Neville L. Johnson
Partner, Johnson & Johnson LLP
439 N Canon Dr
Beverly Hills , CA 90210
Phone: 310-975-1080
Email: njohnson@jjllplaw.com
Southwestern Univ SOL; Los Angeles CA
Douglas L. Johnson
Partner, Johnson & Johnson LLP
439 N Canon Dr
Beverly Hills , CA 90210
Phone: (310) 975-1080
Email: djohnson@jjllplaw.com
McGeorge SOL Univ of the Pacific; CA
Individuals, creators and businesses have a right and a duty to protect themselves and their assets from infringing online activities and to censor unconstitutional speech. However, if copyrighted material found online was fairly used and statements were made in furtherance of free speech related to a public issue, defenses such as fair use and improper takedown under the Digital Millennium Copyright Act, as well as anti-SLAPP (strategic lawsuits against public participation) motions, will prevail and alleged unlawful activity will be deemed lawful. DCMA infringement defenses and anti-SLAPP statutory protections place would-be plaintiffs on notice to consider, in good faith, these nuanced defenses before issuing a takedown notice for allegedly infringing material or attempting to limit speech, respectively.
DMCA Defenses of Fair Use and Improper Takedown Procedure
In 1976, Section 107 of the Copyright Act outlined four nondispositive factors, which on balance will determine whether copyrighted material was used pursuant to fair use. The first factor considers "the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes." Within Section 107, Congress gave explicit, nonexhaustive examples of purposes which would be considered fair, noninfringing uses, including: criticism, comment, news reporting, teaching, scholarship and research. The first factor will weigh in favor of fair use if copyrighted material is recast in such a way that the subsequent use significantly changes the underlying material's character. Further, the first factor will weigh in favor of fair use when underlying copyrighted material is significantly transformed such that the use in the new setting is contextually altered from the original use.
Purposes relating to commercial uses will likely weigh against fair use for the remaining factors. The second factor evaluates "the nature of the copyrighted work," while the third factor reviews, "the amount and substantiality of the portion used in relation to the copyrighted work as a whole." These middle factors evaluate the quality and quantity of both the underlying copyrighted material and alleged infringing use. Finally, the fourth factor analyzes, "the effect of the use upon the potential market for or value of the copyrighted work." In reviewing the final factor, courts will examine the effect on the commercial value of the original work, including resale value, licensing value and market demand for the work.
In SOFA Entertainment Inc. v. Dodger Productions, 709 F.3d 1273 (9th Cir. 2013), a seven-second copyrighted clip of Ed Sullivan introducing the Four Seasons band on "The Ed Sullivan Show" was projected on stage during the end of the first act in "Jersey Boys," the musical dramatization of the band's history. The 9th Circuit held such commercial use was fair. The court found the first factor weighed in favor of fair use because the clip was used as a biographical anchor, commented on and commemorated the historical performance the stage actors were attempting to evoke, and was so highly transformative that the production's commercial use was of little significance. The second factor also favored fair use because the clip used conveyed mostly noncopyrightable, factual information. Under the third factor, the court again noted that during the seven-second clip, neither the mere introduction of the group's imminent performance nor Ed Sullivan's movements and intonations amounting to his charismatic persona were significantly quantitative nor qualitative enough for copyright protection. Finally, the court found that the one-time, seven-second clip in a live-stage production was not a substitute for the original full-length episode nor deprived the copyright holder of derivative uses.
The court in SOFA Entertainment also found the lower court's award of attorney fees was justified under Section 505 of the Copyright Act, which allows district courts discretion to grant reasonable attorney fees to the prevailing party when doing so furthers the act's purposes of encouraging the production of original literary, artistic and musical expression for the good of the public. Specifically, the court stated, "when a fee award encourages a defendant to litigate a meritorious fair use claims against an unreasonable claim of infringement, the policies of the Copyright Act are served." Thus, after SOFA Entertainment, plaintiffs who bring unreasonable infringement claims without considering the Copyright Act's allowance of fair use of existing works to create new works open themselves to liability in the form of attorney fees.
