Finding IP Value
Controversy or Sign o’ the Times?: Fair Use, the DMCA, and Lenz
Recently, the United States Court of Appeals for the Ninth Circuit issued an opinion that further defines the intersection of the “fair use” defense to copyright infringement and the Digital Millennium Copyright Act (15 U.S.C. § 512) (the “DMCA”). In Lenz v. Universal Music Corp., No. 13-16106, 13-16107 (9th Cir., Sept. 14, 2015), the Court stated that in order for a copyright holder to send a take-down notice under the DMCA to a host of online content and meet the DMCA’s requirement of a “good faith belief” that the material at issue is not authorized, it must have considered whether the material makes fair use of the copyright.
In brief, this case arose after plaintiff Stephanie Lenz posted a short video clip on YouTube. The 29-second clip showed Lenz’s child dancing to Prince’s hit song, “Let’s Go Crazy.” Universal Music sent a take-down notice to YouTube, alleging the use of the song in the video was unauthorized, and YouTube removed the video. Lenz then sent a counter-notice to YouTube to have the video restored, to which Universal Music protested. Lenz then sued Universal Music under Section 512(f) of the Copyright Act, which states that “[a]ny person who knowingly materially misrepresents” that “material or activity is infringing” is liable for damages. In short, Lenz claimed her use of “Let’s Go Crazy” was a fair use and not an infringement, and further that Universal Music did not have a good faith belief that her use of “Let’s Go Crazy” was truly infringing, because it did not consider that the use of the song could be fair use.
[Author’s note: I love Prince. You probably do too, let’s be honest. The guy wrote “Kiss,” “Manic Monday,” and the song at issue here, “Let’s Go Crazy.” Despite the popular notion that links this case to the admittedly litigious and somewhat erratic actions of Prince (e.g., the tales of his spark-shooting roller skates and top-notch basketball/pancake-making skills; that weird episode of The New Girl he was on in 2014), he was not involved in the case. Universal Music, however, is the company that apparently manages this song in Prince’s catalog. I’m not saying Prince wouldn’t have sued Lenz if he could have, he has certainly been known to keep tight controls over his music (e.g., suing fans for posting bootleg recordings), but it does not appear that he was directly involved in this particular suit.]
Fair use is the judicially created doctrine (codified at 17 U.S.C. § 112) that excuses copying that would otherwise be infringement for certain specific uses such as commentary, education, or news reporting. The court considers four factors to determine whether a use is “fair,” such that the copying of the protected work is allowed:
(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.
The court weighs these factors and determines whether the allegedly infringing use of a copyrighted work is excused as a fair use. A notable example of an alleged infringement found to be fair use is 2 Live Crew’s use of Roy Orbison’s song “Oh, Pretty Woman” in their own nominal 1989 hit, “Pretty Woman.” See Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569 (1994).
The Ninth Circuit held that a rights-holder seeking to use the DMCA’s take-down notice provision must consider the defense of fair use for any potentially infringing material before it sends a take-down notice. The Court found that the statute contemplated this concept in its language: a party must include a statement that it has a “good faith belief that the use of the material in the manner complained of is not authorized by the copyright owner, its agent or the law.” 15 U.S.C. § 512(c)(3)(A)(v). As fair use is clearly codified in the law, a rights-holder must therefore consider the excuse before using the DMCA’s take-down notice provision. In Lenz, it was undisputed that Universal Music’s take-down procedure—which involves an employee reviewing countless videos on YouTube to determine if any of its content is being infringed—did not explicitly consider fair use. Lenz presented evidence showing that Universal Music did not form a belief regarding fair use one way or another, and knew that it did not. Universal Music argued, however, that its take-down review included considerations that were “tantamount to fair use.” As a result, the Court affirmed the district court’s denial of the parties’ cross-motions for summary judgment and reserved the issue of whether Universal Music’s “actions were sufficient to form a subjective good faith belief about the video’s fair use or lack thereof” for trial. Additionally, the Court held that Lenz could seek nominal damages “due to the unquantifiable harm” from Universal Music’s alleged misrepresentation.
Though this opinion is binding only on the Ninth Circuit, there are important lessons for both content owners/rights-holders and the general public. Additionally, it is likely other courts will follow the Ninth Circuit’s lead when the issue arises.
First, for content owners/rights-holders, it is important to have in place a comprehensive process for reviewing online content posted by others. Before sending a take-down notice to a content provider like YouTube, Instagram, or any other website hosting content, it is important to have considered whether the posting may qualify as fair use. A content owner/rights-holder need not determine whether, as a matter of law, the use is fair, rather it must have considered the fair-use ramifications of the use and still formed a subjective good-faith belief that the use of the content was not authorized. If the content owner/rights-holder has done so, then the take-down notice is likely to survive a Section 512(f) challenge.
Second, for the general internet-posting public, it is important to always remember that though the fair-use defense may be available, such a defense necessarily means that copying occurred. Though the Ninth Circuit made it clear that the burden is not too great on a rights-holder to consider fair use before sending a take-down notice, the Lenz opinion does not insulate an internet-poster from a lawsuit. Damages for copyright infringement can be very costly, so it is important to consider the risks before posting any content online.
Third, and this is more of a general rule of thumb, don’t copy and post Prince’s stuff. You will get taken down.