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Stephanie Lenz v. Universal Music Corp.

Court of Appeals for the Ninth Circuit
815 F.3d 1145 (2016)
ELI5:

Rule of Law:

Under the Digital Millennium Copyright Act (DMCA), a copyright holder must consider the existence of fair use in good faith before sending a takedown notification. A knowing failure to do so can subject the copyright holder to liability for misrepresentation under 17 U.S.C. § 512(f).


Facts:

  • Stephanie Lenz uploaded a 29-second home video to YouTube showing her two young children dancing in her kitchen.
  • The Prince song 'Let’s Go Crazy' was playing audibly in the background throughout the video.
  • Universal Music Corp. acted as the publishing administrator for Prince's copyrights and was responsible for enforcing them.
  • A Universal employee, Sean Johnson, was assigned to monitor YouTube for unauthorized uses of Prince's music.
  • Johnson's review guidelines focused on whether a song was recognizable, a significant portion of the video, or the focus of the video, but did not explicitly mention considering fair use.
  • After reviewing Lenz's video, Johnson concluded the song was the focus and included it in a DMCA takedown notification sent to YouTube.
  • The takedown notice included a required statement that Universal had a 'good faith belief' that the use was 'not authorized by the copyright owner, its agent, or the law.'
  • Upon receiving the notification, YouTube removed Lenz's video from its platform.

Procedural Posture:

  • After her video was removed, Stephanie Lenz sent a counter-notification to YouTube pursuant to § 512(g)(3).
  • Universal protested the first counter-notification, and Lenz, after obtaining counsel, sent a second one.
  • YouTube reinstated the video in mid-July 2007.
  • Lenz filed suit against Universal in the U.S. District Court for the Northern District of California, alleging a claim for misrepresentation under 17 U.S.C. § 512(f).
  • The district court denied Universal's motion to dismiss the action.
  • Both parties filed cross-motions for summary judgment on Lenz's § 512(f) claim.
  • The district court denied both motions, finding a triable issue of fact existed.
  • The district court certified its order denying summary judgment for an interlocutory appeal, which the U.S. Court of Appeals for the Ninth Circuit granted.

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Issue:

Does the Digital Millennium Copyright Act (DMCA) require a copyright holder to consider whether a use of copyrighted material is a 'fair use' before sending a takedown notification under 17 U.S.C. § 512(c)?


Opinions:

Majority - Judge Tallman

Yes. A copyright holder must consider whether a use of copyrighted material is a 'fair use' before sending a takedown notification. Fair use is not merely an excuse for infringement but is a use 'authorized by the law' under 17 U.S.C. § 107. Therefore, to form a good faith belief that a use is not authorized by law, as required by § 512(c), a copyright holder must first consider the existence of fair use. The court reaffirmed that the 'good faith belief' standard is subjective, meaning the question is not whether the use was actually fair, but whether the copyright holder formed a subjective good faith belief that it was not. Because Lenz presented evidence that Universal may not have considered fair use at all, a genuine issue of material fact exists as to whether Universal knowingly misrepresented that it had formed the requisite good faith belief.


Concurring-in-part-and-dissenting-in-part - Judge M. Smith

Yes. A copyright holder must consider fair use, but the court should have found Universal liable as a matter of law. The majority is correct that fair use must be considered before sending a takedown notice. However, there is no triable issue of fact here because Universal's own policies and admissions show it did not consider the statutory fair use factors. Universal's process only evaluated whether a song was the 'focus' of a video, which is not a substitute for the § 107 fair use analysis. Because Universal knew it had not considered fair use, it knowingly misrepresented its 'good faith belief,' and Lenz should have been granted summary judgment on her claim.



Analysis:

This landmark decision establishes that the fair use doctrine is not just a defense to be raised in court, but a right that copyright holders must proactively consider before demanding the removal of online content. It significantly raises the bar for sending DMCA takedown notices, shifting some of the burden from content creators to copyright holders to prevent the abuse of automated takedown systems. The ruling strengthens § 512(f) as a tool for users to hold copyright owners accountable for overreach, though the subjective belief standard means that a copyright holder who performs even a cursory, good-faith fair use analysis is likely shielded from liability. The case solidifies fair use as an integral part of the DMCA process, protecting online speech and creativity from being improperly silenced.

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