In the so-called “dancing baby” case, the Ninth Circuit ruled recently that copyright owners must consider the fair use doctrine before sending Digital Millennium Copyright Act (“DMCA”) takedown notifications to online service providers, such as YouTube.  If copyright owners fail to do so, they risk incurring penalties under DMCA section 512(f).

In 2007, Universal Music Group sent a takedown notification to YouTube requesting removal of plaintiff Stephanie Lenz’s 30-second clip of her son dancing to Prince’s “Let’s Go Crazy.”  After YouTube removed the video from its site, Lenz filed a counter-notice, and YouTube reinstated the video.  Though Universal did not pursue the matter further, Lenz, working with the Electronic Frontier Foundation (“EFF”), then sued Universal, alleging Universal’s takedown notification violated section 512(f) of the DMCA because her video was subject to the fair use protections of the Copyright Act (17 U.S.C. § 107).  In 2013, U.S. District Judge Jeremy Fogel denied both parties’ motions for summary judgment, ordered a trial, and both sides appealed.

Ultimately, the Ninth Circuit sided with Lenz and the EFF, holding that copyright owners who fail to consider whether the allegedly infringing material constitutes fair use prior to sending a takedown notification can be held liable for damages under section 512(f) of the DMCA, which provides for liability where the party submitting the takedown notification misrepresents that material is infringing.  Specifically, 17 U.S.C. section 512(f) states that any person who knowingly, materially misrepresents that a material or activity is infringing will be liable for any damages, including costs and attorneys’ fees, incurred by the alleged infringer who is injured as the result of the service provider relying upon such misrepresentation in removing or disabling access to the material or activity claimed to be infringing.  The court also ruled that a litigant like Lenz can recover nominal damages when such a claim is successful, but emphasized that this holding has a limited application, and that no authority supports the recovery of nominal damages where private actors chill lawful free speech.

The court explained that “[c]opyright holders cannot shirk their duty to consider — in good faith and prior to sending a takedown notification — whether allegedly infringing material constitutes fair use, a use which the DMCA plainly contemplates as authorized by the law.”

However, acknowledging that online infringement is a significant problem with copyright holders, the court stated it was “mindful of the pressing crush of voluminous infringing content that copyright holders face in a digital age,” and that the “consideration of fair use prior to issuing a takedown notification will not be so complicated as to jeopardize a copyright owner’s ability to respond rapidly to potential infringements.”

The Ninth Circuit suggested that “the implementation of computer algorithms appears to be a valid and good faith middle ground for processing a plethora of content while still meeting the DMCA’s requirements to somehow consider fair use.”  Though a computer algorithm may be practical for well-funded organizations, this will not be a practical solution for everyone.  Unfortunately, the court did not lend any further guidance on this point.

While copyright holders were always required to hold a good faith belief that the content targeted by a takedown notification was infringing, this case makes clear that copyright holders must specifically assess fair use, which can often be a nebulous concept.  An additional step that copyright holders may want to take is to include in a takedown request allegations of infringement that explicitly track section 107 of the Copyright Act concerning fair use, thereby making clear that fair use was contemplated, and rejecting out of hand the defense that the copyright holder lacked a good faith belief that the use was an infringement.  By encouraging copyright holders to protect themselves with such measures, this holding will likely make issuing takedown notifications a riskier and more labor-intensive process for legitimate copyright holders.