In an attempt to hit back against the music industry's aggressive moves against video sharing sites, Veoh is flipping the bird: suing Universal Music over threats the company allegedly made to Veoh. It's a pre-emptive strike designed to fend off a potential lawsuit from the music label, which can cripple these companies before they even have a chance to test the DMCA in court.
Going on the offensive, Veoh is seeking a declaration from the U.S. district court in the Southern District of California to say that it hasn't infringed on Universal Music's rights. During July and August, Universal "directly threatened" Veoh and claimed that a lawsuit was coming, said Veoh Chief Executive Steve Mitgang.
The move comes after Viacom sued Google/YouTube for $1 billion, and Universal Music sued Grouper, Bolt.com and MySpace. The Bolt case, settled out of court for $10 million, had an extremely messy ending and the company may never recover. Veoh needs to avoid the same fate.