[Linux-aus] Fwd: [A2k] Viacome files $1bln lawsuit against Google, YouTube

[Janet Hawtin]

---------- Forwarded message ----------
From: Malini Aisola <malini.aisola at keionline.org>
Date: Mar 14, 2007 8:39 AM
Subject: [A2k] Viacome files $1bln lawsuit  against Google, YouTube
To: a2k discuss list <a2k at lists.essential.org>, ecommerce at lists.essential.org

Viacom lawsuit challenges Internet business model

http://www.reuters.com/article/reutersEdge/idUSN1316259920070313?pageNumber=2

By Eric Auchard and Duncan Martell
March 13, 2007

A $1 billion lawsuit filed against Google Inc. and its popular
video-sharing site YouTube by media conglomerate Viacom Inc. could
undermine a key tenet of how the Internet industry does business.

The lawsuit filed on Tuesday accuses Google and YouTube of "massive
intentional copyright infringement," threatening the Internet search
leader's aim to turn the site into a major distributor of entertainment
and an advertising outlet.

The legal attack transforms the back-and-forth angling for negotiating
power between old and new media, which defined the video piracy dispute
over the past year, into a fundamental challenge to what copyright means
in the digital age.

It is also the biggest legal threat to the Internet industry since
Hollywood music labels defeated music sharing site Napster Inc..

"Up until now, I have been a believer that Viacom was seeking fair
compensation for its copyrighted material," Forrester analyst James
McQuivey said.

"I now think Viacom is opening the door to challenge the whole basis of
the Digital Millennium Copyright Act," he said, a portion of which
offers protection to Internet companies that wind up making copyrighted
material available online.

The Digital Millennium Copyright Act (DMCA) of 1998 has served as the
legal standard defining U.S. copyright law in the digital age. While its
main thrust is to criminalize tools that circumvent copyright protection
technologies, it also offers a defense for Internet companies against
copyright lawsuits.

The act limits liability for firms that act quickly to block access to
pirated materials once they are notified by copyright holders of
specific acts of infringement.

Charlene Li, an Internet analyst with Forrester Research, said the
Viacom lawsuit poses a "tremendous challenge" to the business models
underpinning many Silicon Valley start-ups.

The defense offered by many Internet services companies is that they are
protected against copyright suits by current law that requires them
simply to make good-faith efforts to remove pirated materials from their
sites.

"The question becomes, how far must they go to show they are making a
reasonable effort?" Li said. "The fact that YouTube was not using
readily available copy protection technology is what Viacom is going after."

MULTIYEAR PROCESS

The legal issues also should come as no surprise, said UBS analyst
Benjamin Schachter, noting that David Drummond, the executive who led
Google's $1.65 billion acquisition of YouTube last November, serves as
both head of business development and chief legal officer at Google.

"Google is clearly comfortable they knew the legal issues going into the
deal," Schachter said. "How the legal issue will be resolved is probably
a multiyear process."

The lawsuit also marks a departure from the trend of old and new media
companies hashing out their differences over Internet content
distribution out of court, through revenue-sharing deals rather than
legal action.

"Companies have typically never needed to go as far as a lawsuit.
Historically people have realized they needed to collaborate and
experiment together," McQuivey said.

The Viacom suit argues YouTube enables users to post copies instantly of
Viacom-owned videos ranging from comedy programs such as "The Daily Show
with Jon Stewart" and "The Colbert Report" to Nickelodeon children show
"SpongeBob SquarePants."

But YouTube is also a vast repository of amateur video produced by users
of the site.

"YouTube is not as reliant on professionally produced cable and
broadcast content as people are led to believe," said Jordan Rohan, an
analyst at RBC Capital.

In any event, Rohan said he saw little chance that Viacom's assault
would chill the explosive growth in video programming delivered over the
Web.

"There is a lot of enthusiasm among Internet video start-ups and there
are few barriers to entry," Rohan said. "I don't think a billion dollar
lawsuit is going to convince all those video start-ups to pack up and go
home.


--

Malini Aisola

malini.aisola at keionline.org

www.keionline.org


Knowledge Ecology International

1621 Connecticut Ave., NW, Washington, DC 20009 USA

Tel.:  +1.202.332.2670 Fax: +1.202.332.2673

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