Originally published by Saul Perloff (US).
Last week, the Ninth Circuit seemed to fire a warning shot across the bow of overzealous copyright holders: Before issuing a DMCA takedown notice, the copyright holder must stop to consider if the alleged infringement is a fair use of the copyrighted work. But, in the same opinion, the Court appeared to retreat. The majority held that even in the absence of an explicit fair use analysis, a jury could still decide that a copyright holder had a sufficient good faith belief that the infringing work was not a fair use. Stephanie Lenz v. Universal Music Corp., Universal Music Publishing Inc., Universal Music Publishing Group, Inc., Case Nos. 13-16106 & 13-16107 (D.C. No. 5:07-cv-03783) (9th Cir. Sept. 14, 2015). Read the full Lenz Opinion.
As the dissenting Judge pointed out, [i]t is undisputed that Universal did not consider fair use before sending the takedown notice. . . . Universal knew that [generally] a fair use was not infringing, knew that it had not considered fair use, and nonetheless asserted that the video was infringing.
Nevertheless, the majority came to the conclusion that
a jury must determine whether Universal’s actions were sufficient to form a subjective good faith belief about the video’s fair use or lack thereof.
Background
In 2007, Stephanie Lenz uploaded a short video of her young toddler to YouTube, naming it “Let’s Go Crazy #1.” The 29-second clip shows the child bopping around while Prince’s song Let’s Go Crazy plays in the background. Prince’s publishing administrator, Universal Music, discovered the video in a routine YouTube search for unauthorized uses of Prince’s music. Generally, Universal instructed its employees to find unauthorized videos where “the composition was the focus.” The particular employee who found Lenz’s video determined that, due to the video’s title, the fact that the song played loudly in the background, and the fact that Lenz asks the baby if he likes the music, the Prince song was “very much the focus of the video.” At that point, the Universal employee decided to include the video, along with more than 200 others, in a DMCA takedown notice that was sent to YouTube.
The Digital Millennium Copyright Act
The Digital Millennium Copyright Act (DMCA) was enacted in 1998 to address concerns about online infringement of copyrighted works. The DMCA created a safe harbor for online service providers (OSPs) such as YouTube to insulate them from liability for the copyright violations of their users, provided that the OSP promptly removes alleged infringing material after receiving notification (i.e., a takedown notice) from the copyright owner.
A proper takedown notice, in addition to identifying the copyright work and the alleged infringing work, must also include a statement that the copyright holder has a “good faith belief” that the infringing material “is not authorized by the copyright owner, its agent, or the law.” 17 U.S.C. § 512(c)(3)(A)(v).
After receiving a takedown notice, the OSP must notify the user of the takedown, and the user can then respond with a counter-notification that the user has a good faith belief that the content is not an infringement. After receiving a counter-notification, the OSP must restore the content unless the copyright holder chooses to file a lawsuit against the user.
The DMCA also penalizes those who abuse the takedown and put-back provisions. Both users and copyright owners can be liable for damages if either party “knowingly materially misrepresents” that the content either is an infringement or was taken down in error. 17 U.S.C. § 512(f). In this action, Lenz seeks damages from Universal, alleging that Universal knowingly misrepresented in its takedown notice that her video was an infringement.
Fair Use
Lenz argued that the copyright doctrine of fair use applies to her video, thereby authorizing her use under the law. Universal, on the other hand, argued that fair use is not “authorized by . . . the law” because it is merely an affirmative defense that excuses otherwise infringing conduct. In a seemingly big win for Lenz (and other users), the Ninth Circuit determined – in an issue of first impression in any circuit court of appeals – that the copyright statute “unambiguously contemplates fair use as a use authorized by the law.” Employing a purely textual analysis, the Ninth Circuit determined that fair use, as codified in 17 U.S.C. § 107, is indeed a right “uniquely situated in copyright law so as to be treated differently than traditional affirmative defenses” (e.g., misuse of copyright or laches).
Good Faith Belief
Having determined that fair use is “authorized by the law,” the Ninth Circuit was left to determine whether Universal “knowingly misrepresented” in the takedown notice that it had formed a good faith belief the video did not constitute fair use. Relying on its own precedent in Rossi v. Motion Picture Association of America, Inc., the Ninth Circuit re-affirmed that “a copyright holder need only form a subjective good faith belief that a use is not authorized.” Furthermore, an unknowing mistake will not subject the copyright owner to liability, even if that mistake was unreasonable. The plaintiff must show that the copyright holder had actual knowledge of a misrepresentation.
