Software Company [Rosetta Stone] Sues Google for Trademark Infringement [United States]

Rosetta Stone, maker of the popular foreign language software, filed a federal trademark suit against Google in Virginia Friday, alleging that one of the Web giant's major advertising programs allows companies to confuse consumers.

The suit, filed by Gibson, Dunn & Crutcher partner Terence Ross at the U.S. District Court for the Eastern District of Virginia, is just the latest to target Google for its AdWords program, which lets companies buy advertisements that run alongside its search engine results. The ads are triggered by certain keywords, and show up as "sponsored links."

According to the complaint, since 2004, Google has let companies attach their ads to trademarked keywords they do not own. So a search for Rosetta Stone might bring up the company's official Web site, as well several paid advertisements for its competitors. Google also allows companies to use those trademarked terms in the headlines of their ads.

Rosetta Stone's suit accuses Google of allowing companies to "free ride" on its brand and of "hijacking" consumers by confusing them into clicking on the wrong sites.
"Google either is misleading or will mislead consumers in innumerable different ways," the complaint states. "Accordingly, it is impossible for Rosetta Stone to cure this problem merely by pursuing remedies against Google's advertisers alone."

Google has been hit with a string of similar lawsuits over its AdWords program. In April, the 2nd U.S. Circuit Court of Appeals ruled that one of those suits could go forward after a lower court had dismissed it. The appeals court found that Google was using the trademarks in an act of commerce, giving the trademark owners the right to file a claim.

With that legal issue resolved, Gibson's Ross said that juries will have to decide whether Google's practice is likely to confuse consumers.
"There's not going to be any quick resolution of any of these" suits, he said. "You could get different outcomes from different juries over time."

Google itself appears to have expected the legal trouble. In its complaint, Rosetta Stone quotes from one the company's Securities and Exchange Commission filings from 2004, shortly after it adopted its current trademark policy.
"As a result of this change in policy, we may be subject to more trademark infringement lawsuits," the company stated. "Adverse results in these lawsuits may result in, or even compel, a change in this practice which could result in a loss of revenue for us, which could harm our business."

According to Ross, however, there seems to be no sign of Google backing down from the practice. He noted that the company started letting trademarked words into headlines, for instance, after the 2nd Circuit's ruling.

This article first appeared on The BLT: The Blog of Legal Times.

Google Must Face Trademark Suit Involving Keyword Ads [2nd Circuit; United States]

In a long-awaited opinion, the 2nd U.S. Circuit Court of Appeals ruled that Google must face a trademark infringement lawsuit for selling keywords that trigger ads.

The three-judge panel reversed a lower court's dismissal of Rescuecom v. Google, 06-4881, in which computer-repair company Rescuecom had claimed that users could be confused by links to competitors' ads that appear alongside Google search results for the company's trademarked name.

Google had persuaded the lower court to toss the case, arguing that its use of Rescuecom's trademark was internal and not a "use in commerce," which constitutes trademark infringement. The dismissal was hailed as a big victory for Google and other search engines, for which keyword advertising is a lucrative business.

The appeals court ruled Friday that "Google's recommendation and sale of Rescuecom's mark to its advertising customers are not internal uses," sending the case back to the trial court. IP lawyers had been anticipating the decision because of mixed rulings on keyword cases.

In dismissing the case, the lower court had relied on 2nd Circuit precedent in the watershed case of 1-800 Contacts v. WhenU.com., which found that 1-800-Contacts didn't have its trademark infringed by keyword advertising sales. In Friday's ruling, the 2nd Circuit expended considerable effort explaining how the Rescuecom case is different. The 2nd Circuit decision doesn't offer that many answers about the legality of keyword advertising. Rescuecom and others will still have to prove their trademarks were infringed in the end.

Yahoo! Supports OpenSocial; Yahoo!, MySpace and Google to Form Non-Profit OpenSocial Foundation [International]

Yahoo!, MySpace, and Google today announced they have agreed to form the OpenSocial Foundation to ensure the neutrality and longevity of OpenSocial as an open, community-governed specification for building social applications across the web. Yahoo!'s support of OpenSocial and role as a founding member of the new foundation are landmarks for the rapidly growing specification which will now offer developers the potential to connect with more than 500 million people worldwide.

The OpenSocial Foundation will be an independent non-profit entity with a formal intellectual property and governance framework; related assets will be assigned to the new organization by July 1, 2008. The foundation will provide transparency and operational guidelines around technology, documentation, intellectual property, and other issues related to the evolution of the OpenSocial platform, while also ensuring all stakeholders share influence over its future direction.

