According to a filing in the U.S. District Court of Northern California, the entire case was dismissed with prejudice. Both companies issued identical statements on the subject: “EA and Zynga have resolved their respective claims and have reached a settlement of their litigation in the Northern District of California.”

If you don’t recall, EA filed a copyright infringement lawsuit against Zynga in August, charging that Zynga’s social game The Ville was an “unmistakable copy” of EA’s The Sims Social. The complaint was seeking injunctive relief and damages.

The following month, Zynga filed a pair of motions to rebut Electronic Arts’ claims, arguing that The Ville on Facebook is not similar to EA’s The Sims Social. And, in a third filing, it countersued, alleging that EA participated in unlawful actions, including anti-competitive business practices, when it came to recruiting employees.

All of the cases have now been dismissed. The terms of the settlement are confidential, so exactly how the two companies worked out their differences is not known.

But in some respects, the issues EA had surrounding The Ville should no longer be a concern.

In October, Zynga said it was “significantly reducing” its investment in The Ville as part of a restructuring plan that is designed to return the company to profitability. The Ville was just one of more than a dozen games being phased out.

Electronic Arts Vs. Zynga

Zynga filed a pair of motions to rebut Electronic Arts’ claims in the original filing, arguing that The Ville on Facebook is not a carbon copy of EA’s The Sims Social. And in a third filing, it countersued, alleging that EA participated in unlawful actions, including anti-competitive business practices, when it came to recruiting employees.

“Today we responded to EA’s claims, which we believe have no merit,” said Reggie Davis, Zynga’s general counsel, in a statement. “We also filed a counterclaim which addresses actions by EA we believe to be anticompetitive and unlawful business practices, including legal threats and demands for no-hire agreements.”

The three documents, embedded below, provide a behind-the-scenes look at the companies’ intense competition.

Despite EA’s dominance in the industry, Zynga has easily remained the top social games company on Facebook and has recruited away many of EA’s top managers. At the same time, EA has spent billions of dollars trying to gain traction in the social space — with mixed results.

In the original suit, filed by EA in U.S. District Court in San Francisco in August, EA charged that Zynga’s The Ville is an “unmistakable copy” of EA’s The Sims Social. “When The Ville was introduced in June 2012, the infringement of The Sims Social was unmistakable to those of us at Maxis as well as to players and the industry at large,” said Lucy Bradshaw, general manager of EA’s Maxis label.

In Zynga’s response, it asks the court to strike several references in the lawsuit that it believes are not pertinent. Zynga also denies EA’s allegations, claiming that both The Ville and EA’s The Sims Social belong to “a longstanding and well-developed genre known as ‘life simulation’ games,” and “no one, including EA, may lay claim to the exclusive right to develop and release games in that genre.”

The counterclaim gets more juicy.

Zynga says that EA knows that none of the former EA executives named in its lawsuit transmitted any confidential information to Zynga “because EA itself was involved in, and approved of, the exhaustive measures undertaken to ensure that did not happen.” What’s more, Zynga claims that EA tried to restrict its employees from going to work at a competitor, which is against California law.

In the filing, Zynga writes: “Zynga was told by EA’s legal team that Mr. Riccitiello had instructed them to obtain a no-hire agreement from Zynga that prohibited Zynga’s future hiring of EA employees. Absent such agreement, Mr. Riccitiello would direct a lawsuit to be filed against Zynga ‘knowing there was no basis and even though he loses.’”

The lawsuit goes on to claim that Riccitiello made other similar statements.

EA spokesman John Reseburg responded quickly to the allegations in a written statement that mocked the tone of the lawsuit: “This is a predictable subterfuge aimed at diverting attention from Zynga’s persistent plagiarism of other artists and studios. Zynga would be better served trying to hold onto the shrinking number of employees they’ve got, rather than suing to acquire more.”

Here are the filings:

Part 1 Zynga’s Motion to Strike

Part 2 Zynga’s Answer and Demand for Jury Trial

Part 3 Counterclaim _Public_

Last year, the judge offered Oracle a choice: Accept a judgment of $272 million in damages, reduced from $1.3 billion awarded at trial, or seek a new trial. Oracle says in court filings that it wants a new trial.

