Tag Archives: fair use

Can Websites Design Platforms to Avoid Copyright Liability?

VHT, Inc. v. Zillow Group, Inc., No. 2:2015-cv-01096 (W.D. Wash. 2017)

By: Pranav Katti & Nancy Wolff

The Ninth Circuit recently addressed a number of outstanding copyright issues between Zillow, the popular apartment hunting website, and VHT a provider of real estate photographers’ photos, and VHT, although it left the question of whether database registrations offer statutory damages for each image, or if all the images in one application are limited to one award of statutory damages. Although Zillow properly licensed these photos from VHT, the central question was whether Zillow exceeded the scope of this license, and the calculation of damages.

The Zillow Platform: Zillow is a user-oriented site where users can search for certain photos and even save and upload images to a private “personal board”. The photos on Zillow fall within the categories of “displayed”, “not displayed”, “searchable” and “not searchable”. Zillow used VHT photos in two areas on its website, a “listing platform” and “digs”. The listing platform features photos and information about properties while digs features photos of rooms within some of those properties, artfully and aesthetically designed to facilitate home improvement and remodeling.

District Court Decision: The district court previously found that Zillow did not directly infringe the 54,257 listing platform photos, the 22,109 non-displayed photos and the 2,093 displayed but non-searchable digs photos. Zillow also escaped the claim of secondary copyright liability for the use of the photos on digs. However, Zillow’s was found to have directly infringed 3,921 displayed and searchable VHT photos on digs and the court rejected its fair use argument. The court also found that Zillow willfully infringed on 3,373 searchable photos and in assessing damages, asked the jury, which photographs allegedly infringed upon, had an independent economic value.

Ninth Circuit:  On appeal, the Ninth Circuit similarly found that Zillow did not directly infringe upon the copyrights of the 54,257 photos used on their listing platform and the 22,109 non-displayed photos and 2,093 displayed but non-searchable photos.. The reasoning behind this decision lays primarily in the type of agreements that VHT provided Zillow, the control Zillow had over these photos and Zillow designing its system to avoid copyright infringement as much as possible. Also aiding Zillow was their prompt action to address claims of infringement and VHT’s lackluster effort in providing Zillow the information needed to adequately address these claims.

Zillow’s System: VHT provided Zillow with either “evergreen” or “deciduous” rights in the photos provided. Evergreen rights allow a photo to be used without any time restriction, or in other words, a photo can remain on the site even after the property has been sold. Conversely, a deciduous right is time-limited. Zillow required VHT to designate the type of agreement underlying each provided photo, and Zillow’s system then automatically sorted the photos pursuant to these agreements and automatically treated each photo within the scope of its agreement. Zillow designed an automated “trumping” algorithm to determine which photos to display on the listing platform. This system gave preference to photos with evergreen rights in order to design a system avoiding copyright infringement. Because VHT provided the agreement designation for each provided photo, Zillow also did not exert control over these photos.

Direct liability: Zillow avoided direct liability on the 2,093 digs photos that users copied to their personal boards but were not added to Zillow’s searchable database, based on the immunity granted qualified ISP’s under the Copyright Act for user generated content.  Photos designated by Zillow as searchable requires a moderator to designate the photo for tagging. The mere possibility that Zillow had the opportunity to moderate and tag these photos was not sufficient to transform Zillow from a passive host to an active one.

Fair Use: In response to the 3,921 searchable photos which Zillow moderators personally tagged, Zillow contends that digs’ searchable function amounts to fair use as the use was “transformative”. The past two decades has been wrought with cases involving the transformative nature of search engines. Important to the determination is whether the use serves the same function as the original use, whether the entirety of the work is used and whether the new use promotes the purposes of copyright. Merely to use the label of “search engine” is not dispositive and the court must assess each case holistically.

