A long-simmering copyright dispute between Hollywood and the Web has hit the U.S. Court of Appeals for the 2d Circuit — and the outcome could set a national precedent regarding the scope of potential liability for nearly every business on the Internet that posts infringing content.

Viacom Inc. seeks to overturn a devastating loss it suffered in June, when U.S. District Judge Louis Stanton found that, under the safe harbor provisions of the Digital Millennium Copyright Act (DMCA), YouTube bore no liability for thousands of videos posted by third parties on its site in alleged infringement of Viacom’s copyrights. [See sidebar, "Section 512 of the DMCA"]

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