Copyright Owners Must Consider Fair Use in Connection With DMCA Notices
In February 2007, Stephanie Lenz videotaped her young children dancing in the family's kitchen while a song, "Let's Go Crazy" by Prince, played in the background. Lenz uploaded the 29 second video to YouTube. (Although the song purportedly can be heard for about 20 seconds of the video, I have to admit that I could hear very little of it because of the admittedly "poor sound quality" and the sounds the children were making as they pushed toys around the family's kitchen.)
Universal then sent a takedown notice pursuant to Section 512 of the DMCA to YouTube, which stated in part that Universal had a "good faith belief" that the video "is not authorized by the copyright owner, its agent, or the law." In response, YouTube took down the video although it was re-posted approximately six weeks later after Lenz sent a DMCA counter-notification.
Lenz then sued Universal for several claims, two of which were dismissed upon Universal's first motion to dismiss. Lenz then filed an amended complaint that asserted a single claim under Section 512(f) of the DMCA that Universal "knowingly materially misrepresent[ed]" that the home video of her dancing children infringed Universal's copyright in the Prince composition. Specifically, Lenz asserted that her use of the song was a "self-evident non-infringing fair use" under the Copyright Act and that Universal's DMCA notice stating to the contrary was an actionable misrepresentation under Section 512(f) of the DMCA.
Although Universal claimed that "it [was] time for this case to be over," the Court apparently did not agree and denied Universal's motion to dismiss the amended complaint.
Essentially, Universal argued that (1) it did not send a DMCA notice because, although it was sent to the email address dedicated to such notices and contained all the necessary elements of a DMCA notice, Universal apparently "does not agree that YouTube is eligible for protection under the DMCA's 'safe harbors,'"; (2) there was no knowing misrepresentation because fair use is an affirmative defense to otherwise infringing conduct; (3) fair use is never "self-evident" because of its "fact-specific, equitable nature"; and (4) as a fact-specific matter, Lenz's use was not "self-evidently" a fair use. (As a side-note, it seems problematic for Universal to be claiming that it can and does make legal and factual conclusions about whether YouTube is "eligible for protection under the DMCA's 'safe harbors'" but cannot be expected to consider the fair use doctrine.)
Stating as a fact that Universal did send a DMCA notice to YouTube, the Court characterized the issue before it as follows: "whether 17 U.S.C. [Section] 512(c)(3)(A)(v) requires a copyright owner to consider the fair use doctrine in formulating 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.'" Noting that the Copyright Act expressly provides that "fair use of a copyrighted work . . . is not an infringement of copyright," the Court concluded that the copyright owner must consider the fair use doctrine in evaluating its "good faith belief that use of the material in the manner complained of is not authorized by . . . the law." Thus, the Court concluded that an allegation that the copyright owner acted in bad faith by issuing a takedown notice without consideration of the fair use doctrine is sufficient to state a misrepresentation claim under Section 512(f) of the DMCA.
You can find the Court's opinion here (PDF, 10 pages), and for an interesting read, the parties' lengthy briefing on the motion here (PDF, 24 pages), here (PDF, 28 pages) and here (PDF, 18 pages).
