Follow the dancing baby

Whoa! HUUGE! #copyright https://t.co/PeNgW4yYXD

— Ron Coleman (@RonColeman) September 16, 2015

It is huge. Here’s the New York Times‘s coverage; here’s the Wall Street Journal; and here’s the actual 9th circuit opinion in Lenz v. Universal itself.  Everyone is explaining why the deal is so big, of course.  The key question was this:

Section 512(c)(3)(A)(v) requires a takedown notification to include a “statement that the complaining party has a good faith belief that the use of the material in the manner complained of is not authorized by the copyright owner, its agent, or the law.” The parties dispute whether fair use is an authorization under the law as contemplated by the statute—which is so far as we know an issue of first impression in any circuit across the nation.

This is the offending video. 

Fair use or not?   And the answer to the question is this:

We agree with the district court and hold that the statute unambiguously contemplates fair use as a use authorized by the law. Fair use is not just excused by the law, it is wholly authorized by the law. . . . Although the traditional approach is to view “fair use” as an affirmative defense, . . . it is better viewed as a right granted by the Copyright Act of 1976. Originally, as a judicial doctrine without any statutory basis, fair use was an infringement that was excused—this is presumably why it was treated as a defense. As a statutory doctrine, however, fair use is not an infringement. Thus, since the passage of the 1976 Act, fair use should no longer be considered an infringement to be excused; instead, it is logical to view fair use as a right. Regardless of how fair use is viewed, it is clear that the burden of proving fair use is always on the putative infringer.

That sounds right to me.  So, here’s a comment I got in the email from Mike Keyes, an IP partner at Dorsey & Whitney:

The Lenz decision is a path marking case in the world of copyright law.  If a copyright holder sees unauthorized use of its content online, the natural inclination is to take appropriate steps to have that content removed (by sending a “take down” notice to the Internet Service Provider that is hosting the content, such as YouTube.com in the Lenz case).  If the Ninth Circuit decision stands, a copyright holder now must first determine if the party that posted the content has a legitimate legal defense before requesting that the material be taken down.

This is a significant development as it forces content holders to engage in a bit of copyright soothsaying before enforcing their rights. What this decision means from a practical point of view is that anytime content owners see the unauthorized use of their content online (for example music, videos, etc.) they will want to carefully consider their options before demanding that the content be removed.  If the party that posted the content has a reasonable argument that it’s use of the content was “fair” (i.e. That the poster was commenting on the work or engaged in some sort of educational endeavor) the copyright holder faces the specter of a claim for damages if a take down notice is sent.

Kind of, yes.  I don’t know about “soothsaying”; making informed professional judgments is what we are paid to do.  That inevitably requires predicting a range of possible outcomes. So I do agree with Mike when he says that copyright holders must “carefully consider their options before demanding that content be removed.” 

On the other hand, it should not take the Ninth Circuit to tell lawyers to “carefully consider their options,” because (1) lawyers are supposed to always do that; and (2) what we’re talking about here is not just “demanding,” actually, but engaging the DMCA takedown process, which is essentially self-executing and instantly imposes costs on the target of the takedown.  Now, says the Ninth Circuit, that is no longer a risk-free procedure.  Again, here’s what happened in Lenz:

[Universal] decided the video should be included in a takedown notification sent to YouTube that listed more than 200 YouTube videos Universal believed to be making unauthorized use of Prince’s songs. 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.” After receiving the takedown notification, YouTube removed the video and sent Lenz an email on June 5, 2007, notifying her of the removal.

 

On June 7, 2007, Lenz attempted to restore the video by sending a counternotification to YouTube pursuant to § 512(g)(3). After YouTube provided this counter-notification to Universal per 512(g)(2)(B), Universal protested the video’s reinstatement . . . [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.” The protest made no mention of fair use. After obtaining pro bono counsel, Lenz sent a second counter-notification on June 27, 2007, which resulted in YouTube’s reinstatement of the video in mid-July. . . .

Lenz nonetheless sued Universal under § 512(f), which 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 . . . .”

Universal faces liability if it knowingly misrepresented in the takedown notification that it had formed a good faith belief the video was not authorized by the law, i.e., did not constitute fair use. Here, 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. Universal nevertheless contends that its procedures, while not formally labeled consideration of fair use, were tantamount to such consideration. . . .

