IO Group, Inc. v. Veoh Networks, Inc., 586 F. Supp. 2d 1132 (N.D. Cal. 2008), is an American legal case involving an internet television network named Veoh that allowed users of its site to view streaming media of various adult entertainment producer IO Group's films. The United States District Court for the Northern District of California ruled that Veoh qualified for the safe harbors provided by the Digital Millennium Copyright Act (DMCA), 17 U.S.C. § 512 (2006). According to commentators, this case could foreshadow the resolution of Viacom v. YouTube.
Facts of the case Veoh is a self-described Internet Television Network that allows users to share video content over the internet at its site, www.veoh.com . Users have uploaded hundreds of thousands of videos to the site since it first launched in February 2006. Users of the site have the choice to either download or stream the movie file.District Court opinion, page 7. In addition to the user-generated content, such as family gatherings, films by aspiring filmmakers, and job interviews, Veoh also hosts a number of videos that have been uploaded by users other than the copyright owner. Some of these videos belong to Veoh's content partners, such as CBS. In these instances, Veoh has permission to display the works. However, Veoh has also received a number of takedown notices related to allegedly copyrighted material posted to the company's site. Veoh asserts that it has received notice for roughly seven percent of the videos that have been uploaded.
Video upload process Before users are allowed to upload videos to veoh.com, they are required to register with the website.District Court opinion, page 5. As part of this process, they are required to submit a username, password, and email address. When the user selects a video to upload, Veoh also prompts them to add: a title and description; keywords or tags; applicable content categories; and content rating. Once Veoh receives the file, its systems confirm that it is a video file with a compatible codec. It also extracts any metadata associated with the file and stores all the information related to the file in its database.District Court opinion, page 6.
Since users are permitted to submit the video files in a variety of formats, Veoh uses third-party software to automatically convert each of the videos into the Flash format.District Court opinion, page 6-7. In addition to the Flash conversion, Veoh also automatically extracts thirty-two "screencaps" of the video. Sixteen of these screencaps contain the same resolution as the video itself. These screencaps are not available for users to view or access. The other sixteen screencaps are of a lower-resolution. One of these will be displayed in the user's search results while the entire set will be displayed to the end user to assist them in deciding if they would like to download or watch the movie file.District Court opinion, page 8.
Veoh's terms When a user registers with veoh.com, and before they are allowed to upload any content, they must agree to abide by the Veoh's Terms of Use such that:
any User Material that you make available to the Veoh Service may be made freely available by Veoh through the Veoh Service, including without limitation for download by other users, and that this permission is made and granted in consideration of your use of the Veoh Service and is nonexclusive, perpetual, royalty-free, irrevocable and transferable. . . .
Veoh shall have no obligation to monitor any User Material. However, Veoh and its agents shall have and do reserve the right to monitor any User Material from time to time for any lawful purpose. Veoh may, without notice to you, remove or block content of any User Material from the Veoh Service, including disabling access to such User material that you have downloaded through the Veoh Service. Veoh reserves the right to terminate your use of the Veoh Service if we determine that you have violated these Terms or the Acceptable Use Policy.
Veoh requires all users of the Veoh Service to comply with copyright and other intellectual property laws. Accordingly, you may not publish or make available any User Material that constitutes an infringement of third party intellectual property rights, including rights granted by U.S. copyright law, or that otherwise violates the Acceptable Use Policy. You represent and warrant that you have all rights necessary to publish and distribute any User Material made available by you through the Veoh Service and that such User Material conforms to the Acceptable Use Policy. You agree to indemnify and hold Veoh harmless from and against any liability, claims, losses, demands or damages arising out of or relating to your violation of these Terms or the Acceptable Use Policy.
As explained above, Veoh does not permit copyright infringing activities on the Veoh Service and reserves the right to terminate access to the Veoh Service, and remove all User Materials posted, by any persons who are found to be repeat infringers (i.e., persons found to have uploaded copyright infringing User Material on more than two occasions).District Court opinion, page 4.
Veoh also had an Acceptable Use policy that stated:
Veoh respects the rights of copyright owners to control commercial uses of their material, and expects our users to do the same. You are responsible for complying with all federal and state laws applicable to the content available through the Veoh Services, including copyright laws.
Accordingly, Veoh reserves the right to terminate the service account of anyone who it learns is using the Veoh Services in violation of copyright law.
Veoh has since updated its Terms of Use policy and created a separate Copyright policy.
