Copyright Holders Must Evaluate Fair Use Before Sending A Takedown Notice

Section 512(c) permits service providers, e.g., YouTube or Google, to avoid copyright infringement liability for storing users' content if—among other requirements—the service provider "expeditiously" removes or disables access to the content after receiving notification from a copyright holder that the content is infringing. 17 U.S.C. § 512(c). On Monday, September 14, 2015, the Ninth Circuit Court of Appeals addressed the question of "whether copyright holders have been abusing the extrajudicial takedown procedures provided for in the Digital Millennium Copyright Act (DMCA) by declining to first evaluate whether the content qualifies as fair use." It unequivocally ruled "yes." Before sending a takedown notice, the copyright holder must subjectively decide that the use of the copyrighted materials is not a 'fair use.'

Stephanie Lenz posted a 29-second home video on YouTube of her two young children gallivanting around her kitchen to a barely recognizable (bad audio) Prince song, "Let's Go Crazy." At the time Lenz posted the video, Universal Music Corp.(Universal) was Prince's publishing administrator responsible for enforcing his copyrights. An assistant in Universal's legal department decided the video should be included in the takedown notification sent to YouTube that listed more than 200 YouTube videos Universal believed to be making unauthorized use of Prince's song. The notice included a "good faith belief" statement, as required by 17 USC §512(2)(3)(A)(v), that use of the copyrighted material (the song) "is not authorized by the copyright owner, its agent, or the law." YouTube removed Lenz's video and Lenz attempted to restore the video by sending a counter-notification to YouTube pursuant to §512 (g)(3). Universal protested again, reiterating 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 (by then represented on a pro bono basis by the Electronic Frontier Foundation) sent a second counter-notification, which resulted in YouTube's reinstatement of the video.

In 2007, Lenz filed suit against Universal and, after the District Court dismissed her tortious interference claim and claim for declaratory relief, Lenz filed her Second Amended Complaint in 2008, alleging only a claim for misrepresentation under §512(f) - that in submitting the takedown notice, Universal knowingly...