Veoh Networks makes both professionally created programming content and entertainment, as well as user-generated content, available through its website. Two years ago Universal Music Group (owned by Vivendi SA) sued Veoh for copyright infringement, alleging that Veoh's business was essentially based on the infringing use of copyrighted works of others, notably - from Universal's viewpoint - musical groups and artists.

Veoh countered with the fact that it used filtering technology to detect and remove protected content and, in the words of Judge Matz writing for the US District Court for the Central District of California, when Veoh "did acquire knowledge of allegedly infringing material... it expeditiously removed such material", thus vindicating Veoh supporters who have consistently maintained that Veoh is protected by the provisions of the Digital Millennium Copyright Act. This is the second time the legal sun has shone favourably on Veoh: a similar lawsuit brought by Io Group, an adult entertainment company, was also decided in favour of Veoh last year.(1)

A key requirement for insulation from liability for copyright infringement in the United States under the Digital Millennium Copyright Act is the question of whether, when a company becomes aware of infringing content, it promptly removes this content from use and display. The federal court in California ruled that Veoh had done this, and that consequently the safe harbour provisions of the Digital Millennium Copyright Act served to protect Veoh from liability in this case. The order noted that the act "does not place the burden of ferreting out infringement on the service provider".(2)

Universal is expected to appeal on the grounds that the judge's order failed adequately to take into account Universal's claim that everyone connected with Veoh must have known about the infringement and that this alone should sustain the 'knowledge' which would remove the shield from Veoh's business model – a shield otherwise available to web hosting companies under the Digital Millennium Copyright Act. However, it may be an uphill battle for Universal since the court specifically addressed this issue, noting that "if such general awareness were enough to raise a 'red flag,' the [Digital Millennium Copyright Act] safe harbor would not serve its purpose".

For further information on this topic please contact Joseph I Rosenbaum at Reed Smith LLP by telephone (+1 212 521 5400), fax (+1 212 521 5450) or email (jrosenbaum@reedsmith.com).

Endnotes

(1) www.eff.org/files/Io%20v.%20Veoh%20(d%20ct).pdf.

(2) The full text of the decision is available at www.scribd.com/doc/19740660/UMG-v-Veoh-summary-judgment-order.

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