Prince and the 'Dancing Baby' video: Court sets fair use guidelines

By Jeffrey C.P. Wang and Trevor Keath Roberts

Prince and the Dancing Baby Video:  Court Sets Fair Use Guidelines

* This article first appeared in Inside Counsel Magazine on September 28, 2015: http://bit.ly/1MfitU1

In 2008, Stephanie Lenz filed suit under 17 U.S.C. § 512(f) of the Digital Millennium Copyright Act (DMCA) against Universal. She alleged that the media and entertainment giant misrepresented in a takedown notification that a clip she had uploaded constituted a copyright infringement. In essence, her claim questioned whether copyright holders, like Universal, have been abusing DMCA extrajudicial takedown procedures by declining to first evaluate if the content being removed qualifies as fair use.

At the center of the controversy is one of YouTube's early-generation viral videos, a 29-second clip titled "Let's Go Crazy #1" shot by Lenz and posted in February, 2007 (which was when YouTube was still quite new, and only a few months after it had been purchased by Google in October, 2006). The video shows Lenz's 13-month-old son walking with a push toy. After a few seconds, Prince's "Let's Go Crazy!" begins playing from a stereo in the background and the toddler joyfully bobs up and down to the beat.

At that time, Universal was Prince's publishing administrator, and it was responsible for enforcing his copyrights. To accomplish this objective, an assistant reviewed postings on YouTube daily, and when he saw Lenz's upload, he concluded that Prince's song was very much the focus of the video. As a result, the assistant decided the video should be included in a takedown notification being sent to YouTube that listed more than 200 videos Universal believed to be making unauthorized use of Prince's songs.

The takedown notice included a "good faith belief" statement as required by the DMCA: "We have a good faith belief that the above-described activity is not authorized by the copyright owner, its agent, or the law." Upon receipt of the notice, YouTube took the video down and notified Lenz of the removal via email. Lenz attempted to restore the video by sending a counter-notification to YouTube pursuant to § 512(g)(3), but Universal protested the video's reinstatement.

Universal's protest reiterated Universal's belief that the video constituted infringement, but the protest made no mention of fair use. After obtaining pro bono counsel, Lenz sent a second counter-notification which resulted in YouTube reinstating the video in mid-July. Lenz then filed a complaint in July (amended in August 2007), but her claims for tortious interference and a request for declaratory relief were dismissed by the district court.

Lenz then filed her Second Amended Complaint on April 18, 2008, alleging only a claim for misrepresentation under § 512(f). The parties subsequently moved for summary judgment, but both motions were denied on January 24, 2013. The district court then certified its summary judgment order for interlocutory appeal and stayed further proceedings at the district court level pending the resolution of the appeal brought before the Ninth Circuit Court of Appeals.

In making its decision, the Ninth Circuit focused its attention on § 512(c) of the DMCA. This section codifies the takedown procedures, and its subsections include the elements that a takedown notice must contain. One of these required elements is a statement that the copyright holder believes in good faith the infringing material "is not authorized by the copyright owner, its agent, or the law." The question was whether "authorized" in this sense includes the fair use of material under 17 U.S.C. § 107.

In its decision, the Ninth Circuit noted that material that passes the four-step test Congress set forth in the Copyright Act of 1976, as codified in 17 U.S.C. § 107, is considered a permissible use of a copyright. As such, fair use is not just excused by the law, it is wholly authorized by the law. Therefore, the three-judge panel determined that fair use does constitute "authorization" under § 512(c) of the DMCA. As the decision notes:

"Copyright holders cannot shirk their duty to consider-in good faith and prior to sending a takedown notification-whether allegedly infringing material constitutes fair use, . . . "

Thus, with this new guideline in place, Lenz v. Universal has now been cleared for trial. And if it is determined that Universal knowingly misrepresented in its takedown notification that it had formed a good faith belief the video was not authorized by law (i.e., it did not constitute fair use), it could be liable for damages under §512 (f). But the impact of the Ninth Circuit's decision clearly goes beyond this immediate case.

Going forward, fair use must be considered before a takedown notice is sent, so copyright holders may find it more difficult to remove potentially infringing materials from the Internet. But the Electronic Frontier Foundation (EFF), which represented Ms. Lenz in her lawsuit, sees this decision a victory for free speech. "Today's ruling sends a strong message that copyright law does not authorize thoughtless censorship of lawful speech," Corynne McSherry, the foundation's legal director, said in a statement.

But, as reported in the New York Times, the Recording Industry of Association of America (RIAA) understandably has a different perspective on the decision. They believe this ruling could make it even more difficult for IP owners to protect their property rights. A spokesman for the RIAA, Jonathan Lamy, said, "We respectfully disagree with the court's conclusion about the D.M.C.A. and the burden the court places upon copyright holders before sending takedown notices."

If you are a copyright holder, it is very important to keep up to date on cases such as Lens v. Universal. Only by following the developments of the law, and by understanding all of your rights and responsibilities, will you be able to fully protect your assets. Working with a qualified IP attorney can be of great assistance in this regard. Experienced counsel will not only be able to assist you with guarding your intellectual property rights, they can help you optimize your ability to leverage those assets.