The Motion Picture Association of America is seeking a new judgment on what constitutes copyright infringement, seeking those who embed copyrighted material via YouTube or other sources, not just those who host it. Via Arstechnica:

“The Motion Picture Association of America is squaring off against a coalition of Internet giants and public interest groups over the key question of whether it's possible to directly infringe copyright by embedding an image or video hosted by a third party.

A federal judge took that position last July, prompting a chorus of criticism. Two briefs—one by Google and Facebook, the other by the Electronic Frontier Foundation and Public Knowledge—attacked the decision as contrary to past precedents and potentially disruptive to the Internet economy. They asked the Seventh Circuit Court of Appeals to overturn it.

Last week, the MPAA joined the fray with a brief in support of Illinois federal judge John F. Grady's ruling. It urged the Seventh Circuit not to draw a legal distinction between hosting content and embedding it. In the MPAA's view, both actions should carry the risk of liability for direct copyright infringement.

But as Google and Facebook pointed out in a November brief, previous precedents have found the distinction between hosting and embedding legally relevant. The 2007 decision of Perfect 10 v. Amazon is a key precedent. The Ninth Circuit Court of Appeals held in that case that only the server that hosts infringing content, not other servers that may provide links to infringing content, are guilty of direct copyright infringement. The Perfect 10 decision is a strong precedent because it dealt with the closely analogous case of Google's image search engine embedding copies of infringing images hosted on third-party servers.”

What do you think–fair or foul? Let us know in the comments.