NEW YORK: Google Inc won a landmark court victory when a judge on Wednesday threw out Viacom Inc's $1 billion lawsuit accusing it of allowing copyrighted videos on its YouTube service without permission.
Viacom claimed "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 knew about it but did nothing to stop illegal uploads.
But in a 30-page ruling, US 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, such as excerpts from "The Daily Show with Jon Stewart," 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 the decision, which it called "fundamentally flawed."
The New York-based company is controlled by Sumner Redstone and owns cable networks such as 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," said Laura Martin, an analyst Needham & Co. "It is really important for content creators to get paid. This is the beginning, not the end. Sumner won't roll over and die on this."
Kent Walker, Google's general counsel, wrote on the company's blog that the ruling was "an important victory not just for us, but also for the billions of people around the world who use the web to communicate and share experiences."
Law targeted piracy
The lawsuit went to the heart of perhaps the biggest issue facing media companies in the last decade: how to win Internet viewers without ceding control of TV shows, movies and music.
It was seen as a test of the federal Digital Millennium Copyright Act, which makes it a crime to produce technology to circumvent anti-piracy measures and limits the liability of online service providers for copyright infringement by users.
Google and YouTube argued they were entitled to "safe harbor" protection under the law because they had insufficient notice of the particular alleged infringements.
Stanton agreed, saying it would "contravene the structure and operation" of the law "to "impose responsibility on service providers to discover which of their users' postings infringe a copyright."
The judge directed the parties to submit a report by July 14 to address any remaining issues in the case.
"Certainly for Google, there's been so many regulatory and legal negative headlines about them, so to see them on the wining side of something will certainly be a positive," said Benjamin Schachter at Broadpoint AmTech.
In court papers, Google had even contended that Viacom's argument was hypocritical, saying several Viacom managers had uploaded videos to YouTube even after the lawsuit was filed.
Based in Mountain View, California, Google bought YouTube in November 2006 for about $1.65 billion. Earlier this year, YouTube estimated that users upload as much as 24 hours of video to its website every minute.
Viacom Class "B" shares closed up 5 cents at $35.27 on the New York Stock Exchange on Wednesday. Google shares closed down $4.20, or 0.9 percent, at $482.05 on the Nasdaq. Shares of both companies were little changed after-hours.
Viacom claimed "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 knew about it but did nothing to stop illegal uploads.
But in a 30-page ruling, US 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, such as excerpts from "The Daily Show with Jon Stewart," 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 the decision, which it called "fundamentally flawed."
The New York-based company is controlled by Sumner Redstone and owns cable networks such as 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," said Laura Martin, an analyst Needham & Co. "It is really important for content creators to get paid. This is the beginning, not the end. Sumner won't roll over and die on this."
Kent Walker, Google's general counsel, wrote on the company's blog that the ruling was "an important victory not just for us, but also for the billions of people around the world who use the web to communicate and share experiences."
Law targeted piracy
The lawsuit went to the heart of perhaps the biggest issue facing media companies in the last decade: how to win Internet viewers without ceding control of TV shows, movies and music.
It was seen as a test of the federal Digital Millennium Copyright Act, which makes it a crime to produce technology to circumvent anti-piracy measures and limits the liability of online service providers for copyright infringement by users.
Google and YouTube argued they were entitled to "safe harbor" protection under the law because they had insufficient notice of the particular alleged infringements.
Stanton agreed, saying it would "contravene the structure and operation" of the law "to "impose responsibility on service providers to discover which of their users' postings infringe a copyright."
The judge directed the parties to submit a report by July 14 to address any remaining issues in the case.
"Certainly for Google, there's been so many regulatory and legal negative headlines about them, so to see them on the wining side of something will certainly be a positive," said Benjamin Schachter at Broadpoint AmTech.
In court papers, Google had even contended that Viacom's argument was hypocritical, saying several Viacom managers had uploaded videos to YouTube even after the lawsuit was filed.
Based in Mountain View, California, Google bought YouTube in November 2006 for about $1.65 billion. Earlier this year, YouTube estimated that users upload as much as 24 hours of video to its website every minute.
Viacom Class "B" shares closed up 5 cents at $35.27 on the New York Stock Exchange on Wednesday. Google shares closed down $4.20, or 0.9 percent, at $482.05 on the Nasdaq. Shares of both companies were little changed after-hours.
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