Lenz v. Universal Music Corp.: Court Excludes Litigation Fees from Calculation of Damages under DMCA § 512(f).

Copyright Patent

Lenz v. Universal Music Corp., Case No. 5:07-cv-03783-JF (N.D. Cal., Feb. 25, 2010)

Slip Opinion (Hosted by the Citizen Media Law Project)

On February 25, 2010, Judge Fogel for the Northern District of California held that a plaintiff suing over a wrongful Digital Millennium Copyright Act ("DMCA") takedown notice can only recover for damages that were proximately caused by said notice.  This effectively limits the plaintiff’s recovery to attorney's fees for pre-litigation activities such as the filing of the DMCA counter-notification.  To recover for attorney’s fees incurred in the actual § 512(f) suit, the plaintiff’s only recourse is in 17 U.S.C. § 505 of the Copyright Act – providing that “the court in its discretion may allow the recovery of full costs … [or] reasonable attorney’s fee to the prevailing party.”  In so holding, the court  may actually be discouraging 512(f) plaintiffs from bringing suit by limiting their compensable damages.

Ars Technica and Copyrights & Campaigns provide a general overview of the decision.  The Citizen Media Law Project offers briefs of all portions of the case.

In February 2007, Lenz posted a video of her baby son dancing to Prince's "Let's Go Crazy."  In June 2007, the video was taken down after Universal sent YouTube a DMCA takedown notice claiming that the video infringed its copyright in the Prince song.  The video was restored after Lenz filed a DMCA counter-notification claiming that her video’s use of the Prince song was fair use and non-infringing.  Lenz then proceeded to file suit against Universal alleging misrepresentation pursuant to 17 U.S.C. § 512(f) and tortious interference with her contract with YouTube.  She also sought a judicial declaration that she did not infringe on Universal’s copyrights.  Universal filed a motion to dismiss, which was granted on April 8, 2008.  Lenz was given leave to amend her complaint to re-plead her first and second claims for relief.  On April 18, 2008, Lenz filed the operative Second Amended Complaint (“SAC”), alleging only a claim for misrepresentation pursuant to 17 U.S.C. § 512(f).  In its August 20, 2009, order, the Court denied Universal’s motion to dismiss the SAC.  Universal subsequently filed its answer, and on October 30, 2009, after extensive discovery, Lenz filed the current motion for partial summary judgment which was subsequently granted by the court.

At issue in this case are the types of damages which can be recovered under § 512(f). The district court interprets the language of the statute 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" and that a plaintiff may only recover attorneys' fees under § 512(f) for pre-litigation activity -- "i.e., in drafting and issuing the counter notice" -- but not for litigating the case itself.  The court agreed with the defendant that recovery of any other costs and fees is governed by 17 U.S.C. § 505.  With this holding, the court recognized that the combination of the subjective bad faith standard and the proximate causation requirements may lead many potential § 512(f) plaintiffs to refrain from filing suit unless they have suffered substantial economic harm or other significant inconvenience.