Contributory Infringement Claims Proceed Against Internet Provider

UMG Recordings, Inc. v. RCN Telecom Servs., LLC, No. CV1917272MASZNQ, 2020 WL 5204067, at *3 (D.N.J. Aug. 31, 2020)

UMG Recordings brought contributory and vicarious copyright infringement actions against an internet provider (RCN) and its management company (Patriot) for enabling RCN subscribers to repeatedly download and share UMG copyrighted songs. RCN received more than five-million email notifications requesting that RCN warns its subscribers to stop and then cancels the subscribers that refused to stop. RCN made no meaningful changes to its policies and continued to cater all infringing subscribers. On August 31, 2020, a Federal Court in New Jersey denied RCN’s motion to dismiss and allowed Plaintiffs’ Contributory Infringement claim because Plaintiffs sufficiently plead both elements. 1) Knowledge: sufficient knowledge was inferred from the email notifications RCN received; and 2) Material Contribution: material contribution was inferred from RCN’s conduct to continue to provide its network to subscribers that were known repeat offenders. The court also allowed Plaintiffs’ vicarious liability claim because Plaintiffs successfully demonstrated RCN’s right and ability to supervise their subscribers, and RCN’s financial incentive to tolerate the infringing conduct of its subscribers. However, the court dismissed all claims against Patriot because Patriot’s role of providing management services to RCN did not sufficiently establish that Patriot had knowledge of the infringement notices that RCN received or that Patriot had knowledge of the infringement committed by RCN’s subscribers. Plaintiffs’ claims against RCN will proceed into the discovery stage of the lawsuit, while Plaintiffs’ claims are not allowed to continue against Patriot.

No Case Or Controversy In ISP's Declaratory Judgment Suit of NonInfringement

Windstream Services v. BMG Rights Management, 16-cv-5015 (S.D.N.Y. Apr. 17, 2017).

Plaintiff, an internet service provider (ISP), brought an action seeking a declaratory judgment of non-infringement based upon the DMCA's safe-harbor provisions.  Defendant is a music publisher.  The Court granted the defendant's motion to dismiss for lack of subject matter jurisdiction, finding that plaintiff sought an unauthorized advisory opinion (and even if the Court had subject matter jurisdiction, it would exercise its discretion and decline to hear the action).  "[Plaintiff] seeks a blanket approval of its business model, without reference to any specific copyright held by BMG or any specific act of direct infringement by any [plaintiff] subscriber."  The Court observed that the Southern District of California had rejected a nearly identical lawsuit in Veoh v. UMG, 522 F. Supp. 2d 1265 (S.D. Cal. 2007).  The complaint was hypothetical in nature.  Having dismissed the declaratory judgment clai, the Court declined to exercise supplemental jurisdiction over plaintiff's state law claim.

2d Cir. Addresses DMCA "Repeat Infringer" Policy In MP3Tunes Appeal; Finds Only A Single Statutory Damages Award For Infringed Composition & Sound Recording; Addresses Many Other Copyright Law Issues

EMI Christian Music et al. v. MP3Tunes, No. 14-4369 (2d Cir. Oct. 25, 2016).

In the MP3Tunes appeal, the Second Circuit vacated the District Court’s grant of partial summary judgment to the defendants based on its conclusion that MP3tunes qualified for safe harbor protection under the DMCA because the District Court applied too narrow a definition of “repeat infringer”; (2) reversed the District Court’s grant of judgment as a matter of law to the defendants on claims that MP3tunes permitted infringement of plaintiffs’ copyrights in pre‐2007 MP3s and Beatles songs because there was sufficient evidence to allow a reasonable jury to conclude that MP3tunes had red‐flag knowledge of, or was willfully blind to, infringing activity involving those categories of protected material; (3) remanded for further proceedings related to claims arising out of the District Court’s grant of partial summary judgment; and (4) affirmed the judgment in all other respects (relating to statutory damages for sound recordings and compositions, cover art liability, respondeat superior liability for MP3Tunes executives, personal jurisdiction, vicarious and contributory liability, statutory damages for singles & compilations, and punitive damages).

