Earlier this week, a federal court in Los Angeles ruled that Veoh, an online video hosting service similar to YouTube, qualifies for a DMCA safe harbor that protects the service from monetary damages for copyright infringements committed by its users. The plaintiff, Universal Music Group (UMG), alleged that many videos uploaded to Veoh included copyrighted sound recordings owned by UMG.

The ruling represents a big win for all online services that host "user-generated content," including other video hosting sites (like YouTube), music lockering sites (like MP3tunes.com), photo hosting sites (like Flickr), and document-hosting sites (like Scribd). The Court rejected a variety of theories that copyright owners have been pressing in several cases. Professor Eric Goldman at Santa Clara Law School has a complete analysis, but highlights include:

• "[T]he DMCA notification procedures place the burden of policing copyright infringement -- identifying the potentially infringing material and adequately documenting infringement -- squarely on the owners of the copyright." (Quoting the 2007 Ninth Circuit ruling in Perfect 10 v. CCBill.)
• "[I]t takes willful ignorance of readily apparent infringement to find a 'red flag'..." and "general awareness of infringement, without more" does not constitute a "red flag". (Ignoring so-called "red flags" of infringement can disqualify a service provider from the safe harbor in certain circumstances.)
• Sending a list of recording artists to a service provider does not create an obligation on the part of the service provider to police the site for materials featuring those artists.
• "UMG has not established that the DMCA imposes an obligation on a service provider to implement filtering technology at all, let alone technology from the copyright holder's preferred vendor or on the copyright holder's desired timeline."
• "UMG argues that Veoh could have searched its index of data for the names of artists whose videos were identified in the RIAA notices ... [but] the DMCA does not place the burden of ferreting out infringement on the service provider."
• Courts must apply "a different test for 'right and ability to control' than it applied in evaluating the plaintiff's claim for common law vicarious infringement." (Service providers can be disqualified from the safe harbor if they have both a right and ability to control infringing activities and derive a direct financial benefit from those activities.)

In making these rulings, the court simply applied existing DMCA precedents; nothing here is new law. But by applying these precedents to an online video hosting service for the first time, the ruling goes a long way toward clarifying the rules that apply to those sites. Although this is just one district court opinion, and UMG is likely to appeal to the Ninth Circuit, the ruling is very good news for many "Web 2.0" companies that are facing lawsuits or threats of lawsuits from copyright owners.

One final note: while I agree with much of Prof. Goldman's analysis, I disagree with his view that this ruling leaves an "ambiguity" about whether the DMCA safe harbors apply to all forms of copyright infringement liability (direct, contributory, and vicarious). On this point, the governing legislative history is crystal clear. According to the Conference Committee Report (H. Rep. 105-796 at page 73, the very last word from Congress on what they meant to be doing with the statutory language that became law):

"The limitations in subsections (a) through (d) protect qualifying service providers from liability for all monetary relief for direct, vicarious and contributory infringement."

Nothing ambiguous about that.