September 15, 2015

Before Sending DMCA Takedown Notice, Copyright Owners Face Duty to Consider Fair Use, Says Appeals Court

On September 14, 2015, the United States Court of Appeals for the Ninth Circuit held that copyright owners have a “duty to consider—in good faith and prior to sending a [DMCA] takedown notification—whether allegedly infringing material constitutes fair use.” Lenz v. Universal Music, Case No. 13-16106 (9th Cir. Sept. 14, 2015) Slip Op. at 25. If a copyright owner fails to consider fair use prior to sending a DMCA takedown notice, the copyright owner can be liable for damages and attorney fees. Id.

The case arose out of a DMCA takedown notice UMG sent to YouTube in 2007. As required by law, UMG stated in its notice that it had a good faith belief that the video in question—a 30-second clip of the plaintiff’s son dancing to a Prince song—was “not authorized by the copyright owner, its agent, or the law.” Lenz argued that this statement could only be true if UMG had considered—and rejected—the possibility that the video made fair use of the copyrighted Prince song. The Ninth Circuit fundamentally agreed, and as a result, it held that “a copyright holder must consider the existence of fair use before sending a [DMCA] takedown notification.” The question whether UMG complied in this particular case was determined to be a fact question, and the case was remanded for trial.

While the Ninth Circuit’s ruling clearly imposes additional burdens on copyright owners, it also sets important limits on those burdens. To begin with, the Ninth Circuit was clear that copyright owners need only a “subjective belief” that the alleged infringement is not fair use—“[a] copyright owner cannot be liable simply because an unknowing mistake is made, even if the copyright owner acted unreasonably in making the mistake.” Id. at 16 (quoting Rossi v. MPAA, 391 F.3d 1000, 1004-05 (9th Cir. 2004)). So there will be no liability for innocent mistakes. Moreover, the requisite belief need not be the result of a “searching or intensive” inquiry—the inquiry need only be an “initial review.” Id. at 18.

This initial review apparently does not need to be conducted by a lawyer (it was not conducted by a lawyer at UMG). And in some cases, the initial review need not be done by a person at all—the Ninth Circuit noted that “consideration of fair use may be sufficient if copyright holders utilize computer programs that automatically identify” certain types of uses, such as uses of “nearly the entirety” of a copyrighted work, that are not fair. Id. at 19. Unfortunately, given the importance of such automatic systems, the Ninth Circuit explicitly refused to decide what kinds of automation pass muster. As a result, copyright owners relying on automated systems will want to carefully consider their enforcement programs with this new ruling in mind.

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