To be clear, 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, however, a copyright holder forms a subjective good faith belief the allegedly infringing material does not constitute fair use, we are in no position to dispute the copyright holder’s belief even if we would have reached the opposite conclusion. A copyright holder who pays lip service to the consideration of fair use by claiming it formed a good faith belief when there is evidence to the contrary is still subject to § 512(f) liability.

How about soothsaying?  Note what the Circuit says about just how little a copyright holder is asked to do here (citations and internal quotes omitted):

Though Lenz argues Universal should have known the video qualifies for fair use as a matter of law, our court has  already decided a copyright holder need only form a subjective good faith belief that a use is not authorized. . . . [T]the ‘good faith belief’ requirement in § 512(c)(3)(A)(v) encompasses a subjective, rather than objective standard.  A copyright owner cannot be liable simply because an  nknowing mistake is made, even if the copyright owner acted unreasonably in making the mistake. Rather, there must be a demonstration of some actual knowledge of misrepresentation on the part of the copyright owner.

As a result, Lenz’s request to impose a subjective standard only with respect to factual beliefs and an objective standard with respect to legal determinations is untenable. Such a request grafts an objective standard onto 512(c)(3)(A)(v)  . . . We therefore judge Universal’s actions by the subjective beliefs it formed about the video.

So far, pretty reasonable.  The court then went on to say something fairly obvious, which is that you can’t hide behind subjectivity by being willfully blind, specifically holding that the “willful blindness” doctrine can be relied on by a plaintiff in an action such as the one brought by Lenz.  Did the court then make “subjective” just another word for “objective”?

No.  In fact, the Circuit Court found that in this regard the District Court had erred by improperly shifting the burden on summary judgment to Universal.  Lenz, the Court of Appeals ruled, found that absent “evidence from which a juror could infer that Universal was aware of a high probability the video constituted fair use,” Lenz failed to establish a right to go to the jury relying on the willful blindness.  The question of Universal’s subjective good-faith belief with respect to fair use, however, remained one of fact.

This does not place a particularly steep burden on takedown operations.  Proving the copyright owner’s subjective belief, or even willful blindness, on the topic of fair use — which, in reality, is much less commonly applicable than defendants think — is a high hurdle.  What the court did do, however, is require copyright owners to ask the question.  As a practical matter, that means their pre-takedown procedure has to have some component that incorporates fair use, which mainly means that the use should be vetted for the classic four fair-use factors:

1. the purpose and character of the use;
2. the nature of the copyrighted work;
3. the amount and substantiality of the portion taken; and
4. the effect of the use upon the potential market.

Guess what?  In standard piracy situations, the application factors are not hard to evaluate.  And in the case of Lenz’s  29-second “Dancing Baby” video, it wasn’t hard either.  It was easy.  I mean, look how Universal came to its dumb conclusion to send a takedown notice in the first place, per the opinion:

At the time Lenz posted the video, Universal was Prince’s publishing administrator responsible for enforcing his copyrights. To accomplish this objective with respect to YouTube, Robert Allen, Universal’s head of business affairs, assigned Sean Johnson, an assistant in the legal department, to monitor YouTube on a daily basis. Johnson searched YouTube for Prince’s songs and reviewed the video postings returned by his online search query. When reviewing such videos, he evaluated whether they “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 Allen, “[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.”

Johnson contrasted videos that met this criteria to those  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.” None of the video evaluation guidelines explicitly include consideration of the fair use doctrine.

That’s an odd conclusion by the Circuit, I should note first.  Remember the quote above:  “Universal . . . contends that its procedures,while not formally labeled consideration of fair use, were tantamount to such consideration. . . .”  I’d actually have to say Universal is right on this.  There’s no other way to explain the second paragraph above.  And there’s no reason to use legal terms of art in guidelines provided by non-legal personnel paid to just monitor the intertubes for infringements.

What I would say, however, is that Universal and others in its shoes have to do a better job on those guidelines.  “Literally a one line, half line of a Prince song” is “literally” a stupid guideline.  Legal departments have to take the four factors and make them work a little harder in guidelines such as those used by Sean Johnson here.

But it can be done.  This decision has little to do with enforcement programs against real pirates or ones where it can be determined, on a good faith basis — that’s all — that there’s solid legal ground to say that a putative infringer’s use is not defensible as fair use.

UPDATE:  More from Michael regarding the Ninth’s amended opinion.