U.S. District Court Judge A. Howard Matz last Monday dismissed Universal's lawsuit against the Veoh's investors, finding insufficient evidence to make board members liable for company policies on the uploading of copyrighted material to the site.
"Merely exercising ownership power to select members for a Board of Directors cannot invite derivative liability for infringement," Matz wrote. "Nor is there a common law duty for investors (even ones who collectively control the Board) 'to remove copyrighted content.'"
Universal filed suit against Shelter Capital, Spark Capital, and Michael Eisner's Tornante Company in August, charging the investors with "vicarious copyright infringement" and "inducement of copyright infringement".
Matz's dismissal of the complaint follows a major setback in Universal's case against the video sharing hub. Last month, a federal court rejected the studio's attempt to declare Veoh ineligible for "safe harbor" protection under the Digital Millennium Copyright Act.
Content producers, website owners, and ISPs are watching this case closely. Predating Viacom's billion-dollar lawsuit against Google-owned YouTube, Universal vs. Veoh dates back to 2007 and revolves around similar issues of copyright protection in the age of user-generated content and tube sites.
According to MediaPost, Universal may still file an amended complaint against the investors, though Matz warned the company to "reflect carefully" on the matter.
Hollywood studios aren't the only ones to take action against Veoh. Last year, a federal judge found Veoh not guilty of copyright infringement in a similar lawsuit filed by IO Group, the parent company of gay porn studio Titan Media.