A Bittersweet Victory: The Ninth Circuit Reaffirms DMCA Protection

In 2007, Universal Music Group (UMG) brought a lawsuit against Veoh Networks (Veoh), a video hosting website, alleging that Veoh facilitated copyright infringement by providing a website that hosted videos containing music owned by UMG. On December 20, 2011, the Ninth Circuit Court of Appeals upheld a summary judgment in favor of Veoh and held that Veoh was protected by the Digital Millennium Copyright Act’s (DMCA) “safe harbor” provisions. In other words, it found in order to be protected by the safe harbor provisions of the DMCA, sites making files uploaded by users publicly available are required to remove infringing content only when the site becomes aware of the specific infringing content, for example, by means of a DMCA takedown notice.

While Veoh’s website was found to be perfectly legal, its victory is bittersweet; the small startup company filed for bankruptcy early in 2010 from the high cost of defending its case. Its victory, however, was an important victory for the Internet, as a whole, and may also have implications toward the outcome of the case between Viacom and YouTube.

The case also brings to light why the SOPA/PIPA bills before the House and Senate are cause for concern. The DMCA allows companies like Veoh to keep its business running while a case is being litigated. The SOPA/PIPA bills, however, would have immediately shut Veoh’s website down before it even had its day in court, thereby keeping Veoh from running its business which, in this case, was ultimately found to be perfectly legal. There is cause for concern when copyright holders abuse the law to stymie innovative new startups. The SOPA/PIPA bills will be back on Congress’ agenda when it reconvenes in January.

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