Greg Sandoval from CNet News.com reported earlier this week on the discovery of internal emails within YouTube describing how the company’s own employees uploaded Viacom content (such as Colbert Report clips) to the video-sharing site, and how this could seriously damage Google’s position in its massive litigation against Viacom.

The legal principle at issue here is an aspect of Section 512 of the copyright law, enacted as part of the Digital Millennium Copyright Act (DMCA), which specifies how service providers can qualify for “safe harbors” from copyright infringement liability.  One of those qualifications is that service providers have no control over the content that becomes available through their services.  The fact that YouTube employees knowingly uploaded Viacom-owned content would seem to debunk Google’s assertion that it has no control.

Sandoval has referred to this evidence as a “smoking gun” that Viacom could use to destroy Google’s position and win the case.   I beg to differ.

First of all, YouTube’s qualification as a safe harbor under 512 is not the only issue in the case; Viacom has made other allegations of liability besides that YouTube does not qualify as a safe harbor.  But second of all, I would argue that at this point, the last thing that Viacom wants is to win this case on the facts.

Judge Howard Matz’s district court opinion in Universal Music Group v. Veoh last month reinforced the letter of the law under 512.  Judge Matz rendered summary judgment in favor of Veoh, roundly dismissing (literally and figuratively) UMG’s position.  The letter of the law is that if a copyright owner sends a service so-called takedown notices with proper information, and the service provider removes the content promptly, the service provider is off the hook.

The problem is that Viacom most likely does not want Google to be found guilty for YouTube’s behavior under 512 in its current form.  Viacom’s preferred outcome is – or at least ought to be – to get the law itself changed.  Under normal circumstances, a district court doesn’t do that.

Viacom may actually prefer to lose its case at the district court level in order to appeal it to higher courts – preferably the Supreme Court – where the basis of the DMCA can be challenged.  UMG attempted to do the latter in its Veoh case by pointing to early drafts of the law, as it made its way through Congress, as evidence of Congressional intent to establish stricter liability for service providers.  UMG’s lawyers may even have made this argument knowing that it would fall on deaf ears at the district court level but could be useful in an appeal.

Jon Baumgarten, one of the most esteemed copyright litigators in the country (who works unabashedly on behalf of copyright owners), expressed a degree of shock at the Veoh opinion at last week’s Digital Breakfast panel in Washington on technology for controlling copyright.  Only his apparent surprise at the vehemence of the opinion makes me wonder whether UMG intended to lose its case.

A court finding that YouTube does not qualify for safe harbor under 512 may make Viacom temporarily happy – and richer – by way of fines that the court could impose on Google for infringement.   But that’s not really the problem that Viacom wants to solve.

Viacom should want the law changed so that services like YouTube are required to block unlicensed copyrighted material proactively, not just in response to takedown notices; services like YouTube should have to pay for the technology to do this so that companies like Viacom do not have to pay the millions of dollars they shell out every year for antipiracy services.   For example, Viacom should want vicarious liability strengthened so that services that choose not to install filtering technologies become liable.  A fact-based victory on 512 issues in the YouTube case will eliminate Viacom’s opportunity to get that result from this course of legal action.

So, the discovered YouTube emails may be smoking guns, but for Viacom, they seem more like wet blankets.