The Ninth Circuit disagreed that Zillow’s use was transformative. First, Zillow’s use of VHT’s photos did not change their original purpose, to use the photos to artfully depict rooms within real estate properties. Digs also uses the entirety of the image and Zillow supersedes VHT’s purpose in creating the images in the first place. A copying of full works may be justified if it allows consumers to recognize the image and decide whether to search for more information, such as Google’s Google Books project in which snippets of books were provided in a searchable database, which would otherwise take an exorbitant amount of time to find. As the Second Circuit stated, if Google Books “tests the boundaries of fair use”, then Zillow certainly exceeds it.

Secondary Liability The Ninth Circuit found in favor of Zillow on secondary liability based on a “simple measures” standard of the DMCA and the inability of Zillow to police its users. A computer operator is liable for contributory liability if they can take simple measures to prevent further copyright infringement, yet the operator continue providing access to those works. Here, in order to take down large numbers of photos, Zillow required a Zillow image ID contained in the URL of the image location. Zillow posts multiple copies of its images throughout its site, so simply identifying the image does not allow them to easily find the sources of infringement. It was VHT’s burden to provide these URL’s. Additionally, VHT’s argument that Zillow had the ability to employ watermark detection technology is unavailing, because VHT rarely watermarked their photos. Zillow also lacked the practical ability to police its users infringing content. As the Ninth Circuit stated, “Once … photos were uploaded to the listing platform … ferreting out claimed infringement through use on digs was beyond hunting for a needle in a haystack.” VHT failed to provide URL’s to specific sources of infringement and did not employ watermarking technology. These factors combined with Zillow’s inability to police its users’ activity weighed in Zillow’s favor.

Damages: The Ninth Circuit took issue with the District Court’s determination of damages and remanded the case to the district court to determine whether the VHT photos used on digs were part of a compilation or if they are individual photos for purpose of statutory damages. A compilation is entitled to a single award of statutory damages and VHT was seeking damages for each individual photo, which Zillow used.

DMLA joined other photography associations and filed an amicus brief supporting VHT’s position that a determination that all the photos in a group database registration were a compilation would threaten photographers’ ability to enforce their copyrights. DMLA noted that the purpose of group registration under the Copyright Act was to alleviate the financial and administrative burdens of registering large numbers of works. Precluding individual protection of works within a group registration would discourage artists from seeking protection (a status required to file a copyright suit) if registration of a group work could obliterate any protection in infringements of individual works within that group work.

Takeaway: The Ninth Circuit’s decision highlights the protections the DMCA offers internet companies. The court looked at Zillow’s proactive measures in preventing liability, namely by ensuring that VHT controlled their photos as much as possible, setting up automated trumping systems to sort through photos, and being very proactive in response to VHT’s claims of infringement. However, the court did not require additional measures, such as watermarking. It also highlights how difficult the DMCA is on content creators, especially where many images are infringed. It was VHT burden to identify each Zillow URL and not provide merely provide copies of the images to Zillow. On April 8, 2019 the Copyright Office is holding a roundtable on the section of the DMCA relating to the notice required to be given to ISP’s by content holders, and ISP’s responses and the burdens on the parties.  A representative of DMLA will be attending.

Federal Judge Rules that Esquire’s Use of Photo of Trump at Private Wedding Is Not Fair Use (Bounds Explained)

The decision in Otto v. Hearst Communications, Inc., No. 1:17-cv-04712 (S.D.N.Y. 2018) provides a helpful guide to what is does not qualify as fair use in the context of a news story. Fair use is a limitation on a copyright owners exclusive rights and permits the use of a work without consent. It is codified in the current Copyright Act, and the statute provides examples of what can be considered fair use. Because “news reporting” is an example, it is all too common that popular news websites rely on fair use rather than licensing a photo, asserting that the use is news reporting. But is it?

