• by Wendy Davis , Staff Writer @wendyndavis, March 18, 2014

After seven years, three court rulings and millions of dollars in legal bills, Viacom and Google have settled their battle about video clips on YouTube.

Terms of the settlement weren't disclosed, but Re/code reports that no money changed hands. Google and Viacom said in a statement issued today that the deal “reflects the growing collaborative dialogue between our two companies on important opportunities.”

The case dates to 2007, when Viacom sued Google for “massive” copyright infringement on the video-sharing platform YouTube. The heart of Viacom's allegations was that YouTube built its business by  offering users the chance to watch professional clips from programs like “The Daily Show with Jon Stewart.”

Google countered that it was immune from liability, given that it immediately took down infringing clips at the owners' request. The Digital Millennium Copyright Act's safe harbors provide that Web services companies aren't liable for copyright infringement when users uploaded pirated clips, as long as the companies remove the material at the content owners' request.

But those safe harbors have enough exceptions and ambiguities that both sides were able to find plenty to argue about during their lengthy court battle. During the course of litigation, U.S. District Court Judge Louis Stanton dismissed the case against Google twice. The first dismissal was in 2010.

Stanton said at the time that the dispute showed that the DMCA's notice-and-takedown provisions functioned as intended. "When Viacom over a period of months accumulated some 100,000 videos and then sent one mass takedown notice on February 2, 2007, by the next business day YouTube had removed virtually all of them,” he wrote.

Viacom appealed and won a partial victory when the 2nd Circuit Court of Appeals sent the case back to Stanton and ordered him to consider whether Google was “willfully blind” to infringement by users.

Last year, Stanton again ruled in Google's favor. He said at the time that Viacom hadn't presented enough evidence to show “willful blindness” on Google's part. A key piece of Viacom evidence was a March 2006 report prepared by YouTube founder Jawed Karim, which said that clips of "well-known shows," including "Family Guy," "South Park," and "MTV Cribs," were present on the site. But Stanton said that Karim's memo “does not tie his observations to any specific clips,” and therefore doesn't prove that YouTube was willfully blind.

Viacom appealed -- again -- and the case was scheduled to be argued on Monday. The appeal drew attention of numerous outside groups, ranging from digital rights organizations to other entertainment companies

For all the expense of litigation, the underlying dispute was largely about events that ended in 2008, when YouTube's filters began excluding Viacom's clips.

While Google won some key rulings in the case, those decisions won't necessarily help other Web companies. Santa Clara University law professor Eric Goldman, who has followed the lawsuit closely, points out that the rulings “did almost nothing to accelerate the resolution of disputes involving the DMCA safe harbors.”

He adds in an email to MediaPost that other online startups might not be able to afford the high cost of defending themselves in court in similar lawsuits. As of 2010, Google's spent $100 million on the case, chief financial officer Patrick Pichette reportedly said during an earnings call. (Presumably Viacom also spent a small fortune on legal bills.)

Goldman adds: “Unless an innovative new marketplace entrant is as well-funded as Google (and none are), it cannot last long enough to build its business before the litigation costs sink it. So the legacy of YouTube's courtroom 'wins' will be cloudy at best for the next generation of YouTube-like innovators.”