Viacom has filed [PDF] a $1 billion copyright lawsuit against sued YouTube and its corporate parent, Google Inc. In other words, rather than embracing Internet innovation, Viacom has chosen to spend its money on legal fees to stifle new technologies. Not every copyright holder is being so shortsighted when it comes to YouTube -- CBS and Universal Music Group among others have already decided to license their content.

Viacom's suit isn't just a threat to YouTube -- it's a threat to innovators of all stripes. YouTube has complied with takedown requests under the DMCA, including Viacom's 100,000 video takedown barrage last month. If Viacom convinces a court that YouTube is nevertheless liable for copyright infringement, it could have a chilling effect on any business that hosts content on behalf of users and thus frustrate the many perfectly lawful uses of such technologies.

Viacom's filings demonstrate a basic misunderstanding about users' rights. Viacom complains that YouTube allows users to share "unauthorized" materials, yet "unauthorized" does not always equal "illegal" or "infringing." There are many ways in which fans' posting short clips can constitute fair use, such as excerpting for commentary or news reporting. Indeed, Viacom's takedowns last month led to the removal of a variety of non-infringing videos.

Perhaps this lawsuit will end in a settlement, with both parties back at the licensing table. Regardless, it's unfortunate that Viacom has opted to file this misguided lawsuit instead of embracing its fans desire to make novel uses of digital media.