Record Companies Allowed to Pursue Vimeo for Copyright Infringement

Barry Diller - television interview in New York - P - 2010
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A federal judge in New York won't allow user-generated video website Vimeo, owned by Barry Diller's IAC, to dodge a big copyright lawsuit.

Capitol Records and other big labels brought the legal action in December 2009, alleging that Vimeo copied, performed and distributed seminal sound recordings by artists including The Beatles, Daft Punk, Radiohead, Beyonce and the Beach Boys. Vimeo, which is now one of the top 130 most trafficked websites, responded by asserting that it was free of liability thanks to the safe harbor provisions of the Digital Millennium Copyright Act.

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On Thursday, U.S. District Judge Ronnie Abrams denied that defense with respect to 55 of 199 videos in question -- ones where employees had some interaction. The ruling is another big one on the liability of Internet service providers, the second in the past month following the MPAA's win over cyberlocker Hotfile. Although Vimeo can point to some significant victories in the 56-page ruling -- it escapes liability on 144 videos, for instance -- the ruling might give some internet service providers pause. Among other things, the judge granted plaintiffs' motion on summary judgment with respect to pre-1972 recordings, an issue that has suddenly become quite hot.

In the lawsuit, there was no dispute that videos on Vimeo's network contained copyrighted music recordings. The question on summary judgment motions by each of the sides was more to whether Vimeo had sufficiently taken actions upon knowledge of infringements to escape being punished.

The record companies made several arguments why Vimeo didn't do enough.

On the less successful front, the plaintiffs argued that Vimeo didn't establish an adequate repeat infringer policy.

Judge Abrams rejects that assessment. She says that Vimeo's implementation of a system didn't go as far as the copyright owners wanted (e-mail records but not IP addresses were checked, the three-strike system had caveats), but was still "reasonably implemented." The judge's conclusion was informed by Vimeo’s "business circumstances as they evolved during the relevant period." The judge also rejects an argument that Vimeo "willfully blinded" itself to infringements, concluding that plaintiffs' examples of Vimeo executive communications on the subject were insufficient and further, "amounts to little more than their frustration that Vimeo did not use sophisticated monitoring technology in its possession to seek out and remove instances of infringing content."

More successfully, the plaintiffs scored points with the judge on the interaction that Vimeo employees had with videos. The judge looks at evidence that employees uploaded some of the videos and rejects Vimeo's defense they were stored at the direction of users.

The judge also looks at evidence that Vimeo employees entered comments on the videos, "liked" some of the videos, featured some of them on curated channels, "whitelisted" some of the videos by disabling a flagging function and more, and won't rule out the possibility that these actions could rise to "red flag knowledge" of the infringing content. The judge isn't ready to accept the plaintiffs' argument that there was awareness of facts and circumstances that would make it objectively obvious to a reasonable person that those videos were infringing. But the judge isn't dismissing the possibility either. She says it's a "triable issue."

So that will be heard at trial.

What won't be is an allegation that Vimeo induced copyright infringement. For the purposes of determining that, the judge looks at Vimeo's control over user content -- an issue that was discussed in Viacom's battle with YouTube -- and hears evidence that possible monitoring techniques could be effective, that Vimeo had the discretion to manipulate the visibility of content, and that staff communicated with users, at times suggesting that it would tolerate the uploading of copyrighted material.

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But all that's not enough. For instance, on the issue of the visibility, the judge writes how "it is difficult to imagine how Vimeo’s staff of seventy-four (as of 2012) could, through its discretionary and sporadic interactions with videos on the Website, exert substantial influence on approximately 12.3 million registered users uploading 43,000 new videos each day."

There's also no triable issue over pre-'72 recordings. In the past month, as one example of why older recordings are suddenly presenting a big problem for many services, SiriusXM has been hit with one big lawsuit after another over just that issue. The topic of whether Vimeo could apply DMCA safe harbor on these works was discussed, and Judge Abrams' conclusion is that it can't. The decision to grant plaintiffs' summary judgment on this matter comes in the 55th page of a 56-page ruling, but shouldn't be overlooked.

Twitter: @eriqgardner