Advanced Copyright Issues on the Internet - Fenwick & West LLP

limitation that the content of material stored on the system not be modified. And existing caselaw such as the CoStar v. LoopNet decision supported the conclusion that Veoh was notprecluded from the Section 512(c) safe harbor by virtue of its automated processing of usersubmittedcontent. The court noted that Veoh did not itself actively participate or supervise theuploading of files, nor did it preview or select the files before the upload was completed.Instead, video files were uploaded through an automated process that was initiated entirely at thevolition of Veoh’s users. Inasmuch as the conversion to Flash format was a means of facilitatinguser access to material on its web site, the court held that Veoh did not lose the safe harborthrough the automated creation of those files. 1955Turning to the issue of knowledge of the infringing activity, the court found that, becauseIo Group had provided Veoh no notice of any claimed copyright infringement before filing itslawsuit, Veoh had not actual knowledge of the infringing activity at issue. With respect toknowledge through signs of apparent infringing activity, the court noted the applicable “red flag”test, which requires the service provider to be aware of blatant factors indicating infringement.The court found no such factors present in the instant case. None of the allegedly infringingvideo files uploaded by Veoh’s users contain Io Group’s copyright notices. Although one of theworks did contain the plaintiff’s trademark several minutes into the clip, there was no evidencefrom which it could be inferred that Veoh was aware of, but chose to ignore, it. Nor would theprofessionally created nature of submitted content constitute a red flag per se, particularly giventhat the video equipment available to the general public was of such quality that there might belittle distinction left between professional and amateur productions. Finally, the court rejected IoGroup’s argument that Veoh should have known that no legitimate producer of sexually explicitmaterial would have omitted the labels required by federal law for sexually explicit materialidentifying where records as to the performers depicted are kept. The court ruled that theabsence of such labels did not give rise to a genuine issue of material fact as to whether Veohhad the requisite level of knowledge or awareness that the plaintiff’s copyrights were beingviolated. 1956With respect to the requirement to act expeditiously to remove or disable access tomaterial, undisputed evidence established that when Veoh received DMCA-compliant notices, itresponded and removed noticed content on the same day the notice was received or within a fewdays thereafter. In addition, Veoh also promptly investigated other complaints about content onits web site through a “Flag It!” feature that enabled users to bring certain content to Veoh’sattention by flagging it from a set list of reasons such as mis-rated content, sexually explicitcontent, and obscene content. Io Group argued that Veoh had willfully blinded itself to factssuggesting infringement because the list of reasons on the “Flag It!” feature no longer containeda choice for “appears to contain copyrighted material.” The court rejected this argument, notingthat the “Flag It!” feature itself contained a notice, prominently displayed at the top of the “FlagIt!” dialog box, directing copyright owners to a link with instructions for submitting a copyrightinfringement notice to Veoh. 19571955 Id. at 1146-48.1956 Id. at 1148-49.1957 Id. at 1149-50.- 422 -