Groundless Threats Of Copyright Infringement: US Court Explains Damages

A court in the US has for the first time outlined the basis on which people there can claim damages when a copyright owner makes a groundless claim of infringement and demands that material be taken offline.

Under US law a copyright owner can contact a service provider, such as a video sharing website, and demand that they take down material that infringes their rights. The service provider will usually take the material down first, then inform whoever posted it online of their actions and reasons.

US copyright law contains a safeguard against abuse of this process, though. Section 512(f) of the US Copyright Act says that anyone who misrepresents their rights in demanding the takedown of material will have to pay the person who posted it damages.

Exactly what those damages are has never been tested in court, though, until now. In a ruling from the US District Court for the Northern District of California judge Jeremy Fogel has ruled on how that right to damages should be interpreted.

Internet law expert Eric Goldman, who is associate professor of law at Santa Clara University School of Law in the US, said in his blog that this is the first time that a court has ruled on the exact meaning of that piece of the law.

"I can't recall another case discussing the damages requirements of a 512(f) claim," he wrote. "The only other definitive 512(f) plaintiff's win was Online Policy Group v. Diebold (also before Judge Fogel), which settled for $125k before Judge Fogel reached damages. As a result, I believe this is a novel ruling which could have significant implications for future 512(f) cases."

The case involved Stephanie Lenz and her uploading to YouTube of a video of her children dancing to a song by Prince, which was playing in the background. Universal Music issued YouTube with a takedown notice and Lenz sued, claiming that her video was protected by the 'fair use' provisions of US copyright law.

The Court had previously ruled that copyright holders should consider whether material is protected by fair use provisions before they issue takedown notices to service providers. In this ruling it considered what damages the person whose material had been taken down could claim.

Universal had claimed that economic damage had to be "more than marginal" in order for a case to succeed, while Lenz said that she should be entitled to all of her legal fees for disputing the takedown and taking her case to court.

The Court disagreed in part with both sides.

"The use of 'any damages' suggests strongly Congressional intent that recovery be available for damages even if they do not amount to … substantial economic damages," Judge Fogel ruled. "The statutory language, overall statutory scheme, and legislative history all are inconsistent with Universal’s narrow interpretation of 'any damages'."

The Court said, though, that Lenz was not entitled to her legal fees for bringing the case to court because the Copyright Act allowed her to issue a counter-notice asserting her right to publish the clip. Costs related to that counter-notice were allowed, it said, but not those involved in the court case.

Judge Fogel agreed with Universal that if people in Lenz's position were able to recover those costs they could instantly create a right to monetary damages just by hiring lawyers to go to court, thereby incurring costs that would have to be paid by copyright holders.

"Overall, I think the legal rules outlined in this case are more favorable to 512(f) plaintiffs than not, but they also remind us how 512(f)'s utility may be limited in practice," said Goldman in his blog. "This ruling illustrates how hard 512(f) plaintiffs have to work to find compensable damages. We don't see many 512(f) cases being brought. Watching this case, it's easy to see why."