The key passage of the two-page court filing reads as follows (the word “remittitur” refers to the judge’s previous order reducing the award):

Oracle has no choice but to elect a new trial, as accepting the remittitur would force Oracle to risk waiving its right to appeal the Court’s decision on the motions for judgment as a matter of law and for a new trial. Oracle’s objective is to obtain clarification of the law and, if it is right about what the law is and what the evidence supports in this case, to vindicate the verdict of the jury and Oracle’s intellectual property rights as a copyright owner. Accepting the remittitur would be contrary to this objective.

And that means that the whole thing starts over again.

Calling the $1.3 billion award “grossly excessive,” U.S. District Court Judge Phyllis Hamilton in February granted an SAP request to throw out the award. Hamilton said that Oracle never proved that it lost enough business to justify so large a judgment.

Oracle had won the award in November, after accusing SAP’s now-shuttered TomorrowNow unit of copying its software without paying appropriate licensing fees. It had been the largest judgment ever in a copyright infringement case.

At trial, Oracle accused SAP’s now-shuttered TomorrowNow business unit of illegally downloading Oracle software and then making several thousand copies of it, in order to avoid paying the relevant license fees that are Oracle’s financial bread and butter. Oracle ultimately won the claim, but then the fight turned to damages.

Lawyers for Oracle had argued that the company’s damages should be tied to the value of a hypothetical license that TomorrowNow would have had to pay for the software, had it been properly licensed. For its part, SAP had argued that, as competitors, damages should have been calculated based on profits lost by Oracle and gained by SAP as a result of the infringement, and as such is in a much lower range than what Oracle argued for.

The case has caused a lot of personal enmity between Oracle and SAP, as well as with Hewlett-Packard, especially during the 11-month period when former SAP co-CEO Léo Apotheker was CEO of HP. Apotheker’s first days on the job at HP were marred by his apparent absence from HP headquarters, in what couldn’t help but look like an attempt to avoid being served with a subpoena. Maybe Oracle will try again.

According to reports, the companies’ CEOs, Larrys Ellison and Page, are still at an impasse over how to settle Oracle’s patent-infringement lawsuit against Google over the use of Java in its Android operating system.

The latest sticking point: A recommendation from Oracle’s damages expert arguing the company is owed more than $2 billion for copyright infringement and $201.8 million more for patent infringement.

That’s significantly less than the $6.1 billion Oracle claimed Google owes it in court papers, but it’s still far too heady a figure for the search giant.

Reuters reports that in a Tuesday letter to the judge presiding over the case, Google attorney Robert Van Nest urged the court to reject that recommendation, slagging it as deficient. According to Van Nest, its failure to explain just how the figure was calculated and the forecast for how much revenue Oracle might have earned by partnering with Google on Android are grounds enough for ignoring it.

Meanwhile, talks between the dueling Larrys drag on, with an October trial date looming if they fail to reach a settlement.

Beijing-based Baidu is rushing to assess about 2.8 million files on the website, Baidu Wenku, that have been pointed to as suspected of being unlicensed, said Baidu spokesman Kaiser Kuo.

Dozens of Chinese authors have lashed out at Baidu, one of China’s biggest Internet operators, and have criticized the company and Mr. Li, one of China’s most prominent entrepreneurs, saying that the site facilitates copyright infringement.

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Bad news for SAP, Hewlett-Packard, it’s new CEO Léo Apotheker and anyone else tarred and feathered in Oracle CEO Larry Ellison’s recent fusillade of anti-SAP broadsides. A federal judge has denied a request for a gag order in the increasingly contentious legal battle between Oracle and SAP.

According to a court filing made public this morning (click on image above to enlarge), U.S. District Judge Phyllis Hamilton denied Oracle’s request for a three-day delay in the trial and ordered it to begin as scheduled on Monday, without the additional restrictions on extrajudicial communication SAP had requested.

