Did YouTube Employees Upload Copyrighted Content?

In the ongoing back and forth of Viacom’s (s VIA) $1 billion lawsuit against YouTube/Google (s GOOG), evidence may have been uncovered that shows YouTube employees were among those who uploaded unauthorized copyrighted content to the site, according to CNET.

In addition, internal emails show that YouTube managers were aware of the unauthorized content on the site, but kept the material up anyway. CNET explains why this knowledge is important:

Such evidence could be a major blow to YouTube’s defense. If managers possessed “actual knowledge” of copyright infringement on the site and did not quickly remove it, the company may not be entitled to protection under the Digital Millennium Copyright Act’s safe-harbor provision, according to legal experts.

The difference between a general knowledge of copyrighted material on the site and specific knowledge of particular instances is an important distinction. A federal judge recently threw out Universal Music’s lawsuit against online video site Veoh. Jonathan Steinsapir, a Santa Monica-based attorney with Kinsella Weitzman Iser Kump & Aldisert explained to us at the time of the decision:

The Court emphatically rejected UMG’s attempts to get around the DMCA’s immunity by arguing, among other things, that Veoh should be stripped of immunity because it knows, at a very general level, that there is content on its site that infringes others’ copyrights…It was not enough for UMG to prove that Veoh generally knew that some users inevitably upload content to its site that infringes someone else’s copyrights.

A YouTube spokesperson told CNET, “The evidence will show that we go above and beyond our legal obligations to protect the rights of content owners.”

Google is also looking to protect its $1.65 billion investment in the video site. In a separate story, CNET reports that Eric Schmidt said under oath in a Viacom deposition last spring that leading up to the acquisition, he thought YouTube was worth $600 – $700 million. But he paid a billion more than he thought the site was worth to fend off competition from the likes of Yahoo (s YHOO) and Microsoft (s MSFT).

YouTube has made a concerted effort over the past year to sidestep future copyright entanglements by wooing Hollywood and other premium content owners. And times have changed since the 2007 Viacom lawsuit kicked off. YouTube’s content monitoring tool, which debuted after the lawsuit, has evolved from strictly policing the site to enabling content owners to monetize unauthorized content uploads.