misrepresentation – Attorney Evan Brown

September 6, 2020 Copyright, DMCA

YouTube creator’s misrepresentation case over DMCA takedown notices lacked certain key evidence

Plaintiff ran a YouTube channel. Defendant sent takedown notices under the Digital Millennium Copyright Act (DMCA) to YouTube alleging that plaintiff infringed defendant’s copyright. Plaintiff sued defendant under 17 U.S.C. §512(f), which provides for recovery when a person sends a DMCA takedown notice based on “knowingly materially misrepresented” facts.

The district court granted defendant’s summary judgment motion. Plaintiff sought review with the Eleventh Circuit. On appeal, the court affirmed the lower court’s finding that defendant did not knowingly materially misrepresent facts when it sent the DMCA takedown notices to YouTube.

The DMCA’s good faith standard

The DMCA relieves online service providers (such as YouTube) of liability for storing copyright infringing content if, among other things, the service provider properly responds to the copyright holder’s takedown notice. The notice must state that the copyright holder has a “good faith belief” that the identified content infringes. The copyright holder can be liable for damages if it “knowingly materially misrepresents” that the identified content infringes. Copyright law provides that if use of content is fair use, then it is not infringing.

In 2016, the Ninth Circuit evaluated the questions of what it means for a DMCA takedown notice sender to have a “good faith belief” and to “knowingly materially misrepresent” that content infringes. In that case (Lenz v. Universal Music Corp., 815 F.3d 1145 (9th Cir. 2016)), the court held that having a “good faith belief” that certain content infringes requires that the copyright holder, before sending a takedown notice, consider if the potential infringement is a fair use. And the court held that failure to consider fair use before issuing a takedown notice is a misrepresentation of copyright infringement.

What diligence must a takedown notice sender undertake?

What kind of belief must the copyright holder have to be in line with the conduct required of the DMCA? The Lenz court held that a copyright holder’s subjective good faith belief that a use is both unauthorized and not fair use serves as a complete defense to a misrepresentation claim.

Counsel’s consideration of fair use was sufficient

In this case, defendant’s attorneys testified in affidavits that they investigated whether plaintiff’s YouTube uploads infringed. And they testified that they evaluated whether the uploads were fair use. So the court found that defendant, by relying on their attorneys’ investigations and opinions, reasonably believed in good faith that plaintiff’s videos infringed and did not constitute fair use, prior to filing the takedown notices.

The court found that plaintiff’s evidence did not show otherwise. Plaintiff testified in her deposition that she “knew” defendant did not consider fair use. She said that if defendant did consider fair use, it would not have sent the DMCA takedown notices. In the court’s view, this proffered evidence was just a bare and speculative statement, not evidence. It found that plaintiff failed to provide any meaningful evidence that defendant did not consider the fair use doctrine and that it did not have good faith when it submitted the takedown notices.

Johnson v. New Destiny Christian Center Church, Inc., 2020 WL 5289881 (11th Cir., September 4, 2020)

About the author:

Evan Brown is a Chicago technology and intellectual property attorney. Call Evan at (630) 362-7237, send email to ebrown [at] internetcases.com, or follow him on Twitter @internetcases.

July 25, 2014 Fraud/Misrepresentation

Lawsuit against Yelp over how it marketed its review filters can move forward

Plaintiff restaurant owner sued Yelp under California unfair competition law, claiming that certain statements Yelp made about the filters it uses to ascertain the unreliability or bias of user reviews were misleading and untrue. For example, plaintiff alleged that Yelp advertised that its filtering process “takes the reviews that are the most trustworthy and from the most established sources and displays them on the business page.” But, according to plaintiff, the filter did not give consumers the most trusted reviews, excluded legitimate reviews, and included reviews that were demonstrably false and biased.

Yelp filed an Anti-SLAPP motion to strike plaintiff’s complaint under California Code of Civil Procedure section 425.16, arguing that the complaint sought to interfere with Yelp’s free speech rights, and targeted speech that appeared in a public forum and was a matter of public interest. The trial court granted the motion, and plaintiff sought review with the Court of Appeal of California. On appeal, the court reversed.

It held that a motion to strike under the mechanism of California’s Anti-SLAPP statute was unavailable under section 425.17 (c), which prohibits Anti-SLAPP motions against “any cause of action brought against a person primarily engaged in the business of selling or leasing goods or services,” where certain other conditions are met, including the statement being made for purposes of promoting the speaker’s goods or services.

The appellate court disagreed with the lower court which found that Yelp’s statements about its filters were mere “puffery”. Instead, the court held that these actions disqualified the Anti-SLAPP motion under the very language of the statute pertaining to commercial speech.

