Capitol Records v. Vimeo

21-2949-cv
Capitol Records v. Vimeo

                    UNITED STATES COURT OF APPEALS
                        FOR THE SECOND CIRCUIT

                                  August Term 2023

(Argued: October 12, 2023                  Rehearing Decided: September 9, 2025 )

                           Docket Nos. 21-2949-cv/21-2974-cv

                    _____________________________________

    CAPITOL RECORDS, LLC, a Delaware Limited Liability company,
 CAROLINE RECORDS, INC., a New York Corporation, VIRGIN RECORDS
AMERICA, INC., a California Corporation, EMI BLACKWOOD MUSIC INC.,
    a Connecticut Corporation, EMI APRIL MUSIC INC., a Connecticut
    Corporation, EMI VIRGIN MUSIC, INC., a New York Corporation,
   COLGEMS-EMI MUSIC, INC., a Delaware Corporation, EMI VIRGIN
  SONGS, INC., a New York Corporation, EMI GOLD HORIZON MUSIC
CORP., a New York Corporation, EMI UNART CATALOG INC., a New York
  Corporation, STONE DIAMOND MUSIC CORPORATION, a Michigan
  Corporation, EMI U CATALOG INC., a New York Corporation, JOBETE
                MUSIC CO., INC., a Michigan Corporation,

                                  Plaintiff-Appellants,

                                           v.

  VIMEO, INC., a Delaware Limited Liability company, AKA VIMEO.COM,
  CONNECTED VENTURES, LLC, a Delaware Limited Liability company,

                                  Defendant-Appellees,

                               DOES, 1-20 INCLUSIVE,

                                  Defendants.
                    _____________________________________
Before:      LEVAL, PARKER, and MERRIAM, Circuit Judges.

      Plaintiffs, who are rightsholders of musical recordings, all affiliates of
EMI, petition for reconsideration of our decision of January 13, 2025. See Capitol
Recs., LLC v. Vimeo, Inc., 

125 F.4th 409

 (2d Cir. 2025). In that opinion, we ruled,
in part, that Plaintiffs waived the argument under Metro-Goldwyn-Mayer
Studios Inc. v. Grokster, Ltd., 

545 U.S. 913

 (2005), that Defendants Vimeo, Inc.
and Connected Ventures, LLC’s (collectively, “Vimeo”) encouragement of
users to make infringing lip-dub videos may constitute a form of “right and
ability to control” infringement, thus risking forfeiture of the safe harbor
provided by the Digital Millennium Copyright Act, 

17 U.S.C. § 512

(c). The
petition for rehearing is GRANTED in part and DENIED in part.

                                       CATHERINE E. STETSON (Nathaniel A.G.
                                       Zelinsky, Hogan Lovells US LLP,
                                       Washington, D.C.; Russell J. Frackman,
                                       Mitchell Silberberg & Knupp LLP, Los
                                       Angeles, CA, on the brief), Hogan Lovells
                                       US LLP, Washington, D.C., for Plaintiff-
                                       Appellants.

                                       KATHLEEN M. SULLIVAN (Todd Anten,
                                       Owen F. Roberts, Quinn Emanuel
                                       Urquhart & Sullivan, LLP, New York,
                                       NY; Michael A. Cheah, Vimeo, Inc.,
                                       New York, NY; Rachel Kassabian,
                                       Quinn Emanuel Urquhart & Sullivan,
                                       LLP, Redwood Shores, CA, on the brief),
                                       Quinn Emanuel Urquhart & Sullivan,
                                       LLP, Los Angeles, CA, for Defendant-
                                       Appellees.

                                       Hyland Hunt, Ruthanne M. Deutsch,
                                       Alexandra Mansbach, Deutsch Hunt

                                        2
                                       PLLC, Washington, D.C., for amici curiae,
                                       National Music Publishers’ Association,
                                       Recording Industry Association of
                                       America, and Copyright Alliance, in
                                       support of Plaintiff-Appellants.

                                       Matthew C. Schruers, Alexandra
                                       Sternburg, Computer &
                                       Communications Industry Association,
                                       Washington, D.C., for amicus curiae,
                                       Computer & Communications Industry
                                       Association, in support of Defendant-
                                       Appellees.