Read the entire article here

Federal Court Explains the Bounds of Fair Use by a News Organization, Ruling That Esquire’s Use of Photo of Trump at Private Wedding Is Not Fair

by Nancy Wolff, DMLA Counsel

The decision in Otto v. Hearst Communications, Inc., No. 1:17-cv-04712 (S.D.N.Y. 2018) provides a helpful guide to what is does not qualify as fair use in the context of a news story. Fair use is a limitation on a copyright owners exclusive rights and permits the use of a work without consent. It is codified in the current Copyright Act, and the statute provides examples of what can be considered fair use. Because “news reporting” is an example, it is all too common that popular news websites rely on fair use rather than licensing a photo, asserting that the use is news reporting. But is it?

Most likely not. In Otto v. Hearst Communications, Inc., Judge Gregory H. Woods dealt with this issue directly and found that Esquire.com’s use of a photo of Donald Trump at a private wedding in an article about him crashing the wedding was not fair use. The instructive decision, which analyzed the copyright infringement claim and individual components of the fair use defense, provides a clear example of what is not considered fair use in the context of a news story.

In June 2017, Jonathan Otto, a weddinggoer, snapped a photo of Trump, who happened to appear at a wedding held at his golf club in New Jersey. The amateur photographer texted the photo to a friend, only to discover the next morning that his photo had unexpectedly gone viral—first on Instagram, and then splashed across the pages of several online media outlets.

Seeking to protect his rights, Otto, retained counsel and filed for copyright registration. He then enforced his copyright by suing several of the media outlets, including Hearst Communications, Inc., the parent company of Esquire, who had copied and published Otto’s photo, for copyright infringement. In response, Esquire did not dispute that it had copied the photo but asserted a fair use defense arguing that it had used the photo of Trump for news purposes. However, the Court did not buy this argument.

The Court analyzed each of the four fair use factors in detail and explained why, taken together, the factors did not weigh in favor of a finding of fair use. Specifically, he wrote: “Stealing a copyrighted photograph to illustrate a news article, without adding new understanding or meaning to the work, does not transform its purpose—regardless of whether that photograph was created for commercial or personal use.”

While Esquire’s status as a news publication may be important for the fair use inquiry, that fact alone does not make Esquire, or any other media organization, immune from liability under intellectual property laws. Below is an overview of Judge Woods’ analysis and findings on each of the elements of fair use:

Purpose and Character of the Work. First, the Court discussed the purpose and character of Otto’s photo—arguably the most important fair use factor. The judge noted that Hearst’s argument that the use is fair because the photo was created for personal use, and Esquire used it for news, was unpersuasive. While “news reporting” is specifically identified as a potential method of fair use in the statute, courts analyzing this factor still look to the transformativeness of the use of the copyrighted work. For example, did Esquire’s use of the photo in a post describing Trump crashing the wedding add a new meaning or message? Esquire argued that its use did because the article “added commentary regarding the President’s availability for photos at the wedding and broader trend in the President’s behavior.” However, the Court disagreed, concluding that Esquire used the image solely for illustrative purposes—to depict the President’s presence at a private wedding—and did not add anything new to the image.

Nature of the Copyrighted Work. Second, the Court examined the nature of the copyrighted work, such as whether it is expressive or creative versus factual or informational, and whether the work is published or not. While photographs can vary widely on this spectrum, the Court agreed with Esquire’s argument that the image is more factual, because the photo was taken spontaneously to document an event, and Otto did not direct or pose the subjects. As for the publication status of the photo, the parties did not dispute that the image had already been published and disseminated widely before Esquire’s use. Although a copyright owner’s right of first publication is important, the Court found that Esquire’s article did not threaten this right. Consequently, this factor—while far from the most important in the fair use analysis—weighed in favor of fair use.

Amount and Substantiality of the Portion Used. Next, the Court evaluated just how much of Otto’s photograph Esquire used. For its article, Esquire used a slightly cropped version of Otto’s photo, but otherwise did not edit it. As one would assume, the more of a copyrighted work that is taken, the less likely the use is to be fair; however, courts also take the purpose of the use into account, looking back at the first fair use factor. Because it was clear that Esquire used the entirety of the photo and did so without adding new meaning or otherwise transforming the work, the Court found that this factor weighed against fair use.

