Wise Startup Blog

From a recent ruling by a case between Universal Music Group and Veoh, the judge ruled that Veoh is a legal entity as long as it complies with the DMCA.

The safe harbor of the DMCA states that Web services are not liable for copyright infringement if the content is stored “at the direction of a user.” UMG tried to argue that Veoh should not be covered by the safe harbor because it did a bunch of things with the music and video content after it was stored on its servers, including converting it into Flash, breaking it up into chunks for peer-to-peer distribution, and allowing other users to stream it or download it.

The judge, A Howartd Matz, didn’t buy the argument. He found Veoh’s position to be “more persuasive,” noting that user’s must agree to Veoh’s Terms of Service before uploading a video, and that the terms of service clearly prohibit uploading copyrighted material. In other words, the initial act of uploading is considered to be user-directed storage under the DMCA, and whatever Veoh does to process the video after that cannot be used to get around the letter of the law.

This ruling is a godsend to those startups on the edge of legality, and as long as you comply with the DMCA, you are legal. That is, until another court ruling comes along, but since we’re ruled by a series of prior court cases, this should be more ammunition for those sites looking to deliver new, innovative content for users.