                                       Mitchell L. Stoltz, Corynne McSherry,
                                       Electronic Frontier Foundation, San
                                       Francisco, CA, for amicus curiae,
                                       Electronic Frontier Foundation, in
                                       support of Defendant-Appellees.

                                       Rebecca Tushnet, Harvard Law School,
                                       Cambridge, MA, for amici curiae,
                                       Intellectual Property Scholars in Support
                                       of Defendant-Appellees.

LEVAL, Circuit Judge:

      Plaintiffs, who are rightsholders of musical recordings, all affiliates of

EMI, petition for reconsideration of our decision of January 13, 2025. See Capitol

Recs., LLC v. Vimeo, Inc., 

125 F.4th 409

 (2d Cir. 2025) (“January 13 Opinion”).

Plaintiffs brought this action against Defendants Vimeo, Inc. and Connected

Ventures, LLC (collectively, “Vimeo”) claiming that Vimeo is liable to Plaintiffs

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for copyright infringement by reason of hosting on its website videos, posted

by Vimeo users, playing copyright-protected music owned by Plaintiffs. We

found in favor of Vimeo, on the basis of the safe harbor conferred on internet

service providers by § 512(c) of the Digital Millenium Copyright Act

(“DMCA”). See 

17 U.S.C. § 512

(c)(1). We ruled, in part, that Plaintiffs waived

the argument under Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 

545 U.S. 913

 (2005) (“Grokster”), that Vimeo’s encouragement of users to make

infringing lip-dub videos may satisfy the statutory standard of “right and

ability to control” infringement, which can result in forfeiture of the safe

harbor. 

17 U.S.C. § 512

(c)(1)(B). In support of their petition for reconsideration,

Plaintiffs contend that the Grokster-based argument, which this court found to

be waived, was in fact pressed throughout Plaintiffs’ opening brief. Plaintiffs

also ask that we remove from the January 13 Opinion a footnote in which we

discussed the question whether the Grokster-based argument, even if waived in

our court, was adequately preserved for review by the Supreme Court.

      The petition is granted in part and denied in part, for the reasons that

follow. We reject Plaintiffs’ contention that they did not waive the Grokster-

based argument. Their petition is denied in that regard. However, we grant the



                                        4
petition in so far as it seeks to remove the footnote discussing whether the

Grokster-based argument is preserved for review by the Supreme Court.

                                  BACKGROUND

       We assume familiarity with the facts set forth in the January 13 Opinion,

see Capitol Records, 125 F.4th at 413-17, and begin with an overview of precedent

and procedural history relevant to the petition.

I.     The DMCA

       “Section 512(c) of the [DMCA] establishes a safe harbor, which protects

qualifying service providers from liability for infringement when users of the

service upload infringing material onto the providers’ websites.” Id. at 413

(citing 

17 U.S.C. § 512

(c)(1)). “However, the safe harbor is not available to a

service provider if the service provider (A) has actual or red flag knowledge

that the material on its website is infringing and fails to remove the infringing

matter expeditiously, or (B) has the right and ability to control infringing

material on its website and receives a financial benefit directly attributable to

that activity.” 

Id.

 (citing 

17 U.S.C. § 512

(c)(1)).

       In Viacom International, Inc. v. YouTube, Inc., this court held that “the ‘right

and ability to control’ infringing activity under § 512(c)(1)(B) ‘requires

something more than the ability to remove or block access to materials posted

                                           5
on a service provider’s website.’” 

676 F.3d 19, 38

 (2d Cir. 2012) (quoting Capitol

Recs., Inc. v. MP3tunes, LLC, 

821 F. Supp. 2d 627, 645

 (S.D.N.Y. 2011)).

Recognizing the difficulty in defining that “something more,” 

id.,

 the Viacom

opinion offered two possible constructions based on two cases in which a

service provider “exert[ed] substantial influence on the activities of users,

without necessarily—or even frequently—acquiring knowledge of specific

infringing activity.” 

Id.

 First, citing Perfect 10, Inc. v. Cybernet Ventures, Inc., 

213 F. Supp. 2d 1146

 (C.D. Cal. 2002) (“Cybernet”), we suggested that the requisite

“something more” might exist if a service provider imposed editorial standards

over content, and instituted a strict monitoring program to enforce such

standards, including by refusing access to non-compliant users. Viacom, 

676 F.3d at 38

. Second, citing Grokster, we noted that “inducement of copyright

infringement[,] . . . which premises liability on purposeful, culpable expression

and    conduct,     might    also    rise   to   the    level   of    control    under

§ 512(c)(1)(B).” Id. (internal citations and quotation marks omitted).

