Judge Richard Posner of the US Seventh Circuit Court of Appeals has ruled that embedding a copyright-infringing video on another website is not illegal. The decision overturns a 2011 preliminary injunction from a lower court following a lawsuit from Flava Works against social video bookmarking site MyVidster.

The judge noted that MyVidster “doesn’t touch the data stream” related to the infringing videos since they are hosted elsewhere on the Internet and they aren’t responsible for any misdoings. Furthermore, the site doesn’t encourage video swapping, an action that would then encourage infringement, according to the ruling.

The judge likened the actions of MyVidster to that of the New Yorker. That publication gives the name and address of theaters where entertainment can be found but they don’t actually perform them. “Is MyVidster doing anything different?” the judge asked.

In 2010, Flava Works, a pornography production company, sued the social site after it was discovered that they were embedding copyright-infringing clips of Flava Works’ material obtained from third party websites.

For what it’s worth, both Google and Facebook filed paperwork in support of MyVidster citing the Digital Millennium Copyright Act. Both outlets suggested that MyVidster are simply intermediaries and they shouldn’t be held responsible for someone else uploading copyrighted material to their site. The Electronic Frontier Foundation also sided with the social video site while it comes as little surprise that the Motion Picture Association of America backed Flava Works in the dispute. It remains to be seen how this ruling will affect other similar cases that are still pending.