Point 1 about Viacom v. YouTube: There is no calling how this case will come out if/as the parties pursue it through the federal courts —
Section 512 says Web site operators must not "receive a financial benefit directly attributable to the infringing activity" and that they must not be "aware of facts or circumstances from which infringing activity is apparent."
In practice, that language is sufficiently imprecise that it permits lawyers for both sides to argue that it buttresses their position.
Even the U.S. Supreme Court's decision in the Grokster file-sharing lawsuit hasn't resolved this question. The court said that someone who distributes software with the clear intention of promoting copyright infringement can be held liable — but nobody, not even Viacom, has suggested that YouTube's executives have been as brazen as the founders of file-swapping companies years ago.
They hold it. They store it. They enable it to be categorized. There are service providers — utility companies, so to speak — and there are content providers. And I would be very surprised at how [YouTube] could possibly qualify as an ISP within the meaning of (the act).
Siva Vaidhyanathan (discussing Google Library) on the Southern District of New York:
Look, when it comes to copyright, the Southern District of New York and the Second Circuit do not make good law. Learned Hand has been dead a long time. The chances of good law coming out of the home turf of Time Warner, Viacom, and the News Corporation at the behest of some punk-kid company from California are as slim as those of good wine coming from New York. I sure wish New York produced good wines. And I wish SDNY and the Second Circuit understood digital copyright better (see Universal v. Reimerdes). But we shall be waiting a long time for both these things.
Point 1a about Viacom v. YouTube: An out-of-court, business driven settlement can be very tempting —
There's no way this gets settled with Google paying any actual damages. Google will be furiously working to sign a deal with Viacom to get this lawsuit to go away and a licensing deal in place. They’re on a very slippery slope right now, with the Napster carcass lying limp at the bottom.
There's no denying the filing of this suit is just the latest move in a very large chess game the outcome of which may ultimately turn more on business considerations than policy ones.
Point 2 about Viacom v. YouTube: Google's legal team understands the short term good/long term harm tradeoff involved in settling these kinds of disputes —
Google's senior litigation counsel Michael Kwun: "If we don't at least litigate to the point where we get rulings on the issues that matter to us, we’re left with less clarity in the law."
EFF's Fred von Lohmann:
So I think the YouTube acquisition may well represent a legal opportunity for Google (and the Internet industry generally), rather than a vulnerability. After all, litigation to define the copyright rules for new online services is inevitable — better to choose your battles and plan for them, rather than fleeing the fight and letting some other company create bad precedents that will haunt you later.
Concluding footnote about Viacom v. YouTube —