In a victory for Progress Illinois, YouTube has restored the liberal web site's account, which had been disabled after Fox Television Stations, Inc. sent DMCA takedown notices on 3 videos that incorporated footage from WFLD, Fox' Chicago O&O. That third notice constituted a (temporarily) fatal third strike, causing YouTube to label Progress Illinois a "repeat infringer" under the DMCA and terminate its entire account, which now holds 132 videos.
Progress Illinois had contested the takedowns by filing a DMCA counternotice, claiming that its posting of the WFLD footage as a basis for political commentary was a non-infringing fair use under copyright law.
Under YouTube's policies -- which seek to track the DMCA -- the service "may" restore videos 10 business days after receiving a counternotice, as long as the copyright owner doesn't sue in the meantime. Fox never did sue, so today YouTube reposted the contested videos -- as well as all the others that had been disabled when the account was suspended.
Progress Illinois editor Josh Kalven had previously stated that the two sides were in negotiations regarding possible "guidelines" for the posting of WFLD footage. However, the site's counsel, Paul Alan Levy of Public Citizen, tells C&C that his client and Fox never reached a deal.
While Fox declined to sue within the 10-14 day DMCA window, that does not mean Progress Illinois is completely out of the woods. I'm not aware of any legal obstacle to Fox suing the site for copyright infringement after the counternotice window closes (as long as the suit is filed within the usual 3-year statute of limitations). I also believe that Fox can still seek an injunction ordering YouTube to remove the videos under 17 USC § 512(j), even if YouTube complied with the requirements necessary to fall within the § 512(c) safe harbor from a claim for monetary damages.
But for now, it's a clear win for Progress Illinois.