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According to Google CEO Eric Schmidt, Google willingly paid a $1bn premium to acquire YouTube back in 2006. And if Viacom has its way, he'll soon be paying another $1bn 'premium'.

In the search giant's legal battle with the media giant over copyright infringement, Viacom has fired a potentially devastating salvo: it claims it has evidence that YouTube employees were uploading copyrighted content without authorization.

That's according to an article published by CNET's News.com, whose sources also claim that "internal YouTube e-mails indicate that YouTube managers knew and discussed the existence of unauthorized content on the site with employees but chose not to remove the material".

If Viacom does indeed have these emails, Google's legal defense -- that it is protected by the Safe Harbor provisions of the Digital Millennium Copyright Act -- may be shattered. If YouTube was aware of infringing content and refused to remove it, and indeed may have even employed infringers, it may be difficult for YouTube to meet the key criteria that must be met for YouTube to be protected by the Safe Harbor provisions. Specifically, such circumstances would appear to create 'actual knowledge' of infringing activity on YouTube's part, something that service providers can't have if they seek indemnity for third party infringement under the DMCA.

Needless to say, Google isn't happy about the leak of this information and a YouTube spokesman told News.com that "the characterizations of the supposed evidence, made in violation of a court order, are wrong, misleading, or lack important context and notably come on the heels of a series of significant setbacks for the plaintiffs". Nonetheless, the stakes are getting pretty high in this case and if Viacom's rumored smoking guns do exist, one has to wonder whether Google will aggressively move to settle sooner or later.

Unfortunately for Viacom, a victory against Google would likely only be a one-time jackpot. And that means it will still need to continue developing and experimenting with digital strategies. US courts thus far seem inclined to extend the Safe Harbor provisions of the DMCA to online video sharing services like YouTube. While the judge in the YouTube case is not required to apply the favorable rulings received by companies like Veoh, it does appear that some of Viacom's strongest arguments are not as strong as they might have seemed in the past. So while smoking guns could boost Viacom's chances of prevailing in this dispute in some fashion, it can't rely on smoking guns forever.

Assuming that courts continue to apply the DMCA to video sharing services and the United States Congress doesn't step in to legislate otherwise, the Viacoms of the world will still need to figure out how to thrive in a digital world. Smoking gun or not.

Photo credit: Scubabix via Flickr.

Patricio Robles

Published 7 October, 2009 by Patricio Robles

Patricio Robles is a tech reporter at Econsultancy. Follow him on Twitter.

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Comments (3)

Alec Kinnear

Alec Kinnear, Creative Director at Foliovision

This is lawyer play. If you could spend a few million dollars on a lawsuit which will be settled for hundreds of millions or stands a reasonable chance of netting $1 billion.

It doesn't really in the end have much to do with current YouTube. On the current YouTube copyright violating videos tend not to stay up long. I'm often find myself looking at a broken link when I click through to a YouTube videos from an external site.

What's interesting in this case, is that Google doesn't like to settle. By refusing to settle outside of court, they set the bar very high for frivolous lawsuits.

about 7 years ago

Patricio Robles

Patricio Robles, Tech Reporter at Econsultancy

Alec,

Viacom is almost certainly paying its legal fees out of pocket. Sure the lawyers will make a great deal of money but those fees are coming from Viacom, not from a cut of the settlement or judgment. I think you're confusing this with, say, a class action where the settlement is $20m, the lawyers walk away with $5m, and each class member gets a $5 gift certificate from the company that wronged them.

Additionally, YouTube's present state of affairs has no legal bearing on its liability for past actions. If Viacom can prove that YouTube had actual knowledge of infringement and failed to follow the letter of the law in dealing with it, the fact that YouTube is following the letter of the law today does not absolve it from its past actions. That'd sort of be like stealing something a year ago and expecting to get away with it because you haven't stolen anything in the past 6 months.

about 7 years ago

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zippo lighters

great post, the guy is obviously an idiot to get caught so easy!

over 6 years ago

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