On Monday, Google (nasdaq: GOOG - news - people ) announced the arrival of that panacea, a new video filter designed to stem the massive flow of copyright-violating clips mixed into YouTube’s user generated content. Schmidt’s promise that the filter would sort out YouTube’s mounting legal problems, however, hasn’t materialized.

Google faces a $1 billion lawsuit from Viacom (nyse: VIA - news - people ) over thousands of ComedyCentral and MTV clips uploaded by users to YouTube, as well as a class action lawsuit that includes several major European sports leagues. On Thursday, a group of media companies including CBS (nyse: CBS - news - people ), NBC and Disney joined Viacom in setting out a list of demands outlining how their content could be fairly used online. Video sites like Dailymotion and Veoh participated in the partnership. But Google–and YouTube–were conspicuously absent.

Google’s video fingerprinting announcement has done little to assuage these increasingly vocal criticisms or to deflect Viacom’s legal assault. Some copyright watchdogs say Google’s proposed copyright managing system still places too much of the responsibility for policing content on the copyright owner. And more concretely, Google’s filter won’t erase the alleged copyright infringement that’s already occurred on the site for more than a year.

“We’re happy that Google appears to be stepping up to its responsibility and ending the practice of profiting from copyright infringement,” says Jeremy Zweig, a Viacom spokesperson. “But this case is only partly about future infringement–it’s also partly about past infringement.”

Viacom has already identified and asked Google to remove more than 250,000 clips from YouTube, Zweig says. Those potentially infringing videos are the real subject of Viacom’s lawsuit, according to Ken Boehm, an attorney and president of the National Legal and Policy Center, an ethics advocacy group. “The filtering technology may mitigate Viacom’s damages, but the clock mostly stopped ticking on new violations when this lawsuit began” in March, Boehm contends.

One telling precedent may be a recent case in a French court against the video site, Dailymotion. Paris-based Dailymotion was ordered in July to pay a director $32,000 for hosting a single pirated movie, even though the film had already been removed from the site when the lawsuit was filed.

Determining whether Google will face a similar fate is the Digital Millennium Copyright Act, a notoriously murky law created in 1999. According to the DMCA, a Web site can offer copyrighted content if the site’s administrators aren’t aware of it, don’t profit from it–and take the content down when requested by the owner.

Boehm argues that Google has clearly profited from Viacom’s copyrighted clips, using them to build traffic and displaying ads adjacent to them. “The facts simply don’t fall on Google’s side of the ledger,” Boehm contends. “This isn’t someone hosting a Web site in their basement. Google has made real money from this content.”

To reap greater profits from those infringing clips, Boehm argues, Google has dragged its feet in implementing filtering. Though YouTube partnered last January with Audible Magic, a Los-Gatos based company that identifies copyrighted content based on audio matching, that technology was only used to identify content offered by YouTube’s music industry partners. Meanwhile, other video sites including Dailymotion, MSN’s Soapbox and Myspace have all employed Audible Magic to filter all uploaded content.

YouTube spokesman Ricardo Reyes counters that YouTube doesn’t place in-video advertising on any clips that could potentially violate copyright laws, and that the site faces a challenge of content filtering on a much larger scale than other video sites. He also points out that YouTube was the first site to implement 10-minute limits on the lengths of clips–a restriction that has prevented the full-feature piracy common on other sites. “We were confident that we were operating above and beyond the law before this new tool was introduced, and we’re confident now,” he says.

But even with this new tool, YouTube’s filtering makes media companies work too hard to find and delete their content from the site, argues Gregory Rutchik, the founding attorney of the Arts and Technology Law Group. Rutchik says the YouTube filter only identifies the exact matches with fingerprinted videos–it doesn’t even use YouTube’s searching and tagging system to pick out similar content. “That means Google is putting the burden heavily on the content owner to do exactly what Google has said is so difficult to do–search through all of YouTube’s content to find infringing clips,” he says.

None of these issues are likely to ever reach trial. But they will factor heavily into any settlement terms struck by Google and Viacom, says Fred von Lohmann, senior attorney at the Electronic Frontier Foundation. Von Lohmann concurs with Google’s argument that YouTube is fulfilling its legal obligations and that copyright protection is the responsibility of content owners.

But there are always complications, he warns.Von Lohmann points to gaffes like the one reported in The Wall Street Journal last month: The story revealed that Google employees had sold more than $800,000 worth of advertising to two video piracy Web sites. Such incidents could erode a court’s faith in Google’s anti-piracy principles, von Lohmann suggests.

“Who knows what kinds of mistakes could be turned up in the thousands of e-mails revealed in this lawsuit? It’s hard to make sure that everybody gets the message in a company the size of Google,” von Lohmann says. “For YouTube, there are no guarantees.”

