DMCA requires consideration of “fair use” before infringement can be alleged.

Thanks to digital technology, copyright infringement is easier than ever – and the Internet provides a tempting place to display infringing uses of copyrighted material. Recognizing that, Congress passed the Digital Millennium Copyright Act (DMCA), creating a simple mechanism by which copyright owners could get infringing uses quickly removed from the Internet. That mechanism – the “Notice and Takedown” provision of Section 512 of the DMCA – has proven very effective at getting a wide range of materials removed, whether or not they were in fact infringements.

But now the U.S. Court of Appeals for the Ninth Circuit may have provided the targets of such “takedown” notices a way to fight back.

The somewhat unlikely protagonist here: Holden Lenz, or, more accurately, Holden’s mom. You remember Holden. Way back in February, 2007, his mother, Stephanie, took a jumpy, hand-held video of Holden (who was then 13 months old) in what was presumably the Lenz’s kitchen. Holden was dancing and running around to a recording of Prince’s “Let’s Go Crazy”. If you don’t remember, just click on the video embedded above. (Or you can also refresh your recollection by checking out my earlier posts here and here.)

Stephanie posted the video to YouTube, and Holden has been known in copyright circles as the “Dancing Baby” ever since. (Tough break, kid.) That’s because soon after his mom posted his antics for all the world to see, the folks at Universal Music (who were the “publishing administrators” for Prince) proved that they have no sense of humor – or maybe just that they hate cute children. They sent a DMCA takedown notice to YouTube, alleging that the use of “Let’s Go Crazy” in Stephanie’s video constituted an infringement of their client’s song. The ensuing developments made Holden a celebrity.

YouTube immediately blocked access to the video, a not-uncommon reaction by YouTube (or any site which hosts third-party content). That’s because taking such action, and notifying the poster of the content that the video has been removed, are crucial steps toward the immunity offered for a website operator under Section 512.

Lenz (mère, not fils) responded with a “counternotification” asserting that a 29-second snippet of “Let’s Go Crazy” in a video featuring a kid literally “going crazy” was a “fair use” and not an infringement. But she didn’t stop there.

As it turns out, Section 512(f) of the DMCA provides that, if a party demanding a takedown engages in misrepresentation with respect to the alleged infringement, that party may be liable for damages. So Ms. Lenz sued Universal under that section, alleging that the claim of infringement in its takedown notice constituted misrepresentation. Her theory: in order to validly claim that the use of the song was an infringement, Universal would have first had to have considered whether it was a “fair use”. Since (according to Lenz) Universal had not even considered that question before firing off its takedown notice, Universal’s claim of infringement was a misrepresentation.

Universal moved to dismiss Lenz’s complaint. Its argument: Section 512 of the DMCA requires only that the party asking for a takedown represent that the alleged infringement is “not authorized by … the law”. In Universal’s view, a “fair use” is technically not “authorized by law”; rather, it’s an “affirmative defense” that a defendant can use to excuse infringements. (Yes, this is the kind of hyper-technical argument that has made lawyers the butt of zillions of lawyer jokes.)

The trial judge disagreed with Universal. But, presumably recognizing that this is a case of first impression, he stayed the trial and certified the question to the U.S. Court of Appeals for the Ninth Circuit, where some heavy hitters like the Motion Picture Association of America, Recording Industry Association of America, Facebook, Twitter, Google, and Tumblr, joined the fray as amici.

And now the Ninth Circuit has spoken, agreeing with the trial judge and Lenz. Judge Richard Tallman, writing for himself and Judge Mary Murguia, concluded that fair use is indeed a use “authorized by the law”. They rely in particular on the fact that “fair use” is specifically identified and described in Section 107 of the Copyright Act. As a result, the court has held that, before sending a takedown notice under Section 512, a copyright owner must consider whether or not the alleged infringement is a “fair use”.

Good news for the Lenz family, right?

Not necessarily.