Nonetheless, SAP–which, in a change of strategy, will not contest Oracle’s allegations that it contributed to acts of copyright infringement committed by its discontinued TomorrowNow unit–pronounced itself satisfied, saying in a statement, “The decision to narrow the scope of the trial and to start the trial on time will keep the focus on the core issues and eliminate the unnecessary sideshow. This will increase the chance of a faster resolution and we couldn’t be more pleased.”

So expect jury selection to occur on Monday, opening arguments on Tuesday and the rhetorical jousting we’ve seen to date to continue.

PREVIOUSLY:

• Ellison Taunts HP CEO a Second Time
• SAP to Ellison: Save the Drama for Your Mama
• Ellison to HP CEO: “Warrior, Come Out to Plaaeeay!
• SAP: Please Gag Oracle
• HP Scandal Sucks in New York Times Columnist Over Conflict of Interest
• Welch to HP Board: You Don’t Know Jack!
• Insiders Criticize Ellison For HP CEO Slam
• Was Apotheker HP’s First Choice of CEO?
• HP Names Ex-SAP Chief Apotheker as CEO

The German software company said it will no longer contest Oracle’s allegations that it contributed to acts of copyright infringement committed by a discontinued unit called TomorrowNow.

Previously, SAP had accepted liability for the unit’s actions, which included illegally downloading thousands of Oracle documents from its customer-support systems. But SAP had denied knowing of or contributing to those actions. A trial to determine damages in the case is scheduled to begin Monday.

Read the rest of this post on the original site »

You can read all of U.S. District Court Judge Louis Stanton’s decision at the bottom of the post, where I’ve embedded the ruling. Short version: Stanton buys Google’s longstanding argument–that the Digital Millennium Copyright Act protects YouTube from Viacom’s claims. And he seems to agree with Google (GOOG) on almost every point. There’s very little in his ruling that Viacom (VIA) will be happy about.

Even though YouTube and Google executives knew the site had plenty of clips that violated copyright, “mere knowledge of prevalence of such activity in general is not enough” to support Viacom’s claims, Stanton wrote in a 35-page decision.

That’s because the DMCA, signed into law early-on in the first Web boom in 1998, grants “safe harbor” to service providers that don’t know about specific copyright violations and that fix copyright violations when they learn about them. Since YouTube relies on users to upload clips to the service and takes down clips if copyright holders complain, it’s in the clear, Stanton says.

If the ruling holds up, it’s a big blow to traditional copyright laws. Or spun another way, it’s a huge victory for technology companies using the DMCA as a defense.

Google’s statement:

Today, the court granted our motion for summary judgment in Viacom’s lawsuit with YouTube. This means that the court has decided that YouTube is protected by the safe harbor of the Digital Millennium Copyright Act (DMCA) against claims of copyright infringement. The decision follows established judicial consensus that online services like YouTube are protected when they work cooperatively with copyright holders to help them manage their rights online.

This is an important victory not just for us, but also for the billions of people around the world who use the web to communicate and share experiences with each other. We’re excited about this decision and look forward to renewing our focus on supporting the incredible variety of ideas and expression that billions of people post and watch on YouTube every day around the world.

Viacom’s statement:

We believe that this ruling by the lower court is fundamentally flawed and contrary to the language of the Digital Millennium Copyright Act, the intent of Congress, and the views of the Supreme Court as expressed in its most recent decisions. We intend to seek to have these issues before the U.S. Court of Appeals for the Second Circuit as soon as possible. After years of delay, this decision gives us the opportunity to have the Appellate Court address these critical issues on an accelerated basis. We look forward to the next stage of the process.

So what about all of those interesting and entertaining documents both sides filed in the three-year suit and released to the public earlier this year? As I argued earlier, the bulk of them weren’t really relevant at all, and Stanton spends almost no time discussing them.

One worthwhile exception: He does use one email from Viacom attorney Michael Fricklas to help bat away the network’s complaint that YouTube was the equivalent of Grokster, the file-sharing network beaten down in a 2005 Supreme Court decision.

“The difference between YouTube’s behavior and Grokster’s staggering,” Fricklas wrote in a 2006 email. And Stanton agrees.

msj_decision

It’s not a huge shock to see former start-up CEOs join big companies after the demise of their own. But this move is a bit more surprising: It means Shapiro will be working for one of the companies that helped put him out of work.

