Second Circuit Rejects Record Labels’ Attempt to Rewrite the DMCA

In a major win for creator communities, the U.S. Court of Appeals for the Second Circuit has once again handed video streaming site Vimeo a solid win in its long-running legal battle with Capitol Records and a host of other record labels.

The labels claimed that Vimeo was liable for copyright infringement on its site, and specifically that it can’t rely on the Digital Millennium Copyright Act’s safe harbor because Vimeo employees “interacted” with user-uploaded videos that included infringing recordings of musical performances owned by the labels. Those interactions included commenting on, liking, promoting, demoting , or posting them elsewhere on the site. The record labels contended that these videos contained popular songs, and it would’ve been obvious to Vimeo employees that this music was unlicensed.

But as EFF explained in an amicus brief filed in support of Vimeo, even rightsholders themselves mistakenly demand takedowns. Labels often request takedowns of music they don’t own or control, and even request takedowns of their own content. They also regularly target fair uses. When rightsholders themselves cannot accurately identify infringement, courts cannot presume that a service provider can do so, much less a blanket presumption as to hundreds of videos.

In an earlier ruling, the court  held that the labels had to show that it would be apparent to a person without specialized knowledge of copyright law that the particular use of the music was unlawful, or prove that the Vimeo workers had expertise in copyright law. The labels argued that Vimeo’s own efforts to educate its employees and user about copyright, among other circumstantial evidence, were enough to meet that burden. The Second Circuit disagreed, finding that:

Vimeo’s exercise of prudence in instructing employees not to use copyrighted music and advising users that use of copyrighted music “generally (but not always) constitutes copyright infringement” did not educate its employees about how to distinguish between infringing uses and fair use.

The Second Circuit also rejected another equally dangerous argument: that Vimeo lost safe harbor protection by receiving a “financial benefit” from infringing activity, such as user-uploaded videos, that the platform had a “right and ability to control.” The labels contended that any website that exercises editorial judgment—for example, by removing, curating, or organizing content—would necessarily have the “right and ability to control” that content. If they were correct, ordinary content moderation would put a platform at risk of crushing copyright liability.

As the Second Circuit put it, the labels’ argument:

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.

Fortunately, the Second Circuit’s decisions in this case help preserve the safe harbors and the expression and innovation that they make possible. But it should not have taken well over a decade of litigation—and likely several millions of dollars in legal fees—to get there.