The OpenSocial Foundation website at www.opensocial.org will serve as the portal for the community to find all information about OpenSocial and the foundation as they evolve. Developers and website owners can now visit www.opensocial.org for the latest specifications, links to other resources, and the opportunity to get involved.

Engineers from Yahoo!, MySpace, and Google will continue to work together and with the OpenSocial community to further advance the specification through the new foundation, continuing several core elements of OpenSocial since its announcement by Google, MySpace, and many others in November 2007:
· all specifications are available under a Creative Commons copyright license
· public community involvement shapes the specification's direction
· an open source reference implementation called Shindig is being created and developed as a project in the Apache Software Foundation incubator, available at http://incubator.apache.org/shindig/

About OpenSocial
OpenSocial addresses an emerging problem for developers who are eagerly building applications people can enjoy with their friends: before OpenSocial, if a developer built a "favorite photos" application to work on one social network, it would have to be built all over again to work on another site. OpenSocial tackles this problem at its technology ro, providing common "plumbing" that lets social applications run on many different websites without requiring duplicate work from either developers or the websites.
The result is a vast distribution platform for social applications, whether they are for sharing photos or playing games or arranging real-world meetings or any number of other activities ' everything is more fun, interesting, and useful when users can involve their friends and contacts.

Steady Evolution, Important Milestones
Millions of people around the world are beginning to see the benefits of the OpenSocial platform as new features appear on their favorite social networks. MySpace launched the MySpace Developer Platform, which uses the OpenSocial APIs, and began rolling out applications to its users. orkut has also started making OpenSocial applications available to its users, and hi5 will do so at the end of March.

Thanks to the Shindig reference implementation, most websites can have a proof of concept of OpenSocial applications up and running in days. That means websites need only to make this small time investment in order to make thousands of new social features available to their users.

Global members of the OpenSocial community include Engage.com, Friendster, hi5, Hyves, imeem, LinkedIn, Ning, Oracle, Orkut, Plaxo, Salesforce.com, Six Apart, Tianji, Viadeo, XING, and others. In time, OpenSocial will unlock more powerful and pervasive social capabilities across the entire web, as developers' applications can easily reach users across any of the websites, web applications, or social networks they use.

European Commission Approves Google-DoubleClick Deal [International]

The European Commission cleared Google Inc.'s planned $3.1 billion takeover of DoubleClick Inc. after regulators determined that the deal would pose no competition problems.
Wrapping up an in-depth investigation launched in November, the Commission concluded that the deal would be unlikely to harm consumers and that the two companies could not be viewed as rivals, at least for now.

"Even if DoubleClick could become an effective competitor in online intermediation services, it is likely that other competitors would continue to exert sufficient competitive pressure after the merger," the 27-member EC said in a press release following its weekly meeting in Strasbourg, France.

The decision came weeks before the EC's April 2 deadline and follows approval by the Federal Trade Commission. The Brussels decision was widely expected after the EC let a deadline slip for sending a statement of objections, or official list of charges, to the notifying companies.

The ruling vindicates the strategy of Cleary Gottlieb Steen & Hamilton, Google's lead antitrust counsel before the European Union and FTC. Cleary's EU antitrust team was led by Brussels-based partners Francisco-Enrique González Díaz and Maurits Dolmans, assisted by associates Neil Rigby in London and Paul-John Loewenthal in Brussels.

Google and Data Privacy Day

A year after the first Data Protection Day in Europe, Google will be part of the celebration of the now-renamed Data Privacy day, aimed at educating people about their data and how to manage it.

Today is Data Privacy Day, but apparently cake isn't involved, and forget about having a paid holiday, either. We wonder if Hallmark has a card for this?

Though we may take the idea of a day of privacy awareness talked up by Google with a shot of cynicism, the concept remains sound. People have valuable personal information to control, other people would love to steal it, and still more people wish to use it for various reasons. What's an online consumer to do? Well, he could watch a privacy video, Google's third in a series. Or read a handy privacy booklet.

A trio of notables at the search advertising giant discussed Data Privacy Day 2008 (woo hoo!) at the official Google blog. Among the highlights: Google will participate in a data privacy conference at Duke University today.

Speakers from the US and abroad tackle the topic of consumer data privacy. Differences between European and US privacy laws should be a focal point; we see the difference as privacy being mandated in Europe, but largely left up to private industry in the US.

