Stephanie LENZ, Plaintiff-Appellee/Cross-Appellant, v. UNIVERSAL MUSIC CORP.; Universal Music Publishing Inc.; Universal Music Publishing Group Inc., Defendants-Appellants/Cross-Appellees.
Nos. 13-16106, 13-16107
United States Court of Appeals, Ninth Circuit
Filed Sept. 14, 2015
Amended March 17, 2016
801 F.3d 1126
Argued and Submitted July 7, 2015.
Corynne McSherry (argued), Cindy Cohn, Kurt Opsahl, Daniel K. Nazer, and Julie Samuels, Electronic Frontier Foundation, San Francisco, CA; Ashok Ramani, Michael S. Kwun, and Theresa H. Nguyen, Keker & Van Nest LLP, San Francisco,
Steven Fabrizio and Scott Wilkens, Jenner & Block LLP, Washington, D.C., for Amicus Curiae Motion Picture Association of America, Inc.
Jennifer Pariser, of Counsel, Recording Industry Association of America, Washington, D.C.; Cynthia Arato, Marc Isserles, and Jeremy Licht, Shapiro, Arato & Isserles LLP, New York, NY, for Amicus Curiae Recording Industry Association of America.
Joseph Gratz, Durie Tangri LLP, San Francisco, CA, for Amici Curiae Google Inc., Twitter Inc., and Tumblr, Inc.
Marvin Ammori and Lavon Ammori, Ammori Group, Washington, D.C., for Amicus Curiae Automatic, Inc.
Julie Ahrens and Timothy Greene, Stanford Law School Center for Internet and Society, Stanford, CA, for Amici Curiae Organization for Transformative Works, Public Knowledge, and International Documentary Association.
Catherine R. Gellis, Sausalito, CA, for Amicus Curiae Organization for Transformative Works.
Before: RICHARD C. TALLMAN, MILAN D. SMITH, JR., and MARY H. MURGUIA, Circuit Judges.
Opinion by Judge TALLMAN; Partial Concurrence and Partial Dissent by Judge MILAN D. SMITH, JR.
TALLMAN, Circuit Judge:
ORDER
The opinion and dissent filed on September 14, 2015 and published at 801 F.3d 1126 are hereby amended. The amended opinion and dissent are filed concurrently with this order.
With these amendments, the panel has voted to deny Universal‘s petition for panel rehearing and Lenz‘s petition for panel rehearing. Judge Tallman and Judge Murguia have voted to deny Lenz‘s petition for rehearing en banc, and Judge M. Smith has voted to grant Lenz‘s petition for rehearing en banc.
The full court has been advised of the petition for rehearing en banc. No judge has requested a vote on whether to rehear the matter en banc.
Universal‘s petition for panel rehearing is DENIED. Lenz‘s petition for panel rehearing or rehearing en banc is DENIED. No future petitions for panel rehearing or petitions for rehearing en banc will be entertained.
OPINION
Stephanie Lenz filed suit under
I
Founded in May 2005, YouTube (now owned by Google) operates a website that hosts user-generated content. About YouTube, YouTube.com, https://www.youtube.com/yt/about/ (last visited September 4, 2015). Users upload videos directly to the website. Id. On February 7, 2007, Lenz uploaded to YouTube a 29-second home video of her two young children in the family kitchen dancing to the song Let‘s Go Crazy by Prince.1 Available at https://www.youtube.com/watch?v=N1KfJHFWlhQ (last visited September 4, 2015). She titled the video “Let‘s Go Crazy #1.” About four seconds into the video, Lenz asks her thirteen month-old son “what do you think of the music?” after which he bobs up and down while holding a push toy.
