Last week, the Ninth Circuit Court of Appeals handed down a ruling in the “dancing baby” case that will affect every copyright holder that seeks to send out a DMCA takedown request. The court held that a copyright holder must consider an infringer’s fair use before sending out a takedown notice, or open itself up to paying the recipient’s attorney’s fees under the DMCA.

The DMCA (Digital Millennium Copyright Act) allows copyright holders to issue notices to ISPs (Internet Service Providers) that direct the ISP to remove or “take down” the copyright holder’s copyrighted material if it is infringing. The takedown request serves as notice or knowledge that the ISP is hosting infringing content; therefore, if the ISP does not remove the content, it can be roped into an infringement lawsuit as a contributory infringer.

To avoid overzealous copyright holders from bullying ISPs and users who post content, the DMCA provides two “checks.” First, the poster of the allegedly infringing content can file a counter-notification, which serves as a procedural version of “calling the bluff” of the copyright holder. Once served with a counter-notification, the ISP can keep the contested content online unless the copyright holder files a lawsuit within two weeks of the counter-notification being filed. Second, Section 512(f) of the DMCA imputes damages (in the form of attorney’s fees) on either party if they “knowingly, materially misrepresent” the infringement.

The “dancing baby” case featured a YouTube video of a baby dancing to Prince’s song “Let’s Go Crazy.” Universal, the owner of the copyright to the song, sent a takedown request to YouTube claiming the video infringed on its copyright. The creator/poster of the video sent a counter-notification and reposted the video. The creator then brought suit under 512(f), claiming that Universal has sent the takedown notification as a bully tactic, presumably to appease Prince, and should have known that her use was protected by the affirmative copyright defense called fair use. The Ninth Circuit agreed with her, and held that by not considering her fair use of the video, Universal knowingly, materially represented the infringement in its original takedown request.

This decision could be pretty impactful for two reasons. One, thousands of takedown requests are sent out by copyright holders every day. Copyright holders will now have to pay their lawyers the extra money it will cost to analyze a fair use defense before each of those requests are sent out. This bleeds into the second reason this decision could be so impactful: the fair use defense is notoriously unpredictable and fact-specific. And it is that way on purpose—it provides alleged infringers, like the creator of the dancing baby video, to argue that even though they may have literally infringed upon a copyright, they used the copyrighted material in such a way that society recognizes as “fair.” Generally, things like use in education, non-profits, and news reporting are considered fair use. But courts have also developed a very convoluted “transformative” test that says if an alleged infringer sufficiently “transformed” the copyrighted content (probably what the creator of the dancing baby video would argue), it can be considered fair use. What constitutes transformation? Good luck with that.

So at the end of the day, this decision may overly burden copyright holders in their attempt to remove infringement of their works online, or, it may properly protect users from the “bullying” of overzealous copyright holders. Only time will tell if the court struck the proper balance.

A Deeper Look at the DMCA Takedown Process and the Fair Use Requirement

The Ninth Circuit’s ruling in Lenz v. Universal Music Corp., 815 F.3d 1145 (9th Cir. 2016), has significant practical implications for how copyright holders, platforms, and content creators interact under the DMCA framework. Understanding the full legal architecture of the takedown process is essential for anyone operating in the digital content space.

The DMCA Safe Harbor and Its Tradeoffs

The DMCA’s safe harbor provisions, codified at 17 U.S.C. §512, represent a carefully negotiated compromise between copyright holders and internet platforms. Congress recognized in 1998 that holding platforms strictly liable for all user-posted infringing content would make the modern internet impossible to operate—no service provider could review every piece of user-generated content before it went live. The safe harbor shields platforms from copyright liability for user content as long as they respond expeditiously to takedown notices and have implemented a repeat infringer policy.

The price of this immunity is that platforms must process takedowns without making independent infringement judgments. When a platform receives a facially valid DMCA notice, it takes the content down. The copyright holder’s representation that the content is infringing, made under penalty of perjury pursuant to 17 U.S.C. §512(c)(3)(B), is what triggers the platform’s obligation to act.