Effect of the Use on the Potential Market. Finally, the Court considered the effect of Esquire’s use of the photo upon the potential market for or value of the photo. Where the copyright holder has no intention of entering the market, or the inability to do so, courts often find this factor weighs in favor of fair use. However, that is not the case here. Because Otto had acted quickly to protect his rights and was seeking to license the photo, such as to publications like TMZ, the Court found that it was clear that Otto was attempting to enter the market. Esquire’s unauthorized publishing of the same photo destroys the potential market and harm’s Otto’s ability to license the work. As such, the fourth factor also weighed against fair use.

Weighing the four factors together, the Court found that it was evident that Hearst’s use of the image was not fair. “The fact that Hearst’s commercial use did not transform the Photograph’s purpose or add new meaning to the image; the fact that Hearst used the work in its entirety; and the potential harm to any financial opportunities Otto might reasonably pursue for use of the photo, outweigh the fact that the image is factual and published,” Judge Woods concluded.

While any fair use analysis is an inherently fact-driven inquiry, this case is helpful to explain the point that a photo that merely illustrates a newsworthy article, without adding more, is not fair use. If the photo was the news story itself, the result might have been different. This case confirms that images to illustrate articles should be licensed and not just taken

FAIR USE OR INFRINGEMENT?

Industry experts have been scratching their heads after a U.S. judge ruled an image, taken from the website of a professional photographer and used by a film festival online, was fair use. The case, is Brammer v. Violent Hues Productions LLC, and it began when Russell Brammer found one of his pictures, a long exposure shot of Adams Morgan, Washington D.C., had been used on a website promoting the Northern Virginia Film Festival.

Read a complete analysis of the case here

Fair Use or Infringement?-Court finds use of image to illustrate a geographic area on website fair use.

by Nancy Wolff, DMLA Counsel

Fair use is often described as one of the most difficult to understand doctrines of copyright law by the courts. This could not be more obvious than in a recent Northern District of Virginia decision, which found in favor of fair use where an image was used to illustrate a website. Many in the industry thought the use at issue in the case was an obvious infringement as it was one that is typically licensed. In Brammer v. Violent Hues Productions, LLC, the photographer Russell Brammer sued Violent Hues for infringing his copyright of a time-lapse depiction of the Adams Morgan neighborhood of Washington, D.C., at night. Violent Hues used a cropped version of Brammer’s photograph on its website, which was intended to be used as a reference guide providing about an annual film festival in Northern Virginia. The court granted Violent Hues’ motion for summary judgment on its defense of fair use, finding all four of the statutory factors favored a finding of fair use.

As to the first factor – the purpose and character of the use – the court looked to “whether the new work is transformative” and “the extent to which the use serves a commercial purpose.” The court found that Violent Hues’ use of the photograph was transformative in function and purpose. While Brammer’s purpose in capturing and publishing the photograph was promotional and expressive, the court noted that Violent Hues’ purpose in using it was informational because it used the photograph to provide information regarding the local area. Its use was also found to be non-commercial as the photo was not used to advertise a product or to generate revenue. Additionally, the court found that Violent Hues’ use was in good faith because Violent Hues’ owner attested that he believed the photo was publicly available because he found the photo online and saw no indication that it was copyrighted. In further support of good faith was the fact that Violent Hues removed the photo as soon as it learned the photo might be copyrighted.

The second factor – the nature of the copyrighted work – was also held to favor fair use. While the court noted that the photograph contained creative elements, it was a factual depiction of a real-world location and Violent Hues used the photograph purely for its factual content: to depict the neighborhood. The photograph had also previously been published on several websites and “at least one of these publications did not include any indication that it was copyrighted.”

On the third factor – the amount and substantiality of the portion used in relation to the copyrighted whole – the court noted that Violent Hues cropped half of the original photo. The court found this to be no more than necessary to convey the photo’s factual content. Thus, the third factor weighed in favor of fair use as well.

