YouTube’s victory in Viacom’s piracy lawsuit will be, in the long term, a good thing for online innovation.

Almost a decade ago, Napster was dismantled because its users shared songs.  The technology it was based on was neutral – and could have been used to share legal sound files just as easily as illegal files.  But the technology became the target of content creators – musicians – concerned about people using the technology for piracy.

Blaming Napster because people used it to do something illegal is like blaming a hotel because someone turned a room into a meth lab.  The same analogy can be used for YouTube’s situation: they built the rails for video sharing.  People could use that to share a bootleg copy of Shrek 8, thus cheating Mike Myers out of his cut of the domestic gross or DVD sales.  They could also use it to share a video of a cat falling off the bed, or to create a video blog, or to jump start a comedy career, or to reveal a Congressman roughing up a college kid, or a Senator uttering something that sounds like a racial slur and changing the course of the 2008 Presidential election.

To be clear, YouTube should be held accountable for helping police piracy when concerns are brought to their attention, just as a hotel owner should cooperate with warrant-bearing law enforcement officials investigating meth distribution that seems to be coming from their hotel.  The people dealing meth should be punished.  If the hotel stonewalls and knowingly protects said meth dealers, they should be punished.  But otherwise, the hotel owner is just someone providing a product for private use, and can’t be held liable for its mis-use.

There are, of course, legitimate questions about how important Google feels it is to do right by the people it makes money off of – and the dicey question of how much knowledge a site can have of the activity before it makes a move.  But the result of the Google/Viacom case has less to do with a clash of the corporate titans than with shielding future start ups from liability (and excessive damages) for honest efforts to build online social networks.  If start up sites are held liable for their members’ illegal activities, it could crush innovation and entrepreneurship.  Under the Napster rules, some poor schmuck who isn’t as big as Google could lose his shirt for building a website in his basement because of the actions of the users.  The YouTube rules are simply more fair.