Viacom appeals copyright ruling backing YouTube

Media giant Viacom Inc. has challenged a June ruling that video website YouTube did not violate federal copyright laws when it allowed users to upload thousands of pirated clips to the wildly popular site.

In a 72-page appeal filed Friday, Viacom asserted that YouTube’s founders aggressively operated outside legal bounds in an effort to build traffic quickly so they could sell the site for a huge sum. Google Inc. bought YouTube in October 2006 for $1.65 billion.

The stakes are high. Media industry executives view Viacom’s copyright infringement lawsuit, filed three years ago, as an important case to establish ground rules to protect the digital distribution of copyrighted material.

Viacom, which owns movie studio Paramount Pictures and popular cable TV channels including MTV, Comedy Central and Nickelodeon, worries that its businesses would suffer if Internet sites have little incentive to safeguard against the use of other companies’ copyrighted content.

Viacom maintained that, if allowed to stand, the district court ruling would “severely impair, if not completely destroy, the value of many copyrighted creations.”

The media company had demanded more than $1 billion in damages. But U.S. District Judge Louis Stanton of the Southern District of New York ruled against Viacom in June, determining that YouTube operated within a “safe harbor” provision of the Digital Millennium Copyright Act because it promptly removed pirated videos after being notified of a violation.

At the time, Internet advocates hailed Stanton’s ruling as an affirmation of free expression and the growth of the Internet. Viacom wanted to enforce a system in which YouTube and other video websites would have to determine who owned the rights to material before it was posted.

Viacom believes Stanton misinterpreted the Digital Millennium Copyright Act, and it provided internal YouTube e-mails to illustrate that YouTube’s founders were aware of the rampant piracy. The media company alleged that YouTube allowed clips to be posted from “The Daily Show,” “MTV Cribs,” “South Park” and other professionally produced shows to help build interest in the site.

Viacom offered several e-mails as examples of YouTube’s practices, including one in which a YouTube founder instructed colleagues to “Concentrate all of our efforts in building up our numbers as aggressively as we can through whatever tactics, however evil.” Current owner Google Inc. has said it has taken steps to monitor the site and initiated a content identification system to more effectively ferret out copyrighted works.

“We regret that Viacom continues to drag out this case,” Google said in a statement. “The court here, like every other court to have considered the issue, correctly ruled that the law protects online services like YouTube, which remove content when notified by the copyright holder that it is unauthorized. We will strongly defend the court’s decision on appeal.”

Google has said it has spent $100 million to defend against the suit. Viacom recently hired former U.S. Solicitor Gen. Ted Olson to help guide its appeal.

meg.james@latimes.com