Google Reveals Copyright Infringement Lawsuits Over Video-Sharing Service in SEC Filing
{{#rendered}} {{/rendered}}Google Inc.'s online video service has been sued for copyright infringement, providing a possible preview of the legal trouble that may plague the Internet search leader after it takes over YouTube Inc. and its library of pirated clips, the company said Wednesday.
Without providing detail, Google disclosed the video copyright lawsuit in a quarterly filing with the Securities and Exchange Commission. A Google spokesman didn't have any further information about the suit late Wednesday afternoon.
After Google launched its online video service in January, the Mountain View-based company quickly found itself trying to catch up with YouTube — an austere startup that emerged as a pop culture sensation a little more than a year after its February 2005 inception in a Silicon Valley garage.
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Abandoning its attempts to eclipse YouTube, Google last month negotiated a $1.65 billion deal to buy the 67-employee company.
Much of YouTube's success has been driven by easy access to copyrighted video clips posted on the site by the Web site's millions of users. YouTube removes videos when copyright owners complain, but pirated clips continue to crop up.
{{#rendered}} {{/rendered}}The recurring problem has raised fears that some copyright owners are delaying legal claims against YouTube until Google completes the acquisition some time during the few weeks. While San Bruno-based YouTube has been subsisting on $11.5 million in venture capital, Google has accumulated $10.4 billion in cash.
In Wednesday's filing, Google acknowledged it could face more copyright suits once the YouTube deal closes.
Google didn't quantify its possible legal liability but outsiders have been taking a stab at it.
{{#rendered}} {{/rendered}}A widely circulated theory posted on the Internet speculated that Google had set aside $500 million of the YouTube purchase price to pay copyright settlements.
Google Chief Executive Officer Eric Schmidt dismissed that theory as untrue in a Tuesday appearance at the Web 2.0 Summit in San Francisco. He then reiterated Google's commitment to address the concerns of copyright holders.
"YouTube had been on this path and together we will get there more quickly," Schmidt said.
{{#rendered}} {{/rendered}}Just before the Google sale was announced, YouTube negotiated licensing agreements with three of the world's largest record companies — Vivendi's Universal Music Group, Sony BMG Music Entertainment and Warner Music Group Corp.
Because it indexes so much material owned by others, Google has become accustomed to fielding complaints about copyright infringement. Some of the disputes have triggered lawsuits for everything from Google's efforts to make digital copies of library books to its search engine's ability to display snippets of news stories and photos appearing on other Web sites.
Those suits haven't become a big financial drain on Google yet, and investors so far appear confident the company's lawyers will minimize the damage from any claims brought on by the YouTube purchase. Google shares gained $2.43 Wednesday on the Nasdaq Stock Market to close at $475 — about 15 percent above the price before word of the YouTube deal first leaked out.
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