“Safe Harbor” Protects UGC Website: IO Group v Veoh Networks

November 2008


By Tom Frederiks, solicitor, Clitons

New details have emerged regarding steps user-generated content (“UGC”) sites must take to qualify for “ Safe Harbor” protection under US law. In IO Group, Inc ) v Veoh Networks Inc [2008] No C06-03926 HRL (filed 27 August 2008), the US District Court of Northern California denied IO’s request for summary judgment and granted Veoh’s request for summary judgment by confirming that Veoh (a video site much like YouTube) had established its entitlement to “Safe Harbor” defence against the alleged copyright infringement.

IO, a US adult entertainment site and production company, had sued Veoh in copyright infringement for a number of IO’s videos that appeared on the site without authorisation in 2006. The films had been uploaded and viewed by users of Veoh and Veoh sought immunity under the “ Safe Harbor” defence under the Digital Millennium Copyright Act – a US version of Europe’s “Mere Conduit” defences for UGC sites. Under the “Safe Harbor” scheme, a site is effectively immunised from liability in relation to offending material stored “at the direction of a user” provided: (1) it has no actual knowledge of the material; (2) it is not aware of any circumstances from which infringement would be apparent; (3) it removes the material expeditiously on notice; and, (4) it receives no financial benefit directly from the infringing activity.

The Court found that liability (or “awareness” of the offending material) did not arise merely through automated processes carried out by Veoh on the material – such as the conversion of the material into Flash files or from the extraction of stills from images within the files in order to create “thumbnail” images for reference purposes. Perhaps most interestingly, the Court also found that “spot checks” by Veoh employees for compliance of videos with its legal policies and to ensure accuracy in the description and categorisation of the content did not necessarily remove the “Safe Harbor” protection – provided any “red flags” (obvious infringements) were acted upon and all such activity amounted to nothing more than a “gateway” function designed to further the aims of the law. The Court accepted that it would be practically impossible for Veoh to vet all posted content or to properly verify all user’s details (given the ease of false user registration).

Whilst there are many distinguishing factors in this case – Veoh uses “fingerprinting” technology to prevent re-posting of material known to infringe, and IO failed to issue any “take-down notice” before filing the law suit – this case nevertheless perhaps shows a more website-friendly attitude than we have so far seen in Europe. The Court also took a surprisingly-pragmatic approach by finding that “a comprehensive review of every file” would not be “feasible” and that the law was not “intended to have Veoh shoulder the entire burden of policing third-party copyrights on its website (at the cost of losing its business if it cannot) … Rather, the issue is whether Veoh takes appropriate steps to deal with copyright infringement that takes place”.

Though there has been no UK case similar enough to tell whether the European versions of “Safe Harbor” have the limits and extensions applied to Veoh, the recent Belgian case (in which an ISP was ordered to utilise technology screening/filtering to detect infringing material) and this summer’s “Memorandum of Understanding” between ISPs and the music industry (in which the ISPs pledged to co-operate in the fight against online piracy) seem to suggest that the UK attitude towards UGC providers may be rather less accommodating.

The full text of the judgment may be accessed via:http://online.wsj.com/public/resources/documents/veoh1.pdf.

Clintons website can be found at www.clintons.co.uk

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