Capitol Records, LLC v. Vimeo, LLC

Vimeo, LLC (defendant) was an internet service provider that operated a website on which members could post videos of their own creation that were then accessible to the public at large. Even though Vimeo users had to accept its Terms of Service, which prohibited the uploading of videos that infringed another’s rights, users were nevertheless able to upload videos that did not comport with the rules. Vimeo followed a practice of screening videos for the infringement of films, but did not screen them for infringement of sound recordings or other works unless a video was flagged as violating the Terms of Service. Vimeo personnel would evaluate the flagged content and decide whether it should be removed from Vimeo’s website. A group of record and music publishing companies (music companies) (plaintiffs) sued Vimeo for infringement because its website hosted 199 videos containing sound recordings for which the music companies owned the rights. Vimeo moved for summary judgment based on the Digital Millennium Copyright Act’s (DMCA) safe-harbor protection. The music companies cross-moved for summary judgment on grounds that Vimeo was ineligible for such protections. The district court granted the music companies’ motion as to 55 videos containing sound recordings made before 1972, after finding that the DMCA was inapplicable to such works. But the district court held that questions of fact existed as to whether Vimeo had actual or so-called red-flag knowledge of the alleged infringement with respect to those videos that Vimeo personnel had viewed to some degree. The district court also held that evidence that Vimeo personnel had, on occasion, encouraged users to upload infringing videos was insufficient to show that Vimeo had exercised willful blindness to infringement on its website. Both parties appealed, and three questions were certified.