I recently read through U.S. District Judge Howard Matz’s summary judgment opinion in the case of Universal Music Group v. Veoh, as a means of boning up on legal developments in the digital copyright field, in preparation for the Digital Breakfast panel in Washington this coming Thursday morning.  I’ll be joined there by Jon Baumgarten of the Proskauer Rose law firm,  copyright scholar Peter Jaszi of American University, and others.  (I have a few complementary passes available for this panel; please email me if you are interested.)

In his opinion, Judge Matz came down in favor of Veoh, one of the major video-sharing sites.  UMG had sued Veoh in connection with unauthorized copies of UMG music videos found on the site, claiming that Veoh had an obligation to take more proactive steps than it did to remove the unauthorized videos and terminate the accounts of the users that uploaded them.

The judge’s opinion in the case sets several benchmarks for applicability of the Digital Millennium Copyright Act’s “safe harbor” provision that will be relevant in future cases.  The big one in process now is Viacom’s massive lawsuit against Google for videos on Veoh’s larger competitor YouTube.

Veoh argued that it had been taking sufficient steps to caution users against uploading infringing videos, to remove them from its site, and to terminate repeat offenders’ accounts.  Specifically, Veoh followed the “notice and takedown” requirements of section 512 of the U.S. copyright law, which essentially obligate service providers to remove infringing material when copyright owners send them information about the material’s presence on the service.  Veoh also implemented a content filtering system using Audible Magic’s acoustic fingerprinting solution – virtually a de facto standard for user-generated content websites – to recognize infringing uploads and block them if desired.

UMG, meanwhile, argued that Veoh did not respond to takedown notices quickly enough, that it dragged its feet on implementing Audible Magic, and that Audible Magic doesn’t work well enough to catch infringing content anyway.

The court bought none of these arguments.  Instead, Judge Matz found that Veoh did act expeditiously to remove infringing content on receipt of takedown notices if copyright owners provided specific enough information about the content’s identity and location on the site.  He found that, in many cases, UMG didn’t provide such specific information and that Veoh was not obligated to “fill in the blanks” on sketchy information.  He cited various case precedents in support of this, including several cases that Perfect 10, a provider of adult image content, brought against various websites and lost.

Regarding Veoh’s implementation of Audible Magic’s fingerprinting technology, the judge found that Veoh wasn’t obligated “to implement filtering technology at all, let alone technology from the copyright holder’s preferred vendor or on the copyright holder’s desired timeline.”

In general, Judge Matz placed the DMCA-related burden of policing copyright infringement on sites such as Veoh squarely on copyright holders, not on service providers.  His opinion reiterated this point several times.

Viacom’s objective in suing Google is, in essence, to get a court to change this standard; it would like to see the burden of copyright enforcement shift to service providers.  This entails two things.  First, Viacom would like to get a court to interpret Congress’s intent behind parts of the DMCA – specifically the notice-and-takedown and safe harbor provisions under section 512 – differently from the way Judge Matz did.  It would like to see more requirements for policing copyright infringement imposed on service providers in order to qualify for safe harbor against infringement liability.

Second, it would like to see the doctrine of vicarious copyright infringement liability redefined to be more stringent.  Vicarious liability refers (in this type of situation) to a service provider being culpable for copyright infringement if it has both the means of controlling what content is available on its service and a reason for not exercising such control, such as financial gain.

In the Veoh case, UMG tried to get the court to do both of these things; Judge Matz ended up doing neither.

It’s possible that Viacom expects a better result from a jury if it can get its case to go to trial.  Or perhaps it expects a result similar to Veoh from a district court, which may believe that it does not have the clout to change the way the law is interpreted.  In that case, Viacom most likely intends to respond by appealing it up the chain, all the way to the Supreme Court if necessary.  Apparently Viacom believes that its own situation is different enough, or that it has sufficient evidence and legal arguments, for either of these strategies to work.  In any case, two and a half years into the litigation, it’s clear that Viacom is in it for the long haul.  The extent to which the Veoh decision hinders its progress remains to be seen.