In a highly anticipated opinion in the so-called "Dancing Babies" case, the Ninth Circuit clarified this week the steps under the Digital Millennium Copyright Act ("DMCA") that copyright holders must take before issuing a "takedown" notice to content platforms such as YouTube. In a case of first impression, the Court of Appeals held that a copyright holder must analyze whether the allegedly infringing work is a "fair use" before sending the takedown notice. If the copyright holder fails to do so, that omission will be deemed to raise a triable issue of fact about the copyright holder's subjective good faith belief that the use was unauthorized. A copyright holder who lacks subjective good faith may be held liable to the party who uploaded the allegedly infringing content for "knowingly materially misrepresent[ing]" infringement.
In the underlying case, the plaintiff Stephanie Lenz posted a 29-second home video on YouTube of her two children dancing to the song "Let's Go Crazy," a popular song from the pop artist Prince. About four seconds into the video, Lenz asks her 13-month-old-son "what do you think of the music?" In response, the boy bobs up and down while holding a push toy.
At the time, Universal Music Corp., Universal Music Publishing Inc., and Universal Music Publishing Group Inc. (collectively "Universal") owned the copyright to "Let's Go Crazy." As part of a daily search of YouTube for potentially infringing works, one of Universal's employees found the Lenz video. According to the employee, his instructions were to locate works that "embodied a Prince composition," made "significant use … of the composition, specifically if the song was recognizable, was in a significant portion of the video or was the focus of video." The employee concluded the Lenz video met those criteria, and Universal sent a DMCA "takedown" notice to YouTube, pursuant to 17 U.S.C. § 512(c). That statute permits service providers like YouTube to avoid copyright infringement liability for storing users' content if, among other requirements, the service provider "expeditiously" removes or disables access to the content after receiving notification from the copyright holder that the content is infringing. The take-down notice included the required statement that Universal believed in good faith that the video was infringing. YouTube took down the video.
Lenz attempted to restore her video by sending a "counter-notification" to YouTube pursuant to § 512(g), which must include a statement of "good faith belief that the material was removed or disabled as a result of mistake or misidentification." Under that provision of the DMCA, the service provider is obliged to restore the material, unless the copyright holder first institutes a copyright action to enjoin the infringer's behavior. Universal initiated no litigation, but Lenz did, filing a case in the Northern District of California alleging that Universal's take-down notice was actionable.
In an Amended Complaint, Lenz argued that Universal violated 17 US.C. § 512(f), which forbids "knowingly materially misrepresent[ing] . . . that material or activity is infringing" in a DMCA takedown notice. According to Lenz, Universal misrepresented to YouTube that the video was infringing. According to Lenz, the video constituted a fair use of the Prince song, which rendered the video non-infringing. After Judge Jeremy Fogel denied the parties' cross-motions for summary judgment on this issue, he certified the matter for interlocutory appeal.
The Ninth Circuit began its analysis by agreeing with Lenz that a copyright holder must consider whether or not a work is a "fair use" before sending a DMCA takedown notice. Because the successful demonstration of fair use defeats a claim of copyright infringement, the Ninth Circuit held that take-down notices under the DMCA must take account of the possibility that the work is a fair use of the copyrighted work.
Because 17 U.S.C. § 512(f) prohibits misrepresentations in takedown notices, the Court of Appeals next considered whether Universal's takedown notice contained a "material misrepresentation" of infringement. As part of that analysis, the Ninth Circuit ruled that before sending a takedown notice, a copyright holder must form a subjective, good faith belief that the use of the work is not authorized. The inquiry lies not in whether a District Court would adjudge the video as a fair use, but whether the copyright holder formed a good faith belief that it was not.
To determine whether such a subjective good faith belief is present, the Court of Appeals noted that the copyright holder's analysis "need not be searching or intensive." Moreover, noting the "pressing crush of voluminous infringing content that copyright holders face in a digital age," the Court allowed for the possibility that the standard could be satisfied through the use of appropriate software algorithms.
In the case at hand, however, software algorithms were not at issue. The Universal employee reviewed Lenz's video using criteria that did not take account of the four fair use factors (or anything equivalent) in 17 U.S.C. § 107. Universal was therefore not entitled to summary judgment that the original take down notice contained no material misrepresentations. Universal now faces a trial on that question.
The Court of Appeals also ruled that the willful blindness doctrine can be used to determine whether a copyright holder knowingly materially misrepresented that it held a good faith belief that the offending conduct was not a fair use. To prove willful blindness, a plaintiff must establish (1) that the defendants subjectively believed that there is a high probability a fact (i.e. fair use) exists, and (2) the defendant took deliberate actions to avoid learning that fact. Here, Lenz argued that Universal "knew" the video was a fair use because it was willfully blind to the fair use issue. However, the Ninth Circuit disagreed because willful blindness, in this case, required a subjective belief by Universal of a high probability that the video was a fair use. The Court of Appeals concluded that the evidence she presented did not suggest that Universal held such a belief, because the evidence showed that Universal never considered fair use at all.
The Ninth Circuit concluded a plaintiff may sue under 17 U.S.C. § 512(f) for nominal damages, rejecting Universal's argument that a plaintiff must prove a monetary loss.
Judge Milan Smith concurred in part and dissented in part. Under his analysis, a takedown notice contains a material misrepresentation per se under § 512(f) if the copyright holder fails to consider fair use at all. "A party cannot truthfully represent that a work subject to the fair use doctrine is infringing if the party has knowingly failed to consider whether the doctrine applies."