Judge Tosses Universal Music Suit Against Veoh; Safe Harbors & Common Sense Prevail

from the google-should-be-happy dept

In a ruling that has to make the folks at Google/YouTube happy (despite not being a part of the case), a judge has granted summary judgment to Veoh over Universal Music, claiming that Veoh's video hosting site is protecting from liability of infringing videos due to the DMCA's safe harbors. This case, which has many similarities to Viacom's lawsuit against YouTube, has gone against Universal Music in almost every way. This is now the second time that Veoh has had such a lawsuit dismissed, and hopefully the judge in the YouTube case recognizes that this is, in fact, the right decision under the DMCA. This latest ruling isn't a huge surprise. Earlier this year, the judge seemed to reject all of Universal's arguments for why safe harbors shouldn't apply. Universal also got smacked down (twice) in its attempt to separately sue Veoh's investors for the actions of the company's users.

While Veoh, as a company, may be struggling, this is a huge victory for common sense. This case describes exactly the sort of situation that the DMCA safe harbors were designed to deal with. A service provider who has no direct say in what content is uploaded by users should not be liable for that content. It's great that judges are seeing this, and hopefully the judge in the YouTube case sees it the same way. Veoh's case isn't "over" yet, though, since Universal will appeal -- and has already claimed the ruling is "wrong." Yet, so far odds of a successful appeal are not looking good. Hopefully, the appeals courts will also correctly interpret safe harbors (and common sense) to recognize that a service provider should never be liable for the content put up by users.

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Universal Music Told, Once Again, It Can't Sue Veoh's Investors For Veoh's Actions

from the good-news dept

Back in February, Universal Music got slapped down for its highly questionable attempt to sue the investors in Veoh for the actions performed by the company itself. We've never quite understood why the major record labels have tried, repeatedly, to sue the investors of sites and services they don't like. It's hard to see how that's justified, because if those investors are found liable, it would create a huge liability for any investor. Investors don't have day-to-day control over a company, and trying to make them liable for the actions of the company makes no sense. However, not only was Universal shot down in this attempt, but it tried to refile the lawsuit against the investors... and was shot down yet again. The judge noted that Universal Music presented no evidence as to why the investors should somehow be responsible for the actions of the company and tossed out the lawsuits against them again. Hopefully this wakes up EMI, who recently sued the investors in a small startup as well.

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Universal Music Group Slapped Down (Again) In Case Against Veoh

from the can't-sue-the-investors dept

The ongoing lawsuit between Universal Music Group and online video site Veoh is seen by many as a precursor to the various lawsuits against YouTube (or, more specifically, the "big" lawsuit from Viacom). So far, it's not going well for the content companies. In another lawsuit, filed by an adult video company, Veoh won easily. In the UMG case, the judge has already shot down Universal Music's arguments for why Veoh shouldn't get DMCA safe harbor protection.

The latest news is that the judge has also dismissed Universal Music's attempt to include Veoh's investors as a part of the lawsuit. Universal's attempt to do this matched Universal's decision to sue Bertelsmann, a competitor who was also an investor in Napster. This made little sense to us at the time. Making an investor liable for actions of a company they invest in seems to open up a pandora's box of problems. Think of all the "shareholder lawsuits" you now see against management for corporate misdeeds... and turn that around, whereby anyone hurt by a company's actions could sue all of the investors. If investors are liable for a company's misdeeds, then suddenly it becomes a huge liability to invest in anything.

Eventually, Universal Music bought Bertelsmann... and rather than continue suing itself, Bertelsmann "settled." Bertelsmann (now UMG) later settled similar lawsuits brought by other labels, so the full issue of investor liability wasn't really addressed. In this case, the judge found that the only way Universal could make a credible claim that the investors were also liable was to show that they were actively encouraging increased copyright infringement after it was established that Veoh was infringing. That hasn't been established yet, at all, and it appears that the investors were actively pushing Veoh to block infringing content. So, Universal's claim against the investors has absolutely no merit whatsoever.

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Ocean Tomo Patents Being Used To Shake Down Companies That Have Online Recommendations

from the ebay-for-patent-trolls dept

Ocean Tomo is a company that's been around for a few years, trying to establish itself as the auction house for patents. I've already made clear how troubling I believe its business model to be, but the company always tries to put a friendly face on it, claiming that it's not about aiding so-called "patent trolls" but actually reducing the problem of patent trolling. However, that (of course) isn't what's actually happening. A patent on personal recommendation systems ("if you bought x, you'll like y") was bought via Ocean Tomo by what seems likely to be a bunch of lawyers under the company name Quito (though, it's not entirely clear who's involved) and is now being used in a lawsuit against thirteen big internet companies that employ any type of rating system. The companies being sued are: Netflix, Amazon, Yahoo, RealNetworks, last.fm, Pandora Media, Slacker Inc., Veoh, Hulu, NBC Universal, CBS, News Corp., and Strands.

As you look through that list, you'll recognize that some have done significantly innovative work in taking the concept of an online recommendation system and actually making it useful. The simple idea of doing recommendations is pretty straightforward. Making it work well? Not so much. Hell, that's why Netflix is offering $1 million to anyone who can improve their recommendation engine by just 10%. The basic ideas expressed in the patent are not where the value in these recommendation systems lies. It's in the actual effort of figuring out how to make them work better. This patent has nothing to do with the actual success of a recommendation system, but the holders of it may now get a pay day just for holding the patent, thanks to Ocean Tomo's auctions. And, of course, this means that all of those companies that were actually innovating will, at the very least, now need to spend legal dollars defending against this massive innovation blocker.

