Did Viacom Find YouTube's smoking gun?

Sources say New Evidence has Emerged That Could Help Viacom in its Billion Dollar Infringement Lawsuit Against YouTube

(CNET)  This article was written by Greg Sandoval.

Lawyers working on a $1 billion copyright lawsuit filed by Viacom against Google's YouTube may have uncovered evidence that employees of the video site were among those who uploaded unauthorized content to YouTube.

In addition, 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, three sources with knowledge of the case told CNET.

The e-mails, according to the sources who asked for anonymity because of the ongoing litigation, surfaced during an exchange of information between the two sides of the legal dispute. They are one of the cornerstones of Viacom's case, as well as that of a separate class action lawsuit filed against Google and YouTube by a group of content owners, the sources said. The group includes a European soccer league and a music-publishing company.

Such evidence could be a major blow to YouTube's defense. If managers possessed "actual knowledge" of copyright infringement on the site and did not quickly remove it, the company may not be entitled to protection under the Digital Millennium Copyright Act's safe-harbor provision, according to legal experts.

"The facts you described could very well be the smoking gun that puts a hole through Google's case," Roger Goff, an entertainment attorney not involved in the case, told CNET News. "(If the facts are accurate), Google will have a very difficult time claiming that (its staff members) don't undermine its protection."

The provision, established in 1998, was designed to give online services a measure of protection from liability for infringing materials uploaded to their sites - as long as they meet a certain criteria, including:

(A)(i) The services don't have actual knowledge that the material, or an activity using the material on the system or network, is infringing.

(ii) in the absence of such actual knowledge, is not aware of facts or circumstances from which infringing activity is apparent; or

(iii) upon obtaining such knowledge or awareness, acts expeditiously to remove, or disable access to, the material.

The entertainment industry has been skeptical about YouTube's claims that it did not have knowledge of the once-plentiful amounts of infringing content available on the site. Clips from popular TV shows, feature films, or sports events would often bubble up in YouTube's Most Viewed or Most Discussed sections.

It should be noted that the correspondence described by sources likely make up only a sliver of the material exchanged, and there's no way to know the full spectrum of internal discussions regarding copyright at YouTube.

"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," Aaron Zamost, a YouTube spokesman, said Monday evening. "The evidence will show that we go above and beyond our legal obligations to protect the rights of content owners.

Any questions about what YouTube employees may or may not have uploaded to YouTube must also be asked of Viacom's employees. Court documents show that on August 25, Viacom agreed to turn over records that shed light on "Viacom's decisions to upload or authorize the uploading of videos to YouTube" and on the company's policies "for allowing videos to remain on YouTube for marketing promotional or other business reasons."

This suggests that Viacom employees also uploaded clips to the site. A company representative declined to comment.

Viacom has long acknowledged that it was one of the first to promote shows online by posting clips to YouTube. But the conglomerate has also said the uploading of clips does not undermine or diminish its copyright claim.

YouTube's counterargument has always been, how is the company supposed to know the difference between pirated and legally uploaded clips when companies like Viacom are among those uploading material?

Google acquired YouTube for $1.65 billion in October 2006, a price tag that set the bar for Web 2.0 acquisitions. Long before that, many in the film and television industries claimed that YouTube was building a big audience by enabling people to pirate professionally produced television shows and films.

Since Viacom first filed its suit in March 2007, accusing Google and YouTube of encouraging users to commit intellectual-property theft, many online services and entertainment companies have closely watched the case because of its broad implications. What the YouTube-Viacom suit could help settle, to some degree, is who is responsible for policing and initiating the removal of pirated materials - the copyright owners or the operators of online services?

But should the case ever go to trial, the outcome may be less significant than legal experts once predicted. While the lawsuit has meandered in the courts for 30 months, other legal battles featuring companies with less marquee value have already gone a long way toward determining Web services' key issues surrounding copyright.

Two weeks ago, U.S. District Judge A. Howard Matz issued a decision saying video site Veoh was not responsible for copyright violations committed by users because it was entitled to protection under the DMCA. Universal Music Group, the world's largest record company, had filed a copyright suit against Veoh that experts said was very similar to the YouTube-Viacom case. Matz's decision appeared to set an important precedent that would help YouTube and Google argue against Viacom, the parent company of MTV Networks and Paramount Pictures.

The issue is whether Veoh takes appropriate steps to deal with copyright infringement," Matz wrote. He concluded that it had.

YouTube supporters cheered Matz's ruling, believing that it would apply to YouTube's situation because the Web's largest video site had long established and enforced a "takedown policy," whereby the company removed infringing content, once notified by a copyright owner. And later, the video site took steps not required by the DMCA by establishing a state-of-the-art filtering process that helps block material from being uploaded to the site.

But attorneys for Viacom and members of the class action are expected to argue that YouTube's filtering system is a gaping hole in YouTube's defense. One of the major complaints that content owners had about YouTube was that before the company launched its filtering technology, they were forced to file takedown notices for every instance of infringement. In some cases, an entertainment company could remove a popular clip, only to see someone else upload it again seconds later.

