Capitol Records, LLC v. Vimeo, LLC

826 F.3d 78 (2nd Cir. 2016)

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Nature of the Case

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Facts

'The DMCA was enacted in 1998. This case focuses on the safe harbor provided by § 512(c), which is supplemented by protections provided in § 512(m). These portions of the statute undertake, through complex provisions, to establish a compromise, which, on the one hand, augments the protections available to copyright owners, and, on the other, insulates service providers from liability for infringements of which they are unaware, contained in material posted to their sites by users, so as to make it commercially feasible for them to provide valuable Internet services to the public. The Act establishes a notice-and-takedown regime. The notice-and-takedown regime requires a service provider, to preserve its eligibility for the safe harbor, to 'expeditiously . . . remove . . . material that is claimed to be infringing,' or disable access to it, whenever the service provider (1) receives a notice of infringing material on the service provider's site or (2) otherwise becomes aware of the infringement or of circumstances making the infringement apparent. § 512(c)(1)(C), (A)(iii). The act immunizes those that qualify for the statute's benefits from liability for copyright infringements posted by users on the providers' websites if the service providers are unaware of the infringements, and, second, expressly relieve them of any obligation to monitor the postings of users to detect infringements as a condition of qualifying for the safe harbor. Service providers, however, forfeit entitlement to the safe harbor if they fail to expeditiously remove the infringing material upon receipt of notification of the infringement or upon otherwise becoming aware of it. Ds Website hosts a wide array of home videos, documentaries, animation, and independent films. As of 2012 D has hosted more than 31 million videos and had 12.3 million registered users in 49 countries. Approximately 43,000 new videos are uploaded to Vimeo each day. Users post videos without the intervention or active involvement of D. D does watch or prescreen videos before they are made available on the website. When a video is uploaded, it is automatically converted to Vimeo's format and stored on Vimeo's servers. All users must accept D's Terms of Service. These require, inter alia, that: users upload (1) only videos that they have created or participated in creating, and (2) only videos for which they possess all necessary rights and that do not infringe on any third party rights. Every time a user uploads a video, the Website displays three rules: (1) 'I will upload videos I created myself,' (2) 'I will not upload videos intended for commercial use,' and (3) 'I understand that certain types of content are not permitted on Vimeo.' Users have the technical ability to upload videos that do not comply with the rules. D has 16 employees to curate content. These employees identify some videos with a 'like' sign, occasionally prepare commentary on a video, offer technical assistance to users, participate in forum discussions, and at times inspect videos suspected of violating D's policies. D also enables users to 'flag' videos that they believe violate the Terms of Service. The flagging interface also explains how to submit a DMCA claim. On the three identified occasions in which Ps had sent D takedown notices, the district court found that D had responded 'expeditiously.' Ps did not send takedown notices regarding the videos involved in this suit. D did not screen for infringement of sound recordings. Ps contend that this fact, together with statements made by D employees (found in emails), show indifference and willful blindness to infringement of recorded music, and that D has furthermore actively encouraged users to post infringing videos. Ps sued D charging D with direct, contributory, and vicarious copyright infringement. Ps identified 199 videos that included recordings of music. D moved for summary judgment on the basis of § 512(c)'s safe harbor. Ps cross-moved for partial summary judgment that D was ineligible for the safe harbor. It held that questions of fact existed as to whether D had actual or red-flag knowledge of the alleged infringement where D had viewed the content to some degree. It held that evidence that D employees had sometimes encouraged users to upload infringing videos was insufficient to show that D had exercised willful blindness The district court granted partial summary judgment to Ps as to videos that allegedly infringed pre-1972 sound recordings. The court granted summary judgment to D under the safe harbor as to 136 videos on the basis that there was no evidence that D employees had observed them. As to videos for which there was evidence of some observation by D employees, the court denied both sides' motions, ruling that there were triable issues of fact regarding whether D had acquired actual or red flag knowledge of infringement that would disqualify it from safe harbor protection. The district court rejected Ps' argument that D should be held liable under a willful blindness theory. On reconsideration, the district court granted D summary judgment on an additional 17 videos, on 15 because of insufficient evidence of observation by D staff, and on two because they contained only short portions of the allegedly infringed recordings, which the court found insufficient to support a finding of red flag knowledge. Both parties appealed. Three questions were certified for appeal: '(a) Whether the DMCA's safe-harbor provisions are applicable to sound recordings fixed prior to February 15, 1972 '; (b) 'Whether, under the holding of Viacom, a service provider's viewing of a user-generated video containing all or virtually all of a recognizable, copyrighted song may establish 'facts or circumstances' giving rise to 'red flag' knowledge of infringement and; 'whether Ps' evidence showed willful blindness that could justify imposition of liability on D, notwithstanding the safe harbor provisions.