This case is a throwback in every way. We rarely see lengthy (this one clocks in at 46 pages), detailed, and philosophical Section 512(c) opinions any more, and we only get this one because of the case’s extreme age. Capitol Records (the successor to EMI) sent its first cease-and-desist letter to Vimeo in 2008 and sued Vimeo for copyright infringement in 2009. Yes, this is a 15-year-old lawsuit.[FN]
[FN: This lawsuit is almost old enough to drive a car. As discussed in the implications section below, a reminder that lengthy litigation is a feature, not a bug, to copyright owners because it functions as lawfare to drain its opponents of resources. Either the opponent folds because it runs out of money, or investors are dissuaded from investing because they know their investment dollars will go to the defense lawyers instead of engineering or marketing.]
The 281 videos at issue, uploaded in 2006-13, had background music that allegedly infringing the plaintiffs’ copyrights. All of these videos are “videos with which Vimeo employees interacted after those videos were uploaded by users to Vimeo’s website—for example, by selecting the video to be featured in a prominent section of the website or by posting a comment about the video.”
As suggested by this case’s age, this case has been through so many proceedings that I won’t try to recap its drama-filled history. The district court’s rulings became final in 2021. On appeal, the Second Circuit agrees, in an opinion written by Judge Leval.
Burdens of Proof
512(c) is an affirmative defense, so nominally the defense has the burden to establish each of its ~12 elements. Here, the court shifts the burden to the plaintiff on the contested points after Vimeo satisfied its burden to show its eligibility for 512(c):
Although it is the defendant’s burden to show that it meets the qualifications for entitlement to the safe harbor—such as by showing that it is a service provider within the meaning of the statute—we have held, citing the Nimmer copyright treatise, that it is the plaintiff’s burden to demonstrate that a service provider has lost entitlement to the safe harbor because it had actual or red flag knowledge of the infringement. In our view, for the same reasons, a plaintiff must also bear the burden of persuasion in showing that the defendant was disqualified from the safe harbor because it received a financial benefit directly attributable to the infringing activity while having the right and ability to control such activity.
Red Flags of Infringement
The “red flags of infringement” 512(c) exclusion has been the source of endless confusion, and this opinion doesn’t clear up the confusion and maybe adds to it.
The court lays out its standard:
Plaintiffs needed to show that Vimeo employees were aware of facts making it obvious to (a) a person who has no specialized knowledge or (b) a person that Plaintiffs have demonstrated does possess specialized knowledge that: (1) the videos contained copyrighted music;(2) the use of the music was not licensed; and (3) the use did not constitute fair use.
The court says that the copyright owners didn’t meet this burden:
- “The fact that licensing music, as a general matter, can be challenging or confusing does not make it obvious that music accompanying a particular user-uploaded video was not licensed. Even if a person without specialized knowledge would have
intuited a likelihood that many of the posted videos were not authorized, that
would not make it obvious that a particular video lacked authorization to use
the music….those employees’ awareness that music found on their videos was under copyright did not show that they knew whether the music they heard on user videos came from EMI or another label.” - Capitol’s 2008 C&D didn’t change the analysis: “an awareness that EMI sent a letter in the past demanding removal of its music gave no assurance that EMI did not thereafter make contracts licensing the use of its music, especially in view of evidence that some users who posted the videos containing EMI music asserted that EMI had provided them with authorization to use the music. The DMCA does not require service providers to perform research on mere suspicion of a user’s infringement to determine the identity of the music in the user’s video, identify its source, and determine whether the user acquired a license.”
- “Plaintiffs contend that they showed that the Vimeo staff had “legal acumen” as to copyright laws. We disagree. Their argument rests solely on Vimeo’s having told its employees not to produce videos containing copyrighted music and Vimeo’s having communicated to users that using copyrighted music “generally (but not always) constitutes copyright infringement.” Those facts do not support the conclusion that a Vimeo employee, absent familiarity with copyright laws, would have a basis for knowing whether the use of copyrighted music in a particular video was or was not a fair use. Plaintiffs’ argument goes too far; it would require Vimeo employees to assume that uses of copyrighted material are never fair use.” (emphasis added).
