Rare Ruling on Damages for Sending Bogus Copyright Takedown Notice–Lenz v. Universal

By Eric Goldman

Lenz v. Universal Music Corp., 5:07-cv-03783-JF (N.D. Cal. Feb. 25. 2010)

In the lawsuit over the allegedly bogus takedown of a YouTube video of a baby dancing to Prince’s “Let’s Go Crazy” (previous blog coverage), Judge Fogel has defined some standards for computing damages in a 17 USC 512(f) case, which creates a cause of action for sending certain types of bogus copyright takedown notices. I can’t recall another case discussing the damages requirements of a 512(f) claim–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.

512(f) says that the sender of an impermissible takedown notice “shall be liable for any damages, including costs and attorneys’ fees, incurred [by the 512(f) plaintiff] as the result of the service provider relying upon such misrepresentation…” Judge Fogel interprets the language to mean that “a §512(f) plaintiff’s damages must be proximately caused by the misrepresentation to the service provider and the service provider’s reliance on the misrepresentation.” Accordingly, 512(f) does not require plaintiffs to show that they suffered economic losses.

At the same time, the judge says that the statute does not include all damages that occurred “but for” the bogus takedown notice. Specifically, the attorneys’ fees and costs associated with actually bringing a 512(f) claim (as opposed to getting legal guidance to file a 512(g) counternotice) are not covered by 512(f). Instead, “while any fees incurred for work in responding to the takedown notice and prior to the institution of suit under § 512(f) are recoverable under that provision, recovery of any other costs and fees is governed by § 505.” Section 505 says that a court may award costs and reasonable attorneys’ fees to the prevailing party at its discretion. By definition, a 512(f) violation occurs only when the takedown notice sender has made a knowing and material misrepresentation, so most judges probably will exercise their discretion favorably towards a winning 512(f) plaintiff, but it’s not an automatic award. Furthermore, by implication, losing 512(f) plaintiffs could be ordered to pay the defendants’ costs and attorneys’ fees.

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. Not only must the 512(f) plaintiff overcome the Rossi case, which effectively mooted claims for erroneous takedown notices, but 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.

In the rest of the opinion, Judge Fogel rejects a number of other affirmative defenses advanced by Universal, including withering attacks that Lenz had bad faith and unclean hands.

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