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Google, YouTube Win Copyright Case Against Viacom

June 24, 2010

Google won a ruling over media companies this week after a Manhattan federal judge threw out Viacom Inc.’s $1 billion lawsuit accusing YouTube of allowing copyrighted videos on its site without permission.

Viacom said “tens of thousands of videos on YouTube, resulting in hundreds of millions of views,” had been posted based on its copyrighted works, and that the defendants were aware but did nothing to stop it.

However, U.S. District Judge Louis Stanton said it would be improper to hold Google and YouTube liable under federal copyright law merely for having a “general awareness” that videos might be posted illegally.

“Mere knowledge of prevalence of such activity in general is not enough,” he wrote. “The provider need not monitor or seek out facts indicating such activity.”

Viacom said it plans to appeal to the U.S. Second Circuit Court of Appeals.

It said the ruling was “fundamentally flawed,” and does not reflect neither Congress’ intent behind copyright laws nor recent U.S. Supreme Court decisions.

The lawsuit went to the heart of the biggest issue facing media companies in the last decade:  how to win Internet viewers without relinquishing control of TV shows, movies and music.

Viacom is controlled by Sumner Redstone and owns cable networks like MTV and Comedy Central as well as the Paramount movie studio.

“These issues are really important for content creators to protect their intellectual property against the usage by online aggregators,” Laura Martin, an analyst Needham & Co, told Reuters. “It is really important for content creators to get paid.

“This is the beginning, not the end,” she went on. “Sumner won’t roll over and die on this.”

Stanton seemed more interested in YouTube’s behavior than the mindset of its founders.

Stanton said that Viacom spent several months accumulating about 100,000 videos violating its copyright and then sent a mass takedown notice on February 2, 2007.  Stanton said that by the next business day, YouTube had removed virtually all of them.

Stanton said there’s no dispute that “when YouTube was given the (takedown) notices, it removed the material.”

Eric Goldman, a Santa Clara University associate professor who specializes in high-tech law, told The Associated Press that the judge’s reasoning was “clear and decisive.”  He said, “He rose above the fray and didn’t get into any of the mudslinging that was going on in this case.”

Since it was sold to Google in 2006 for $1.76 billion, YouTube has developed a system that helps flag copyright violations when videos are posted.  Viacom argues those copyright detection tools prove YouTube could have done more to keep illegal content off its site.

Google general counsel Kent Walker said the company is confident Stanton’s decision will hold up. 

The 30-page ruling is “thoughtful, thorough and well-considered,” Walker said in an interview with AP. He also hailed the decision as “a victory for a new generation of creators and artists eager to showcase their work online,” Walker said.

Facebook, eBay Inc. and Yahoo Inc. were among the Internet companies that backed Google in its battle with Viacom.

Documents show that Viacom hoped to buy YouTube before getting trumped by Google, making it seem as if the media company’s later claims of copyright abuse may have been bitter claims.

A July 2006 e-mail from Fricklas, Viacom’s top lawyer, even disputed that YouTube was engaged in rampant copyright infringement. “Mostly YouTube behaves,” Fricklas wrote.

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