Lenz v. Universal Music Corp., et al.

In a case of first impression, the United States District Court for the Northern District of California held that a copyright owner, before issuing a takedown notice under the Digital Millennium Copyright Act (DMCA), must first evaluate whether the material sought to be taken down makes fair use of the owner’s copyrighted work.

The plaintiff in this action had posted a video on YouTube of her children dancing with the Prince song “Let’s Go Crazy” playing in the background. Universal Music Corp. and its affiliates, as owners of the copyright to the song, sent YouTube a takedown notice which included the statement required by 17 U.S.C. § 512(c)(3)(A)(v) that “the complaining party has a good faith belief that use of the material complained of is not authorized by the copyright owner, its agent, or the law.” The plaintiff brought a misrepresentation claim against the Universal defendants under 17 U.S.C. § 512(f), alleging that her use of the song constituted fair use and claiming that the defendants acted with bad faith in sending a takedown notice in regards to a use that was therefore “authorized” by law.

In its motion, Universal contended that copyright owners cannot be required to evaluate the question of fair use prior to sending a takedown notice because “fair use is merely an excused infringement of copyright rather than a use authorized by copyright owner or by law.” The court found that the phrase “authorized by law” was unambiguous and that an activity authorized by law is one “permitted by law or not contrary by law.” The court went on to find that fair use is a lawful use of a copyright.

Having reached this conclusion, the court denied defendants’ motion to dismiss, holding that “in order for a copyright owner to proceed under the DMCA with ‘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 owner must evaluate whether the material makes fair use of the copyright.” The court made clear that a misrepresentation claim requires a showing of subjective bad faith, and that “a full investigation to verify the accuracy of a claim of infringement is not required.” Nonetheless, on a motion to dismiss, “[a]n allegation that a copyright owner acted in bad faith by issuing a takedown notice without proper consideration of the fair use doctrine . . . is sufficient to state a misrepresentation claim pursuant to Section 512(f) of the DMCA.”

Plaintiff’s complaint included allegations of bad faith and deliberate ignorance, including allegations that defendants acted solely to satisfy Prince’s personal agenda related to protecting his music on the Internet and had nothing to do with any particular video that uses his songs. Accordingly, despite expressing doubt as to whether the plaintiff would ultimately be able to prove the defendants acted with subjective bad faith in sending the takedown notice, and survive a motion for summary judgment following discovery, the court allowed the plaintiff’s misrepresentation claim to proceed.