Finally, regarding the fourth factor – the effect of the use upon the potential market for or value of the copyrighted work – the court found no evidence that Violent Hues’ use had any effect on the potential market for Brammer’s photo. The court noted that Brammer still made sales of the photograph (at least two) after Violent Hues’ alleged infringement began, and Brammer testified that he made no effort to market the photo. Additionally, the court found the cropping of the photo and its non-commercial use to undercut a finding of adverse effect on the photo’s market.

In all, the court found that each of the four factors favored Violent Hues and thus held that Violent Hues’ use was a fair use and that there was no copyright infringement.

This decision has been roundly criticized by the industry and it has been noted that it is not often that a court gets every fair use factor wrong. The plaintiff is appealing the decision and many associations in the visual arts industry, including DMLA, are planning to file either separate or joint amicus briefs. Specifically of concern is the distinction between using an image for informational purpose and using and image for aesthetic purpose. By its nature, every image conveys some information, and to be successful, should be aesthetically appealing. Further, one of the touchstones of stock imagery licensing is that one image or clip can be reproduced for many different purposes. In addition, the fact that an image is displayed without a copyright notice should not mean that the work is free to use without consent, absent a legitimate exception, as copyright notice has not been a requirement under US copyright law since 1989. Lastly, when looking at harm to the market the court should look at the potential harm to the market if the type of unauthorized use is widespread. As the licensing of images to websites to enhance the look of the site or to provide visual information regarding a geographic area is common, widespread unauthorized use of this nature could have a significant impact on the licensing of visual content.

 

DMLA’s Amicus Brief Supports Argument as Oracle defeats Google Fair Use Argument over Java Code Packets

Last week the U.S. Court of Appeals for the Federal Circuit reversed the U.S. District Court for the Northern District of California’s ruling of fair use in Oracle America, Inc. v. Google LLC, and held that a verbatim and non-transformative taking in the presence of an actual or potential licensing market fatally undermined the defense.

Even in industries unrelated to computers, mobile devices, software, and source code, the court’s broad pronouncement that “[t]here is nothing fair about taking a copyrighted work verbatim and using it for the same purpose and function as the original in a competing platform” is both powerful and beneficial to creators and licensors of copyrighted content. DMLA’s amicus brief with the support of the coalition of Visual Artists– and one of many amicus briefs in this hotly contested case– helped explain to the court of appeals the importance of licensing markets in fair use cases in general. Ultimately DMLA supported the winning argument and contributed to the creation of appellate-level precedent that will help image licensors everywhere in responding to many infringement claims, as it turns on harm to the licensing market.

Read the entire article here

Oracle defeats Google Fair Use Argument over Java Code Packets

(ORACLE AM., INC. V. GOOGLE LLC
No. 2017-1118, 2017-1202, 2018 WL 1473875 (Fed. Cir. Mar. 27, 2018)

by Nancy Wolff, DMLA Counsel

Last week the U.S. Court of Appeals for the Federal Circuit reversed the U.S. District Court for the Northern District of California’s ruling of fair use in Oracle America, Inc. v. Google LLC, and held that a verbatim and non-transformative taking in the presence of an actual or potential licensing market fatally undermined the defense. Oracle had sued Google for copyright infringement, alleging that Google had unlawfully used 37 packages of Oracle’s Java application programming interface – “pre-written Java source code programs” that serve as shortcuts for various computer functions to save programming time – in its Android-powered devices. Google copied verbatim 11,500 lines of Oracle’s copyrighted computer code as well as the structure, sequence, and organizing of the packages. After a second jury trial on fair use, Google prevailed on its fair use defense, and Oracle appealed after the district court rejected its post-trial motion for judgment as a matter of law.

