Of course, when most people think about potential legal
liability for YouTube, they are thinking about potential copyright
risks. And although nothing in the Internet legal realm is entirely
certain, YouTube looks to be on relatively firm legal ground.
Unlike some more aggressive companies (like the old Napster),
YouTube has the benefit of a set of special "safe harbors" created
for online service providers as part of the Digital Millennium Copyright
Act (DMCA). If your activities fall within the
safe harbors, as defined in Section 512 of the Copyright Act,
you can't be liable for money damages for copyright infringement
based on those activities. There is a different safe harbor for
each of the following activities: providing network access (e.g.,
your ISP), caching, storing material on behalf of uses (e.g., web
hosting), and providing information location tools (e.g., search
engines and linking).
One of those DMCA safe harbors was designed to protect providers
of hosting services. When it was passed, Congress had big web
hosting services in mind, but the rules work just as well for video
hosting services (like YouTube), blog hosting (like Blogger), and
music lockering (like MP3Tunes). There are a number of requirements
that a hosting provider must meet, but the most important one is
the implementation of a "notice-and-takedown" policy. YouTube has
such a policy in place, allowing copyright owners to notify it of
infringing videos and taking them down promptly upon receiving such
a notice. Other requirements include implementing a policy of
terminating "repeat infringers," which YouTube also has, and
registering a "copyright agent" with the Copyright Office, which
YouTube has done.