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Seems like this technology requires being able to feed the videos from a site into the engine to fingerprint and then compare. There seems to be a technical and also legal flaw to this.
Technical: You have to write a spider for each site individually because they protect each video. They can detect how many videos you "watch" and if it is over a certain threshold they simply ban you. If they think you are spidering their videos they just have to change the authentication method. IP's suspected of spidering can be banned outright and shared across the network of piraters.
Legal: IANAL but reverse engineering something in order to break its protection is usually considered illegal. The DMCA might have some provisions to allow it or might add some in the future but that still leaves the technical problems mentioned above.
On an unrelated note, this technology has yet further applications. It would be cool for someone to be able to upload a clip or screenshot from a movie and then have the site report back, what movie is this from? Which can ultimately be used for things like, who is this girl?
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