Last updated: March 13, 2007 11:22 pm

Viacom seeks $1bn YouTube damages

Viacom has launched the first legal challenge against YouTube, suing the Google-owned internet video site for “massive intentional copyright infringement” and asking a federal court for more than $1bn in damages.

In its suit, Viacom claimed that more than 160,000 of its clips, from programmes such as The Daily Show with Jon Stewart and SpongeBob SquarePants, had been published on YouTube without permission and accused the company of a “brazen disregard” for copyright law.

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The legal action represents the sharpest clash between traditional media companies and a new generation of internet start-ups, which have attracted audiences by letting users post music and video clips on their sites.

Viacom, which owns MTV, Comedy Central, Nickelodeon and other youth-oriented brands, has argued that YouTube, which Google acquired for $1.65bn in October, has used its copyrighted material without permission to build a massive audience.

Last month it demanded YouTube remove more than 100,000 of its video clips after the companies failed to reach an agreement on licensing. Negotiations foundered over financial terms and questions about who would control advertising relationships.

Philippe Dauman, Viacom’s chief executive, expressed frustration that Google had not installed filtering technology to enable content companies more easily to determine when their material had been posted on YouTube. “Quite honestly, in my 20 to 25 years in this business, I’ve never encountered a major company which has behaved in such a wilful way for so long,” Mr Dauman said.

Google said it was confident YouTube had respected the legal rights of copyright holders and believed the courts would agree.

Still, the lawsuit is a setback for the company’s efforts to forge commercial relationships with the biggest content companies, which it launched soon after acquiring the video site. Eric Schmidt, Google’s chief executive, led many of the talks. Yet in spite of some short-term and promotional deals, the big media groups which produce the most popular programming have largely rebuffed YouTube. Some, such as NBC Universal, have joined Viacom in expressing their frustration with the site.

In addition to copyright and financial questions, traditional media companies are wary of allowing Google to achieve dominance in the fast-growing market for internet video.

Some companies, including NBC and News Corp, have held discussions about creating possible alternatives to YouTube.

Mr Dauman indicated on Tuesday that Viacom would continue to improve its own websites. It has also struck deals in recent months to supply its content to other internet groups such as Joost, a broadband television company started by the founders of Skype.

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