512 reasons studios should be nervous

By Eriq Gardner

If lawyers for content owners aren't careful, they risk putting case law on the books that will hinder their ability to get tough on pirates.

A few months ago, the user-generated website Veoh won an important victory in California district court, defending copyright claims by an adult-entertainment production company. Veoh emerged victorious after convincing a judge that the website's strong take-down policies combined with section 512(c) of the Digital Millennium Copyright Act gave it "safe harbor" from liability. 

That defense is exactly the one being tested by YouTube in its $1 billion lawsuit brought by Viacom. The Viacom-YouTube lawsuit is going at a snails pace in New York, however, while Veoh continues to notch victory after victory in Hollywood's backyard.

Last week, Veoh and its lawyer Michael Elkin at Winston & Strawn followed up the August victory by winning a preliminary motion against a much larger plaintiff, Universal Music Group, which also is trying to claim that Veoh should be held liable for infringing works on their website.

The decision might not be as far-reaching as the last one because the court reserved the right to later decide the much larger issue of the ultimate applicability of 512(c) to this case. However, the court rejected arguments that various activities, including automatically creating different copies after an upload and allowing users to access uploaded videos via streaming or full download, disqualify Veoh from asserting the "safe harbor" defense.

Opinion is split around copyright circles whether the Veoh cases will have a material effect on the Viacom-YouTube dispute. Different jurisdiction probably means that the court in New York won't care much about it. These Veoh decisions, however, could put the pressure on Viacom to get a victory, or risk a lot of ground in the piracy wars. And should Viacom win,  the road to a Supreme Court showdown looks more paved than ever.