Veoh Gets Another Nice 512(c) Win–UMG v. Veoh

January 5, 2009 · by · in Copyright, Derivative Liability

By Eric Goldman

UMG Recordings, Inc. v. Veoh Networks, Inc., 2008 WL 5423841 (C.D. Cal. Dec. 29, 2008)

Last year, in Io v. Veoh, online video sharing site Veoh got a significant win under the DMCA online safe harbors (17 USC 512(c)). That opinion makes my list as one of the top 10 cyberlaw cases of 2008, and I’m considering teaching it in Cyberlaw next year.

Last week, Veoh–a site where users upload and share video–got another nice 512(c) win. UMG claimed that the following activities by Veoh did not constitute “storage at the direction of a user”:

“(1) automatically creating “Flash-formatted” copies of video files uploaded by users; [the Io court had already ruled that this didn’t block a 512(c) defense]

(2) automatically creating copies of uploaded video files that are comprised of smaller “chunks” of the original file;

(3) allowing users to access uploaded videos via a technology called “streaming”;

(4) allowing users to access uploaded videos by downloading whole video files”

UMG’s statutory reading is novel, but this is partially due to the fact that it’s a really goofy way of reading the statute. Accordingly, the court rejects UMG’s argument that any of these technological manipulations of user-uploaded videos disqualify Veoh from coverage under 512(c). This does not mean Veoh will qualify for 512(c)–the court wasn’t opine on that issue–but the court’s opinion is a strong signal that Veoh will qualify.

I don’t expect the ruling to have much bearing on the Viacom v. YouTube case. I don’t recall Viacom making the goofy statutory argument that UMG made here, so this ruling should be tangential to the arguments in that case. On the other hand, the ruling adds another defense-favorable interpretation of 512(c) as applied to online video sites and gives another data point that the courts just aren’t buying the copyright owners’ arguments. Maybe that will help nudge Viacom and YouTube to settle.