Media company seeks more than $1 billion in damages, claiming that nearly 160,000 unauthorized clips appear on video-sharing site.
The complaint, filed in the U.S. District Court for the Southern District of New York, contends that nearly 160,000 unauthorized clips of Viacom's entertainment programming have been available on YouTube and that these clips have been viewed more than 1.5 billion times. (PDF: Viacom's complaint.)
Viacom, an entertainment giant that owns Paramount Pictures, DreamWorks and a number of cable channels, said it has also asked the court for an injunction to halt the alleged copyright infringement.
"YouTube appropriates the value of creative content on a massive scale for YouTube's benefit without payment or license," Viacom said in its complaint. "YouTube's brazen disregard of the intellectual-property laws fundamentally threatens not just plaintiffs but the economic underpinnings of one of the most important sectors of the United States economy."
The lawsuit represents a serious escalation in the conflict with YouTube, and it is also the most significant legal challenge over intellectual-property rights to video sharing's No. 1 site. But some industry observers doubt that this will embolden other entertainment companies to mount their own court challenges.
Google downplayed the legal challenge and extolled the benefits to content creators that it sees in YouTube.
"We have not received the lawsuit but are confident that YouTube has respected the legal rights of copyright holders and believe the courts will agree," Google said in a statement. "YouTube is great for users and offers real opportunities to rights holders: the opportunity to interact with users; to promote their content to a young and growing audience; and to tap into the online-advertising market. We will certainly not let this suit become a distraction to the continuing growth and strong performance of YouTube and its ability to attract more users (and) more traffic, and (to) build a stronger community."
Google, which acquired YouTube last October for $1.65 billion, recognized the possibility that the video site would one day be forced to wage lengthy court battles. The company has reportedly set aside a sum of money to fund legal costs.
Meanwhile, Google has successfully negotiated licensing deals with many entertainment companies, including Warner Music Group, CBS and most recently, the BBC.
Some advocacy groups suggested that the "fair use" doctrine of copyright law, which allows the noncommercial reproduction of works for purposes like criticism, comment, news reporting and research, should protect YouTube users that post short clips or mainstream-media works.
"Simply (defining material as) 'unauthorized' does not make its use illegal," Gigi Sohn, president of the advocacy group Public Knowledge, said in a statement.
"I don't think this is the start of a whole series of litigation," said Edward Naughton, intellectual-property partner at Holland & Knight. "I think this is Viacom and Google in a negotiation that hasn't gone so smoothly, so it has gone to litigation...Viacom is just really turning up the heat."
Although legitimate copyright concerns come into play, Viacom's action is "probably about a large company that would prefer the old status quo, where they had most of the control (over their content distribution), and they didn't cede it to companies like YouTube and Google," said Jeffrey Lindgren, an intellectual-property lawyer at Morgan Miller Blair in San Francisco.
"I would expect some (suits from other companies to) follow," he added, "but I don't know (that) this is really going to lead to the onslaught that is the end of Google and YouTube."
Viacom isn't the only entertainment conglomerate yet to partner with the Google division. Some executives have been very critical of YouTube's practices, including .
An NBC Universal representative declined to comment Tuesday on whether the company has plans for litigation against YouTube similar to that of Viacom. Twentieth Century Fox Film spokesman Chris Alexander, meanwhile, said the Viacom complaint is far more sweeping than any action his company has pursued against the video-sharing site.
Earlier this year, the News Corp. unit subpoenaed YouTube for the identities of two users who had allegedly posted as-yet-unaired episodes of the popular show 24 because it was "interested in protecting full episodes of our series that we have yet to monetize," he said.
"We take protection of our copyrights very seriously, and we look at them on a case-by-case basis," Alexander said, but he added that he was unaware of any companywide policy governing clips, as opposed to entire episodes, posted to video-sharing sites.
Viacom last month caused a stir by demanding that YouTube remove 100,000 infringing clips. Some observers shrugged, calling it a negotiating tactic by Viacom and predicted that the two would eventually become partners.
Nonetheless, Viacom says in its complaint that YouTube failed to prevent its users from posting pirated material to the site. San Bruno, Calif.-based YouTube will remove clips that feature unauthorized material only after it receives a takedown notice from the copyright holder, Viacom said.
This, many entertainment executives say, is unfair. YouTube's policy, which the company says complies with copyright law, forces many of the biggest studios to devote time and money toward policing someone else's site. Often, no sooner than a company asks YouTube to take down a clip, users post a new version of the same clip.
"YouTube has deliberately chosen not to take reasonable precautions to deter the rampant infringement on its site," Viacom said in its complaint. "Because YouTube directly profits from the availability of popular infringing works on its site, it has decided to shift the burden entirely onto copyright owners to monitor the YouTube site on a daily or hourly basis to detect infringing videos.
A source inside Viacom said the company would likely have not filed suit, had it not repeatedly found clips that it had already asked to be taken down.
"More and more of the company's resources are going to this," the source said. "The company basically is paying for an entire new department to watch YouTube."
Google lawyers said they are relying on a 1998 law called the Digital Millennium Copyright Act (DMCA) to shield them from liability. One provision of that statute generally says companies are off the hook if they remove copyrighted content promptly when it is brought to their attention.
Internet services may only benefit from that so-called "safe harbor" if they also meet a four-pronged test. Those conditions include not being "aware of facts or circumstances from which infringing activity is apparent" and not receiving "financial benefit directly attributable to the infringing activity."
Viacom in its complaint argues Google and YouTube do not qualify for that relief, but Glenn Brown, an in-house product counsel for the merged companies, said he was confident their actions were on solid legal ground. "We meet those requirements and go above and beyond them in helping content providers identify copyright infringements," he said in a telephone interview Tuesday afternoon.
YouTube was also expected late last year to release a technology that would automatically weed out copyright content from the site. NBC's Zucker and others in Hollywood have accused the company of dragging its feet. Viacom said that only when an agreement is reached will YouTube begin safeguarding an entertainment company's copyright property.
"YouTube has deliberately withheld the application of available copyright protection measures in order to coerce rights holders to grant it licenses on favorable terms," according to the complaint.CNET News.com's Elinor Mills contributed to this report.