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A recent 9th Circuit decision, issued Dec. 20, 2011, more clearly outlines what is expected of online service providers in order for them to be eligible for protection under the Digital Millennium Copyright Act (DMCA) section 512(c) safe harbor, which limits service providers’ liability for “infringement of copyright by reason of the storage at the direction of a user of material that resides on a system or network controlled or operated by or for the service provider.”
When a video is uploaded to Veoh, several things happen. First, Veoh’s software breaks down the video file into 256-kilobyte chunks and then automatically converts the file into Flash format. The system then makes the video available for streaming or download by other users. UMG argued that none of that was envisioned in 512(c), and that facilitating access to materials goes beyond the definition of storage.