Google Inc. won a landmark victory over media companies as a Manhattan federal judge threw out Viacom Inc.'s $1 billion lawsuit accusing the Internet company of allowing copyrighted videos on its YouTube service without permission.
Viacom claimed "tens of thousands of videos on YouTube, resulting in hundreds of millions of views,'' had been posted based on its copyrighted works, and that the defendants knew about it but did nothing to stop illegal uploads.
But in a 30-page ruling, U.S. District Judge Louis Stanton said it would be improper to hold Google and YouTube liable under federal copyright law merely for having a "general awareness'' that videos might be posted illegally.
"Mere knowledge of prevalence of such activity in general is not enough,'' he wrote. "The provider need not monitor or seek out facts indicating such activity.''
Viacom said it plans to appeal to the U.S. Second Circuit Court of Appeals.
It called Stanton's ruling "fundamentally flawed,'' saying it reflects neither Congress' intent behind copyright laws nor recent U.S. Supreme Court decisions.
The lawsuit went to the heart of perhaps the biggest issue facing media companies in the last decade: how to win Internet viewers without ceding control of TV shows, movies and music.
It was seen as a test of the Digital Millennium Copyright Act, a 1998 federal law making it a crime to produce technology to circumvent anti-piracy measures, and limiting liability of online service providers for copyright infringement by users.
New York-based Viacom is controlled by Sumner Redstone and owns cable networks such as MTV and Comedy Central as well as the Paramount movie studio.
It alleged that copyrighted works uploaded illegally included "The Daily Show with Jon Stewart,'' "South Park,'' ''SpongeBob SquarePants,'' and others.
"These issues are really important for content creators to protect their intellectual property against the usage by online aggregators,'' said Laura Martin, an analyst Needham & Co. "It is really important for content creators to get paid.
"This is the beginning, not the end,'' she said. "Sumner won't roll over and die on this.''
Kent Walker, Google's general counsel, on the company's blog, called the ruling "an important victory not just for us, but also for the billions of people around the world who use the web to communicate and share experiences.''
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