Court narrowly construes damages provision of DMCA Section 512(f); litigation fees not recoverable

A federal court this week narrowly construed the damages and attorneys' fees provisions of the DMCA section that provides a cause of action for sending knowingly false takedown notices. The court held that a plaintiff in a case under 17 USC § 512(f) may only recover damages "proximately caused by the misrepresentation to the service provider and the service provider’s reliance on the misrepresentation" and may only recover attorneys' fees under Section 512(f) for pre-litigation activity -- "i.e., in drafting and issuing the counter notice" -- but not for litigating the case itself.
Order on damages and attorneys fees

The ruling came in the Lenz v. Universal case, in which UMG, acting on behalf of Prince, issued a takedown notice to YouTube over a 29-second video that features a baby dancing to "Let's Go Crazy." According to the complaint, Stephanie Lenz uploaded the video to YouTube Feb. 8, 2007; UMG sent a takedown notice June 4; YouTube removed the video shortly thereafter; and Lenz filed a DMCA counternotice June 27. UMG never sued for copyright infringement, and so YouTube restored the video in mid-July. On July 24, 2007, represented by the EFF, Lenz sued under Section 512(f), which provides a cause of action against "Any person who knowingly materially misrepresents under this section...that material or activity is infringing." As of today, the video, which Lenz says she posted "for her family and friends to enjoy," has been viewed 954,167 times.

So, assuming that Lenz can indeed show that UMG "knowingly materially misrepresent[ed]" that the video was infringing, what damages can she recover? The statute says she can get:

any damages, including costs and attorneys’ fees, incurred by [her]...[if she 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...

Judge Jeremy Fogel's decision concludes Lenz can recover even if she did not suffer economic losses. But I don't see how Lenz suffered more than nominal losses here; she was simply annoyed that her video (hosted for free by YouTube) was temporarily removed, and she found some lawyers/activists who jumped at the chance to make a federal case out of it. Under the court's decision, Lenz may recover for attorneys' "fees incurred both prior to litigation–i.e., in drafting and issuing the counter notice." But such fees must be minimal here. The EFF attorneys spent 30 seconds watching the video, and I'm sure it took them only about 5 more to reach their conclusion that this was a fair use. Drafting and sending a counternotice should have taken them only about 15 minutes. Realistically, the fees unrelated to the actual litigation (which the court held are recoverable even though EFF works pro bono) are probably well under $1,000. The court's interpretation of Section 512(f) as excluding from recoverable fees the fees incurred in the litigation itself makes sense; a plaintiff who suffered little or no actual damages should not be able to effectively manufacture massive damages in the form of attorneys' fees by engaging in years of litigation over an issue that was effectively remedied through the counternotice process. As Judge Fogel notes (citing, ironically, an article critical of copyright owners' takedown practices), the whole point of the DMCA's notice-and-takedown (and counternotice) procedure is to resolve these matters outside of the courthouse.

All is not lost for Lenz, however. Though, if Lenz prevails, she (or, more precisely, EFF) won't be able to recover litigation fees under Section 512(f), she may be able to do so under 17 USC § 505, which provides that in copyright cases, "the court in its discretion may allow the recovery of full costs ... [and] a reasonable attorney's fee to the prevailing party." Litigation-related attorneys' fees in this case, which has now dragged on for 2 1/2 years, could reach well into the six figures for each side. The Supreme Court has opined that factors the court may consider in exercising its discretion to award attorneys' fees to a prevailing party include "frivolousness, motivation, objective unreasonableness (both in the factual and in the legal components of the case) and the need in particular circumstances to advance considerations of compensation and deterrence." Fogerty v. Fantasy, Inc., 510 US 517, n.19 (1994).

Lastly, keep in mind that all this talk about damages and attorneys' fees is relevant only if Lenz ends up prevailing on her substantive Section 512(f) claim. While I've yet to meet anyone who thinks it was actually a good idea for UMG to send a notice on this particular video, it's far from clear that Lenz will be able to prevail under the Ninth Circuit's standard set forth in Rossi v. MPAA, which requires a showing of subjective bad faith on the part of the copyright owner (i.e., the plaintiff must show that the copyright owner actually believed it was sending a takedown notice on non-infringing material); a showing that a reasonable copyright owner would not have sent the notice is insufficient to sustain a cause of action. Indeed, in an earlier ruling in this case, Judge Fogel said he "has considerable doubt that Lenz will be able to prove that Universal acted with the subjective bad faith required by Rossi, and following discovery her claims well may be appropriate for summary judgment." I expect those summary judgment proceedings to occur over the next few months.

(h/t Prof. Eric Goldman)