Embedding a copyright-infringing video on another Web site is not illegal, a court ruled yesterday.

Judge Richard Posner ruled at the U.S. Seventh Circuit Court of Appeals that MyVidster, a social video bookmarking site, did not infringe the copyright of Flava Works, a porn production company, when it embedded copyright-infringing versions of Flava Works content from third-party Web sites.

The decision overturned a preliminary injunction from 2011, imposed by a lower court after Flava Works filed suit against MyVidster in 2010.

According to the Appeals Court ruling, MyVidster "doesn't touch the data stream" and therefore doesn't host the infringing video, but links to versions hosted elsewhere on the Web.

MyVidster was "not encouraging swapping, which in turn encourages infringement," the ruling said:

MyVidster is giving web surfers addresses where they can find entertainment. By listing plays and giving the name and address of the theaters where they are being performed, the New Yorker is not performing them. It is not "transmitting or communicating" them. Is myVidster doing anything different? To call the provision of contact information transmission or communication and thus make myVidster a direct infringer would blur the distinction between direct and contributory infringement and by doing so make the provider of such information an infringer even if he didn't know that the work to which he was directing a visitor to his website was copyrighted.

Both Google and Facebook filed papers in support of MyVidster. They argued that sites such as theirs should be seen as intermediaries only, and that they should not be held liable if someone uploads copyrighted material to their servers, claiming Digital Millennium Copyright Act (DMCA) safe harbor. The Electronic Frontier Foundation (EFF) also filed an amicus brief in support of MyVidster.

The Motion Picture Association of America (MPAA) sided with Flava Works, filing a brief urging the appeals court to uphold the lower court's injunction.

How this will affect other cases remains unseen. For instance, 23-year-old Richard O'Dwyer, who operated the Web site TV-Shack, is to be extradited from the U.K. to the U.S. to face copyright infringement charges. His site offered links to other Web sites that hosted uploaded copyrighted television shows and films, but did not host the material itself.