The Federal Circuit disagreed with the district court’s assessment, and analyzed each of the four fair use factors in 17 U.S.C. 107. In particular, under the first factor (nature and purpose of the use), the court held that Google’s use of Oracle’s code was both commercial and not “transformative” because the purpose of the software packages in Google’s Android operating system was the same as the purpose of the package in Oracle’s Java platform; Google did not change the expressive content or message of the code; and use of the code in smartphones as opposed to other computer hardware did not constitute “new context.” As many courts do, the Federal Circuit did not pay much heed to the second factor (nature of the copyrighted work), but emphasized under the third factor (amount of the work used), that the taking at issue here was more than was defensible. For instance, there was no dispute that only 170 lines of code were needed to write in Java programming language, but Google copied 11,500 lines.

The court spent considerable time discussing the fourth factor (effect on the potential market), focusing on harm to actual markets for the copyrighted work, as well as the market for potential and derivative uses. The court noted that the record clearly showed actual market harm in that Oracle’s copyrighted works had already been used in mobile devices, that Google directly competed with Oracle using Oracle’s own code, and that the existence of the free Android operating system caused significant damage to Oracle’s negotiating position with third parties like Amazon. The district court also had failed to consider potential market harm, including licensing Java “for smartphones with increased processing capabilities”; importantly, the court observed that just because Oracle had never built its own smartphone device was irrelevant “because potential markets include licensing others to develop derivative works.” Because factors one and four weighed heavily against fair use (factor two weighed in favor, and factor three was likely against), the Federal Circuit reversed and remanded for a trial on damages.

Even in industries unrelated to computers, mobile devices, software, and source code, the court’s broad pronouncement that “[t]here is nothing fair about taking a copyrighted work verbatim and using it for the same purpose and function as the original in a competing platform” is both powerful and beneficial to creators and licensors of copyrighted content. DMLA’s amicus brief with the support of the coalition of Visual Artists– and one of many amicus briefs in this hotly contested case– helped explain to the court of appeals the importance of licensing markets in fair use cases in general. Ultimately DMLA supported the winning argument and contributed to the creation of appellate-level precedent that will help image licensors everywhere in responding to many infringement claims, as it turns on harm to the licensing market.

Fox News Network, LLC v. TVEyes, Inc.: Second Circuit Rejects Fair Use Defense for Mass Archiving and Re-Distribution of Copyrighted TV Content

By: Scott J. Sholder

A panel of the U.S. Court of Appeals for the Second Circuit today issued its much-anticipated opinion in the TVEyes appeal, reversing the decision of the U.S. District Court for the Southern District of New York, and holding that TVEyes’ copying, storage, and re-distribution for viewing, downloading, and sharing, of massive amounts of copyrighted TV content was not fair use.

Read the entire story here.

Fox News Network, LLC v. TVEyes, Inc.: Second Circuit Rejects Fair Use Defense

By: Scott J. Sholder

A panel of the U.S. Court of Appeals for the Second Circuit today issued its much-anticipated opinion in the TVEyes appeal, reversing the decision of the U.S. District Court for the Southern District of New York, and holding that TVEyes’ copying, storage, and re-distribution for viewing, downloading, and sharing, of massive amounts of copyrighted TV content was not fair use.

TVEyes is a for-profit media company offering a service that allows its clients to “sort through vast quantities of television content in order to find clips that discuss items of interest to them.” TVEyes records 1,400 channels’ worth of TV broadcasts, 24 hours a day, and makes the copied content searchable by also copying the closed-captioned text that accompanies the videos. Clients can search for videos based on keywords and play unlimited video clips, each up to ten minutes in duration, and may archive, download, and share clips by e-mail. Clients pay $500 per month for these services.

The District Court held that the searching, archiving, and watching functions offered by TVEyes constituted fair use, but that the downloading and e-mailing functions did not. Fox only challenged the “watch” function (and its ancillary functions like downloading, archiving, and sharing), but not the search function.

