universal.jpgUniversal Music Group, whose artists include U2, Mary J Blige and Mariah Carey has finally made good on its threat to sue — filing against online video sharing sites Grouper and Bolt for allowing users to swap pirated versions of its musicians’ videos.

These companies are smaller than YouTube, and thus are easier targets for Universal, which might be seeking to use these cases as precedents for a wider fight– regardless of any short-term licensing agreements it may have signed with YouTube after that site got the huge resources of Google behind it. (Or, Universal may be happy with the copyright filtering technology agreed to in its deal with YouTube and Google, and so is now going after the renegades).

Bolt and Grouper say the Digital Millennium Copyright Act gives them protection, because it suggests that a site is in the clear if it takes down copyrighted content. The question is whether a site should be required to use proactive means to avoid such content, and whether its technology promotes sharing afterward.

UMG lawyers argue the sites are copying, reformatting, distributing and creating derivative works from Universal’s musicians. So Universal is testing a narrow definition of DMCA for the first time. In this way, Bolt and Grouper make for interesting case examples.

Grouper, in particular, is significant. Grouper users can download the videos to their computer, iPod, or PSP — and once they have a physical copy, they can view it and share it with whom they please (similar to the old Napster with music), Steve Poland points out.

Bolt, however, operates much like YouTube, allowing users to view only Flash versions of the videos in their web browser without any ability to copy the video to their physical computer.

Thus, these suits are a great way for Universal to test these two models under the DMCA.

Gill Sperlein, general counsel of adult-entertainment company Io Group, which filed a complaint against another video-sharing site Veoh Networks, told the WSJ (sub required): “They’re making a copy, so that’s direct copyright infringement. Then they’re posting it on their Web sites and financially benefiting.”

Bolt.com had 8.1 million unique visitors in August, according to online measurement company, Comscore, while Grouper had 1.8 million visitors — a fraction of YouTube’s 72.1 million visitors.