Fair Use Must Be Considered Before Sending DMCA Takedown Notices; 9th Circuit

Lenz v. Universal Music, No. 13-16106 (9th Cir. filed 9/14/2015) [decision].

Copyright owners must consider whether allegedly infringing use is "fair use" before sending takedown notices under the DMCA, holds the 9th Circuit.  In the so-called "dancing baby case," Plaintiff alleged that Universal Music violated 17 USC 512(f) by misrepresenting in a takedown notice that a home video of her son dancing to a Prince song and posted on YouTube constituted an infringing use of a portion of a "Prince" composition.  The Court held that the DMCA requires copyright owners to consider fair use before sending a takedown notice, and that failure to do so raises an issue of fact whether the copyright owner formed a subjective good faith belief that the use was not authorized by law.  Available theories of good faith belief are actual knowledge, and willful blindness.  "Universal faces liability if it knowingly misrepresented in the takedown notification that it had formed a good faith belief the video was not authorized by the law, i.e. did not constitute fair use." A prevailing plaintiff in such a case is entitled to nominal damages.  Ultimately, the 9th Circuit affirmed the district court's denial of the cross-motions for summary judgment, such that the case would proceed to trial on the issue of whether Universal had actual knowledge, and the amount of damages.

Fraudulent DMCA Take-Down Notice May Be Basis For Claim If iTunes Stores Music At Direction Of A User

Distribuidora De Discos Karen, C por A. v. Seijas, No. 13 Civ. 5200 (NRB), 2015 BL 93133 (S.D.N.Y. Mar. 26, 2015).

Denying defendants' motion to dismiss, the Court held that: (1) a misrepresentation claim under the DMCA may be predicated on a technically defective take-down notice; (2) a misrepresentation claim under the DMCA must be predicated on a take-down notice that is not directed towards activity that the DMCA protects; and (3) it was premature to decide whether Apple stores music on iTunes "at the Direction of a User."  Accordingly, a notice sent by Defendants to iTunes stating that certain recordings had not been licensed for distribution can be the subject of a misrepresentation claim under the DMCA even if it did not meet all the statutory requirements for such a notice, but, such a claim could only apply if the notice was “directed at ‘storage at the direction of a user,' ” which might or might not have been true in the instant case.

Here, defendants and plaintiffs disputed who owned certain publishing and sound recording rights.  The artists' counsel sent Apple a take-down notice, saying that “no license has been issued” with respect to the recordings.  Apple then dropped the subject recordings from iTunes, and plaintiffs sued, alleging misrepresentation under the Digital Millennium Copyright Act of 1998, 17 U.S.C. § 512(f).  The DMCA creates a notice-and-takedown procedure for allegedly infringing copies of works posted online, and subsection (f) creates a cause of action for sending fraudulent takedown notices.  Defendants moved to dismiss for failure to state a claim.  The Court found that the communication to Apple “was not so deficient as to fall outside the reach of subsection 512(f).”  But, the remaining issue was whether iTunes falls within the section 512(c) safe-harbor, to wit: "whether Apple stores music on iTunes 'at the direction of a user,' 17 U.S.C. § 512(c) (1)".  The Court found that "the complaint simply does not state enough facts about iTunes for us to say what happens behind the scenes, so we cannot decide at the present stage whether iTunes stores music at the direction of users."  Accordingly, the motion to dismiss was denied.

NMPA Take Down Notices Sent To Lyric Sites

Billboard reports that the National Music Publishers Association ("NMPA") has sent take-down notices to 50 commercial lyric sites operating without licenses.  The article highlights the site RapGenius.  The article further reports that David Israelite, Chief Executive of the NMPA, said that the take-down notices are a precursor to the filing of lawsuits against the unlicensed sites for copyright infringement.

Summary Judgments In MP3Tunes Case

Capitol Records, Inc. v. MP3Tunes, LLC, 1:07-cv-09931-WHP (S.D.N.Y. filed 8/22/2011) [Doc. 267].

"This case turns in large part on whether MP3tunes is eligible for protection under the safe harbors created by the Digital Millennium Copyright Act ("DMCA"), 17 U.S.C. 512."

The Court addressed Plaintiff's argument that MP3tunes failed to reasonably implement a repeat infringer policy. The court distinguished between "blatant infringers" and users who merely consume the content and found "this applies to MP3tunes executives." There was no evidence that executives or employees had firsthand knowledge that websites linked on the sideload.com website were unauthorized. Additionally, MP3tunes did nor purposefully blind itself to its users' identities and activities, and had a procedure for responding to DMCA takedown notices.

The Court next addressed MP3tune's compliance with Plaintiff's take-down notices. The court found that MP3tunes was obligated to remove specifice works traceable to users' "lockers" and that MP3tunes interpreted the reach of Plaintiff's notices too narrowly. However, MP3tunes was not obligated to take down all of Plaintiff's cotnent because the notices provided a representative list. Plaintiff had to provide sufficient information --additional web addresses -- for MP3tunes to locate other infringing material. "Absent adequate notice, MP3tunes would need to conduct a burdensome investigation in order to determine whether songs in its users' accounts were unauthorized copies. As discussed, the DMCA does not place this burden on service providers."

The Court next addressed actual or "red flag" knowledge of infringement. The Court found that MP3tunes "undoubtedly...is aware that some level of infringement occurs. But there is no genuine dispute that MP3tunes did not have specific 'red flag' knowledge with respect to any particular link...other than the URLs noticed [in the DMCA takedowns]."

The Court next addressed defendant's benefit and control of infringing activity, finding "at worst, MP3tunes set up a fully automated system where users can choose to download infringing content."

In sum, MP3tunes could claim safe harbor protection for plaintiff's works stored on and linked to on the websites. However, MP3tunes did not qualify for safe harbor protection for songs identified in takedown notices which it failed to remove.

The Court then turned to whether MP3tunes is secondarily liable for storing material at the direction if its users. The court found that MP3tunes knowledge of the unauthorized use of infringing material "is manifest." "Accordingly, [Plaintiff's] motion for summary judgment on its claim for contributory infringement with respect to the songs listed in [Plaintiff's] takedown notices and which MP3tunes failed to removed from users' lockers is granted."

The Court next turned to direct infringment. Plaintiff motion with respect to songs downloaded by employees was denied because there was a dispute as to whether the songs were downloaded by employees in the course of their employment. On the other hand, an individual named defendant was directly liable for the songs personally "sideloaded" from unauthorized sites.

Fair Use and DMCA Take-Downs

Lenz v. Universal Music Publishing, Inc., No. 07-CV-03783, 2008 BL 247967 (N.D. Cal. Oct. 28, 2008), denying defendants Universal Music Publishing, Inc. and Universal Music Publishing Group’s (collectively, “Universal”) request for certification for interlocutory appeal in a case involving an allegedly infringing YouTube video.

Although Universal sought certification of a controlling question of first impression on the issue of fair use and a copyright owner’s obligations with regard to the Digital Millennium Copyright
Act (DMCA) takedown notice procedures, the court found the question did not provide substantial grounds for difference of opinion, nor that a resolution of the question would materially advance the litigation at this stage.

[More from Bloomberg.]

The court, in an earlier decision held that the DMCA requires consideration of fair use prior to sending a takedown notice. Universal then filed the instant motion, seeking certification for
interlocutory appeal pursuant to 28 U.S.C. § 1292(b) of the issue of “whether 17 U.S.C. § 512(c)(3)(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.’” The court denied Universal’s motion for interlocutory appeal.