Loss of DMCA Safe Harbor Protection by Employee Interactions with Content

Posted by Cyberbear on December 1, 2013 in Copyright Law, DMCA, Intellectual Property, Internet, Judicial Decisions, Litigation, Tech News |

Posted by: Geoff Morris

vimeo logoIn Capitol Records, LLC v. Vimeo, LLC, the United States District Court, Southern District of New York, denied, in part, Vimeo’s Motion for Summary Judgment that claimed Safe Harbor protection. The Court held that Vimeo could not claim, by law, the Safe Harbor protections of the Digital Millenium Copyright Act (“DMCA”), codified at 17 U.S.C. § 512, when Vimeo’s employees uploaded ten videos containing copyrighted material; Vimeo’s employees interacted with 55 videos containing copyrighted material; and users uploaded an unknown number of videos containing pre-1972 sound recordings. The Court’s ruling is a warning to all Online Service Providers (“OSPs”) to develop policies and procedures guiding employees on not destroying the OSP’s DMCA Safe Harbor protections.

First, the Court held that triable issues of fact remained as to whether ten videos that were uploaded by Vimeo employees were stored at the direction of a user, as required by §512(c)(1). The ten videos in question arguably contained copyrighted material. Capitol argued that under agency theory, the employees were not users. The Court recognized that icons appear next to employees’ usernames. For each of those ten videos, that icon next to the uploading user identified the user as an employee. Citing Columbia Pictures Industries, Inc. v. Fung, No. CV 06-5578 (SVW), 2009 WL 6355911 (C.D.Cal. Dec. 21, 2009), aff’d in part and modified, 710 F. 3d 1020 (9th Cir. 2013) (holding that a moderator who helped users upload infringing content was not acting at the direction of a user) and Capitol Records, Inc. v. MP3tunes, LLC, 821 F. Supp. 2d 627 (S.D.N.Y. 2011), reconsideration granted on other grounds, 2013 WL 1987225 (S.D.N.Y. May 14, 2013) (holding that an employee’s use of a personal account to upload content is at the direction of a user) the Court reasoned that reasonable minds could differ as to whether the employers were acting as users or employees under agency theory. Therefore, the Court denied Vimeo’s summary judgment claim for DMCA Safe Harbor protection on those ten videos.

Second, the Court held that triable issues of fact remain as to whether employee interaction with 55 videos established actual or “red flag” knowledge of infringing content on the network. The DMCA does not grant Safe Harbor to an OSP when that OSP has actual or “red flag” knowledge of infringing material. 17 U.S.C. § 512(c)(1)(A). The Second Circuit interpreted this provision to only apply to specific instances of infringement. Viacom International, Inc. v. YouTube, Inc., 676 F.3d 19 (2d Cir. 2012). Here, Vimeo employees had “liked” or commented on twenty-six video. They also placed two videos on a channel. Additionally, they “whitelisted”, which means to prevent users from flagging the videos, twenty. Lastly, they “buried”, which means to prevent those videos from appearing on the “Discovery” tab, four videos. In total, Vimeo interacted with 55 videos. The Court resisted an urging by Capitol to find that these employee interactions gave Vimeo actual or “red flag” notice of infringing material because it was not clear to the Court that the videos in question were “objectively obvious to a reasonable person” to infringe a copyright. Therefore, the Court denied Vimeo’s summary judgment claim for Safe Harbor protection for those 55 videos.

Lastly, the Court granted Summary Judgment to Capitol that the DMCA Safe Harbor did not apply to videos containing copyrighted music recorded before Feb. 15, 1972. The Court cited 17 U.S.C. § 301, stating that Federal Copyright law did not limit rights and remedies to sound recordings fixed prior to Feb. 15, 1972. The Court reasoned that only Congress could extend the DMCA to pre-1972 sound recordings. The Court also cited a Dec. 2011 Copyright Office report concluding as such. Therefore, without identifying a known number of videos, the Court granted summary judgment to Capitol on all videos contain pre-1972 sound recordings.

In conclusion, the Court’s ruling makes clear that OSP’s must implement policies and procedures to prevent employees from removing the OSP from the Safe Harbor provisions of the DMCA. OSP’s should ensure that employees do not use employee accounts to interact with content on the OSP’s website. Further, OSPs should consider whether the potential loss of the DMCA Safe Harbor is worth having employees engaged in promotion activities such as “liking”, commenting, “whitelisting”, or favoriting (not specifically in this case) content on the OSP’s website, even with personal accounts. Discovery may soon seek to match users that interact with potentially infringing content with employee records. Further, pre-1972 sound recordings will continue to be an issue for OSPs until, or if, Congress decides to act on it. If Congress does not act, Courts will deny OSPs the protection of the DMCA Safe Harbor for content containing pre-1972 sound recordings.

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