On February 7, 2007 Stephanie Lenz of Gallatzin, Pennsylvania posted an innocuous video of her 18-month-old son Holden pushing a baby toy while dancing to a barely recognizable song in the background.
Effectively, what Universal was telling YouTube was, take down Lenz video or prepare to be sued for contributory infringement - oh, and tell your customer that she can go to jail for what she did. The DMCA rewards companies that play it safe: If YouTube took the video down erroneously, by statute it would have no liability. So what did YouTube do? It took down the video.
The use of these takedown notices is becoming ubiquitous and threatens to undermine the doctrine of fair use. Unfortunately, the law in this regard is at best ambiguous. Ultimately, this case and those like it will hinge on the term in the DMCA that requires the copyright holder to have a good faith belief that the use of the copyrighted work is not authorized by law.
Infringing or not?
There is no doubt that the song Lets Go Crazy is copyrighted, although reasonable parties can disagree about its musical merit. (OK, I admit, I rarely listen to music made after 1972). Thus, it is clear that someone selling copies of the song online, or even giving them away would likely constitute an infringement and would merit a takedown notice.
By obtaining a copyright to Lets Go Crazy, Universal obtained a bundle of rights under copyright law. These include the rights to make or prevent the making of copies and derivative works and to control the public performance of the work, as well as other rights. However, in granting these rights, Congress, mindful of its constitutional power "to promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries," provided that certain uses of copyright works were not infringing. These included what is called "fair use" -- generally non-commercial (educational, literary, commentary, parody and even entertainment) uses of a portion of the copyrighted work that dont deprive the copyright holder of substantial revenue. (A gross oversimplification of the doctrine, but a useful shorthand.)
It is important to note that a fair use of a copyrighted work is not an infringement and is permitted under the copyright law. You dont need the copyright holders permission to make a fair use of the work and can do so even when the copyright holder tells you no. In short, fair use is "authorized by law."
The DMCA and takedown abuse
To combat the plague of copyright infringement online and to strike a balance between the rights and obligations of the copyright holder, the user of the copyrighted work, and the Internet Service Provider (ISP) or other third party that might be inadvertantly hosting the allegedly infringing work, Congress provided a streamlined mechanism to remove potential infringements while short circuiting the need to file a lawsuit in federal court: The takedown notice.
The takedown notice allows the copyright holder to tell an innocent third party that they are hosting an infringing work through the use of a declaration to that effect under oath. The ISP can then either keep the work up -- in which case they have the potential for liability for either direct or contributory infringement themselves -- or they can take the work down -- in which case they have no liability to either their customer (the person whose work they just erased) or to the copyright holder. For the ISP, it's not choice at all: They typically take down the allegedly infringing work.
The law provides that the recipient of the takedown notice notify the person posting the materials about the notice, and there is a mechanism to get the offending materials put back up. To do so, however, the customers has to be willing to give the ISP (and, by extension, the copyright holder) their name, address, contact information, and consent to be sued in Federal Court under oath. Moreover, the customer must state under oath that they have a "good faith belief that the material was removed or disabled as a result of mistake or misidentification of the material to be removed or disabled."