In March 2007, Viacom sued YouTube and Google, alleging that they should be held responsible for the copyright infringements committed by YouTube users. The lawsuit sought more than $1 billion in damages and came on the heels of Viacom's delivery of more than 100 000 takedown notices targeting videos allegedly owned by Viacom (which YouTube promptly complied with). Shortly after the Viacom lawsuit, a number of class actions were also filed on behalf of sports leagues music publishers and other copyright owners against YouTube all based on the same theory.
These lawsuits tested the strength of the DMCA safe harbors as applied to online service providers that host text audio and video on behalf of users. The whole idea of the DMCA safe harbors was to provide legal protections for online service providers like YouTube who otherwise would hesitate to create the online platforms that have revolutionized creativity culture and commerce. Consequently, the outcome of this case is important not just for YouTube but also for lots of other online services including eBay, Blogger, Flickr, Scribd, Amazon, and many others. Previous court rulings have recognized that the safe harbors apply to video hosting sites.
In March 2010, the parties in the lawsuit filed motions for summary judgment. In April 2010, EFF and other nonprofit groups filed an amicus brief urging the court to reject the plaintiffs' effort to undermine the DMCA safe harbors.
In April 2012, the Second Circuit revived Viacom's lawsuit but largely eviscerated most of Viacom's legal theories. In April 2013, the district court again ruled in YouTube's favor, and Viacom once again appealed. EFF (along with Public Knowledge) again filed an amicus brief supporting YouTube. That brief explained why Viacom incorrectly argued that YouTube lost its safe harbor because it "induced" infringement. The case settled in March 2014, shortly before the scheduled oral argument on the second appeal.
The Justia case page provides a more complete set of filings in this case.