Viacom vs. Google: The Complaint

ResourceShelf’s Gary Price sent me a link to the complaint, which is a public record of course. From a purely “letter of the law” standpoint there is probably merit in the litigation. But what are the damages? The statutes provide for damages for instances of infringement (Exhibit A to the complaint) but in the real world there have probably been none.

Arguably Viacom has not lost actual or potential revenue (but see graphic below) and may have ironically benefited from any infringement, as more people were exposed to their shows/content and ratings actually improved in at least one case (SNL). But that’s not really a line of argument that Google can pursue too aggressively in defending because it’s also something an admission.

But here’s one line of argument that Viacom is pursuing (click to enlarge):

viacom complaint

In other words, people won’t buy Viacom shows/content/films on “home video” because they will have already seen them on YouTube. This is actually an empirical question. But I don’t believe the Viacom position that this is correct.

Viacom arguably does have a strong enough case (based on actual infringement) to force some sort of advantageous settlement. But Google has a dilemma. The company doesn’t want to settle so that others will follow suit (so to speak) to boost their bargaining power with YouTube. But Google also doesn’t want to risk establishing a precedent that may go against them and create future legal exposure.

Though not an IP lawyer this case strikes me as analogous to the trademark litigation that Google endured around SEM. At issue on one level is the reasonableness and timeliness of Google’s efforts to filter and prevent violations or quickly cure after being notified.

It will be really interesting to see how this plays out.

Having done it for almost nine years I can tell you that litigation is a nasty, distracting business in which the litigators, basically unhappy people in all respects, strut, gloat and try to wield power over their opponents. I can see the plaintiffs’ counsel cackling with delight at the prospect of deposing Eric Schmidt and the YouTube founders, among potentially dozens of others. Then there are the hourly fees — ka-ching!

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Here’s the Google statement in response to the suit (via PaidContent):

“We are confident that YouTube has respected the legal rights of copyright holders and believe the courts will agree. 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, more traffic and build a stronger community.”

And later . . .

YouTube has become even more popular since we took down Viacom material. We think that’s a testament to the draw of the user-generated content on YouTube.  We’ve been very successful forging thousands of successful partnerships with content owners—like Warner Music, Sony/BMG, Universal Music, BBC, and the NBA—interested in finding new audiences for their programming.  These partnerships offer the YouTube community access to some of the best content in the world, ranging from entertainment and sports to politics and news.  And we’re only getting started.”


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