With respect to that last point, copyright owners would love a legal standard that assumed away the existence of fair use!
As evidence that a content reviewer can’t predict fair use, the court points to the Goldsmith Supreme Court arguments, where dozens of copyright law professors joined amicus briefs on each side of the fair use question. If law professors can’t agree about fair use, I guess the court thinks no one can? (A reminder that a law professor rarely agrees with themselves, let alone anyone else LOL).
This tendentious fact-parsing about scienter makes my head hurt. I have little confidence in my ability to predict what facts will and won’t matter to the next inquiry on red flags of infringement.
Right and Ability to Control
The court says that Congress’ drafting of the 512(c) conditions left much to be desired (I agree!), including its exclusion for services with the “right and ability to control” infringement:
Exercise of control could mean many different things. What sort of control did Congress have in mind? How much control is required? If it meant simply the legal right and the technical capability to remove videos from the site, or prevent their installation, it would be rare for a service provider not to fall within that description. In virtually all cases, private operators of websites that host material posted by users have the legal right to select the categories of videos they will allow, and to exclude those that do not conform, as well as the technical ability to effectuate these choices….
Construing Section 512(c)(1) to mean that profiting from possession of a capability that virtually all private service providers are expected to possess would effectively foreclose access to the Act’s safe harbor and would substantially undermine what has generally been understood to be one of Congress’s major objectives in passing the DMCA: encouraging entrepreneurs to establish websites that can offer the public rapid, efficient, and inexpensive means of communication by shielding service providers from liability for infringements placed on the sites by users. It seems highly unlikely that Congress intended that this ambiguous provision should be interpreted to have a meaning that would effectively undo a major benefit that the Act appears intended to confer.
Amen, but thwarting the establishment of websites that “offer the public rapid, efficient, and inexpensive means of communication” is exactly what copyright owners have been doing–using the DMCA safe harbors as a cudgel–for decades.
In the Viacom case, the Second Circuit said that the “right and ability to control” 512(c) exclusion required “something more” than the technical capacity to control, and that “something more” was the defendant’s “substantial influence” over users. The term “substantial influence” was never defined by the Second Circuit, and it provides no useful semantic guidance to any question that matters. The phrase just shifts the rhetorical analysis from “control” to “substantial influence.”
The copyright owners were fine with the “substantial influence” test because they argued that a service engages in “substantial influence” whenever it does content moderation. In other words, per their argument, every service would always substantially influence all of its users’ content if it does any content moderation, which every service does. Nice.
The Second Circuit doesn’t agree:
Vimeo’s intrusions into user autonomy over their posts were far less extensive [than the cited precedent] as to both coercive effect and frequency. Calling attention to selected videos by giving them a sign of approval or displaying them on a Staff Picks channel (or the contrary, by demoting them) did not restrict the freedom of users to post whatever videos they wished.
As for Vimeo’s insistence that user videos be limited to those created at least in part by the user, and its ban of pornography as well as gameplay videos and other unoriginal content, this was somewhat more intrusive. But these requirements were in the nature of (i) avoiding illegality and the risk of offending viewers and (ii) designing a website that would be appealing to users with particular interests. It seems unlikely that, in Congress’s use of an ambiguous term in formulating the standards for eligibility for the safe harbor to encourage entrepreneurs to create websites, it intended to deny eligibility for the safe harbor to entrepreneurs merely because they sought to exclude content that violates other laws or because they sought to design sites to make them appealing to selected categories of consumer preferences— whether for child-friendly videos, videos devoted to dance, kittens and puppies, hunting and fishing, cars, baseball, wildlife, antiques, carpentry, or whatever else. The creation of websites designed to satisfy consumer demands appears to be precisely the sort of entrepreneurial activity that the safe harbor was intended to encourage
(I hope any copyright owner that tries to deny us cat videos experiences some instant karma).