Ms. Lenz argued that Universal could not have formed, and did not form, any subjective belief because it didn’t consider fair use at all before firing off its takedown notice. But Universal argued that its pre-takedown notice procedures effectively took “fair use” into consideration, even if the term “fair use” was not formally referred to in those procedures. And that was enough for Judges Tallman and Murguia to send the case back to the District Court so that a jury could decide whether Universal’s pre-takedown notice procedures were sufficient to allow it to “to form a subjective good faith belief about the video’s fair use or lack thereof”.

What kind of procedures would do the trick? Judge Tallman suggested that it might be enough to implement computer algorithms to process a plethora of content, if those algorithms were designed to consider the factors underlying a “fair use” determination. (It appears that Universal’s procedures involved having a Universal employee (a) surf the Internet for uses of Universal music and then (b) determine simply whether a video embodied a Prince composition by making significant use of the composition – effectively a quantitative, not qualitative, review.)

So Universal has another chance to avoid liability by convincing the jury that, before sending the takedown notice concerning the Lenz video, Universal had (a) considered whether the video was a fair use and (b) had formed a “subjective good faith belief” that it was not. Note that this doesn’t mean that the court would ultimately decide whether the video constituted fair use, but rather whether Universal did enough to form a good faith belief (with which the court might or might not agree) that the video wasn’t a fair use. In Judge Tallman’s words: “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.”

That standard is actually pretty low, and it seems to give Universal a fair amount of running room on remand.

(A third judge on the Ninth Circuit panel, Milan Smith, concurred in the result, but dissented from Judge Tallman’s reasoning on a number of technical points. For example, Judge Smith would remand the case so that a jury could determine not whether Universal had done enough to form a good faith belief as to whether the Lenz video was a fair use, but rather whether the video was in fact a fair use. If it was a fair use, Judge Smith was satisfied that Universal’s takedown notice was a misrepresentation.)

The Court also addressed one more question: even if Lenz wins, what would be the measure of the “monetary relief” to which she would be entitled? Universal argued that Lenz must show “actual monetary loss.” But, as Judge Tallman opined, DMCA Section 512(k) defines monetary relief as “damages, costs, attorneys fees and any other form of monetary payment.” Thus, Lenz may actually be compensated for her time, costs, attorneys fees and other expenses incurred in this eight year ordeal.

So what to make of this decision some eight years in the making. It did receive a fair amount of coverage when it was handed down. Is it really that important?

Well, yes, and no.

The DMCA Notice and Takedown process is widely used because it is wildly effective. Copyright owners know they don’t have to go to court to protect their rights. Send a takedown notice and the video goes away. Few people targeted by a takedown notice ever file a counternotification, for a range of reasons: among others, maybe they don’t understand the process, or maybe they’re worried about facing a lawsuit.

The Lenz decision may give pause to some copyright holders thinking about shooting off a takedown request. But it probably won’t stop many of them. The “subjective belief’ bar set by Judge Tallman doesn’t seem that high. Fair use, being the fluid concept that it is, is very fact specific. A copyright owner who creates a plan for some substantive review of a video before filing a Notice and Takedown request – including documentation of the thought process leading to the final decision – seems pretty likely to meet Tallman’s standard in most of the cases.

On the other hand, this should weed out the truly frivolous takedown notices. The ones, for instance, that are used to remove embarrassing material from the Internet, even where no copyright infringement applies – like when the subject of a video, who holds no copyright ownership, files a Notice and Takedown request despite having no legal right to do so. Or where the DMCA is used to attack trademark violations, which technically aren’t covered under the Digital Millennium Copyright Act.

And, of course, the Ninth Circuit’s decision may prove no more than temporary precedent. After all, I don’t see either side giving up after eight years in court. Not when there’s still the possibility of rehearing en banc and then filing a Petition for Certiorari with the Supreme Court. Imagine, by the time the Supreme Court actually takes the case, Holden Lenz might actually be old enough to argue it himself…