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Veoh Networks, Inc. v. UMG Recordings, Inc., et al., USDC S.D. California

The district court granted defendant record companies’ motion to dismiss video-hosting website Veoh’s declaratory relief action for lack of a “case or controversy” and based on its discretion to decline jurisdiction under the Declaratory Judgment Act. Plaintiff had filed an action seeking a declaration of non-infringement of defendants’ copyrights based on the DMCA safe harbor for online service providers (Section 512(c)).

In its motion, defendant argued that the dispute underlying the requested declaratory relief was “too vague” to satisfy the “case or controversy” requirement and that the wide-ranging relief plaintiff sought could not be awarded given this abstraction. Plaintiff blamed the vagueness on the fact that before it filed suit, defendants had contacted plaintiff and informed plaintiff that it was violating defendants’ copyrights, but would not provide specific information about which copyrights were allegedly being infringed. The court was not persuaded by this response. The court acknowledged that the complaint suggested a “disagreement.” However, because plaintiff did not provide specific information in its complaint about which of defendants’ copyrights were allegedly being infringed, the court found that it failed to sufficiently establish an actual controversy. Specifically, the court held that “[b]ecause plaintiff does not reference any specific copyright, even by way of example, the relief requested would necessarily take the form of an advisory opinion. Succinctly, the court cannot determine whether a safe harbor for copyright infringement exists without knowing which rights are at stake.” In this context, the court refused to provide Veoh with a blanket validation of the legality of its business model – a declaration which would affect copyright holders not before the court.

The court then went on to hold that even if there were a case or controversy and jurisdiction was proper, plaintiff’s claim was dismissed under the court’s discretionary powers. The court noted that exercising jurisdiction under the Declaratory Judgment Act is discretionary and that the court could decline to exercise jurisdiction where it appears the declaratory relief suit was filed for an improper tactical purpose or to anticipate an affirmative defense. In declining to exercise its jurisdiction, the court focused on the fact that the requested relief would seemingly insulate plaintiff’s business model “against all infringement claims, from every copyright holder, for all time” and noted its suspicion that plaintiff was using the case as a “bargaining chip” where it faced a backdrop of constant litigation.