Google: Copyright infringement lawsuit risks 'could be substantial'

Google: Risks from copyright infringement lawsuits substantial
Written by Donna Bogatin, Contributor

UPDATE: Earlier this month I underscored the real, substantial copyright infringement risks Google faces, large financial and business model risks (see below).

Viacom has now quantified the risk for Google: $1 billion. A Viacom complaint filed in the U.S. District Court for the Southern District of New York contends that nearly 160,000 unauthorized clips of Viacom's have been available on YouTube, that these clips had been viewed more than 1.5 billion times and Viacom is therefore entitled to $1 billion in damages, CNET reports.

MARCH 4, 2007: Once a year, Google is legally mandated to provide shareholders an accurate assessment of the real financial risks it faces. 

Google to shareholders on the “substantial” risks it faces regarding potential copyright infringement claims: 

Any time one of our products or services links to or hosts material in which others allegedly own copyrights, we face the risk of being sued for copyright infringement or related claims. Because these products and services comprise the majority of our products and services, the risk of harm from such lawsuits could be substantial.

In its 2006 Annual Report to shareholders, Google also acknowledges: 

We have had copyright claims filed against us alleging that features of certain of our products and services, including Google Web Search, Google News, Google Video, Google Image Search, Google Book Search and YouTube, infringe their rights.

Adverse results in these lawsuits may include awards of substantial monetary damages, costly royalty or licensing agreements or orders preventing us from offering certain functionalities, and may also result in a change in our business practices, which could result in a loss of revenue for us or otherwise harm our business. 

I have oft underscored the multi-billion dollar high-stakes gamble Google is risking with its fair-use and DMCA fueled business model. SEE: “Why Google will lose its multi-billion dollar video bet

The Google magic is fueled by its uncanny ability to wantonly sell ads against “the world’s information” even though it has not compensated the content owners for the information and it has no explicit legal right to exploit the information commercially. 

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MORE: Google warns of Microsoft, Yahoo competition and Will Google diversification pay off in 2007?

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