Veoh decision setback for Viacom, but Google not off hook

(Credit: Veoh.com)

The unprecedented decision by a U.S. district court judge to dismiss a copyright infringement case against video-sharing site Veoh is definitely favorable to Google, YouTube, and all user-generated sites, copyright attorneys say.

But the ruling doesn't mean that Google will necessarily prevail in the $1 billion copyright suit filed against it by Viacom, parent company of MTV and Paramount Pictures.

There are significant differences between Veoh and YouTube, according to Mark Litvack, a well-known copyright attorney who once worked for the Motion Picture Association of America (MPAA) and is now with the firm Reed Smith.

Veoh was sued by the Io Group, which does business as Titan Media, an adult entertainment company. According to court documents, Io said between June 1, 2006, and June 22, 2006, the company found 10 videos it owned--some as long as 40 minutes--posted to Veoh without its authorization. The Io Group filed suit on June 23, 2006, charging that Veoh had not done enough to protect its copyright.

The judge in the case, Howard Lloyd of the U.S. District Court for the Northern District of California found that Veoh and other sites that host user-generated videos can't be held solely responsible for vetting the clips. But what's different about Io and Viacom is that Io didn't notify Veoh of the copyright infringement on the site before filing suit.

In contrast, Viacom sent more than 100,000 "take-down notices" to YouTube prior to filing its $1 billion copyright complaint.

"The first reaction from Io was to sue rather than to work through the system," Litvack said. "They didn't find out whether Veoh worked to protect copyright, which it appears they do relative to the Digital Millennium Copyright Act."

What Litvack is referring to is the DMCA's Safe Harbor provision, which limits the responsibility of an Internet service provider for any criminal acts committed by users provided they follow a set of procedures. For example, ISPs must remove unauthorized content once they are made aware of it by the copyright owner, and must boot users who repeatedly violate copyright. They must also avoid profiting from any pirated content.

Litvack said that it appears Veoh followed these requirements and would have done so in Io's case had it been informed of the infringing content. Another important difference between Io and Viacom is that Io didn't prove Veoh's business model was dependent on piracy. In its ongoing lawsuit with YouTube, Viacom argues that YouTube is built on illegal content.

"What the Supreme Court said in the Grokster and Napster cases is that you have to look at the business model," Litvack said. "The files on Napster were something like 95 or 98 percent unauthorized copyright material that was illegally posted to the site. The copyright owners in that case demonstrated that Napster and Grokster were both well aware of the piracy on their site. There was no evidence that this was the case at Veoh."

Viacom issues statement following decision
The distinction was not lost on Viacom. Following the court's decision in the Veoh case, the media conglomerate issued this statement: "YouTube is a business built on infringement that has failed to take reasonable measures to respect the rights of creators and content owners. Google and YouTube have engaged in massive copyright infringement."

Litvack said that Viacom's attorneys can still prevail provided that they prove YouTube is a business built on pirated material and that parent company Google has knowledge of the unauthorized clips on the site.

But even with these differences, Litvack said Lloyd's decision did not benefit Viacom: "I'd be hard pressed to say that the decision is a good precedent for Viacom."

Fred von Lohmann, a senior staff attorney at the Electronic Frontier Foundation, an advocacy group for Internet users, was much more optimistic about YouTube's chances after learning of the Veoh ruling.

One of the lawyers who worked on the Grokster case, von Lohmann said that: "I think it was a complete victory for Veoh and for the 11 or so other user-generated sites that have copyright cases pending. The decision was pretty much a vindication for sites that comply with the DMCA."

He conceded that Io's decision to sue first without sending any notice to Veoh may prove to be an important distinction between that case and YouTube's. He added that it shouldn't make much difference as long as YouTube "has been responding to all of Viacom's notices," which he said the company appears to have done.

But von Lohmann argues that the many similarities between Veoh's case and YouTube's may prove more significant.

He said that the court noted Veoh's efforts to protect copyright and said YouTube has long adopted many of the same practices, such as booting repeat copyright offenders and blocking videos that have been flagged as unauthorized so exact copies can't be reposted.

While von Lohmann acknowledged that Lloyd's decision in the Veoh case isn't binding and doesn't force other judges to consider his ruling, he thinks it will be a "very influential decision because it's the first to rule specifically on user-generated sites."

"Generally speaking, judges pay attention to what their colleagues have said in previous cases," von Lohmann said. "I think this strengthens all user-generated sites that comply with the DMCA Safe Harbor provision."

[Pete Bardo]

To prove that YouTubes business model depends on unauthorized copyright material, won't Viacom first have to prove it's a real business, that is, that it makes money.

Interesting thought for the day. If it turns out that YouTube is losing money and that it's business model is dependent on piracy, will Viacom owe Google for the loss? I know, it's a silly question, but if they are seeking a percentage of the profits gained from posting Viacom-owned material and that profits are negative...you do the math.

[TV James]

@Pete - Ha! Love it!

[ajbright]

No and no. They only have to prove that Google intended to make profit, that is they gained money in some way for showing or sharing the pirated material. That will actually be quite tough by itself.

And obviously Viacomm wouldn't have to pay Google if their model was based on selling their content, any more than they'd have to pay a legitimate store that sold DVDs and didn't make a profit. They'd still get to collect royalties on the DVD sales, regardless of whether the business itself was profitable or not.

Seriously though if Google has complied with the DCMA, that is they've banned repeat offenders, removed stolen content on request and did their best to stop copies of previous removed material getting back on their site, then they have nothing to worry about. They would have complied with the Safe Harbor provisions, so the case would have no merit.

Viacomm would have to prove they haven't, that they deliberately allowed copyright material to be shown on YouTube and they profited in some way from showing it. I doubt they can do either of those things.

[badasscat]

ajbright:

Google is required to do almost none of the things you say they are under the DMCA. I really wish some of you people calling for YouTube's head would actually read the law just once. All they are required to do is remove the copyrighted material about which they are notified. There's nothing in the law about "banning" anyone or stopping copies of previously-uploaded material from appearing on the site. ALL they are required to do under the law is remove material once they are notified by the copyright holder, and to suspend the accounts of repeat infringers in "appropriate circumstances". (That doesn't banning those people; they're free under the law to sign up again, and YouTube is not required to do anything about it. In addition, there's no definition of what "appropriate circumstances" are - YouTube is free to define it.)

The DMCA is a terrible law in general but in this one small area, it puts the onus squarely on the copyright holders. *That was the compromise*. The RIAA and MPAA loved this bill (they wrote it) and everybody else hated it, and this was the *one* part they compromised on in order to get it passed. Now they want to go back and undo that compromise, or pretend they never made it.

The problem for them is they did, and it's there in the law, in plain view of anybody that wants to read it. The only requirement for content providers is that they remove copyrighted material *once they are notified*. And they only need to do it in each individual case, ie. they don't need to then police themselves for the same material they've already removed later. It is up to the copyright holders to notify the service provider of each and every case of copyright infringement, repeat or not.

[Sandesk]

Unprecedented decision? Hardly. Read the opinion, it is well-reasoned.

Greg Sandoval should have mentioned that Mark Litvak (whom Greg has quoted numerous times in various stories - hey, get another source) worked for the MPAA.

Sloppy reporting.

[sandonet]

Read the story Sandesk,

I said the case is unprecedented and it is. If you can point to a similar decision involving a user-generated site I'll write a correction. As far as Litvack is concerned, I quoted attorneys litvack and von lohmann, who are EACH well known for having opposite views on this copyright issue. How much more fair can I be? Or isn't that a concern?

Sounds like you just want me to say what you want me to say.