Viacom sues YouTube and Google

From Mark Cuban's lips to Sumner Redstone's ears.... Upping the ante at the negotiating table, Viacom sued YouTube and Google today for upwards of $1 billion in damages. Although you may remember Viacom's outside counsel -- Donald Verrilli Jr. of Jenner & Block -- from MGM v Grokster, this case raises several really interesting issues not found in the peer-to-peer cases, in addition to one that came up in the original Napster case.

YouTube's approach to copyrighted material has been the same as Google's -- if (and only if) a copyright owner complains that one of his/her clips was posted without permission, YouTube will remove that specific clip. That's what the Digital Millennium Copyright Act of 1998 requires Web hosting companies to do in order to be shielded from lawsuits. It's also consistent with the 9th Circuit Court of Appeals' first ruling in the Napster case, which said it was the record companies' job, not Napster's, to look for and identify  infringements on the network. Viacom sued YouTube in a different circuit -- it was filed in New York, in the 2nd Circuit -- and argued that several YouTube features make it impossible for copyright holders to detect all the infringements enabled by the site. Viacom demanded that YouTube use technology to prevent or remove infringing posts, effectively making YouTube police itself on behalf of copyright owners.

More important, Viacom argues that YouTube doesn't qualify for the DMCA's "safe harbor" for Web hosting companies. YouTube duplicates and displays works on a site it controls and monetizes, the lawsuit contends, while a Web hosting firm leaves such activities and control to its customers. If Viacom prevails in court on this point, that's bad news for every user-generated content site -- particularly the ones that syndicate their content elsewhere online. Paging Dr. MySpace....

Intriguingly, some of the things Viacom complains about are the kinds of features that legitimate users demand from a site like YouTube. For example, YouTube lets people post videos that can be seen only by the users ("friends") they select. That's a great approach for letting far-flung relatives watch home videos, but it's also a fine way to keep Viacom's lawyers from spotting "Mission: Impossible" clips. Similarly, the embedding function helps filmmakers tap the viral energy of the Web to gain exposure for their short works and promotional pieces. But it also helps spread an infringing work far and wide.

The ideal outcome here is for Viacom to strike a licensing deal with YouTube that turns the former's clips into incremental revenue. I suspect that Viacom feels the same way; the problem is figuring out how to define the clips' worth. By serving as a virtual VCR for "The Daily Show," "South Park" and other Viacom titles, does YouTube reduce the amount of revenue those shows generate? There's some evidence that the effect is just the opposite -- that online exposure increases viewership on TV. How about YouTube's effect on Viacom's websites and their advertising revenue? Does it draw eyeballs away from comedycentral.com, et al, or does it expose Viacom clips to a complementary -- and much larger -- collection of viewers?

Hey, if questions like these were easy to answer, we'd be seeing more licensing deals and fewer lawsuits.