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Posted in Copyright Law, Cyberspace Law, Entertainment Law

By Sarra Ziari

On August 20, 2008, in Lenz v. Universal Music Corp., Judge Fogel of the United States District Court, N.D. California ruled that copyright owners must consider fair use before issuing takedown notices under the Digital Millennium Copyright Act (“DMCA”), and issued a warning against the misuse of takedown notices by overreaching copyright owners. 

On February 7, 2007, Stephanie Lenz videotaped her young children dancing in the family kitchen to the song “Let’s Go Crazy” by the artist known as Prince, which played in the background. Lenz uploaded the video to YouTube.com, the popular Internet video hosting site for the purpose of sharing her son’s dancing with friends and family.

Universal Music Corp., Universal Music Publishing, Inc., and Universal Music Publishing Group (collectively, “Universal”), the owner of the copyright to “Let’s Go Crazy”, sent YouTube a takedown notice pursuant to Title II of the DMCA on June 4, 2007. The notice demanded that YouTube remove Lenz’s video from the site because of a copyright violation for the use of the Prince song. The next day YouTube complied with the notice and removed the video. YouTube notified Lenz that her video had been removed in response to Universal’s claim of copyright infringement. YouTube further warned Lenz that repeated incidents of copyright infringement could lead to the deletion of her account and all of her YouTube video content. Lenz sent YouTube a counter-notification on June 27, 2007 asserting that her video constituted fair use of the song “Let’s Go Crazy” and that as such did not violate the Universal copyright. Lenz further demanded that the video be re-posted on YouTube.com. YouTube re-posted the video several weeks later.   

Lenz filed suit against Universal alleging that Universal misrepresented that Lenz’s use of the song “Let’s Go Crazy” was an infringement under the DMCA. Universal filed a motion to dismiss for failure to state a claim upon which relief may be granted. The District Court denied Universal’s motion on August 20, 2008, ruling that a copyright owner must consider fair use before issuing a takedown notice.

The DMCA requires, among other things, that a copyright owner provide in a takedown notice “a statement that the complaining party has a good faith belief that use of the material in the manner complained of is not authorized by the copyright owner, its agent, or the law” (17 U.S.C. §512(c)(3)(A)(v)). There was no dispute that Lenz used the copyrighted material in her video or that Universal is the true owner of Prince’s copyrighted music. The only issue was whether the DMCA requires a copyright owner to consider the fair use doctrine in formulating the requisite good faith belief that use of the material in the manner complained of is not authorized by the copyright owner, its agent, or the law.

Universal argued that copyright owners cannot be required to evaluate the applicability of fair use prior to sending a takedown notice, noting that fair use is merely a permitted excuse to infringement rather than an authorized use. Lenz argued that fair use is an authorized use of copyrighted material and that the fair use doctrine is an express component of copyright law. Lenz further argued that unnecessary removal on non-infringing material causes significant injury to the public where time-sensitive or controversial subjects are involved and the counter-notification procedure does not resolve the problem.

The court sided with Lenz, noting that the Copyright Act of 1976 provides explicitly that the fair use of a copyrighted work is not an infringement of copyright. Thus, before a copyright owner proceeds under the DMCA, the copyright owner must first consider and evaluate whether the use of the material might constitute fair use. The court noted that Lenz had alleged sufficient bad faith and deliberate ignorance of fair use to overcome Universal’s motion to dismiss. The court rejected Universal’s argument that copyright owners may lose the ability to respond rapidly to potential infringements, and that the fair use is a fact-intensive inquiry will make it difficult to predict the applicability of fair use.  Judge Fogel noted that a fair use evaluation will, in a majority of cases, not be so complicated as to jeopardize a copyright owner’s ability to respond to potential infringements, and that the DMCA already requires owners to make an initial review of the potentially infringing material prior to sending a takedown notice and that a consideration of fair use is simply part of that review.

While this decision is a clear victory for Lenz, Judge Fogel noted that it is doubtful that Lenz will be able to prove that Universal acted with the requisite subjective bad faith in sending the takedown notice.  Thus, while Lenz’s allegations are sufficient to proceed beyond the pleading stage, there is no indication that Lenz’s case will survive the next level of proving the high evidentiary burden required to show Universal acted with bad faith. However, this remains an important decision that may make motion picture companies, television studios and record labels think twice before sending out a takedown notice without first considering whether the alleged infringing use may be considered a fair use under copyright law.

Sarra Ziari is an associate with Weintraub Genshlea Chediak Tobin & Tobin practicing in the Corporate and Intellectual Property groups. Sarra focuses her practice on representing public and private companies.