Pirating software? What a surprise

Miguel Helft has an article in The New York Times about a squabble between Yahoo and YouTube:

Pointing to internal YouTube e-mail messages, Viacom said in a court filing that the video site’s founders turned a blind eye when users uploaded copyrighted clips so they could amass a big audience and sell the company quickly.
The charge was one of many made by Viacom in filings unsealed on Thursday in its three-year-old copyright lawsuit against YouTube and Google, which bought YouTube in 2006 for $1.65 billion. Google fired back, saying Viacom was distorting the record by taking passages from e-mail messages out of context. It also said Viacom employees and agents “continuously and secretly” uploaded clips from the company’s television shows and movies to YouTube for promotional purposes, even as they were complaining about copyright violations.
“They are both tearing each other up, and both are scoring points,” said Eric Goldman, director of the High-Tech Law Institute at the Santa Clara University School of Law.
The lawsuit accused YouTube of profiting from thousands of clips from Viacom movies and shows that were uploaded to the site without permission. It was filed at the height of tensions between Google and media companies over copyrights — tensions that have since eased substantially. YouTube, which is by far the Web’s largest video site, has set up an automated system to detect infringing videos and signed revenue-sharing agreements with more than a thousand media companies.
But more broadly, media companies remain wary of losing control as more of their products become digital, making them easier to copy.
As part of their motions for summary judgment in the case, both sides released hundreds of pages of documents and exhibits on Thursday, including internal documents obtained through the discovery process. Among them were scores of email messages from YouTube’s founders— Chad Hurley, Steve Chen, and Jawed Karim— discussing what to do about clips uploaded to YouTube that clearly belonged to major studios or television networks. In a 2005 email message to Roelof Botha, a partner at Sequoia Capital, YouTube’s major outside investor, Mr. Chen described a system that the company had put in place for users to flag copyrighted and pornographic content: “That way, the perception is that we are concerned about this type of material and we’re actively monitoring it.” Mr. Chen goes on to acknowledge that much of the infringing material will remain on the site, but that users won’t be able to easily stumble upon it. Google countered that the message was truncated and taken out of context, and that it merely suggested that YouTube was serious about policing its site for copyrighted content.
One email message revealed that, even as YouTube’s founders were discussing how to deal with copyrighted clips, one of them was uploading such material. In July of 2005, Mr. Chen wrote: “Jawed, 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.” Google said that message referred to “viral videos”, not pirated media content.
In another e-mail message from January of 2006, a Google executive refers to a conversation with Mr. Hurley and another YouTube executive about copyrights, and compares YouTube with the much less popular Google Video service. “YouTube is at an advantage because they aren’t the target that we are with issues like this. They are aware of this (I spoke with them on Friday) and they plan on exploiting this in order to get more and more traffic.”
In its brief, Google pointed to internal Viacom documents in which executives discussed buying YouTube and described it primarily as a place for user-created videos, not a haven for pirated content as they assert in the suit. “Consumption of ‘branded’ content on YT is relatively low,” an executive wrote in an internal presentation from July 2006.
Google also said Viacom filed the suit only when its negotiations over a partnership agreement with YouTube ended after Google bought the site. It said the suit was part of a push to get better licensing terms for its content. Google said Viacom used various methods to cover its tracks when uploading videos to YouTube. It hired outside marketing agents, used email addresses that couldn’t be traced to Viacom when registering accounts, and uploaded videos from places like Kinko’s, rather than from company computers, Google said.
In one e-mail exchange, employees of the MTV unit of Viacom discussed how to alter a clip they were uploading so it would appear to be unauthorized, presumably because that might generate more interest in it online. “The goal is to make it look ‘hijacked’,” one employee wrote.
“Viacom’s efforts to hide the source of the content it caused to be posted on YouTube were too good,” Google said in its filing, adding that “Viacom and its lawyers were unable to recognize that dozens of the clips alleged as infringements in this case were uploaded to YouTube with Viacom’s express authorization.”
Given Viacom’s tactics, Google argued that it would have been impossible for its employees to know which videos were uploaded without permission. One of Google’s central defenses is that YouTube always complied with the Digital Millennium Copyright Act by promptly taking down videos whenever a copyright owner said they had been uploaded without permission.
The Viacom filing suggests that as Google was trying to compete with YouTube in early 2006, executives at the highest levels of Google debated whether to emulate YouTube’s more lax approach to copyright. “Is changing our policy to increase traffic knowing before that we’ll profit from illegal downloads how we want to conduct business? Is this Googley?” asked David Eun, then a vice president for content partnerships.
The filings suggest that Eric E. Schmidt, the chief executive, supported a more liberal copyright policy for Google Video, while Sergey Brin, a co-founder, opposed it. At one point, a Google Video executive recoiled at the notion that Google would buy YouTube: “I can’t believe you’re recommending buying YouTube... they’re 80% illegal pirated content.” Google bought YouTube six months later.
While most media companies are no longer fighting with YouTube, some of the biggest still view it as a rival. Despite a multitude of content deals, YouTube has struggled to build a large database of full-length television shows and movies. And it faces rising competition for that kind of content from sites like Hulu, a joint venture between NBC Universal, Fox and ABC.