That’s because MySpace Music is a joint venture between News Corp. (NWS) and the big music labels, including Universal Music Group. And Shapiro, among others, has pointed to Universal’s copyright-infringement lawsuit against Veoh as one the primary reasons for the video site’s downfall.

But apparently, Shapiro doesn’t mind working for Universal now. In any case, he’ll be reporting to MySpace execs Courtney Holt, Mike Jones and Jason Hirschhorn, not Doug Morris. And you could argue that it makes sense for MySpace Music to have a tech guy on board who has intimate knowledge of the big music labels, warts and all.

Plus, MySpace Music needs help from wherever it can find it. The site still boasts some 30 million unique users. And as other free music sites melt away, it is one of the only places to get legal streams without paying for them. But two years after launch, it’s still a mess to navigate, and I don’t know anyone who uses it on a regular basis. Maybe Shapiro can help.

Veoh, meanwhile, never actually went away. Something called Qlipso purchased the site, which had raised some $70 million, for less than $10 million in March.

The parties filing the suit include the American Society of Media Photographers, the Graphic Artists Guild, the Picture Archive Council of America, the North American Nature Photography Association, Professional Photographers of America, and a number of individual photographers and illustrators.

Read the rest of this post on the original site

Both sides filed the requests, as has been expected for some time, at the end of last month and is a sign that years of laborious discovery and depositions have come to a close.

There’s not much to the filings themselves:

• Google’s (GOOG) document reiterates the company’s initial argument. The search giant says it doesn’t knowingly store or play copyrighted clips on the site, and if it does, it is protected by the Digital Millennium Copyright Act. Google also cites last fall’s ruling in the Veoh/Universal Music Group case, in which a court ruled in favor of the video-sharing site.
• Viacom’s (VIA) document reiterates its initial argument, which is that Google and YouTube knew what they were doing and profited from it, which means the DMCA does not protect them. And perhaps it says something more interesting. Hard to tell, since U.S. District Court judge Louis Stanton has redacted more than a page of the document, as you can see here:

Wonder what that says? Me too.

Viacom filing:
Via 1710
Google filing:
Goog1710

And Google (GOOG) appears to have lost a tussle in Italian court today.

Mediaset, a commercial broadcaster controlled by Prime Minister Silvio Berlusconi, has won a copyright-infringement ruling, and a Rome court has ordered YouTube to remove all of Mediaset’s content from the site.

Variety:

The broadcaster began legal action in July 2008 following a trawl through the YouTube site revealed 4,643 clips and 325 hours of unauthorized Mediaset material, the company claimed.

In his written report, judge Tommaso Marvasi referred in particular to the prevalence on YouTube of Mediaset’s Italo version of “Big Brother,” which he described as the most important reality show on Italian television. It is also the Mediaset program most viewed on the Internet.

In a statement, Mediaset said that the ruling was historic because for the first time the rights of the broadcasters and program editors to their exclusive products had been fully recognized.

Mediaset is reportedly looking for more than $730 million in damages, but no word on how that phase of the trial will proceed.

YouTube’s response, via a spokesman:

We are considering our next steps, including a possible appeal. Under European and Italian law, service providers such as YouTube are not responsible for screening the content people upload. But we actually go beyond the law by offering copyright holders effective tools which allow them to manage how and whether their content is made available. It’s a programme called Content ID. More than 1,000 broadcast partners including Rai and Fox Channels Italy have chosen to use it. Mediaset could simply join these other partners and use the tools as well. Alternatively, it would be enough for them to provide us the URLs of the videos and we would remove them.

Win some, lose some. Earlier this year, YouTube–along with most other Web companies that rely on user-generated and/or uploaded content–was celebrating Veoh’s U.S. court victory against Universal Music.

If that ruling stands, it appears to put almost all of the onus on content owners to keep their stuff off of video sites. Which could pose a problem for Viacom (VIA) and its billion-dollar lawsuit against Google.

• Orphan works–books whose copyright holders are unknown–will be overseen by an independent trustee who will administer their licensing, not by Google.
• Books published outside the United States, United Kingdom, Canada and Australia will be excluded from the settlement.

