Wednesday 21 December 2011, 12:06 | By

Universal loses Veoh lawsuit at appeal

Grooveshark Timeline Legal

Veoh

Universal Music has lost an appeal in its legal battle with one time YouTube rival Veoh.

Which basically reaffirms the precedent that such sites need only operate basic takedown systems – that remove copyright content at the request of copyright owners – in order to benefit from the safe harbour provisions of the Digital Millennium Copyright Act, the bit of US law that means content sharing sites are not liable for copyright infringement even if they host user-uploaded content that is unlicensed.

Universal’s lawsuit argued that Veoh management were aware that their website routinely hosted unlicensed videos and therefore should have done more to ensure such content didn’t go live, presumably by introducing the sort of automated takedown technology YouTube has adopted in recent years. But on first hearing in 2008, and now on appeal, US judges have said there is no obligation on video site owners to run anything but the most basic of takedown procedures, even if they are aware that means they are inadvertently hosting unlicensed content most of the time.

Appeal court judges added that while there was an obligation on Veoh to deal with takedown requests “promptly”, Universal had no evidence that it hadn’t done so. In fact the music major hadn’t sent any takedown requests before beginning legal action to test the company’s efficiency. And it can’t issue any test takedown demands now, because Veoh shut down in February 2010, citing the costs of fighting the Universal lawsuit as being key in its demise.

So, the ruling and precedent set in the original hearing on this lawsuit stands. That content-sharing sites need only operate basic takedown systems to get DMCA protection was also confirmed in the ruling on the subsequent higher profile legal battle between MTV owner Viacom and YouTube, which focused on the takedown procedures operated by the market leader video-sharing site in its earlier days.

As previously reported, various players in the US music industry have expressed frustration of late with the low standards expected of takedown systems by the American courts, which – some artists, labels and music publishers argue – puts far too much onus on rights owners to have to constantly monitor video sharing sites for illegal uploads of their content.

As technology to automate the takedown process, to an extent, becomes more readily available, many in the music industry would like the use of such technology to be mandatory for any sites with user-upload functionality. Rulings in the Veoh and Viacom v YouTube case contradict that desire, but we may see the record industry begin to lobby Congress for amendments to be made to the DMCA to better define, and increase, the obligations of video site operators. The Recording Industry Association Of America has already indicated this is something being considered.

But in the meantime of course, Universal knows pursuing new litigation against user-upload sites, which hide behind DMCA protection despite operating allegedly shoddy takedown systems, is a risky game, which is why Universal’s lawyers have been trying to find other ways to sue Grooveshark – one such site in their eyes – in a way where DMCA safe harbours do not apply. Hence the company’s most recent lawsuit focusing on allegations that Grooveshark staff, and not users, upload much of the unlicensed material.

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