(Adds background to case, paragraphs 3-8)
By Andrew Chung
WASHINGTON, March 27 (Reuters) - The U.S. Supreme Court on Monday refused to hear a bid by major record labels to revive copyright infringement claims against video-sharing website Vimeo LLC for hosting content that included songs by famed bands such as the Beatles, the Jackson 5 and the Beach Boys without permission.
The high court's action was a blow to Vivendi SA's Capitol Records and units of Sony Corp, which warned of rampant online copyright abuse if a ruling by a lower court shielding Vimeo from liability remained in place. Vimeo is owned by media mogul Barry Diller's IAC/InterActiveCorp.
The case was being closely watched by Hollywood and the recording industry, which are seeking stronger protections for their copyrights, as well as high-tech companies wary of having to police user-generated content.
The dispute centered on the interpretation of a 1998 U.S. law called the Digital Millennium Copyright Act, or DMCA, which protects internet service providers from liability when users upload copyrighted content, so long as they remove infringing material once they receive notice or otherwise become aware of it.
The labels in 2009 sued Vimeo, alleging infringement over music in 199 videos that Vimeo users had uploaded to the site. A New York federal court in 2013 threw out claims related to the most of the videos, but said Vimeo should face allegations related to content with sound recordings made before 1972.
That court said the federal DMCA protections were not applicable to recordings from before 1972, the year Congress first included them in the scope of federal copyright law. Pre-1972 recordings are protected by state law.
Last year, the New York-based 2nd U.S. Circuit Court of Appeals disagreed, finding that the DMCA applied to infringement claims brought under federal and state law, including oldies songs. It said service providers should not have to incur the heavy burden of monitoring every posting to ensure it did not contain pre-1972 recordings.
The record labels asked the Supreme Court to hear their appeal of the circuit court ruling, but the justices declined.
Reporting by Lawrence Hurley and Andrew Chung; Editing by Will Dunham