Fair Use Must Be Considered Before Sending DMCA Takedown Notice: Ninth Circuit | Practical Law

Fair Use Must Be Considered Before Sending DMCA Takedown Notice: Ninth Circuit | Practical Law

In Lenz v. Universal Music Corp., the US Court of Appeals for the Ninth Circuit held that under the Digital Millennium Copyright Act (DMCA), copyright holders must consider whether allegedly infringing material constitutes fair use before sending a takedown notice and failure to do so raises a triable issue on whether the copyright holder formed a subjective good faith belief that the use was not legally authorized.

Fair Use Must Be Considered Before Sending DMCA Takedown Notice: Ninth Circuit

Practical Law Legal Update 6-618-7866 (Approx. 4 pages)

Fair Use Must Be Considered Before Sending DMCA Takedown Notice: Ninth Circuit

by Practical Law Intellectual Property & Technology
Published on 15 Sep 2015 • USA (National/Federal)
In Lenz v. Universal Music Corp., the US Court of Appeals for the Ninth Circuit held that under the Digital Millennium Copyright Act (DMCA), copyright holders must consider whether allegedly infringing material constitutes fair use before sending a takedown notice and failure to do so raises a triable issue on whether the copyright holder formed a subjective good faith belief that the use was not legally authorized.
On September 14, 2015, in Lenz v. Universal Music Corp., the US Court of Appeals for the Ninth Circuit held that under the Digital Millennium Copyright Act (DMCA), copyright holders must consider in good faith whether allegedly infringing material constitutes fair use before sending a takedown notice (Nos. 13–16106, 13–16107, (9th Cir. Sept. 14, 2015)).
Section 512(c) of the DMCA permits service providers to avoid copyright infringement liability for storing user's content if, among other requirements, the service provider removes content after receiving the copyright holder's notice that the content is infringing. Section 512(c)(3)(A) sets out the elements that must be contained in the takedown notice, including a statement that the copyright holder has a good faith belief that the use of the material in the manner complained of is not authorized by the copyright owner, its agent or the law (17 U.S.C. § 512(c)(3)(A)(v)).
In certain situations, a copyright holder may be subject to liability under Section 512(f) if they knowingly materially misrepresent that the material is infringing (17 U.S.C.§ 512(f)).
On February 7, 2007, Stephanie Lenz uploaded to YouTube a 29-second video of her two young children dancing to Prince's song Let's Go Crazy. At the time Lenz posted the video, Universal Music Corp., Universal Music Publishing, Inc. and Universal Music Publishing Group (collectively Universal) monitored YouTube daily for potential infringement of its copyrighted material, including the Prince song. When Universal reviewed the video on YouTube, it determined that it wanted the video removed. As a result:
  • Universal sent YouTube a takedown notice.
  • YouTube removed the video and notified Lenz of the removal.
  • Lenz sent a counter-notice to YouTube, which provided it to Universal.
  • Universal protested the video's reinstatement, reiterating that the video was an infringement.
  • Lenz sent a second counter-notice.
  • YouTube reinstated the video in July 2007 after Lenz sent the second counter-notice.
Lenz sued Universal on July 24, 2007. Eventually both parties moved for summary judgment on Lenz's claim under Section 512(f) that Universal knowingly materially misrepresented that the video was infringing. The US District Court for the Northern District of California denied both motions and certified its order for interlocutory appeal to the Ninth Circuit, which affirmed the district court's order.
The Ninth Circuit noted that the issue of whether fair use is an authorization under the law as required under Section 512(c)(3)(A)(v) is an issue of first impression and held that it is because:
  • Section 107 of the Copyright Act both empowers and formally approves the use of copyrighted material if the use constitutes fair use.
  • Fair use is distinct from affirmative defenses where a use infringes a copyright but there is no liability because of a valid excuse.
  • Even if fair use is classified as an affirmative defense, for purposes of the DMCA, it is uniquely situated in copyright law so it is treated differently than traditional affirmative defenses.
As a result, the Court held that a copyright holder must consider the existence of fair use before sending a takedown notice under Section 512(c).
The Court next considered if a genuine issue of material fact exists concerning whether Universal knowingly misrepresented that it had formed a good faith belief the video did not constitute fair use. The key issue according to the Court is whether Universal formed a subjective good faith belief that the video is not fair use, citing Rossi v. Motion Picture Ass'n of Am. Inc., 391 F.3d 1000 (9th Cir. 2004). Importantly, the Court, with a partial dissent:
  • Noted that a copyright holder's consideration of fair use need not be intensive, but it must do more than pay lip service to the fair use consideration. Without passing judgment, the Court considered that the use of computer algorithms could be a valid and good faith, middle ground for processing significant amounts of content while still meeting the DMCA's requirements to consider fair use.
  • Held that the willful blindness doctrine may be used to determine whether a copyright holder knowingly materially misrepresented that it held a good faith belief the offending activity was not fair use. However, under the specific facts of this case, the Court concluded that Lenz could not proceed to trial under this theory because she did not show that Universal subjectively believed there was a high probability that the video constituted fair use, citing Global-Tech Appliances, Inc. v. SEB S.A., 131 S. Ct. 2060, 2070 (2011). To meet this showing, Lenz should have provided evidence from which a juror could infer that Universal was aware of the high probability the video was fair use.
In considering any potential damages recovery for Lenz, the Court held that a plaintiff may seek recovery of nominal damages for an injury incurred as a result of a Section 512(f) misrepresentation because the DMCA:
  • Specifies the recovery of any damages by the injured party.
  • Is akin to a statutorily created intentional tort where an individual may recover nominal damages, comparing the potential damages in this situation to situations where nominal damages may be awarded for other intentional torts, like defamation and trespass to land.
The partial dissent concurred with the majority's holding that the DMCA requires copyright holders to consider fair use before sending a takedown notice. However, when considering liability under Section 512(f), the partial dissent:
  • Considered the relevant issue to be misrepresentations concerning whether the work is infringing, not the party's diligence in forming its belief concerning infringement. Specifically, the dissent reasoned that a party cannot truthfully represent that a work subject to the fair use doctrine is infringing if the party knowingly failed to consider whether the doctrine applies.
  • Disagreed that there is a material dispute about whether Universal considered fair use and asserted that because Universal did not consider fair use it could be held liable for knowingly misrepresenting that the video was infringing if the video is a non-infringing fair use.
  • Disagreed that the willful blindness doctrine applies in this situation because the evidence showed that Universal knowingly failed to form any belief about fair use.