Fair Use Analysis Before Takedown Notice Is Asked for By Another Federal District

Magistrate Jeremiah C. Lynch noted that the “good faith belief” requirement of '512(c) “is measured based on a subjective standard. Rossi v. Motion Picture Ass'n of America, Inc., 391 F.3d 1000, 1004 (9th Cir. 2004). Thus, liability for
a misrepresentation under '512(f) may be imposed only upon a showing of a
copyright owner's subjective bad faith '.” Magistrate Lynch then observed that “properly pled allegations” by parties like Ouellette under ”512(c) and (f) “which plausibly suggest that a 'copyright owner acted in bad faith by issuing a takedown notice without proper consideration of the fair use doctrine' may be sufficient to state a misrepresentation claim.”

A federal appeals court ruling is expected soon in a separate case in which Viacom sued YouTube over the unauthorized posting of online content. In 2010, Southern District of New York Judge Louis L. Stanton granted summary judgment for defendant YouTube. Viacom International Inc. v. YouTube Inc., 718 F. Supp. 2d 514. Although that case focuses largely on what constitutes an ISP's “actual knowledge” of infringing activity for purposes of determining whether an ISP should have safe harbor protection under the DMCA, YouTube contended in its appellee brief before the Second Circuit that Viacom “had trouble distinguishing user-posted clips from marketing clips that Viacom had uploaded itself, and it wanted to 'err on the side of leaving up some infringing material rather than being overly aggressive and taking down one of the many approved clips.' Viacom left up 'many, many clips' that it concluded were possible fair uses.”

Obvious Infringement

But while Magistrate Lynch embraced the Lenz court's fair use rule, there was some good news for Viacom because he nevertheless placed a burden on plaintiff Ouellette to demonstrate in his complaint how his video-critique uploads could be fair uses. This led to the dismissal of Ouellette's complaint. Magistrate Lynch concluded: “Ouellette's bare allegations of his fair use of Viacom's copyrighted materials do not include any facts reflecting that his alleged fair use would have been clear to Viacom. Specifically, Ouellette does not plead any facts describing the purpose and character of his use of Viacom's materials, the nature of the copyrighted works he used, the amount and substantiality of the copyrighted materials he used, and the effect of his use upon the potential market for, or value of, Viacom's copyrighted works. See, 17 U.S.C. '107.” The magistrate added: “Viacom's mere failure to use human oversight with the scanning software does not render it plausible that Viacom had actual knowledge that the software failed to identify a user's fair use of copyrighted material.”

Even in the Lenz litigation, U.S. District Judge Jeremy Fogel cautioned: “The Court did not hold that every takedown notice must be preceded by a full fair use investigation. ' Rather, it recognized, as it has previously, that in a given case fair use may be so obvious that a copyright owner could not reasonably believe that actionable infringement was taking place. See, Online Policy Group v. Diebold, Inc., 337 F.Supp.2d 1195, 1204 (N.D.Cal.2004).” But District Judge Fogel noted this type of case “is likely to be extremely rare.” Lenz v. Universal Music Corp., 07-3783 (N.D.Calif. Oct. 28, 2008), denying Universal's motion to certify an interlocutory appeal.

The Lenz litigation continues in discovery. Last month, in line with a previous magistrate's order finding waiver by Lenz of the attorney/client privilege, Federal Magistrate Howard R. Lloyd of the Northern District of California found, among other things: “As defendants point out, this case has received, and continues to receive, considerable media attention. Accordingly, to the extent she has not already done so, plaintiff shall conduct a diligent inquiry and reasonable search and produce all publicity-related communications that reflect her or her counsel's motives for pursuing this litigation, including any such communications pertaining to publicity that occurred later in the litigation.”

Copyright fair use has been procedurally enshrined as an affirmative defense to infringement claims. But in 2009, the U.S. District Court for the Northern District of California startled copyright owners in ruling that, to comply with the “good faith” requirement of '512(c) of the Digital Millennium Copyright Act (DMCA), 17 U.S.C. '512 (http://1.usa.gov/vvSvKc), such content proprietors must conduct a fair-use copyright analysis of unlicensed online uses of their works prior to sending a takedown notice to Internet Service Providers (ISPs). Lenz v. Universal Music Corp. , 572 F.Supp.2d 1150 (N.D.Calif. 2008). Now a federal magistrate for the U.S. District Court for the District Montana has adopted the Lenz fair use rule. Ouellette v. Viacom International Inc., 10-133. (Both the California and Montana federal district courts reside within the U.S. Court of Appeals for the Ninth Circuit.)