At the time Lenz posted the video, Universal was Prince‘s publishing administrator responsible for enforcing his copyrights. To accomplish this objective with respect to YouTube, Robert Allen, Universal‘s head of business affairs, assigned Sean Johnson, an assistant in the legal department, to monitor YouTube on a daily basis. Johnson searched YouTube for Prince‘s songs and reviewed the video postings returned by his online search query. When reviewing such videos, he evaluated whether they “embodied a Prince composition” by making “significant use of ... the composition, specifically if the song was recognizable, was in a significant portion of the video or was the focus of the video.” According to Allen, “[t]he general guidelines are that ... we review the video to ensure that the composition was the focus and if it was we then notify YouTube that the video should be removed.”
Johnson contrasted videos that met this criteria to those “that may have had a second or less of a Prince song, literally a one line, half line of Prince song” or “were shot in incredibly noisy environments, such as bars, where there could be a Prince song playing deep in the background ... to the point where if there was any Prince composition embodied ... in those videos that it was distorted beyond reasonable recognition.” None of the video evaluation guidelines explicitly include consideration of the fair use doctrine.
When Johnson reviewed Lenz‘s video, he recognized Let‘s Go Crazy immediately. He noted that it played loudly in the background throughout the entire video. Based on these details, the video‘s title, and Lenz‘s query during the video asking if her son liked the song, he concluded that Prince‘s song “was very much the focus of the video.” As a result, Johnson decided the video should be included in a takedown notification sent to YouTube that listed more than 200 YouTube videos Universal believed to be making unauthorized use of Prince‘s songs.2 The notice included a “good faith belief” statement as required by
After receiving the takedown notification, YouTube removed the video and sent
II
Lenz filed the instant action on July 24, 2007, and her Amended Complaint on August 15, 2007. After the district court dismissed her tortious interference claim and request for declaratory relief, Lenz filed her Second Amended Complaint on April 18, 2008, alleging only a claim for misrepresentation under
On February 25, 2010, the district court granted Lenz‘s partial motion for summary judgment on Universal‘s six affirmative defenses, including the third affirmative defense that Lenz suffered no damages. Both parties subsequently moved for summary judgment on Lenz‘s
The district court certified its summary judgment order for interlocutory appeal under
III
We review de novo the district court‘s denial of summary judgment. When doing so, we “must determine whether the evidence, viewed in a light most favorable to the non-moving party, presents any genuine issues of material fact and whether the district court correctly applied the law.” Warren v. City of Carlsbad, 58 F.3d 439, 441 (9th Cir. 1995). On cross-motions for summary judgment, we evaluate each motion independently, “giving the nonmoving party in each instance the benefit of all reasonable inferences.” ACLU v. City of Las Vegas, 333 F.3d 1092, 1097 (9th Cir. 2003).
When evaluating an interlocutory appeal, we “may address any issue fairly included within the certified order because it is the order that is appealable, and not the controlling question identified by the district court.” Yamaha Motor Corp., U.S.A. v. Calhoun, 516 U.S. 199, 205 (1996) (emphasis in original) (quotation omitted). We may therefore “address those issues material to the order from which appeal has been taken.” In re Cinematronics, Inc., 916 F.2d 1444, 1449 (9th Cir. 1990) (emphasis in original) (permitting appellate review of a ruling issued prior to the order certified for interlocutory appeal).
IV
Effective on October 28, 1998, the DMCA added new sections to existing copyright law by enacting five Titles, only one of which is relevant here: Title II—Online Copyright Infringement Liability
A
To avoid liability for disabling or removing content, the service provider must notify the user of the takedown.
If an entity abuses the DMCA, it may be subject to liability under
B
We must first determine whether
Fair use is not just excused by the law, it is wholly authorized by the law. In 1976, Congress codified the application of a
Notwithstanding the provisions of
sections 106 and106A , the fair use of a copyrighted work ... for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include—
- the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
- the nature of the copyrighted work;
- the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
- the effect of the use upon the potential market for or value of the copyrighted work.
The fact that a work is unpublished shall not itself bar a finding of fair use if such finding is made upon consideration of all the above factors.
