A federal appellate court has handed Veoh a sweeping victory in a copyright infringement lawsuit brought by Universal Music Group.
The 9th Circuit ruled on Thursday that Veoh qualified for the Digital Millennium Copyright Act's “safe harbor” provisions, which broadly state that online services providers aren't liable for infringement by users as long as providers remove material upon the owner's request.
Those safe harbors have some exceptions, including one for Web companies that know about infringement on their sites. Universal argued that Veoh wasn't eligible for the safe harbors because it should have known that users were uploading infringing material, like music videos by groups, such as Black Eyed Peas.
But the court rejected Universal's argument and ruled that companies like Veoh are only liable if they have "specific knowledge of particular infringing activity."
"Copyright holders know precisely what materials they own, and are thus better able to efficiently identify infringing copies than service providers like Veoh, who cannot readily ascertain what material is copyrighted and what is not," the 9th Circuit wrote.
The legal dispute dates to 2007, when Universal sued Veoh for copyright infringement based on clips uploaded by users. While the case was pending, Veoh declared bankruptcy and was absorbed by Qlipso Media Networks, but the litigation continued.
A trial judge ruled in favor of Veoh, and a three-judge panel of the 9th Circuit upheld that ruling in 2011. But the entire court agreed to reconsider the case after an appellate court in New York ruled against Google's YouTube in a lawsuit that presented similar issues. In that matter, the 2nd Circuit held that companies like YouTube can lose the safe-harbor protection if they're "willfully blind" to infringement -- even without knowledge about specific pirated clips.
The judges deciding the Veoh matter said they agreed that a service can't "willfully bury its head in the sand" to avoid knowledge about specific infringing clips, but that Veoh hadn't done so. "The evidence demonstrates that Veoh promptly removed infringing material when it became aware of specific instances of infringement," the court said.