For those Web companies that comply by it, the Digital Millennium Copyright Act is turning out to be their best friend. Last week, Universal Music Group (UMG) was denied a summary judgment by a Los Angeles court in its copyright infringement case against Veoh. (Court order embedded below). UMG wanted a summary judgment against Veoh, arguing that it could not hide behind the safe harbor provisions of the DMCA, which state that Web services are not liable for the copyright infringement of its users if it takes certain steps to prevent it.
This is the second time a summary judgment has been denied to a company trying to sue Veoh for copyright infringement. (The last time it was a porn company). These orders are setting important legal precedents not just for Veoh, but for YouTube and others also facing DMCA lawsuits.
The safe harbor of the DMCA states that Web services are not liable for copyright infringement if the content is stored “at the direction of a user.” UMG tried to argue that Veoh should not be covered by the safe harbor because it did a bunch of things with the music and video content after it was stored on its servers, including converting it into Flash, breaking it up into chunks for peer-to-peer distribution, and allowing other users to stream it or download it.
The judge, A Howartd Matz, didn't buy the argument. He found Veoh's position to be “more persuasive,” noting that user's must agree to Veoh's Terms of Service before uploading a video, and that the terms of service clearly prohibit uploading copyrighted material. In other words, the initial act of uploading is considered to be user-directed storage under the DMCA, and whatever Veoh does to process the video after that cannot be used to get around the letter of the law.
If you live by the DMCA, be prepared to die by the DMCA.