While
Universal‘s sole textual argument is that fair use is not “authorized by the law” because it is an affirmative defense that excuses otherwise infringing conduct. Universal‘s interpretation is incorrect as it conflates two different concepts: an affirmative defense that is labeled as such due to the procedural posture of the case, and an affirmative defense that excuses impermissible conduct. Supreme Court precedent squarely supports the conclusion that fair use does not fall into the latter camp: “[A]nyone who ... makes a fair use of the work is not an infringer of the copyright with respect to such use.” Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 433 (1984).
Given that
Although the traditional approach is to view “fair use” as an affirmative defense, this writer, speaking only for himself, is of the opinion that it is better viewed as a right granted by the Copyright Act of 1976. Originally, as a judicial doctrine without any statutory basis, fair use was an infringement that was excused—this is presumably why it was treated as a defense. As a statutory doctrine, however, fair use is not an infringement. Thus, since the passage of the 1976 Act, fair use should no longer be considered an infringement to be excused; instead, it is logical to view fair use as a right. Regardless of how fair use is viewed, it
is clear that the burden of proving fair use is always on the putative infringer.
Bateman v. Mnemonics, Inc., 79 F.3d 1532, 1542 n.22 (11th Cir. 1996) (Birch, J.). We agree. Cf. Lydia Pallas Loren, Fair Use: An Affirmative Defense?, 90 Wash. L. Rev. 685, 688 (2015) (“Congress did not intend fair use to be an affirmative defense—a defense, yes, but not an affirmative defense.“). Fair use is therefore distinct from affirmative defenses where a use infringes a copyright, but there is no liability due to a valid excuse, e.g., misuse of a copyright, Practice Mgmt. Info. Corp. v. Am. Med. Ass‘n, 121 F.3d 516, 520 (9th Cir. 1997), and laches, Danjaq LLC v. Sony Corp., 263 F.3d 942, 950-51 (9th Cir. 2001).
Universal concedes it must give due consideration to other uses authorized by law such as compulsory licenses. The introductory language in
Even if, as Universal urges, fair use is classified as an “affirmative defense,” we hold—for the purposes of the DMCA—fair use is uniquely situated in copyright law so as to be treated differently than traditional affirmative defenses. We conclude that because
C
We must next determine if a genuine issue of material fact exists as to whether Universal knowingly misrepresented that it had formed a good faith belief the video did not constitute fair use. This inquiry lies not in whether a court would adjudge the video as a fair use, but whether Universal formed a good faith belief that it was not. Contrary to the district court‘s holding, Lenz may proceed under an actual knowledge theory, but not under a willful blindness theory.
1
Though Lenz argues Universal should have known the video qualifies for fair use as a matter of law, we have already decided a copyright holder need only form a subjective good faith belief that a use is not authorized. Rossi v. Motion Picture Ass‘n of Am., Inc., 391 F.3d 1000 (9th Cir. 2004). In Rossi, we explicitly held that “the good faith belief requirement in
When enacting the DMCA, Congress could have easily incorporated an objective standard of reasonableness. The fact that it did not do so indicates an intent to adhere to the subjective standard traditionally associated with a good faith requirement....
In
§ 512(f) , Congress included an expressly limited cause of action for improper infringement notifications, imposing liability only if the copyright owner‘s notification is a knowing misrepresentation. A copyright owner cannot be liable simply because an unknowing mistake is made, even if the copyright owner acted unreasonably in making the mistake. Rather, there must be a demonstration of some actual knowledge of misrepresentation on the part of the copyright owner.
Id. at 1004-05 (citations omitted). Neither of these holdings are dictum. See United States v. Johnson, 256 F.3d 895, 914 (9th Cir. 2001) (en banc) (“[W]here a panel confronts an issue germane to the eventual resolution of the case, and resolves it after reasoned consideration in a published opinion, that ruling becomes the law of the circuit, regardless of whether doing so is necessary in some strict logical sense.“). We therefore judge Universal‘s actions by the subjective beliefs it formed about the video.