Google also backed the creation of educational materials on teen online privacy. One slide advises teens to "think about tomorrow when acting today."

Google launches 'knol' beta

Google has announced that it is developing a content service that will one day be a rival to Wikipedia. The announcement by the Service Engine giant came a few days back when the company announced that ‘Knol’ the name of the content service will be launched shortly to the general public in the coming next year. ‘Knol’ the company’s term for a unit of knowledge would be a repository of knowledge where readers would be able to read articles from various experts on different topics.

The online encyclopaedia is somewhat different from its rival Wikipedia. Wikipedia on the one hand does not acknowledge its contributors and other readers can edit the original content but Knol on the other hand would acknowledge its contributors and only the contributors would be allowed to edit their articles. Wikipedia is a non-profit ad-free content service whereas Knol would not be ad-free and the authors would be able to benefit from the advertisements placed in their respective pages.

Knol is an ambitious attempt by Google to streamline and organize information on various topics. With this new service anyone would be able to write a webpage on any topic and have it indexed in Google’s search engine. The good thing about this new venture by Google is that the authors would be paid for their contributions. Knol would revolutionize content development and create a platform for expert writers to contribute authentic articles for the benefit of the readers.

Networking, Technology, Nudity and Copyright [Google, Inc. v. Perfect 10, Inc.]

Perfect 10, Inc. ("Perfect 10") alleged that Google, Inc. ("Google") directly and secondarily infringed Perfect 10's copyrights in certain images of nude models. The allegations were based on the operation of Google Image Search, a search engine for images. The claim of direct infringement was based on Google Image Search's use of thumbnails of the copyrighted images. Specifically, using an automated process, Google identifies an image on a web site, captures a reduced-size and reduced-resolution copy of the image, caches the copy on its servers, presents the copy in response to user's searches and responds to a user clicking on a search result by creating a window with two frames: one which displays the search result including the reduced-size image and one which displays the web site where the full-sized version of the image is located. The allegations of secondary infringement were -two fold: (i) vicarious infringement based on the existence of and Google's failure to exercise a practical, legal right to stop or limit others from infringing Perfect 10's copyrights; and (ii) contributory infringement based on Google's distribution of a product which was not capable of a significant non-infringing use and Google's active encouragement of infringement.

The Court of Appeals concluded that Google was not responsible for displaying the full-sized images when a user clicked on a search result: the publisher of the web site which incorporated such images was. Consequently, Google did not directly infringe Perfect 10's copyrights with respect to the full-sized images.

The Court of Appeals found that Google's use of the cached copies of the images was a direct infringement, but it was also found to be a fair use partly because Google use of the copyrighted images was transformative (i.e. for a purpose other than the purpose for which Perfect 10 used the images) and of benefit to society.

Perfect 10's claim of vicarious infringement was unsuccessful. Google's contracts with its advertisers did not amount to a legal right to control their behaviour and Perfect 10 did not identify any other practical means for Google to do so.

Even though the Court of Appeals concluded that Google's search engine had significant uses beyond assisting others to infringe copyright, the question of contributory infringement was remanded to the District Court because it had not considered the following questions: (i) whether or not Google had actual knowledge that infringing materials were being made available through its search engine; (ii) whether or not there were simple measures which Google could take to prevent further damage to Perfect 10's copyrighted images; and (iii) if such measures existed, whether or not Google had failed to implement them.

The decision of the District Court is available at: http://www.ca9.uscourts.gov/coa/newopinions.nsf/DE8297F56287C0BC882572DC007DACC6/$file/0655405.pdf?openelement.
The decision of the Court of Appeals is available at: http://www.cacd.uscourts.gov/CACD/RecentPubOp.nsf/
ecc65f191f28f59b8825728f005ddf4e/3fdcaed8913a22018825711c005055a5?OpenDocument

European Commission will investigate Google's DoubleClick deal

Google's purchase of advertising giant DoubleClick has been thrown into doubt by the European Commission, which has announced that it will launch an in-depth investigation into the deal on competition grounds.

The decision will be a blow to Google, putting a question mark over the deal until at least next spring. The Commission has 90 working days in which to make its decision on the future of the combined company. A decision must be made before 2nd April 2008.

The internet search giant makes most of its money from text ads that appear beside the answers to search queries. Doubleclick is an online ad-serving company whose systems post and monitor internet adverts.