Users were reminded of its terms during the upload process. Upon the first notice Veoh receives that a user has uploaded infringing content, Veoh terminates that user's account, disables all content uploaded by that user, and blocks that user's email address to prevent them from creating a new account. Additionally, Veoh creates a digital fingerprint of the infringing file to detect other copies of it on Veoh's servers and to prevent the same file from being uploaded at a later date.
Veoh's employees will also perform spot checks of newly uploaded videos on occasion to check for compliance with its policies. During these checks, employees check to make sure the proper rating has been assigned to movies containing sexually explicit material or reveals obvious copyright infringement. If a movie is found to be in violation of its policies, Veoh disables access to it.
Lawsuit
IO Group is one of the copyright holders that had their copyrighted films uploaded to Veoh without their permission.District Court opinion, page 3. IO Group noticed that ten of its films were available on veoh.com in varying lengths from six seconds to around forty minutes. Instead of notifying Veoh with a takedown notice after IO Group had initially discovered the clips, IO Group filed a lawsuit on June 23, 2006. IO alleged Copyright Infringement, Contributory Copyright Infringement, and Vicarious Copyright Infringement. at page 9. Around this same point in time, Veoh had independently determined that it would no longer allow adult content on its site.
District Court ruling
Legal standard The issue was before the court on a cross motion for summary judgment. Ordinarily, a court would evaluate whether the defendant was guilty of infringement before evaluating whether the DMCA Safe Harbor provisions apply. However, the Court decided it was "appropriate and more efficient" to begin by addressing whether Veoh was eligible for protection under § 512(c).District Court opinion, page 10. See also
DMCA safe harbors
Threshold requirements In order for Veoh to be eligible for one of the Safe Harbors, it needs to satisfy the following thresholds: It must be a service provider.17 U.S.C. § 512(k) (2006). It must adopt, inform, and reasonably implement a policy that terminates the account of repeat infringers on the service provider's system17 U.S.C. § 512(i)(1)(A) (2006). It must accommodate, and not interfere with, standard technical measures utilized by copyright owners to identify their works.17 U.S.C. § 512(i)(1)(B) (2006).
In this case, IO did not dispute that Veoh was a service provider. Nor did IO dispute that Veoh adopted and informed its end users of a policy regarding repeat infringers. Finally, IO did not assert that Veoh tried to interfere with any of IO's standard technical measures.District Court opinion, page 12. IO did dispute that Veoh's application of its infringer policy was reasonable and asserted that it was a triable issue vitiating Veoh's motion for summary judgement.
While the DMCA does not explicitly define what reasonably implemented means, the Court was able to look to the binding precedent set by the Ninth Circuit in Perfect 10, Inc. v. CCBill LLC, 488 F.3d 1102 (9th 2007). In that case, the Ninth Circuit defined Reasonable to mean "if, under 'appropriate circumstances,' the service provider terminates users who repeatedly or blatantly infringe copyright."District Court opinion, page 13 (citing Perfect 10, Inc. v. CCBill LLC, 488 F.3d at 1109).
The Court found that Veoh had put forth evidence of a working notification system that adequately addressed infringement notices because Veoh had identified a designated Copyright Agent to receive notifications of claimed infringement; Veoh had generated and utilized digital fingerprints; Veoh terminated user accounts after a single warning; Veoh disabled all content uploaded by the infringing user; Veoh blocked the infringing user's email address from opening a different account; Veoh had terminated 1,096 users under its repeat infringer provision; and Veoh had often responded to takedown notices on either the day it was received or shortly thereafter.District Court opinion, page 13.
IO wasn't convinced. They believed that Veoh's policy came up short because it did not prevent terminated users from re-registering with a different e-mail address.District Court opinion, page 14. IO argued that Veoh should be held to a standard where they track users by their actual names or their IP Address. The Court did not agree and also noted that IO did not present any evidence that indicated that blocking users through the use of actual names or IP addresses would be any more reasonable than using the user's e-mail address. (The opinion mentions Wikipedia in FN8 as the source for information pertaining to the operation of IP addresses.) Nor was IO able to present any evidence that an actual repeat infringer had created a new account.
Instead, the Court pointed out that the DMCA provisions only require that the service provider terminate the account of a repeat infringer when appropriate. The crutch to this provision centers on the service provider's requirement that it knows of the infringement. Were courts to extend that duty beyond the text, it would hinder the policies of Congress. Indeed, another United States District Court had previously found that "the DMCA requires reasonable, not perfect, policies...."District Court opinion, page 15 (citing Corbis Corp. v. Amazon.com, Inc., 351 F. Supp. 2d 1090, 1104 (W.D. Wa. 2004)). As such, Veoh's policy of tracking infringing content was enough to satisfy the initial threshold requirement.
17 U.S.C. § 512(c)