On September 14, 2015, a Ninth Circuit panel issued a unanimous decision in Lenz v. Universal Music Corp., Case No. 13-16106. In the context of the Digital Millennium Copyright Act (DMCA) a copyright holder must consider fair use of a copyright before sending a DMCA takedown notification.
In February 2007, the Plaintiff Stephanie Lenz posted a twenty-nine second video on YouTube.com. The video showed her children dancing to the Prince song “Let’s Go Crazy.” Universal Music Corp. is the holder of the copyright of “Let’s Go Crazy.” In June 2007, Universal issued a DMCA takedown notice to Lenz claiming the video violated their copyright. In July 2007, after the video was taken down by YouTube, Lenz sued Universal for declaratory judgment that her video’s use of the song was non-infringing as a fair use of copyrighted material.
Fair use is an exception to the exclusive right of the author of a creative work to use the work. Under fair use someone may use a copyrighted work to provide commentary, criticism, parody, news reporting, research, teaching, library archiving or scholarship.
District Court Decision
A DMCA takedown notice under 17 U.S.C. § 512(c)(3)(A)(v) requires a copyright holder provide “[A] statement that the complaining party has a good faith belief that use of the material in the manner complained of is not authorized by the copyright holder, its agent, or the law.” As a result of her video’s takedown, Lenz filed a claim for misrepresentation under § 512(f) alleging that Universal had misrepresented her video was infringing. Universal filed for summary judgment that the use was infringing. The District Court denied Universal’s motion. The District Court held that the language of 17 U.S.C. § 512(c)(3)(A)(v) unambiguously requires a copyright holder contemplate fair use prior to issuing a DMCA takedown notification and Universal had not shown it considered fair use prior to its takedown notification.
Court of Appeals Decision
The Court of Appeals for the Ninth Circuit affirmed the District Court’s decision. Universal argued that fair use is not “authorized by the law” and is instead an affirmative defense to otherwise infringing use of a copyrighted work. The Ninth Circuit noted this position is incorrect and that Congress and the Supreme Court have made clear anyone who makes fair use of a copyrighted work is not an infringer of a copyright as such use is authorized by the law. As such, Universal was required to have a good faith belief the accused content was not fair use before issuing a DMCA takedown notice.
The Ninth Circuit then considered whether Universal knowingly misrepresented it had formed a good faith belief the video did not constitute fair use. The Court noted that “good faith belief” is a subjective standard and not an objective standard. As a subjective standard, the Court held an accused infringer must demonstrate the copyright holder had actual knowledge of a misrepresentation. The Court also held that willful blindness to fair use could also be sufficient to show misrepresentation but a showing of willful blindness was unavailable to Lenz as Lenz could not show there was a “high probability” Universal thought the use was fair use. The Court noted a copyright holder’s consideration of fair use need not be “searching or intensive” but must be part of the initial review of the work. The Court went on to note that implementation of a computer program may be sufficient to satisfy fair use.
The Impact of the Decision
This is the first time a Federal Circuit Court has considered whether a DMCA takedown notification requires a good faith belief the use is not authorized by fair use. As such, it is an important precedent for copyright holders and creators of digital content.
A copyright holder must carefully analyze digital content before issuing a DMCA takedown notice. The copyright holder should consider all potential non-infringing uses of copyrighted material and not just whether their copyrighted material is being used. Non-infringing uses include fair use as well as compulsory licenses. Fair use analyses should include the four factor test for determining fair use: (1) the purpose and character of the use; (2) the nature of the copyright work; (3) the amount and substantiality of the portion used; and, (4) the effect of the use upon the potential market for the copyrighted work. If a copyright holder chooses to implement a computer program to analyze works on the internet they should incorporate consideration of fair use into the program.
A copyright holder should document that they considered fair use before they issue a DMCA takedown notification. Such documentation could prevent liability even if the accused work is later found to be fair use.
If you have any questions or wish to discuss how the Court's decision may impact your company, please contact an attorney in the Copyright practice group of Brinks Gilson & Lione.