July 2 (Bloomberg) -- Viacom Inc., the New York media company suing Google Inc.'s YouTube unit for $1 billion, lost a legal bid to review its rival's computer search code.

Viacom, owner of MTV Networks and Comedy Central, sued YouTube last year, accusing the online video-sharing company of allowing users to post clips from Viacom shows including ``South Park'' and ``The Colbert Report'' without permission.

U.S. District Judge Louis Stanton in New York today turned aside Viacom's bid to review the computer source code that controls YouTube's and Google's search functions to determine if it can distinguish between infringing and non-infringing videos.

The code is ``a critical trade secret,'' according to Stanton. Disclosure could cause ``catastrophic competitive harm'' to Google, the most-used Internet search engine, he said.

``YouTube and Google should not be made to place this vital asset in hazard merely to allay speculation,'' Stanton wrote in his opinion. He said he wanted ``a plausible showing'' that the code can identify infringing works before he'd require it to be turned over.

The ruling came in two related cases against YouTube. One was brought by Viacom and the other by England's Football Association Premier League Ltd.

Removes Material

Mountain View, California-based Google has denied Viacom's claims in the lawsuit, saying YouTube follows the law by removing copyrighted material when it becomes aware of it.

Stanton granted other so-called discovery requests by the plaintiffs. Google was ordered to turn over information from its ``logging'' database, which shows each time a YouTube video was viewed.

Google fell $7.69 to $527.04 in Nasdaq Stock Market trading. The shares have dropped 24 percent this year. Viacom shares fell 20 cents to $20.20 in New York Stock Exchange composite trading.

The case is Viacom International Inc. v. YouTube Inc., 1:07-cv-02103, U.S. District Court, Southern District of New York (Manhattan).

To contact the reporter on this story: David Glovin in Manhattan federal court at dglovin@bloomberg.net

Last Updated: July 2, 2008 18:30 EDT