UMG Recordings, Inc. v. Shelter Capital Partners LLC
667 F.3d 1022
| 9th Cir. | 2011Background
- Veoh operates a public video-sharing website where users upload videos and others view them; UMG sues for direct and secondary infringement.
- Veoh requires users to register, assent to Publisher Terms and Conditions and Terms of Use, granting Veoh licenses to display, distribute and modify uploaded content.
- Automated processes occur on upload: chunking, transcoding to Flash formats, metadata extraction, and automatic public access provisioning.
- Veoh uses hash filtering and Audible Magic to block infringing videos; once identified, infringing material is removed and repeat infringers are terminated.
- UMG’s DMCA notices pre-suit identified specific videos; they did not name UMG or assert rights to all works by UMG artists.
- District court granted Veoh summary judgment under DMCA § 512(c) safe harbor; issues on appeal concern knowledge, control, and the Investor Defendants.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does § 512(c)(1) cover Veoh's access-facilitating processes? | UMG argues 'storage' is limited to mere storage, excluding access mechanisms. | Veoh argues the language is broader: 'by reason of the storage' includes access-facilitating steps. | Yes; 512(c) covers access-facilitating automatic processes. |
| Whether Veoh had actual knowledge or red flags of infringement under § 512(c)(1)(A)(i)-(ii) | UMG contends Veoh knew or should have known of infringing material beyond DMCA notices. | Veoh contends general hosting of copyrighted material is insufficient; no specific infringing material identified. | Merely hosting a category of content or generic knowledge is insufficient; no genuine issue of knowledge. |
| Whether Veoh had the right and ability to control infringing activity under § 512(c)(1)(B) | UMG arguesVeoh could exert control and thus lose safe harbor if it failed to police | Veoh contends it cannot control all infringing uploads absent knowledge of specific items; general ability is insufficient. | Right and ability to control requires knowledge of specific infringing material; Veoh lacked only when not aware of specifics; otherwise safe harbor remains. |
| Is the Investor Defendants' conduct sufficient for secondary liability after Veoh wins safe harbor? | UMG asserts Investor Defendants contributed to infringement via control/funding. | Investors did not concertedly control Veoh; no actionable site-and-facilities tying them to direct infringement. | Dismissal of contributory, vicarious, and inducement claims against Investor Defendants upheld; insufficient control or concerted action. |
Key Cases Cited
- A&M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (9th Cir. 2001) (contributory and vicarious liability concepts in online infringement context)
- Perfect 10, Inc. v. Cybernet Ventures, Inc., 508 F.3d 1146 (9th Cir. 2007) (service-provider safe harbors and policing duties; not imposing broad investigative burden)
- Ellison v. Robertson, 357 F.3d 1072 (9th Cir. 2004) (DMCA safe harbors and service-provider liability context)
- Napster, Inc. v. Grokster, Ltd., 545 U.S. 913 (Supreme Court 2005) (vicarious liability concepts; distinguish between active involvement and safe harbors)
- Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417 (U.S. Supreme Court 1984) (conduit/availability context for indirect infringement standards)
- Holmes v. Securities Investor Prot. Corp., 503 U.S. 258 (U.S. Supreme Court 1992) (by reason of proximate causation interpretation in related statutes)