2
Universal faces liability if it knowingly misrepresented in the takedown notification that it had formed a good faith belief the video was not authorized by the law, i.e., did not constitute fair use. Here, Lenz presented evidence that Universal did not form any subjective belief about the video‘s fair use—one way or another—because it failed to consider fair use at all, and knew that it failed to do so. Universal nevertheless contends that its procedures, while not formally labeled consideration of fair use, were tantamount to such consideration. Because the DMCA requires consideration of fair use prior to sending a takedown notification, a jury must determine whether Universal‘s actions were sufficient to form a subjective good faith belief about the video‘s fair use or lack thereof.3
To be clear, if a copyright holder ignores or neglects our unequivocal holding that it must consider fair use before sending a takedown notification, it is liable for damages under
3
We hold the willful blindness doctrine may be used to determine whether a copyright holder “knowingly materially misrepresent[ed]” that it held a “good faith belief” the offending activity was not a fair use. See
To demonstrate willful blindness a plaintiff must establish two factors: “(1) the defendant must subjectively believe that there is a high probability that a fact exists and (2) the defendant must take deliberate actions to avoid learning of that fact.” Global-Tech Appliances, Inc. v. SEB S.A., 563 U.S. 754, 766 (2011). “Under this formulation, a willfully blind defendant is one who takes deliberate actions to avoid confirming a high probability of wrongdoing and who can almost be said to have actually known the critical facts.” Id. at 769-70. To meet the Global-Tech test, Lenz must demonstrate a genuine issue as to whether—before sending the takedown notification—Universal (1) subjectively believed there was a high probability that the video constituted fair use, and (2) took deliberate actions to avoid learning of this fair use.
On summary judgment Lenz failed to meet a threshold showing of the first factor. To make such a showing, Lenz must provide evidence from which a juror could infer that Universal was aware of a high probability the video constituted fair use. See United States v. Yi, 704 F.3d 800, 805 (9th Cir. 2013). But she failed to provide any such evidence. The district court therefore correctly found that “Lenz does not present evidence suggesting Universal subjectively believed either that there was a high probability any given video might make fair use of a Prince composition or her video in particular made fair use of Prince‘s song ‘Let‘s Go
V
Universal incorrectly asserts that Lenz must demonstrate she incurred “actual monetary loss.”
Lenz may seek recovery of nominal damages due to an unquantifiable harm suffered as a result of Universal‘s actions.5 The DMCA is akin to a statutorily created intentional tort whereby an individual may recover nominal damages for a “knowingly material misrepresent[ation] under this section [512].”
“In a number of common law actions associated with intentional torts, the violation of the plaintiff‘s right has generally been regarded as a kind of legal damage in itself. The plaintiff who proves an intentional physical tort to the person or to property can always recover nominal damages.” 3 Dan B. Dobbs et al., The Law of Torts § 480 (2d ed. 2011). The tort need not be physical in order to recover nominal damages. Defamation, for example, permits the recovery of nominal damages:
A nominal damage award can be justified in a tort action only if there is some reason for awarding a judgment in favor of a claimant who has not proved or does not claim a compensable loss with sufficient certainty to justify a recovery of compensatory or actual damages. There may be such a reason in an action for defamation, since a nominal damage award serves the purpose of vindicating the plaintiff‘s character by a verdict of the jury that establishes the falsity of the defamatory matter.
W. Page Keeton et al., Prosser and Keeton on Torts § 116A, at 845 (5th ed. 1984). Also, individuals may recover nominal damages for trespass to land, even though the trespasser‘s “presence on the land causes no harm to the land [or] its possessor....” Restatement (Second) of Torts § 163 & cmts. d, e (1965).