At the outset of its opinion, the Court of Appeals noted the similarities between this case and Authors Guild v. Google, Inc., in which the court held that mass copying of books for purposes of limited text searching was fair use, but it explained that Authors Guild “test[ed] the boundaries of fair use,” and that TVEyes “has exceeded those bounds.” In sum, the court held that TVEyes’ re-distribution of copyrighted content was only modestly transformative under the first fair use factor, but that other fair use factors outweighed any transformative purpose. Despite myriad recent case law holding that transformative use is the most important fair use factor, the TVEyes court seemed to hearken back to a slightly earlier era of fair use and reiterated that the fourth factor – market harm – is “the single most important element.”

The court held that TVEyes’ copying could be considered transformative in that “it enables TVEyes’s clients to isolate from the vast corpus of Fox’s content the material that is responsive to their interests, and to access that material in a convenient manner.” Similar to the Sony “Betamax” case, the court noted that TVEyes’ watch function was also akin to time- and place-shifting, and “certainly qualifies as technology that achieves the transformative purpose of enhancing efficiency,” and so was “at least somewhat transformative.” However, the transformative character of the use was not enough to outweigh the commercial nature of the services offered because TVEyes “essentially republishes that content unaltered from its original form, with no ‘new expression, meaning or message.’”

The court found the second factor – the nature of the copyrighted works – inconsequential, but placed significant weight on the third factor, which analyses the amount of the copyrighted works made available to the public. This factor weighed in favor of Fox because, unlike in Authors Guild where Google Books made available only snippets, “TVEyes makes available virtually the entirety of the Fox programming that TVEyes users want to see and hear,” and given the brevity of most news reports, at very least copied and distributed “the entirety of the message conveyed by Fox to authorized viewers of the original” content.

Turning to the fourth factor, the Second Circuit agreed with Fox that “TVEyes undercuts Fox’s ability to profit from licensing searchable access to its copyrighted content to third parties.” Consumers were clearly willing to pay for such a service, and TVEyes therefore “deprives Fox of revenue that properly belongs to the copyright holder,” effectively usurping the market for Fox to offer similar aggregation, searching, and licensing services for its own content. This usurpation, combined with the amount of content offered and the modest transformativeness overshadowed by TVEyes’ commercial use of Fox’s content, defeated TVEyes’ fair use defense. The court remanded with instruction to the District Court to amend its permanent injunction accordingly.

Judge Kaplan of the Southern District of New York, sitting by designation, filed a separate concurring opinion to express his disagreement with the majority’s finding that TVEyes’ uses were at all transformative. He opined that the “somewhat transformative” designation was irrelevant given that the other fair use factors outweighed the transformative use, and that issuing such dicta would serve only to confuse the already complicated question of what constitutes transformative purpose. Nonetheless, Judge Kaplan expressed his own views on why TVEyes’ use of Fox’s content was not transformative, including that the mere “enhancing the efficiency with which copies of copyrighted material are delivered to secondary issuers” was not transformative because TVEyes simply repackaged and delivered the original content with no news aesthetics, insights, or understandings.

The Second Circuit’s decision is significant in that it further defines the outer boundaries of fair use by providing a concrete example of what falls outside the doctrine, which is helpful given the arguably expansive implications of the Authors Guild decision, and by distinguishing a facially similar service from the Google Books project it deemed fair use in that case. It also signals a potential shift in focus back to the “market harm” factor of fair use, and away from a strict focus on transformative purpose, but at the same time adds to the growing sense of confusion about what may be considered transformative, or in this case, “somewhat transformative.”

Cowan, DeBaets, Abrahams & Sheppard LLP drafted an amicus brief in this case on behalf of American Photographic Artists, American Society of Media Photographers, Digital Media Licensing Association, National Press Photographers Association, and Professional Photographers of America, in support of Fox News Network.

DMCA Takedown Notices Require Fair Use Considerations

Nancy Wolff and Josh Wolkoff, Cowan DeBaets Abrahams & Sheppard, LLP

Lenz v. Universal Music Corp., Case Nos. 13-16106 and 13-16107, in the United States Court of Appeals for the Ninth Circuit.

