Source: http://seattlecopyrightwatch.com/copyright/fair_use_puts_a_block_on_dmca_take_down_tactics/
Timestamp: 2019-04-24 06:34:18+00:00

Document:
Universal Music Corporation filed a DMCA takedown notice to remove from YouTube Stephanie Lenz’s 29 second home video of her two young children dancing to Prince’s song Let’s Go Crazy. Lenz sued Universal for making misrepresentations of infringing use in its takedown notice.
boils down to a question of whether copyright holders have been abusing the extrajudicial takedown procedures provided for in the DMCA by declining to first evaluate whether the content qualifies as fair use.
We hold that the statute requires copyright holders to consider fair use before sending a takedown notification, and that failure to do so raises a triable issue as to whether the copyright holder formed a subjective good faith belief that the use was not authorized by law.
Lenz posted her video on YouTube on February 7, 2007. Upon discovering the video on YouTube, a Universal employee evaluated whether to send a DMCA takedown notice to YouTube. On the basis that the Prince song was recognizable, that it played loudly in the background throughout the entire video, that Lenz named her video Let’s Go Crazy #1 and that Lenz asked her toddler if he liked the song, the Universal employee determined that the Prince song was the focus of the video and that a DMCA takedown notice should be sent. The Universal video evaluation guidelines did not include considering fair use.
YouTube removed the video on June 5, 2007. After a glitch in filing a counter-notification that the video was removed by mistake, the video was reinstated pursuant to Lenz’s June 27, 2007 counter-notification. Lenz sued Universal for misrepresentation under §512(f) of the DMCA. The district court denied Universal’s motion to dismiss. The parties both moved for summary judgment on Lenz’s §512(f) misrepresentation claim. The district court denied both motions, resulting in the appeal to the Ninth Circuit.
Under §512(c)(3)(A), a takedown notice must identify the copyrighted work, identify the allegedly infringing material and include a statement that the copyright holder believes in good faith that the infringing material is not authorized by the copyright owner, its agent, or the law.
The service provider must notify the user who posted the allegedly infringing content of the takedown. The user can restore the removed content by sending the service provider a counter-notification. §512(g)(1)-(2). The counter-notification must include a statement that the user has a good faith belief that the material was removed or disabled as a result of mistake or misidentification. The service provider must inform the copyright holder of the counter-notification and must restore the removed content unless the service provider receives notice from the copyright holder that the copyright holder has filed a lawsuit to restrain the user’s infringing behavior.
Subsection (1) of §512(f) is the only subsection at issue in this case.
Section 512(c)(3)(A)(v) requires a takedown notification to include a statement that the complaining party 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. The parties dispute whether fair use is an authorization under the law as contemplated by the statute—which is so far as we know an issue of first impression in any circuit across the nation. Canons of statutory construction dictate that if the language of a statute is clear, we look no further than that language in determining the statute’s meaning. A court looks to legislative history only if the statute is unclear. We agree with the district court and hold that the statute unambiguously contemplates fair use as a use authorized by the law.
The Ninth Circuit explained its reasoning.
Notwithstanding the provisions of sections 106 and 106A, the fair use of a copyrighted work, for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright….
17 U.S.C. § 107. The statute explains that the fair use of a copyrighted work is permissible because it is a non-infringing use.
Because 17 U.S.C. § 107 both empowers and formally approves the use of copyrighted material if the use constitutes fair use, fair use is ‘authorized by the law’ within the meaning of § 512(c).
The Ninth Circuit rejected Universal’s argument that fair use is not “authorized by the law” within the meaning of §512(c) because it is an affirmative defense. The Ninth Circuit views fair use as a right, not excused conduct.
Even if, as Universal urges, fair use is classified as an ‘affirmative defense,’ we hold—for the purposes of the DMCA—fair use is uniquely situated in copyright law so as to be treated differently than traditional affirmative defenses. We conclude that because 17 U.S.C. § 107 created a type of non-infringing use, fair use is ‘authorized by the law’ and a copyright holder must consider the existence of fair use before sending a takedown notification under § 512(c).
The Ninth Circuit had previously held that the good faith required by §512(f) is subjective good faith that a use is not authorized and not good faith as set by an objective standard. Further, the copyright owner must have actual knowledge of the misrepresentation to be held liable under §512(f). The Ninth Circuit stuck to its previous rulings in this case.
Universal faces liability if it knowingly misrepresented in the takedown notification that it had formed a good faith belief the video was not authorized by the law, i.e., did not constitute fair use. Here, Lenz presented evidence that Universal did not form any subjective belief about the video’s fair use—one way or another— because it failed to consider fair use at all, and knew that it failed to do so. Universal nevertheless contends that its procedures, while not formally labeled consideration of fair use, were tantamount to such consideration. Because the DMCA requires consideration of fair use prior to sending a takedown notification, a jury must determine whether Universal’s actions were sufficient to form a subjective good faith belief about the video’s fair use or lack thereof.
To be clear, if a copyright holder ignores or neglects our unequivocal holding that it must consider fair use before sending a takedown notification, it is liable for damages under §512(f). If, however, a copyright holder forms a subjective good faith belief the allegedly infringing material does not constitute fair use, we are in no position to dispute the copyright holder’s belief even if we would have reached the opposite conclusion. A copyright holder who pays lip service to the consideration of fair use by claiming it formed a good faith belief when there is evidence to the contrary is still subject to § 512(f) liability.
The Ninth Circuit ruled that the plaintiff claiming damages under §512(f) need not show actual monetary loss.
Section 512(f) provides for the recovery of ‘any damages, including costs and attorneys’ fees, incurred by the alleged infringer who is injured by such misrepresentation, as the result of the service provider relying upon such misrepresentation in removing or disabling access to the material or activity claimed to be infringing.’ We hold a plaintiff may seek recovery of nominal damages for an injury incurred as a result of a § 512(f) misrepresentation.
Lenz may seek recovery of nominal damages due to an unquantifiable harm suffered as a result of Universal’s actions. The DMCA is akin to a statutorily created intentional tort whereby an individual may recover nominal damages for a knowingly material misrepresentation under this section 512.
(Opinion pdf pages 22 – 23).
The Ninth Circuit acknowledged that its ruling increases the responsibilities of copyright holders in the DMCA context.
This case is Lenz v. Universal Music Corp., Nos. 13-16106, 13-16107, Ninth Circuit Court of Appeals.
Judge Richard C. Tallman wrote the majority opinion, in which Judge Mary H. Murguia joined.
Judge Milan D. Smith, Jr. concurred in part and dissented in part.
Judge Smith concurred in all of the majority opinion except for the majority’s ruling on the knowing misrepresentation of a good faith belief analysis. Judge Smith questioned the majority’s approach to three issues.
First, I question whether § 512(f) directly prohibits a party from misrepresenting that it has formed a good faith belief that a work is subject to the fair use doctrine. I construe the plain text of the statute to prohibit misrepresentations that a work is infringing, not misrepresentations about the party’s diligence in forming its belief that the work is infringing. Second, I disagree that there is any material dispute about whether Universal considered fair use. Because Universal did not consider fair use, it may be held liable for ‘knowingly’ misrepresenting that the video was infringing, if it should be determined that the video is a non-infringing fair use. Universal’s misrepresentation, if any, was knowing because Universal knew it had not considered fair use, and therefore knew it lacked a basis to conclude that the video was infringing. Third, I do not believe that the willful blindness doctrine applies where, as here, a party has failed to consider fair use and affirmatively misrepresents that a work is infringing.
(Opinion pdf pages 26 – 27).

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