A US appeals court on Thursday revived a billion-dollar lawsuit filed by entertainment giant Viacom accusing Google-owned website YouTube of knowingly profiting from pirated video clips.

The judge handling the appeal reversed a lower court's decision two years ago to toss out the case, saying "a reasonable jury could find that YouTube had actual knowledge or specific awareness of infringing activity on its website."

Viacom praised the ruling as a definitive message that "intentionally ignoring theft is not protected by the law."

Google focused on a portion of the decision that weakened the legal threat by concluding that a set of YouTube features at issue in the case did indeed merit safe haven under the law.

"All that is left of the Viacom lawsuit that began as a wholesale attack on YouTube is a dispute over a tiny percentage of videos long ago removed from YouTube," a Google spokeswoman said in response to an AFP inquiry.

"Nothing in this decision impacts the way YouTube is operating," she continued. "YouTube will continue to be a vibrant forum for free expression around the world."

Viacom sued Google and YouTube in March 2007, arguing that they condoned pirated video clips at the website to boost its popularity.

The lawsuit was merged with a similar complaint being pursued by the English Premier League, which said football clips were also routinely posted on YouTube without authorization.

Viacom's suit charged that YouTube was a willing accomplice to "massive copyright infringement" and sought more than one billion dollars in damages.

The suit was dismissed in June 2010 by a federal judge on the grounds that YouTube was protected against Viacom's claims by provisions of the Digital Millennium Copyright Act.

The 1998 legislation provides protection for Internet firms from copyright violations by their users, and the judge ruled that YouTube's actions, such as quickly removing infringing videos when requested, were in line with the act.

Viacom's film and television empire includes many youth-oriented networks like MTV and VH1, popular comedy shows such as Jon Stewart's "The Daily Show" and the Paramount movie studio.

YouTube was a year-old Internet sensation when Google bought it in a 1.65-billion-dollar stock deal in 2006.

The Viacom copyright case was closely watched at the time as film and television studios grappled with adapting to the ease with which digital content could be shared on the Internet.

Online streaming of shows and movies has since become common, with creators finding new sources of revenue from online delivery, including through alliances with services such as Netflix, Hulu, YouTube, and Xbox Live.

Resurrection of the Viacom lawsuit came a day after an announcement that Viacom is making films from its Paramount Pictures studio available for rent at YouTube and a Google Play arena at the Internet firm's social network.

Titles made available include "Hugo" and "The Adventures of Tin Tin" as well as "Captain America" and mobster classic "The Godfather."

Paramount films were being made available online at youtube.com/movies in Canada and the United States.

Movies could be rented for online viewing at prices ranging from $2.99 for older titles to $4.99 for newly released high-definition films.

YouTube has launched film rentals in Britain, France, Japan, Canada, and the United States, boasting deals with Warner Brothers, Universal, Paramount, Sony Pictures, and Walt Disney Studios.

"Paramount Pictures is one of the biggest movie studios on the planet," YouTube content partnership director Malik Ducard said in a release breaking the news on Wednesday.

"We're thrilled to bring nearly 500 of their films to movie fans in the US and Canada."