The plaintiff record labels and music publishers argued that MP3tunes never reasonably implemented a repeat‐infringer policy.  In addressing this argument, the Second Circuit answered two questions: first, whether certain MP3tunes users qualified as “repeat infringers”; and second, if so, whether MP3tunes reasonably implemented a policy directed at them.  As to the first question, the Second Circuit held "all it takes to be a 'repeat infringer' is to  repeatedly upload or download copyrighted material for personal use."  (Emphasis in original)  Having answered that question, the Court then found that MP3tunes did not "even try to connect known infringing activity of which it became aware 2through takedown notices to users who repeatedly created links to that infringing content in the sideload.com index or who copied files from those links...A jury could reasonably infer from that evidence that MP3tunes actually knew of specific repeat infringers and failed to take  action "

The Court also, notably, addressed statutory damages and whether it was improper to make only a single award where there are different owners of the copyright in the sound recording and in the composition.

 In our view, then, Congress did not intend for separate statutory damages awards for derivative works such as sound recordings, even when the copyright owner of the sound recording differs from the copyright owner of the musical composition.    In sum, the District Court’s decision to permit only one award of statutory damages for the musical composition and corresponding sound recording comports with both the plain text and the legislative history of the Copyright Act.  We therefore affirm that part of the judgment.

In addition to attacking the District Court’s exercise of personal jurisdiction over him, the individual defendant (MP3Tune's CEO) argued that there was insufficient evidence to support the jury’s finding that he was vicariously or contributorily liable for MP3tunes’s infringements.  The Second Circuit disagreed,

DMCA Safe Harbor Applies To Pre-1972 Sound Recordings & Plaintiffs Have Burden Of Proving Red-Flag Knowledge; 2d Cir.

Capitol Records, LLC v. Vimeo, No. 14/1048 (2d Cir. June 16, 2016).

The Digital Millennium Copyright Act (DMCA) safe harbor (section 512 of the Copyright Act) applies to pre-1972 sound recordings and protects service providers from infringement liability under state copyright laws, holds the Second Circuit on an interlocutory appeal in a copyright infringement action brought by record labels against Vimeo.  Further, the Court held that the mere fact that a video contains all or virtually all of a “recognizable,” copyrighted sound recording and was viewed in some fashion by a service provider’s employee is insufficient to prove knowledge or red flag knowledge of infringement; and further that the record company plaintiffs' evidence was insufficient to support the imputation of knowledge to Vimeo through the theory of willful blindness.

On the safe harbor question, the Second Circuit found that "A literal and natural reading of the text of § 512(c) leads to the conclusion that its use of the phrase 'infringement of copyright' does include infringement of state laws of copyright. One who has been found liable for infringement of copyright under state laws has indisputably been found 'liable for infringement of copyright'.”  Further, "To construe § 512(c) as leaving service providers subject to liability under state copyright laws for postings by users of infringements of which the service providers were unaware would defeat the very purpose Congress sought to achieve in passing the statute."  Construing the safe harbor of § 512(c) as not granting protection to service providers from liability for state-law-based copyright infringements would substantially defeat the statute’s purposes.  Accordingly, the 2nd Circuit vacated the district court's grant of summary judgment to Plaintiffs as to the availability of the DMCA safe harbor to Vimeo in relation to liability for infringement of pre-1972 sound recordings. 

On the "red flag" part, the 2nd Circuit addressed the shifting burdens of proof (plaintiff has the burden of proving red flag knowledge) and held that "A copyright owner’s mere showing that a video posted by a user on the service provider’s site includes substantially all of a recording of recognizable copyrighted music, and that an employee of the service provider saw at least some part of the user’s material, is insufficient to sustain the copyright owner’s burden of proving that the service provider had either actual or red flag knowledge of the infringement."  The Court then addressed several reasons why.  Accordingly, the Court held that Vimeo was entitled to summary judgment on those videos as to the red flag knowledge issue, "unless plaintiffs can point to evidence sufficient to carry their burden of proving that Vimeo personnel either knew the video was infringing or knew facts making that conclusion obvious to an ordinary person who had no specialized knowledge of music or the laws of copyright."

