Why Google Wanted a YouTube Lawsuit

An anonymous reader writes "After YouTube was purchased for $1.6 Billion, there was rampant speculation that Google would soon be waist-deep in billion dollar lawsuits. Despite the enormous liability issues, Google purchased YouTube for a mind-numbing sum, leaving many doubters wondering if Google considered all of costs involved. A theory has been put forth explaining what Google may have been thinking when it bought the company." From the article "Letting YouTube fight this battle alone with their own lawyers might have resulted in a very public and unnecessary loss that would have crippled Google's video ambitions and possibly caused collateral damage to a bunch of related industries (especially search)." In short, the author argues that Google had a lot more to lose had it kept away from YouTube and let the old-media companies crush it with lawsuits."

Sad that money means so much in the courtroom

The sad thing about this is that it actually does make sense that Google should buy Youtube for the reason stated in the OP.

It is really sad how the interpretation has become a matter of who can afford the most lawyers and things like that. I think this is a trend that is seen at it's strongest in the USA but we sure also see this here in Europe and Denmark where I live.
In my simple mind the law should be equal for everyone no matter how much money they have, but that really is being naive these days as far as I can figure.

I don't know if my thinking here is to much influenced by movies like Civil Action [imdb.com], but then again it claims to be based on a true story (and the movie is almost 10 years old, so I guess this isn't a new trend, at least in the US).

Re:Sad that money means so much in the courtroom

The good thing is that google is waging the war against the mafiaa rather than you and me. File sharing and DCMA are totally different things, but I'll welcome any adversary against the *AA. If they are clipped off from both sides (content and consumers) some good might come out of it.

Face it, google is the best corporation to take this law suit along, much better than say Apple or Microsoft. I agree they aren't perfect, but for all the things that they do, they simply are one of the better choices.

Re:Sad that money means so much in the courtroom

Sad it may be, but it is ievitable that money matters in a civil lawsuit. As long as people are allowed to sue to recover just damages, others will be tempted to sue to obtain unjust settlments.

When things come to trial, if our laws are at least reasonably just, then justice has better than even chance. The real problem is the majority of times when things don't come to trial, when defendants pay the plaintiffs to go away; when freedoms are quietly forgone; those are the times that justice is threatened most.

The legal profession should police itself better. It is unethical to use the fear of having to mount a defense to extort money or concessions from people. There is no moral difference between that and using threats of physical force.

Lawyers who are party to legal muggings should be disbarred.

Can anyone confirm?

I tried Googling for their reasons, but results aren't conclusive.

Bad deal

By this interpretation, Google could have waited for the lawsuits to start and then buy YouTube for very little money, they could have saved a Billion.

Re:Bad deal

But then, you see, the other companies would have already won in court, which sets precedent for all video services. Google bought YT to prevent this from occurring.

Re:Bad deal

Then they could not have influenced the result with their lawyers. $100 million in legal costs is nothing to Google if it means a favorable "fair-use" ruling.

The thing is, I'm not sure it will go to their plans, or turn out the way they want. They want a fair use ruling that says as long as they comply with take-down notices, they are free and clear despite making money off of copyrighted content (ad impressions until a video is taken down).

A favorable fair-use will basically cement their (and many others') position that indexing and news indexing/aggregation is legal under fair-use laws. An unfavorable ruling, depending on the judges' wording, could be used as very high-powered ammunition against it by companies that think Google News and other services are "stealing" content. It could also spur unintelligent legislation regarding fair-use.

I'm divided. I want fair-use to be very clear under the law, but I don't think what Google/YouTube is doing is right. Slapping users on the wrists and deleting infringing videos obviously isn't enough to deter infringement.

Re:Bad deal

its not "fair use" for whom? If the courts see Google and simply a carrier then the infringement is being done by the users and not Google. As long as Google takes down any infringments upon notice they are abiding by DMCA. So far the really popular videos on youtube have mostly been homemade stuff that sometimes includes a small bit of soundtrack. These are "fair use" under many interpretations, and Google making ad money from these videos is fine.

What would be interesting is if the courts declare that any ad money made from infringing videos has to be collected and given to the owner.

Re:Bad deal

but I don't think what Google/YouTube is doing is right. Slapping users on the wrists and deletinginfringing videos obviously isn't enough to deter infringement.

In a FEW situations (full pre-release TV episodes,) GooTube has some grossly infringing content. That represents a problem they need to address.

For the vast majority of the rest, calling it "infringement" amounts to saying we don't have the right to our own culture.

The crappy low-quality content on YouTube won't deprive anyone of sales. If anything, it will increase sales by reminding people of little bits of their past which they want to recapture (eg, cheesy 80's videos and saturday morning cartoons); It gives the best possible advertising for shows like The Colbert Report; It lets us all make fun of the latest absurdity uttered by the president (or Pelosi, Boxer, or [insert your least favorite politician here], they all count as pretty much equally worthless). Unfortunately, copyright law doesn't care about that - It cares only that the copyright holder (rarely the "artist", so don't even go there) didn't give permission. That must change if copyright will survive the next few years with any meaning at all.

