Capitol Records, LLC v. Vimeo, No. 14/1048 (2d Cir. June 16, 2016).
The Digital Millennium Copyright Act (DMCA) safe harbor (section 512 of the Copyright Act) applies to pre-1972 sound recordings and protects service providers from infringement liability under state copyright laws, holds the Second Circuit on an interlocutory appeal in a copyright infringement action brought by record labels against Vimeo. Further, the Court held that the mere fact that a video contains all or virtually all of a “recognizable,” copyrighted sound recording and was viewed in some fashion by a service provider’s employee is insufficient to prove knowledge or red flag knowledge of infringement; and further that the record company plaintiffs' evidence was insufficient to support the imputation of knowledge to Vimeo through the theory of willful blindness.
On the safe harbor question, the Second Circuit found that "A literal and natural reading of the text of § 512(c) leads to the conclusion that its use of the phrase 'infringement of copyright' does include infringement of state laws of copyright. One who has been found liable for infringement of copyright under state laws has indisputably been found 'liable for infringement of copyright'.” Further, "To construe § 512(c) as leaving service providers subject to liability under state copyright laws for postings by users of infringements of which the service providers were unaware would defeat the very purpose Congress sought to achieve in passing the statute." Construing the safe harbor of § 512(c) as not granting protection to service providers from liability for state-law-based copyright infringements would substantially defeat the statute’s purposes. Accordingly, the 2nd Circuit vacated the district court's grant of summary judgment to Plaintiffs as to the availability of the DMCA safe harbor to Vimeo in relation to liability for infringement of pre-1972 sound recordings.
On the "red flag" part, the 2nd Circuit addressed the shifting burdens of proof (plaintiff has the burden of proving red flag knowledge) and held that "A copyright owner’s mere showing that a video posted by a user on the service provider’s site includes substantially all of a recording of recognizable copyrighted music, and that an employee of the service provider saw at least some part of the user’s material, is insufficient to sustain the copyright owner’s burden of proving that the service provider had either actual or red flag knowledge of the infringement." The Court then addressed several reasons why. Accordingly, the Court held that Vimeo was entitled to summary judgment on those videos as to the red flag knowledge issue, "unless plaintiffs can point to evidence sufficient to carry their burden of proving that Vimeo personnel either knew the video was infringing or knew facts making that conclusion obvious to an ordinary person who had no specialized knowledge of music or the laws of copyright."
Lastly, the Court rejected the Plaintiffs’ argument that the district court erred in its ruling in Vimeo’s favor as to the Plaintiffs’ reliance on the doctrine of willful blindness.