The European Commission, which regulates competition law in Europe, has wide-ranging powers, including the power to block the merger in Europe.

The investigation will look at whether the combined company will be able to use its power to stop others competing with it in the future.

"[The Commission] will investigate whether the merger, which combines the leading providers of respectively, on the one hand, online advertising space and intermediation services, and, on the other hand, ad serving technology, could lead to anti-competitive restrictions for competitors operating in these markets and thus harm consumers," said a Commission statement.

The investigation will also make a more complicated analysis when it decides whether Google's purchase has the effect of eliminating a future competitor.

"The Commission will, in particular, investigate whether without this transaction, DoubleClick would have grown into an effective competitor of Google in the market for online ad intermediation," said the Commission.

The European Commission has been very active in competition cases in the technology sector this year, and won a major victory when Microsoft said it would not appeal a Commission ruling it had disputed since it was made in 2004.

Since summer it has accused memory maker Rambus of abusing its dominant market position and conducting a "patent ambush", and has said that a six year investigation into Intel revealed that the chip giant had an "overall anti-competitive strategy".

Google gets into 'data privacy' hot water

Google's proposed purchase of online ad giant DoubleClick would lead to "a massive violation of data privacy rights", says a German data protection expert.

As reported by web legal experts Out-law.com, the Data Protection Commissioner of the German state of Shleswig-Holstein Thilo Weichert has sent his views to Europe's Competition Commissioner Neelie Kroes saying that the $3.1 billion merger would result in the "fundamental provisions of the European Data Protection Directive [being] violated."

Weichert's views rely on the assumption "that in the event of a takeover of DoubleClick the databases of that company will be integrated into those of Google" he said.

"Such an approach contradicts fundamental data privacy principles of the European Union: limited specific use, transparency, the right to object, the protection of sensitive data and the right to having data deleted," he wrote in the letter.

Google Foe Ends Unique Trademark Suit Over Keywords

After four years of locking horns with Google in court, Michigan-based American Blind and Wallpaper Factory has abandoned its unique trademark infringement case against the Silicon Valley titan.

The end comes just a couple of months shy of a scheduled trial date. Such a trial would have been the first time a jury took a crack at an important question in today's trademark law: whether a search engine infringes when it lets one company pay to place its ad alongside search results on a competitor's name.

In a settlement reached late last week, both sides agreed to halt their claims. American Blind won no concessions whatsoever.

American Blind's chief executive, Joel Levine, said Tuesday the company pulled out for financial reasons, and because American Airlines, which has more money in its litigation coffers, has recently filed a very similar suit.

"American Airlines is more well-suited to take on Google than we are," Levine said. "We sell blinds and wallpaper and that's what we do best. We're not litigators."

American Blind did hire some heavy hitters to handle the Northern California federal court case on its behalf -- New York-based Kelley Drye & Warren and Howrey. Google hired Keker & Van Nest.

Keker partner Michael Page said American Blind's decision wasn't just about money.

"They had a terrible case and they decided it wasn't worth pursuing," he said. "They quit and went home."

Indeed, American Blind suffered some serious setbacks this year, including being sanctioned in June for failing to preserve and hand over relevant documents. Magistrate Judge Richard Seeborg found that, "even though the evidence does not support a conclusion of intentional document destruction or that American Blind or its employees specifically intended to deprive Google of relevant evidence, the record demonstrates a willful indifference at American Blind towards ensuring that relevant documents were preserved, collected, and produced."

The company was ordered to pay Google $15,000 in compensation.

The judge also allowed Google to present evidence at the upcoming trial about American Blind's alleged purchase of its own competitors' trademarked keywords.

Levine, to whom Howrey attorneys referred all comment Tuesday, said the sanctions had "zero" effect on their decision to pull out of the litigation. The CEO pointed out that the case began when Google filed a declaratory judgment complaint against American Blind.

Levine said he thinks Google chose to file suit against American Blind because it is small.

"They chose us," he said. "It's a legal strategy. They picked a sizable company but not a huge one."

Keker's Page disputes this, saying Google filed suit only after American Blind had been threatening to sue for 18 months.

"We didn't pick them because they were a small guy," he said.

In April, U.S. District Judge Jeremy Fogel found that two of American Blind's allegedly infringed trademarks were not well-known enough to support a trademark infringement case. This greatly limited the number of marks at play in the litigation.

