Lenz v. Universal Music Corp., Nos. 13-16106, 13-16107 (9th Cir. Sept. 14, 2015)
The OTW amicus brief gets a shoutout! Stephanie Lenz sued under 17 U.S.C. § 512(f), alleging that Universal misrepresented in a takedown notification that her 29-second home video was an infringing use of a composition by Prince. The Ninth Circuit 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.” A partial dissent would have gone even further.
At the time Lenz posted the video, Universal enforced Prince’s copyrights. Universal’s head of business affairs assigned an assistant in the legal department to monitor YouTube. The assistant searched YouTube for Prince songs, and evaluated whether search results “embodied a Prince composition” by making “significant use of . . . the composition, specifically if the song was recognizable, was in a significant portion of the video or was the focus of the video.” According to the head of business affairs, “[t]he general guidelines are that . . . we review the video to ensure that the composition was the focus and if it was we then notify YouTube that the video should be removed.” By contrast, videos “that may have had a second or less of a Prince song, literally a one line, half line of Prince song” or “were shot in incredibly noisy environments, such as bars, where there could be a Prince song playing deep in the background . . . to the point where if there was any Prince composition embodied . . . in those videos that it was distorted beyond reasonable recognition” would be left alone, but none of Universal’s video evaluation guidelines explicitly included consideration of fair use. The legal assistant reviewing Lenz’s video recognized Let’s Go Crazy immediately and noted that it played loudly in the background throughout the entire video. “Based on these details, the video’s title, and Lenz’s query during the video asking if her son liked the song, he concluded that Prince’s song ‘was very much the focus of the video’” and included it in a takedown notification sent to YouTube that listed more than 200 YouTube videos. 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.”
YouTube complied with the takedown; Lenz counternotified. Universal protested the video’s reinstatement because Lenz failed to properly acknowledge that her statement was made under penalty of perjury, as required by § 512(g)(3)(C), and 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.” Lenz sent a second counter-notification and sued. The court of appeals allowed an interlocutory appeal of the denial of both parties’ motions for summary judgment on Lenz’s §512(f) misrepresentation claim.
Section 512(f) provides: “Any person who knowingly materially misrepresents under this section—(1) that material or activity is infringing, or (2) that material or activity was removed or disabled by mistake or misidentification, shall be liable for any damages . . . .” So, is fair use “authorized by … the law”? Yes, unambiguously so: the statute makes clear that fair use is noninfringing use, sanctioned by the law. Universal said that fair use is just an affirmative defense/excuse. But fair use is not just an excuse, whatever its procedural posture: a fair user is not an infringer—that is, a fair user is not an infringer who is excused. Fair use is a right, not an excuse (as, for example, copyright misuse is). (Citing Bateman v. Mnemonics, Inc., 79 F.3d 1532, 1542 n.22 (11th Cir. 1996); cf. Lydia Pallas Loren, Fair Use: An Affirmative Defense?, 90 Wash. L. Rev. 685, 688 (2015) (“Congress did not intend fair use to be an affirmative defense—a defense, yes, but not an affirmative defense.”)).
Universal agreed that it had to consider other legally authorized uses, such as compulsory licenses. But the statutory language is very similar. Compare 17 U.S.C. § 112(a)(1) (“Notwithstanding the provisions of section 106, . . . it is not an infringement of copyright for a transmitting organization entitled to transmit to the public a performance or display of a work . . . to make no more than one copy or phonorecord of a particular transmission program embodying the performance or display . . . .”), with id. § 107 (“Notwithstanding the provisions of sections 106 and 106A, the fair use of a copyrighted work . . . is not an infringement of copyright.”). Even if we did call fair use an affirmative defense, for DMCA purposes, “fair use is uniquely situated in copyright law so as to be treated differently than traditional affirmative defenses.” Thus, “a copyright holder must consider the existence of fair use before sending a takedown notification under § 512(c).” This is a bit less than has been reported—the court is very clear that the burden of showing fair use always remains on a defendant, which is both wrong for the reasons given and arguably dictated by Supreme Court precedent.
Did Lenz show a genuine issue of material fact on Universal’s knowing misrepresentation of its subjective good faith belief that the video wasn’t fair use? The majority allowed Lenz to proceed under an actual knowledge theory, but not under a willful blindness theory.
Unreasonable mistakes aren’t actionable under §512(f); some actual knowledge of misrepresentation is required. “Lenz presented evidence that Universal did not form any subjective belief about the video’s fair use—one way or another— because it failed to consider fair use at all, and knew that it failed to do so.” The court found that a jury needed to determine whether “Universal’s actions were sufficient to form a subjective good faith belief about the video’s fair use or lack thereof.” Going forward, though, “if a copyright holder ignores or neglects our unequivocal holding that it must consider fair use before sending a takedown notification, it is liable for damages under § 512(f).” If, having done so, the copyright owner forms a subjective good faith belief that there’s no fair use, it doesn’t matter how wrong it is. Nor must the copyright owner’s consideration be “searching or intensive,” including “investigation” of the allegedly infringing content.
However, paying “lip service” to the concept of fair use isn’t a guaranteed shield. (Citing Disney Enters., Inc. v. Hotfile Corp., No. 11-cv-20427, 2013 WL 6336286, at *48 (S.D. Fla. Sept. 20, 2013) (denying summary judgment of § 512(f) counterclaim due to “sufficient evidence in the record to suggest that [Plaintiff] Warner intentionally targeted files it knew it had no right to remove”); Rosen v. Hosting Servs., Inc., 771 F. Supp. 2d 1219, 1223 (C.D. Cal. 2010) (denying summary judgment of § 512(f) counterclaim where the takedown notification listed four URL links that did not contain content matching the description of the purportedly infringed material); Online Policy Grp. v. Diebold, Inc., 337 F. Supp. 2d 1195, 1204–05 (N.D. Cal. 2004).)
