Footnotes Don’t Preserve Arguments: Second Circuit’s Waiver Ruling on Grokster-Based “Right and Ability to Control” under DMCA §512(c) in Capitol Records v. Vimeo (Rehearing)

Introduction

This rehearing decision in Capitol Records v. Vimeo addresses a narrow but consequential question of appellate practice with direct implications for Digital Millennium Copyright Act (DMCA) safe harbor litigation. The plaintiffs—music rightsholders affiliated with EMI—sued Vimeo over user-uploaded videos that used plaintiffs’ copyrighted recordings. Vimeo invoked the DMCA’s §512(c) safe harbor. In a January 13, 2025 opinion, the Second Circuit affirmed summary judgment for Vimeo, concluding that plaintiffs had not shown Vimeo forfeited safe harbor. The panel also stated that plaintiffs had waived a particular argument: that Vimeo’s encouragement of “lip‑dub” videos could constitute “right and ability to control” infringement under Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913 (2005).

On rehearing, plaintiffs asked the court to revisit (1) the panel’s determination that they waived the Grokster‑based theory on appeal and (2) a footnote in the January 13 opinion questioning whether their Grokster theory was preserved for Supreme Court review. The panel—Judges Leval, Parker, and Merriam—denied rehearing on the waiver ruling but granted it to delete the Supreme Court preservation footnote.

Summary of the Opinion

The court’s ruling is twofold:

Waiver affirmed: Plaintiffs waived the Grokster-based “inducement equals right and ability to control” theory for forfeiture of the DMCA §512(c) safe harbor by failing to develop that argument in the Argument section of their opening brief and by expressly stating in a footnote that the argument was foreclosed by a prior decision in this case (Vimeo I). Merely reciting facts in the statement of facts or alluding to the theory in a footnote did not preserve it. The court relied on the settled rule that arguments not developed on appeal are deemed forfeited, even if fully argued below (citing Palin v. N.Y. Times Co., 113 F.4th 245, 279 (2d Cir. 2024)).
Footnote removed: The court granted plaintiffs’ request to strike a footnote from the January 13 opinion that had cast doubt on whether plaintiffs had preserved the Grokster theory for Supreme Court review. The panel amended the prior opinion to remove that footnote and took no position on Supreme Court preservation.

Importantly, while the panel did not reach the merits of whether Vimeo’s lip‑dub promotion could constitute “right and ability to control” under §512(c)(1)(B), it reiterated that Vimeo I (826 F.3d 78 (2d Cir. 2016)) did not foreclose a Grokster-based theory of control; that interlocutory decision addressed willful blindness and red-flag knowledge, not inducement-as-control.

Analysis

Precedents Cited and Their Role

17 U.S.C. §512(c) (DMCA Safe Harbor): Shields service providers from monetary liability for user-posted content if conditions are met. Two key disqualifiers are:
- (A) actual or red-flag knowledge of infringement coupled with failure to expeditiously remove; or
- (B) “right and ability to control” infringing activity plus a “financial benefit directly attributable” to that activity.
Viacom Int’l, Inc. v. YouTube, Inc., 676 F.3d 19 (2d Cir. 2012): The seminal Second Circuit construction of §512(c)(1)(B). It held “right and ability to control” requires “something more” than the power to remove content and identified two non-exclusive routes by which a provider’s “substantial influence” might satisfy the standard:
- Cybernet path: Editorial standards and a strict monitoring and enforcement program over user content can be “something more.”
- Grokster path: Inducement of infringement—purposeful, culpable promotion of infringing uses—might also constitute “control.”
Perfect 10, Inc. v. Cybernet Ventures, Inc., 213 F. Supp. 2d 1146 (C.D. Cal. 2002): A district court example where a provider exercised extensive editorial control and monitoring over users (pre-approval, detailed content rules, enforcement), illustrating “substantial influence” beyond mere removal power.
Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 545 U.S. 913 (2005): Established inducement liability for copyright infringement where a defendant promotes infringing uses. Viacom suggested such inducement might supply “something more” under §512(c)(1)(B), potentially disqualifying a provider from safe harbor.
UMG Recordings, Inc. v. Shelter Capital Partners LLC, 718 F.3d 1006 (9th Cir. 2013): Referenced by parties for the concept of “substantial influence,” and often cited in §512(c) jurisprudence, though the Second Circuit’s controlling guidance remains Viacom.
Capitol Records, LLC v. Vimeo, LLC, 826 F.3d 78 (2d Cir. 2016) (Vimeo I): An interlocutory decision addressing pre‑1972 sound recordings, red-flag knowledge, and willful blindness. It rejected willful blindness based on “sporadic” employee encouragement but did not reach inducement-as-control. In this rehearing, the court clarifies Vimeo I did not foreclose Grokster-based control.
Palin v. N.Y. Times Co., 113 F.4th 245, 279 (2d Cir. 2024): A critical appellate practice authority: issues not developed in the argument are deemed forfeited, even if fully aired in the district court. The panel leans on Palin to hold plaintiffs waived their Grokster-based §512(c)(1)(B) theory.

