NEW YORK (AP) -- A federal appeals court reinstated a copyright case against YouTube on Thursday, finding that a jury could conclude that the online video service knew it was infringing rights when it allowed the distribution of videos of popular television shows and other programs.
The 2nd U.S. Circuit Court of Appeals decided the case after hearing lawyers several months ago debate whether the 1998 Digital Millennium Copyright Act shields a company like YouTube from broad copyright claims. Google bought YouTube for $1.76 billion in 2006.The appeals decision pertained to several lawsuits filed against YouTube, including one in which Viacom Inc. claimed the video service giant committed "rampant copyright infringement" and others in which The Football Association Premier League Ltd. and various film studios, television networks, music publishers and sports leagues joined to challenge YouTube's practices.
The plaintiffs said YouTube committed copyright infringement based on the display and reproduction of approximately 79,000 audiovisual clips appearing on its website between 2005 and 2008.
In a statement, YouTube portrayed the 2nd Circuit decision as a victory, saying the court "rejected Viacom's reading of the law."
It added: "All that is left of the Viacom lawsuit that began as a wholesale attack on YouTube is a dispute over a tiny percentage of videos long ago removed from YouTube. Nothing in this decision impacts the way YouTube is operating. YouTube will continue to be a vibrant forum for free expression around the world."
Viacom said in a statement that it was pleased as well.
"This balanced decision provides a thoughtful way to distinguish legitimate service providers from those that build their businesses on infringement," it said. "The Court delivered a definitive, common sense message to YouTube - intentionally ignoring theft is not protected by the law. We are confident we will prevail when the merits of our case are heard."
A lower court judge had ruled that YouTube was protected from copyright infringement claims.
The ruling concerns the safe harbor provision of the 1998 Digital Millennium Copyright Act. That provision shields a company from liability if it doesn't have actual knowledge of copyright infringement. Once notified, the company must eliminate the infringement quickly.
A three-judge appeals panel said the lower court judge correctly concluded that the safe harbor provision requires knowledge or awareness of specific infringing activity.
But it said it must reinstate the lawsuit that the judge had tossed out because a reasonable jury could find that YouTube had actual knowledge or awareness of specific infringing activity on its website. It said the lower court erred when it interpreted the "right and ability to control" provision of the safe harbor provision required "item-specific" knowledge.
The New York-based Viacom owns popular cable channels such as MTV, Comedy Central and Nickelodeon. Google is based in Mountain View, Calif.