By Alexis Crawford Douglas (As originally posted at K&L Gates IP Law Watch)
The U.S. Digital Millennium Copyright Act (DMCA) has been a potent tool for combatting copyright infringement on the Internet. Section 512 shields Internet service providers from liability if they expeditiously remove content after copyright owners submit takedown requests notifying the ISP of infringing content. Last week, in Lenz v. Universal Music Corp., the Ninth Circuit held that copyright owners must consider fair use before sending takedown notices, or they could face liability for damages.
This decision cautions copyright owners to take a closer look at infringing content and document their fair use analysis before submitting takedown requests. An intensive investigation is not required and the fair use analysis may not be correct, but the copyright owner must have a good faith belief that fair use does not apply.
After Stephanie Lenz posted a 29-second video of her son dancing to Let’s Go Crazy by Prince on YouTube, Universal submitted a takedown request and had the video removed (https://www.youtube.com/watch?v=N1KfJHFWlhQ). The legal assistant who submitted the request determined that Prince’s song was the focus of the video and included it (along with more than 200 other videos of Prince songs) in a takedown notification to YouTube. Takedown notices must include, as this one did, a statement that the copyright owner has ‘a good faith belief that the above-described activity is not authorized by the copyright owner, its agent, or the law.’ Lenz submitted two counter-notifications to have the video reinstated and filed the lawsuit at issue.
The Ninth Circuit affirmed the District Court for the Northern District of California’s denial of both parties’ motions for summary judgment on Lenz’s claim that Universal violated Section 512(f) of the DMCA (set out below) because Universal materially misrepresented that her video was infringing when it was, instead, a fair use.
The Ninth Circuit held unequivocally that fair use of a work is not an infringement and is authorized by copyright law and therefore, ‘a copyright holder must consider the existence of a fair use before sending a takedown notification’. The court noted that fair use is different from traditional affirmative defenses, which serve as an excuse for infringement, but under the Copyright Act fair use does not amount to infringement at all.
Moreover, if a copyright owner fails to consider fair use, it could be liable for nominal damages. Section 512(f) of the DMCA provides (in relevant part):
Any person who knowingly materially misrepresents under this section — (1) that material or activity is infringing . . . shall be liable for any damages . . . .
In considering whether Universal knowingly misrepresented that it had a good faith belief the video was infringing, the court looked at whether Universal had formed a subjective good faith belief that the video was not fair use. The court stated that a subjective good faith belief ‘does not require investigation of the allegedly infringing content’, and it was mindful of the widespread infringing content that copyright owners confront on the Internet, but copyright owners still must consider fair use.
In reaching its decision, the court responded to amicus briefs by organizations including the Recording Industry Association of America, whose members review enormous amounts of content online. The court noted that computer algorithms appeared to be a valid, good faith method of processing the massive volumes of infringing content and indicated the ways the program could identify infringing content. However, the Lenz concurrence noted that such an algorithm must be capable of applying the fair use factors. Without bright-line rules for fair use, these factors can be challenging to apply even for seasoned experts, much less computer algorithms.
Finally, the Ninth Circuit held that due to the ‘any damages’ language in Section 512(f), Lenz could seek recovery of nominal damages due to harm suffered as a results of Universal’s actions (although damages could not be awarded for impairment of free speech rights because chilling of free speech is government action, not action by private citizens). Analogizing to awards of nominal damages in defamation cases, the court held that a 512(f) plaintiff may seek nominal damages even if no actual harm resulted from the takedown.
Circuit Judge Milan D. Smith, Jr. concurred in the judgment of the Lenz majority opinion, that copyright holders are required to consider whether potentially infringing material is fair use before issuing a takedown notice, but dissented on the issue of whether the misrepresentation under 512(f) must be a misrepresentation of the copyright owner’s ‘good faith belief,’ or a misrepresentation that the work is infringing. Judge Smith noted that parties must individually consider whether a work is a fair use before representing that the work is infringing in a takedown notice. If they do not and the work is a non-infringing fair use, they are subject to liability for knowingly misrepresenting that the work is infringing.”