Here's a great resource for anyone study libel and copyright laws along with various other corners of the legal code that relate to the world wide web. Ever since the dawn of the internet, there have been people fighting over their share of it, and what is and isn't allowed to go on it.

It seems the internet is not the open range many people once thought it was, although many of the plaintiffs in these lawsuits eventually dismissed the cases - or lost them and had to pay costs. It's an interesting look at how people have used the valuable "invisible property" that is the internet in ways that the legal code could have never anticipated.
LINK

A lot of people, including myself, have questioned whether Google's buyout of YouTube opens up the search giant to copyright infringement lawsuits. Although there is certainly a strong possibility that Google will get sued, it's not clear whether or not they will lose.

Both YouTube members who upload copyrighted material and Google could be held liable for copyright infringement, but the law is vague on what actions Google must make to avoid breaking the law. YouTube users are the ones uploading the videos, and they are supposed to follow the guidelines which they agreed to when they signed up. That includes only uploading videos that they own distribution rights to or videos in the public domain. Google/YouTube just hosts these videos. Under provisions in the 1998 Digital Millennium Copyright Act, a host must remove content as soon as it's notified that it infringes on copyrights. YouTube already does that, so while there are literally millions of infringing videos on YouTube, there should be close to zero videos that YouTube has been notifed are infringing.

Many copyright owners have no problem with their content being uploaded on to YouTube. It promotes their material for free, and can lead to greater revenue in the future. For that reason, I would expect many of those copyright owners to remain silent about infringement of their work and even join in themselves, perhaps releasing new music videos and other content on YouTube before selling their "better" goods somewhere else, perhaps with an ad for their paid content (be it a CD, a movie, or anything else) within the YouTube video.
Law Blog » Does YouTube Make Google a Copyright-Infringement Target?