Judge Rules in YouTube’s Favor in $1 Bil. Viacom Suit

After three years of waiting, Viacom finally got an answer regarding its lawsuit against YouTube, but not the one it wanted.

On Wednesday, a U.S. federal judge tossed out the media giant’s billion dollar copyright lawsuit against the Google-owned video site. But soon after that decision, Viacom vowed to appeal the case—and take it to a higher court.

“We believe that this ruling by the lower court is fundamentally flawed and contrary to the language of the Digital Millennium Copyright Act, the intent of Congress, and the views of the Supreme Court as expressed in its most recent decisions,” reads a Viacom statement.  “We intend to seek to have these issues before the U.S. Court of Appeals for the Second Circuit as soon as possible.”

It is the Digital Millennium Copyright Act that has always been at the heart of Viacom’s suit. And it’s the spirit of that law where Viacom likely feels it still has a case.

The Digital Millennium Copyright Act was passed in 1998, just as the Internet was coming into its own as a mainstream medium. It was written in part to protect Internet Service Providers like AOL and Earthlink from being liable for copyright violations; essentially, it established that these companies simply transmit information over the Internet—i.e. they provide the dumb pipes for the Web—and thus they are not to be held responsible for whether that information was copyright protected or not.

In Viacom’s view, Web publishers like YouTube an other sites that allow for users to post content freely play a very different role in the Internet ecosystem than do ISPs. The company’s contention is that they should not be protected under the Digital Millennium Copyright Act.

Plus, Viacom has alleged all along that YouTube executives were not unaware of copyrighted materials being posted on the site, as an ISP might be, and thus were complicit in illegal activity. This seemed to be born out by several emails sent by YouTube executives that were made public a few months ago in which officials seemed to indicate that they knowingly looked the other way when professional videos made there way onto the site.

“It is and should be illegal for companies to build their businesses with creative material they have stolen from others,” said Michael Fricklas, Viacom evp, general counsel & secretary in a statement. “YouTube and Google stole hundreds of thousands of video clips from artists and content creators, including Viacom, building a substantial business that was sold for billions of dollars.  We believe that should not be allowed by law or common sense.”

Of course, Google doesn’t see things this way, and took Wednesday’s decision as a precedent setting victory. Indeed, if this decision stands, other Web publishers, social networks and other digital content distributors could feel emboldened to use copyrighted material to build Web traffic, without fear of penalty.

“The decision follows established judicial consensus that online services like YouTube are protected when they work cooperatively with copyright holders to help them manage their rights online,” wrote Kent Walker, Google’s vp and general counsel on the company’s corporate blog.

“This is 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 with each other.”