Could a $1B lawsuit be the end for YouTube?

Why are you still sitting at your desk? Viacom sued YouTube and you should be running around like Mark Cuban with his head cut off.

Below, Viacom's argument as presented in their official complaint, filed in New York federal district court. I've taken the liberty of editing the language a bit and consolidating a few points, since they would be repetitive for anyone who follows Google or YouTube news. But I've also included direct quotes. If something's not clear, let me know in the comments and I'll fix.

1. YouTube's value is largely based on infringing works.
2. Google maintains control over YouTube's business, and contributes to YouTube's infringement by syncing Google Video search with YouTube's library.
   
3. Although individual users are the ones to upload videos, YouTube copies the videos to its servers, indexes the metadata, and creates thumbnails. YouTube then publicly displays and performs the infringing works. The complaint: "Thus, the YouTube conduct that forms the basis of this Complaint is not simply providing storage space, conduits, or other facilities to users who create their own websites with infringing materials. To the contrary, YouTube itself commits the infringing duplication, public performance, and public display of Plaintiffs’ copyrighted works, and that infringement occurs on YouTube’s own website, which is operated and controlled by Defendants, not users."
   
   * This is an important point, since Google has argued -- as any ISP or file storage provider would argue -- that they are not liable for illegal actions taken by users, as they are not aware of that activity until notified by a third party.
   
   
4. Embedded videos and e-mailing vidoes from YouTube constitute public performance, too.
   
5. The embedded videos that attract the most users are copyrighted works, and YouTube displays its brand over them.
6. YouTube doesn't have a license for these works.
7. "Defendants have actual knowledge and clear notice of this massive infringement, which is obvious to even the most casual visitor to the site. The rampant infringement of Plaintiffs’ copyrights on YouTube is open and notorious and has been the subject of numerous news reports."
   
   * Should this case go to trial, Viacom will have to somehow prove that Google has continuous knowledge of the infringement. Seeing that there are infringing works on the site and seeing that fact in a database that you monitor are two different things.
   
   
8. It's not like the infringement is a secret, since keywords pointing to copyrighted works are apparent in the tags, and since the content owners' logos appear in the works.
   
   * Anecdotal? I'm sure Google could argue that they can't possibly police tags and visual clues, especially given that several content companies upload their own material for various reasons.
   
   
9. "YouTube derives advertising revenue directly attributable to the infringing works, because advertisers pay YouTube to display banner advertising to users whenever they log on to, search for, and view infringing videos. Through the embed function and in other ways, infringing videos also draw users to YouTube’s site in the first instance, and YouTube then derives additional advertising revenue when those users search for and watch other videos on the site. In either event, there is a direct causal connection between the presence of infringing videos and YouTube’s income from the additional “eyeballs” viewing advertising on the site. The draw of infringing works has also made an enormous contribution to the explosive growth of YouTube, resulting in the remarkable $1.65 billion valuation Google placed on it only a short time after its founding. Thus, infringement of Plaintiffs’ works contributes substantially and directly to the value of YouTube’s business."
10. YouTube has the right and ability to control the videos on its site, and even imposes terms of use on uploaders. YouTube also proactively removes pornography.
    
    * The active policing of pornography is a big point. Google/YouTube is obviously able to apply some content standards, but only when it suits their purposes it would seem. However, Google may be able to argue that the detection of porn -- via filters that monitor skin tones and/or keywords -- is different from detecting the wide variety of copyrighted works that are uploaded.
    
    
11. YouTube also sends cease and desist letters to persons and companies that provide services allowing people to copy videos off YouTube's servers. YouTube does this because they can't profit if users don't come to the 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."
    
12. "In stark contrast, because it profits directly from the infringement of Plaintiffs’ works on its website, YouTube has failed to employ reasonable measures that could substantially reduce, or eliminate, the massive amount of copyright infringement on the YouTube site from which YouTube directly profits. Even though Defendants are well aware of the rampant infringement on the YouTube website, and YouTube has the right and ability to control it, YouTube’s intentional strategy has been to take no steps to curtail the infringement from which it profits unless notified of specific infringing videos by copyright owners, thereby shifting the entire burden – and high cost – of monitoring YouTube’s infringement onto the victims of that infringement."
13. Even if a company issues a takedown notice, the video reappears with only a small part changed. YouTube doesn't block repeat offenders from doing this, and doesn't prevent users who have been kicked off from signing up again.
14. There is an inevitable time lag between when a video appears on the site and when a content owner sends a takedown notice.
15. YouTube is also deliberately interfering with copyright owners' ability to find copyrighted works. YouTube limits searches to returning only 1,000 results, thus limiting an owner from seeing all the infringing works. Even if the owner issues a takedown notice for 1,000 works, another 1,000 will appear.
16. YouTube also allows "friends" on the site to share videos privately, and which can't be seen by copyright holders.
17. Despite all this, YouTube offers protections to companies that sign license agreements. "By limiting copyright protection to business partners who have agreed to grant it licenses, YouTube attempts to coerce copyright owners to grant it a license in order to receive the protection to which they are entitled under the copyright laws."
18. Even if Google eventually provides copyright protection, that won't compensate content owners from the damage already incurred.