Demetriades v. Yelp, Inc., 2014 WL 3661491 (Cal. Ct. App. July 24, 2014)

Evan Brown is an attorney in Chicago advising clients on matters dealing with technology, the internet and new media.

September 9, 2010 Defamation, Fraud/Misrepresentation, Section 230

Yelp successful in defamation and deceptive acts and practices case

Reit v. Yelp, Inc., — N.Y.S.2d —, 2010 WL 3490167 (September 2, 2010)

Section 230 of Communications Decency Act shielded site as interactive computer service; assertions regarding manipulation of reviews was not consumer oriented and therefore not actionable.

As I am sure you know, Yelp! is an interactive website designed to allow the general public to write, post, and view reviews about businesses, including professional ones, as well as restaurants and other establishments.

Lots of people and businesses that are the subject of negative reviews on sites like this get riled up and often end up filing lawsuits. Suits against website operators in cases like this are almost always unsuccessful. The case of Reit v. Yelp from a New York state court was no exception.

Plaintiff dentist sued Yelp and an unknown reviewer for defamation. He also sued Yelp under New York state law for “deceptive acts and practices”. Yelp moved to dismiss both claims. The court granted the motion.

Defamation claim – protection under Section 230

Interactive computer service providers are immunized from liability (i.e., they cannot be held responsible) for content that is provided by third parties. So long as the website is not an “information content provider” itself, any claim made against the website will be preempted by the Communications Decency Act, at 47 U.S.C. 230.

In this case, plaintiff claimed that Yelp selectively removed positive reviews of his dentistry practice after he contacted Yelp to complain about a negative reivew. He argued that this action made Yelp an information content provider (doing more than “simply selecting material for publication”) and therefore outside the scope of Section 230’s immunity. The court rejected this argument.

It likened the case to an earlier New York decision called Shiamili v. Real Estate Group of New York. In that case, like this one, an allegation that a website operator may keep and promote bad content did not raise an inference that it becomes an information content provider. The postings do not cease to be data provided by a third party merely because the construct and operation of the website might have some influence on the content of the postings.

So the court dismissed the defamation claim on grounds of Section 230 immunity.

Alleged deceptive acts and practices were not consumer oriented

The other claim against Yelp — for deceptive acts and practices — was intriguing, though the court did not let it stand. Plaintiff alleged that Yelp’s Business Owner’s Guide says that once a business signs up for advertsing with Yelp, an “entirely automated” system screens out reviews that are written by less established users.

The problem with this, plaintiff claimed, was that the process was not automated with the help of algorithms, but was done by humans at Yelp. That divergence between what the Business Owner’s Guide said and Yelps actual practices, plaintiff claimed, was consumer-oriented conduct that was materially misleading, in violation of New York’s General Business Law Section 349(a).

This claim failed, however, because the court found that the statements made by Yelp in the Business Owner’s Guide were not consumer-oriented, but were addressed to business owners like plaintiff. Without being a consumer-oriented statement, it did not violate the statute.

Other coverage of this case:

Rebecca Tushnet

August 20, 2008 Copyright, DMCA, Fraud/Misrepresentation

Sender of DMCA takedown notice should consider fair use

Lenz v. Universal Music Corp., No. 07-3783 (N.D. Cal. August 20, 2008). [Download the opinion]

Hat tip to Joe Gratz for breaking this story.

One of the things that a person sending a takedown notice under the Digital Millennium Copyright Act (DMCA) has to swear to is that he or she “has a good faith belief that use of the material in the manner complained of is not authorized by the copyright owner, its agent, or the law.” 17 U.S.C. §512(c)(3)(A) (emphasis added). If the sender of the takedown notice makes a knowingly material misrepresentation as to whether the law authorizes the use of the material, the party whose content is taken down can sue under 17 U.S.C. §512(f). This serves as a backstop against DMCA takedown abuses.

Suppose that the complained-of work may be protected by fair use. If the sender is deliberately ignorant of that possibility, can that result in a misrepresentation that runs afoul of 512(f)? That question had not been answered before today, when the U.S. District Court for the Northern District of California said “yes.”

The case is Lenz v. Universal Music Corp., No. 07-3783. You may have heard of this case before, as it’s the one where the mom filmed her daughter dancing to Prince’s “Let’s Go Crazy” and uploaded that to YouTube, only to have it removed after a Universal DMCA takedown notice. Lenz sued under §512(f) and Universal moved to dismiss.