What’s the role of automation?
[T]he implementation of computer algorithms appears to be a valid and good faith middle ground for processing a plethora of content while still meeting the DMCA’s requirements to somehow consider fair use. For example, consideration of fair use may be sufficient if copyright holders utilize computer programs that automatically identify for takedown notifications content where: “(1) the video track matches the video track of a copyrighted work submitted by a content owner; (2) the audio track matches the audio track of that same copyrighted work; and (3) nearly the entirety . . . is comprised of a single copyrighted work.” (citing OTW brief)
Then, individuals could review the “minimal” remaining content. It’s notable that many algorithms are far more expansive, as any algorithm identifying Lenz’s work for takedown would have been. The EFF/OTW-style algorithm is designed to identify works for which the case for fair use is harder to make, and to exclude remixes, which at the least require some human consideration. However, it’s unclear how anti-fair use the human scrutiny can be and still stay in “good faith,” and copyright owners may still be free to decide that they just don’t think much of anything is fair use. (The cited cases involve either (1) clear misidentification of targeted files that would have been apparent to any human or (2) a plaintiff whose business model didn't depend on exploiting its copyrights and thus was acting out of censorial motives.)
As for what happened in this case, although willful blindness is an available theory, the facts didn’t support it. Willful blindness requires that “(1) the defendant must subjectively believe that there is a high probability that a fact exists and (2) the defendant must take deliberate actions to avoid learning of that fact.” Lenz couldn’t show that Universal subjectively believed there was a high probability that the video constituted fair use.
As for damages, §512(f) allows recovery of “any damages, including costs and attorneys[’] fees, incurred by the alleged infringer . . . who is injured by such misrepresentation,” including nominal damages, though not nominal damages for “impairment of free speech rights,” since Universal isn’t a government actor. Actual monetary loss isn’t required. The violation of a plaintiff’s right by an intentional tort is a kind of legal damage itself, even if the tort isn’t physical. Requiring substantial economic damages “would vitiate the deterrent effect of the statute.” The court of appeals declined to decide whether she could recover expenses or pro bono costs/attorneys’ fees.
Judge Milan Smith concurred in part and dissented in part. He construed the plain text of the stattue to “prohibit misrepresentations that a work is infringing, not misrepresentations about the party’s diligence in forming its belief that the work is infringing.” Moreover, there was no material dispute about whether Universal considered fair use, and thus he would have concluded that it could be liable for knowingly misrepresenting that the video was infringing: “Universal knew it had not considered fair use, and therefore knew it lacked a basis to conclude that the video was infringing.” Judge Smith concurred that § 512 requires copyright holders to consider whether potentially infringing material is a fair use before issuing a takedown notice.
The majority’s approach depended on Universal’s implied assertion that it had considered fair use when it certified in its takedown notification that it held a good faith belief that the video was not authorized by the law. But § 512(f) doesn’t directly prohibit a party from falsely implying that it has considered fair use. In Judge Smith’s view, the relevant representation was Universal’s assertion that the video is infringing. “If the video is a fair use, Universal’s representation that the video is infringing was false.”
Of course, Universal’s misrepresentation has to be “knowing” to make it liable, not merely innocent or negligent. If this requires subjective belief that the use was unauthorized, “it is difficult to see how Lenz can possibly prevail.” Though the majority suggested that Universal could be liable if its actions weren’t sufficient to form a good faith belief about fair use, Universal would also apparently have to know that its actions weren’t sufficient. “Knowingly” shouldn’t be construed in so limited a way. “Universal may be held liable for knowingly misrepresenting that the video was infringing if, knowing it had not considered whether the video was a fair use, it erroneously asserted that it was infringing.” “Good faith” belief that a use wasn’t authorized by law would be meaningless if you didn’t have to consider whether a use was fair. A party that fails to consider fair use knows that “having failed to consider fair use, it lacks a basis to assert that the work is infringing.” This is recklessness, in common law terms.
It was undisputed that Universal didn’t consider fair use before sending the takedown notice. Its policy was to send takedown notices if “the composition was the focus of the video.” Judge Smith disagreed with the majority that applying this policy in this case could have been “sufficient to form a subjective good faith belief about the video’s fair use or lack thereof,” because §107 lists the fair use factors and Universal’s policy didn’t permit it to consider those factors. “Moreover, Universal knew it lacked a basis to conclude that the work was infringing, because it knew that if this video was a fair use, it was not infringing,” because §107 so states.
Judge Smith agreed that automated algorithms could be useful in identifying infringing content, but the record didn’t show whether these programs were currently capable of analyzing fair use. In order for it to be ok for a copyright owner to rely solely on an algorithm, that algorithm had to be capable of applying the fair use factors.
Ultimately, “Universal may be held to account if the video was not infringing, because it knew it lacked a basis to assert that it was.” Willful blindness wasn’t a helpful doctrine here. This statutory misrepresentation action should be analogized to common law torts like fraud, deceit, and misrepresentation, which have their own principles for determining when an action was taken “knowingly”—including when a party knows it is ignorant of the truth or falsity of its representation. It didn’t make sense to ask whether Universal subjectively believed that there was a high probability the video was a fair use, because Universal knowingly failed to form any belief about whether the video was fair use. That was enough for a “knowing” misrepresentation.
What now? It may remain very difficult to show a knowing misrepresentation, under the majority’s standards. But at the very least, remixers have a new reason to counternotify when they have a good faith belief in their own fair uses.