of copyright by reason of the storage [of material] at the direction of a user” as required by
Section 512(c)(1); second, that genuine issues of fact remained about whether Veoh had actual
knowledge of infringement or was aware of facts or circumstances from infringing activity was
apparent; and third, that the plaintiffs had presented sufficient evidence that Veoh received a
financial benefit directly attributable to infringing activity that it had the right and ability to
control. The court did not address whether Veoh adopted and reasonably implemented a repeat
infringer termination policy or whether, upon notification, Veoh expeditiously removed or
disabled access to infringing material as required by Section 512 (c). Although the plaintiffs
contested those points in the district court, their only mention of them on appeal was in a
footnote in their opening brief and they set forth no arguments as to those points.^2595
“By reason of the storage.” Turning to the first issue, the court held that the phrase “by
reason of the storage at the direction of the user” was meant to cover more than mere electronic
storage lockers, and the language and structure of the statute, as well as the legislative intent that
motivated its enactment, clarified that Section 512(c) encompasses the access-facilitating
processes that automatically occurred when a user uploaded a video to Veoh. The court noted
that the plaintiffs’ narrow reading of the “by reason of” language to be limited solely to storage
activities per se would create internal statutory conflicts. By its terms, Section 512(c)
presupposes that service providers will provide access to users’ stored material (they are required
to disable access to such material upon a qualifying notice from the copyright holder), and it
would thus contravene the statute to hold that such access disqualified Veoh from the safe
harbor.^2596
The court did not find persuasive the plaintiffs’ effort to reconcile the internal
contradictions its reading of the statute created by positing that Congress must have meant
Section 512(c) to protect only web hosting services. The court found that this theory failed to
account for the reality that web hosts store user submitted materials in order to make those
materials accessible to other Internet users. Thus, Section 512(c) should be interpreted to enable
web hosting services to copy content and transmit it to Internet users. The court observed that
the language of the statute recognizes that one is unlikely to infringe a copyright by merely
storing material that no one could access, and so includes activities that go beyond storage in its
language stating “the material or an activity using the material ... is infringing” (emphasis
added) in Section 512(c)(1)(A)(i).^2597
Accordingly, the court concluded, “Under the broader definition [of ‘service provider’]
applying to § 512(c), there is no limitation on the service provider’s ability to modify user-
submitted material to facilitate storage and access, as Veoh’s automatic processes do. Had
Congress intended to include such a limitation, it would have said so expressly and
unambiguously, as it did in the narrower definition of ‘service provider.’”^2598
(^2595) Id. at 1015 & n.5.
(^2596) Id. at 1015-17.
(^2597) Id. at 1018-19.
(^2598) Id. at 1019-20.