Most entertainment lawyers know that Viacom is suing YouTube and Google for copyright infringement from user-generated program content.1 Everyone today is a television producer and author; the Internet is filled with Jon Stewart programs, excerpts from current movies, and other copyrighted content owned by others.

Is it all fair use? What is the public interest in permitting everyone to be an author? Does not user-generated content “Promote the Progress of Science and Useful Arts,” which is the constitutional copyright mandate in Article I, Section 8, Clause 8? Was the purpose of the framers to promote the creation of knowledge so as to enhance the public welfare?

There are many legal issues with user-generated content including: (a) secondary copyright liability; (b) the Digital Millennium Copyright Act’s “safe harbors”; (c) who owns the material, and the effect of click-wrap agreements; (d) collaboration “wiki” content, which permits users to edit a Web page content; (e) obscenity; (f) defamation and false light; (g) right of publicity and privacy; (h) children’s online privacy protection, among other things.

Here, we will deal only with the first cases concerning the “safe harbors” for Internet Service Providers (ISPs). The unauthorized user may be a direct copyright infringer, but the deep pocket is a company like Google.

Difficult and controversial questions of copyright liability in the online world prompted Congress to enact Title II of the Digital Millennium Copyright Act (DMCA), the Online Copyright Infringement Liability Limitation Act.2 In order to strike a balance between their respective interests, the DMCA seeks to preserve strong incentives for service providers and copyright owners to cooperate to detect and deal with copyright infringements that take place in the digital networked environment.3 Congress hoped to provide greater certainty to ISPs concerning their legal exposure for infringements that may occur in the course of their activities.

In IO Group Inc. v. Veoh Networks Inc. ,4 defendant Veoh Networks provided software and a Web site that enabled sharing user-provided video content on the Internet, of which it has received notices of alleged copyright infringement with respect to less than 7 percent of such videos. Veoh is very well financed. The plaintiff, IO Group, discovered unauthorized parts of its copyright films and sued Veoh rather than send the required notice under the DMCA.

For the “safe harbors,” Veoh must fulfill certain threshold issues to qualify. Magistrate Howard R. Lloyd first held that:

[S]ection 512(i) does not require service providers to track users in a particular way to or affirmatively police users for evidence of repeat infringement. See CCBill, 488 F.3d at 1109-10. Instead, “[a] policy is unreasonable only if the service provider failed to respond when it had knowledge of the infringement.” Id. at 113. Here, the uncontroverted evidence shows that Veoh (a) has a working notification system, (b) has a procedure for dealing with DMCA-compliant notifications, and (c) does not actively prevent copyright owners from collecting information necessary to issue such notices. Plaintiff says that defendant does not qualify for safe harbor because it does not track infringers. However, Veoh does track content that has been identified as infringing and permanently blocks that content from ever being uploaded by any user.

Accordingly, the court finds that Veoh has presented evidence that it satisfies the threshold requirements to qualify for safe harbor under the DMCA. Plaintiff has not presented evidence raising a genuine issue of material fact as to whether Veoh implements its repeat infringer policy in a reasonable manner.

The next question was whether Veoh qualifies for the exception:

In essence, a service provider is eligible for safe harbor under section 512(c) [of the DMCA] if it (1) does not know of infringement; or (2) acts expeditiously to remove or disable access to the material when it (a) has actual knowledge, (b) is aware of facts or circumstances from which infringing activity is apparent, or (c) has received DMCA-compliant notice; and (3) either does not have the right and ability to control the infringing activity, or—if it does-—that it does not receive a financial benefit directly attributable to the infringing activity.

According to plaintiff, Veoh does not qualify for safe harbor under Section 512(c) because (a) the materials in question were not stored on Veoh’s system at the direction of a user; (b) Veoh was aware of apparent infringing activity; and (c) Veoh has the right and ability to control the infringing activity and obtains a direct financial benefit from such activities. The court will address each of these contentions in turn.

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