’t just the whack-a-mole scenario where Vimeo attempted to takedown infringing works and new users kept posting infringing materials — by failing to simply remove the works, Vimeo was, at least at first blush, “contributing” to the infringement. As a result, the Court concluded that this active editorial control could impute knowledge of the alleged infringement upon on Vimeo itself.

The Insider will keep you posted as this case moves forward to trial. For now though, it appears that if a jury answers the questions of fact above in the negative, Vimeo would be on the outside the safe-harbor provisions of the DMCA and staring at infringement.  This could make the sum of the equation “video + you” much greater than Vimeo originally intended.

 

SOURCE: ECF Docket, Capitol Records, LLC, et al. v. Vimeo, LLC d/b/a/ Vimeo.com, et al., No. 09 Civ. 10101 (RA), Southern District of New York.

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