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Yes you can claim copyright exemption, says US court

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The automated processing of video files by online video company Veoh does not bar that company from claiming exemption from copyright laws, a US court has ruled. The judgment is the first time that a US court has ruled on some of the specific processes.

A judge in the US District Court for the Central District of California has said that the fact that Veoh processes video files to make them available online does not prevent it from claiming a defence of 'safe harbor' from liability for copyright infringement.

Veoh is defending a copyright action brought by Universal Music Group which accuses it of infringing the copyrights it holds in millions of songs and videos. The case has yet to be fully heard.

Universal had asked the Court to prevent Veoh from using a safe harbor defence, which is available when material is simply passed on at the direction of a user, when the intermediary is not aware that material requested by a use infringes copyright.

US copyright law says that the safe harbor exempts a service provider "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".

Universal said that Veoh's automatic processing of every video meant that it was doing more than just storing material "at the direction of a user". This, it argued, made it ineligible for the safe harbor protection.

Veoh processed the video material in four ways. It created Flash versions of the files; created copies of the files; allowed users to access them via streaming; and allowed users to access them as downloads.

US courts had previously decided that companies engaging in the creation of Flash versions of files could still be protected by 'safe harbor', but the Court in this case was the first to rule on the other three processes.

"It is undisputed that all of these software functions are directed toward facilitating access to materials stored at the direction of users," said the ruling, by Judge Howard Matz. "Nevertheless, UMG contends that [n]one of these activities [actually] constitutes ‘storage at the direction of a user.’"

"The question is therefore whether the... limitation on liability applies to service providers whose software performs these functions for the purpose of facilitating access to user-stored material. As already noted, the Court finds that it does," said Matz.

The judge ruled that the automated processing was designed to enable an activity which was permitted under 'safe harbor' rules, namely "storage at the direction of the user".

"The four software functions that UMG challenges fall within the scope of [safe harbor], because all of them are narrowly directed toward providing access to material stored at the direction of users," he said. "Both the conversion of uploaded files into Flash format and the 'chunking' of uploaded files are undertaken to make it easier for users to view and download movies, and affect only the form and not the content of the movies; 'streaming' and downloading merely are two technically different means of accessing uploaded videos."

See: The ruling (9-page/212kb pdf)

Copyright © 2008, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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