A federal judge dismissed Media giant Viacom’s $1 billion lawsuit against Google on June 23 after in a ruling that Viacom did not prove the Internet company’s YouTube service committed copyright infringement.

According to the Huffington Post, Viacom claimed in their suit that Google branded YouTube as the “most watched video site” of clips that were uploaded illegally by millions of people worldwide. Viacom argued that their popular shows “The Daily Show” and “The Colbert Report” were among those illegally uploaded.

Judge Lewis Stanton of the U.S. District Court for the Southern District of New York dismissed the suit, granting a motion for summary judgment by Google lawyers. Google claimed that a 12-year-old law which protects Internet services from copyright infringement suits backs their actions. Under the Digital Millennium Copyright Act, Internet services are protected from copyright suits if they remove content from their Web sites after being notified of a violation. According to Judge Stanton, YouTube removed the content when they were told to do so by Viacom in 2007.

“This is an important victory not just for us, but also for the billions of people around the world who use the web to communicate and share experiences with each other,” Kent Walker, vice president of Google, said in a YouTube blog post. “The decision follows established judicial consensus that online services like YouTube are protected when they work cooperatively with copyright holders to help them manage their rights online.”

“We’re excited about this decision and look forward to renewing our focus on supporting the incredible variety of ideas and expression that billions of people post and watch on YouTube every day around the world,” Walker said.

Viacom, the owner of MTV, BET and Paramount pictures, argued that Google was aware of YouTube’s copyright infringement practices when it bought the site for $1.65 billion in Google stock in late 2006, but turned a blind eye. In addition, Viacom wanted Google to review videos prior to posting them instead of waiting until they are flagged for removal, according to CNN.com.

But Slate.com technology writer Farhad Manjoo said Google has in fact operated YouTube on that standard. Manjoo said Google implemented “a system called ContentID that takes down potentially unauthorized material by looking for just the sort of red flags Viacom has outlined.”

Viacom said it plans to appeal the court’s decision.

“We believe that this ruling by the lower court is fundamentally flawed and contrary to the language of the Digital Millennium Copyright Act, the intent of Congress, and the views of the Supreme Court as expressed in its most recent decisions,” Viacom executives said in a statement. “We intend to seek to have these issues before the U.S. Court of Appeals for the Second Circuit as soon as possible. After years of delay, this decision gives us the opportunity to have the Appellate Court address these critical issues on an accelerated basis. We look forward to the next stage of the process.”

Manjoo said Viacom has indicated it has no serious problems with how YouTube operates now, but that the company is seeking a ruling in their favor to impose more stringent copyright and digital rights management controls on Web companies.