Such incidents could erode a court's faith in Google's anti-piracy principles, von Lohmann suggests.

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At her pop-ups, she would present the work of designers like Peter Marigold, Fabien Cappello and Julia Lohmann.

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All of that, says Fred von Lohmann of the Electronic Frontier Foundation, means Digg is in uncharted legal territory.

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Von Lohmann concurs with Google's argument that YouTube is fulfilling its legal obligations and that copyright protection is the responsibility of content owners.

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But they will factor heavily into any settlement terms struck by Google and Viacom, says Fred von Lohmann, senior attorney at the Electronic Frontier Foundation.

FORBES: YouTube's Filter Fails to Please

The Electronic Frontier Foundation's von Lohmann says potential plaintiffs may not sue Digg for fear of generating even more publicity about something they want kept quiet.

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"We're not talking about something that is a dedicated piracy tool, " said Fred von Lohmann, senior intellectual property attorney at the civil liberties group, Electronic Frontier Foundation.

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The exemption is one of a record six granted by the Copyright Office on Wednesday, and was announced so unexpectedly, that even the EFF's Fred von Lohmann admitted that he was "surprised and pleased" by the development.

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