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.

2d Cir. To Hear Vimeo Interlocutory Appeal

Capitol Records, LLC v. Vimeo LLC, 2d Cir. Index Nos. 14-15 and 14-16 (2d Cir. April 9, 2014) [Doc. 57].

The Second Circuit agreed to hear interlocutory appeals, pursuant to 28 U.S.C. § 1292(b), and to consolidate the appeals.  The Second Circuit is now in a position to rule on whether the DMCA applies to pre-1972 sound recordings, and to clarify the willful blindness doctrine.

Vimeo Decision Modified; Leave To Appeal Granted

Capitol Records, LLC v. Vimeo, LLC, 2013 ILRC 3345, No. 09-cv-10101 (S.D.N.Y. Dec. 31, 2013).

Upon further review of the record, the Court agreed with defendants that Vimeo is entitled to summary judgment with respect to five videos for which the only evidence of employee interaction was that the user's account had been "whitelisted."  "It is simply unrealistic to infer that a Vimeo employee watched" those videos.  Also upon further review, the Court found that for two videos, the infringing nature of the videos was not objectively "obvious" and therefore Defendants did not have "red flag" knowledge of the videos' infringing content.  However, the Court found that 18 of the videos still should go to a jury.

The Court granted Plaintiff's motion to amend the complaint to add additional videos, including both pre- and post- 1972 sound recordings.

Lastly, the Court granted Vimeo's motion to certify two questions for interlocutory appeal: (1) Are the DMCA's safe-harbor provisions applicable to sound recordings fixed prior to Feb. 15, 1972, (2) and does a service provider's mere viewing of a user-generated video containing third party copyrighted music automatically give rise to a triable issue of fact as to the service provider's knowledge of infringement under the DMCA?

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.