The other shoe -- or is it the other egg? -- has dropped on VideoEgg Inc., a company whose mission is to make it easier for advertising to be distributed by giving individuals the incentive to do it instead. Apparently they made it too easy.

In a 65-page complaint filed last Friday, EMI Music is alleging several kinds of copyright infringement and unfair competition, citing almost 80 pieces it owns that it said San Francisco-based VideoEgg and its partners had used inappropriately. The company is requesting up to $150,000 per copyright infringement, attorney fees, and both preliminary and permanent injunctions.

"Defendant VideoEgg purports to offer technology and services that allow users, through websites operated by VideoEgg's 'partners' to upload digital videos to VideoEgg servers, view those videos, and then distribute them virally and for free over the Internet...Among the videos copied, publically performed, and distributed by VideoEgg, Hi5, and/or their users are videos containing Plaintiffs's sound recordings and musical compositions," the complaint reads in part.

EMI would not comment further on the lawsuit because it is a matter of pending litigation.

VideoEgg has its own explanation of its services: "We believe that advertising on the internet is about giving users control," its Web site reads. "We invite them to engage with the advertisers content on their terms. This philosophy to advertising is summed up by our mantra 'Nice Works."'

To a certain extent, this lawsuit is a natural follow-on to the Viacom lawsuit against YouTube/Google in March 2007, which is still underway and which was predicted last April by intellectual property attorney Gavin McGinty in a recent article published by Current, on copyright infringement in "mashup" videos.

"Copyright infringement is copying a substantial part of a work, either in a qualitative or quantitative sense," McGinty said. "The rule of thumb is, if you're likely to be able to spot the origin of the source material, then it's likely to be a substantial part."

"We are disappointed that EMI is pursuing legal action when the law provided clear means to address their concerns," VideoEgg said in a statement. "We have always complied with the copyright laws and are entitled to safe harbor under the DMCA from any claims brought by EMI." The company went on to say it had used the Audible Magic content identification system and noted that it had never received a takedown notice from EMI.