In February 2007, Stephanie Lenz posted on YouTube a 29-second clip of her 13-month-old son dancing to Prince's song "Let's Go Crazy". The audio was of poor quality, and the song was audible for about 20 seconds of the 29 seconds. In June 2007, Universal, the copyright holder for "Let's Go Crazy", sent YouTube a takedown notice in compliance with DMCA requirements, claiming the video was a copyright violation. YouTube removed the video, and notified Lenz of the removal and the alleged infringement. At the end of June 2007, Lenz sent YouTube a counter-notification, claiming fair use and requesting the video be reposted. Six weeks later, YouTube reposted the video. In July 2007, Lenz sued Universal for misrepresentation under the DMCA, and sought a declaration from the court that her use of the copyrighted song was non-infringing. According to the DMCA 17 U.S.C. § 512, the copyright holder must consider whether use of the material was allowed by the copyright owner or the law. In September 2007, Prince released statements that he intended to "reclaim his art on the internet". In October 2007, Universal released a statement that Prince and Universal intended to remove all user-generated content involving Prince from the Internet, as a matter of principle.
Decision
District court
Based on Prince's and Universal's statements, Lenz argued that Universal was issuing takedown notices in bad faith, as they attempted to remove all Prince-related content rather than considering whether each posting violated copyright, and in particular was a non-infringing fair use. Universal expressed concerns over the fact-intensive investigation and subjective results of determining whether a potentially infringing use falls under the general fair use doctrine. The district court held that copyright owners must consider fair use before issuing DMCA takedown notices. Thus, the district court denied Universal's motion to dismiss Lenz's claims, and declined to dismiss Lenz's misrepresentation claim as a matter of law. The district court believed that Universal's concerns over the burden of considering fair use were overstated, as mere good faith consideration of fair use, not necessarily an in-depth investigation, is sufficient defense against misrepresentation. The court also explained that liability for misrepresentation is crucial in an important part of the balance in the DMCA. On February 25, 2010, Judge Fogel issued a ruling rejecting several of Universal's affirmative defenses, including the defense that Lenz suffered no damages, though the court did suggest that at that stage in the proceedings, Lenz's damages seemed nominal. In January 2013, Judge Fogel denied both parties' motions for summary judgment.
Ninth Circuit
Both parties cross appealed to the Ninth Circuit Court of Appeals. Oral argument was held July 7, 2015. On September 14, 2015, the 9th Circuit affirmed the District Court, holding that while fair use arises procedurally as an affirmative defense, copyright holders have a "duty to consider—in good faith and prior to sending a takedown notification—whether allegedly infringing material constitutes fair use". Importantly, the court viewed fair use not as a valid excuse to otherwise infringing conduct but rather as not infringement in the first place. "Because 17 U.S.C. § 107 created a type of non-infringing use, fair use is 'authorized by the law' and a copyright holder must consider the existence of fair use before sending a takedown notification under § 512."