Legal Reasoning

The panel’s reasoning proceeds in two steps: first, a close reading of the plaintiffs’ appellate briefing to determine waiver; second, a limited modification to the prior opinion regarding Supreme Court preservation.

1) Waiver through briefing choices

The court distinguishes two separate §512(c)(1)(B) “paths” recognized in Viacom:

Cybernet path: “substantial influence” through editorial standards and systematic monitoring; and
Grokster path: “substantial influence” through inducement (purposeful encouragement of infringing use).

Plaintiffs argued both paths in the district court. But on direct appeal, their opening brief pressed the Cybernet path exclusively, with section headings and developed argument focused on editorial judgments, monitoring, and content curation. The brief did not develop a Grokster-based inducement-as-control argument. To the contrary, in a footnote (footnote 5), plaintiffs “acknowledged” that Vimeo I “forecloses (at this stage)” any inducement argument and said they were merely preserving it for further review. Vimeo then highlighted in its opposition that plaintiffs limited their challenge to Cybernet. Plaintiffs did not contest that characterization on reply.

Against this backdrop, the panel applied the Palin rule: issues not accompanied by developed argument are forfeited. It underscored several points:

Facts aren’t arguments: Including facts in the Statement of Facts that could support an inducement theory does not preserve the legal theory if the Argument section does not actually advance it.
Footnotes aren’t arguments: A footnote acknowledging a theory exists, while simultaneously disclaiming it as foreclosed and “preserving” it for later review, does not avoid waiver.
Headings matter: The appellate Argument section’s headings and structure showed plaintiffs were pursuing the Cybernet theory and not the Grokster theory. The brief never used “Grokster” or “induce” in the Argument section (apart from the footnote and a string cite unrelated to the theory).
Framing controls the appeal: Plaintiffs’ attempt to recast the “waived” argument as a distinction between a standalone Grokster inducement claim and a Grokster-based safe harbor forfeiture argument failed. The opening brief drew no such distinction, and the only question on appeal was safe harbor eligibility, not a separate inducement tort.

Accordingly, the court held plaintiffs waived the Grokster-based path to “right and ability to control,” and it declined to revisit that holding on rehearing.

2) Clarifying what Vimeo I did—and did not—decide

The panel went out of its way (both in January and again here) to make clear that Vimeo I addressed willful blindness and red-flag knowledge—not the Grokster-based inducement-as-control theory. The prior decision’s rejection of willful blindness based on “sporadic” employee comments did not foreclose a distinct inducement theory under §512(c)(1)(B), especially one premised on a platform’s encouragement of lip‑dub videos.

While the panel did not reach the merits because of waiver, it acknowledged the “force” of the idea that platform encouragement of infringing lip‑dubs could be relevant to safe harbor forfeiture through “right and ability to control.” This preserves the viability of the Grokster path in future §512(c)(1)(B) cases where the issue is properly raised.

3) Removing the Supreme Court preservation footnote

In the January 13 opinion, the panel had questioned whether plaintiffs’ footnote “preserved” their Grokster theory for Supreme Court review. On rehearing, the court agreed to remove that discussion (Footnote 15), thus refraining from stating any view about whether or how the theory may be considered by the Supreme Court. The amendment is limited: it does not revive the argument in the Second Circuit; it simply deletes dicta about Supreme Court review.

Impact

On appellate practice

Footnotes cannot carry the load: The opinion emphatically teaches that a footnote “preserving” an argument does not substitute for substantive development in the Argument section. Saying a theory is “foreclosed” and reserving it “for further review” amounts to conceding it for purposes of the appeal.
Structure and headings matter: Courts read the Argument section’s headings and organization to identify what is—and is not—being urged. If a theory is not framed as an issue with developed reasoning, it is not preserved.
Silence on reply can seal waiver: When an appellee points out that an appellant limited its challenge, failure to correct that on reply reinforces waiver.

