Demanding that YouTube remove 160,000 videos last month clearly wasn't enough. Viacom International, the parent company of MTV, Comedy Central, and Paramount, is suing Google -- YouTube's parent company -- to the tune of ... one billion dollars!

The suit, filed in the U.S. District Court for the Southern District of New York, alleges, "YouTube has harnessed technology to willfully infringe copyrights on a huge scale, depriving writers, composers and performers of the rewards they are owed."

The key word here is willfully. Did YouTube "willfully" -- and not merely negligently -- infringe upon Viacom's copyrights? If it had willfully done so, then why did it comply with Viacom's DMCA takedown requests?

The key case here will most likely be MGM v. Grokster, 04-480 (2005), where the U.S. Supreme Court held that "one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties." In other words, the failure to foresee that a device may be used for infringement in the future is neither contributory nor vicarious infringement. The creation of a device specifically for the purpose of infringing is an act of contributory or vicarious infringement. YouTube has "substantial non-infringing uses," including distributing licensed content as well as content in the public domain. Therefore, we can conclude, based on that fact, that YouTube was not created specifically for the purpose of infringing.

But what about when the manufacturer is aware that infringement is happening by way of his or her device? The Court addressed that, as well:

Accordingly, just as Sony did not find intentional inducement despite the knowledge of the VCR manufacturer that its device could be used to infringe, mere knowledge of infringing potential or of actual infringing uses would not be enough here to subject a distributor to liability. Nor would ordinary acts incident to product distribution, such as offering customers technical support or product updates, support liability in themselves. The inducement rule, instead, premises liability on purposeful, culpable expression and conduct, and thus does nothing to compromise legitimate commerce or discourage innovation having a lawful promise.

There is no evidence to indicate that YouTube ever actively encouraged users to pirate content.

Furthermore, the Court held in MGM that, in order to be found guilty of contributory or vicarious liability, a manufacturer must have "had specific knowledge of infringement at a time when they contributed to the infringement and failed to act upon that information." Again, Viacom demanded that 160,000 specific videos be removed from YouTube, and YouTube complied.

Viacom's argument is incredibly weak, and this looks like a ploy for (1) media attention, or (2) an attempt to get a settlement out of Google. Google, however, is smart enough and has enough money that it may just take this case to court in order to get a ruling which says that Viacom is crazy. People who accuse others of infringement love out-of-court settlements, because it means that they don't have to go to court, where most infringement-accusers end up losing and then set a precedent for allowing other infringement suits to be thrown out in the future.