U.S. Appeals Court for the 9th Circuit redefines the notion of control under the DMCA (UMG v. Veoh)

On 14 March 2013, the U.S. Court of Appeals for the 9th circuit withdrew its decision in UMG Recordings (see Newsletter 1/2012 p.4-5) and replaced it with a new superseding opinion which included some useful guidelines regarding the application of the DMCA safe-harbor to third party content websites.

By way of background, Veoh operated a video-sharing platform where users could upload and share videos with other users. Although Veoh had implemented various procedures to prevent infringement, UMG noticed that many of their copyrighted works had been uploaded on this website without their authorization.  UMG therefore filed suit against Veoh for direct and secondary copyright infringement but the District Court granted summary judgment to Veoh after determining that although Veoh may have had generalized awareness of infringement on its service, it was not aware of any specific infringing content which it would have failed to take down. The District Court therefore found that Veoh was protected by the DMCA hosting safe harbor defense.

The Ninth Circuit, in its original decision, affirmed this judgment, not only on the ground that Veoh arguably lacked “knowledge” but also “control” over specific infringing activity. The Ninth Circuit held that Veoh’s lack of control over infringing activity derived from Veoh’s lack of knowledge of specific infringing content. After the Second Circuit held last year in Viacom v. YouTube (see Newsletter 1/2013 p. 5) that this definition of the control requirement was incorrect, the 9th Circuit called for additional briefing and issued this revised decision.

In its new opinion, the 9th Circuit abandoned its earlier holding that item-specific knowledge was required in order to show the required “control over infringing activity” which disqualified a service provider from DMCA protection. Rather, the 9th Circuit adopts the Second Circuit’s holding in Viacom v. YouTube that the requisite control, for DMCA purpose, can be shown by a service provider’s “substantial influence on the activities of users, irrespective of whether it also has knowledge of such activity”. For the 9th Circuit, such a situation can notably occur where the service provider exercises “high levels of control over activities by users” or where he adopts a “purposeful conduct” as in Grokster.

Although the 9th Circuit essentially affirmed its earlier decision in UMG Recording v. Shelter, this new opinion introduces further guidelines and brings much welcomed consistency to the conditions of the DMCA safe harbor defenses. [Béatrice Martinet Farano]