In 1998, Section 512 of the Copyright Act granted copyright holders and their agents the statutory right to issue written takedown notices to service providers for allegedly infringing material and listed, among other things, elements for effective notices. The most importing element to this current discussion is Section 512(c)(3)(A)(v) which states, the takedown notice must include, "a statement that the complaining party has a good faith belief that the use of the material in the manner complained of is not authorized by the copyright owner, its agent, or the law." Under Section 512(f), when access to material is disabled or removed based upon reliance on a copyright holder's improper takedown notice, who knowingly materially misrepresents their "good faith belief" that material is infringing, the issuer will be liable for any damages incurred by an injured party, including attorney fees and costs.
Lenz v. Universal Music Corp., 815 F.3d 1145 (9th Cir. 2016), was a case of first impression regarding the sufficiency of takedown procedures for allegedly infringing online materials. The lawsuit was triggered by a mother posting a 29-second video of her toddler dancing to Prince's "Let's Go Crazy" on YouTube. Lenz argued that under Section 512(c), a copyright holder is required to consider fair use prior sending a takedown notice. Universal alleged that fair use need not be considered at that stage since, rather than being authorized by law, it is an affirmative defense which excuses infringing conduct. At issue was whether the takedown notice Universal sent to YouTube materially misrepresented Universal's "subjective good faith belief" that the video was infringing because they had not yet considered fair use.
The 9th Circuit in Lenz provided much-needed clarification to language in Section 512(c) by interpreting the words "authorized ... by law" to include fair use, explicitly holding that before issuing takedown notices, copyright holders must consider fair use while forming a "good faith belief" the copyrighted material was infringed. The 9th Circuit then denied the parties' motions for summary judgment, finding there was legitimate triable issue as to whether Universal had, in fact, considered and formed a "good faith belief" that Lenz's use was not fair prior to their issuing the takedown notice.
After Lenz, copyright holders now have the burden to show that, prior to issuing a takedown notice, they did in fact consider fair use while forming a subjective good faith belief that material was infringing. A court may disagree with but not disregard the copyright holder's subjective good faith beliefs. However, if copyright holders knowingly misrepresented or failed to engage in such considerations prior to issuing a takedown notice, they will not overcome their burden and will be liable for damages under Section 512(f).
California SLAPP Suits and Anti-SLAPP Defenses
California's anti-SLAPP statute, Code of Civil Procedure Section 425.16, was enacted in 1992 to allow courts "to dismiss at an early stage non-meritorious litigation meant to chill the valid exercise of the constitutional rights of freedom of speech and petition in connection with a public issue." Sipple v. Found. for Nat'l Progress, 71 Cal. App. 4th 226, 235 (1999). Often, large private interests bring SLAPP motions in an attempt to bar and discourage speech about public issues and government proceedings. Thomas v. Quintero, 126 Cal. App. 4th 635, 657 (2005). After a plaintiff brings a SLAPP motion, Section 425.16(f) allows defendant to move to strike the complaint with an anti-SLAPP motion. At this time, courts engage in a two-step process to evaluate each parties' motions. Sedgwick Claims Mgmt. Servs. v. Delsman, 2009 WL 2157573, aff'd 2011 U.S. App. LEXIS 5830 (9th Cir. 2001). First, the defendant has the burden to show, but not prove, their actions arose from protected rights of petition or free speech as defined by the statute. Maranatha Corr., LLC v. Dep't. of Corr. & Rehab., 158 Cal. App. 4th 1075, 1084 (2008); Braun v. Chronicle Publ'g. Co., 52 Cal. App. 4th 1036, 1043 (1997); Fox Searchlight Pictures, Inc. v. Paladino, 89 Cal. App. 4th 305 (2001). Second, if the defendant makes such a showing, the burden shifts to the plaintiff who must show, with evidence which would be admissible at trial, a probability of success on their claim.