II.    District Court Proceedings and Interlocutory Appeal

       In addressing Plaintiffs’ contention that they did not waive the Grokster-

based argument, we focus first on the arguments advanced by Plaintiffs in the

district court. In their motion for partial summary judgment demanding

                                            6
rejection of Vimeo’s defense based on the DMCA safe harbor and in opposition

to Vimeo’s motion for summary judgment, Plaintiffs argued, following the

framework laid out in Viacom, that “[t]he right and ability to control

infringement” under the DMCA “can be demonstrated in two different ways:”

(1) the Cybernet path—by showing “a monitoring program that, for example,

includes detailed instruction on issues of layout, appearance, and content,” or

(2) the Grokster path—by showing “inducement to infringe which premises

liability on purposeful, culpable expression and conduct.” J. App’x at 164

(internal quotation marks omitted). In their district court briefing, Plaintiffs

offered thirteen pages of argument analogizing Vimeo’s efforts to curate its

website, enforce content restrictions, and monitor user content to the

monitoring program in Cybernet, see id. at 165–77, and ten separate pages

framing Vimeo’s efforts to, among other things, create, upload, and promote

lip-dub videos, as inducement to infringe under Grokster, see id. at 177–86.

Vimeo dedicated nearly five pages of its opposition brief to rebutting Plaintiffs’

Cybernet-based arguments, see Defendants’ Opposition To Plaintiffs’ Motion for

Partial Summary Judgment And Reply In Further Support Of Defendants’

Motion For Summary Judgment Pursuant To The DMCA Safe Harbor, ECF No.



                                        7
76, at 21-25, and nearly six pages to rebutting Plaintiffs’ Grokster-based

arguments, see id. at 25-30.

      In ruling on the summary judgment motions, the district court adopted

Plaintiffs’ proposed structure, “us[ing] the cases cited in . . . Viacom—Cybernet

and Grokster—as analytical guideposts” because “each supplies a distinct

example of conduct” to establish a right and ability to control. Spec. App’x at

39. In particular, in a sub-section titled “Cybernet—Substantial Influence

Through a Monitoring Program,” id., the district court, following

approximately six pages of analysis, found no triable issue as to Vimeo’s

exertion of substantial influence on user activity through its monitoring

program. See id. at 45. In the following sub-section titled “Grokster—Substantial

Influence through Inducement of Infringement,” id., the district court, as

detailed in approximately eight pages of analysis, found “no basis to conclude

that Vimeo exerted substantial influence on its users’ activities through

inducement,” id. at 52. In this sub-section, the district court specifically rejected

Plaintiffs’ Grokster-based argument regarding lip-dub videos. The court

acknowledged the presence in the record of “stray instances of wrongful

conduct by Vimeo employees on the [w]ebsite and/or a generalized effort to



                                         8
promote videos that incorporate music,” but concluded that this evidence did

“not rise to the level . . . adduced in Grokster,” where “the record was replete

with evidence that defendants clearly voiced the objective that recipients use

[their product] to download copyrighted works.” Id. at 48 (internal quotation

marks omitted).

      In a separate order, the district court certified three questions for

interlocutory appeal—none of which concerned right and ability to control

under § 512(c)(1)(B):

      (i) whether the safe harbor of § 512(c) applies to pre-1972 sound
      recordings; (ii) whether evidence of some viewing by Vimeo
      employees of videos that played all or virtually all of
      “recognizable” copyrighted songs was sufficient to satisfy the
      standard of red flag knowledge, which would make Vimeo
      ineligible for the DMCA safe harbor; and (iii) whether Plaintiffs
      have shown that Vimeo had a general policy of willful blindness
      to infringement of sound recordings, which would justify
      imputing to Vimeo knowledge of the specific infringements.

Capitol Recs., LLC v. Vimeo, LLC, 

826 F.3d 78, 82

 (2d Cir. 2016) (“Vimeo I”).