And if we don't see a massive copyright reform in the near future? Well... Ask any 16YO whether or not they consider it "wrong" to copy a CD. Copyright has fallen to the level of speeding as a socially-acceptible crime; we all know we might get caught, we all do it anyway, and we don't care. Except, rather than a $150 fine, you can get a $150,000 fine. Ouch.

Re:Bad deal

Yup, and thats the law. Feeling its wrong, having it be common sense its wrong doesn't make it legal.

Changing the law will make it legal.

So in that case you wouldn't mind if someone with deep pockets were to attempt to bring about a change in that law by using its legal muscle to help establish a favourable precedent?

Well, Go Google!

Re:Bad deal

Yes. Another day, another person who does not have any actual inside information into Google, attempts to guess why they are too brilliant to not have made a mistake buying Youtube.

Big companies CAN make mistakes, I dont know if Google has or not and I have no less insight into Google than anyone else here.

not likely

Google could have filed amicus briefings on behalf of the defendant (they did so a couple years ago when yahoo was being sued).

But the proposition is backwards. youtube had no money or revenue. Google has both. That's a big red "sue me" sign stapled on their back.

Re:not likely

Google could spend millions/billions on amicus filling to defend YouTube, but as soon as it looked like they might win the media companies would cut a deal with YouTube and no legal precedent would be established.

By owning YouTube the can know at least know they might win.

Amicus curiae

Thats why they have Amicus curiae briefs. If Google just wanted to help YouTube defend themselves, they could have filed such a brief for much less than the 1.6 billion (or whatever it was) they spent on YouTube. Or if they really wanted to take an active role in the lawsuit, they could have waited for it to be filed and then bail out YouTube for much less money. Though its questionable whether or not they would have ever been sued in the first place had YouTube not been bought by someone who could pay up.

No matter how you cut it, this would have been a silly strategy. Can we please stop pretending we are on Google's board of directors and posting all this speculative BS on what we think they are doing or will do in the future? Please?

Re:Amicus curiae

I would guess that it would be a pretty stupid reason to buy YouTube. I imagine the reasons for buying YouTube go far beyond just wanting to be a target for a lawsuit. However, it may have been seen as a bonus possible outcome. "If we buy this, someone might decide to go sue happy on us, and then we can likely crush that nonsense, make a big public showing of the ordeal, and secure our business that drove us to buy YouTube from future assault".

Why not just pay for the lawyers?

But the third point -- Expand and protect current fair use related provisions involving copying intellectual property -- is the most important for Google.

If that were the case, google could just donate money to youtube to pay for their legal defence, and not get involved with actually owning the company. It would cost an insignificant amount relative to the $1.6B purchase fee, and they wouldn't have to pay damages in the event of defeat.

Re:Why not just pay for the lawyers?

Interesting idea, look how well it is working for M$ and SCO. M$ isn't tied to the rise and fall of SCO.

There are two issues with this though:
1) Google has no incentive to continue on the fight, other than their own personal liability on Google Video, and considering it is almost the same thing you may as well own the other company. In the M$ SCO case, it's plaintiff not defendant that M$ is supporting.
2) Iff Google spent a tonne of cash on YouTube in defence and won, YouTube would undoubtedly be worth a lot more and likely be a prime candidate for purchase as their liability aspects had been tried out in court.

My $0.02

Righttttttt

Thats why they paid over the odds for a company begging to be sued so they could turn it into a target too rich to resist.

Its far more likely Google wanted to be a dominant player in a market other than search so badly they forked out the $1.6 billion knowing a lawsuit would likely follow if they could not negotiate a quick settlement and apparently in the process overvalued not just youtube but also the amount of clout they hold with the content providers.

It was an act of hubris not a brilliant strategy!

I'd bet money that Google bought YouTube to get face time/leverage with television/movie execs. Google has failed miserably to get the entertainment folks on board. I think they made an expensive gamble that they could leverage YouTube to get the studios on board and they lost.

They didn't pay with real money

They paid in stock, which they basically printed themselves. Not the same thing as actual dollars. Valuable yes, but not the same.

My thoughts...

I thought they were ready to tackle Copyright reform. We read about the UK reforming Copyright laws, and I think its time companies with some smarts tackle the same issues stateside. It would be really nice if Google is able to help start a movement towards Copyright reform.

Then why didn't Google wait until such a lawsuit

Then bought YouTube with a discount?

Re:Alright!

Although I'm not sure I agree with the idea that Google wants to attract lawsuits, it does actually happen that a company will occasionally court a court action (sorry, bad pun not intended) simply to establish a precedent which works in their favour - if such a precedent can be established it renders a company previously treading on legal thin ice suddenly much more investable, or makes a legally grey area suddenly less of a risk for massive investment. Sometimes it's better to get the lawsuits out of the way early to know whether it's worth carrying on.