A few months back, porn studio Flava Works and the MPAA launched a legal campaign against site myVidster to outlaw the embedding of videos that weren't uploaded with the permission of the copyright holders. Specifically Hypothetically, you could be punished for posting an old N*Sync video to you blog that wasn't uploaded by Vevo (or whoever). Thankfully the 7th Circuit Court of Appeals struck that case down.
According to GigaOm, Judge Richard Posner says that because myVidster was not hosting the links, but merely pointing them to content, it infringed on no copyrights. He considered it akin to the New Yorker providing show listings to readers. Furthermore, he went out of his way to mention that viewing illegally uploaded videos was not copyright infringement either.
"But as long as the visitor makes no copy of the copyrighted video that he is watching, he is not violating the copyright owner's exclusive right… His bypassing Flava's pay wall by viewing the uploaded copy is equivalent to stealing a copyrighted book from a bookstore and reading it. That is a bad thing to do (in either case) but it is not copyright infringement."
And while that puts any notion of infringement to rest, what's curious about that statement is that it doesn't necessarily close the argument on the viewing of illegally uploaded videos being considered theft. But that issue, if taken up, will be on another day. For now, embed at will. [U.S. Courts via Eric Goldman via GigaOm]