The Ninth Circuit Court of Appeals issued an important ruling last Fall in the long-running “dancing baby” case, affirming that copyright holders must consider whether a use of material is fair before sending a takedown notice under the Digital Millennium Copyright Act. We welcomed that ruling, but the majority decision also set the bar for enforcing that requirement higher than Congress intended. So Stephanie Lenz asked the Ninth Circuit to rehear the case en banc to address those elements of its ruling that risk leaving many victims of improper takedowns without a practical vehicle to vindicate their rights (EFF and the San Francisco law firm of Keker & Van Nest, LLP, represent Stephanie Lenz in the case).

In an amended opinion issued today, the Ninth Circuit declined Lenz's request for rehearing. At the same time, the appeals court made some interesting changes to its first ruling.

What hasn’t changed: The court’s new opinion stands by its earlier determination that rightsholders must consider whether a use is a lawful fair use before issuing a takedown notice. It leaves intact its determination that fair use is not just a carve-out of the copyright system but a right on the same level of those described in the rest of the statute. Finally, the new opinion retains its determination that a victim of takedown abuse can vindicate her rights even if she cannot show actual monetary loss.

However, the court did excise several paragraphs stressing that a fair use analysis need not be “searching or intensive” and implying that a rightsholders could use computer algorithms and automated matching programs to largely meet its obligations. For years, EFF and others have acknowledged that automated programs and filters may have a role to play the notice and takedown process. But they cannot substitute for a fair use analysis in many cases and we don’t believe that what the court intended to suggest. We’re glad rightsholders can no longer misinterpret the ruling on this score.

Even more substantial changes may be found in the dissenting opinion. Judge Smith’s initially powerful dissent is now even stronger. He agreed with the majority’s conclusions on fair use and damages, but sharply disagreed on whether Universal had met its obligations. There was ample evidence that Universal did not train its reviewers to consider fair use before sending a takedown notice, so it is hard to understand how it could have done so. For Judge Smith, that was enough to find for Lenz. He wrote:

It is undisputed that Universal’s policy was to issue a takedown notice where a copyrighted work was used as “the focus of the video” or “prominently featured in the video.” By Universal’s own admission, its agents were not instructed to consider whether the use was fair. Instead, Universal directed its agents to spare videos that had “a second or less of a Prince song” or where the song was “distorted beyond reasonable recognition.” And yet, from this, the majority concludes that “whether Universal’s actions were sufficient to form a subjective good faith belief about the video’s fair use or lack thereof” presents a triable issue of fact.

I respectfully disagree. The Copyright Act explicitly enumerates the factors to be considered in assessing whether use of copyrighted material is fair. 17 U.S.C. § 107.

Universal’s policy was expressly to determine whether a video made “significant use”—not fair use—of the work. Nothing in Universal’s methodology considered the purpose and character of the use, the commercial or noncommercial nature of the use, or whether the use would have a significant impact on the market for the copyrighted work. See § 107. There is therefore no disputed issue of fact: Universal did not consider fair use before issuing a takedown notice. Moreover, Universal knew it had not considered fair use, because § 107 explicitly supplies the factors that “shall” be considered in determining whether a use is fair. . . . that is sufficient in my view to conclude that Universal’s takedown notice was a knowing misrepresentation.

Judge Smith also noted that:

Had Universal properly considered the statutory elements of fair use, there is no doubt that it would have concluded that Lenz’s use of Let’s Go Crazy was fair.”

We agree with both conclusions, and we’re disappointed that the majority did not. After more than eight years, this litigation continues. EFF will continue to fight for fair use in this case and others.