YouTube has been all over the news lately, owing to its $1.6 billion acquisition by Google. Many of the articles have observed that the video sharing website faces a thicket of copyright issues, because users frequently post both copyrighted videos and homemade videos containing some copyrighted content (e.g., commercial songs as background music). A Universal Music executive was widely quoted recently as saying that YouTube and MySpace are large-scale copyright infringers.

YouTube hasn’t yet been targeted by a major lawsuit. Indeed, it has cut deals with a number of media companies, including Universal Music. But earlier this week, Universal filed lawsuits against two smaller video sharing websites, Bolt.com and Grouper.

We haven’t seen the legal papers yet, so we don’t know all the details about what actions Bolt.com and Grouper may or may not have taken to foster infringement. But these cases have the potential to set important precedents. It’s a safe bet that Bolt.com and Grouper will argue that they take down copyrighted content when notified by content owners, as required under the Digital Millennium Copyright Act’s “notice and takedown” safe harbor provisions. Universal will argue that the activities of Bolt.com and Grouper go beyond what is protected under the safe harbor.

The question of when hosting and disseminating content supplied by users can lead to liability is a crucial one. The popularity of user-generated content, and sites for sharing such content, is exploding. This doesn’t appear to be momentary fad — it’s directly related to the empowering nature of the Internet and digital technologies.

Of course, litigation in this area may be partly aimed at providing leverage for negotiating deals. Established media companies have shown interest in harnessing the power and popularity of video sites and viral distribution. YouTube’s deals reportedly involve developing a mechanism for content companies to receive a share of the ad revenue associated with viewing their content. News Corp. recently acquired MySpace. And in an interesting twist, Grouper — one of the sites being sued — was purchased in August by Sony Pictures. So some major content companies could find themselves on both sides of this new set of copyright disputes.

UPDATE — We have put together an overview of legal developments since the Supreme Court’s Grokster decision that includes the cases against Grouper and Bolt.

This entry was posted on Wednesday, October 18th, 2006 at 6:14 pm and is filed under Digital Copyright. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.