      On the third certified question—willful blindness—Plaintiffs argued that

Vimeo “actively encouraged users to post videos containing infringing

material,” and that a service provider “cannot adopt a general policy of urging

or encouraging users to post infringing material and then escape liability by



                                        9
hiding behind a disingenuous claim of ignorance of the users’ infringements.”

Id. at 99

. In support, Plaintiffs specified a handful of instances where employees

failed to comply with company policy by telling users not to worry about

infringement, including one instance where a Vimeo employee responded to a

user’s question that he “‘see[s] all the time at vime[o] videos, (for example Lip-

dub) music being used that is copyrig[ht]ed, is there any problem with this?’

by telling the user ‘[w]e allow it, however if the copyright holder sent us a legal

takedown notice, we could have to comply.’” 

Id. at 85

.

      In responding to the certified questions, we rejected Plaintiffs’ argument,

finding the evidence of the “sporadic instances . . . in which Vimeo employees

inappropriately encouraged users to post videos that infringed music,” none

of which related to the videos at issue in the lawsuit, did not support a finding

of “the sort of generalized encouragement of infringement supposed by

[Plaintiffs’] legal theory” of willful blindness, and was thus “insufficient to

justify a finding of red flag knowledge.” 

Id. at 99

. We did not mention Grokster

or use the word “induce” anywhere in our opinion resolving the interlocutory

appeal.




                                        10
III.   Direct Appeal

       On direct appeal, Plaintiffs did not address the Grokster inducement

theory, other than in a footnote to the portion of their opening brief discussing

right and ability to control under Cybernet. The footnote stated:

       Providers can also exercise “substantial influence” when they
       induce infringement, as occurred in Grokster. See Viacom, 

676 F.3d at 38

; UMG Recordings, Inc. v. Shelter Cap. Partners LLC, 

718 F.3d 1006, 1030

 (9th Cir. 2013). Grokster represents a different type of
       control that “premises liability on purposeful, culpable expression
       and conduct.” Viacom, 

676 F.3d at 38

 (quoting Grokster, 

545 U.S. at 937

). The rightsholders acknowledge that Vimeo I forecloses (at this
       stage) the argument that Vimeo’s “urging” and “encouraging
       users to post infringing material” constituted inducement under
       Grokster. Vimeo I, 

826 F.3d at 99

. The rightsholders preserve this
       argument for further review.

Appellants’ Br. at 28 n.5 (“Footnote 5”).

       In its opposition brief, Vimeo forcefully noted Plaintiffs’ abandonment

of the Grokster inducement argument:

       In granting summary judgment to Vimeo on this issue, the district
       court examined two decisions as “analytical guideposts”: Cybernet,
       

213 F. Supp. 2d 1146

, and [Grokster], 

545 U.S. 913

 (2005). SPA 39.
       On appeal, Plaintiffs limit their challenge to the district court’s
       Cybernet analysis.




                                       11
Appellees’ Br. at 24 (citing Appellants’ Br. at 27-28 & n.5). Plaintiffs did not

deny or contest Vimeo’s assertion that Plaintiffs were “limit[ing] their

challenge to the district court’s Cybernet analysis.” 

Id.

      In our January 13 Opinion, we affirmed the district court’s grant of

summary judgment in favor of Vimeo. In so doing, we noted a possible

question whether Vimeo’s promotion of lip-dub videos encouraged

infringement in a way that might be deemed an exercise of the right and ability

to control under Grokster and thus a possible forfeiture of the safe harbor. While

we recognized some “force in the argument that encouraging users to make

infringing lip-dubs should trigger forfeiture of a safe harbor designed to

protect service providers from liability for infringements for which they were

in no way responsible,” we concluded on the basis of Footnote 5 of Plaintiffs’

opening brief that Plaintiffs had decided not to assert the argument. Capitol

Records, 125 F.4th at 427. We expressed surprise at Plaintiffs’ conclusion that

our ruling in Vimeo I foreclosed the argument. We wrote,

      We do not read our opinion in Vimeo I as foreclosing this
      potentially forceful argument. Our comments in Vimeo I to the
      effect that Plaintiffs’ arguments were not supported by the
      evidence concerned a different issue: willful blindness to
      infringement, which we ruled could not be demonstrated by “a
      handful of sporadic instances . . . in which Vimeo employees


                                        12
       inappropriately encouraged users to post videos that infringed
       music.” Vimeo I, 

826 F.3d at 99

.

