Vimeo and the DMCA Prevail in the Second Circuit

The U.S. Court of Appeals for the Second Circuit has issued a decision in the long-running Capitol Records v. Vimeo litigation by leading record labels against the video platform Vimeo. The decision affirms the court’s commitment to applying the safe harbors of the Digital Millennium Copyright Act (DMCA) sufficiently broadly to satisfy Congress’s objective of promoting the growth of the Internet. At the same time, the case shows how costly, time-consuming litigation over the scope of the DMCA’s safe harbors can interfere with this intent.

Timeline

1. The record label plaintiffs filed their initial complaint in 2009 alleging that Vimeo infringed their copyrights by hosting videos that contained their sound recordings without their authorization. 
2. Vimeo responded in 2012 that it was protected by the DMCA’s safe harbors for online service providers (OSPs) that provide hosting services. Since then, litigation has continued over whether Vimeo met the requirements of the 17 U.S.C. § 512(c) safe harbor for hosting. 
3. In 2013, the district ruled that the DMCA did not apply to some of the sound recordings at issue, and that Vimeo may have had sufficient awareness of the infringing nature of some of the videos to disqualify it from the safe harbor’s protection. 
4. In 2016, the Second Circuit reversed the district court; it found that the DMCA did apply to all the sound recordings, and it articulated standards the district was to apply in evaluating the Vimeo’s eligibility for the safe harbors. 
5. In 2021, applying these standards, the district court found that Vimeo met the requirements for the safe harbor. 
6. The labels appealed, and now in 2025, the Second Circuit has affirmed the district court’s ruling that Vimeo qualified for the safe harbor. 

“Red Flag” Knowledge

One of the major conditions for qualifying for the DMCA’s hosting safe harbor is that the OSP does not have “red flag” knowledge that the material uploaded by a user is infringing. The record labels argued that Vimeo employees had this knowledge because Vimeo published a blog post stating that Vimeo employees were aware that licensing music could be confusing and painful. The labels asserted that it therefore “would have been obvious to those employees that the videos they observed containing what they knew to be copyrighted music had not been licensed.” The Second Circuit panel easily dismissed this argument: “the fact that licensing music, as a general matter, can be challenging or confusing does not make it obvious that music accompanying a particular user-uploaded video was not licensed.”

The case involved a claim over a form of lip-synching, which Vimeo’s co-founder coined as “lip-dubbing.” The panel observed that the boundaries of fair use are not so well-settled that even a person acquainted with the copyright law would know “whether and when a dancing, acting, or lip-dubbing performance of copyrighted music might pass muster as a fair use.” The panel pointed to the recent Andy Warhol case as evidence of “the difficulty distinguishing fair use from infringement.” It noted that more than 40 copyright experts filed amicus briefs in the Supreme Court supporting a finding of fair use, while eighteen IP professors filed amicus briefs arguing the contrary position, concluding, “where academic scholars specialized in the study of the fair use question and the Justices of the Supreme Court are so divided, we cannot conclude that it was ‘apparent’ … to untutored employees of Vimeo that dancing, acting, or lip-dubbing performances of copyrighted music uses posted by Vimeo users were not fair use.” 

Right and Ability to Control

Another major condition for qualifying for the safe harbor is that the OSP does not receive a direct financial benefit from the infringing activity when it has “the right and ability to control such activity.” The panel recognized that it was unclear what sort of control Congress had in mind when it enacted this requirement. Every website operator has a degree of legal and technical control over the activity that occurs on its site, so construing this prong broadly would effectively disqualify virtually all service providers from the safe harbor. It was unlikely that Congress intended this result. Accordingly, the panel interpreted “the right and ability to control” user postings as exercising “substantial influence” over them.  

The record labels argued that Vimeo exercised such influence by promoting and demoting user posts based on their likey appeal to other users, as well as banning gameplay videos and other videos that merely reproduced existing content. The panel found that “Vimeo’s intrusions into user autonomy over their posts were far less extensive as to both coercive effect and frequency” than in other cases, ruling that “denial of eligibility for the safe harbor based on such noncoercive exercises of control over only a small percentage of postings would undermine, rather than carry out, Congress’s purposes in establishing the safe harbor.”

The panel recognized that denying Vimeo access to the safe harbor would subject the service to the large expense of monitoring millions of posts to protect itself against copyright infringement liability. To avoid this expense, Vimeo and other OSPs would stop making “their websites responsive to user desires, substantially diminishing their utility to the public.” The panel stated that where the balance of interests among rightsholders, OSPs, and users should ideally be struck is a policy question committed to the judgment of Congress, and “if Congress believes we have misunderstood its compromise or has changed its mind as to where the balance should lie, it is for Congress to pass corrective legislation.”

Conclusion

Agreeing with the result advocated by amici including CCIA, the Second Circuit correctly decided this case. But it has taken fifteen years to get there. Lengthy litigation of this sort is not uncommon in DMCA cases, where the rightsholders relentlessly pursue technology companies up and down the courts in a war of attrition (seeViacom v. YouTube and Sony/Cox). Some technology companies are sufficiently well-resourced to withstand the gauntlet, but others, like Veoh, are forced out of business even if they are vindicated in court. As noted above, in the DMCA Congress sought to achieve a compromise among the interests of rightsholders, service providers, and users—a compromise to which the rightsholders agreed. The seemingly endless campaign by rightsholders to disqualify service providers from enjoying the benefits of the DMCA safe harbors runs contrary to the spirit of this compromise.