In 2007 Stephanie Lenz filed a law suit against Universal Music, alleging that it had violated the Digital Millenium Copyright Act (DMCA) by sending her a takedown notice that misrepresented the extent of their rights. Lenz had made a 29 second videotape of her two small children dancing to a Prince song (Let’s Go Crazy) on the radio and had posted the video on YouTube. YouTube contacted her to indicate that it had received a takedown notice for this video. The notice alleged that it infringed upon Universal’s rights in the song. YouTube removed the video from its service. Lenz sought to have the video reinstated using the provisions of the DMCA. Notwithstanding Universal’s resistance, the video was eventually reinstated by YouTube.
Lenz’s lawsuit (which was supported by the Electronic Frontier Foundation) stalled on the issue of whether the DMCA required copyright owners to take fair use into consideration before issuing takedown notices. On Monday, September 14, the U.S. Court of Appeals for the 9th Circuit issued its decision on this issue, clearing the way for the matter to finally head to trial. The Court ruled that copyright owners do indeed have an obligation to take fair use into account. In order to issue a takedown notice, the copyright owner must include a statement, pursuant to 17 USC § 512(c)(3)(A)(v) to the effect that “We have a good faith belief that the above-described activity is not authorized by the copyright owner, its agent, or the law.” The DMCA provides, in §512(f) that a party that abuses the DMCA by, among other things, materially misrepresenting “that material or activity is infringing”, is liable for damages.
The core issue for the court to determine was what meaning to give to the statement required by the DMCA that the copyright owner has a good faith belief that the material at issue is not “authorized. . . by law.” More specifically, the issue was whether the fair use defences in the Copyright Act are merely defences, or whether they are provisions capable of “authorizing” certain uses of copyright protected materials. The Court of Appeal found that “the statute unambiguously contemplates fair use as a use authorized by law.” (at p. 11) It ruled that fair use was only characterized as a defence for procedural purposes. The provision itself declares that “the fair use of a copyright work. . . is not an infringement of copyright.” (Note that in Canada, the fair dealing provisions are framed in a similar manner: “Fair dealing . . . does not infringe copyright. . . “.(see ss. 29-29.2 of the Copyright Act). The Court of Appeals also found that even if fair use were considered an “affirmative defense”, it would still have a different character. The Court concluded that because the fair use provision of the U.S. Copyright Act “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.” (at p. 15)
The Court of Appeal also turned its attention to whether Universal knowingly represented that it believed the video did not constitute a fair use of the copyright protected work. The Court was of the view that Universal had to establish a subjective (rather than an objective) good faith belief that the use in question was not authorized. The Court clarified that a copyright owner that formed a good faith belief that a use was not a fair use would not be liable under the DMCA for sending out a takedown notice. However, “if a copyright holder ignores or neglects our unequivocal holding that it must consider fair use before sending a takedown notification”, it will be liable (at p. 17). The Court also made it clear that any copyright owner who merely ”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 liable (at pp. 17-18). The consideration given to the fair use issue “need not be searching or intensive.” (at p. 18) The Court did not rule out the use of screening algorithms to detect potentially infringing content and even to meet the statutory requirement to consider fair use, although it did not consider the issue in detail as Universal did not claim to have used a screening algorithm in this case.
The Court also indicated that a “willful blindness” theory might be available to determine whether a copyright owner made a knowing misrepresentation of a good faith belief that the activity at issue was not fair use. However, on the facts before it, it ruled that the wilful blindness was not available. To show wilful blindness, a plaintiff would have to establish both the defendant’s subjective belief that “there is a high probability that a fact exists” and that the defendant took “deliberate actions to avoid learning of that fact” (at pp. 20-21) The Court found that Lenz had not met the threshold to establish the first element of that test.
On a final point, Universal had argued that Lenz’s suit must fail because she could not show that she suffered any monetary loss as a result of their actions. The Court of Appeals ruled that a plaintiff in Lenz’s circumstances could seek the recovery of nominal damages.
The decision of the U.S. Court of Appeals is significant. It is handed down in a context in which many feel that copyright holders have been abusing the notice and takedown provisions of the DMCA, effectively using them to suppress otherwise legitimate expression. The Court of Appeal had some strong words for copyright owners, warning them that they “cannot shirk their duty to consider – in good faith and prior to sending a takedown notification – whether allegedly infringing material constitutes faire use, a use which the DMCA plainly contemplates as authorized by the law.” (at p. 25)