Up until now, I believe, YouTube has consistently taken the position that it would not conduct its own fair use analysis of videos subject to DMCA notices, and would simply follow the procedures outlined in 17 U.S.C.§ 512(g), which provide that a host wait 10-14 days after receipt of a counternotice if it wishes to maintain its safe harbor from an infringement claim. In re-posting the video, YouTube subjects itself to a (very small) risk of liability from Hilton (né Mario Lavandeira), but will also earn the gratitude of those concerned that some copyright owners are abusing the DMCA's notice-and-takedown process to suppress political speech with which they disagree.
Here's the background: NOM's video, titled "No Offense," contains about 3 seconds from Lavandeira's "video blog" in which he calls Prejean a "dumb bitch" (NOM beeps out "bitch") because of her now-famous answer to a question from Lavandeira at the Miss USA pageant, in which she expressed opposition to same sex marriage. The ad argues that gay marriage opponents are routinely subject to "intolerance" by supporters, and uses Lavandeira's "bitch" comment as a prime example.
Lavandeira sent YouTube a DMCA takedown notice on or about April 30, at which point YouTube promptly took down the video. NOM responded with a counternotice on May 1. Normally in this situation, YouTube would wait 10-14 business days to restore the video -- at least until May 15. (YouTube would not re-post if Lavandeira sued in the meantime, which hasn't occurred.) But on May 5, NOM's attorney Barry Bostrom wrote a letter to YouTube requesting immediate re-posting of the video, on the grounds that Lavandeira could not have asserted in good faith that the video was infringing, given the obvious fair use defense.
To my surprise, YouTube agreed with Bostrom and has restored the video. In an email sent on the night of May 6, a member of YouTube's copyright team wrote Bostrom:
Dear Barry,YouTube deserves many kudos for this step. By re-posting the video fewer than 10 business days after receiving NOM's counternotice, it gave up the DMCA's safe harbor in the event Lavandeira sues YouTube. See 17 U.S.C.§ 512(g). I am very confident YouTube would prevail in such a suit, given that there was no infringement in the first place, see id. § 107 ("the fair use of a copyrighted work...is not an infringement of copyright"), but YouTube does deserve much credit for essentially waiving its safe harbor defense.
Thank you for your letter. We have reviewed the content in question and determined that this appears to be an example of fair use under Section 107 of the Copyright Act.
This content has been restored and your account will not be penalized. For technical reasons, it may take a day for the videos to be available again.
The YouTube Team
So what happens now? Lavandeira could sue YouTube or NOM for copyright infringement; I predict a court would dismiss such a suit at the earliest opportunity, and probably issue Rule 11 sanctions for bringing such a patently frivolous case. NOM could also sue Lavandeira under 17 U.S.C. § 512(f) for having made a bad-faith accusation of infringement in his initial DMCA takedown notice.
Interestingly, the Miss Universe organization ("MUO") has also made a claim on the same ad (or the 30-second version), objecting to the use of its footage, which depicts Prejean answering the question about same sex marriage. I don't believe MUO ever sent a DMCA notice (it wasn't necessary since Lavandeira had sent one first), but MUO could theoretically send one now. Such a notice would be just as meritless as Lavandeira's, and it would be interesting to see how YouTube reacts if MUO takes such a step.
All in all, this is very positive step by YouTube, and a blow to those like Lavandeira who have abused copyright laws in an effort -- however ineffective -- to silence their political opponents.