       In Vimeo I, we rejected Plaintiffs’ contention of Vimeo’s willful
       blindness in substantial part because of the tiny scope of isolated
       instances of a different sort of encouragement to infringe: where
       employees deviated from company policy by telling users not to
       worry about infringement. Our opinion neither said nor implied
       that encouragements to infringe could not impact Vimeo’s
       entitlement to the safe harbor under Section 512(c)(1)(B). The
       discussion furthermore did not concern Vimeo’s policy to
       encourage lip-dubs. We can see no basis for Plaintiffs’ reading our
       Vimeo I opinion as “foreclose[ing] . . . the argument that Vimeo’s
       ‘urging’ and ‘encouraging users to post infringing material’
       constituted inducement.”

Id. at 427-28.

       In a footnote, we also questioned whether Plaintiffs could properly

preserve the Grokster argument for review by the Supreme Court without

having raised it before us, especially in the circumstance in which our court

had not expressed views on the question. See id. at 427 n. 15 (“Footnote 15”).

       Plaintiffs filed a timely petition for rehearing. Vimeo filed a response.

                                 DISCUSSION

       In their petition for reconsideration, Plaintiffs make two arguments.

First, they contend that, contrary to our perception of waiver, they were in fact

arguing the Grokster-based inducement theory of right and ability to control in



                                        13
their opening brief. Second, they argue that we should eliminate from our

opinion our expression of doubt as to whether they had properly preserved

that argument for review by the Supreme Court. We discuss each of these

arguments in turn.

      I.     Waiver of Grokster Inducement Theory

      Plaintiffs insist that they did not waive the Grokster inducement theory

of right and ability to control; far from waiving, they in fact “pressed [it] . . .

throughout the text of their brief.” Petition at 1.

      It is true that in the Fact Section of Plaintiffs’ brief, they recite facts that

would support the Grokster-based argument in question. However, nowhere in

the Argument section of the brief do they make the Grokster-based argument,

predicated on the facts recited, that inducement to infringe through the lip-dub

program could satisfy the requirement of right and ability to control under the

Grokster precedent. To the contrary, the brief in Footnote 5 expressly

“acknowledge[d] that Vimeo I forecloses (at this stage) the argument that

Vimeo’s ‘urging’ and ‘encouraging users to post infringing material’

constituted inducement under Grokster.” Appellants’ Br. at 28 n.5. “It is a settled

appellate rule that issues . . . unaccompanied by some effort at developed

argumentation, are deemed forfeited.” Palin v. N.Y. Times Co., 

113 F.4th 245

, 279

                                         14
(2d Cir. 2024) (internal quotation marks omitted). “This is true even if an

appellant argued the same issues more fully before the district court that she

left undeveloped on appeal.” 

Id.

      Plaintiffs contend that they went on to argue those facts in the portion of

the Argument section addressing right and ability to control under

§ 512(c)(1)(B), specifically, under the heading “I. A Reasonable Factfinder

Could Conclude That Vimeo Possessed The Right And Ability To Control

Infringing Activity And Received A Benefit.” Appellants’ Br. at 27. But that

portion of Plaintiffs’ brief made different arguments about right and ability to

control—primarily the argument based on Cybernet, that is that the exertion of

substantial influence by imposition of strict editorial controls over user

postings and submissions can constitute right and ability to control.

      Since Viacom and throughout the evolution of arguments in this case, it

has been clear that the approach to demonstrating “substantial influence”

outlined in Cybernet, and the encouragement to infringe approach, based on

Grokster, are two distinct ways to satisfy right and ability to control. Plaintiffs’

initial brief in this appeal vigorously argued the Cybernet-based theory that

right and ability to control was achieved by imposition of editorial controls



                                        15
over user content. As for satisfying right and ability to control by

encouragement of infringement, as approved by Grokster, Plaintiffs’ brief did

not argue it because they “acknowledge[d]” that theory as “foreclose[d]” by

our earlier ruling in Vimeo I. Id. at 28 n.5.