Courts across the country have given mixed rulings on whether the search engine advertising model at issue -- which, for Google, is called AdWords -- constitutes trademark infringement, said Eric Goldman, a professor at Santa Clara University School of Law. All other cases of this nature have also ended pretrial, said Goldman, who closely tracks such litigation.

Google has not yet filed a response to American Airlines' complaint, which was brought in North Texas.

Google, the Moon Shot and Copyright [International]

Here is an interesting quote from the article “Google’s Moon Shot; the quest for the universal library” by Jeffrey Toobin, New Yorker, issue of 2007-02-05:

- - - - - - - - quote from article - - - - - - - - -

“Google asserts that its use of the copyrighted books is “transformative,” that its database turns a book into essentially a new product. “A key part of the line between what’s fair use and what’s not is transformation,” Drummond said. “Yes, we’re making a copy when we digitize. But surely the ability to find something because a term appears in a book is not the same thing as reading the book. That’s why Google Books is a different product from the book itself.” In other words, Google says that being able to search books on its site—which it describes as the equivalent of a giant library card catalogue—is not the same as making the books themselves available. But the publishers cite another factor in fair-use analysis: the amount of the copyrighted work that is used in the creation of the new one. Google is copying entire books, which doesn’t sound “fair” to the plaintiff publishers and authors. “Traditional copyright analysis says that a transformation leads to the creation of a new and independent work, like a parody or a work of criticism,” Jane Ginsburg, a professor at Columbia Law School, said. “Copying the entire work, which is what Google is doing, does not preclude a finding of fair use, but it does fall outside the traditional paradigm.”

- - - - - - - - end of quote - - - - - - - - -

By this analogy for use (key-word reference searching of books rather than reading the entire contents) access to this digital storehouse of books is much like access to articles in full-text databases. The difference is that licensing contracts govern usage of copyrighted articles in databases, and the lawsuits of publishers against Google books show that there is no equivalent system for copyrighted books scanned by Google. Another example of the use of books in the way we use journals is a quote elsewhere in the New Yorker article. Google scans the entire book, but makes the text available to the reader only a section at a time.

Point - Counterpoint

“The suits that have been filed are a business negotiation that happens to be going on in the courts. We think of it as a business negotiation that has a large legal-system component to it” — Marissa Mayer, Google

“This is basically a business deal. Let’s find a way to work this out. It can be done. Google can license these rights, go to the rights holder of these books, and make a deal” — Pat Schroeder, president of the Association of American Publishers.

Licensing as a Barrier

“If Google says to the publishers, ‘We’ll pay,’ that means that everyone else who wants to get into this business will have to say, ‘We’ll pay,’ The publishers will get more than the law entitles them to, because Google needs to get this case behind it. And the settlement will create a huge barrier for any new entrants in this field.” — Lawrence Lessig

“Google didn’t get video search right—YouTube did, Google didn’t get blog search right—technorati.com did. So maybe Google won’t get book search right. But if they settle the case with the publishers and create huge barriers to newcomers in the market there won’t be any competition. That’s the greatest danger here.” — Tim Wu

Viacom v. Google [Has Internet Freedom been put to the test?]

The notion of the Internet as a free ride, a place in cyberspace where almost anything is available for nothing, might at last be put to a real test.

After weeks of fruitless negotiations, the media conglomerate Viacom - owner of MTV, Nickelodeon, Comedy Central and Paramount Pictures - sued Google and its wildly popular video-sharing site YouTube yesterday for what it claims is copyright infringement.

Viacom, which is seeking $1 billion in damages, said in its suit that YouTube has benefited from what it called "massive intentional" violations of copyrights of Viacom-owned videos.
The lawsuit represents the biggest face-off between old and new media since the Recording Industry Association of America forced Napster to shut down its song-trading system in 2001. And it could force changes in the delivery of the Internet's biggest draw, its free content, analysts say.

Or it could be a negotiating tactic: Media companies have watched with both fascination and fear as YouTube, which was purchased by search-engine giant Google in November for $1.76 billion, has exploded into a hugely popular online destination, where millions of people view and post videos and short films ranging from the mundane to the bizarre.
The lawsuit likely is one of many to come, said Bruce Sunstein, co-founder of the intellectual property law firm Bromberg & Sunstein in Boston.
"Finding a way of peaceful coexistence is quite a struggle," Sunstein said. "Google's motto is 'Don't be evil,' and you could argue that with YouTube that motto is wearing a little thin."
In a statement, Viacom said YouTube "is a significant, for-profit organization that has built a lucrative business out of exploiting the devotion of fans to others' creative works in order to enrich itself," adding that YouTube and Google "actively engage in, promote and induce this infringement."

