MPAA "embedding is infringement" theory rejected by court

A federal appeals court has decisively rejected a legal theory that would have placed anyone who embeds a third-party video on her website in legal jeopardy. In a Thursday decision, Judge Richard Posner of the Seventh Circuit Court of Appeals ruled that the "video bookmarking" site myVidster was not liable to the gay porn producer Flava Works if users embedded copies of Flava videos on myVidster.
Judge Posner's reasoning is interesting. He argues that when you view an infringing video on a site such as YouTube, no one—not you, not YouTube, and not the guy who uploaded the infringing video—is violating copyright's reproduction or distribution rights. And since simply viewing an infringing copy of a video isn't copyright infringement, he says, myVidster can't be secondarily liable for that infringement.

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