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Article: December 2015: Entertainment Litigation Update

Business Litigation Reports

Ninth Circuit Holds That Copyright Holders Must Consider Fair Use Before Sending Takedown Notifications. In Lenz v. Universal Music Corp., No.13-16106 (9th Cir. Sept. 14, 2015), the Ninth Circuit became the first federal court of appeals to address the question of whether fair use constitutes “authorization under the law” under the Digital Millennium Copyright Act (“DMCA”).   Answering that  question in  the affirmative, the Ninth Circuit held that the DMCA requires copyright holders to “consider the existence of fair use before sending a takedown notification” under the DMCA.

Lenz involved a  YouTube  video posted by the plaintiff, Stephanie Lenz, which featured Lenz’s children dancing to a song by Prince. Universal flagged the video as infringing  based on a number of guidelines, none of which expressly  involved consideration of fair use. Universal  sent a takedown notification to YouTube which, as required by the DMCA, included a statement that Universal had “good faith belief ” that Lenz’s use of the song in her video was unauthorized. 17 U.S.C. § 512(c)(3)(A)(v). YouTube removed Lenz’s video.

Lenz sued  Universal under  17  U.S.C.  section 512(f ) on the grounds that Universal had “material[ly] misrepresent[ed]” in its takedown notification that her video was infringing.  In essence, Lenz asserted that Universal had failed to consider whether her video made fair use of the song and Universal had therefore misrepresented that it had formed a good faith belief that Lenz’s use was not “authorized by law.” Universal countered that a fair use is not “authorized by law” for purposes of the statute. The Ninth Circuit disagreed, concluding that because the statute defining fair use, 17 U.S.C. section 107, explicitly states that fair use is not infringement, id. at 11, “fair use is ‘authorized by law’ and a copyright holder must consider the existence of fair use before sending a takedown notification under 512(c).” Id. at 15.

In addition to this landmark holding, Lenz is notable for its analysis of the  means of assessing whether a copyright holder’s statement of good faith belief constitutes a  “knowing” misrepresentation. The court explained that this is a subjective  rather than objective inquiry: the question of the truth of Universal’s good faith belief statement turned not on whether the court itself would consider Lenz’s  video fair use, but rather on “whether Universal formed a good faith belief that it was not.”  Id. at 15, 17.  The court noted that plaintiffs can establish this subjective belief via evidence that the copyright holder had actual knowledge that it was making a misrepresentation in its takedown notification when it claimed to have a good faith belief that plaintiff’s work was infringing. The court held that evidence of a failure to consider fair use raises a triable issue of fact as to whether the copyright holder made a knowing misrepresentation. See id. at 15-17.

Intriguingly, and of interest to copyright holders, the court held that the consideration of fair use necessary to avoid liability under section 512(f ) “need not be searching or intensive.” Id. at 18.  In fact, the court suggested, without deciding, that the use of computer algorithms to flag for takedown content that is highly unlikely to constitute fair use, with human employees reviewing  the small amount of remaining content, would likely be sufficient.  Id. at 19.

The court also held that plaintiffs generally  rely on the willful blindness doctrine to establish that a copyright holder made a knowing misrepresentation. That doctrine requires a showing that the copyright holder was aware of a high probability that the use in question was fair, but nonetheless took deliberate action to avoid learning that fact.   However, because Lenz had failed to provide any evidence “that Universal was aware of a high probability the video constituted fair use,” the court held that she could not rely on willful blindness. Id. at 20-21.

It will be interesting to see whether other circuits follow the Ninth Circuit’s analysis. In the meantime, copyright holders should consider fair use before sending takedown notifications.