UMG Recordings v. Shelter Capital Partners

Under the Digital Millennium Copyright Act “safe harbor” provision, a website provider is not liable for copyright infringement if the provider is not aware of infringement or removes access to copyrighted material once the provider becomes aware of infringement, and actual knowledge of infringement is required for a provider to be liable.

Veoh Networks ("Veoh") runs an online file share website accessible to the public. Universal Music Group ("UMG") is one of the world’s largest recorded music publishing companies. Despite protections put in place by Veoh, some of the users of Veoh’s website downloaded and uploaded videos which UMG had copyright protected. UMG brought suit against Veoh for direct and secondary copyright infringement. The district court granted summary judgment in favor of Veoh under the Digital Millennium Copyright Act ("DMCA") “safe harbor” provision. UMG appealed. Under the “safe harbor” provision of the DMCA, a service provider is not liable for user illegal activity if the provider inter alia, does not have actual knowledge of infringing behavior, the behavior is not apparent, or if upon knowledge of infringing behavior the provider removes or disables access to the material. The Ninth Circuit found that Veoh immediately removed the copyrighted material once it became aware of infringement. The Court also found that UMG could not identify any specific infringing music video available on Veoh’s website. The Court held that secondary liability couldn't be implied against a provider based upon constructive knowledge that technology may be used to infringe copyrights. As long as the technology was capable of non-infringing uses, constructive knowledge cannot be applied against the provider. The Court held that specific knowledge of a particular infringing activity must be shown in order for a provider like Veoh to be liable for copyright infringement. AFFIRMED in part and REMANDED in part.