Veoh Decision Good News For Google, Potentially Bad News For Viacom In YouTube Litigation

Online video destination Voeh Networks was sued in 2006 for copyright infringement by IO Group (an adult video producer). The facts in the case and claims are generally similar to those of Viacom vs. YouTube. Yesterday a federal District Court judge in California issued a ruling that, barring an appeal by IO, vindicates Veoh and absolves the company of liability for copyright infringement. (Here’s the decision.)

The Viacom case is in New York District court and the Veoh ruling has no direct bearing on the outcome of that case, but it will be somewhat persuasive and Google will use the ruling in its arguments.

The court’s rationale for ruling (on summary judgment) for Veoh and against IO was that Veoh was entitled to protection under the DMCA’s “safe harbor” provision (Section 512(c)), which reads:

Section 512(c) limits the liability of service providers for infringing material on websites (or other information repositories) hosted on their systems. It applies to storage at the direction of a user. In order to be eligible for the limitation, the following conditions must be met:

–The provider must not have the requisite level of knowledge of the infringing activity, as described below.

–If the provider has the right and ability to control the infringing activity, it must not receive a financial benefit directly attributable to the infringing activity.

–Upon receiving proper notification of claimed infringement, the provider must expeditiously take down or block access to the material.

The “knowledge standard” (bullet one above) is as follows:

Under the knowledge standard, a service provider is eligible for the limitation on liability only if it does not have actual knowledge of the infringement, is not aware of facts or circumstances from which infringing activity is apparent, or upon gaining such knowledge or awareness, responds expeditiously to take the material down or block access to it.

The court in Veoh found as a matter of law that all the provisions for Safe Harbor protection were met. It found that Veoh had proper anti-infringement policies and practices in place and was policing instances of infringement in good faith. (Again, IO can appeal to a higher court to overturn the ruling.)

Google is making arguments similar to what Veoh successfully made in this case. But there may be factual issues surrounding what YouTube executives knew about infringement and how aggressively they sought to police it after discovering that infringement. For example, if Viacom can prove that executives at YouTube knew infringement was going on, tolerated it and failed to take appropriate action, there could well be a finding of liability for Google (though no punitive damages).

However, this case is generally positive news for Google and YouTube.

There’s more in the Wall Street Journal and PaidContent.