Io Group, Inc. v Veoh Networks, Inc.

Case Name: Io Group, Inc. v. Veoh Networks, Inc.

Case Cite:
Io Group, Inc. v. Veoh Networks, Inc., 586 F. Supp. 2d 1132 (N.D. Cal. 2008).
2008 LEXIS 65915
Lexis: 2008 LEXIS 65915

Facts of the case:
Plaintiff Io Group, INc. which does business as Titan Media, produces markets, and distributeds a variety of adult entertainment products including audiovisual works, films in which it holds and owns registered copyrights for. The defendant, Veoh Networks, Inc. is describes itself as a "internet television network" that provides software and a website designated to dispense video content provided by its users, to users over the internet. Much of the provided content is not professional and may include family videos or amateur films. Since its creation in 2006 the website has shared hundreds of thousands of user provided videos, in this time defendant has received notice of alleged infringements on less than seven percent of all content. Defendant company also promotes the videos provided it to it by its promotional partners, and will also occasionally post its own promotional videos. However, all official and protected videos of Defendant and its promotional partners are posted by employees of defendant. Defendant's employees are also responsible for selecting from the posted videos a section to be placed in the featured video portion of the website. Defendant also has premium subscription available to users who wish to pay a charge to receive or provide "premium content" however, this premium content feature was not available during the time of the alleged infringement.

Additionally, defendant has and had at the time of alleged infringement, a policy that established the "Terms and Use" and "Acceptable Use Policies" posted on their website. These accepted use provisions required that users register with defendants site and agree to abide by the policies before users are able to upload content to veoh.com. Users therefore had to agree to provisions that require users to comply with copyright and other intellectual property laws, insisting that users not publish or otherwise make available user material that would constitute an infringement of third party intellectual property rights. The policy further states that Veoh is not obligated to monitor any user material, however, if Veoh observes a perceived violation it retains the right to remove the content and terminate user's posting abilities. Additionally, Veoh had users agree to indemnify and hold Veoh harmless from and against any liability, claims, losses, demands, or damages arising out of or relating to user's violation of the Terms of Acceptable Use Policy.

During the time between June 1st and June 22nd 2006, Plaintiff alleged that it discovered clips of content from ten of its copyrighted films had been uploaded and viewed on defendant's website, without authorization granted by Plaintiff. Several of these alleged clips were between six seconds and less than one minute in length, while a few clips were longer than twenty minutes, and one clip was up to forty minutes in length. However, with the exception of one video that displayed the Plaintiff's "Titan Media Trademark" several minutes into the clip,none of the posted clips contained copyright notices. When Plaintiff realized the existence of the clips on defendant's website, they did not notify defendant of believed infringement, and in fact, the lawsuit served defendant as the first notice of alleged copyright infringement. Simultaneously to Plaintiff deciding to bring the lawsuit, defendant determined that it would eliminate all adult content from the site, thus despite not being aware of any copyright infringement, Defendant had already terminated the posting of Plaintiff's copyrighted material by the time they received notice of the suit being filed.

Procedural Posture:
Plaintiff adult entertainment media company filed a civil action alleging copyright infringement against defendant, a video-sharing Internet website operator. Plaintiff filed a motion for summary judgment alleging defendant's liability to which the website operator responded by filing a motion for summary judgment based on it qualification for "safe harbor" under 17 U.S.C.S. ß 512 of the Digital Millennium Copyright Act (DMCA).

Defendant's motion to deny summary judgment, after the court assessed that the defendant was in fact eligible for "safe harbor' under Section 17 U.S.C.S. ß 512 of the Digital Millennium Copyright Act (DMCA), and thus could not be liable for contributory infringement because it had already established a reasonable policy to protect from promoting or allowing the upload and viewing of infringing materials by its users.

Important Dicta:
In light of the DMCA safe harbors limitations on copyright owners ability to receive injunctive receive, it is appropriate here for the court to determine the issues for summary judgement in an untraditional order, because a dispute of fact will only be relevant if it can affect the proceeding's outcome. Thus even if the court assumed that the plaintiff's infringement claims could pass summary judgement requirements, the court here concludes that defendant is eligible for safe harbor protection from damages, and thus renders the possible injunctive relieve provided under the DMCA moot.

Likely future importance or unanswered questions:
Court decided issue of applicability of Section 512(c) of DMCA's safe harbor to protect defendant here despite the defendant's use of automated functions that facilitate access to user provided content on its website, because when considered in context of the defendant's business, this is determined to be a matter of first impression. Furthermore, the defendant is a service provider under the definition of 512(c), and as such means that defendant is provider of online services, or network access, or the operator of facilities therefor, and includes an entity described in subparagraph (A), and such providers are not limited to merely storing material. If the term of service provider as applied to defendant was to be read in a narrower context, Congress would have expressed such limitation unambiguously. Thus utilizing automated functions to facilitate the uploading and viewing abilities of users is not enough to remove defendant from safe harbor.

Critical Analysis:
The court concluded that the defendant fits securely within the bounds of the DMCA safe harbors, as Court did not find that DMCA was intended to place the entire burden of policing content on the shoulders of the defendant. To expect such a burden to reside solely with the defendant would be unreasonable if failure to meet burden could result in the termination of defendant's business. Instead, the court concluded that the issue to consider is whether the defendant service provider, has taken appropriate steps to deal with any copyright infringement which may occur. Here, it was shown via evidence that the defendant had a long standing policy to prevent and discourage copyright infringement, that the defendant had taken and continued to actively take steps to limit incidents of infringement or unauthorized works from being posted on its website. The court specified that the regulation of the internet is a new and broad area, and thus only extended DMCA safe harbor protections to the facts of this specific case, so that the decision would not be interpreted as applying to service providers who had less sufficient anti-infringement policies in place.
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