Lastly, the Court rejected the Plaintiffs’ argument that the district court erred in its ruling in Vimeo’s favor as to the Plaintiffs’ reliance on the doctrine of willful blindness.

Cox Communications Not Protected By DMCA Safe Harbor In Bit-Torrent Case

BMG Rights Management v. Cox Communications, no. 14-1611 (E.D. Va. Dec. 1, 2015).

In an action by the putative owners of 1,400 musical compositions against an internet service provider (Cox) for contributory and vicarious liability based on its users Bit Torrent infringement, the Court held inter alia that the ISP was not protected by the DMCA safe-harbor because it did not terminate access of repeat infringers under appropriate circumstances.  The Court found that defendant did not implement a repeat infringer policy before 2012, and after 2012 it did not reasonably implement its policy.  Thus, if Plaintiff is successful at trial, it will not be limited in the remedies it seeks.

Other issues the Court addressed was whether Plaintiff had standing (the copyright registrations listed Plaintiff, its predecessor, someone else, or the works were purchased).  The Court further found questions of material fact, 1) whether there is evidence of direct infringement by third parties; (2) whether there is evidence of Cox’s contributory infringement; (3) whether there is evidence of Cox’s vicarious liability; and (4) whether BMG failed to mitigate its damages.  Lastly, the Court found that the "unclean hands" defense failed as a matter of law.

Safe Harbor Does Not Protect Vimeo For All Videos

Capitol Records v. Vimeo, No. 1:09-cv-10101-RA (S.D.N.Y. Opinion & Order filed 09/18/13) [Doc. 119].

Plaintiffs are record labels and publishers that brought a copyright infringement action against Vimeo, an online video sharing platform.  Vimeo moved for summary judgment, asserting entitlement to “safe harbor” protection pursuant to the DMCA. Plaintiffs cross-moved for partial summary judgment seeking a ruling that Vimeo is ineligible for such protection. The question before the Court was whether Vimeo is entitled to safe harbor protection pursuant to the DMCA.  The Court held that triable issues of fact remained as to whether Vimeo is entitled to safe harbor protection as to fifty-five of the videos that Vimeo employees interacted with or uploaded.  However, the Court held that Vimeo was entitled to summary judgment as to the remaining 144 videos at issue in the suit.

First, the Court considered threshold criteria whether Vimeo is eligible for safe-harbor protection.  The Court found that Vimeo is a "service provider", it had adopted and reasonably implemented a "repeat infringer policy", and it did not interfere with standard technical measures.  Thus, Vimeo was eligible for safe-harbor protection.

Having satisfied the threshold criteria, the Court considered whether Vimeo met the requirements of § 512(c), which apply to any claims “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 or for the service provider.”  As to 10 of the videos, the Court found a triable issue with respect to whether certain employees were storing their content as “users” within the meaning of § 512(c) or as employees acting within the scope
of their employment.  Also, the Court found triable issues exist as to whether Vimeo acquired actual or red flag knowledge of the infringing content in 55 videos with which Vimeo employees interacted (e.g., commented on the videos, "liked" the videos, placed on channels etc.)  By contrast, there was no evidence that Vimeo acquired actual or red flag knowledge as to 144 videos with which Vimeo employees indisputably did not interact, and Vimeo was thus entitled to summary judgment as to these videos.

Plaintiffs' "willful blindness" arguments failed.  The Court noted that service providers are under no affirmative duty to seek out infringement, even when they possess technological measures permitting them to do so.

Also, the Court concluded that Vimeo lacked the right and ability to control infringing activity.  The Court considered the totality of Vimeo’s monitoring program, and rejected Plaintiffs’ arguments and found no triable issue as to the exertion of substantial influence on user activity.  The Court also rejected Plaintiffs' argument that Vimeo exerted substantial influence on its users’ activities through inducement.

The Court also concluded that Vimeo acted expeditiously when it removed videos pursuant to take-down notices.

