US District Judge Louis Stanton ruled that Google's YouTube did not violate copyright when clips from Viacom's MTV and Comedy Central cable television channels were posted on the video-sharing website.
He also said that YouTube had done all it could to remove videos which infringed on copyright protections.
Viacom had been seeking 1 billion dollars in damages for copyrighted videos that appeared on Google's YouTube website. Viacom charged that Google deliberately relaxed its own copyright compliance standards so that it "could profit from illegal downloads."
YouTube lawyers maintained that Viacom executives secretly uploaded their videos in order to boost their popularity. Google claimed that Viacom's lawsuit was motivated by frustration that Google had beaten the entertainment conglomerate in the race to buy YouTube in a 1.8-billion-dollar deal in 2006.
Viacom said in a statement it would appeal the decision, calling Stanton's ruling "fundamentally flawed."
In a blog, Google called the decision an "important victory" not only for the company "but also for the billions of people around the world who use the web to communicate and share experiences with each other."