The court seemingly hints that “substantial influence” means “restrict[ing] the freedom of users to post whatever videos they wished,” but then goes on to say that ordinary TOS house rules don’t disqualify a service from 512(c). Again, the court is obviously dodging all of the hard questions. Is influence insubstantial if users are free to post what they want? OK, then what does a restriction of user posting look like? For example, Vimeo said it doesn’t permit real estate walkthrough videos. The court seems to be saying that’s not a restriction on user “freedom” (an unfortunate word choice in an era where the definitions of censorship are partisanized), but then, what is? It would be so much better if the Second Circuit actually offered a definition of “substantial influence,” rather than dancing around the issue with ambiguous innuendo, but no.
The court also said that Vimeo doesn’t engage in too much manual content promotion because it gets 15M video uploads/year and only has 74 employees, so “the number of videos that 74 staff members could have evaluated and emphasized amounted to no more than an insignificant percentage of those posted.” Seriously? Are we now going to count the percentages of content moderation interventions and set an arbitrary threshold for too much moderation that becomes 512(c)-disqualifying? Copyright owners would LOVE to explore that standard–it’s doctrinally murky and an easy way to increase the costs of discovery.
The court then says conclusorily:
Plaintiffs did not show that staff awards, consisting of likes, thumbs-ups, and promotions to a Staff Picks channel (or demotions), came anywhere near amounting to exercising “substantial influence” over the contents of user-posted videos.
OK, but what exactly is the definition of “substantial influence” again?
The opinion then offers 500+ words of philosophical musing on the policy balancing act of 512(c), a single paragraph I’m going to quote in full (minus the cites and a paragraph-long footnote discussed below, with more philosophical musings) so you can understand my befuddlement:
In our view, denial of eligibility for the safe harbor based on such noncoercive exercises of control over only a small percentage of postings would undermine, rather than carry out, Congress’s purposes in establishing the safe harbor. In establishing this safe harbor with its limitations, Congress sought to achieve a compromise with the following complex objectives. First, Congress recognized that the creation of websites on which the public could post videos would render a hugely valuable public service. However, the expense of either policing all postings to weed out infringements or of paying damages for infringements by users would be prohibitive. Entrepreneurs could not be expected to establish such ventures if doing so would expose them to an open-ended risk of liability for the posting by users of infringing videos or if they would need to incur unsustainable costs in policing posted videos to ensure that they were free of infringements. Congress therefore enacted inducements to establish such websites by granting safe harbors protecting service providers from liability for infringements posted by users and by expressly exempting the service providers from any obligation to conduct burdensome research to detect infringements At the same time, Congress recognized that the posting of infringements by users of websites could cause significant economic harm to copyright holders. Accordingly, Congress placed some limitations on eligibility for the safe harbor. While Congress deemed it important not to impose on website operators the huge burden of checking user posts for infringement, it recognized that this burden would be considerably lessened if the operator was already voluntarily incurring a large expense in monitoring and controlling user posts to serve the operator’s own business purposes. In such cases, where an operator is not merely passively accepting content but is arguably playing a large role in shaping the content of user posts, checking also for infringements would add only a relatively modest incremental expense and would not substantially disincentivize the provision of socially valuable sites. Congress therefore gave rightsholders some limited recourse against service providers that have the “right and ability to control” infringements by users, which our court has interpreted to apply in circumstances when the service provider has exercised “substantial influence” over user activities. To interpret this provision as Plaintiffs argue—to deny Vimeo access to the safe harbor merely because of the tiny influences it exercised—would subject Vimeo to a huge expense in monitoring millions of posts to protect itself against the possibility of liability for infringements. It would undermine the compromise that we understand Congress to have sought. It would prevent service providers from seeking to make their websites responsive to user desires, substantially diminishing their utility to the public.
I could spend a lifetime trying to parse this paragraph, the assumptions it makes, and how the empirical evidence supports and conflicts with it. For now, one small point: a safe harbor that takes 15 years to adjudicate raises all of the same policy concerns as the absence of a safe harbor.
