The case involves the mainstream video-sharing site Veoh.com, which used to include an adults-only area. They got into legal trouble back in 2006 when the adult entertainment company IO Group, parent company of gay producer Titan Media, found some of their content on Veoh.
The IO Group sued, even though Veoh took down the videos when asked. The IO Group's case hinged on the claim that because the videos had gone through Veoh's encoding process, Veoh should therefore lose its right to protection under the Digital Millennium Copyright Act.
Judge Howard Lloyd threw out the IO Group's case on the grounds that the encoding process, which transforms the videos into the easy-to-use Flash format during upload, happens independently of the Veoh staff.
“Here, Veoh has simply established a system whereby software automatically processes user-submitted content and recasts it in a format that is readily accessible to its users," he wrote. “Veoh preselects the software parameters for the process from a range of default values set by the thirdparty software,” the judge continued. “But Veoh does not itself actively participate or supervise the uploading of files. Nor does it preview or select the files before the upload is completed. Instead, video files are uploaded through an automated process which is initiated entirely at the volition of Veoh’s users.”
The decision also includes language acknowledging the extreme difficulty in monitoring the vast amount of uploads that happen on sites like Veoh.
However, Judge Lloyd also added, “The decision rendered here is confined to the particular combination of facts in this case and is not intended to push the bounds of the safe harbor so wide that less-than-scrupulous service providers may claim its protection."
YouTube has been fighting with telecom giant Viacom for the past year in a $1 billion copyright infringement case; while the Veoh decision doesn't directly affect YouTube, the company's chief legal counsel praised the decision.
"It is great to see the court confirm that the DMCA protects services like YouTube that follow the law and respect copyrights," Zahavah Levine told TechCrunch.com. "YouTube has gone above and beyond the law to protect content owners while empowering people to communicate and share their experiences online. We work every day to give content owners choices about whether to take down, leave up, or even earn revenue from their videos, and we are developing state-of-the-art tools to let them do that even better."
The decision includes several guidelines for how video-sharing sites can make sure they're protected, including requirements that these sites:
• Tell users that uploading copyrighted material is prohibited.
• Comply with DCMA takedown notices.
• Take steps to control users who infringe on copyrights.