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Saturday, August 30, 2008

Effect Of Veoh Decision On YouTube/Viacom Case Unclear

YouTube is cheering a new decision dismissing a copyright infringement lawsuit against Veoh Networks that is similar to a battle it's fighting against Viacom. But not everyone thinks the ruling will hurt Viacom in its $1 billion lawsuit against the video-sharing site.
In the Veoh case, a federal magistrate in San Jose, Calif. threw out a lawsuit brought by adult entertainment company Io Group. The court found that the video-sharing site was protected from liability by the Digital Millennium Copyright Act.
The extent of that law's protections are key to several pending cases by traditional media companies against sites that rely on user-generated content including, most famously, Viacom's lawsuit against Google's YouTube.
At issue in the Veoh case were Io clips that users had uploaded to the video-sharing site without authorization. Io argued that Veoh should have done more to police its site, but Veoh countered that it was protected by the Digital Millennium Copyright Act's safe harbor provisions. Those protections generally give companies immunity from liability for copyright infringement as long as they remove pirated material posted by users upon request.
Federal magistrate Howard Lloyd agreed with Veoh's interpretation and ruled that the federal statute does not require companies to screen user-submitted content in advance. "Plaintiff's suggestion that Veoh must be required to reduce or limit its business operations is contrary to one of the stated goals of the DMCA," he wrote. "The DMCA was intended to facilitate the growth of electronic commerce, not squelch it."
Viacom's lawsuit is pending in federal court in New York, and the judge in the case is not legally required to follow the ruling of the San Jose court. But the judge in the YouTube case might still be persuaded by another judge's reasoning in a similar lawsuit.
Not surprisingly, YouTube immediately cheered the decision. "It is great to see the Court confirm that the DMCA protects services," the company said in a statement.
For its part, Viacom said in a statement that it still thought YouTube was liable for copyright infringement. "Even if the Veoh decision were to be considered by other courts, that case does nothing to change the fact that YouTube is a business built on infringement that has failed to take reasonable measures to respect the rights of creators and content owners. Google and YouTube have engaged in massive copyright infringement -- conduct that is not protected by any law, including the DMCA."
Some bloggers and industry observers, including the digital rights group Electronic Frontier Foundation, said the decision seemed to bolster YouTube.
Eric Goldman, director of the High Tech Law Institute at Santa Clara University, was among those who thought the court's reasoning could bode poorly for Viacom. "It's terrific news for YouTube," he said.
Goldman added that the court's rejection of the proposition that Veoh should have instituted measures to prevented pirated clips from ever appearing on the site is especially significant. "Can plaintiffs tell defendants how to run their business? This court's saying, 'Definitely not.'"
Another portion of the ruling that could help YouTube deals with the site's transcoding of videos into Flash. Lloyd held that automatically converting the clips into Flash doesn't deprive Veoh of immunity. "Veoh is not precluded from safe harbor ... by virtue of its automated processing of user-submitted content," he wrote.
Still, not everyone agrees that this case offers powerful support for Google's video-sharing site. "It's a factually different situation," said Bruce Boyden, an assistant law professor at Marquette.
One of the most significant dissimilarities is that Io never notified Veoh about the infringing clips. On the contrary, the first time Veoh learned of the alleged piracy was when it was served with the lawsuit.
But Viacom complained numerous times to YouTube about alleged copyright infringement on the site. YouTube has responded by taking down particular clips, but the problem is that users continued to upload new copies.
"Viacom, unlike Io, has been sending tons of Section 512 takedown notices to YouTube. The question there is going to be, what does YouTube have to do after it gets those notices other than just pulling down the one file that's complained about?" Boyden said.
Additionally, Lloyd noted in his ruling that Veoh did everything possible to prevent piracy. "Perhaps most importantly, there is no indication that Veoh has failed to police its system to the fullest extent permitted by its architecture," Lloyd wrote.
But one of Viacom's allegations against YouTube is that, prior to late 2007, the site had copyright infringement detection tools but made them available only to partners. If that's true, the decision in Veoh is not especially helpful to YouTube, Boyden said.

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