DMCA Safe-Harbor Immunizes ISP Irrespective of Employees’ Knowledge of Infringement

The Court of Appeals for the Second Circuit (New York) held that the ISP website owner who had a DMCA takedown process but whose employees had personal knowledge that some third-party posted videos did contain infringing material was immunized by the Digital Millennium Copyright Act of 1998 (“DMCA”), 17 U.S.C. § 512(c). Capitol Records LLC v. Vimeo LLC, Case No. 14-1048 (2nd Cir. June 16, 2016) (Available Here).

The DMCA establishes a safe harbor in § 512(c), which gives qualifying Internet service providers (“ISP”) protection from liability for copyright infringement when their users upload infringing material on the service provider’s site and the service provider is unaware of the infringement. 17 U.S.C. § 512(c). Defendant Vimeo is an ISP operating a website on which members can post videos of their own creation, which videos are then accessible to the public at large. Plaintiff Capitol represents record companies and music publishing companies, which own copyrights in sound recordings of musical performances.

The issue at trial was whether Vimeo possessed so-called “red flag” knowledge of circumstances that made infringement apparent, which would make Vimeo ineligible for the protection of the safe harbor. Some viewing by Vimeo employees of videos that played all or virtually all of “recognizable” copyrighted songs was sufficient to satisfy the standard of red flag knowledge, which would make Vimeo ineligible for the DMCA safe harbor. The DMCA has a notice-and-takedown regime at §522(c)(1)(C), (A)(iii) which augments the rights of copyright owners. To gain the benefit of the DMCA immunity, the notice and take-down procedure is required.

Vimeo has had great success as a site for the storage and exhibition of videos. Its website hosts a wide array of home videos, documentaries, animation, and independent films. Founded in 2005, as of 2012 it hosted more than 31 million videos and had 12.3 million registered users in 49 countries. All Vimeo users must accept its Terms of Service. These require, inter alia, that: users upload ( 1) only videos that they have created or participated in creating, and (2) only videos for which they possess all necessary rights and that do not infringe on any third party rights. Vimeo’s “Community Guidelines” also provide content restrictions and information about its copyright policy. Every time a user uploads a video, the Website displays three rules: (1) “I will upload videos I created myself,” (2) “I will not upload videos intended for commercial use,” and (3) “I understand that certain types of content are not permitted on Vimeo.” Nonetheless, users have the technical ability to upload videos that do not comply with the rules.

Between October 2008 and November 2010, Vimeo deleted at least 4,000 videos in response to takedown notices by copyright owners. The question for the Appeals Court was whether, under Viacom Int’l, Inc. v. YouTube, Inc., a service provider’s viewing of a user-generated video containing all or virtually all of a recognizable, copyrighted song may establish ‘facts and circumstances’ giving rise to ‘red flag’ knowledge of infringement” within the meaning of §512(c)(l)(A)(ii).

The Court found that the service provider’s personnel are under no duty to “affirmatively seek[]” indications of infringement. Following Nimmer’s analysis, defendant would, in the first instance, show entitlement to the safe harbor defense by demonstrating its status as an ISP that stores thrid-party users’ content on its system, that the allegedly infringing matter was placed on its system by a user, and that it has performed precautionary, protective tasks required by §512 as conditions of eligibility, including that it adopted and reasonably implemented a policy designed to exclude users who repeatedly infringe, that it designated an agent for receipt of notices of infringement, and that it accommodates standard technical measures used by copyright owners to detect infringements.

However, on the issue of disqualifying knowledge, the burden falls on the copyright owner to demonstrate that the service provider acquired knowledge. An employee of the ISP – Vimeo saw at least some infringing material. Vimeo established that the employee’s viewing might have been brief. “Second, the insufficiency of some viewing by a service provider’s employee to prove the viewer’s awareness that a video contains all or virtually all of a song is all the more true in contemplation of the many different business purposes for which the employee might have viewed the video.” For example, the employee may be engaged in classification by subject matter, or sampling to detect inappropriate obscenity or bigotry. “Furthermore, employees of service providers cannot be assumed to have expertise in the laws of copyright.”

“[T]he willful blindness doctrine may be applied, in appropriate circumstances, to demonstrate knowledge or awareness of specific instances of infringement under the DMCA, ” Viacom, 676 F.3d at 35, but in the present case, there was insufficient evidence. Capitol, the copyright owner argued that the employees demonstrated willful blindness to infringement of music and that infringement gave rise to a duty to investigate further and that the employees encouraged users to post infringing matter. The Court did not buy these arguments. “In Viacom, we made clear that actual and red flag knowledge under the DMCA ordinarily must relate to “specific infringing material,” id. at 30, and that, because willful blindness is a proxy for knowledge, id. at 34-35, it too must relate to specific infringements.” Capitol did make these showings.

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