Lastly, the Court concluded that DMCA protection did not apply to pre-1972 sound recordings.  The Court recognized other authority in the SDNY that found otherwise, but found the recent decision by the New York First Dep't, UMG Recordings, Inc. v. Escape Media Grp., Inc., 964 N.Y.S.2d 106 (1st Dep’t 2013), and the December 2011 Copyright Office Report concluding that the DMCA  safe harbors do not apply to pre-1972 records.  Accordingly, even those 144 videos that were otherwise protected by the DMCA are not protected if they are pre-72 recordings.

CLE "Does The DMCA Apply To Pre-1972 Sound Recordings"

This afternoon, David Rabinowitz and I co-presented a CLE entitled "Why The Internet Distribution of Pre-1972 Sound Recordings Is Different From Everything Else In Copyright Law -or- Does The DMCA Apply To Pre-1972 Sound Recordings."  Topics included a brief history of copyright in sound recordings, the scope of common law copyright protection, federal preemption of common law copyright (except for pre-1972 recordings), related claims of unfair competition, the DMCA safe-harbor, conflicting case law on whether the DMCA safe-harbor applies to pre-1972 recordings, and conflicting decisions on whether there is immunity for service providers under the Communications Decency Act.  Thank you to those who attended.

Reconsideration in MP3Tunes Case

Capitol Records, Inc. v. MP3Tunes, LLC, No. 07-cv-9931 (S.D.N.Y. filed May 14, 2013) [Doc. 368].

All parties moved for reconsideration of the Court's October 25, 2011 order (821 F. Supp. 2d 627), springing from the 2nd Circuit's decision in Viacom Int'l v. YouTube, Inc., 676 F.3d 19 (2d Cir. 2012).  Plaintiff's motion was granted in part and denied in part: plaintiff's motion was granted as to the issue of willful blindness and "red flag" knowledge, and denied as to the inducement of copyright claim.  Defendant's motion regarding direct copyright infringement was granted in part and denied in part.  Defendant's motion for reconsideration regarding infringement of cover art, regarding personal jurisdiction and summary judgment as to his vicarious liability was denied.

There is an interesting discussion of "red flag" knowledge of infringement, under which service providers can lose the protection of the DMCA safe harbors if they have actual or apparent (i.e., "red flag") knowledge of infringing conduct.

Pre-1972 Recordings Subject To DMCA

UMG Recordings, Inc. v. Escape Media Group, Inc., No. 100152/2010 (Sup. Ct., N.Y. Co. July 10, 2012) (Kapnick, J.S.C.).

New York State Court holds that the "safe harbor" provisions of the DMCA extend to common law copyright claims relating to pre-1972 recordings.

Plaintiff moved to dismiss defendant's "safe harbor" affirmative defense under the DMCA [17 U.S.C. 512(c)(1)].  Section 301(c) of the Copyright Act makes clear that the copyrights of pre-1972 recordings are not protected by the federal Copyright Act, and the Court analyzed whether the DMCA may provide a defense or "safe harbor" to internet service providers facing New York State common law copyright infringement claims (as opposed to claims under the federal act).  The Court observed that only one court has considered the issue (Capitol Records, Inc. v. MP3Tunes, 821 F. Supp.2d 627, 640 (SDNY 2011), and concluded that "there is no indication in the text of the DMCA that Congress intended to limit the reach of the safe harbors provided by the statute to just post-1972 recordings."  In response to a report by the Register of Copyrights that "it is for the Courts to interpret the applicable statute and decide the issues raise by this motion.  This Court is not attempting to extend the Copyright Act to pre-1972 recordings, but, nonetheless, does find, based on the relevant language of the statutes...that the safe harbor provisions codified by section 512(c)(1) of the DMCA is applicable to pre-1972 recordings."  Accordingly, plaintiff's motion to dismiss the DMCA affirmative defense was denied.

However, the Court did dismiss defendant's affirmative defense based on the Communications Decency Act of 1996 (the "CDA") [47 U.S.C. 230].  Lastly, the Court dismissed defendant's counter-claim for violation of a New York State anti-trust statute, the "Donnelly Act" (NY General Business Law 340), but denied plaintiff's motion to dismiss the counter-claims for tortious interference with contract and business relations.

2d Cir Decision On DMCA Safe Harbor In Viacom v Youtube

Viacom v. YouTube (2d Cir. Apr. 5, 2012). Decision. Not a "music" case, but extremely important decision that will impact future infringement cases.

