In Viacom vs. Google, legal shenanigans abound

Experts aren't surprised by accusations of creative editing and failure to produce evidence in this hardball court fight. But they caution that judges usually see through tricks.

YouTube founders Steve Chen (center) and Chad Hurley (right) speak with Walt Mossberg at the D Conference in 2007. Viacom is making much of Hurley's 'lost' e-mails. Viacom did some aggressive editing of Chen's e-mails. CNET

Since March 2007, when Viacom first accused Google in a $1 billion lawsuit of profiting off thousands of unauthorized copyrighted clips that once appeared on YouTube, most of the conflict had smoldered out of public view.

Once the case documents were unsealed on Thursday, all the spite roared into the open . Google attacked Viacom for chopping up e-mails from YouTube's founders in an obvious attempt to invent sinister-sounding messages. In Viacom's motion for summary judgment, the parent company of Comedy Central and Paramount Pictures railed against Google and YouTube for developing "serial amnesia" during depositions and also for failing "to preserve and produce" key documents--a no-no in civil proceedings.

So, is this just legal gamesmanship , or have both sides gone too far?

"(The judge) will probably see through most of the cherry-picked quotes. I don't think it's a very smart tactic in litigation."
-- Jack Lerner, a USC law professor

"Lawyers do this kind of thing in trial all the time," said Jack Lerner, a law professor specializing in copyright law at the University of Southern California. "The judge and his clerks will probably read the briefs while they're all together and they will probably see through most of the cherry-picked quotes. I don't think it's a very smart tactic in litigation."

It should come as no surprise the parties are playing hardball. There's a lot at stake, including the $1 billion damage amount Viacom seeks. Depending on how the dispute is decided, it could mean content-sharing on the Web will be far more restricted than now. On the other hand, for film studios, music labels, and other content creators, a Viacom loss could mean protecting copyright online becomes much more expensive and labor-intensive.

But the collateral damage from this nasty spat could include the public's right to information. Both sides attempted to keep many of the documents sealed for three years, and Google continues to fight to prevent the release of depositions from Eric Schmidt, Google's CEO, Larry Page, one of Google's two co-founders, and Chad Hurley, YouTube's CEO and co-founder. Google has not said why it doesn't want the documents made public.

"I find it disturbing that the papers are permitted to be filed under seal," wrote Ray Beckerman, an attorney and well-known legal copyright opponent of the music industry, earlier this month. "Whatever happened to 'courts of record?' It used to be virtually impossible to get things filed under seal...now that we finally have the technology to know and share what is really going on in our courts, the parties and/or the courts seem bound and determined to take that away from us."

"Whatever happened to courts of record? It used to be virtually impossible to get things filed under seal."
-- Ray Beckerman, copyright attorney

Lerner said that in civil cases like this, judges will typically try to safeguard trade secrets and privacy. Viacom lawyers wrote in one of their briefings that there is only a small amount of trade secrets involved in the case. Adding to the confusion about Google's reluctance to disclose the depositions are the details we've already seen from Schmidt's testimony. Legal experts say it doesn't sound like he was discussing trade secrets.

In October, CNET published a small portion of the deposition Schmidt gave last May in which he said that prior to Google's $1.7 billion acquisition of YouTube in 2006, he valued the video site at between $600 million to $700 million. The CEO acknowledged Google paid a $1 billion premium for the video-sharing site.

Convincing a judge to seal a document isn't close to being the most aggressive tactic employed in this case.

In Viacom's summary judgment motion filed last week, the company quoted Steve Chen, one of YouTube's co-founders, in an e-mail saying: "Concentrate all our efforts in building up our numbers as aggressively as we can through whatever tactics, however evil."

A statement like that in a copyright complaint gives the impression that Chen is prepared to rip off artists or pretty much do anything to grow his site. Viacom, however, omitted important parts of the e-mail. This is Chen's full statement:

"If I were running the show, I'd say, we concentrate all of our efforts in building up our numbers as aggressively as we can through whatever tactics, however evil, i.e., scraping MySpace."

News Corp., MySpace's parent company, may be unhappy to learn of Chen's then plans, but the statement had little to do with Viacom or pirated videos.

Viacom may have taken liberties with the e-mails in its possession. But the New York company claims it didn't receive all the e-mails it was entitled to under the law. Viacom claimed that Google didn't act in good faith in turning over documents. Viacom's lawyers said Schmidt handed over only 19 records from June 2006, the month that Google began evaluating a YouTube acquisition. Schmidt was asked why a big acquisition like YouTube didn't generate more paperwork from him.

Read CNET's FAQ on the Viacom vs. Google copyright case by clicking this image.

"(It) has been my practice for 30 years to not retain my e-mails unless asked specifically," Schmidt said in his deposition, according to Viacom's briefing. He later said: "It was my practice to delete or otherwise cause the e-mails that I had read to go away as quickly as possible."

Hurley told Viacom lawyers that he "lost" his e-mails for the period Viacom was interested in because of a computer crash. Viacom, however, retrieved many of Hurley's e-mails from the personal computer of Jawed Karim, another one of YouTube's three co-founders. When Hurley was presented with copies of those e-mails, a skeptical Viacom said in its filing that the YouTube CEO "developed serial amnesia."

Without speaking to Google's case specifically, Columbia Law School Professor Jane Ginsburg said, "The American trial system depends on pretrial discovery (in which the parties are required to exchange information). As a general practice, losing or destroying documents is not a good thing. It opens you up to serious sanctions."

The tech sector doesn't have a great record of protecting potential evidence in high-profile copyright cases.

•In May 2008, a federal judge ordered TorrentSpy, a BitTorrent index accused in a film industry lawsuit of copyright violations, to pay $110 million to the Motion Picture Association of America (MPAA) after finding that site operators had hid and destroyed evidence. TorrentSpy, which later went bankrupt, claimed that it didn't intentionally lose any information.

•In the MPAA's copyright face off against RealNetworks over its DVD-copying software, RealDVD, U.S. District Judge Marilyn Patel sanctioned Real for losing three notebooks belonging to one of the company's former engineers. Patel ordered Real to pay some of the studios' legal fees and also said she would assume when deciding which way to rule that the MPAA's assertions about what was in the notebooks were correct. Earlier this month, Real settled with the studios and agreed to scrap RealDVD.

•In the music industry's lawsuit against the Usenet network last year, the top four labels accused Usenet of destroying evidence or of failing to produce witnesses on multiple occasions. The federal judge found numerous instances of discovery misconduct by Usenet.

In the end, the winner of this case may be the company that can withstand the most pain...and embarrassment.

In an e-mail exchange released Thursday between Judy McGrath, CEO of MTV Networks and Van Toffler, MTV Networks president, the two discussed Viacom's interest in acquiring YouTube, but they weren't thrilled that the deal wouldn't happen. The two also made what must be some embarrassing criticisms of their own management. "What happened to our what the (expletive) ways," Toffler wrote.

"It takes three months and 58 meetings to get a $1 million acquisition done at our company," Toffler said apparently not referring to YouTube specifically. "We're fast becoming those we scorned."

 

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