Viacom Sues YouTube

Viacom(VIA) just upped the ante in its high-stakes battle against Google's(GOOG) YouTube.

Viacom announced Tuesday that it has sued the popular video sharing site in federal court, seeking more than $1 billion in damages. YouTube violated its copyright protections by hosting popular clips on its site, Viacom alleges, while at the same time reaping the benefits by selling advertising. Viacom also seeks an injunction preventing YouTube from using its clips.

"There is no question that YouTube and Google are continuing to take the fruit of our efforts without permission and destroying enormous value in the process," Viacom said in a statement released Tuesday morning. "This is value that rightfully belongs to the writers, directors and talent who create it and companies like Viacom that have invested to make possible this innovation and creativity."

Viacom also said that YouTube's actions stood in "stark contrast" to that of other distributors of its content, who acknowledged its fair value.

Progress of the dispute will be closely watched as it may be a sign of things to come for YouTube's relationship with other content owners as well. Google claims that it is protected by the Digital Millennium Copyright Act (DMCA). Content owners who find their copyrighted material on YouTube should notify the company, in which case the search giant will remove it.