When is a takedown notice based on a misrepresentation, and when does taking material down constitute a breach of YouTube's duties?

In 2007, YouTube informed Stephanie Lenz of Pennsylvania that it had removed a video she had posted after YouTube had received a takedown notice from Universal Music Publishing Group ("UMPG"). The video, 29 seconds long, showed Lenz's 13 month old son dancing to Prince's Let's Go Crazy. Ms. Lenz sent a counter-notification to YouTube requesting that YouTube re-post the video, but YouTube did not do so until, six weeks later, UMPG dropped its copyright claim.

Now, with the assistance of the Electronic Frontier Foundation, Lenz is suing UMPG. Her complaint (pdf) seeks (1) a declaration that the use of Let's Go Crazy in the video constitutes fair use, (2) an injunction against any lawsuit or threat against Lenz in connection with her video, and (3) damages under the DMCA because UMPG "knowingly materially misrepresent[ed]" that the video infringed UMPG's copyright in Let's Go Crazy.

Lenz's first cause is based on the provision of the DMCA. 17 U.S.C. § 512(f) providing that anyone who "materially misrepresents" that "material or activity is infringing" is liable to the alleged infringer (in this case, Lenz) for any damage arising from the misrepresentation.

Copyright overclaiming is a problem, and UMPG plainly concluded in the end that it had been wrong in its initial position that Lenz's video infringed the copyright in Let's Go Crazy. But was that error so obvious at the time UMPG sent its takedown notice that it was a "material misrepresentation"? It is a trite at this point to observe that whether a given unauthorized use of copyrighted material is a non-infringing fair use is a difficult, case-by-case question; nevertheless, some cases are less difficult than others

In this case there does not seem to be any reasonable basis for UMPG to have believed Lenz's video infringed the copyright in Let's Go Crazy. Len'z video used only 29 seconds of the song, was for non-profit purposes, and would not serve as a substitute for any primary or derivative use of Prince's song. In short, the decision UMPG made 6 weeks after sending its takedown notice is one it should have reached before sending the notice. Lenz's case may not be as strong as that asserted in OPG v. Diebold, but it is one that should worry UMPG.

Lenz's lawsuit might worry Viacom even more. Viacom sent Google/YouTube over 100,000 takedown notices based merely on the fact the videos targeted by those notices contained "unauthorized" clips of material in which Viacom owns the copyright. By definition, any non-infringing fair use will be "unauthorized." Lenz's use of Let's Go Crazy was unauthorized. It was not infringing. It seems likely that among Viacom's 100,000 plus takedown notices are many that Viacom either knew or should have known were unwarranted. How could Viacom possibly have made over 100,000 legitimate fair use decisions about 100,000 different videos?

In addition, Lenz's lawsuit asserts a second, very creative, cause of action alleging that UMPG's unwarranted takedown notice tortiously interfered with Lenz's contract with YouTube. Roughly speaking, UMPG tortiously interfered with Lenz's contract with YouTube if (1) UMPG knew in sending its takedown notice it would cause YouTube to breach a contract with Lenz and (2) UMPG acted "improperly" in sending the notices. What constitutes "improper" conduct is often difficult to determine; nevertheless, it seems obvious that UMPG's takedown notice was "improper" if Lenz prevails on her first cause of action -- for her to do so, the court must find that the claim of infringement asserted in its takedown notice was a "material misrepresentations" that violated § 512(f). The outer boundaries separating "proper" from "improper" conduct may be vague; "material misrepresentations," however, are obviously well on the "improper" side of those boundaries.

The remaining and more difficult question on this second cause of action is whether YouTube breached its contract with Lenz when it did not restore her video until 6 weeks after she sent her counter-notice. YouTube's Terms of Use provide that in the event YouTube, in response to a takedown notice, removes a video, the person who submitted the video can file a counter-notice asserting her argument that the video does not infringe the rights of the person who sent the original takedown notice. Section 8B of the Terms of Use further provides that when YouTube receives such a counter-notice

YouTube may send a copy of the counter-notice to the original complaining party informing that person that it may replace the removed content or cease disabling it in 10 business days. Unless the copyright owner files an action seeking a court order against the content provider, member or user, the removed content may be replaced, or access to it restored, in 10 to 14 business days or more after receipt of the counter-notice, at YouTube's sole discretion. (emphasis added)

In short, even if UMPG's takedown notice was unwarranted, YouTube's failure to restore the video for six weeks after receipt of Lenz's counter-notice does not seem to be a breach of any express contractual duty owed by YouTube to Lenz -- the contract provides that YouTube has the unilateral right to restore or not restore the contested material. Moreover, the DMCA provides, in 17 U.S.C. § 512(g)(1) , that "a service provider shall not be liable to any person for any claim based on the service provider’s good faith disabling of access to, or removal of, material or activity claimed to be infringing or based on facts or circumstances from which infringing activity is apparent, regardless of whether the material or activity is ultimately determined to be infringing." (emphasis added)

Nevertheless, Lenz could possibly prevail in arguing that the legitimacy of her video was so obvious that YouTube's failure to immediately restore it after she served her counter-notice was a breach of its implied duty to act in "good faith." As § 512(g)(1), quoted above, indicates, YouTube's immunity from liability for disabling Lenz's video requires that in doing so it acted in "good faith." Moreover, though the duty rarely seems to have practical weight, every contract implicitly requites the parties to act in good faith. Finally, YouTube emphasizes that it will consider seriously the merits raised by counter-notices -- its Community Guidelines, which are incorporated by reference into its Terms of Service, provide that "[i]f we remove your video after reviewing it, you can assume that we removed it purposefully, and you should take our warning notification seriously."

If YouTube had indeed taken UMPG and Lenz's respective positions seriously, it is difficult to believe it needed to wait until UMPG backed off from its infringement claim to conclude that Lenz's video was non-infringing. Thus, Lenz's argument on her tortious interference with contract claim would be that YouTube breached its obligations to her to evaluate UMPG's infringement claim "seriously." It is a very interesting and creative claim, and one that truly puts YouTube's policies in these disputes to the test.

Addendum: Sherwin Sly adds some cogent analysis to the dispute between Lenz and UMPG.