Veoh Cleared In Universal Music Group Copyright Suit

By Tina Peng

Law360, New York (September 14, 2009) -- A federal judge has ruled that Veoh Networks Inc., which operates the Veoh video-sharing software and Web site, is entitled to safe harbor under the Digital Millennium Copyright Act and is not liable for monetary or injunctive relief to Universal Music Group entities that had sued it for copyright infringement.

Judge A. Howard Matz of the U.S. District Court for the Central District of California granted Veoh's motion for summary judgment Sept. 11 and ordered the parties to meet and confer “as to whether there are any issues remaining in this case that truly require judicial resolution,” according to civil minutes filed Monday.

UMG Recordings Inc. and affiliates including Universal Music Corp. sued Veoh, Shelter Capital Partners LLC, Shelter Venture Fund LP and several other defendants in 2007, alleging direct, contributory and vicarious copyright infringement, as well as inducement of copyright infringement, according to the minutes.

In December the court found that Veoh's services fall within the scope of the DMCA's “safe harbor” because they occur by reason of the storage at the direction of a user of material that resides on a system or network controlled or operated by or for the service provider, the minutes said.

Judge Matz rejected UMG's contention that Veoh did not satisfy the remaining provisions to win safe harbor protection because there were issues of material fact as to whether Veoh expeditiously removed infringing material when it acquired actual knowledge of the material, whether Veoh had the right and ability to control allegedly infringing activity from which it received a direct financial benefit, and whether Veoh adopted and reasonably implemented a policy of terminating repeat infringers, according to the minutes.

In a statement Veoh CEO Dmitry Shapiro welcomed the ruling.

“We can continue to support our many content partners, including Disney, CBS, Viacom, Sony and Time Warner, who understand the need to innovate and work together to create value in the emerging business of Internet distribution,” he said.

“From an industry perspective, this decision is a big deal as well, as we now have a second clear victory showing that companies who work diligently to respect property owners and the DMCA will be able to run their businesses and be successful without the fear of those select content owners who may be uncomfortable with emerging technology,” Shapiro said.

A UMG representative could not immediately be reached for comment.

Veoh won another safe harbor victory in 2008 when Magistrate Judge Howard R. Lloyd of the U.S. District Court for the Northern District of California ruled that it was entitled to safe harbor under the DMCA and that it should not be held responsible for enforcing third-party copyrights.

Io Group Inc. sued Veoh in June 2006 after finding that clips from 10 of its copyrighted adult films had been uploaded and viewed on Veoh's Web site. The video maker accused Veoh of willful, contributory and vicarious copyright infringement.

Veoh is represented in the current case by Winston & Strawn LLP.

Universal is represented by Irell & Manella LLP.

The case is UMG Recordings Inc. et al. v. Veoh Networks Inc. et al., case number 07-5744, in the U.S. District Court for the Central District of California.

--Additional reporting by Julie Zeveloff