This appeal required the Second Circuit to clarify the contours of the “safe harbor” provision of the Digital Millennium Copyright Act (DMCA) that limits the liability of online service providers for copyright infringement that occurs “by reason of the storage at the direction of a user of material that resides on a system or network controlled or operated by or for the service provider.” 17 U.S.C. § 512(c). The District Court held that the defendants were entitled to DMCA safe harbor protection primarily because they had insufficient notice of the particular infringements in suit. The Second Circuit held:

We conclude that the District Court correctly held that the § 512(c) safe harbor requires knowledge or awareness of specific infringing activity, but we vacate the order granting summary judgment because a reasonable jury could find that YouTube had actual knowledge or awareness of specific infringing activity on its website. We further hold that the District Court erred by interpreting the “right and ability to control” provision to require “item-specific” knowledge. Finally, we affirm the District Court’s holding that three of the challenged YouTube software functions fall within the safe harbor for infringement that occurs “by reason of” user storage; we remand for further fact-finding with respect to a fourth software function.

Labels Denied Interlocutory Appeal In MP3Tunes Case

Capitol Records, Inc. et al. v. MP3Tunes, LLC et al., No. 07-9931 (S.D.N.Y. filed Jan. 9, 2012) [Doc. 277].

Plaintiffs (record companies and music publishers) asked the Court to certify an interlocutory appeal of the Amended Memorandum & Order dated October 25, 2011 ("October 25,2011 Memorandum & Order") pursuant to 28 U.S.C. § 1292(b). Plaintiffs sought interlocutory appeal on whether, (i) the DMCA safe harbors apply to sound recordings fixed before February 15, 1972, (ii) a repeat infringer policy can be reasonably implemented by terminating only "blatant" infringers, and (iii) red flag knowledge of infringement can be established through sources other than takedown notices. The Court denied Plaintiffs' request.

Veoh Protected By Safe Harbor; 9th Cir.

UMG Recordings Inc. et al. v. Veoh Networks Inc. et al., No. 09-56777 (9th Cir. filed 12/20/2011) [Doc. 39]

Veoh Networks (Veoh) operates a publicly accessible website that enables users to share videos with other users. Universal Music Group (UMG) is one of the world’s largest recorded music and music publishing companies, and includes record labels such as Motown, Def Jam and Geffen. In addition to producing and distributing recorded music, UMG produces music videos. Although Veoh has implemented various
procedures to prevent copyright infringement through its system, users of Veoh’s service have in the past been able, without UMG’s authorization, to download videos containing songs for which UMG owns the copyright. UMG responded by filing suit against Veoh for direct and secondary copyrightinfringement. 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 or for the service provider.” 17 U.S.C. § 512(c). The 9th Circuit agreed, and accordingly affirmed.

"We ... hold that merely hosting a category of copyrightable content, such as music videos, with the general knowledge that one’s services could be used to share infringing material, is insufficient to meet the actual knowledge requirement under [the statute]".

Summary Judgments In MP3Tunes Case

Capitol Records, Inc. v. MP3Tunes, LLC, 1:07-cv-09931-WHP (S.D.N.Y. filed 8/22/2011) [Doc. 267].

"This case turns in large part on whether MP3tunes is eligible for protection under the safe harbors created by the Digital Millennium Copyright Act ("DMCA"), 17 U.S.C. 512."

The Court addressed Plaintiff's argument that MP3tunes failed to reasonably implement a repeat infringer policy. The court distinguished between "blatant infringers" and users who merely consume the content and found "this applies to MP3tunes executives." There was no evidence that executives or employees had firsthand knowledge that websites linked on the sideload.com website were unauthorized. Additionally, MP3tunes did nor purposefully blind itself to its users' identities and activities, and had a procedure for responding to DMCA takedown notices.

