October 2015
By Daniel Lacy

Stephanie Lenz recorded and posted a 29 second video on YouTube in February 2007. That simple act would lead to a nearly decade long legal battle with some of the most powerful players in the entertainment and tech industries weighing in. The dispute, now commonly known as the “Dancing Baby” case, has garnered national attention primarily because it highlights a legal grey area of internet activity that millions of people engage in daily: posting amateur videos of friends and family that also incidentally include copyrighted media.

Lenz posted a brief video featuring her toddler son dancing to Prince’s famous song “Let’s Go Crazy.” Shortly after posting the video, Universal Music Corporation (UMC), the copyright holder of the song, submitted a takedown notice to YouTube alleging copyright infringement per the Digital Millennium Copyright Act (DMCA). When her video was removed, Lenz filed a complaint with YouTube contending fair use and requested the video be reposted. YouTube reposted the video shortly thereafter. In response to UMC’s actions, Lenz filed suit in federal court alleging misrepresentation under the DMCA and asked for a ruling from the court that the subject video was not infringing.

Section 512(c) of the DMCA, often referred to as takedown procedures, allows service providers like YouTube to avoid copyright liability for content posted on their site so long as they remove infringing content after receiving a notification from the copyright holder. For a takedown notice to be valid, a copyright holder must include certain elements in each notice to the third party service provider. Some of these elements include identification of copyrighted work claimed to have been infringed and in this case, most importantly, “a statement that the complaining party has 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.”

Recently, the 9th Circuit Court of Appeals upheld the District Court’s ruling, holding that copyright holders cannot file takedown notices without first determining whether the alleged content constitutes fair use. This ruling paves the way for a jury trial to decide whether UMC knowingly misrepresented its good faith belief the video was not authorized by law.

The court explained that fair use was “uniquely situated in copyright law so as to be treated differently than traditional affirmative defenses.” As a result, copyright holders like UMC must first consider whether fair use is applicable before issuing takedown notices or they can be held liable for abusing the DMCA takedown procedures. The copyright holder must form a “good faith belief” that the alleged infringing material doesn’t constitute fair use. The court clarified by explaining that “a copyright holder who pays lip service to the consideration of fair use by claiming it formed a good faith belief when there is evidence to the contrary is still subject to 512(f) liability.”

Regardless how this case is decided at trial, the Court of Appeals ruling may have set a new guideline for how copyright holders can enforce their rights online. The holding appears to place an additional burden on copyright holders which requires them to determine whether a given use of its material is fair use prior to sending the take down notice.

The sheer number of powerful companies that became involved in this lawsuit demonstrates the potential impact of this ruling. The Dancing Baby case quickly became Hollywood vs. Silicon Valley. The Motion Picture Association of America and Recording Industry Association of America supported UMC while numerous high profile Silicon Valley firms including Google, Twitter, and Tumbler publicly backed Lenz.

This case also serves as a cautionary tale for any attorney who represents trademark, copyright, or patent holders. It is undoubtedly important that intellectual property owners diligently police the market place for acts of potential infringement. However, the steps taken to enforce those rights don’t come without risk. At first glance, the rather simple act of filing a DMCA takedown notice or sending a cease and desist letter to a potential infringer appears to incur little risk or cost to the property owner. The Dancing Baby case highlights one of the many potential unintended consequences of enforcement actions against potential third party infringers.

Unfortunately, there is no way to predict how a party will react to an enforcement action. Hopefully, they will comply with the demand, but sometimes the potential infringer is willing to push back. A course of action that at first seemed like a simple low cost way to enforce rights could turn out to be an extremely costly and time consuming legal battle with no guarantee of a favorable outcome. Consequently, it’s vitally important that attorneys counsel their clients on the risks and benefits of enforcement actions.

Moreover, no matter how legally sound a potential enforcement action appears, counsel must consider how the public could view the actions. There is no shortage of cases where major national brands were publicly embarrassed and ridiculed for legal actions they felt were completely justified. Strategies for IP enforcement cannot be viewed in a legal vacuum, instead the company’s brand and bottom line must be considered as an integral part of the decision.