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.
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