The Court next addressed MP3tune's compliance with Plaintiff's take-down notices. The court found that MP3tunes was obligated to remove specifice works traceable to users' "lockers" and that MP3tunes interpreted the reach of Plaintiff's notices too narrowly. However, MP3tunes was not obligated to take down all of Plaintiff's cotnent because the notices provided a representative list. Plaintiff had to provide sufficient information --additional web addresses -- for MP3tunes to locate other infringing material. "Absent adequate notice, MP3tunes would need to conduct a burdensome investigation in order to determine whether songs in its users' accounts were unauthorized copies. As discussed, the DMCA does not place this burden on service providers."

The Court next addressed actual or "red flag" knowledge of infringement. The Court found that MP3tunes "undoubtedly...is aware that some level of infringement occurs. But there is no genuine dispute that MP3tunes did not have specific 'red flag' knowledge with respect to any particular link...other than the URLs noticed [in the DMCA takedowns]."

The Court next addressed defendant's benefit and control of infringing activity, finding "at worst, MP3tunes set up a fully automated system where users can choose to download infringing content."

In sum, MP3tunes could claim safe harbor protection for plaintiff's works stored on and linked to on the websites. However, MP3tunes did not qualify for safe harbor protection for songs identified in takedown notices which it failed to remove.

The Court then turned to whether MP3tunes is secondarily liable for storing material at the direction if its users. The court found that MP3tunes knowledge of the unauthorized use of infringing material "is manifest." "Accordingly, [Plaintiff's] motion for summary judgment on its claim for contributory infringement with respect to the songs listed in [Plaintiff's] takedown notices and which MP3tunes failed to removed from users' lockers is granted."

The Court next turned to direct infringment. Plaintiff motion with respect to songs downloaded by employees was denied because there was a dispute as to whether the songs were downloaded by employees in the course of their employment. On the other hand, an individual named defendant was directly liable for the songs personally "sideloaded" from unauthorized sites.

MP3Tunes Decision on Counterclaims

Defendant's counterclaims Dismissed:

DMCA claim
New York's GBL 349 (re: consumer protection)
Common law unfair competition
California Business and Professional Code 17200

Defendant's counterclaims NOT dismissed:

Declaratory judgment claim that it is a service provider protected by the safe-harbor provision of 17 USC 512 (of the DMCA)

[No. 1:07-cv-09931-WHP-FM (Doc. 73 filed Mar. 4, 2009).]

Denying Summary Judgment to RIAA in Veoh

In the federal case UMG Recordings v. Veoh Networks, UMG's motion for summary judgment has been denied. UMG moved for partial summary judgment determining that Veoh was not entitled to the "safe harbor" afforded by the Digital Millennium Copyright Act. The District Court disagreed.

Decision.

UMG Recordings, Inc. v. Veoh Networks, Inc., No. 2:07-cv-05744-AHM-AJW (C.D. Cal., decided Dec. 29, 2008) [Doc. 293]

Fair Use and DMCA Take-Downs

Lenz v. Universal Music Publishing, Inc., No. 07-CV-03783, 2008 BL 247967 (N.D. Cal. Oct. 28, 2008), denying defendants Universal Music Publishing, Inc. and Universal Music Publishing Group’s (collectively, “Universal”) request for certification for interlocutory appeal in a case involving an allegedly infringing YouTube video.

Although Universal sought certification of a controlling question of first impression on the issue of fair use and a copyright owner’s obligations with regard to the Digital Millennium Copyright
Act (DMCA) takedown notice procedures, the court found the question did not provide substantial grounds for difference of opinion, nor that a resolution of the question would materially advance the litigation at this stage.

[More from Bloomberg.]

The court, in an earlier decision held that the DMCA requires consideration of fair use prior to sending a takedown notice. Universal then filed the instant motion, seeking certification for
interlocutory appeal pursuant to 28 U.S.C. § 1292(b) of the issue of “whether 17 U.S.C. § 512(c)(3)(v) requires a copyright owner to consider the fair use doctrine in formulating a good
faith belief that ‘use of the material in the manner complained of is not authorized by the copyright owner, its agent or the law.’” The court denied Universal’s motion for interlocutory appeal.

DMCA & The Safe Harbor - Web Video

IO Group, Inc. v. Veoh Networks, Inc., (N.D.Cal. Aug. 27, 2008), granting defendant's motion for summary judgment in a copyright case based on user-generated web-video content.