We have been involved in reviewing DRM solutions for clients and have negotiated several licenses for this technology. We have also been involved in the litigation that relates to tampering with copy protection devices and code. If you are weighing the issue of watermarking your content - whether written, software, video, music - I’d be interested in knowing which solutions you think have worked best/worst.

Here is what confuses me. It seemed easy for the Academy of Motion Picture Arts and Sciences to catch Salvador Nunez, the sister of an Oscar voter, who allegedly uploaded a copy of “Flushed Away” to the Internet. A digital watermark was purportedly embedded into “each of the DVDs distributed to the nearly 6,000 voters for this year’s Academy Awards,” according to thebatt.com and the Electronic Engineering Times.

Or was it? The motion picture association is currently reviewing info from “digital watermarking” providers in an attempt to come up with a standard solution. I doubt their request for info yields anything new and will probably not go any further than the last time this was done in 2003. (See ARDG mtg info) The last time this was done — all proposals were “inadequate” it seems.

If it was so easy or desireable, why hasn’t the MPA adopted this approach instead of its repetitive complaint that it is losing billions each year to piracy? It may infact be that the MPA and its members really do not want to adopt this type of solution. Afterall, who is really going to pay for it.

Existing Solutions. The adult industry has been exposed (no pun intended) to digital watermarking technologies for years, in part to account for 2257 record keeping requirements. Adult content publishers use drm on still and video images to track referrals, for record keeping and simply to follow the money. [Update: Academics have been writing about digital watermarking technologies and the science of DRM for years].

In addition to Digimarc, that is making a big push touting a patented solution, companies such as www.verimatrix.com, www.surety.com and www.adobe.com have offered tried and true solutions. This is yet another opportunity for the “mainstream” industry to learn from the adult industry. I doubt however that this lesson will be learned anytime soon.

(About Verimatrix: Founded in 1999, Verimatrix is a leading provider of Pay TV encryption, content protection and security solutions that provide the ability to detect and prosecute digital piracy wherever it occurs within the distribution chain. With satisfied customers in North America, Western Europe, Japan, South Korea, Thailand, and Australia, Verimatrix offers content provider approved carrier-class solutions specifically for today’s bi-directional IPTV networks. Through the seamless integration of patented digital watermarking technology into its best-of-breed encryption solutions, Verimatrix protects content as well as revenue streams. Verimatrix has excellent relationships with the major Hollywood studios by providing valuable anti-piracy solutions for the fight against rampant digital piracy.)

Potential reasons for not adopting a solution.

- in addition to cost, content owners are reluctant to alienate their audience by making the use of content more difficult. That being said, Apple’s iTunes has solved this problem somewhat for music downloads. In Europe, where the EU has attacked - on behalf of industry - Apple’s closed digital rights management system - Apple and EMI launched a DRM free download alternative. Movies are platform dependent in a way music is not. Sure there is a major difference depending on bit rate. Movies simply will not play if the player does not have the proper decoder. Try playing a .mod file for example on quicktime. It won’t work. Thus, each player must have the right decoder for the format of the movie/video content. Or to put it another way, the content is in a format that will only play on a player that can decode that content. Otherwise, you may get video but no sound, vice versa or nothing.

- the movie industry in the US has a broader group of stakeholders than the music industry. This could be a reasonable excuse. Movie right/stakeholders include actors guilds, music right holders, directors, non-union actors. But what does this have to do with it taking so long for the MPA to come up with a solution to control the digital rights management of their content?

- the channel is theater releases, direct to video and rarely direct to the Internet. The investment by the MPA in brick and mortar movie theatres means that any solution is an added cost to an already expensive distribution model. Movie studios already argue that they lose money on each release. DRM is an added cost and it is unclear who will bear it. The MPA has however to come up with something more like PBS does when it broadcasts their monthly specials. If you’ve ever tried taping one for time shifting purposes, you’ll find the tape contains a single interrupt you would not have seen had you watched the program on the tv initially. The signal over the TV transmits a signal interrupt that your VHS picks up and results in a commercially unusable copy. It’s ok to watch if it’s just you watching the “Three Tenors” that you missed but it won’t compete with PBS’ promotion to sell you a good copy if you send in a donation. Clearly they’ve figured out DRM - even in a low tech model.

- Piracy often happens from cracked dvds. Although the MPA sent a letter to Cineplex in Toronto threatening not to release films in Canada unless Canada did something about making it a criminal offense to bring a camera into a movie theatre, the real problem is cracking dvds. Despite its illegality, dvd’s are not impenetrable. Thus, the content itself must be watermarked or a closer coordination with the dvd formatting standard must be developed.

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