Online free speech: Damages a possibility in Universal Musics takedown of dancing baby

U.S. District Judge Jeremy Fogel ruled late Thursday that Stephanie Lenz can get some limited recompense from the music label for ordering YouTube to drop a 29-second video of her son dancing to the music of Universal artist Prince.

Lenz still must prove her case before collecting anything. But it appears to be the first answer to the question of how an apparently ill-brought takedown notice should be punished under the Digital Millennium Copyright Act.

“The decision is significant as the first one to construe the question of how broadly the terms damages and fees should be construed under the DMCA,” wrote Ian Ballon, Internet law expert at Greenberg Traurig, in an e-mail.

The Electronic Frontier Foundation sued Universal on behalf of Lenz in 2008, arguing that the music company’s lawyers should have taken a moment to consider whether Lenz had a fair-use right to post the clip before firing off a takedown notice to YouTube. YouTube removed the video, but restored it six weeks later when Lenz filed a counternotice.

In going after damages, EFF, which aims to protect civil liberties on the Web, wants to make real a deterrent for copyright holders who abuse the takedown process under §512(f) of the DMCA.

Universal, which is represented by Los Angeles’ Munger, Tolles & Olson, argued that Lenz couldn’t have suffered any legitimate damages as a result of her video being pulled off of YouTube. Fogel disagreed, writing that Universal’s construction would make the statute toothless.

“Requiring a plaintiff who can make such a showing 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,” Fogel wrote (pdf).

However, Fogel indicated that only a limited amount of damages and legal fees could be recovered — specifically, those that were “proximately caused by the misrepresentation” to YouTube and YouTube’s reliance on it.

Ballon wrote that the judge “narrowly construed” the DMCA provisions, effectively limiting attorneys’ fees to legal work done prior to filing the lawsuit. EFF would have to apply for litigation fees — which it said totaled more than $400,000 — under a different section of copyright law, §505 of the Copyright Act. (That section “makes fee awards discretionary in the judgment of the court,” Ballon noted.)

Corynne McSherry, an EFF lawyer representing Lenz, called the ruling a victory.

“I think what’s important here is that someone who’s had their speech chilled can move forward and bring a lawsuit under 512(f),” said McSherry.

Fogel’s ruling came in response to a summary judgment motion brought by EFF. In it he also cleared Lenz of accusations of bad faith in bringing the suit and seeking damages.

Ballon said Fogel’s ruling scales back a decision earlier in the case that inspired others to file similar suits.

“While the earlier Lenz decision encouraged users to seek sanctions for wrongful take down notices … the narrow scope of damages and attorneys fees potentially recoverable for such claims under Lenz will likely scale back the volume and frequency of such claims (except perhaps in cases such as Lenz itself where special interest groups take on a case pro bono),” Ballon wrote in an e-mail.

Munger, Tolles lawyers working on the case declined to comment or didn’t respond to phone calls seeking comment.The lawsuit asks for a declaratory judgment that Lenz’s home video does not infringe any Universal copyright, as well as damages and injunctive relief restraining Universal from bringing further copyright claims in connection with the video.

This lawsuit is part of EFF’s ongoing work to protect online free speech in the face of bogus copyright claims. EFF is currently working with Stanford’s Fair Use Project to develop a set of “best practices” for proper takedowns under the Digital Millennium Copyright Act.