Those are substantive alterations, but they clearly haven’t placated critics who accuse Google (GOOG) of attempting an “end-run around copyright law as we know it.”

The Open Book Alliance–a coalition whose members include the Internet Archive, Amazon (AMZN), Microsoft (MSFT) and Yahoo (YHOO)–has blasted the revision twice already, decrying it as “a sleight of hand” intended to distract people from Google’s continued efforts to establish a monopoly over digital content access and distribution.

“The proposed changes fail to address this deal’s fundamental flaws,” Open Book Alliance Co-Chair Gary Reback said in a vitriolic statement. “Despite Google’s effort to spin this deal, it does nothing to promote competition nor does it reform Google’s exclusive access and monopoly hold on this digital database of books. Their proposed ‘unclaimed works fiduciary’ will have zero authority to promote competition or expand access. It is a cynical diversion away from the parties’ continued reliance on the discredited argument that competitors can obtain access through the very means Google did–getting sued for copyright infringement and abusing the class action process. This deal remains rife with anti-trust, class action and copyright violations.”

But first the company needs to figure out who the culprits are.

Microsoft (MSFT) has filed five so-called “John Doe” civil suits against the hackers, whom it can’t identify yet. Redmond accuses the unknown attackers of a variety of crimes, from fraud to copyright infringement; it says it hopes the filings will “deter malvertising in the future.” (See full text of the complaint below.)

There’s a decent chance that the Microsoft bad guys are, in fact, the same guys who hijacked the Times last weekend. The methodology they used to get the ads onto Redmond’s MSN publishing network seems similar, and so does the fake “virus detected” warning the ads use to confuse surfers.

And, intriguingly, online ad monitor Click Forensics says it thinks it has identified a link between the malware that the Times served up and the stuff that the Microsoft attackers were trying to distribute. The company also thinks the two attacks are connected to a click fraud ring it has dubbed the “Bahama Botnet.”

Even if Microsoft does end up getting its hands on these guys, I think we’ll be seeing more of this stuff. Since the Times story broke last weekend, I’ve been talking to a variety of ad tech experts about the incident. And it sounds as if the technique the hackers used to compromise the paper–essentially, passing themselves off as legitimate advertisers–will be very difficult to stop if someone is determined to use it.

The best solution I’ve heard so far: Monitoring systems that can quickly detect an attack and warn publishers that they’re running malvertisements. It’s unclear how long the bogus Times ad stayed up, but the fact that it got switched on over the weekend indicates that the attackers assumed the paper would be slow to react.

Microsoft Malware complaint –

Depends on who you ask, of course.

Executives at Veoh say Judge A. Howard Matz has given them a new lease on life, and at least some of the company’s investors are doing some chest-beating. Universal, the world’s largest music label, says it’s confident it will win an appeal.

You can get the same split opinion by asking two different companies that happen to be locked in a similar fight. Executives at Google’s (GOOG) YouTube, which is trying to fend off a copyright suit filed by Viacom (VIA), say the Veoh ruling bolsters their case. You can guess what Viacom says.

The gist of the fight: Universal says Veoh didn’t try hard enough to keep illegally uploaded material off the video site; Veoh says it made a good-faith effort. Matz agreed with Veoh and tossed out Universal’s claims.

Even if you disregard the posturing, it’s fair to say there’s a genuine debate over the ruling’s meaning. Veoh, along with some of my bloggy colleagues, is treating the decision as the final word on Web copyright disputes, or at least those that involve the Digital Millennium Copyright Act.

And Matz certainly slapped Universal around. But it’s worth noting that copyright owners have lost Web cases in the Ninth District before, but ultimately won on appeal. Ask Grokster, the now-defunct file-sharing network that dissolved after a 2005 Supreme Court ruling.

