Video-sharing service Vimeo, a subsidiary of Barry Diller’s IAC/InterActiveCorp, is another in a growing cadre of social media sites that share users' content with one another, allowing users to post videos and comments about those videos. The site has more than 14 million registered users and gets its revenue from subscription fees and advertising.
Like other social media sites that seek to build a larger audience and then hope to monetize their investment by targeted advertising to users (Pinterest, in particular, comes to mind), Vimeo walks a fine line when it comes to user-posted content that includes copyrighted material.
Sites that allow user-posted content generally enjoy protection from charges of infringement under the safe-harbor provision of the Digital Millennium Copyright Act (DMCA), which applies if a site removes infringing material when informed about it.
But in 2009, Capitol Records sued Vimeo for infringement over 199 user-generated lip-sync videos posted on the former's site, charging that Vimeo was facilitating copyright infringement by allowing the videos to remain on its site.
Vimeo — which has grown massively since the filing of the case to a database of more than 30 million videos — has long claimed that it dutifully responded to DMCA take-down notices but did not receive any for the videos in question. It sought to dismiss Capitol's suit, arguing that the videos don't infringe due to the DMCA's safe harbor.
The problem for Vimeo is that its employees posted comments about or even “liked” some of the allegedly infringing videos. Capitol argued that Vimeo should not be protected by the DMCA’s safe harbor because Vimeo knew that the uploaded videos contained unlicensed copyrighted material and that Vimeo benefited financially from them.
In response, Vimeo did not deny that its employees had interacted with the videos, but claimed that such interaction did not cross the threshold under the DMCA for “knowing” about infringing activity and therefore losing its immunity.
Vimeo lost its bid to dismiss. On Sept. 18, 2013, a federal judge ruled that some of the videos might not qualify under DMCA. The judge felt that Vimeo’s employees’ interactions with the videos meant that it was not completely clear whether Vimeo had “actual or red flag knowledge” that would lose the company immunity under the DMCA.
The Vimeo litigation had been on hold pending a ruling in a similar case, in which Viacom sued Google’s YouTube for displaying Viacom’s copyrighted television and movie content on the Internet without authorization. In this case, the volume of videos being uploaded onto YouTube (estimated at a rate of more than 24 hours of viewing time per minute) may have contributed to the district court ruling in YouTube’s favor, because the judge found it difficult to believe that YouTube could possibly monitor all of its users’ activities, some infringing, as fast as Viacom or other copyright-holders may have preferred.
But let's rewind to the Vimeo episode. In the recent opinion denying Vimeo’s motion, the judge clearly felt that Vimeo’s proposed knowledge requirement set too high a standard for liability and was unprepared to hold as a matter of law that a service provider may disclaim knowledge of infringing material under any circumstance short of an “employee’s awareness that the uploader has no legal defense for his or her otherwise infringing conduct.”
Doing so, the judge felt, would “collapse the distinction the DMCA makes between actual and red flag knowledge” and could “run contrary to the statute’s requirement that infringing content only be objectively obvious to a reasonable person.”
So, as of now, Vimeo remains on the hook. For other entities, the takeaway is that if a site allows users to post materials, its owners should not allow its employees to comment on them, positively or negatively, without checking that those user-generated materials are not infringing. The wisest course may be to simply instruct employees not to comment on user-generated materials at all. Or else, you may drift outside the DMCA’s safe harbor.