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Viacom's copyright infringement lawsuit against YouTube threatens the way that hundreds of millions of people use the internet, YouTube owner Google has said in its court defence.

YouTube is accused by media conglomerate Viacom of copyright infringement in a $1bn court case that could prove a vital testing ground for the legal basis of businesses grounded in user-submitted content.

Google said that it not only complies with US copyright law, but that it goes "far beyond" its legal obligations in the way that it protects content producers and owners.

Viacom is suing YouTube in a New York court for copyright infringement, alleging that YouTube profits from the videos it hosts that infringe its copyright.

Viacom owns television stations such as Comedy Central, MTV and Nickelodeon, and says that YouTube is liable for copyright infringement even when it is users who publish clips from its shows via the site.

Google says that YouTube is protected by US Copyright law which shields it from liability if it did not publish the material and if it acts swiftly to take it down once informed of its existence.

Viacom sought more than $1bn in punitive damages, despite the copyright legislation only allowing actual or statutory damages. The court ruled in March that it could not seek punitive damages.

Its suit claims that Viacom-owned videos have been viewed more than 1.5 billion times, breaching the US's Digital Millennium Copyright Act (DMCA).

Google denies that it has broken that law. In fact it claims that the law was written with services such as YouTube in mind.

"Viacom’s lawsuit challenges the protections of the DMCA that Congress enacted a decade ago to encourage the development of services like YouTube," said Google in its defence, lodged with the court. "Congress recognized that such services could not and would not exist if they faced liability for copyright infringement based on materials users uploaded to their services. It chose to immunize these services from copyright liability provided they are properly responsive to notices of alleged infringement from content owners."

"YouTube fulfills Congress’s vision for the DMCA. YouTube also fulfills its end of the DMCA bargain, and indeed goes far beyond its legal obligations in assisting content owners to protect their works," said the court document.

The DMCA contains what is called a safe harbor provision, which is what protects companies from liability for material uploaded by third parties. It is this which Google believes will protect it.

Viacom, though, claims that Google deliberately ignores its obligations in order to turn a profit on advertising on pages.

"YouTube strategy has been to avoid taking proactive steps to curtail the infringement on its site, thus generating significant traffic and revenues for itself while shifting the entire burden – and high cost – of monitoring YouTube on to the victims of its infringement," said Viacom in its original claim.

"YouTube is a significant for-profit organisation that has built a lucrative business out of exploiting the devotion of fans to others' creative works in order to enrich itself and its corporate parent, Google. Their business model, which is based on building traffic and selling advertising off of unlicensed content, is clearly illegal," it said.

YouTube warns users as they upload material that they must have permission to do so, something which could help it defend itself in court. Both sides in the dispute have asked for a jury trial.

Google said in its court submission that the case could alter the very nature of the internet if it goes Viacom's way.

"By seeking to make carriers and hosting providers liable for internet communications, Viacom's complaint threatens the way hundreds of millions of people legitimately exchange information, news, entertainment, and political and artistic expression," it said.

Copyright © 2008, OUT-LAW.com

OUT-LAW.COM is part of international law firm Pinsent Masons.

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