implementation of Veoh’s policy. Io Group had presented no evidence that a repeat infringer
had, in fact, established a new account under false pretenses, much less that Veoh had
intentionally allowed that to happen. The court rejected Io Group’s reliance on the Napster case
as establishing a requirement under Section 512(i) that a site operator track users by their actual
names or IP addresses. Io Group had presented no evidence suggesting that tracking or verifying
users’ actual identity or that blocking their IP addresses would be a more effective reasonable
means of implementation, particularly given that IP addresses identify only a particular computer
connected to the Internet and not particular users. The court ruled that Section 512(i) does not
require service providers to track users in a particular way or to affirmatively police users for
evidence of repeat infringement. Veoh’s tracking of content that had been identified as
infringing and permanently blocking that content from ever being uploaded by any user was
adequate to satisfy Section 512(i) requirements.^2560
The court then turned to whether the requirements of the Section 512(c) safe harbor had
been satisfied. Io Group argued that the Flash files and screencaps created during the publication
process were not stored on Veoh’s system “at the direction of a user,” but by Veoh’s own acts
and decisions, and that Section 512(c) was not intended to protect the creation of those files
because Veoh used them as a means of distribution (e.g., by indexing content and organizing
them into lists), and not just storage. The court rejected this argument, noting that the broader
definition of “service provider” under Section 512(k)(1)(B) does not contain an express
limitation that the content of material stored on the system not be modified. And existing case
law such as the CoStar v. LoopNet decision supported the conclusion that Veoh was not
precluded from the Section 512(c) safe harbor by virtue of its automated processing of user-
submitted content. The court noted that Veoh did not itself actively participate or supervise the
uploading of files, nor did it preview or select the files before the upload was completed.
Instead, video files were uploaded through an automated process that was initiated entirely at the
volition of Veoh’s users. Inasmuch as the conversion to Flash format was a means of facilitating
user access to material on its web site, the court held that Veoh did not lose the safe harbor
through the automated creation of those files.^2561
Turning to the issue of knowledge of the infringing activity, the court found that, because
Io Group had provided Veoh no notice of any claimed copyright infringement before filing its
lawsuit, Veoh had no actual knowledge of the infringing activity at issue. With respect to
knowledge through signs of apparent infringing activity, the court noted the applicable “red flag”
test, which requires the service provider to be aware of blatant factors indicating infringement.
The court found no such factors present in the instant case. None of the allegedly infringing
video files uploaded by Veoh’s users contain Io Group’s copyright notices. Although one of the
works did contain the plaintiff’s trademark several minutes into the clip, there was no evidence
from which it could be inferred that Veoh was aware of, but chose to ignore, it. Nor would the
professionally created nature of submitted content constitute a red flag per se, particularly given
that the video equipment available to the general public was of such quality that there might be
little distinction left between professional and amateur productions. Finally, the court rejected Io
(^2560) Id. at 1143-45.
(^2561) Id. at 1146-48.