By now, you’ve probably heard about the “Dancing Baby” lawsuit, involving a botched attempt by Universal Music to have YouTube remove a video 29-second video of a playful toddler because a Prince song can be heard in the background. Today a federal appeals court sided on one important issue with that kid’s mother, who is suing Universal, claiming the music giant overstepped the law by not considering that the background music falls under the umbrella of an acceptable fair use.

Just a quick primer on this case for newcomers. In Feb. 2007, the mom posted the above clip to YouTube. It features her young child happily moving around the kitchen while “Let’s Go Crazy,” from the 1984 Prince and The Revolution album Purple Rain, plays in the background.

Someone at Universal, back before the entire copyright takedown process was automated, flagged this non-commercial clip as a copyright infringer and included it in a list of takedown requests sent to YouTube. The video platform did briefly remove the video, but the mom — with the help of an attorney — was able to get it reinstated after convincing the Google-owned site that her video constituted a fair use of the song.

Not content to let this happen to others, the mom filed a lawsuit [PDF] against Universal, saying the company had violated the Digital Millennium Copyright Act.

That law states that that “Any person who knowingly materially misrepresents” that something infringes on copyright “shall be liable for any damages, including costs and attorneys’ fees, incurred by the alleged infringer… 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.”

The mom believes that her video was so obviously a case of fair use that Universal was knowingly filing a false DMCA claim when it asked YouTube to remove the clip.

Universal countered that the DMCA doesn’t mention fair use and that fair use is not an authorized use of a song, but an excusable use. To the publisher, this means that the “shoot first, ask questions later” approach of the takedown demand was appropriate: Universal requested a takedown because it was not an authorized use, and it was reinstated when it was later determined to be fair use. This after-the-fact consideration of fair use is acceptable, according to Universal.

But as noted by the court in a 2008 order denying Universal’s motion to dismiss, the Copyright Act’s section on Fair Use explicitly states that fair use is “not an infringement of copyright.”

Universal also tried to argue against the need to proactively consider fair use before issuing a DMCA takedown request, saying that it would slow down the process of combating actual infringement. But the District Court noted that the DMCA “already requires copyright owners to make an initial review
of the potentially infringing material prior to sending a takedown notice… A consideration of the applicability of the fair use doctrine simply is part of that initial review.”

Nearly nine years on since that video was first posted, the case continues to linger, with the court refusing summary judgment requests from both sides.

There was some significant movement on the matter this morning though, as the Court of Appeals for the 9th Circuit held [PDF] that the DCMA “requires copyright holders to consider fair use before sending a takedown notification,” and that these copyright holders can be sued to determine whether their actions violated the law.

“Fair use is not just excused by the law, it is wholly authorized by the law,” reads the majority opinion.

“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,” continues the opinion. “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.”

And since the law expressly authorizes fair use, explains the court, it’s a “misnomer” to say it’s a defense that excuses conduct.

Likewise, since Universal acknowledges that it must take other legally authorized uses — like compulsory licenses — into consideration before demanding a takedown, “Universal’s argument that it need not consider fair use in addition to compulsory licenses rings hollow.”

The more complicated question involves what exactly the mom will need to prove in court to make her case that Universal violated the DMCA by not considering fair use.

The appeals court has set the bar pretty high on this aspect of the case. Universal does not need to argue that the use of the Prince song in the video infringed on any copyright. It only needs to show that it considered the issue of fair use and formed a genuine good faith belief that it didn’t apply, even if Universal was mistaken in the end.

“A copyright owner cannot be liable simply because an unknowing mistake is made, even if the copyright owner acted unreasonably in making the mistake,” writes the court. “Rather, there must be a demonstration of some actual knowledge of misrepresentation on the part of the copyright owner.”

If that good faith claim is just “lip service,” and there is evidence showing that Universal believed something was fair use and then went ahead and requested the takedown, the company would be liable under the law, says the court.

The mom has thus far presented evidence that Universal failed to form any opinion about the video’s fair use. Universal counters that its policy at the time — while not explicitly calling out fair use — did effectively take the possibility into account.

The court says it will be up to a jury to determine “whether Universal’s actions were sufficient to form a subjective good faith belief about the video’s fair use or lack thereof.”

Since the video itself was non-commercial and was only removed from YouTube for a brief period of time, Universal had argued that the mom had no claim for damages. The appeals court allowed that she may seek “nominal” damages, but this is more a case of principal and setting legal precedent than trying to hit the courtroom jackpot.

“Today’s ruling sends a strong message that copyright law does not authorize thoughtless censorship of lawful speech,” explains Corynne McSherry, legal director at the Electronic Frontier Foundation, which provided pro bono representation for the mom in this case.

The decision that copyright holders must consider fair use has more impact now than it did when Universal first tried to take the video down.

In 2007, many DMCA requests were compiled and complied with manually. Now, both the copyright holders and the platforms like YouTube and Vimeo have all but completely automated their processes regarding the DMCA.

But determining fair use properly would seem to require at least some level of human intervention — having a living, thinking being who can review a clip and make a determination based on familiarity with copyright law.

However, the court held today that human review is not absolutely necessary the “implementation of computer algorithms appears to be a valid and good faith middle ground for processing a plethora of content while still meeting the DMCA’s requirements to somehow consider fair use.”

The appeals panel gives the example of an algorithm that sends a takedown notice when a video meets three conditions:
1. The video track matches the video track of a copyrighted work submitted by a content owner;
2. The audio track matches the audio track of that same copyrighted work;
3. Nearly the entirety… is comprised of a single copyrighted work.

The EFF notes that the appeals panel’s ruling has come out just as the election campaigns are starting to heat up. Politicians have been known to try to use copyright to silence critics — like the California city that is currently suing a man who used city council footage to make videos critical of local leaders.

Similarly, Philip Morris International used copyright to successfully block an anti-smoking group from posting the company’s embarrassing promotional videos of events featuring strippers, DJs in panda suits, and an all-male breakdance party.

“The decision made by the appeals court today has ramifications far beyond [the plaintiff’s] rights to share her video with family and friends,” said McSherry. “We will all watch a lot of online video and analysis of presidential candidates in the months to come, and this ruling will help make sure that information remains uncensored.”

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