You can read all of Matz’s judgment at the bottom of this post. But this excerpt, in which he argues that simply having illegal material on your site isn’t a crime, and neither is knowing about it (at least, in a general sense), gives you a good idea of Matz’s thrust and tone:

No doubt it is common knowledge that most websites that allow users to contribute material contain infringing items. If such general awareness were enough to raise a “red flag,” the DMCA safe harbor would not serve its purpose of “facilitat[ing] the robust development and world-wide expansion of electronic commerce, communications, research, development, and education in the digital age,” and “balanc[ing] the interests of content owners, on-line and other service providers, and information users in a way that will foster the continued development of electronic commerce and the growth of the Internet.”

Legal debate aside, the ruling does give a practical benefit for Veoh. It allows the company to fetch a higher price on the auction block.

CEO Dmitry Shapiro has been shopping the site to bidders over the summer, and as of a few months ago, he was willing to accept less than the $70 million investors like Time Warner (TWX), Goldman Sachs (GS) and former Disney (DIS) CEO Michael Eisner have poured into the site.

Selling a Web video site in 2009 is a tough challenge without a handicap, but the lawsuit was a big one. It was a huge time-and-money suck–Veoh may have spent as much as $6 million fighting the case in the last two years–and more important, the unresolved case was a huge liability. Who wants to buy a lawsuit?

Now, Shapiro says, Veoh’s options include not selling at all. He insists that some of Veoh’s existing backers are willing to recapitalize the company and that new investors might join in as well.

I’ll take him at his word, but if I had to bet, I’d wager that Veoh ends up getting acquired sooner than later. Maybe quite soon–the company has a board meeting today.

Wonder what they’ll talk about?

VEOH –

Still here? How about that? You get a bonus video! (But be warned: Pacino chews up a lot of scenery here, and there is some impassioned cursing.)

The Sun notes that Discovery, which owns Discovery Channel, Animal Planet and other cable properties, filed a patent for the device in February; but the Sun notes that the patent filing was not made public until last Thursday.

The story reports that “diagrams included with Discovery’s patent application…depict a rectangular device with physical controls for user navigation.” The device would be for reading e-books and “providing for e-commerce.” As the Sun notes, Discovery already holds a patent on some security and copy protection features, and earlier this year sued Amazon.com (AMZN) for alleged infringement by the Kindle.

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In a post to its new community site Tuesday, Psystar said it has dumped its original legal counsel and hired Texas-based legal firm Camara & Sibley LLP to represent it.

Why? It’s not entirely clear. Certainly, Psystar’s explanation leaves a lot to be desired. “Psystar has always been more a Cowboy than a Hippie,” the company said. “Now we’ve changed lawyers to better reflect who we are. Everyone here values openness. And that’s how we’re going to fight Apple: in public.”

An ironic claim for the company to be making given that Apple has accused it of being backed by shadowy third parties. But if, as Psystar claims, it as “nothing to hide,” then perhaps it really has nothing to hide.

In any event, we’ll find out in a few months. “A new trial date has been set for January 11, 2010, in federal court in San Francisco,” Psystar said. “As we move toward trial, we’ll be keeping you informed about the arguments, the evidence, and what’s going on in the case. And, come January, Camara & Sibley will be ready to fight for Psystar, guns blazin’.”

And end up a-headin’ for the last roundup, no doubt…

In a post to its new community site Tuesday, Psystar said it has dumped its original legal counsel and hired Texas-based legal firm Camara & Sibley LLP to represent it.

Why? It’s not entirely clear. Certainly, Psystar’s explanation leaves a lot to be desired. “Psystar has always been more a Cowboy than a Hippie,” the company said. “Now we’ve changed lawyers to better reflect who we are. Everyone here values openness. And that’s how we’re going to fight Apple: in public.”

An ironic claim for the company to be making given that Apple has accused it of being backed by shadowy third parties. But if, as Psystar claims, it as “nothing to hide,” then perhaps it really has nothing to hide.

In any event, we’ll find out in a few months. “A new trial date has been set for January 11, 2010, in federal court in San Francisco,” Psystar said. “As we move toward trial, we’ll be keeping you informed about the arguments, the evidence, and what’s going on in the case. And, come January, Camara & Sibley will be ready to fight for Psystar, guns blazin’.”

And end up a-headin’ for the last roundup, no doubt…

Also: Debtor is suffering under mounting legal costs as it is steadily beaten into submission by Apple (AAPL) and its notoriously vicious legal team.

