Despite its ability to offer unlimited space for an infinite amount of creative material, the Internet sure seems awfully crowded these days.  

With lawsuits, that is. 

Viacom Inc., which filed a $1 billion copyright infringement lawsuit against Google Inc. and YouTube last week, received its own slap on the wrist Thursday when a couple of activist groups sued the media conglomerate for hastily requesting that YouTube yank a Colbert Report parody that featured clips from the actual Comedy Central show.  

Viacom, the cable network's parent company, improperly asked YouTube to pull the spoof because the clips taken from the show were protected under federal copyright law's "fair use" provision, according to the lawsuit filed in U.S. District Court in San Francisco by the Electronic Frontier Foundation and Stanford Law School's Center for Internet and Society. 

Those two groups filed the suit on behalf of MoveOn.org Civic Action and Brave New Films LLC, which produced the short "Stop the Falsiness," an obvious goof on Colbert and his bogusly conservative satirical talk show. 

Viacom, which reviewed some 1.8 million videos before flaggin more than 150,000 of them for copyright violations, said Thursday that it had no record of a request to pull the Colbert parody and deemed the lawsuit a waste of time on the plaintiffs' part. 

"I can inform you that Viacom has no problem with your client's continued use of it on its Website or on YouTube," Michael Fricklas, Viacom's general counsel, wrote in a letter to the plaintiffs' attorneys after reviewing the video. 

All of which sounded good to Electronic Frontier attorney Corynne McSherry, but she said that her camp would still continue to investigate the matter.  

"We're happy they don't have a problem with our clip," she told the Associated Press. "But at this point it is still our understanding that they sent a takedown notice based on it. And as far as we're concerned, we still have a lawsuit pending." 

The suit asserts that MoveOn and Brave New Films are entitled to damages under the 1998 Digital Millennium Copyright Act, which states that content watering holes such as YouTube are practically immune to copyright lawsuits, so long as they react promptly to takedown requests. 

In suing YouTube last week, Viacom stated that the video-sharing Website most certainly did not react promptly to a request last month to remove Viacom-owned content (including clips from Comedy Central, Nickelodeon, MTV, BET and more) from the site. 

While video and music-sharing sites are no stranger to copyright-infringement complaints, lawsuits such as the one filed Thursday, alleging that something was taken down too quickly and without reason, are rare. 

"People just shoot off a takedown notice without really giving a second thought to the material being taken down and whether it's really proper to be taken down," McSherry said. "A lot of people cave in because they don't realize they can push back or they can't afford to push back." 

Added MoveOn.org executive director Eli Pariser: "With this lawsuit, we are making clear that corporations like Viacom must not be allowed to muzzle independent video creators and censor their free speech." 

But although Google and YouTube are currently in the hot seat at the behest of that very corporation, NBC Universal and News Corp. are over in the peanut gallery thinking, hmmm, we want to be more like them. 

Minus the lawsuit, of course. 

News Corp. chairman Rupert Murdoch and the suits at NBCU parent General Electric must not have been too thrilled to learn that Google alone was going to be raking in a third of all online advertising dollars this year, per the Los Angeles Times, and that YouTube attracts more users than all of the TV networks' Websites combined. 

So, in the ongoing quest to compete with successful user-generated content sites such as YouTube, NBCU and News Corp. announced Thursday that they have inked deals with Yahoo, Microsoft, AOL and MySpace (which News Corp. owns) to better distribute TV shows and movies to the online masses, as well as give them a place to play with their own creations and share them with friends—via one massively stocked Website.  

Shows such as Heroes, The Office, Family Guy and 24 and films from Universal Pictures and 20th Century Fox are a few examples of the kind of content that will be available on the upcoming mega-site, with the help of advertisers such as Cadbury Schweppes, Cisco Systems, Intel Corp. and General Motors, all of whom have already signed on to support the new venture.

According to the Times, NBCU and News Corp. had also been in talks with Viacom to get its cable nets and Paramount Pictures on board, but after Viacom sued Google the rival corporations decided to go ahead without it for now. 

"Our alliance proves that you can deliver quality online video entertainment and protect intellectual property and copyright at the same time," Kevin Johnson, president of Microsoft's platform and services division told the Times. 

Oh…snap.