Though not a music case, the EFF describes the decision as "required reading". 

Online Common Law Copyright Infringement (P2P)

In UMG Recordings, Inc. v. Veoh Networks, Inc., No. 08-600558 (Sup.Ct., N.Y. Co. complaint filed Feb. 25, 2008), major label UMG sued on-line company Veoh for common-law copyright infringement under New York law for alleged infringement of Pre-1972 recordings. "The need for New York to protect UMG's property rights in the Pre-1972 Recordings is particularly urgent because UMG's property is being taken and virallly distributed over the Internet by [Veoh]." (Compl. at 4.) Is this the first case in New York state to describe certain on-line distribution patterns as viral?

As plaintiff notes, pre-1972 sound recordings are subject to protection under New York State law. Capitol Records, Inc. v. Naxos of American, Inc., 4 N.Y.3d 540, 830 N.E.2d 250 (2005). But given that the complaint lacks any claims for copyright infringement of plaintiff's interests in post-1972 sound recordings under the federal Copyright Act, is this a test-case? Presumably, post-1972 recordings are available (e.g., synched to videos) on Veoh.

Let's examine the allegations:

Veoh's use of the Pre-1972 Recordings in violation of UMG's rights under New York law is part of Veoh's strategy to become one of the Internet's most popular and valuable 'video sharing' websites, and to thereby attract advertising dollars and tens of millions of dollars of venture capital investment and increase the value of its services...the harm that Veoh causes to UMG, including in the new, developing, and crucial Internet market, is enormous.

Veoh's website is later described as "where thousands of audiovisual works copied by Veoh are available for immediate viewing, downloading, and other forms of so called 'sharing.'"

Many of the audiovisual works on Veoh's website embody the Pre-1972 Recordings...that are synchronized with commercial works such as television programs, documentaries, and other expensive, professionally-made videos. The Pre-1072 Recordings that are embodied in the audiovisual works on Veoh's website are integral to those audiovisual works and to their appeal and popularity.

...

Veoh refuses to employ simple safeguards available to it and used by various of its competitors to avoid unlawful copying and distribution of works owned by others...

So, in sum: the alleged infringement arises out of Pre-1972 recordings synced to videos (whether such synchronization was authorized is not alleged), and Veoh is doing nothing to stop it. As the complaint alleges, "Defendants' conduct is...a classic attempt to 'reap where they have not sown'..."

In fact, the complaint uses such buzz words as "encourage, induce, and enable members" -- indicating a contributory infringement theory under state law. Thus, it appears that plaintiff is positioning this case to be the State's parallel to federal jurisprudence on P2P contributory infringement. (Grokster.) However, without 17 USC 101 et seq., Plaintiff is relying on common law copyright infringement and misappropriation, and unjust enrichment.

And being outside the scope of the federal Copyright Law, they may have valid claims for punitive/exemplary damages, in addition to profits and injunctive relief.

But, it is curious that Plaintiff's make allegations regarding Veoh's failure to apply safe-guards. Whereas defendants might have refuge in the Copyright Act's "safe-harbor" provisions (DMCA), is the same protection available under state copyright law? And if not, what leverage does that provide digital content producers in their claims against ISPs, at least with respect to pre-1972 recordings?

[Request a copy of the complaint.]

Safe Harbor No More?

CMJ: Perfect 10 on remand. A challenge to DMCA safe harbor by requiring affirmative steps to protect against infringement? I think big-media (e.g., Viacom v. YouTube) will say "It's about time!"

But, smarter minds offer brighter opinions (the following is a polling of great copyright minds):

(1) The more accepted view is that 512 safe harbor provisions trump the common law doctrines of secondary liability. Thus, assuming that Google has complied with all the Section 512 preconditions (ie notice and takedown, repeat offender policy, etc.) there really ought not to be liability for the Google Image search.

(2) The Court is focusing on Google AdSense. It is not at all clear that Adsense "activity" is protected under the "search engine" prong of 512(d). So you are back to "traditional" contributory/vicarious liability analysis for the AdSense program.

...of course, Google is in the land of the 9th Circuit, home to Silicon Valley.