4:51 p.m. | Updated A federal appeals court on Thursday reversed a lower court's decision to throw out a $1 billion lawsuit that was filed against YouTube by Viacom and other media companies five years ago.
The copyright infringement suit, which has become a symbol of the clash between entrenched media companies and the upstarts that are now competing with them, sought damages for clips from shows that had been uploaded by users to YouTube.
A federal judge sided with YouTube in 2010, saying the company was shielded from Viacom's copyright claims by "safe harbor" provisions of the Digital Millennium Copyright Act, or D.M.C.A . Viacom subsequently appealed.
On Thursday, the United States Court of Appeals for the Second Circuit vacated the original ruling, stating that "a reasonable jury could conclude that YouTube had knowledge or awareness" of copyright infringement "at least with respect to a handful of specific clips."
It said a lower court should review whether YouTube, in its nascent state as a video Web portal, had been willfully blind to the fact that some of its users were uploading copyrighted videos.
Lawyers and analysts say the twists and turns in the lawsuit have implications for the D.M.C.A., which gives some protections to Web site operators. In a statement on Thursday, YouTube said that "the Second Circuit has upheld the longstanding interpretation of the D.M.C.A. and rejected Viacom's reading of the law."
"All that is left of the Viacom lawsuit that began as a wholesale attack on YouTube is a dispute over a tiny percentage of videos long ago removed from YouTube," the statement continued. "Nothing in this decision impacts the way YouTube is operating. YouTube will continue to be a vibrant forum for free expression around the world."
Viacom, however, said it was pleased by the ruling, writing, "The court delivered a definitive, common sense message – intentionally ignoring theft is not protected by the law."
YouTube has come a long way since the original lawsuit was filed. It is now a hub for many professionally produced video from Viacom and other media companies. On Wednesday, in fact, a deal was announced between YouTube and Viacom's Paramount Pictures unit that will let users rent some Paramount movies on the Web site. Paramount already had similar deals with other sites.
Malik Ducard, the director of content partnerships for YouTube, praised Paramount in a statement, saying, "Paramount Pictures is one of the biggest movie studios on the planet. We're thrilled to bring nearly 500 of their films to movie fans in the U.S. and Canada on YouTube and Google Play."
This post has been revised to reflect the following correction:
Correction: April 5, 2012
An earlier version of this post misstated the timing of the appellate court ruling and of a Paramount-YouTube deal. The court ruling was Thursday, not Wednesday; the Paramount deal was announced Wednesday, not Tuesday.
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