'Good Faith' Is Subjective

In Ouellette, Todd Ouellette had added his own critiques to news clips from Viacom and uploaded the videos to websites like MySpace and YouTube. Viacom sent takedown notices to the website operators. Section 512(f) of the DMCA states a copyright owner “who knowingly materially misrepresents” there is infringing activity will be liable for “any damages ' incurred by the alleged infringer.” In his pro se complaint, Ouellette alleged that Viacom violated '512(f) by misrepresenting in the takedown notices that his uploads were infringing. He also referred to “scanning software” that he claimed Viacom should have had its employees double check to ensure it wasn't “mis-identifying Fair Use videos.” Viacom moved for dismissal on the pleadings.

Magistrate Jeremiah C. Lynch noted that the “good faith belief” requirement of '512(c) “is measured based on a subjective standard. Rossi v. Motion Picture Ass'n of America, Inc. , 391 F.3d 1000, 1004 (9th Cir. 2004). Thus, liability for
a misrepresentation under '512(f) may be imposed only upon a showing of a
copyright owner's subjective bad faith '.” Magistrate Lynch then observed that “properly pled allegations” by parties like Ouellette under ”512(c) and (f) “which plausibly suggest that a 'copyright owner acted in bad faith by issuing a takedown notice without proper consideration of the fair use doctrine' may be sufficient to state a misrepresentation claim.”

A federal appeals court ruling is expected soon in a separate case in which Viacom sued YouTube over the unauthorized posting of online content. In 2010, Southern District of New York Judge Louis L. Stanton granted summary judgment for defendant YouTube. Viacom International Inc. v. YouTube Inc. , 718 F. Supp. 2d 514. Although that case focuses largely on what constitutes an ISP's “actual knowledge” of infringing activity for purposes of determining whether an ISP should have safe harbor protection under the DMCA, YouTube contended in its appellee brief before the Second Circuit that Viacom “had trouble distinguishing user-posted clips from marketing clips that Viacom had uploaded itself, and it wanted to 'err on the side of leaving up some infringing material rather than being overly aggressive and taking down one of the many approved clips.' Viacom left up 'many, many clips' that it concluded were possible fair uses.”

Obvious Infringement

But while Magistrate Lynch embraced the Lenz court's fair use rule, there was some good news for Viacom because he nevertheless placed a burden on plaintiff Ouellette to demonstrate in his complaint how his video-critique uploads could be fair uses. This led to the dismissal of Ouellette's complaint. Magistrate Lynch concluded: “Ouellette's bare allegations of his fair use of Viacom's copyrighted materials do not include any facts reflecting that his alleged fair use would have been clear to Viacom. Specifically, Ouellette does not plead any facts describing the purpose and character of his use of Viacom's materials, the nature of the copyrighted works he used, the amount and substantiality of the copyrighted materials he used, and the effect of his use upon the potential market for, or value of, Viacom's copyrighted works. See, 17 U.S.C. '107.” The magistrate added: “Viacom's mere failure to use human oversight with the scanning software does not render it plausible that Viacom had actual knowledge that the software failed to identify a user's fair use of copyrighted material.”

Even in the Lenz litigation, U.S. District Judge Jeremy Fogel cautioned: “The Court did not hold that every takedown notice must be preceded by a full fair use investigation. ' Rather, it recognized, as it has previously, that in a given case fair use may be so obvious that a copyright owner could not reasonably believe that actionable infringement was taking place. See , Online Policy Group v. Diebold, Inc. , 337 F.Supp.2d 1195, 1204 (N.D.Cal.2004).” But District Judge Fogel noted this type of case “is likely to be extremely rare.” Lenz v. Universal Music Corp., 07-3783 (N.D.Calif. Oct. 28, 2008), denying Universal's motion to certify an interlocutory appeal.

The Lenz litigation continues in discovery. Last month, in line with a previous magistrate's order finding waiver by Lenz of the attorney/client privilege, Federal Magistrate Howard R. Lloyd of the Northern District of California found, among other things: “As defendants point out, this case has received, and continues to receive, considerable media attention. Accordingly, to the extent she has not already done so, plaintiff shall conduct a diligent inquiry and reasonable search and produce all publicity-related communications that reflect her or her counsel's motives for pursuing this litigation, including any such communications pertaining to publicity that occurred later in the litigation.”