Record Label UMG Loses Appeal Against Veoh, Gets Cold Shoulder From YouTube in Fight With Megaupload

Written by Joe Ross. Posted in Featured, Trends

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Published on December 22, 2011 with No Comments

Universal Music Group has not had the best time of things in the legal realm recently. I wanted to follow up on my previous post about their convoluted attempt to remove a video from YouTube featuring several of their artists expressing their love for the file-sharing site Megaupload. But I’m going to start with a recent court loss by UMG that, while it didn’t help the victorious defendant, may help discourage similar suits in the future. Stories like these can change how we make, share and monetize content online. I’ll occasionally interrupt our admittedly more entertaining and useful fare to bring you updates on important legal developments are affecting life on the internet.

Corynne McSherry of the Electronic Frontier Foundation wrote Tuesday that the 9th Circuit has affirmed [PDF] a lower court’s ruling that video distribution company Veoh was covered by the Digital Millenium Copyright Act‘s “safe harbors” with regard to allegedly infringed user-generated content. In the court’s own words:

The district court granted summary judgment to Veoh after determining that it was protected by the Digital Millennium Copyright Act (DMCA) “safe harbor” limiting service providers’ liability for “infringement of copyright by reason of the storage at the direction of a user of material that resides on a system or network controlled or operated by orfor the service provider.” 17 U.S.C. § 512(c). We agree, and accordingly affirm.

As McSherry’s post explains, plaintiff Universal Music Group claimed that the safe harbor applies to companies storing potentially infringing user uploads but not to those displaying or distributing that content. The district court and finally the 9th Circuit pointed out that to read the law so narrowly would siphon off all of the protection it was meant to grant to cooperative content sites.

The EFF also pointed out that UMG hadn’t sent a single notice to Veoh requesting them to take down infringing content. 17 USC 512(c)(1)(C) requires sites like Veoh to respond “expeditiously” to good-faith notifications of infringement, presumably with an eye at least partially toward minimizing the need for costly and time-consuming litigation. UMG decided against sending such notices, and the resulting litigation played a part in Veoh’s eventual bankruptcy (they are now a subsidiary of another online video company, according to Wikipedia).

EFF accurately sums up Veoh’s court victory as bitter-sweet, but the precedent will hopefully be of assistance to other companies in future attempts to intimidate or litigate legitimate platforms out of existence. Hopefully, it will at least push would-be plaintiffs to try notice-and-take-down before filing a suit.

Now, let’s revisit UMG’s Megaupload debacle (here’s another link to my first post about it, check it out for some more background). While early reports assumed the removal was in the form of a take-down request like the one UMG failed to issue to Veoh, the label eventually claimed that they removed it themselves, pursuant to a secret agreement with YouTube that supposedly grants UMG direct access to the site’s content management system. According to a 2009 letter from a label attorney to YouTube’s head legal honcho Lance Kavanaugh the removal removal rights are not limited to suspected infringement.

Eriq Gardner at Hollywood Reporter reports that YouTube has put the video back up, citing the need for more information to keep it down. Moreover, they told him their partners can’t take stuff down unless they “own the rights” to it or it includes live material covered by “exclusive agreements with their artists.” Admittedly, that’s not a denial that UMG has some agreement with YouTube giving the former direct access to remove stuff from the latter. But it’s a clear statement that YouTube isn’t going to publicly support UMG on this one, at least not yet.

That’s a bold move, considering YouTube is owned by Google, who recently partnered up with UMG on the Google Music service and store. The terms of the deal aren’t public, but I’m sure they’re not permanent. That means there’s potential that an ugly public relations and/or legal battle where YouTube and Google either stay on the sidelines or keep distancing themselves from UMG’s conduct may bode ill for Google Music’s song library down the road.

About Joe Ross

Joe Ross is one of the cofounders of KeyPulp. A law student, gadget geek and sci-fi fanatic, Joe also enjoys playing music, matching wits with kittens, and being proven wrong by his beautiful fiancée. Note: Joe writes about legal stuff sometimes. None of that is legal advice and it should never be construed as such. | 

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