“Let’s Go Crazy” Over Fair Use

Apr 28, 2016 by Michael Smith

Summary

On September 17, 2015, a U.S. Appeals Court unanimously ruled that copyright holders must consider “fair use” before sending a takedown notification. (Lenz v. Universal [2015] 9th Circuit Court of Appeals, Nos. 13-16106, 13-16107, D.C. No. 5:07-cv-03783-JF.) The three judge panel affirmed the district court’s denial of the parties’ cross-motions for summary judgment in an action under the Digital Millennium Copyright Act (“DMCA”), alleging that the defendants violated 17 U.S.C. § 512(f) by misrepresenting in a takedown notification that the plaintiff’s home video constituted an infringing use of a portion of a Prince composition. The claim boiled 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. The panel held that if a copyright holder does not consider fair use, then 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.

Factual Background

Stephanie Lenz filed suit under 17 U.S.C. § 512(f)—part of the Digital Millennium Copyright Act (“DMCA”)— against Universal Music Corp., Universal Music Publishing, Inc., and Universal Music Publishing Group (collectively “Universal”). On February 7, 2007, Lenz uploaded to YouTube a 29-second home video (the “video”) of her two young children in the family kitchen dancing to the song “Let’s Go Crazy” by Prince. At the time Lenz posted the video, Universal was Prince’s publishing administrator responsible for enforcing his copyrights. (It should be noted that during his life, Prince was considered a pioneer in copyright law, he did not have any direct involvement in this case.) To accomplish this objective with respect to YouTube, Robert Allen, Universal’s head of business affairs, assigned Sean Johnson, an assistant in the legal department, to monitor YouTube on a daily basis. None of the video evaluation guidelines [used by Johnson] explicitly include consideration of the fair use doctrine. When Johnson reviewed Lenz’s video, he recognized Let’s Go Crazy immediately and further concluded that Prince’s song “was very much the focus of the video.” As a result, Johnson decided the video should be included in a takedown notification sent to YouTube that listed more than 200 YouTube videos Universal believed to be making unauthorized use of Prince’s songs. The notice included a “good faith belief” statement as required by 17 U.S.C. § 512(c)(3)(A)(v): “We have a good faith belief that the above-described activity is not authorized by the copyright owner, its agent, or the law.”

After receiving the takedown notification, YouTube removed the video and sent Lenz an email, notifying her of the removal. Two days later, Lenz attempted to restore the video by sending a counter- notification to YouTube pursuant to § 512(g)(3). YouTube provided this counter-notification to Universal per § 512(g)(2)(B), and Universal protested in response. Universal’s protest reiterated that the video constituted infringement because there was no record that “either she or YouTube were ever granted licenses to reproduce, distribute, publicly perform or otherwise exploit the Composition.” The protest made no mention of fair use. Lenz sent a second counter-notification, which resulted in YouTube’s reinstatement of the video. In her suit, Lenz alleges Universal misrepresented in the takedown notification that the video constituted an infringing use of a portion of a composition by Prince, which Universal insists was unauthorized by the law.

Fair Use Standard

Fair use is not just excused by the law, it is wholly authorized by the law. In 1976, Congress codified the application of a four-step test for determining the fair use of copyrighted works:

Notwithstanding the provisions of sections 106 and 106A, the fair use of a copyrighted work, . . . for purposes such as criticism, comment, news reporting, teaching, scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include—

(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;

(2) the nature of the copyrighted work;

(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

(4) the effect of the use upon the potential market for or value of the copyrighted work. (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.

Takedown Notifications

Effective on October 28, 1998, the DMCA added new sections to this existing copyright law by enacting five Titles, including Title II—Online Copyright Infringement Liability Limitation Act—now codified in 17 U.S.C. § 512. Section 512(c) permits service providers, e.g., 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 a copyright holder that the content is infringing. 17 U.S.C. § 512(c). Section 512(c)(3)(A) sets forth the elements that such a “takedown notification” must contain. These elements include identification of the copyrighted work, identification of the allegedly infringing material, and, critically, a statement that the copyright holder believes in good faith the infringing material “is not authorized by the copyright owner, its agent, or the law.” Id. § 512(c)(3)(A). The procedures outlined in § 512(c) are referred to as the DMCA’s “takedown procedures.”

To avoid liability for disabling or removing content, the service provider must notify the user of the takedown. § 512(g)(1)–(2). The user then has the option of restoring the content by sending a counter-notification, which must include a statement of “good faith belief that the material was removed or disabled as a result of mistake or misidentification . . . .” § 512(g)(3)(C). Upon receipt of a valid counter-notification, the service provider must inform the copyright holder of the counter-notification and restore the content within “not less than 10, nor more than 14, business days,” unless the service provider receives notice that the copyright holder has filed a lawsuit against the user seeking to restrain the user’s infringing behavior. Id. § 512(g)(2)(B)–(C). The procedures outlined in § 512(g) are referred to as the DMCA’s “put-back procedures.” These procedures were followed by Lenz, Universal, and YouTube.

The appeals court had to determine whether 17 U.S.C. § 512(c)(3)(A)(v) requires copyright holders to consider whether the potentially infringing material is a fair use of a copyright under 17 U.S.C. § 107 before issuing a takedown notification. The parties disputed whether fair use is an authorization under the law as contemplated by the statute. Universal’s argument was that fair use is not “authorized by the law” because it is an affirmative defense that excuses otherwise infringing conduct. The Lenz Court held that Universal’s interpretation is incorrect as it conflates two different concepts: an affirmative defense that is labeled as such due to the procedural posture of the case, and an affirmative defense that excuses impermissible conduct. Supreme Court precedent squarely supports the conclusion that fair use does not fall into the latter camp: “[A]nyone who . . . makes a fair use of the work is not an infringer of the copyright with respect to such use.” Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 433 (1984). The appeals court upheld the lower court and held that the statute unambiguously contemplates fair use as a use authorized by the law. The Court concluded 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).”

Conclusion

The Lenz Court observed that, “copyright holders cannot shirk their duty to consider—in good faith and prior to sending a takedown notification— whether allegedly infringing material constitutes fair use, a use which the DMCA plainly contemplates as authorized by the law.” As a result, the Court held 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.

(The views expressed by Michael Smith in this article are his, and do not necessarily reflect the views of Law & Beyond.)