UMG Recordings, Inc. v. Shelter Capital Partners, LLC

if a provider of web hosting service has no actual knowledge or awareness of copyright infringement and the plaintiff never specifies what content is copyright infringing, the provider will be able to claim safe harbor under statute 512.

Shelter Capital Partners, LLC (“SCP”) was a web hosting service that had virtual storage lockers for customers to upload and store video content. When a customer went to upload content they had to agree not to post content they didn’t have a legal right to be sharing. SCP had a system set up for checking the content that was uploaded to the storage lockers to make sure that the content did not violate any copyright licenses. UMG Recordings, Inc. (“UMG”) owned the copyright licenses to many songs. Despite SCP’s efforts, it admitted that some of the videos that were uploaded to SCP’s storage lockers violated UMG’s copyright licenses. UMG sued SCP for copyright infringement and the district court granted safe harbor to SCP under statute 512. The safe harbor defense of 512 requires that the provider have no actual knowledge of infringing activity, the provider is unaware of facts or circumstances from which infringing activity is apparent, upon obtaining knowledge or awareness of infringing activity the provider acts quickly to remove or disable infringing content, does not receive financial benefit directly related to the infringing activity, and upon notification of claimed infringement quickly removes or disables claimed infringing content. UMG appealed that decision saying that SCP had knowledge or was aware of the infringing activity. The court AFFIRMED the district court’s ruling of safe harbor for SCP because UMG did not identify to SCP any specific infringing video and therefore SCP could not have actual knowledge or awareness of such activity.