Pystar’s bankruptcy declaration will delay Apple’s copyright-infringement suit against it, but only temporarily. In the meantime, the company will be allowed to continue to do business and perhaps, strengthen its defense. But on June 5, the date of its bankruptcy hearing, things could get nasty. Psystar will almost certainly be forced to reveal its financial backers, and if they are the nefarious Svengalis that Apple claims, there may be hell to pay.

The judge disagreed. And his reasons for doing so will undoubtedly come into play in the Viacom case and others as well. “Veoh has simply established a system whereby software automatically processes user-submitted content and recasts it in a format that is readily accessible to its users,” the judge wrote. “Veoh preselects the software parameters for the process from a range of default values set by the third-party software. … But Veoh does not itself actively participate or supervise the uploading of files. Nor does it preview or select the files before the upload is completed. Instead, video files are uploaded through an automated process which is initiated entirely at the volition of Veoh’s users.”

Google (GOOG) was understandably quite pleased with the ruling: “It is great to see the Court confirm that the DMCA protects services like YouTube that follow the law and respect copyrights,” Zahavah Levine, YouTube’s chief counsel,” said in a statement.

Viacom (VIA) was equally displeased, understandably. “Even if the Veoh decision were to be considered by other courts, that case does nothing to change the fact that YouTube is a business built on infringement that has failed to take reasonable measures to respect the rights of creators and content owners,” the company said in a statement. “Google and YouTube have engaged in massive copyright infringement–conduct that is not protected by any law, including the DMCA.”

Plus, said Schmidt, Google’s attention is best focused where the real money is, or will be soon: mobile advertising. “We can make more in mobile than desktop, eventually,” Schmidt said. “The reason is because the mobile device is more targeted. Think about it: You carry your phone with you everywhere. It knows all about you. We can use that to do a very, very targeted ad. Over time, Google will make more money from mobile advertising.”

“Copyrights are not supposed to protect board games,” intellectual property attorney Pete Kinsella told CNet News.com. “What copyrights protect is the expression of an idea rather than the idea itself. The law allows people to design around things, and particularly when there isn’t patent protection, the law has great incentive to design around things by making things somewhat different.”

Which is an unfortunate state of affairs for Hasbro (HAS): The newly launched Wordscraper has, in a very short time, already signed up 3,569 users. And it will surely gather more as word of its debut spreads. What will the game company do now? What will it do if Wordscraper’s creators release it as a true board game?

“Scrabble: Every Word’s a WINNER!”

Except for Scrabulous, apparently. The online knockoff of Hasbro’s 75-year-old word game has been removed from Facebook at the game-maker’s request. “In response to a legal request from Hasbro, the copyright and trademark holder for Scrabble in the U.S. & Canada, the developers of Scrabulous have suspended their application in the U.S. and Canada until further notice,” Facebook explained in a statement.

Not exactly a surprise, given recent events. Last week, Hasbro filed suit against Scrabulous creators Jayant and Rajat Agarwalla, claiming trademark and copyright infringement. “Hasbro has an obligation to act appropriately against infringement of our intellectual properties,” said Barry Nagler, Hasbro’s general counsel, at the time. “We view the Scrabulous application as clear and blatant infringement of our Scrabble intellectual property, and we are pursuing this legal action in accordance with the interests of our shareholders, and the integrity of the Scrabble brand.”

An understandable view. Scrabulous is, let’s face it, trading on Scrabble’s name and conceit. And, until it was pulled, it had over two million users and was generating over $25,000 per month in revenue–for someone other than Hasbro. That said, when was the last time you played Scrabble offline?

If you answered, “I can’t recall,” or “at Aunt Marge’s house when I was eleven,” you’re probably like a lot of other folks out there who only rediscovered the game because of Scrabulous. And when you think about it that way, Scrabulous could have been the perfect licensing opportunity for Hasbro (HAS), had the company decided to view it as that, instead of an affront to its intellectual property. Two-million- users-and-growing is a hell of a lot better than the 8,900 users the official Scrabble Facebook app has garnered since its launch earlier this month.