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Viacom's $1 billion lawsuit against Google's YouTube kicks off what could be the end game for the video sharing site.

Viacom filed a complaint in the Southern District of New York that alleges a "massive intentional copyright infringement of Viacom's entertainment properties." Viacom seeks $1 billion in damages and an injunction prohibiting Google and YouTube from further copyright infringement (this would probably mean that Google would have  stop any Viacom video from being uploaded).

The complaint contends 160,000 unauthorized clips have been available on YouTube and viewed more than 1.5 billion times. And in a roundabout way Viacom can prove damages–the company said its own traffic went up when it pulled its video from YouTube. On Viacom's earnings conference call, CEO  Philippe Dauman said "since we issued the takedown notice, video streaming traffic on our sites has increased dramatically."

That's the basic news. The next question: What does this mean for YouTube?

The short answer: More lawsuits. As Mark Cuban has noted previously lawsuits are a huge risk for GooTube. Can Viacom sister company CBS be that far behind with a lawsuit? How about NBC? Howard Stern? Any actor seeking a royalty? Cuban is serving YouTube subpoenas for giggles. Meanwhile, Google is loaded. The damages are endless.

It's likely that Viacom will trigger a lawsuit avalanche. That possibility raises an interesting question: If you pull all of the professional content from YouTube will it continue to thrive?

Judging from my own behavior–I go to YouTube to watch clips I missed–YouTube will look less appealing without professional content. I just don't care about most of the homemade items. I'm probably not alone in that assessment. Which is why this Viacom suit will be very interesting to watch.

* Excerpts From Viacom's Scathing Complaint *

Whether Viacom is looking for leverage, a test of copyright law or the end of YouTube isn't exactly clear.

One thing is certain: Viacom doesn't pull punches. GoogleWatch cooked up 18 reasons why Viacom is screaming about YouTube. The complaint that has everyone talking has many more than that.  

Here are some choice excerpts direct from the complaint (note the subheads are my interpretation of Viacom's claims):

YouTube as copyright killer (maybe economy too):

YouTube has harnessed technology to willfully infringe copyrights on a huge scale, depriving writers, composers and performers of the rewards they are owed for effort and innovation, reducing the incentives of America’s creative industries, and profiting from the illegal conduct of others as well. Using the leverage of the Internet, YouTube appropriates the value of creative content on a massive scale for YouTube’s benefit without payment or license. YouTube’s brazen disregard of the intellectual property laws fundamentally threatens not just Plaintiffs, but the economic underpinnings of one of the most important sectors of the United States economy.

Viacom on the neverending war:

YouTube’s website purports to be a forum for users to share their own original “user generated” video content. In reality, however, a vast amount of that content consists of infringing copies of Plaintiffs’ copyrighted works, including such popular (and obviously copyrighted) television programming and motion pictures as “SpongeBob SquarePants,” “The Daily Show with Jon Stewart,” “The Colbert Report,” “South Park,” “Ren & Stimpy,” “MTV Unplugged,” “An Inconvenient Truth,” “Mean Girls,” and many others. Unauthorized copies of these and other copyrighted works are posted daily on YouTube and each is viewed tens of thousands of times.

YouTube does infringement on purpose:

Defendants actively engage in, promote and induce this infringement. YouTube itself publicly performs the infringing videos on the YouTube site and other websites. Thus, YouTube does not simply enable massive infringement by its users. It is YouTube that knowingly reproduces and publicly performs the copyrighted works uploaded to its site.

YouTube has benefited greatly (Duh: $1.65 billion smackaroos!):

Defendants know and intend that a substantial amount of the content on the YouTube site consists of unlicensed infringing copies of copyrighted works and have done little or nothing to prevent this massive infringement. To the contrary, the availability on the YouTube site of a vast library of the copyrighted works of Plaintiffs and others is the cornerstone of Defendants’ business plan.

YouTube puts the burden of proof on copyright owners:

YouTube has deliberately chosen not to take reasonable precautions to deter the rampant infringement on its site. Because YouTube directly profits from the availability of popular infringing works on its site, it has decided to shift the burden entirely onto copyright owners to monitor the YouTube site on a daily or hourly basis to detect infringing videos and send notices to YouTube demanding that it “take down” the infringing works.No DRM for YouTube:Moreover, YouTube has deliberately withheld the application of available copyright protection measures in order to coerce rights holders to grant it licenses on favorable terms.

YouTube is sneaky:

YouTube has also implemented features that prevent copyright owners from finding infringing videos by searching the YouTube site. YouTube thereby hinders Plaintiffs’ attempts to locate infringing videos to protect their rights. At the same time, YouTube allows its users to make the hidden videos available to others through other YouTube features like the “embed,” “share,” and “friends” functions. In this way, YouTube continues to profit from the infringement, while hindering Plaintiffs from preventing it.

And…

On information and belief, YouTube has also sent cease and desist letters to persons who provide software that can be used to make copies of videos from YouTube’s library, asserting that such use is not “authorized.” In truth, YouTube opposes such copying because YouTube receives advertising revenue and new users only if viewers are drawn to YouTube’s own site to view videos, not when users make copies that they can share with others independently of YouTube’s site. Thus, when it is in YouTube’s financial interest to do so, it proactively polices conduct it regards as unauthorized, even on other websites.

The Google-YouTube circle of copyright hell:

Google has also recently launched a feature on Google’s own website whereby a search for videos returns thumbnails and results for videos on YouTube, thereby participating in, inducing, contributing to, and profiting from the infringement on YouTube. Additional massive damages to plaintiffs and others have been caused by Google’s preservation and backing of YouTube’s infringing business model.

The money shot:

Defendants’ infringement has harmed and continues to harm the interests of authors, songwriters, directors, producers, performers, and many other creators. If left unchecked, rampant infringement will gravely undermine Plaintiffs and other companies that generate creative works, and will threaten the livelihoods of those who work in and depend upon these companies. Plaintiffs therefore have no choice but to seek immediate redress. Plaintiffs seek a declaration that Defendants’ conduct willfully infringes Plaintiffs’ copyrights, a permanent injunction requiring Defendants to employ reasonable methodologies to prevent or limit infringement of Plaintiffs’ copyrights, and statutory damages for Defendants’ past and present willful infringement, or actual damages plus profits, of at least one billion dollars.

Source: Viacom's Lawsuit Could Mean YouTube's End Game