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Viacom Inc sues YouTube for US$1 billion

Media conglomerate Viacom Inc is suing YouTube for US$1 billion, saying that the video-sharing site had built a business by using the Internet to "willfully infringe copyrights on a huge scale."

Other media companies also have major concerns about YouTube, but Viacom's was the first lawsuit filed by a major media owner.

Several media companies have reached agreements to supply YouTube with clips, including CBS Corp, General Electric Co's NBC Universal and the BBC.

However, many other media firms remain reluctant to deal with the Web site because of copyright concerns.

YouTube had been a quirky, fast-growing startup until the deep-pocketed Internet search behemoth Google Inc bought the company last November for US$1.76 billion.

But YouTube's soaring popularity, especially among younger people who are increasingly tuning out traditional media, has broadcasters frightened of losing viewers and advertising dollars.

Last month, Viacom demanded that YouTube remove more than 100,000 unauthorized clips from its site, and since that time, the company has uncovered more than 50,000 additional unauthorized clips, Viacom spokesman Jeremy Zweig said.

A quick search of YouTube's site turned up numerous clips from Viacom programs including segments from Comedy Central's The Daily Show with Jon Stewart and Nickelodeon's SpongeBob SquarePants cartoon.

In the lawsuit, filed in US District Court in New York, Viacom says YouTube "harnessed technology to willfully infringe copyrights on a huge scale" and had "brazen disregard" of intellectual property laws.

Viacom is especially at risk because many of its shows are aimed at younger viewers who also are heavy Internet users.

At the same time, Viacom is trying to find other, legal ways to distribute its shows digitally, such as by selling episodes of The Daily Show and South Park for US$1.99 each through Apple Inc's iTunes service. Those shows can then be viewed on a computer or iPod.

YouTube says it cooperates with all copyright holders and removes programming as soon as it is notified.

But Viacom argues that approach lets YouTube avoid taking the initiative to curtail copyright infringement, instead shifting the burden and costs of monitoring the site onto copyright holders.

Alexander Macgillivray, associate general counsel for products and intellectual property at Google, said YouTube was protected under the 1998 Digital Millennium Copyright Act, which gives online service providers protection from copyright lawsuits so long as they comply with requests to remove unauthorized material.

"We're saying that the DMCA protects what we're doing," Macgillivray said in an interview.

On the other hand, he said, "the DMCA is silent on what we have to do if we don't get a notice" to remove material.

Universal Music Group, a unit of France's Vivendi SA, had threatened to sue YouTube, saying it was a hub for pirated music videos, but later reached a licensing deal with them. NBC and the BBC also provide YouTube with clips.

A major lawsuit against YouTube has been widely anticipated because so much of the online video pioneer's success has been driven by easy access to copyright clips shared by its users.

American Technology Research analyst Rob Sanderson believes Viacom filed the lawsuit to pressure Google into setting clear ground rules and fees for the usage of copyrighted content.

"This is all about a media company trying to protect its future," Sanderson said. "It's not about them trying to get damages for the past sins of YouTube."
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