Viacom, which last month demanded that Google take down more than 100,000 of its videos from YouTube, is asking the U.S. District Court for the Southern District of New York for an injunction that would bar Google and YouTube from persisting in what it says are the infringing activities.

Google issued a statement saying it had not been served with the lawsuit but was "confident that YouTube has respected the legal rights of copyright holders."
In its own statement, YouTube pointed out that its video-sharing system actually benefits copyright owners because it exposes their material to a huge audience:
"YouTube is great for users and offers real opportunities to rights holders: the opportunity to interact with users; to promote their content to a young and growing audience; and to tap into the online-advertising market."

Many Internet aficionados sided with YouTube, and said Viacom's lawsuit would probably not have a revolutionary impact on the Internet as a whole.
Jeff Jarvis, who blogs about media at Buzzmachine.com and is director of the interactive journalism program the City University of New York's Graduate School of Journalism, yesterday posted an entry in which he called the Viacom lawsuit "boneheaded." But he wrote in an e-mail later that he did not think it meant "the beginning of the end of the free Internet."
"There are too many smart media companies that realize the value of your fans recommending you," Jarvis wrote. He compared Viacom's move to the RIAA's legal efforts against Napster, which agreed to pay more than $26 million to settle its disputes with music publishers and songwriters.

"This is very much like the music industry except that this time, the companies are not marching in lockstep over the cliff," Jarvis wrote. "This time, there are a lot of smart companies that are trying to take advantage of the fact that their fans are recommending and distributing them to more fans. Viacom is standing pretty much alone."

But Jonathan Dube, vice president of the Online News Association and editorial director of the Canadian Broadcasting Corp.'s Web site, CBC.ca, said Viacom is "simply trying to protect its content and control its ability to profit from it."

Viacom, which also owns BET, VH1, Nick at Nite, CMT: Country Music Television, Spike TV, TV Land and about 120 other networks around the world, is still making its content available to users who visit those Web sites, Dube said, but on its own terms.
"Users can watch clips on Viacom's sites - such as from Comedy Central's The Daily Show with

Jon Stewart - and even take the code and embed it on their own sites, similar to YouTube," Dube said. "It's still too early to tell exactly what content people will be willing to pay for and what content will end up purely free."
John K. Hartman, a journalism professor at Central Michigan University, said the Viacom/YouTube imbroglio could be a harbinger of other developments
"We are not far away from Google, Yahoo buying newspaper chains to control content and ads and eliminate suits," said Hartman.
"The Internet," he said, "wants to be free."

W. Joseph Campbell, an associate professor in the School of Communication at American University in Washington, said he was having trouble believing that Viacom's suit against YouTube "will prove to be a major impediment for a resource as dynamic and swiftly changing as the Internet."

However, he said, "It does seem as if we're becoming farther removed all the time from the prospect of 'Googlezon' dominance."

Viacom sues Google’s You Tube for Copyright Infringement [International]

Media conglomerate Viacom Inc. (VIAb.N: Quote, Profile, Research) sued Google Inc. (GOOG.O: Quote, Profile, Research) and its Internet video-sharing site YouTube for more than $1 billion on Tuesday in the biggest challenge yet to the Web search leader's strategy to dominate the online video market.

The lawsuit accuses Google and its popular online video unit of "massive intentional copyright infringement" for allowing users to upload popular shows, threatening ambitions to make YouTube a major entertainment and advertising outlet.
The legal challenge from Viacom, home to the MTV and Comedy Central channels, also suggested a wider battle between traditional and Internet media companies that now compete for audiences and advertising dollars.

"This is a seminal event in Media-Internet relations ... and how the value of content will be clarified in the online medium," wrote UBS analyst Aryeh Bourkoff in a client note.

Shares in Viacom slipped 9 cents to close at $39.48 on the New York Stock Exchange and Google shares fell $11.72, or 2.6 percent, to $443.03 on Nasdaq.

Viacom has been the most vocal critic of YouTube during months of negotiating over payment for use of its programming. The Sumner Redstone-controlled company last month demanded YouTube pull over 100,000 video clips uploaded by users
"YouTube's strategy has been to avoid taking proactive steps to curtail the infringement on its site, thus generating significant traffic and revenues for itself while shifting the entire burden -- and high cost -- of monitoring YouTube on to the victims of its infringement," Viacom said.

