On September 18, record label companies including Capitol Records, Virgin Records America, and others prevailed in a lawsuit against the video-sharing website, Vimeo in a copyright infringement action. Specifically, the record companies alleged that the user-generated content (“UGC”) uploaded to Vimeo was of copyrighted and protected content belonging to music moguls such as The Beatles, Coldplay, Norah Jones, Nat King Cole, the Beach Boys, and other big names.
Adding fuel to the fire, when record companies initiated the lawsuit in 2009 they alleged that in addition to allowing unlicensed videos of lip-synced songs belonging to record companies, Vimeo’s services “intentionally differs from…other ‘user-generated content’ websites” That is, that Vimeo did more then just lend a blind eye, but actually led website users to believe that the copying was not a problem.
Vimeo defended the allegations citing the DMCA safe harbor provision (Digital Millennium Copyright Act), which protects service providers on the Internet from claims of copyright infringement made against them that result from the conduct of their users. However, in order to be afforded those protections, the service provider must meet the criteria set forth in the safe harbor provision. Specifically, a party acting in good faith must: (1) qualify as a “service provider”; (2) have registered an agent to receive notifications of claimed infringement; (3) have adopted and reasonably implemented a repeat-infringer policy; and, (4) not interfere with “standard technical measures” used by copyright owners to identify or protect their works.
Vimeo alleged they met the criteria and should be afforded DMCA safe harbor protection. While Judge Abrams, the judge presiding over the case, reasoned that Vimeo’s repeat-infringer policy was “reasonably implemented,” he determined that there was evidence that Vimeo was aware of infringing videos on their site. Vimeo responded that “given the sheer volume of video content uploaded every day, Vimeo does not — and cannot — view every video uploaded by its users to attempt to determine whether it infringes a copyright or otherwise violates Vimeo’s terms of service.” That is, Vimeo claims that given the amount of videos uploaded daily, it could not possibly have actual knowledge that the UGC on its website was infringing content.
Judge Abrams dismissed that argument holding that Vimeo did not take sufficient actions upon knowledge of the infringements to escape being held accountable. The particular evidence that was raised and corroborated that brought the judge to this conclusion, was that actual Vimeo employees uploaded some of the copyrighted videos, and additionally, that Vimeo employees commented on, and “liked” some of the copyrighted content.
The Capitol Records v. Vimeo decision illustrates the critical distinction between a platform that operates a passive content conduit and one that participates in — or benefits from — the infringing activity of its users. The DMCA safe harbor under 17 U.S.C. § 512(c) is available to online service providers that store user-generated content, but it contains conditions that require active compliance, not passive reliance.
The DMCA’s safe harbor for UGC storage platforms — § 512(c) — protects service providers that lack actual knowledge of infringement and are not aware of facts or circumstances from which infringing activity is apparent (so-called “red flag” knowledge). The distinction between actual knowledge and red flag knowledge matters enormously in practice.
Actual knowledge means the service provider knows that specific infringing material is on its system. Red flag knowledge means the infringement was so obvious that a reasonable service provider would have recognized it without being specifically notified. In Viacom Int’l, Inc. v. YouTube, Inc., 676 F.3d 19 (2d Cir. 2012), the Second Circuit held that red flag knowledge requires awareness of specific infringing material, not just general awareness that infringement might be occurring on a platform. The Vimeo case went further, finding that evidence of employee participation — uploading, liking, and commenting on infringing videos — constituted actual knowledge that could not be dismissed as mere general awareness.
In addition to the knowledge prongs, the safe harbor is unavailable to service providers that receive a financial benefit directly attributable to the infringing activity where the provider has the right and ability to control that activity. This is the vicarious liability analog in the DMCA framework: if the platform benefits financially from the presence of popular infringing content, and has the ability to remove or control that content, it cannot claim safe harbor protection.
Vimeo’s premium subscription and advertising model arguably benefited from the presence of popular music-synchronized videos on the platform. The question of whether the platform received a financial benefit “directly attributable” to the specific infringing content was a contested factual issue, but the employee conduct evidence made the knowledge prongs more damaging and the overall safe harbor defense less credible.
For any online platform that accepts and hosts user-generated content, maintaining DMCA safe harbor protection is essential. Losing safe harbor protection exposes the platform to direct copyright infringement liability for everything its users upload — an exposure that no commercially viable UGC platform could survive. The requirements for § 512(c) safe harbor protection are:
The Vimeo case is a cautionary tale for any online platform that relies on DMCA safe harbor protection. The safe harbor is a valuable shield, but it requires diligent, documented compliance. Employee training is critical: the conduct that sank Vimeo’s safe harbor defense was not a systemic technology failure but the behavior of individual employees who uploaded and interacted with infringing content. A compliance program that trains employees to recognize and avoid such conduct, implements clear protocols for responding to takedown notices, and maintains records of all DMCA-related activity is essential.
If you have questions about copyright law or copyright infringement, contact the copyright attorneys at Revision Legal at 855-473-8474 or complete our contact form.
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