Umg Recordings, Inc. v. Shelter Capital Partners Llc
718 F.3d 1006
9th Cir.2013Background
- Veoh operates a public video-sharing site with user uploads and partner content; it uses automated processes to store, transcode, and deliver videos to users.
- UMG owns copyrights to music videos and sued Veoh for direct and secondary infringement, alleging Veoh facilitated access to infringing copies.
- Veoh employed hash filtering and Audible Magic to block infringing content, but infringing videos still circulated.
- DMCA safe harbor under 17 U.S.C. § 512(c) was invoked by Veoh; district court granted summary judgment for Veoh on § 512(c) eligibility.
- UMG appealed challenging whether Veoh’s access-facilitating automatic processes fall within § 512(c)(1) and whether Veoh had requisite knowledge and control; court affirmed safe harbor and dismissed secondary liability claims against investor defendants.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Veoh qualifies for §512(c) safe harbor | UMG contends activities are not “by reason of storage” | Veoh argues broad “by reason of storage” covers access functions | Yes, Veoh satisfies §512(c)(1) as storage-directed and access-facilitating |
| Whether Veoh had actual or red-flag knowledge of infringement | UMG asserts knowledge or red flags existed via notices and other evidence | Veoh argues lack of specific knowledge or red flags; notices did not establish knowledge | No genuine issue; Veoh lacked actual or red-flag knowledge |
| Whether Veoh had the right and ability to control infringing activity | UMG contends Veoh could control infringing activity; thus not protected | Veoh lacked substantial influence over users’ infringing acts | Veoh satisfied §512(c)(1)(B) only if substantial influence; here not shown; court finds safe harbor nevertheless? |
| Whether Investor Defendants incur secondary liability | UMG seeks vicarious/contributory/inducement liability | Investors argue no control or agreement to operate Veoh | Dismissed against Investor Defendants |
| Rule 68 costs and attorney’s fees | District court’s Rule 68 ruling upheld; remanded to determine Rule 68 costs excluding fees per Delta/Trident/Champion framework |
Key Cases Cited
- Napster, Inc. v. Grokster, Ltd., 545 U.S. 913 (U.S. 2005) (right and ability to control; indirect liability standards not controlling DMCA safe harbors)
- Viacom Int’l v. YouTube, Inc., 676 F.3d 19 (2d Cir. 2012) (subsequent circuit refining ‘right and ability to control’ standard)
- Grokster, Ltd. v. MGM, 545 U.S. 913 (U.S. 2005) (inducement and control in peer-to-peer context)
- Perfect 10, Inc. v. Cybernet Ventures, Inc., 488 F.3d 1102 (9th Cir. 2007) (DMCA safe harbors interpretation; limitations on investigative duties)
- CoStar Grp., Inc. v. LoopNet, Inc., 164 F. Supp. 2d 688 (D. Md. 2001) (limits on service-provider duties to monitor)
- Ellison v. Robertson, 357 F.3d 1072 (9th Cir. 2004) (context for OCILLA safe harbors and ISP liability)