YouTube does not prevent copyrighted content from being uploaded onto its site, but will take material down at the request of copyright owners.

Google said it was confident that YouTube respects the copyrights at issue in the Viacom case.
"We will certainly not let this suit become a distraction to the continuing growth and strong performance of YouTube," Google said in a statement.
General Electric Co.'s (GE.N: Quote, Profile, Research) majority-owned NBC Universal and News Corp. (NWSa.N: Quote, Profile, Research) have also criticized YouTube's policies on copyright protection but stopped short of legal action, testimony to the dilemma of media companies forced to choose between embracing a fast-growing outlet for younger audiences and trying to build competing Web vehicles themselves.

"We've dealt with YouTube on a case by case basis to have content taken down," a News Corp. (NWSa.N: Quote, Profile, Research) spokesman said, adding that the company supported Viacom's right "to protect its own content in whatever way it needs to."

Viacom found another ally in Time Warner Inc. (TWX.N: Quote, Profile, Research)
"It is clear from this lawsuit that it is time for YouTube to remove unauthorized material from its site," a Time Warner spokesman said. "We are in talks and hopeful we can work together toward a solution that would effectively identify and filter out unauthorized material and license copyrighted works for an appropriate revenue share."

Viacom contends that almost 160,000 unauthorized clips -- from excerpts of comedy talk show "The Daily Show with Jon Stewart" to pieces of children's programs like "SpongeBob SquarePants" -- have been uploaded on to YouTube's site and viewed more than 1.5 billion times.

The decision to sue Google followed "a great deal of unproductive negotiation," the company said.
Viacom filed the suit in the U.S. District Court for the Southern District of New York, seeking an injunction against further violations and damages.
Google bought YouTube last November for $1.65 billion, aiming to capitalize on its explosive audience growth built from sharing both homemade and professionally produced videos.

YouTube has reached licensing deals with major record labels, but still faces the ire of major media companies. Google has promised new technology to help identify pirated videos, but has not given a timetable for its introduction.

Any progress Viacom makes in its lawsuit could spur other companies to consider legal action against YouTube and raise new questions about the laws governing digital distribution.
"If there's anything central to Google's business model, it is being at the center of everything," said Forrester Research analyst James McQuivey. "This has the potential to put them on the periphery."

Viacom and peers like NBC Universal, in which France's Vivendi (VIV.PA: Quote, Profile, Research) owns a minority interest, are also investing heavily in their own Internet video sites to benefit from the migration of television audiences to the Web.
"There is certainly an opportunity for YouTube to do a deal with Viacom, but Viacom does not have to have a YouTube deal," said analyst Richard Greenfield of Pali Capital.

Google's dominance in Web search has made it a magnet for lawsuits by copyright and trademark holders.
The Silicon Valley company faces outstanding lawsuits in the United States and Europe by major book, magazine and online news publishers as well as small-time Web site operators.
Google has prevailed in high-profile suits against it by auto insurer GEICO -- owned by billionaire investor Warren Buffett's holding company Berkshire Hathaway Inc. (BRKb.N: Quote, Profile, Research) -- over trademark infringement, and in a demand by the U.S. Justice Department for consumer Web search data.

Microsoft on Google's 'copyright violation' [International]

