Judge Hands Veoh -- And Maybe YouTube -- Major Victory

By Eriq Gardner

As Viacom's lawsuit against YouTube continues through its discovery phase, a San Jose district judge's decision concerning a small pornography company may represent a significant development on the issue of copyright infringement liability in the digital age.

U.S. District Judge Howard Lloyd has issued a summary judgment that online video-sharing
service Veoh isn't liable for copyright infringement for material uploaded to its Web site by users, dismissing a lawsuit brought by adult-entertainment production company, Io Group. Here's the ruling.

The reason why this case may be so important is that the parties in the case echoed the positions in Viacom-v. YouTube: Io claimed that the offending user-generated website was much like Grokster and should hold liable for secondary infringement. Veoh defended itself by pointing out Section 512(c) of the Digital Copyright Millennium Act, which affords "safe harbor" from liability to online service providers that promptly respond to notices of infringing material.

At least for now, Veoh has won the day.

Judge Lloyd ruled that Veoh, who was repped by Michael Elkin at Winston & Strawn, has "a strong DMCA policy" and "takes active steps to limit incidents of infringement on its website and works diligently to keep unauthorized works off its Web site."

The judge went even further, spelling out the difference between Veoh and the original version of Napster:

"Napster existed solely to provide the site and facilities for copyright infringement, and its control over its system was directly intertwined with its ability to control infringing activity... by contrast, Veoh’s right and ability to control its system does not equate to the right and ability to control infringing activity. Unlike Napster, there is no suggestion that Veoh aims to encourage copyright infringement on its system. And, there is no evidence that Veoh can control what content users choose to upload before it is uploaded."

If the case represents a harbinger of things to come in the Viacom-YouTube case, even Google couldn't have written this decision any better. In fact, in response to Judge Lloyd's decision, YouTube chief counsel Zahavah Levine issued a statement saying that: "It is great to see the court confirm that the DMCA protects services like YouTube that follow the law and respect copyrights."

Some lawyers believe that the case won't factor into how a New York court decides the YouTube case. Carey Ramos, a partner at Paul Weiss, tells us that "the result was driven by some unique facts in the case -- first and foremost that Io is seeking to protect copyright in adult material and for whatever reason did not give notice to Veoh that they were hosting infringing material."

Nevertheless Ramos believes that Veoh may suddenly become one of the most influential digital media businesses around as "others will try to mimic what they did that afforded them protection."