Viacom, Google trade accusations over YouTube

LOS ANGELES — Viacom and Google,
raising a slow-brewing corporate drama to the boiling point, swapped
blistering accusations of piracy and clandestine actions as part of a
high-stakes legal war aimed at redrawing how television programs and
movies are watched on the Internet.

The claims, contained in previously undisclosed documents unsealed Thursday in Viacom’s $1 billion
copyright infringement lawsuit against YouTube, shed a glaring light on
the tactics each media giant allegedly employed as they sought to
exploit for their own purposes the Web’s most popular video site.

Viacom, which owns a host of cable channels including Cartoon Network and MTV, sued YouTube in March 2007 for hosting videos of Viacom’s TV shows, such as episodes of “South Park.”

In the court documents, the New York media conglomerate alleged YouTube founders made a “deliberate decision to build a business based on piracy.”

YouTube, which was acquired by Google Inc. in November 2006 for $1.8 billion, maintained that Viacom’s own marketing staff had uploaded many of the videos to YouTube in an effort to promote Viacom-produced shows. It also accused Viacom of acting on a case of sour grapes, because the media company had tried and failed to buy YouTube.

Viacom’s lawsuit, which claims more than $1 billion in damages, strikes at the heart of Hollywood’s
trepidation about the Internet, where, many fear, the widespread
availability of unauthorized video content will undermine television
and movies the same way music and newspapers were ravaged by piracy and
free offerings.

Earlier this month one of Viacom’s
cable networks, Comedy Central, pulled “The Daily Show” and “The
Colbert Report” from the free video site Hulu, worried that it was
undercutting cable TV operators who pay to carry the network.

Among the bolder allegations from the court documents is Viacom’s accusation that one of YouTube’s founders, Jawed Karim, had posted “stolen videos” on YouTube in 2005. In an e-mail from Steve Chen, another YouTube founder, to Karim, Chen said, “Jawed, please stop putting stolen videos on the site.”

YouTube said in a statement that the videos in question were not Viacom
shows but movies Karim had found on the Web sites of aviation
enthusiasts. It said Karim, an airplane buff, was unaware he had done
anything wrong and stopped uploading the videos. Karim left YouTube in
2005.

YouTube also came out slugging. The San Bruno, Calif., company released copies of e-mails by Viacom employees and contractors purportedly regarding the uploading of videos of its shows to YouTube.

In one e-mail from 2006, MTV Senior Vice President Brian Diamond discussed ways to make its YouTube uploads have a “hijacked effect.” YouTube also released e-mails from Viacom contractors complaining that their YouTube accounts had been flagged as having copyrighted videos and disabled.

Another bombshell in the court papers was an internal Viacom document from July 2006 highlighting why the company should buy YouTube. It said such a deal would be a “transformative acquisition.”

In a string of e-mails, MTV Networks President Van Toffler asked MTV Chief Executive Judy McGrath whether Viacom
would buy YouTube. McGrath replied, “Probably not buying YouTube, if I
had to wager.” Asked why not, McGrath said, “Because it’s our
(expletive) company,” expressing frustration at Viacom’s ability to pull off a deal.

Viacom in a statement dismissed the details as irrelevant “red herrings.”

From a legal standpoint, Viacom needs to prove that YouTube and Google knew about the pirated videos and decided to leave them up so they could financially profit from them.

In a motion filed in U.S. District Court in New York, Viacom
argued that YouTube was operated “with the unlawful objective of
profiting from … ‘truckloads’ of infringing videos that flooded the
site.” Corporate parent Google “readily embraced and perpetuated YouTube’s piracy and willful blindness,” Viacom argued.

YouTube claimed it was protected by the Digital
Millennium Copyright Act, which provides some immunity for websites
that host content uploaded by the public. YouTube said that its staff
removed pirated videos from the site once they were discovered and that
it took a further step of developing software in 2007 to scan for
copyrighted shows and automatically pull them.

YouTube said the law sheltered companies whose
business models rely on authorized content. “YouTube earns revenue from
advertising, not infringement,” it stated in a court document filed
last week.

Both Viacom
and YouTube have asked for an expedited “summary judgment” in which the
judge awards a victory to one party to avoid protracted litigation. A
hearing for the request is expected to be held this summer.

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