      That Plaintiffs’ arguments relied only on the Cybernet theory, and not on

the Grokster theory is also apparent from the topic-headings in the Argument

section of the brief. These include:

             A. A Provider Exerts “Substantial Influence” When It Makes
                Editorial Judgments About Users’ Uploads.
                   1. Step 1: Is There A Relationship Between The Provider’s
                      Control And The Infringing Activity?
                   2. Step 2: Does The Provider Exercise Editorial Judgment
                      Over Its Users’ Activity?
                   3. Cybernet And Subsequent Precedent Confirm These
                      Steps.

             B. A Jury Could Find That Vimeo Exerted Significant Editorial
                Judgment Over Users’ Content.
                   1. Vimeo’s Control Exceeded The Provider’s Control In
                      Cybernet.
                   2. The District Court Misapplied The Substantial Influence
                      Standard And Improperly Drew Every Inference In
                      Vimeo’s Favor.

             C. Vimeo Directly Benefited From Infringement.
                  1. “Direct Financial Benefit” Has Its Common-Law
                     Meaning.


                                          16
                   2. Vimeo Received A Financial Benefit Causally Related
                      To Users’ Infringement.

Appellants’ Br. at 28-52 (emphases added). Each of these headings, and the

argumentation text that followed, made clear that the argument they made was

the Cybernet-based argument of achieving right and ability to control by

imposition of editorial controls. In no context did they rely on the Grokster-

based theory of achieving right and ability to control by encouraging users to

infringe. Other than in Footnote 5 (and a string-cite on an unrelated point, see

id. at 29), the brief makes no mention of Grokster, or of the word “induce,” in the

Argument section. As for the Grokster-based encouragement argument, we

merely took Plaintiffs at their word—that they had concluded that the

argument was foreclosed by our earlier ruling and therefore did not argue it.

      We do not dispute that Plaintiffs relied on the inducement or

encouragement of users to post infringing content, especially in encouraging

the posting of lip-dubs, but their arguments were advanced solely as support

for Plaintiffs’ Cybernet-based argument on exertion of editorial control. The

introductory sentence of the relevant section states, “Vimeo encouraged users

to make specific types of content. Cf. Cybernet, 

213 F. Supp. 2d at 1181-82

.”

Appellants’ Br. at 40. The cited parts of the opening brief do not, as Plaintiffs


                                        17
now contend, argue the separate Grokster-based theory. And if there were any

doubt about which theory was being argued and which was not, Plaintiffs

eliminated any possible doubt by explaining in Footnote 5 why they did not

argue the Grokster-based inducement theory. In the footnote, Plaintiffs

acknowledge that the Grokster theory represents “a different type of control”

than control achieved under the Cybernet theory, which they were vigorously

arguing. 

Id.

 at 28 n.5.

      We conclude that, in Footnote 5, Plaintiffs expressly waived the Grokster-

based argument that Vimeo had substantial influence over, or the right and

ability to control, infringement. As noted above, Vimeo expressly flagged

Plaintiffs’ waiver of the Grokster inducement argument in its opposition brief.

See Appellee Br. at 24 (“On appeal, Plaintiffs limit their challenge to the district

court’s Cybernet analysis.”) (citing Appellants’ Br. at 27-28 & n.5). Plaintiffs did

not challenge this framing of their opening brief on reply.

      Plaintiffs try to escape this conundrum by arguing that their waiver was

not of the Grokster-based theory of forfeiture of the safe harbor, but rather of a

claim under Grokster for induced infringement. We are not persuaded. As

Vimeo points out, the distinction between a Grokster-based claim and Grokster-



                                        18
based forfeiture of the DMCA safe harbor appeared nowhere in Plaintiffs’

opening brief. And, perhaps more importantly, it ignores that the issue on

appeal was Vimeo’s eligibility for the safe harbor—not liability for an

infringement claim.

      We reject Plaintiffs’ argument that we erred in finding that they waived

(or forfeited) the Grokster-based argument that Vimeo’s inducement of users to

lip-dub qualified as right and ability to control.

II.   Preservation of Grokster Inducement Theory for Supreme Court
      Review

      Plaintiffs ask us to remove language in Footnote 15 of the January 13

Opinion suggesting that their Grokster inducement theory of right and ability

to control is barred from review by the Supreme Court. We agree to Plaintiffs’

proposed modification and amend the January 13 Opinion accordingly.

                                CONCLUSION

      For the foregoing reasons, the petition is hereby GRANTED in part and

DENIED in part. We hereby AMEND the January 13 Opinion to remove

Footnote 15.




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