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Vimeo not liable for ‘unfair competition’ over unlicensed music

By | Published on Wednesday 4 April 2018


At least one chapter in the long running dispute between Universal’s Capitol Records (an EMI label when all this began) and user-upload site Vimeo is over. A New York judge has ruled on a legal technicality being employed by the record company to try to make the video platform liable for the unlicensed use of its music.

This eight year legal battle had safe harbour at its heart and then the pesky pre-1972 technicality. Though the technicality in this latest stage wasn’t actually to do with copyright law at all, instead Vimeo was accused on unfair competition.

US-wide federal copyright law only protects sound recordings released since 1972, with earlier recordings still in copyright relying on state-level protection. This has caused much debate over whether certain elements of federal copyright law can and should still apply to those older pre-1972 tracks.

For example, the obligation in federal law for online and satellite radio stations to pay royalties to artists and labels. Also the often controversial safe harbour, which says that internet companies aren’t financially liable for unlicensed content uploaded to their servers by their users, providing they offer copyright owners a system to have that material removed.

Should the safe harbour also apply to pre-1972 recordings or not? When a judge originally ruled that Vimeo was – in the main – safe harbour compliant all the way back in 2013, she also concluded that the safe harbour only applied to post-1972 sound recordings. Which would mean internet companies could be held liable for any golden oldies being shared across their platforms, with or without a takedown system.

That was potentially a major limitation of the safe harbour that internet service providers, search engines, server companies and user-upload sites like YouTube and Vimeo were all busy relying on. However, in 2016 an appeals court ruled that safe harbour should also apply to those older records, because saying otherwise – the judges reckoned – would “defeat the very purpose Congress sought to achieve in passing the statute”.

The US Supreme Court later refused to hear the case, meaning the appeals judgement stood and Vimeo was assured safe harbour protection even when pre-1972 tracks were used without permission in videos posted on the site.

So, what next? Well, why not claim that the unauthorised sharing of pre-1972 tracks on Vimeo constituted ‘unfair competition’ under New York state law? Why not indeed. Although, it turns out, no infringement means no unfair competition.

That’s according to judge Ronnie Abrams, the same judge who originally reckoned safe harbour didn’t apply to pre-1972 recordings. But, the appeals judges having overturned that judgement, Abrams has now ruled that the ‘unfair competition’ technicality can’t be employed if liability for copyright infringement can’t be proved.

According to Law360, she said: “If Vimeo is not legally responsible for the infringement of plaintiff’s copyrights, then it has not committed any misappropriation of their property. Without misappropriation, plaintiff’s unfair-competition claims fail”.

She added that the safe harbour “is designed to preclude liability for third-party users’ posts that include infringements of which the service providers were unaware. That purpose applies equally to copyright-infringement claims and to unfair-competition claims that seek liability for the infringement of copyright”.

So, that’s that. Although this dispute is not yet over. Not least because there remains the question over whether or not Vimeo ignored so called ‘red flag knowledge’ about infringement on its platform that could deprive it of safe harbour protection entirely.