Knowledge. Turning to the second issue of knowledge requirements, the court began
with an issue of statutory construction, noting that, “to be coherent, the statute must be read to
have an implicit ‘and’ between § 512(c)(1)(A)(i) and (ii). We thus treat the provisions as stating
that to qualify for the safe harbor, a service provider must either (1) have no actual knowledge
and no ‘aware[ness] of facts or circumstances from which infringing activity is apparent’ or (2)
expeditiously remove or disable access to infringing material of which it knows or is aware.”^2599
The Ninth Circuit first dealt with the issue of whether generalized knowledge of
infringement on a service provider’s system is sufficient to disqualify the safe harbor. The
plaintiffs contended that, because Veoh hosted a category of copyrightable content – music – for
which it had no license from any major music company, it must have known this content was
unauthorized, given its general knowledge that its services could be used to post infringing
material, and this fact should be sufficient to demonstrate knowledge of infringement. The court
rejected this argument on several grounds. First, it noted there are many music videos that could
in fact legally appear on Veoh. And if merely hosting material that falls within a category of
content capable of copyright protection, with the general knowledge that one’s services could be
used to share unauthorized copies of copyrighted material, was sufficient to impute knowledge to
services providers, the Section 512(c) safe harbor would be rendered a dead letter. Section
512(c) applies only to claims of copyright infringement, yet the fact that a service provider’s web
site contained copyrightable material would remove the service provider from Section 512(c)
eligibility.^2600 For support, the Ninth Circuit pointed to the Supreme Court’s Sony decision, in
which it ruled that, so long as the product distributed by a defendant that is used for copyright
infringement is “capable of substantial noninfringing uses,” the Court refused to impute
knowledge of infringement.^2601
The Ninth Circuit noted that requiring specific knowledge of particular infringing activity
made good sense in the context of the DMCA, which Congress enacted to foster cooperation
among copyright holders and service providers in dealing with infringement on the Internet.
These considerations were reflected in Congress’ decision to enact a notice and takedown
protocol encouraging copyright holders to identify specific infringing material to service
providers. They were also evidenced in the “exclusionary rule” that prohibits consideration of
substantially deficient Section 512(c)(3)(A) notices for purposes of determining whether a
service provider has actual knowledge or is aware of facts and circumstances from which
infringing active is apparent. Thus, Congress had made a considered policy determination that
the DMCA notification procedures would place the burden of policing copyright infringement
and identifying the potentially infringing material squarely on the owner of the copyright.^2602
(^2599) Id. at 1020 n.11.
(^2600) Id. at 1020-21. The court added a new footnote 12 that was not contained in its 2011 opinion, stating: “Proper
DMCA notice under 17 U.S.C. § 512(c)(3) provides only a claim of infringement, and is not necessarily
sufficient by itself to establish actual or ‘red flag’ knowledge.” Id. at 1021 n.12 (emphasis in the original).
(^2601) Id. at 1021 (quoting Sony Corp. of America v. Universal City Studios, Inc., 464 US. 417, 442 (1984)).
(^2602) UMG Recordings, 718 F.3d at 1021-22.