While each of the defendants has the right, ability and legal obligation to prevent infringement of plaintiffs’ copyrighted works, they have allowed infringement to go unchecked, content to profit handsomely from advertisements that appear side-by-side with infringing content.

What's particularly about the suit is that EMI's strategy seems to imply that because VideoEgg used technology like Audible Magic and human review to filter copyrighted content from the company's servers, it's more liable, not less.

No wonder YouTube took so long to install filtering software, which has long been demanded by rightsholder organization like the Recording Industry Association of America. In a prepared statement, VideoEgg argues the suit is without merit and asserts that it upheld the law under the DMCA:

VideoEgg has consistently worked to employ best practices to protect content owners. We took all the steps necessary to avoid copyright infringement issues, including systemwide deployment of Audible Magic, the leading provider of content identification services. Moreover, we have never received a takedown notice from EMI nor any of its affiliated companies.

Moreover, the company's deal to provide Hi5 with video uploading services for the social network's users ended in April, so it can not be accused of continuing to enable new cases of infringement. What's worrisome is that EMI is going after a company for doing exactly what the RIAA asked — pro-actively policing its network for infringement. And where's ostensibly tech-savvy former Googler Douglas Merrill in all of this? Somebody needs to explain to EMI's legal team how bad it looks trying to punish one of the companies actually doing their bidding.

• Joe Green (top left) has raised $7.3 million for his Facebook application, Causes. Which would be more impressive had the funding not come from Peter Thiel's Founders Fund. Thiel is an investor in Facebook, and has a vested interest in creating the impression that Facebook appmakers are worth something.
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• Drew Houston (not pictured) runs a company, Dropbox, which offers online file storage, a service users can't get from anyone else. Except AOL, Google, Microsoft, and Yahoo, and a good dozen other startups.
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• VideoEgg CEO Matt Sanchez (top, second from left) tried to compete with YouTube and failed. Or "evolved," as BusinessWeek put it, into an ad network for Flash games, a crowded field that so far has garnered VideoEgg gross revenues of $300,000 a month. The magazine lauded Sanchez for raising $27 million in venture funding; it should have asked instead how much is left.
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• RockYou cofounder Jia Shen (bottom left) launched his widget startup while working for another company, Iconix, according to IM chats produced in court. He and cofounder Lance Tokuda settled a lawsuit with iconix last year. They're now trying — so far unsuccessfully — to raise another round of venture funding, or sell the company.

• Yahoo: New homepage, launched just as rising (formerly leaving) exec Brad Garlinghouse takes the helm of the homepage and My Yahoo. And every blogger's got something to say (except for me and my monkey).
• Google: Google Notebook, which is boring because it's so fundamentally useful.
• Microsoft: Windows Media Player 11, which sucks less than earlier Windows Media Players. (In other words, it sucks.)
• Apple: The MacBook. $100 more than the iBook I bought last week. Damn it.
• AOL: AOL UnCut. What does VideoEgg have that YouTube doesn't? A fat legitimate contract.