Now, why is this such a potential headache for companies like record labels, whose bottom line depends on creativity? The way copyright enforcement works outside of licensed platforms such as YouTube and SoundCloud -- which rely largely on content uploaded by users at a rate that is practically galactic in scope and employ their own systems for takedowns and/or monetization on uploads -- is that a trade body such as the RIAA will scan for material it owns or represents and that appears on unlicensed websites. Copyright owners will then alert internet service providers like Google with demands for the material's removal. (Once something is taken down, targets of takedowns have the ability to file counternotices.) Adding further burdens to the task of playing “whack-a-mole” is taken unkindly by copyright holders.
However, the appeals court offered some relief.
"To be clear, if a copyright holder ignores or neglects our unequivocal holding that it must consider fair use before sending a takedown notification, it is liable for damages," the judges wrote. "If, however, a copyright holder forms a subjective good faith belief the allegedly infringing material does not constitute fair use, we are in no position to dispute the copyright holder's belief even if we would have reached the opposite conclusion."
To translate that to English, the owner of a work must take it upon themselves to consider “in good faith,” and before requesting any removal, whether or not a user-uploaded piece of content is using that work legally under fair use. If they don't, they can be sued by the uploader. The judges also suggested (without issuing a firm ruling) that the use of algorithms -- "intelligent" math equations, essentially -- to identify infringing works could incorporate a reasonable consideration of fair use "in good faith." An algorithm could potentially be written to more deeply analyze the context of an copyrighted work's appearance on a site and whether that context could possibly be a fair usage of the work. If a company was sued by an uploader over a wrongful takedown request, it would be a reasonable defense on their part to explain that any algorithm used was constructed to, "in good faith," attempt to consider that work's employment of fair use.
In practical terms, the current, wholly imperfect system of takedown requests will have to adapt somehow, or the industry opens itself up to the risk of being sued repeatedly for being too aggressive.
(YouTube, SoundCloud and Sony Music Group refused to comment on the ruling. Universal Music Group referred us back to the RIAA's statement on the ruling -- having taken part in the case's litigation for many years it's not surprising the RIAA would have an opinion quickly on the matter. The same goes for the MPAA. Warner Music Group did not immediately respond to a request for comment.)
Eight years on the Internet -- the time from lawsuit to this week's opinion -- is a relative epoch. The same year Lenz' dancing baby video came down, Apple unveiled the iPhone. Art owners' approach to user-uploaded content has undergone some dramatic changes in that time.
The RIAA wrote in its 2013 amicus brief that "it is a simple matter for users to appropriate copyrighted music for their 'own' video creations," as Lenz's 'dancing baby' video did, and that these types of videos "unlawfully deprive the RIAA's members and other copyright holders of significant revenue and allow these sites and their advertisers to profit from infringing acts."
Viral videos, even ones that use copyrighted work, aren't a top priority for copyright owners these days, say observers. Monday's shutdown of Sharebeast and other similar actions show where the action has shifted. Many key stakeholders in the "content wars" have now come to recognize and accept the fact that a baby dancing to a scratchy, distorted-sounding version of a Prince song in the background is not a market substitute. Record labels have also come to see these uploads to have promotional value as well.
Nevertheless, the content industry won't stop fighting and can't be expected to stop sending takedown notices. While sympathy for major labels and motion picture studios may not be something many are interested in seeing their therapists about, efforts to gain some control over the digital distribution of the art they own should at least be recognized as Sisyphean, a thankless chore for those, like Sean Johnson, in the legal departments of these companies. These soldiers will now have to recognize, however, that the rights of copyright owners aren't more or less important than the free speech of other creators. Perhaps there's some common ground.