BUSINESS LEGALITY: UMG'S COPYRIGHT INFRINGEMENT CASE AGAINST VEOH FAILS
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In the Universal Recordings vs. Shelter Capital Partners case, the online video service provider, Veoh, has been safeguarded by the appeals court from UMG’s accusation after they confirmed a lower court’s ruling insisting that the company is protected by the DMCA’s “safe harbor” that limits digital service providers’ legal responsibility for the infringing actions of their users. UMG’s disputed that Veoh should not be protected under “safe harbor” because the video provider had knowledge of users’ copyright infringement occurring on its service. The court determined that Veoh had an automated software system that processed user-submissions and that the company did not directly participate or supervise the streaming of its contents to users. Furthermore, evidence showing that Veoh failed to remove infringing content promptly when made aware of it was not proven. Thus, UMG lost the ruling for lack of evidence. Regardless of the victory, the financial burden of court costs drained Veoh which led to the company’s demise in early 2010. The company’s assets were purchased by Qlipso several months later and they currently operate under the same domain. In addition, the original lawsuit by UMG was filed in 2007 accusing Veoh for direct, contributory, and vicarious infringement, and for inducement of infringement. They also claimed that the software the company used to filter infringing content was not sufficiently effective and that Veoh only deleted videos associated with a certain URL instead of all the URLs correlating with that particular URL.






