In this protracted litigation, plaintiff Stephanie Lenz brought suit in 2007 against defendant Universal Music Corp., asserting a claim for misrepresentation under the Digital Millennium Copyright Act (DMCA), 17 U.S.C. § 512, based on allegations that she suffered damages from YouTube’s removal of her viral video as a result of Universal’s takedown notice. On cross-motions for summary judgment, the court denied both plaintiff’s and defendant’s motions.
A notification of claimed infringement sent to a service provider under § 512(c) must include “[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.” Lenz asserted that Universal’s statement in its takedown notice that the company had a “good faith” belief that Lenz’s video “is not authorized by the copyright owner, its agent, or the law” could not have been in good faith, given that Universal’s procedures for reviewing YouTube videos did not include an analysis of whether the video constituted fair use, and was therefore an actionable misrepresentation under § 512(f). The court disagreed, finding that while Universal had an obligation to properly consider whether the video constituted fair use of the copyrighted song before it sent the takedown notice and that Lenz had put forth sufficient evidence that the company had failed to do so, Universal’s mere failure to consider fair use is insufficient to give rise to liability under § 512(f). According to the court, under the Ninth Circuit’s decision in Rossi v. Motion Picture Assoc. of America, Inc., Lenz must demonstrate that Universal had some actual knowledge that its takedown notice contained a material misrepresentation.
Universal argued that although the employee responsible for the video review procedure was not instructed to and did not consider fair use per se, his consideration of a number of factors that would be relevant to a fair use determination (the existence of a transformative noncommercial purpose; the nature of the copyrighted work; the amount and substantiality of the use of the copyrighted work; and the effect on the market for the copyrighted work) was sufficient to avoid liability. The court disagreed, finding that while requiring a copyright holder to engage in a full-blown fair use analysis prior to sending a DMCA takedown notice would be inconsistent with the remedial purposes of the statute, it is insufficient for a copyright holder to consider facts that might be relevant to a fair use analysis without making any effort to evaluate the significance of those facts – including their legal significance – in the context of the doctrine. “[A]t a minimum a copyright owner must make at least an initial assessment as to whether the fair use doctrine applies to the use in question in order to make a good faith representation that the use is not ‘authorized by law.’”
Notwithstanding Universal’s admitted failure to consider fair use before sending takedown notices, the court concluded its actions were not sufficient to establish liability under § 512(f) under the subjective good faith standard required by the Ninth Circuit’s holding in Rossi v. Motion Picture Assoc. of America, Inc. “In light of Rossi, it appears that Universal’s mere failure to consider fair use would be insufficient to give rise to liability under § 512(f). Lenz thus must demonstrate that Universal had some actual knowledge that its Takedown Notice contained a material misrepresentation.” The court rejected Lenz’s argument that Universal’s takedown procedures for evaluating copyright infringement were so deficient that Universal willfully blinded itself as to whether any video might constitute fair use.
In order to establish Universal’s willful blindness, Lenz must establish: (1) Universal must subjectively believe a high probability exists that any given video might make fair use of a copyrighted composition, and (2) that Universal took deliberate actions to avoid learning of that fact. The court noted that, based on the evidence that Universal assigned the task of reviewing YouTube postings for infringing uses of Prince’s songs to a single person without giving that employee any information or training about fair use, a trier of fact could conclude that Universal took deliberate actions to avoid learning whether any particular use of one of Prince’s works was protected by the fair use doctrine. Lenz did not present evidence, however, suggesting that Universal subjectively believed either that a high probability that any given video might make fair use of a Prince composition or that Lenz’s video in particular made fair use of Prince’s song Let’s Go Crazy, and was therefore not entitled to summary judgment. The court also found that Universal was not entitled to summary judgment under the subjective knowledge standard because it had not affirmatively shown that it lacked a subjective belief that a high probability existed that any given video might make fair use of a Prince composition.
The court also rejected Universal’s argument that the company was entitled to summary judgment because Lenz could not demonstrate that she suffered any damages recoverable under § 512(f). Lenz asserted three categories of damages: loss of YouTube’s hosting services and chilling of her free speech; lost time and resources; and attorneys’ fees and costs. The court found Lenz could not maintain a damages claim under the DMCA for either loss of YouTube’s services (which are free) or the chilling of her free speech. Noting that no reported cases definitively indicated Lenz could recover for the time (about 10 hours) and resources (electricity to power her computer, Internet and telephone bills) that she expended in attempting to have her video reinstated under the DMCA’s counter-notice procedures, the court reiterated its previous determination that requiring a plaintiff who demonstrates an actionable misrepresentation to also demonstrate “not only that she suffered damages but also that those damages were economic and substantial would vitiate the deterrent effect of the statute.” Similarly, the court found it unclear that Lenz could not recover attorneys’ fees (which were provided to her pro bono) as damages.