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Wednesday, October 18, 2006

Universal Music Group sues Grouper and Bolt: Let's set some legal precedent

Universal Music Group is suing the video sites Grouper and Bolt, alleging that their businesses have built their businesses "on the backs" of Universal artists, allowing music videos and songs to be posted without permission or compensation.

Here's the LA Times coverage...Wall Street Journal...NYTimes/Reuters. From that last piece:

    Universal, with artists like U2, Mary J. Blige and Mariah Carey, said it was seeking damages of as much as $150,000 for each incident of copyright infringement, plus costs. It estimated that thousands of videos were being viewed on both sites.

My quick take: video-sharing sites believe they are protected by the Digital Millennium Copyright Act, passed by Congress in 1998. This, in essence, says that a copyright holder needs to notify a hosting site (like a Grouper, Bolt, or YouTube) that they've got illegal content up. As long as the site removes it (and meets some other criteria, too), the DMCA is supposed to protect the site from lawsuits.

Of course, real life is not like `Survivor': there is no such thing as total immunity from lawsuits. This one will establish whether the DMCA really does protect video sharing sites.

What would be the implications if Universal won? It could force video sites to have a human review every piece of content that they receive (YouTube says it receives 65,000 videos a day), or develop software (which does not exist today) to automatically identify copyright-infringing images and audio. And that added expense could cause sites to conclude that hosting user-posted content isn't worth the trouble and expense of reviewing it. (If a site didn't review even one video uploaded by a user, it could potentially be liable for $150,000 if it turns out to be NBC's "Lazy Sunday" sketch from SNL rather than a clip of someone's cat playing the piano.)

One other thought: the legal system moves slowly. By virtue of this lawsuit having been filed, video sharing sites are going to start doing a much better job of policing copyrighted content. By the time the court decides anything, I expect the problem will have diminished significantly.