Also, the court makes this oblique reference: “where an operator is not merely passively accepting content but is arguably playing a large role in shaping the content of user posts”…what does that mean? Perhaps IAPs and storage lockers “passively accept content,” but does that describe content publication services that deploy automated filters and subjective TOS rules? The concept of “passively accepting content” is fundamentally incoherent, and I think that end of the court’s spectrum is a strawman. And the other end is “a larger role in shaping” UGC–larger than what? What does it mean to “shape” content? You may also recall I strenuously objected to the “shaping content” phrase in the Liapes case. Is “shaping content” the same as exercising editorial discretion or something else? The court leaves open the ability of copyright owners to argue that future defendants “shaped” UGC, with more irresolute doctrinal fights and expensive discovery requests.
The court’s mondo paragraph included this footnote that also made my head spin:
it is arguable that exercise of control as to content, or other elements of a site that are unrelated to infringement, does not show “control” within the meaning of the statute. Under this view, exercises of control by site operators that were not addressed to incidence of infringement would contribute nothing to a showing of “right and ability to control” and would therefore be inadmissible as evidence supporting that showing. We do not need to decide whether such exercise of control is relevant to establishing “right and ability to control” infringement because, on either view, Vimeo did not exercise “substantial influence” such that it lost the protection of the safe harbor.
Count the number of double- and triple-negatives in that passage and see if you can figure out what it means. I think the court is talking about how to account for content moderation decisions unrelated to copyright infringement, but it dodges the issue by invoking a trump card: Vimeo doesn’t have “substantial influence.” This is a deus ex machina resolution because that term is undefined and can mean whatever the court wants it to mean.
To ensure our head spins a little more, the court says in dicta that “encouraging users to make infringing lip-dubs” could be the “right and ability to control” infringement (i.e., it would “substantially influence” users, I guess?), but the copyright owners waived the argument. Putting aside that “lip-dubs” reached its heyday over a decade ago and isn’t as much of a thing any more, the court seems to be saying that “encourage” some kinds of content could be 512(c) disqualifying. Yet another angle for copyright owners to explore in future cases…
Implications
Yes, 512(c) opinions are routinely this long, tendentious, epistemological, and irresolute. They are painful to blog and make it impossible to reliably anticipate how these holdings would apply to slightly different facts. Could you teach my students what is and isn’t a “red flags of infringement” or “right and ability to control” using this opinion? If so, you are a better teacher than I am.
Fortunately (?), I don’t know how many more opinions we’ll see like this. A lot has changed on both sides since this lawsuit was born in the early Obama years. First, Vimeo remarkably survived the financial hurdle of this case, but copyright owners have dissuaded many other entrepreneurs from entering into the space due to their reputation for lawfare. This opinion’s celebration of the DMCA’s nominal support for innovation won’t magically bring these investors and entrepreneurs back. Second, when copyright owners do bring lawsuits against defendants with potential 512(c) defenses, they pick thinly capitalized targets with egregious practices who will either fold or get stomped in court. See, e.g., Spinrilla.
This court’s ruling nominally is defense-favorable. However, by adding more doctrinal questions that copyright owners can explore in future cases, this opinion actually is part of the problem rather than part of the solution. This case exemplifies the tortured 512(c) jurisprudence in the Second Circuit that relies heavily on caveats, open questions, qualifications, innuendo, and double-negatives. Copyright owners thrive in these kinds of jurisprudential mudpits because it enables their lawfare. This court probably thought it was doing 512(c) defendants some favors, but so long as a 512(c) defense takes 15 years to adjudicate, it’s not really a defense-favorable opinion.
This case surely brings to mind the Veoh case, also from the same era as this case but resolved a decade ago. The denouement in that case: Veoh always qualified for 512(c) but ran out of money. Thus, my tagline for the case: “Veoh is legal, Veoh is dead.” In this case, Vimeo also always qualified for 512(c), but it took 15 years and countless millions in defense costs to prove that. I guess we could call it a win for Vimeo, because Vimeo is still around and didn’t run out of money like Veoh did. But it’s hard to call any survivor of a mudfest war of attrition a “winner.”
This might be a good time to revisit my short piece from a decade ago on how Section 512(c) has failed.
Case Citation: Capitol Records, LLC v. Vimeo, Inc., 2025 WL 77234 (2d Cir. Jan. 13, 2025)