Google dropped a bombshell today. It claims that Viacom, who is currently suing its video sharing site YouTube, knowingly and purposefully promoted the uploading of Viacom's copyrighted works to the site, trying to make them look like pirated copies.

Viacom's suit against YouTube has been smoldering in the U.S. District Court for the Southern District of New York since March 2007.  After Viacom failed in multiple bids to acquire the video sharing site, it filed suit seeking $1B USD in damages from YouTube's current owner, internet mogul Google.  Viacom accuses YouTube of allowing 160,000 infringed video clips to be posted.

As the opening briefs of the case were just unsealed and released to the public today, Google has posted a blog blasting Viacom and saying that the lawsuit threatens the future of the internet.

Writes Google:

With some minor exceptions, all videos are automatically copyrighted from the moment they are created, regardless of who creates them. This means all videos on YouTube are copyrighted -- from Charlie Bit My Finger, to the video of your cat playing the piano and the video you took at your cousin’s wedding. The issue in this lawsuit is not whether a video is copyrighted, but whether it's authorized to be on the site. The DMCA (and common sense) recognizes that content owners, not service providers like YouTube, are in the best position to know whether a specific video is authorized to be on an Internet hosting service.

Google is referring to the fact that current copyright interpretation is that you in effect have a copyright as soon as you create content.

Google also reveals that it is confident it has evidence to prove that Viacom was secretly uploading videos to YouTube to promote programming on its TV networks like Comedy Central and BET.  Writes Google:

For years, Viacom continuously and secretly uploaded its content to YouTube, even while publicly complaining about its presence there. It hired no fewer than 18 different marketing agencies to upload its content to the site. It deliberately "roughed up" the videos to make them look stolen or leaked. It opened YouTube accounts using phony email addresses. It even sent employees to Kinko's to upload clips from computers that couldn't be traced to Viacom. And in an effort to promote its own shows, as a matter of company policy Viacom routinely left up clips from shows that had been uploaded to YouTube by ordinary users. Executives as high up as the president of Comedy Central and the head of MTV Networks felt "very strongly" that clips from shows like The Daily Show and The Colbert Report should remain on YouTube.

If Google can indeed prove this, it could be Google's own "smoking gun".  Viacom's so-called "smoking gun" piece of evidence in the case came in October of last year when it unearthed YouTube emails in which the site co-founder Chad Hurley chastises co-founder Jawed Karim for uploading copyrighted video.  He writes:

jawed (Karim), please stop putting stolen videos on the site. We're going to have a tough time defending the fact that we're not liable for the copyrighted material on the site because we didn't put it up when one of the co-founders is blatantly stealing content from other sites and trying to get everyone to see it.

That email was extremely significant as the Digital Millennium Copyright Act only extends "Safe Harbor" provisions to internet content sites if they don't know infringement is occurring on their site and remove infringed works when they are brought to their intention.  The Digital Millennium Copyright Act (DMCA) 17 U.S.C. §512(c)(1)(A) states that a service provider cannot be held liable for infringing material uploaded to their site as long as:

1. The services do not have actual knowledge that the material, or an activity using the material on the system or network, is infringing;

2. In the absence of such actual knowledge, is not aware of facts or circumstances from which infringing activity is apparent; or

3. Upon obtaining such knowledge or awareness, acts expeditiously to remove, or disable access to, the material.

The YouTube emails certainly damaged Google's case.  However, if it can prove its big claims about Viacom, it could well have a victory on its hands.  The site does seem to have current precedent in its favor -- in September 2009, much smaller video site Veoh won in a court case brought by Universal Music Group.  Veoh's victory came thanks to applying the "Safe Harbor" defense.

The case is critical as the amount Viacom is seeking is almost as much as the purchase price of the site itself.  Google paid $1.65B USD to acquire YouTube in October 2006, about a year and a half after the first video was uploaded to the site on April 23, 2005.  The site still struggles with profitability -- its daily bandwidth expenses alone are over $1M USD, and it's trying to transition to high-definition offerings.