Vimeo Prevails on DMCA Safe Harbor Defense Against Record Labels in Second Circuit Copyright Case

Client Alert

January 22, 2025

On January 13, 2025, the fifteen-year-long legal battle between EMI-affiliated record labels led by Capitol Records (Plaintiffs) and video-sharing internet service provider Vimeo, Inc. reached a new end, as the U.S. Court of Appeals for the Second Circuit, on its second look at the case and in an opinion by Judge Pierre Leval, upheld the district court’s grant of summary judgment in favor of Vimeo under Section 512(c) of the Digital Millennium Copyright Act (DMCA).

In 2009, Plaintiffs sued Vimeo for copyright infringement stemming from videos uploaded to the video-hosting site which Plaintiffs alleged contained unlicensed background music. At issue on this appeal were 281 videos uploaded to Vimeo between 2006–2013 that “include recordings of musical performances owned or controlled by Plaintiffs, and with which Vimeo employees interacted (for example: commented upon, liked, promoted or demoted, or placed in a community channel).” Capitol Records, LLC v. Vimeo, Inc., No. 21-2949, slip op. at 5 (2d Cir. Jan. 13, 2025) (“Vimeo II”). These videos at issue also include some published by Vimeo employees themselves, during the relevant time period, containing unlicensed use of Plaintiffs’ music.

Despite these interactions between Vimeo employees and the infringing content, the Second Circuit held that on the record before it, the district court correctly granted summary judgment to Vimeo because it was entitled to safe harbor under Section 512(c) of the DMCA. The Court of Appeals found that Vimeo employees did not possess “red flag” knowledge of infringement or exert “substantial influence” over the user content at issue, rejecting the Plaintiffs’ arguments for why safe harbor protection should not apply. The Second Circuit found that the DMCA’s safe harbor exclusions did not prevent Vimeo from insulation from civil liability because “there was insufficient evidence to prove that it would have been obvious to those employees that the content of the videos was neither authorized by the rightsholder nor fair use… and [Plaintiffs] failed to show that Vimeo had sufficient ‘right and ability to control’ within the meaning of the statute to lose entitlement to safe harbor.” Id.

The Court applied a burden-shifting analysis, explaining that once Vimeo met its burden to show it qualified for protection under Section 512(c), “it is [Plaintiffs’] 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.” Id. at 21 (quoting Vimeo I). The Court found that Plaintiffs failed to meet this burden, explaining that “a service provider’s non-expert employees cannot be expected to necessarily know whether a particular use of copyrighted music in a video constituted infringement, or, alternatively, whether it was a fair use.” Id. at 23. Further emphasizing this point, the Court added that “even an employee who was a copyright expert cannot be expected to know when use of a copyrighted song has been licensed.” Id. at 24. The Court explained that to meet the standard for establishing red flag knowledge, Plaintiffs needed to demonstrate that “Vimeo employees were aware of facts making it obvious… 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.” Id. at 25.

Of note, the Court cited the Supreme Court’s recent fair use case to show the difficulty a reasonable person would have in determining whether or not copyrighted music in a given video is infringing or not. Judge Leval wrote that “[t]he difficulty distinguishing fair use from infringement at the time in question is illustrated by the Supreme Court’s subsequent consideration of Andy Warhol Foundation for the Visual Arts, Inc. v. Goldsmith, 598 U.S. 508
(2023),” and the fact that over 40 copyright law experts filed amicus briefs in the Supreme Court supporting a finding of fair use, while 18 professors filed amicus briefs arguing the opposite. Vimeo II, at 29-30. Thus, Judge Leval observed, “[w]here academic scholars specialized in the study of the fair use question and the Justices of the Supreme Court are so divided, we cannot conclude that it was ‘apparent,’ as required by Section 512(c)(1)(A)(ii), to untutored employees of Vimeo that dancing, acting, or lip-dubbing performances of copyrighted music uses posted by Vimeo users were not fair use.” Id. at 30.

The Court also rejected Plaintiffs’ additional argument that Vimeo had the right and ability to control the infringing content. Comparing Vimeo’s conduct to the unique circumstances of the few website operators whom the Court had previously found to have the right and ability to control the infringing content, the Court concluded that “Vimeo’s intrusions into user autonomy over their posts were far less extensive as to both coercive effect and frequency.” Id. at 37. The Court acknowledged that there is “uncertainty regarding what Congress meant by ‘right and ability to control [the infringing] activity,’” but held that the language of the section should not be construed to conflict with Congress’s primary objectives in passing the DMCA. Id. at 32.

As to those objectives, the Court observed that Congress passed the DMCA to “encourag[e] 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.” Id. at 33. As a website designed to satisfy consumer demands, the Court found Vimeo to be “precisely the sort of entrepreneurial activity that the safe harbor was intended to encourage.” Id. at 39.

Vimeo II thus illustrates the power of the safe harbor defense, the hurdles to establishing liability in the face of a Section 512(c) defense, and the fact-bound nature of such defenses. Service providers, whether content-hosting websites or content distributors, would do well to consider how and to what extent their existing practices may support such a DMCA defense, and whether they have met the prerequisites to taking advantage of the statute’s safe harbor protections.