The Digital Millennium Copyright Act (DMCA) was enacted in 1998 to address in part issues created by the internet and the widespread posting of content by users. In reforming the Copyright Act in 1978, the drafters thought that this Act would serve well into the future as it was content neutral but they could not foresee the way the Internet dramatically altered the way users exchanged content online and how perfect copies of copyrighted content could be virally distributed in seconds. Internet service providers (ISPs) were concerned with strict liability and monetary damages based on content posted by users and hosted on their servers over which they could not monitor and control. Section 512 of the Copyright Act was enacted to balance the concerns of ISPs and copyright owners. Qualified ISP were granted immunity from liability if they received a proper notice of infringement and expeditiously removed the infringing content.

There has been much litigation over the years regarding various aspects of the DMCA, including whether a copyright owner is required to consider whether the use made of the uploaded content is considered a fair use and not an infringement before issuing a takedown notice. Because of the massive amount of content uploaded by users, and the difficulty to search the ever increasing number of sites, content owners, including the music industry, employ technology to crawl the internet to find unlicensed content in order to end the ISP the requisite takedown notice.

A test case was brought in 2007 by Stephanie Lenz, a mother who sued Universal Music Group after YouTube removed a 29-second video of her toddler dancing to Prince’s “Let’s Go Crazy” in response to a DMCA takedown notice submitted by Universal Music Group, Prince’s music publisher. Not surprisingly, the Electronic Frontier Foundation, a pro user group supported Lenz in bringing this test case. Dubbed the “dancing baby case,” Lenz argued that her video was protected by the doctrine of fair use and that Universal’s takedown notice violated a section of the DMCA that provides liability for knowingly making material representations because it misrepresented that the video was infringing without considering fair use . Under the DMCA, a proper takedown notice must include a statement that the owner or its agent has a “good faith belief” that the use of the copyrighted work is not authorized under the law.

The case ultimately made its way to the Ninth Circuit Court of Appeals. An appeal the court was asked to examine whether fair use was a right under copyright and an authorized use, or a defense to infringement and unauthorized. In a significant ruling to content owners and ISP’s, the court issued a bright line rule that copyright holders must consider the fair use doctrine before issuing takedown notices to remove otherwise infringing content under the DMCA. The Court’s decision makes clear that a failure to do so can open the door to nominal monetary damages and attorneys’ fees for any material misrepresentations made (or improper procedures used) in the course of pulling content from service providers like YouTube. The court explained that fair use must be treated differently than other affirmative defenses because fair use is not merely an exception to an infringement – it is one that that is expressly “authorized by law” under Section 107 of the Copyright Act.

The Ninth Circuit took great pains, however, to qualify the thrust of its ruling, suggesting that it was “mindful of the pressing crush of voluminous infringing content that copyright holders face in a digital age.” In particular, a sender must only form a “subjective good faith belief” that the use is not a fair use or not authorized under the law. The inquiry “need not be searching or intensive” and, in fact, the Court recognized the role that computer algorithms and automated programs might play in making such fair use determinations and issuing proper takedown notices. The Ninth Circuit also confirmed that the question of liability for material misrepresentations does not hinge on whether or not the use is indeed a fair use: courts are “in no position to dispute the copyright holder’s belief even if [the court] would have reached the opposite conclusion.”

As a result content owners should review their notice and takedown procedures in order to ensure that their procedures give due consideration to potential fair uses. DMLA, in watching this case over the years, revised the declaration in its DMCA notice to include reference to a fair use review: I have a good faith belief that use of the material in the manner complained of herein is not authorized by COPYRIGHT HOLDER, its licensing representatives, or the law and is not a fair use.

Even if using recognition technology to find infringing uses, someone should review the use to determine if the use is a fair use or not. As fair use is determined on a case by case basis, and in not the easiest area of the law, the determination just needs to be made in good faith. As noted by the Ninth Circuit, it is not a material misrepresentation if a court might come out differently. Fair use is a judgment call after weighing the requisite four factors. DMLA has a webinar on fair use found here and the Copyright Office has published an index of fair use cases [http://copyright.gov/fair-use/]