• by Wendy Davis  @wendyndavis, April 11, 2014

Vimeo and the record labels are taking their battle to the 2nd Circuit Court of Appeals, which agreed this week to hear arguments about whether the video-sharing service is liable for copyright infringement by users.

The record labels sued Vimeo in 2009, alleging that the service infringed copyright by displaying “lip dubs,” or videos featuring people lip-synching to famous songs. The labels argued that numerous clips on the service infringed copyright — and that Vimeo should be held responsible.

But IAC/Interactive's Vimeo countered that the Digital Millennium Copyright Act's safe harbors protected the company from liability.

Those safe harbors provide that Web platforms aren't liable when users infringe copyright, providing the sites take down infringing content upon request. But the safe harbors have some exceptions, including one that applies when companies know about infringing clips on the site.

U.S. District Court Judge Ronnie Abrams in New York issued a mixed ruling last year. She said that Vimeo qualified for the safe harbors for some of the clips, but not others. Specifically, she ruled that the record labels were entitled to proceed to trial in any instances where Vimeo employees “interacted” with clips, such as by “liking” them, or placing them on a whitelist, which prevented other users from flagging them for terms-of-service violations.

Abrams also ruled that Vimeo was liable for infringement for any clips that used pre-1972 music, which she said isn't covered by the DMCA's safe harbors.

Vimeo applied to appeal both of the issues that it lost to the 2nd Circuit Court of Appeals. The record labels agreed that the court should rule on whether the safe harbors apply to pre-1972 music, but not whether Vimeo was disqualified from safe harbor protections where its employees interacted with clips.

The 2nd Circuit on Wednesday granted Vimeo's request to consider the case.

Questions about whether the safe harbors apply to pre-1972 music have never been definitively resolved. Abrams ruled that companies couldn't claim safe harbors for older music due to a provision in the federal copyright law, which says the DMCA doesn't limit state-law copyright protections for pre-1972 sound recordings. A state appellate court in New York recently reached the same conclusion in a case involving Grooveshark, and ruled that the online company wasn't entitled to safe harbor protections for pre-1972 music. But a federal judge in Manhattan ruled differently in a lawsuit involving MP3tunes.com.

A decision that pre-1972 songs aren't covered by safe harbors could pose problems for Web services companies, according to Santa Clara University law professor Eric Goldman. He says one result of that type of ruling will be more restrictive policies by companies like Vimeo, which have no easy way to know when users upload clips that aren't subject to safe harbor protections.