Media heavyweights Viacom and Google announced last week that their massive, seven-year copyright lawsuit has settled, just days shy of arguments on the pending appeal.
The companies jointly issued the following statement: “This settlement reflects the growing collaborative dialogue between our two companies on important opportunities, and we look forward to working more closely together.” While terms of the settlement remain undisclosed,reports state that no money traded hands.
The parties’ legal battle began back in 2007, when Viacom, owner of media platforms such as MTV, Comedy Central, Nickelodeon and Paramount Pictures, filed suit in New York federal court against Google (shortly after its acquisition of YouTube), alleging that YouTube was knowingly posting Viacom’s copyrighted shows and clips without permission. Among the content at issue were episodes of South Park and The Daily Show. Viacom sought $1 billion in damages against Google for the alleged copyright violations and argued that YouTube had the responsibility to remove pirated content. Google defended by seeking protection under the copyright laws and maintained that it would, and did, take down videos specifically identified by copyright owners.
Viacom’s suit was an uphill battle, which may very well be the reason why it chose to go the “collaborative dialogue” route rather than to continue its losing fight. Viacom was first knocked down in 2010 when the district court granted summary judgment for Google, finding that Google was acting “within the law” under the safe harbor provisions of the Digital Millennium Copyright Act (DMCA). The court held that due to the sheer volume of content on the YouTube site, Google could not have actual knowledge of pirated content, and could therefore not be turning a blind eye to such content. When given notice as required under the DMCA, Google removed the material. Viacom appealed the decision, and the Second Circuit revived the case, but sent it back to the district court, which again ruled in Google’s favor in 2013. Viacom again appealed the decision and the parties were due back into court yesterday.
The settlement reflects the change in the market in terms of both the impact of and control over the Internet over the past seven years. While traditional media companies like Viacom first viewed Internet outlets such as YouTube as a threat to their business in 2007, the outlook has since shifted from one of fear to one of opportunity.
Media companies have grown smart about utilizing outlets like YouTube, be it through licensing, advertising, or on-demand play. Google/YouTube, too, has played a role in changing the traditional media company sentiments toward its business by doing what it can to minimize online piracy. Since 2007, the company has been active in legally licensing content, and has adopted a filtering technology, Content ID, which detects copyrighted material and alerts media companies of possible unauthorized content use.
So the open issues of the suit were resolved in the market, rendering the decision to settle smart and strategic. As massive as Viacom is, it could not shake the growth of the Internet or the strength of the DMCA. And as they say, if you can’t beat ‘em, join ‘em.