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Veoh Gets Another DMCA Safe Harbor Win, This Time Against Universal Music

from the good-decisions dept

You may recall that last year, the video hosting website Veoh had a big win when a court ruled that the site was protected by DMCA safe harbors from infringement committed by users. Of course, that particular lawsuit was only one of a few that Veoh is involved in. In a separate case, brought by Universal Music Group, UMG made some somewhat twisted arguments as to why Veoh shouldn't qualify for DMCA safe harbor protections. Basically, it said that Veoh gave up its safe harbors by creating copies of the video in transforming their format and creating copies that were in smaller "chunks" than the original. UMG also went out on a limb claiming that the fact that users could stream videos and download whole videos also took away their safe harbor protections. It's hard to see how those arguments make any sense at all, and it sounds like UMG lawyers were just throwing every possible argument against the wall, knowing they had little to work with.

The good news is that the judge has rejected all of those arguments, saying none of them seemed to mean Veoh gave up its safe harbor protections. The lawsuit isn't over yet, and the court hasn't ruled on whether Veoh (overall) is protected by the DMCA, but in rejecting UMG's weakly reasoned arguments for why Veoh had given up those protections, it suggests that Veoh is likely to prevail here too.

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Court Ruling In Veoh Case Could Be A Big Boost To YouTube Over Viacom

from the a-good-decision dept

A judge has ruled that online video hosting site Veoh is not guilty of copyright infringement for videos uploaded by its users. The judge made the proper ruling here, noting that the DMCA's safe harbors protect Veoh. The lawsuit was brought by adult video entertainment firm Io, who was upset that Veoh's users kept uploading clips from its films. As the judge properly noted, Veoh follows all the rules necessary under the DMCA to avoid liability (this doesn't mean that the individuals doing the uploading aren't liable, however).

While this may seem like a small case, it is quite similar to Viacom's infamous lawsuit against YouTube/Google. Considering that YouTube follows the DMCA's rules in a similar manner to Veoh, this ruling suggests that YouTube is also protected by the DMCA safe harbors, just as many had stated from the beginning. The key issues raised by Io (and also raised by Viacom) is that these sites lose their DMCA safe harbors because they take action on the content, often transcoding the content from one format into flash. However, the judge in the Veoh case trashed that argument pretty easily:

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. Veoh preselects the software parameters for the process from a range of default values set by the third party software... 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 folks over at Google are, understandably, pretty happy about this ruling, which confirms their position that YouTube is protected: "It is great to see the Court confirm that the DMCA protects services like YouTube that follow the law and respect copyrights."

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Universal Music Too Impatient To Wait For Earlier Lawsuit Results; Sues Veoh

from the you-sued-me?--ok,-I'll-sue-you dept

A month ago, we detailed the long history of Universal Music mistakenly suing just about every online video hosting firm (other than Google's YouTube, who gave Universal Music a sweetener to sue everyone else and skip YouTube). The conclusion to that story was that, following a typical "pay up or else" threat from Universal Music, video hosting site Veoh took the initiative and preemptively sued to have a judge claim that what it was doing was perfectly legal. Rather than wait to hear what the judge has to say on the matter, Universal Music simply went right ahead and sued Veoh anyway. Once again, this is a misguided lawsuit against a company that is doing nothing wrong for a service that isn't taking any money away from Universal Music. People sometimes complain that we spend too much time pointing out the mistakes of the recording industry. We'd love to stop it -- but the record label execs seem to have absolutely no recognition for how badly they continue to muck up their own businesses.

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Veoh Sick Of Waiting For Lawsuit; Pre-emptively Sues Universal Music

from the stop-with-the-threats dept

Speaking of Edgar Bronfman and Universal Music being confused about the market, it appears that the company is being sued by online video site Veoh. This one requires going back a little and looking at the history to understand what's happening. In September last year, Universal Music Group CEO Doug Morris made the ridiculous claim that YouTube and MySpace owed Universal Music millions because they were hosting videos that contained Universal's music. Note that this wasn't about downloadable (or even streamed) song files. It's about videos that happen to have Universal music in the background. There's no credible way for Universal to claim that anyone was using music in such a video as a substitute for actually purchasing music. If anything, these videos help promote the music. This was, clearly, a blatant money grab (and one that would actually tend to cut off the promotional value of these videos).

Soon after this, Google bought YouTube, and as a part of the deal had them pay off Universal Music and the other labels. A rumored part of the deal was that the record labels would not sue YouTube, but would sue YouTube competitors. Universal Music obliged, suing smaller sites Bolt and Grouper. There was an attempted settlement, but problems with the settlement quashed a potential acquisition for Bolt recently. A month later, Universal also sued MySpace. Basically, it's decided to shake down every online video service, hoping for some cash settlements even though it would probably lose in court.

Last month, apparently, Universal Music alerted Veoh that it was "considering" suing the company for "massive copyright infringement," though it failed to provide any details. It's a typical shakedown situation. Basically a threat with nothing to back it up other than a "you wouldn't want to end up like those other websites, now would you?" implied threat. Veoh apparently decided to fight back. Rather than wait for Universal Music to file a lawsuit, it's gone to a judge to ask for a declaratory judgment that Veoh's service is perfectly legal under the DMCA safe harbor provisions. It's great to see at least one company stand up to Universal on this one -- especially after the disappointment of Google paying off the record labels on this issue. Hopefully the judge recognizes the issues at stake.

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