Because the parties agreed that Universal had not considered fair use before it issued the takedown notice to YouTube, Lenz argued that Universal had absolutely no subjective belief, one way or another, that the video was a fair use. Universal argued instead that its instructions to employees, while not formally a fair use analysis, were sufficient consideration of fair use to form a subjective good faith belief.
This is the point where the majority and the dissent seem to disagree. The majority concluded that Universal’s actions were at least enough to raise a genuine issue of fact for the jury to decide regarding its own subjective good faith belief that the video was not fair use. The majority, again pointing to Rossi, emphasized that the consideration required to form a good faith belief on the issue of fair use does not need to be searching or intensive, especially in light of the volume of infringing uses presented in the digital age. The majority even suggests (without deciding) that running a computer algorithm to detect infringing content may be sufficient to meet this standard.
The dissent found the majority’s reasoning wanting. The dissent takes issue that the majority’s reading of Rossi requires a subjective belief that the fact asserted in the takedown notice is false. According to the dissent, “[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.” Instead, a party who knowingly fails to consider fair use lacks a basis to assert that the work is infringing and, therefore, should be found to have some actual knowledge of misrepresentation. The dissent believes this concept of “conscious ignorance” is more in keeping with the tortious nature of misrepresentation as compared to the majority’s concept of “willful blindness” borrowed from criminal law.
Willful Blindness Doctrine
In perhaps the strongest blow to Lenz, the Ninth Circuit held that Lenz could not proceed to trial on a theory of willful blindness. In the district court below, Lenz argued that Universal’s procedures for evaluating copyright infringement were so deficient that it willfully blinded itself to the possibility that her video could be a fair use. The majority of the Ninth Circuit panel agreed that, in appropriate circumstances, this theory of willful blindness could support a claim of liability. Citing the Supreme Court’s decision in Global-Tech Appliances, Inc. v. SEB S.A, the Ninth Circuit applied a two-part test: “Lenz must demonstrate a genuine issue as to whether – before sending the takedown notification – Universal (1) subjectively believed there was a high probability that the video constituted fair use, and (2) took deliberate actions to avoid learning of this fair use.”
The Ninth Circuit determined Lenz failed to meet her burden of the first factor. Lenz did not present any evidence “from which a juror could infer that Universal was aware of a high probability the video constituted fair use.” Again, Lenz’s only evidence was that Universal failed to engage in any form of fair use determination. For this reason, the Ninth Circuit granted Universal’s cross-motion for summary judgment on the issue of willful blindness, and Lenz may not raise the issue at trial.
The Ninth Circuit’s opinion is a slight, yet significant, expansion of the willful blindness theory with regard to liability under the DMCA. The willful blindness theory was first developed by the Second Circuit in the landmark case Viacom International, Inc. v. YouTube, Inc. In that case, the Second Circuit found that Congress, through the DMCA, limited – but did not abrogate – the common law willful blindness doctrine. See Viacom, 676 F.3d at 34–35. Importantly, however, the Second Circuit’s determination rested on a textual analysis of § 512(m)(1), which applies only with regard to OSPs. In Lenz, the Ninth Circuit expanded the application of the willful blindness doctrine to copyright owners, quickly citing to Viacom without otherwise acknowledging any distinction. Unlike copyright owners, OSPs are not required to take affirmative steps to monitor for specific infringing activity. So, we are left wondering, does the DMCA (presumably through § 512(f)) abrogate the common law willful blindness doctrine as to copyright owners?
As mentioned above, the dissent makes the case that § 512(f)’s standard of “knowingly,” with its common law tort roots, is at least some evidence that Congress intended to emulate such torts as fraud, deceit and misrepresentation. Quite simply “a misrepresentation is knowing if the party knows it is ignorant of the truth or falsity of its representation.” Accordingly, the dissent would find that Universal’s failure to form any belief regarding fair use is sufficient to satisfy § 512(f)’s standard of a “knowing” misrepresentation.
Commentary
Fair use has always been a murky area, difficult to define and tricky to navigate. The Ninth Circuit may have advanced the ball by clarifying that, at least in the context of the DMCA, fair use is a right rather than a defense. Thus, copyright owners must take pause to consider some form of fair use analysis before issuing a DMCA takedown notice. But what kind of analysis will suffice? In this regard, the opinion may create more questions than it answers. One thing is for sure, though: The Ninth Circuit has not set the bar very high. Whether this is a game-changing decision that will have any practical effect on the behavior of overzealous copyright holders remains to be seen.
This article was prepared by Jeff Pettit (supervised by Saul Perloff).
Curated by Texas Bar Today. Follow us on Twitter @texasbartoday.
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