“Vimeo has extensive knowledge of the use of copyrighted recordings on its website, and Vimeo encourages and induces its users to copy, adapt, and upload
copyrighted recordings,” the complaint asserts.

A number of legal issues are swirling, including those tied into inducement, the DMCA, and fair use.  The case comes just a few months after Veoh Networks brushed back Universal Music Group in summary judgment, based on a successful DMCA defense.

But this case is about more than just removing offending content; rather, it introduces tricky issues of encouraging infringement and derivative works.

In 2005, the Supreme Court ruled against Grokster on the grounds that the file-sharing network was overtly encouraging - or inducing - downloads of copyrighted works.  But Vimeo is altering the final product, potentially introducing some fair use arguments into the case.

This story has been provided by our content partner Digital Music News.