Lawyers for Viacom and the class action group are expected to argue that if YouTube was notified that a specific clip was pirated, and had the power to prevent copies from going up but did not act to remove them, the company violated the DMCA.

The plaintiffs use as evidence a paraphrased statement from Chad Hurley, YouTube's CEO, and one of its three co-founders, which appeared in The New York Times in February 2007, the sources said.

"(Hurley) said the company was still working on its filtering technology," the Times wrote. "He said it had agreed to use it to identify and possibly remove copyrighted material from Warner Music, and it would discuss a similar arrangement with Viacom as part of a broader deal."

A Viacom representative said at the time, "They are saying we will only protect your content if you do a deal with us - if not, we will steal it."

The YouTube-Viacom suit is unlikely to go to trial before next year. Certainly, with YouTube wooing entertainment companies as it attempts to battle Hulu, Netflix, Crackle, iTunes, and other digital-video outlets, there exists the possibility that YouTube and Viacom will come to some kind of settlement.

A settlement might be anticlimatic, but could be the best for all concerned.

[cbsblogger]

We need a Supreme Court that turns the tide towards public interests instead of greed and corporate interests. Obviously the bought and paid for Congress will never do it.

[jomo44]

I predict a mass attack on viacom from the far reaches of the outerwebs. ion cannons charging...

[cowboy_texas]

Viacom claiming ANYTHING they own as "intellectual property" is a joke in itself.

[kil_auren]

What will they do next? Maybe they'll creep into our house's at night and zap us with a neural neutralizer so we can't re-see, rememeber, or accidently dream about something Viacom paid to produce.

We need to turn off our TV's. Think how much you pay every month for it and then think about how many times you say to yourself "108 channels and nothing but crap and reruns'. The same goes for the cost of a movie ticket. When was the last time, or how many times in the last year did you leave a movie theater thinking, "Wow, that was really worth the price of admission."

Yeah they keep stuffing garbage at us and are offended when we can find a minute and a half of an hour long tv show that was honestly worth sharing. More news...Maybe I'll just 'recount it at the water cooler' the next day...I could probably paint a better visual image with my words anyway.

Will they sue me?

[annathoms]

OK here we go this is my story, davidsfarm a you-tuber account, came after me on you-tube. He told the world I stole his son and I kidnap him. Not true, I fought in court for almost tow years to keep my child safe. This man is a convicted pedophile, it is now in the news paper here in Canada. This man is a monster! He got paid by YT for all the bash vids he put up off, me and enough mother off a so-called stolen son.
This man has a criminal record that would make you sick. But YT let him roll. I think they need to be held accountable for all the crap I, and the other mother have gone though.

[toddclemmer]

Waaaaaaaaah!!!! Anyone who attacks a "tentacle" of enormous information pimp, Google, is ok in my book.

[lst19]

There used to be a show on Comedy Central called Tough Crowd with Colin Quinn. Even though the show will never be released on DVD or anywhere else, Viacom removed all clips from YouTube. This is just pure spite. If you're just going to relegate a TV show to the dustbins of history, at least let the comedians on that show get some exposure.

I understand protecting your intellectual property but a few clips from a show you're never going to do anything with doesn't hurt anyone.

[eddygil1960]

I think we should all boycotte viacom for putting out the vilest product while punishing youtube for allowing postings of content that no one would see otherwise.

[akd85]

Shouldn't this article have a disclosure statement that CBS is owned by Viacom?

This is what Viacom doesn't get... YouTube is basically free promotion for your materials. You are biting the hand that feeds you. Yes, we get that its your "property" but all this does is make you look like ajerk and actually hurt your shows.

[declanm-2009]

CBS is not owned by Viacom. See this story from 2006:
http://www.cbsnews.com/stories/2006/01/03/business/main1176111.shtml

[BullardJ]

Viacom is being stupid here and they will pay dearly for it.

Instead of spending millions of dollars trying to wage a legal battle against Youtube (and against the internet as a whole by extension) they should spend that money on figuring out what viewers like about Youtube and implement their own service. They should take advantage of a market that clearly exists as Youtube has clearly demonstrated. Viacom should find better ways to use the web to distribute and promote their product instead of putting up barriers. The broadcasting giants that chase legal action against the Napsters, Youtubes, P2P , etc etc is akin to the US Governement's drug war. Its a huge sink for money and resources with no payoff. Did the defeat of Napster lead to reduced music pirating? No way, music piracy is at an all-time high. So what good did it do? Stop fighting and start giving consumers what they want. Viacom should launch their own service similar to Youtube with sneak previews, past shows, classic clips etc and allow users to upload what they want, including copyrighted material. Sorry media companies but that's the cold hard reality and you won't be able to change it by suing Youtube. You are just further polarizing a potential customer base against you.

[filmguy107]

Thou shalt not steal!