Copyright experts scoffed Tuesday at attempts by a top Microsoft lawyer to discredit Google's approach to copyrighted material.
Most believed Associate General Counsel Thomas Rubin's speech before a book conference -- as well as his opinion piece in the Financial Times -- had a lot more to do with Microsoft's vicious competition with Google than about solid legal arguments.
"Clearly they're in a pitched battle," said Mark Flagel, a partner with Latham & Watkins in Los Angeles. "Microsoft is doing everything it can to pick its fights. This is a popular one."
In a speech before the Association of American Publishers, Rubin accused Google of systematically violating copyright law. Google's Book Search and YouTube video sites are the perpetrators of these injustices, according to Rubin.
"Concocting a novel 'fair use' theory, Google bestowed upon itself the unilateral right to make entire copies of copyrighted books not covered by these publisher agreements without first obtaining the copyright holder's permission," Rubin's speech read. "Anyone who visits YouTube ... will immediately recognize that it follows a similar cavalier approach to copyright."
Google disputes that it violates any copyright laws. Its book search site allows people to search texts of many copyrighted books, the company maintains, but if a copyright owner has not consented, the searcher will only see a snippet of the copyrighted book.
That's a critical distinction for legal analysts. It's one thing, they say, to offer a search of a book's text and quite another to make an entire copyrighted book available, without permission, for copying -- which Google maintains it does not do. Google also claims it removes copyrighted songs and video from YouTube any time it is notified of infringement.
"The goal of search engines, and of products like Google Book Search and YouTube, is to help users find information from content producers of every size," David Drummond, Google's chief legal officer, said in a statement in response to Rubin's speech. "We do this by complying with international copyright laws, and the result has been more exposure and in many cases more revenue for authors, publishers and producers of content."
Rubin cast Microsoft's own book search as superior on copyright treatment. Experts didn't find this a surprising move given that Google, with its recent online word processing and spreadsheet offerings, has begun to encroach on Microsoft's core software businesses.
Microsoft has reacted to Google's success in recent years by beefing up its search capabilities, but may wind up harming itself with Rubin's arguments. After all, a lot of the law is unsettled when it comes to copyright protection in the digital age, said Eric Goldman, director of Santa Clara University School of Law's High Tech Law Institute.
"It's a very dangerous game for Microsoft to go out and push a major player in this space on copyright issues," Goldman said. "It's entirely possible that if they succeed in painting Google into a box, they may have inflicted a wound on themselves."
Courts are still grappling with whether Google's approach to books constitutes "fair use" under copyright law, Flagel said. Judges are also weighing whether Google should be held responsible for providing information, in search results for instance, about businesses that infringe on other people's copyrights.
The 9th Circuit U.S. Court of Appeals is expected to rule on three related cases on that subject by the end of the summer, said Fred Von Lohmann, a staff attorney for the Electronic Frontier Foundation in San Francisco.
Von Lohmann said Rubin's speech, which played up the fact that Microsoft asks copyright holders' permission before using their works, highlighted a way of thinking that he finds highly disturbing. Seeking permission from movie studios and publishing houses before using their material for a new innovation might be something Microsoft -- with its resources -- can do easily, but small-time innovators can't, Von Lohmann said.
"If you're a startup in a garage, is Hollywood going to return your calls if you're trying to develop something like YouTube?" he said. "Do you think they would have been able to launch a company if they had to negotiate permission?"
He continued: "The question here is not about do you like Google better or Microsoft. The question is, do you want a world where you can innovate first, or you have to hire lawyers and ask Hollywood's permission."

Google's Patent Search [International]

The US Patent and Trademark Office had better watch out. There's a new patent search engine in town.

In December, Mountain View, Calif.-based Google Inc. debuted its newest search tool, Google Patent. The new engine unleashed a frenzy of patent searches across the Internet, as Internet surfers looked up everything from sex toys to bongs. Bloggers unearthed celebrity inventions like rocker Eddie Van Halen's patent on a guitar support and actress Jamie Lee Curtis's creation of a diaper with a side pocket for wipes.

Intellectual property lawyers were less excited. For professionals, Google Patent is just another entry in the already-crowded field. The PTO, Lexis-Nexis Group, West Publishing Corp. and several other companies all offer patent search engines. "Everyone had the same reaction," says Fish & Richardson patent prosecutor Scott Harris. "It's nothing new, just one more way to get the same information."

Patents are in the public domain, meaning they're free for anyone to read, search and republish. All Google did was give the patent library a face lift, with a cleaner, more accessible interface. Results come faster: While the PTO's search engine takes a couple of seconds, Google's is practically instantaneous. Generally, Google Patent also reports more results. A search for "flying machine," the Wright brothers' famous 1906 patent on the airplane, got 95 hits on the PTO site and 787 on Google.

But more hits don't mean more patents. Google's database includes approximately 7 million patents from the 1790s through the middle of 2006. That lag is a problem for patent lawyers, who depend on completely current information.

"[Google Patent's] value to lawyers will be dependent upon Google's ability to stay up-to-date with the actions of the Patent and Trademark Office," says Kaye Scholer's Jason Hoffman, an associate in the firm's patent litigation practice.

Even if Google's database is not totally current, IP litigators might find a good use for Google Patent in infringement cases. All 7 million patents are stored on Google servers, so the company clearly knows about them. That could be a courtroom danger, opening up the company to claims of willful infringement if Google itself faces any patent litigation, say patent lawyers. Maybe Google should stick to its own patents.