(CN) - The video-sharing website Veoh is not liable for any copyright infringing material posted by its users, the 9th Circuit ruled Thursday for a second time.
The federal appeals panel in Pasadena, Calif., agreed to rehear the case but came to the same conclusion it did in December 2011: Veoh Networks is not liable for direct or secondary copyright infringement.
Universal Music Group and other music copyright holders had sued the YouTube-like website for secondary copyright infringement. It claimed that Veoh had not been vigilant enough in stopping users from uploading infringing music videos. UMG also sued Veoh's main backers, including Disney's Michael Eisner, claiming they were also liable.
The lawsuit followed Veoh's efforts to rid the site of infringing material. By applying an "Audible Magic filter" to all new uploads, Veoh removed some 60,000 videos and terminated the accounts of thousands of users who repeatedly uploaded infringing material.
A federal judge sided with Veoh, and the 9th Circuit upheld that ruling -- both in 2011 and again on Thursday, after UMG successfully sought a rehearing. The panel withdrew the 2011 ruling and replaced it with a near-identical one.
The appellate panel agreed with U.S. District Judge A. Howard Matz that the "safe harbor" provision of the Digital Millennium Copyright Act (DMCA) exempted Veoh, as a service provider, from liability because the videos were stored on the site by users. Veoh had also made a good-faith effort to monitor usage, according to the court.
"[T]he evidence demonstrates that Veoh promptly removed infringing material when it became aware of specific instances of infringement," Judge Raymond Fisher wrote. "Although the parties agree, in retrospect, that at times there was infringing material available on Veoh's services, the DCMA recognizes that service providers who are not able to locate and remove infringing materials they do not specifically know of should not suffer the loss of safe harbor protection."
The panel also upheld the dismissal of UMG's complaint against the investor defendants on the basis that they did not have significant control over the company to support secondary liability.
The court denied Veoh's request for attorney's fees, and asked the lower court to decide if Veoh is entitled to other costs, since UMG rejected Veoh's 2008 offer to settle the case for $100,000.
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