Here we go, here we go, here we go..

After months of anticipation, it's happening: Universal is suing MySpace, one of the leading "social networking" sites, for copyright infringement - or as the Beeb puts it:

"Universal's lawsuit, lodged in a US district court, claims that MySpace "encourages, facilitates and participates in the unauthorised reproduction, adaptation, distribution and public performance". "

Interesting that Universal's suit, as here quoted, does not mention the weasel word "inducement", as their attack must surely be based on MGM v Grokster and its new test for third party copyright infringement. My Space obviously know this since they reply:

""We provide users with tools to share their own work - we do not induce, encourage, or condone copyright violation in any way."

So draw up your seats, guys and gals, and watch the Titans fight.

In European law, MS might well claim that it had a good defense under the safe harbour of the E-Commerce Directive, as hosts under Art 14, so long as they removed copyright videos expeditiously on notice and take down (which, as a rule, such sites do).

In US law, however, it's much less clear and will depend how far the court wants to stretch the Grokster dictum. Two principles are going to come into full opposition for the first time: the Grokster dicta on inducement and third party liability for copyright, and the 'safe harbor' provisions of the US Digital Millennium Copyright Act, which are similar to Art 14 of the ECD, and which have been regarded in the past as adequately protecting the likes of YouTube and My Space from suits arising from copyright content posted by third parties. Napster, in the first of the major P2P cases way back when, attempted to plead the DMCA hosting safe harbor, but had it rejected on the grounds , in essence, that they were not a hands-off third party "host", since they were knowingly exerting control over the music files they indexed. My Space may be a much more difficult case for rejection, since they resemble a conventional host providing physical storage for files provided without their knowledge by a third party, just as with a hosting ISP, far more closely than Napster did.

The even bigger issue here may be : if MySpace goes down, what happens to the other blogging and user-content based sites like Bebo, FaceBook , Live Journal etc all of which depend to a lesser or larger extent on users sharing "cool" copyright material as well as self generated material? In particular, it will have huge implications for You Tube, where a copyright battle has been anticipated ever since Google bought it and made sure $200m of the price was put away as a "copyright warchest". Google are currently trying to head off the You Tube battle by negotiating with major publishers for permission to stream their works. For smaller or more "open source" sites like LiveJournal which run to cover costs and not to make money via ads, such a licensing arrangement would probably be uneconomic; which might lead to the folding of all but the most commercial and media-controlled blog/networking/web 2.0 user-content sites - a disastrous outcome.

One key point in YT's favour differentiating it from MYSpace et al is that YT streams its video, and does not host it, hence does not readily provide a free source of permament downloads: and has also, interestingly, made extensive efforts to suppress code provided by third parties to turn YT's stream into downloadable content. YT , unlike Napster and Grokster/KaZaa, has also gone out of its way to make clear it is not condoning copyright infringement as part of "sticking it to the man", hence resisting an obvious claim of inducement. Furthermore YT only allows very short videoes to be streamed, not entire TV programmes or albums as the P2P networks do - however it is also well known that some TV shows, eg, are in fact put up on YT in short chunks.

At root, there is a real problem here that may not be superable in the current legal structure. When Grokster was brought down, it was clear the court felt that its business model was mainly built on flagrantly delivering copyright content without rightsholder permission; even though it was shown Grokster was shown to be also used to deliver content like free software and out of copyright archive material, these were a relatively insignificant part of its payload (or business model).

With the web 2.0 sites, there is a spectrum. You Tube originally built its name on user generated and owned content : videos of cute cats on iPOds and art school degree exam animations. Yet now it clearly carries some, but perhaps not a majority , of "mainstream" media content used without permission of rightsholders among its millions of videos delivered today. Similarly My Space built its brand as the home for new and unsigned bands delivering their own copyright content; but now has a mixed business model. Universal claim "Our music and videos play a key role in building the communities that have created hundreds of millions of dollars of value for the owners of MySpace. " and they may not be exaggerating (well, not too much.)

Kill the baby of copyright infringement and you throw out the bathwater of the most popular medium for encouraging self created and owned creativity we have ever seen; MySpace has 90 million users alone and then look at all the other blogs, the Flickrs (and perhaps the eBays, where a similar problem prevails - among a million legitimate listings there will be a thousand for copyright infringing material). Notice and take down is one answer but it already exists in both the US and EU as a legal right and it is not satisfying the rightsholders, who want pre emptive blocking by the social sharing sites. Filtering for copyright material may be a better answer (as the Australian settlement compells KaZaa to do) but My Space were already developing tools to do this and yet it has not stopped this suit. What a US court could do is retreat from the "inducement" theory of Grokster and return to the "substantially non infringing uses" test of Sony: certainly My Space should attempt to push it that way.

Let's hope for all us blogger's sakes that an answer can be found that suits all parties. Simple defiance of the rightsholders by the anti-copyright crowd will not hold back the sea forever.