On September 14, 2015, in what has become known as the “dancing baby case,” the Ninth Circuit held that copyright holders must consider fair use before sending a DMCA takedown notification.  If they do not, they can be liable for at least nominal damages under 17 U.S.C. §512(f), which states: “[a]ny person who knowingly materially misrepresents under this section . . . that material or activity is infringing . . . shall be liable for damages . . . .”

Plaintiff Stephanie Lenz sued Universal Music and related defendants after they sent a DMCA takedown notice to YouTube requesting the removal of a 29-second home video that Ms. Lenz posted of her two young children dancing to Prince’s Let’s Go Crazy.   Section 512(c)(3)(A) of the Copyright Act requires a takedown notification to state that the complaining party has “a good faith belief that the use of the material . . . is not authorized by . . . the law.”  When Universal reviewed the video to determine if it infringed Let’s Go Crazy, its guidelines did not explicitly include consideration of the fair use doctrine.  Ms. Lenz therefore alleged that Universal misrepresented that it had a good faith belief that the video was an unauthorized use because Universal had failed to consider fair use. 

The parties’ dispute turned on whether, under Section 512(c), fair use is a use “authorized by the law,” or, as Universal argued, an affirmative defense that excuses otherwise infringing conduct (and therefore not a required consideration).  The Court observed that 17 U.S.C. §107 explicitly states “the fair use of a copyright work . . . is not an infringement of copyright”; in other words, fair use is permissible because it is a non-infringing use.  Turning to Section 512(c), the panel noted that the dictionary definition of “authorize” is “empower” and “formally approve.”  Therefore, the court held that because Section 107 both empowers and formally approves of the fair use of copyrighted material, fair use is “authorized by the law” within the meaning of Section 512(c), and must be considered before sending a takedown notification.

Although this decision places an added burden on copyright holders who wish to issue DMCA takedown notices, the Court’s opinion was not an unqualified win for Ms. Lenz.  For example, the Court stated “[i]f . . . a copyright holder forms a subjective good faith belief that 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.”  Further, “a copyright holder’s consideration of fair use need not be searing or intensive.”  The Court was “mindful of the pressing crush of voluminous infringing content that copyright holders face in a digital age,” and, in dicta, outlined a procedure for considering fair use that might pass muster under Section 512(c) whereby a copyright holder uses a computer algorithm to identify potentially infringing content and then employs individuals to review the content the computer algorithm does not cull.

Remanding the case for further consideration, the Ninth Circuit left it to a jury to determine whether the procedures Universal employed qualified as a consideration of fair use and, if not, whether Ms. Lenz was entitled to damages or attorneys’ fees. The case is Lenz v. Universal Music Corp., Case Nos. 13-16106, 13-16107 (9th Cir. Sept. 14, 2015).