The Four-Factor Fair Use Analysis

Under 17 U.S.C. §107, fair use is evaluated by balancing four non-exclusive factors:

• Purpose and character of the use: Commercial uses weigh against fair use; transformative uses—those that add new meaning, expression, or message to the original—weigh strongly in favor. A baby dancing to a song, without creating any new expression from the song itself, presents a weaker transformative argument than a parody or a critical commentary.
• Nature of the copyrighted work: Highly creative works (music, fiction, art) receive stronger copyright protection than factual or functional works. Pop songs like “Let’s Go Crazy” fall toward the more-protected end of this spectrum.
• Amount and substantiality of the portion used: Using a small excerpt is more defensible than reproducing an entire work. Using the “heart” of a work—its most recognizable or valuable element—can weigh against fair use even if the excerpt is brief.
• Effect on the market for the original: This factor asks whether widespread use of this type would harm the market for the original work or its derivatives. A home video posted to YouTube probably does not meaningfully compete with licensed performances of the song, which weighs in favor of fair use.

The Ninth Circuit held in Lenz that before sending a DMCA notice, the copyright holder must form a subjective good faith belief that the use is not fair use. The holder does not need to conduct an exhaustive formal analysis—but it cannot simply ignore the fair use question. This is a relatively modest requirement in principle, but it has real operational implications for large rights holders who send tens of thousands of automated takedown notices.

Section 512(f): The Misrepresentation Damages Provision

Section 512(f) of the DMCA provides that “[a]ny person who knowingly materially misrepresents under this section that material or activity is infringing . . . shall be liable for any damages, including costs and attorneys’ fees, incurred by the alleged infringer.” This provision was intended as a deterrent against bad-faith takedown abuse, but courts interpreted it narrowly for years. The Lenz decision expanded its reach by holding that ignoring fair use before sending a notice can constitute the kind of knowing misrepresentation that triggers Section 512(f) liability.

Critically, the Ninth Circuit held that a copyright owner’s subjective good faith—even a mistaken belief—can satisfy the mental state requirement. The holder does not need to intend to make a false claim; it only needs to have formed a genuine belief about infringement. But where a holder automates the takedown process without building in any fair use review, the “subjective good faith” standard becomes harder to satisfy. A machine cannot form a belief, and a human who delegates entirely to automation may not have formed a genuine belief either.

Practical Implications for Copyright Holders

Copyright holders who send significant volumes of DMCA notices should take the following steps in light of the Lenz decision:

• Build fair use review into the takedown workflow. Automated content-matching systems can identify potential infringement, but a human reviewer or a defined decision tree should assess fair use indicators before a notice is sent. Common fair use signals include short excerpts, obvious commentary or parody, non-commercial use, and educational contexts.
• Document the review process. In any subsequent litigation over Section 512(f) liability, contemporaneous documentation that fair use was considered—even briefly—is valuable evidence of subjective good faith.
• Calibrate enforcement against business priorities. A home video of a child dancing to your song poses essentially zero market harm and high sympathy value for the poster. Pursuing such content aggressively invites negative publicity, potential legal costs, and judicial skepticism in future enforcement actions.

Practical Implications for Content Creators

If your content is subject to a DMCA takedown notice, you have rights and options:

• File a counter-notification if you believe your use is non-infringing, including if you have a fair use defense. The counter-notification process under 17 U.S.C. §512(g) requires you to consent to federal court jurisdiction and swear under penalty of perjury that you have a good faith belief your use is lawful.
• Preserve evidence. Document the takedown notice, the platform’s response, and all communications with the copyright holder. This evidence is essential if you pursue a Section 512(f) claim.
• Consult a copyright attorney immediately. The deadlines in the counter-notification and subsequent lawsuit framework are short and unforgiving. Waiting risks losing procedural rights.

If you are a copyright holder looking to remove infringing content from the Internet, or have yourself been served with a DMCA takedown request, please contact one of our expert Copyright Attorneys at 231-714-0100.