In its motion to dismiss, Universal contended that copyright owners cannot be required to evaluate the question of fair use prior to sending a takedown notice because fair use is merely an excused infringement of a copyright rather than a use authorized by the copyright owner or by law.

But the court disagreed. “[T]he fact remains that fair use is a lawful use of a copyright. Accordingly, in order for a copyright owner to proceed under the DMCA with ‘a good faith belief that use of the material in the manner complained of is not authorized by the copyright owner, its agent, or the law,’ the owner must evaluate whether the material makes fair use of the copyright.” The court went on to say that “[a]n allegation that a copyright owner acted in bad faith by issuing a takedown notice without proper consideration of the fair use doctrine thus is sufficient to state a misrepresentation claim pursuant to Section 512(f) of the DMCA.”

Because Lenz’s complaint contained allegations of this nature, it was detailed enough to pass Twombly muster [Bell Atlantic Corp. v. Twombly, — U.S. —-, 127 S. Ct. 1955, 1964-65 (2007)], and the case moves forward.

The practical effect of this decision is that one sending a DMCA takedown notice without considering whether the person who posted the content is making a fair use, does so at his or her peril. Let’s be clear — the decision does not mean that sending a takedown notice in a situation where it turns out to be a fair use will automatically result in a finding of §512(f) misrepresentation. But it does add another implicit item on the checklist of the takedown notice sender.

November 28, 2007 Fraud/Misrepresentation

Online purchaser not entitled to $1 hard drives

Perez v. Luu, — S.W.3d —-, (Tex. App. November 1, 2007).

Perez sued Luu in Texas state court after Luu refused to fulfill Perez’s order of 100 hard drives that Perez ordered from Luu online. Luu’s website mistakenly listed the price of the hard drives as $1 each, when in reality Luu charged closer to $1,200 apiece.

The matter proceeded to trial and the court entered judgement in favor of Luu. Perez appealed, and the appellate court affirmed. It held that Perez failed to establish a violation of the Texas Deceptive Trade Practices Act.

The court determined that the relevant portions of the statute [Tex. Bus. & Com. Code Sec. 17.41 et seq.] required a showing of intent to misrepresent the price of goods being offered for sale. Luu introduced evidence showing that the $1 pricing was merely a mistake — the website was new and the developer had previously used a $1 quantity for testing purposes. Moreover, there was language on Luu’s website which gave him the right to correct any errors in pricing.

Beaded jewelry website tussle turns into lawsuit alleging bogus DMCA takedown notice

Does a hosting provider breach the contract with its customer when it responds to a DMCA takedown notice concerning its customer’s content? The plaintiff in this case would have you believe that. [Download the Complaint]

Jades Creations, LLC v. White, No. 07-50225 (N.D. Ill., Filed November 16, 2007)

Rockford, Illinois-based Jades Creations, LLC has filed suit in federal court against its competitor in the beaded jewelry industry over what Jades claims were unmeritorious takedown notices sent to Earthlink under the Digital Millennium Copyright Act.

Back in October, SW Creations sent a DMCA takedown notice to Earthlink, the host of Jades Creations’ Web site, claiming that material located thereupon infringed SW Creations’ copyright and trademark rights. (Never mind the DMCA does not apply to trademarks.) Jades, of course, disputed the fact that there was infringing content on its site, and successfully had access to its site restored after sending Earthlink a counternotification.

But Jades didn’t stop there. Obviously perturbed by what it believed to be an unwarranted takedown notice that caused it to lose business, it filed a lawsuit in the Northern District of Illinois, asking for a declaration of non-infringement and asserting various tort claims for the takedown notice.

One of the claims is for tortious interference with the contract between Jades and her hosting provider Earthlink. This is intriguing, but it looks like there could be a bit of a hurdle here.

Under Illinois law, a successful plaintiff in a tortious interference with contract action has to prove, among other things, that an actual breach of contract occurred because of the defendant’s conduct. Belden Corp. v. InterNorth, Inc., 413 N.E.2d 98 (Ill. App. 1st Dist. 1980). Did Earthlink breach the contract with its hosting customer when it obeyed the demands of a third party DMCA takedown notice?

Jades alleges that this was a breach (see paragraph 60 of the complaint). Do you agree?

Earthlink’s terms of service can be found here. And remember, 17 U.S.C. 512(g) provides that “a service provider shall not be liable to any person for any claim based on the service provider’s good faith disabling of access to, or removal of, material or activity claimed to be infringing or based on facts or circumstances from which infringing activity is apparent, regardless of whether the material or activity is ultimately determined to be infringing.”

Tag: misrepresentation