When Google bought YouTube for $1.65 billion in stock last October, the property was widely seen as a fixer-upper. Based on a lawsuit filed by Viacom on March 13, the house that Hurley, Chen, and Karim built has a nice view, but its foundation now looks a bit shaky.
Viacom, the parent of MTV, Comedy Central, and Paramount Pictures, has filed a $1 billion lawsuit against Google and YouTube, charging "massive copyright infringement" for making almost 160,000 unauthorized clips of Viacom content available on YouTube. Those clips have been viewed more than 1.5 billion times, Viacom maintains. Viacom said YouTube's model "is based on building traffic and selling advertising off of unlicensed content."
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In a statement, Google said it's "confident YouTube has respected the legal rights of copyright holders" and thinks the courts will agree.
Gregory Rutchik, an attorney at Arts & Technology Law Group, says Viacom has an uphill battle in arguing that YouTube isn't protected by the Digital Millennium Copyright Act, which shields online service providers from liability for the actions of customers. Rather than sue the individuals who uploaded those unauthorized clips, as the recording industry does in its crusade against song sharing, Viacom went after the deep-pocketed Google. Says Rutchik: "It's a negotiating tactic."