Source: http://seattlecopyrightwatch.com/copyright/isps_receive_dmca_safe_harbor_protection_for_pre-1972_sound_recordings/
Timestamp: 2019-04-24 06:30:24+00:00

Document:
Capitol Records and other sound recording copyright owners sued Vimeo for copyright infringement, alleging Digital Millennium Copyright Act (DMCA) violations. Vimeo is an Internet service provider that allows members to post videos the members create, which the general public can view. The copyright owners alleged that some of the member-created videos included copyrighted content without authorization from the copyright owners. The interlocutory appeal from the district court presented three issues to the Second Circuit Court of Appeals.
(i) whether the DMCA §512(c) safe harbor applies to pre-1972 sound recordings. This is a different issue than copyright owners’ rights under state copyright law for pre-1972 sound recordings.
(iii) whether Plaintiffs have shown that Vimeo had a general policy of willful blindness to infringement of sound recordings, which would justify imputing to Vimeo knowledge of the specific infringements.
The Second Circuit affirmed the district court’s rulings in part and vacated in part. The Second Circuit ruled that the DMCA safe harbor, a federal statute, protects service providers from infringement liability for pre-1972 sound recordings, which are covered by state law. Secondly, the Second Circuit ruled that some viewing by a service provider’s employee of a video that plays all or virtually all of a recognizable copyrighted song does not disqualify the service provider from safe harbor protection. Thirdly, the Second Circuit ruled that the copyright owners did not show a policy of willful blindness by Vimeo that would have disqualified Vimeo from safe harbor protection.
The DMCA Safe Harbor Protects Service Providers from Infringement Liability for Pre-1972 Sound Recordings.
The DMCA safe harbor 1) immunizes qualifying Internet service providers from liability for infringing content posted by users when the service provider is unaware of the infringement (§512(c)) and 2) relieves the service provider from any obligation to monitor user posts for infringing content (§512(m)). Under §301(c) of the Copyright Act, state copyright law applies to pre-1972 sound recordings until February 15, 2067, when pre-1972 sound recordings pass into the public domain. The plaintiff copyright owners argued that reading the §512(c) safe harbor to include pre-1972 sound recordings conflicts with the §301(c) exclusion of federal law applicability to pre-1972 sound recordings. The Second Circuit disagreed.
A literal and natural reading of the text of § 512(c) leads to the conclusion that its use of the phrase “infringement of copyright” does include infringement of state laws of copyright. One who has been found liable for infringement of copyright under state laws has indisputably been found ‘liable for infringement of copyright.’ In this instance, Congress did not qualify the phrase ‘infringement of copyright’ by adding, as it did in other circumstances, the words, ‘under this title.’ To interpret § 512(c)’s guarantee that service providers ‘shall not be liable for infringement of copyright’ to mean that they may nonetheless be liable for infringement of copyright under state laws would be, at the very least, a strained interpretation—one that could be justified only by concluding that Congress must have meant something different from what it said.
(Opinion pdf pages 28 – 30).
Some Viewing by a Service Provider’s Employee of a Video that Plays All or Virtually All of a Recognizable Copyrighted Song Does Not Disqualify the Service Provider from Safe Harbor Protection.
Vimeo employs a small team of people to curate content – marking “likes,” preparing commentary, offering technical assistance, participating in forums and inspecting videos for Vimeo policy violations. Vimeo’s screening practice is limited to visual screening and does not include audio screening. The plaintiff copyright owners argued that the failure to conduct audio screening, coupled with employee statements in emails, demonstrated willful blindness to recorded music infringement and that Vimeo actively encourage users to post infringing videos.
In order to be disqualified from the benefits of the safe harbor by reason of red flag knowledge under § 512(c)(1)(A)(ii), the service provider must have actually known facts that would make the specific infringement claimed objectively obvious to a reasonable person.
The hypothetical ‘reasonable person’ to whom infringement must be obvious is an ordinary person—not endowed with specialized knowledge or expertise concerning music or the laws of copyright. Furthermore, as noted above, § 512(m) makes clear that the service provider’s personnel are under no duty to ‘affirmatively seek’ indications of infringement. The mere fact that an employee of the service provider has viewed a video posted by a user (absent specific information regarding how much of the video the employee saw or the reason for which it was viewed), and that the video contains all or nearly all of a copyrighted song that is ‘recognizable,’ would be insufficient for many reasons to make infringement obvious to an ordinary reasonable person, who is not an expert in music or the law of copyright. Because the district court’s denial of Vimeo’s motion for summary judgment and concomitant certification of this question suggest that the district court believed that the evidence described in the question, without more, could render the service provider ineligible for the safe harbor, and relied on this proposition to deny summary judgment in every instance in which there was evidence that an employee of Vimeo had seen at least a portion of a video that contained substantially all of a ‘recognizable’ copyrighted song, we vacate the district court’s ruling on this question and remand for reconsideration in light of our further discussion of the standard for red flag knowledge.
(Opinion pdf pages 38 – 40).
The Second Circuit pointed to the shifting burdens of proof for red flag knowledge as a source of confusion. The defendant Internet service provider bears the initial burden of proof in showing that it is entitled to the safe harbor defense. The copyright owner then takes on the burden of demonstrating that the service provider either had actual knowledge of the infringement or showing facts and circumstances from which infringing activity was obvious (red flag) and that the service provider failed to promptly take down the infringing material. The copyright owner is entitled to take discovery to show that the service provider had either actual knowledge or red flag knowledge of the infringement.
The Copyright Owners Did Not Show a Policy of Willful Blindness by Vimeo that Would Have Disqualified Vimeo from Safe Harbor Protection.
Section 512(m) relieves the service provider of obligation to monitor for infringements posted by users on its website. We see no reason why Vimeo’s voluntary undertaking to monitor videos for infringement of visual material should deprive it of the statutory privilege not to monitor for infringement of music. Plaintiffs’ argument is refuted by § 512(m).
Section 512(c) specifies the consequences of a service provider’s knowledge of facts that might show infringement. If the service provider knows of the infringement, or learns of facts and circumstances that make infringement obvious, it must act expeditiously to take down the infringing matter, or lose the protection of the safe harbor. But we can see no reason to construe the statute as vitiating the protection of § 512(m) and requiring investigation merely because the service provider learns facts raising a suspicion of infringement (as opposed to facts making infringement obvious). Protecting service providers from the expense of monitoring was an important part of the compromise embodied in the safe harbor.
A copyright owner’s allegations of an Internet service provider’s “red flag knowledge” or actual knowledge must relate to specific infringing material.
The evidence cited to us by Plaintiffs, consisting of a handful of sporadic instances (amongst the millions of posted videos) in which Vimeo employees inappropriately encouraged users to post videos that infringed music cannot support a finding of the sort of generalized encouragement of infringement supposed by their legal theory. It therefore cannot suffice to justify stripping Vimeo completely of the protection of § 512(m). Moreover, because that evidence was not shown to relate to any of the videos at issue in this suit, it is insufficient to justify a finding of red flag knowledge, under the principle of Viacom, as to those specific videos. Thus, notwithstanding a few unrelated instances in which its employees improperly encouraged specific infringements, Vimeo can still assert the protection of § 512(m) for the present suit, and claim the benefit of the safe harbor, in the absence of a showing by Plaintiffs of facts sufficient to demonstrate that Vimeo, having actual or red flag knowledge of infringement in the videos that are the subject of Plaintiffs’ suit, failed to promptly take them down.
(Opinion pdf pages 53 – 54).
This case is Capitol Records, LLC v. Vimeo, LLC, No. 14-1048/1049/1067/1068, Second Circuit Court of Appeals.

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