Inside Viacom’s $1B YouTube Suit: ‘Bad Vibe’ E-Mails Unsealed

In its long-running copyright case against YouTube, Viacom presented evidence that the video site ignored rampant copyright infringement in its early days, fearing that to crack down on such content violations would slow its growth.

Filings by the prosecution and defense, unsealed yesterday by a U.S. District Court, portray deep rifts within Viacom about YouTube’s importance to its business as a promotional vehicle. Meanwhile, Viacom’s filings suggest YouTube’s founders exchanged frequent cavalier e-mails – now public for the first time – about flagrant copyright abuses on the site.

In one such correspondence, founder Steve Chen wrote to co-founders Jawed Karim and Chad Hurley, “We have to keep in mind that we need to attract traffic. how much traffic will we get from personal videos? remember, the only reason why our traffic surged was due to a video of this type… viral videos will tend to be THOSE type of videos.”

In its defense, YouTube said it had no way of knowing which content Viacom itself had uploaded. It says Viacom hired at least 18 different agencies to upload the media conglomerate’s copyrighted video to the site, and that it “roughed up” those clips to make them appear pirated. Additionally, YouTube states Viacom sent employees to Kinko’s to use computers that couldn’t be linked to the company.

“Viacom’s efforts to disguise its promotional use of YouTube worked so well that even its own employees could not keep track of everything it was posting or leaving up on the site,” YouTube wrote in a blog post yesterday. “As a result, on countless occasions Viacom demanded the removal of clips that it had uploaded to YouTube, only to return later to sheepishly ask for their reinstatement.”

It’s now been three years since Viacom sued YouTube for $1 billion in damages related to its copyrighted content. Both parties have asked the judge in the case for a summary judgment, which would allow a ruling based on available facts without a trial.

In its filings, Viacom presented to the court a flotilla of internal memos from Google and YouTube – including some very early e-mail correspondence between YouTube’s co-founders about how to handle instances of copyright infringement on the site. In one such message from June 2005, YouTube co-founder Steve Chen told his fellows, “We got a complaint from someone that we were violating their user agreement. i *think* it may be because we’re hosting copyrighted content.”

A month later, Chen chastised fellow co-founder Karim for uploading copyrighted content directly. He 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…when one of the co-founders is blatantly stealing content.”

The early e-mail exchanges paint a picture of three young entrepreneurs uncertainly debating what their approach to copyrighted content should be. Often, Hurley, Chen, and Karim appear caught between a desire to grow YouTube’s audience and video viewing activity at all costs, and a desire to play nice with big media.

“I just don’t want to create a bad vibe… and perhaps give the users or the press something bad to write about,” Hurley wrote in August 2005.

Some of the e-mails deal with a copyright flagging feature, launched in early September. Chen wrote of the feature, “The perception is that we are concerned about this type of material and we’re actively monitoring it.” But he made clear the removal of flagged content would not be automatic. “The actual removal of this content will be in varying degrees. We may want to keep some of the borderline content on the site but just remove it from the browse/search pages.”

YouTube removed the copyright flagging feature in late September 2005, Viacom notes, apparently to protect itself from liability. In an e-mail to his fellow co-founders, Hurley wrote, “If we don’t remove them we could be held liable for being served a notice.”

Much of YouTube’s legal argument in the Viacom case revolves around showing the clear value Viacom perceives in promoting its content on YouTube. In addition to instructing internal staffers and marketing agencies to upload its content from a variety of accounts, it also advertised with YouTube and – in July 2006 – even sought to buy the site.

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