Google seen inheriting YouTube's legal challenges

  1. NEW YORK -- Google Inc., no stranger to lawsuits, may find a whole new class of complainers lining up for a check after the Web search leader buys video entertainment site YouTube Inc. for $1.65 billion.
    The acquisition will give Google a major foothold in the emerging market for video advertising, but it also stands to inherit court challenges from independent film makers, garage bands, television studios and others who may chafe at YouTube users uploading copyrighted material to the site without permission.
    Legal experts and industry veterans said these artists and companies could look to YouTube's new deep-pocket backer for payment, either in business deals or courtroom battles.
    "For some of the bigger players in the industry, and given the amount of publicity that this deal has brought, it may be a perfect staging area for them to bring an infringement suit," said Kristin Achterhof, partner at Katten Muchin Rosenman LLP, a law firm with Hollywood and music industry clientele.
    Google has faced a battery of lawsuits, from trademark infringement suits from auto insurer GEICO and news agency Agence France Presse, to legal spats with the US government over privacy issues, to copyright suits from book publishers.
    Although Google and YouTube seem to be on good terms with the media industry by announcing on Monday a spate of deals with music labels, analysts say the legal travails of the Web's most popular video service are just beginning.
    YouTube, which serves some 100 million videos per day, has become the target of scorn among some rights owners as the site says it has no idea how many of the 70,000 videos uploaded each day by users are pirated.
    Internet veteran and HDNet founder Mark Cuban last month famously called anyone willing to buy YouTube a "moron."
    "I don't think you can sue Google into oblivion, but as others have mentioned, if Google gets nailed one single time for copyright violation, there are going to be more shareholder lawsuits than Doans has pills to go with the pile on copyright suits that follow," he wrote, referring to the backache medication, on his blog on Monday.
    Wait and see
    For its part, YouTube says it takes down pirated video clips quickly at the behest of rights owners. As a matter of policy and due to its high volume, YouTube does not pre-screen uploads. That policy and ease of use has made it the top video service online.
    In September, YouTube discussed a new technology that lets rights owners identify their clips and take a cut of ad revenue or eliminate the clip. That has helped lure new partners.
    The world's largest music company Universal Music Group, whose CEO Doug Morris labeled YouTube a "copyright infringer" just four weeks ago, struck a deal with the service to offer thousands of its music videos to YouTube viewers.
    YouTube also landed deals with Sony BMG and television network CBS Corp.. The deals were similar to an agreement with the Warner Music Group last month.
    The music industry has realized that settling business in boardrooms could be more profitable than courtrooms following a slew of legal action against technology companies over the past five years that did little for declining album sales.
    "We're very actively embracing technological change rather than suing these companies," Sony BMG executive Thomas Hesse told Reuters.
    But privately, several of YouTube's music industry partners see the deals as merely a trial of a new idea rather than a new media model.
    "Music companies are more likely to make a deal (because) they've lost control of their content anyway," said Forrester Research analyst Josh Bernoff. "People who own high-priced video are not particularly comfortable with the idea of somebody else doing whatever they want with the content."
    Then there are the thousands of musicians and video programmers who have yet to strike deals.
    "The next lawsuits will come from the independent labels or any label who's not licensing to YouTube, which is everyone but the four majors," said Christian Castle, a music industry attorney. "Lawsuits can come from anywhere in the world."
    Los Angeles-based Castle said YouTube's lax policy that helped it win viewers will have long-term repercussions.
    "The young entrepreneurs in Silicon Valley tonight are trying to figure out how to build a better YouTube and they are not thinking about getting the licenses for content owners," Castle said. "That's the real damage that Google has done by rewarding these people."

    Copyright 2006 Reuters
  2. But I LIKE YouTube... it's saved me a TON of money (that I spent on bags...)