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Veoh Vindicated; Vivendi Vanquished. DMCA Rules.

Veoh Networks, which makes both professionally created programming content and entertainment, as well as user-generated content, available through its website, has often lived in the shadow of Google, YouTube, and Apple’s iTunes. Earlier this week, Veoh got a bit of sunshine.

Two years ago, Universal Music Group (a company owned by Vivendi SA), sued Veoh for copyright infringement. The suit alleged that Veoh’s business was essentially based on the infringing use of copyrighted works of others, notably from Universal’s viewpoint, musical groups and artists.

Veoh countered with the fact that it used filtering technology to detect and remove protected content and, in the words of Judge Matz, writing for the U.S. District Court for the Central District of California, when Veoh “did acquire knowledge of allegedly infringing material . . . . it expeditiously removed such material . . .,” vindicating Veoh supporters who have consistently maintained Veoh is protected by the provisions of the Digital Millennium Copyright Act (DMCA). This is the second time the legal sun has shone on Veoh. A similar lawsuit brought by Io Group, an adult entertainment company, was also decided in favor of Veoh last year.

Legal Bytes has previously reported the criteria necessary to comply with the DMCA (you did read that, right?), thus you know that a key requirement for insulation from liability for copyright infringement under the DMCA is the question of whether, when a company becomes aware of infringing content, it promptly removes it from use and display. The California Court rules that Veoh had done just that, and consequently the safe harbor provisions of the DMCA served to protect Veoh from liability in this case. Judge Matz’ order notes: "The DMCA does not place the burden of ferreting out infringement on the service provider". You can read the full text of the Summary Judgment Order of the California Court.

Universal is expected to appeal, claiming the Judge’s order fails to adequately take into account Universal’s claim that everyone connected with Veoh must have known about rampant infringement and that alone should sustain the ‘knowledge’ which would remove the shield from their entire business model – a shield otherwise available to web hosting companies. However, it may well be an uphill battle since the Court specifically addressed this issue, noting “If such general awareness were enough to raise a ‘red flag,’ the DMCA safe harbor would not serve its purpose".

If you are concerned you don’t know enough about digital rights management; compliance with the provisions of the DMCA; about liability applicable to website owners and operators or the rights available to content owners, the Advertising Technology & Media group at Rimon is for you. Try us. You might like us. Feel free to call me or, if you are already a client, call the Rimon attorney with whom you regularly work. 

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Objects in the Mirror Are Closer Than They Appear

Who would have thought that would refer to our financial system, real estate markets, building developers, technology providers and, lest we forget, automobile manufacturers. This was a year of challenge and change. America elected its first Afro-American President, who inherits a country involved in wars, economic turmoil of unprecedented proportions and a government tab increased by $1 trillion in the past 90 days. The NY Giants won the Super Bowl (and may do it again). The price of gasoline went from $2 a gallon to more than $4 a gallon to less than $1.50 a gallon this year, and the stock market experienced unprecedented swings, some days approaching 1,000 points; and fluctuations of anywhere from 200 to 600 points stopped being unusual—sometimes in the same day! No laughing matter, the Federal Reserve was doling out discount coupons for the purchase of investment banks, banks were buying brokerage houses, and non-banks were lining up to become regulated banks, just so they could share in the bail out fund. Indeed, the term “bail out,” once the domain of skydivers and sinking rowboats, became the most over-used word in the news (and in Congress). Speaking of domains, ICANN turned the world of domain names on its ear with its proposed Draft Applicant Guidebook (Legal Bytes; November 2008). Cyberwarfare no longer remained the domain of motion pictures like “War Games,” “Terminator” and “Matrix” when Georgian websites were under attack while Russians soldiers invaded the real Georgian sites. And speaking of Georgia, a court in the other state of Georgia upheld the validity of promotions held via SMS text messaging. Virtual worlds were in the news: divorces, theft of intellectual property, defamation, performance rights, even the murder of an avatar resulted in an arrest. “Green,” behavioral and children’s marketing, blogs, word of mouth and viral marketing occupied much of the discussion at the FTC; identity theft and data breaches continue to create privacy concerns; ad-blocking technology mounted an assault on interactive advertising; testimonials and endorsements created buzz, as did publicity rights, led by the estate of Marilyn Monroe (Legal Bytes; May 2008); a New York court decided that emails could amend a contract because they are “writings”; and the online, interactive video gaming industry, wireless advertising and content distribution, and the rise of processing platforms that serve as home computers, entertainment centers, Internet access and gaming portals—oh, and some are handheld and wireless. The fact that 2008 marked the 40th anniversary of the conception of the x86 device and the beginning of what we now know as personal computing—spawned by the obsession of a San Antonio engineer named Austin O. “Gus” Roche—and the 10th anniversary of the publication of my law journal article “Privacy on the Internet: Whose Information Is It Anyway?” went pretty much unnoticed.

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Are You For Real?

In the 1960s, Stanley Milgrim, then a psychologist at Yale University, conducted a controversial experiment. In an obviously controlled setting for the study, Milgrim and his associates directed their subjects to give ever-increasing electrical shocks to strangers whenever they gave the wrong answer to questions in a test of memory. The strangers were really actors pretending to experience pain and did not actually receive any jolts of electricity. The study, intended to measure how compliant people would be to obey authority figures, even to the point of inflicting pain on otherwise innocent individuals, was disturbing, to say the least. The subjects, despite some discomfort at first, continued to “shock” the test-taking actors. The experiment raised ethical concerns about subject study methodologies, among other things.

However, recently, Mel Slater, a computer scientist at University College London in England (with a joint appointment to the Universitat Politecnica de Catalunya in Barcelona), reproduced this experiment without running afoul of the ethical concerns that the original study raised. Mr. Slater conducted his experiment in a virtual world where test-taking “victims” were avatars whose expressions changed from happy to pained in response to the actions of participants in the study—much the same way the real-life actors did more than 40 years ago. Not only were the results astonishingly similar, but to the surprise of many, the real-life participants experienced increased heart rates and described feelings of regret or feeling badly about delivering electrical shocks—even though they knew the strangers on the other side of the screens were avatars and not real people!

Continue reading “Are You For Real?”

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User-Generated Content

User-generated content (“UGC”) on the Web is serious business and becoming more so by the day. While many know UGC as a challenge to IP rights, eMarketer is predicting advertising spending on social networking, photo sharing, gaming and amateur video websites to reach $4.3 billion by 2011—compared with the $450 million in advertising revenue they reported in 2006. That means companies are going to have to figure out how to differentiate themselves and maintain positioning in the face of increased competition. The ease of creation, coupled with technology—whether embedded players, gadgets and widgets, or more sophisticated interactive game sites—means that millions of users can create, post and “snag” user-generated content, and the trend shows no sign of diminishing. Social networking companies are significant sources of advertising revenue and are growing targets for investors seeking to build market share or obtain a piece of the transactional pie. Increasingly, mobile marketing and messaging companies are building the wireless and global brands, and are increasingly monetizing their social networking and messaging capabilities.

Legislators and regulators are noticing the exuberant success and popularity these services enjoy and, with a demographic skewed to a younger portion of the population, there is no question these services, the advertising they carry, and the content available on their sites, will continue to draw scrutiny in the months and years ahead. Rimon represents social networking companies, advertising agencies, and advertisers and media companies around the world. When you think of legal issues surrounding user-generated content—standards, copyright protection, digital rights management, filtering, viral or buzz marketing and so much more—please think of our Advertising Technology & Media Law practice group.