The district court therefore properly concluded in its 2010 order:
The use of “any damages” suggests strongly Congressional intent that recovery be available for damages even if they do not amount to ... substantial economic damages.... Requiring a plaintiff who can [show that the copyright holder knowingly misrepresented its subjective good faith] to demonstrate in addition not only that she suffered damages but also that those damages were economic and substantial would vitiate the deterrent effect of the statute.
Lenz v. Universal Music Corp., No. C 07-3783 JF, 2010 WL 702466, at *10 (N.D. Cal. Feb. 25, 2010). Relying on this opinion, the Southern District of Florida held the same. Hotfile, 2013 WL 6336286, at *48 (“[T]he Court observes that the quantity of economic damages to Hotfile‘s system is necessarily difficult to measure with precision and has led to much disagreement between the parties and their experts. Notwithstanding this difficulty, the fact of injury has been shown, and Hotfile‘s expert can provide the jury with a non-speculative basis to assess damages.“).
We agree that Lenz may vindicate her statutorily created rights by seeking nominal damages. Because a jury has not yet determined whether Lenz will prevail at trial, we need not decide the scope of recoverable damages, i.e., whether she may recover expenses following the initiation of her
VI
Copyright holders cannot shirk their duty to consider—in good faith and prior to sending a takedown notification—whether allegedly infringing material constitutes fair use, a use which the DMCA plainly contemplates as authorized by the law. That this step imposes responsibility on copyright holders is not a reason for us to reject it. Cf. Consumer Prod. Safety Comm‘n v. GTE Sylvania, Inc., 447 U.S. 102, 123-24 (1980) (“[A]ny increased burdens imposed on the Commission as a result of its compliance with [the Consumer Product Safety Act] were intended by Congress in striking
AFFIRMED. Each party shall bear its own costs.
M. SMITH, Circuit Judge, concurring in part and dissenting in part:
I concur in all but Part IV.C of the majority opinion. However, I disagree with the majority‘s conclusion that “whether Universal‘s actions were sufficient to form a subjective good faith belief about the video‘s fair use or lack thereof” presents a triable issue of fact. Universal admittedly did not consider fair use before notifying YouTube to take down Lenz‘s video. It therefore could not have formed a good faith belief that Lenz‘s video was infringing, and its notification to the contrary was a knowing material misrepresentation. Accordingly, I would hold that Lenz is entitled to summary judgment.
I agree with the majority‘s conclusion that
However, I part ways with the majority on two issues. First, I would clarify that
I
As the majority explains, we have previously held in Rossi v. Motion Picture Ass‘n of Am., Inc. that “the ‘good faith belief requirement in
Universal urges us to construe Rossi to mean that liability attaches under
One who asserts a belief that a work is infringing without considering fair use lacks a basis for that belief. It follows that one who knows that he has not considered fair use knows that he lacks a basis for that belief. That is sufficient “actual knowledge of misrepresentation” to meet the scienter requirement of
II
It is undisputed that Universal‘s policy was to issue a takedown notice where a copyrighted work was used as “the focus of the video” or “prominently featured in the video.” By Universal‘s own admission, its agents were not instructed to consider whether the use was fair. Instead, Universal directed its agents to spare videos that had “a second or less of a Prince song” or where the song was “distorted beyond reasonable recognition.” And yet, from this, the majority concludes that “whether Universal‘s actions were sufficient to form a subjective good faith belief about the video‘s fair use or lack thereof” presents a triable issue of fact.
I respectfully disagree. The Copyright Act explicitly enumerates the factors to be considered in assessing whether use of copyrighted material is fair.
Moreover, Universal knew it had not considered fair use, because
Based on Rossi‘s holding that a subjective good-faith belief in infringement is sufficient to satisfy
The majority‘s unfortunate interpretation of
* * *
In sum: Universal represented that it had formed a good-faith belief that Lenz‘s video was an infringement of copyright—that is, that the video was not fair use. Because Universal did not actually consider the factors constituting fair use, its representation was false—a misrepresentation. Because those factors are set forth in