On DMCA §512(c) “right and ability to control” litigation

Two viable paths remain: Viacom’s dual-path framework is reaffirmed. Plaintiffs may seek to disqualify safe harbor either by the Cybernet path (editorial/monitoring “substantial influence”) or the Grokster path (inducement “substantial influence”).
Inducement is still on the table: The Second Circuit explicitly states that Vimeo I does not foreclose the Grokster path. Future plaintiffs can press inducement-as-control, and future defendants must be mindful that platform-level encouragement of infringing conduct may jeopardize safe harbor eligibility if paired with a “direct financial benefit.”
Platform behavior under the microscope: The panel’s acknowledgment of the “force” of a lip‑dub inducement theory signals that platform promotional campaigns, employee messaging, or design features that actively encourage infringing uses could be probative of “right and ability to control.”
But the standard remains high: Viacom’s “something more” remains the touchstone; mere takedown ability is insufficient. Plaintiffs must concretely tie inducement to infringing activity and meet the statutory requirement of direct financial benefit causally linked to the infringing activity.

On Supreme Court review

Neutral posture from the Second Circuit: By removing the preservation footnote, the panel leaves the question of Supreme Court consideration to the Court’s own doctrines. Litigants should not infer any Second Circuit-imposed barrier to Supreme Court review beyond the waiver ruling here.

Complex Concepts Simplified

DMCA §512(c) safe harbor: A legal shield for online services that host user content. It protects against monetary liability for users’ infringements if the service follows certain rules, like responding to takedown notices. The shield can be lost if the service provider either (a) knows about infringement and fails to act, or (b) has the “right and ability to control” the infringing activity and enjoys a direct financial benefit from it.
“Right and ability to control” (512(c)(1)(B)): Not just the power to delete content. It requires “something more,” such as:
- Cybernet path: Imposing detailed content rules, pre-screening, and strict monitoring/enforcement over users’ content;
- Grokster path: Actively encouraging or inducing users to engage in infringing activity.
Inducement (Grokster): When a service purposefully encourages users to infringe (e.g., marketing the service as a tool to get unauthorized content), that is “inducement,” a basis for infringement liability. In the §512(c) context, such inducement may also show the provider had the “right and ability to control” the infringement, potentially forfeiting safe harbor.
Red-flag knowledge vs. willful blindness: Separate bases to lose safe harbor if a provider either actually knows or is willfully blind to specific infringement and fails to act quickly. The court’s earlier Vimeo I decision found sporadic employee comments insufficient for willful blindness.
Waiver/forfeiture on appeal: If you do not develop an argument in the Argument section of your appellate brief—through headings, analysis, and citations—you generally lose the ability to have the appellate court consider it. Footnotes or background facts are not enough.
Interlocutory appeal: An appeal of specific legal questions before the case ends in the district court. Vimeo I was such an appeal limited to issues like pre‑1972 recordings and red-flag knowledge; it did not decide inducement-as-control under §512(c)(1)(B).

Practical Takeaways for Litigants

Brief both paths if you intend to rely on both: When challenging §512(c) safe harbor, develop the Cybernet and Grokster paths as distinct theories with separate headings, facts, and legal analysis.
Don’t rely on “preservation” footnotes: A footnote is not a substitute for argument. If you believe a prior decision forecloses an issue, say so—but recognize that such a statement may constitute waiver in your current appeal.
Link inducement to benefit: If pressing a Grokster-based theory, marshal evidence tying platform-level encouragement to actual infringing activity and to the service provider’s direct financial benefit from that activity.
Service providers should avoid mixed messages: Company-wide policies, employee communications, and promotional campaigns that could be construed as encouraging infringing uses raise risk. Training and enforcement against inconsistent messaging matter.

Conclusion

The Second Circuit’s rehearing decision cements two important points. First, as a matter of appellate practice, arguments must be developed in the Argument section to be preserved; footnote references and background facts do not suffice, and an express statement that a theory is “foreclosed” amounts to waiver. Second, as a matter of substantive DMCA law, the court reaffirms the viability of two pathways to showing “right and ability to control” under §512(c)(1)(B)—Cybernet (editorial/monitoring control) and Grokster (inducement)—and clarifies that its earlier decision in Vimeo I did not foreclose inducement-as-control.

While the court did not decide whether Vimeo’s promotion of lip‑dub videos would amount to inducement-based “control,” its recognition of the argument’s potential “force” signals that platform-level encouragement of infringing uses remains a live and potent theory for future cases—provided it is properly briefed. By removing its own commentary on Supreme Court preservation, the panel also avoids prejudging that distinct question. Overall, Capitol Records v. Vimeo (Rehearing) is a pointed reminder: in high-stakes safe harbor litigation, the way an argument is framed—or not framed—on appeal can be outcome determinative.