Rights holders who demand that material be taken offline without such an assessment risk paying out damages and costs to whoever published the material, the court said.
Copyright law is designed to make sure that producers of work retain control of their work and benefit from its use, but there are situations in which it does not apply. In US law 'fair use' of material is allowed without payment to or permission from copyright owners. In the UK, the equivalent principle is called 'fair dealing'.
When copyright holders see unlicensed use of material on the internet they can issue takedown notices to whoever is publishing the work. Material is usually taken down immediately and the issue solved later.
A US court has ruled that it is the duty of copyright holders to make a basic assessment of whether fair use is being made of material or not. If they do not then whoever published the material can sue them.
The ruling came in a closely-watched dispute between a woman and Universal Music over the use of a song by Prince in the background of a YouTube-published video. The woman's 13-month-old son is dancing to the song Let's Go Crazy, which can be heard playing in the room in which the baby and another child are being filmed.
Universal demanded that YouTube take the video down, which it did, informing the woman, Stephanie Lenz, of its decision. Lenz said that her use of the song in the video was fair use and demanded the reinstatement of the video. It was republished six weeks later and can still be seen on YouTube.
Lenz has now sued Universal for misrepresentation and interference with her contract with YouTube. She is suing under section 512(f) of the US Digital Millennium Copyright Act (DMCA) which says that:
"Any person who knowingly materially misrepresents under this section –
(1) that material or activity is infringing, or
(2) that material or activity was removed or disabled by mistake or misidentification,
shall be liable for any damages, including costs and attorneys' fees, incurred by the alleged infringer, by any copyright owner or copyright owner's authorized licensee, or by a service provider, who is injured by such misrepresentation, as the result of the service provider relying upon such misrepresentation in removing or disabling access to the material or activity claimed to be infringing, or in replacing the removed material or ceasing to disable access to it."
Lenz argued that companies such as Universal which wanted to remove material such as her video were obliged to assess whether or not material came under the fair use exclusions to copyright law. According to the US District Court for the Northern District of California, Universal disagreed.
"Universal suggests that copyright owners may lose the ability to respond rapidly to potential infringements if they are required to evaluate fair use prior to issuing takedown notices," said judge Jeremy Fogel in his ruling. "Universal also points out that the question of whether a particular use of copyrighted material constitutes fair use is a fact-intensive inquiry, and that it is difficult for copyright owners to predict whether a court eventually may rule in their favor."
Fogel disagreed with Universal's view. "While these concerns are understandable, their actual impact likely is overstated," he said. "Although there may be cases in which such considerations will arise, there are likely to be few in which a copyright owner’s determination that a particular use is not fair use will meet the requisite standard of subjective bad faith required to prevail in an action for misrepresentation."
Judge Fogel noted that the issue of whether or not copyright owners had to make a judgement on fair use had never been directly decided in the courts. He said that copyright owners must decide if fair use exemptions apply before taking action.
"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," he said.
"An allegation that a copyright owner acted in bad faith by issuing a takedown notice without proper consideration of the fair use doctrine thus is sufficient to state a misrepresentation claim pursuant to Section 512(f) of the DMCA. Such an interpretation of the DMCA furthers both the purposes of the DMCA itself and copyright law in general," he said.
Judge Fogel said that the damages available to Lenz might be small, but that damage had been done. "Though damages may be nominal and their exact nature is yet to be determined, the Court concludes that Lenz adequately has alleged cognizable injury under the DMCA," he said.