For a defendant to overcome their burden in within the first step, they must show their actions are protected speech as defined in Section 425.16(e). The first three subdivisions of Section 425.16(e) use both content and context to narrowly define protected speech. Subdivision 1 protects statements made before a legislative, executive or judicial proceeding. Subdivision 2 protects statements made in connection with an issue under consideration or review by a legislative, executive or judicial proceeding. Subdivision 3 protects statements made in a place open to the public or a public forum in connection with an issue of public interest. It has always been relatively easy for defendants to overcome their burden if their actions neatly fell into any of the first three subdivisions. However, the catchall provision in Subdivision 4 is undefined in content or context, merely protecting "any other conduct in furtherance of the exercise of the constitutional right of petition or the constitutional right of free speech in connection with a public issue of an issue of public interest." This left it to the courts to carefully define when and what type of conduct would be considered "in furtherance of" free speech "in connection with a public issue."
When applying the first three subdivisions, "public issue" and "public interest" are generally defined as topics relating to local, national or international matters. Integrated Healthcare Holdings, Inc. v. Fitzgibbons, 140 Cal. App. 4th 515, 523 (2006). However, there has been confusion about applying and interpreting the catchall provision's phases "in furtherance of" and "in connection with." Courts were merely looking at the content of the conduct at issue. Courts eventually identified four, nonexclusive categories of conduct within the catchall provision, including: (1) statements about persons or entities in the public eye (Wilbanks v. Wolk, 121 Cal. App 4th 883, 898 (2004); Rivero v. American Fed'n. of State, Cty. and Mun. Employees, AFL-CIO, 105 Cal. App. 4th 913 (2003); Sipple, 71 Cal. App. 4th 226; Church of Scientology of Cal. v. Wollersheim, 42 Cal. App. 4th 628 (1996); Seelig v. Infinity Broad. Corp., 97 Cal. App. 4th 798 (2002)), (2) conduct which could directly affect a large number of people beyond direct participants (Rivero, 105 Cal. App. 4th 913; Church of Scientology, 42 Cal. App. 4th 628; Damon v. Ocean Hills Journalism Club, 85 Cal. App. 4th 468 (2000); Ludwig v. Superior Court, 37 Cal. App. 4th 8 (1995); Dowling v. Zimmerman, 85 Cal. App. 4th 1400 (2001)), (3) conduct involving a topic of widespread ongoing public interest (Du Charme v. Int'l Bhd. of Electrical Workers, 110 Cal. App. 4th 107, 119 (2003)), and (4) matters which affect a community similarly to that of a government entity (Damon, 85 Cal. App. 4th 468).
Still, it was difficult for defendants whose conduct did not fall within the first three subdivisions of Section 425.16(e) to show their conduct fit cleanly within Subdivision 4. Eventually, to combat the catchall provision's breadth, the courts allowed an analysis of both content and context -- similar to the first three subdivisions of Section 425.16(e) and the embedded context from the act's preamble ("to encourage continued participation in matters of public significance") -- to extend into the analysis for Subdivision 4 to aid in determining whether the defendant's conduct "furthered" free speech "connected" to a public issue. San Diegans for Open Gov't v. San Diego State Univ. Research Found., 13 Cal. App. 5th 76, 101 (2017); Mendoza v. ADPS Screening & Selection Servs., Inc., 182 Cal. App. 4th 1644, 1653 (2010); Terry v. Davis Cmty. Church, 131 Cal. App. 4th 1534 (2005); Hecimovich v. Encinal School Parent Teacher Org., 203 Cal. App. 4th 450 (2012). The courts justified allowing an analysis of both content and context because, given the contextual differences surrounding the defendant's speech, a matter of public issue may be implicated in one setting but not another, or may implicate a public issue without furthering public discourse. The initial cases providing for contextual analysis evaluated three nondeterminative factors, including, the speech, the speaker and the audience. As such, the defendant's burden was both clarified and heightened once it was determined that Section 425.16(e)(4) allowed for an analysis of both a content and context.
Filmon.com, Inc. v. DoubleVerify, Inc.
Whether the contextual analysis to Section 425.16 would not include the exempted commercial speech under Section 425.17 has been answered in Filmon.com, Inc. v. DoubleVerify, Inc., 7 Cal. 5th 133 (Cal. 2019). In that matter, a for-profit business entity that offered online tracking, verification and "brand safety" services to internet advertisers allegedly disparaged a competitor in confidential reports to its paying clients. The court found that an analysis of the contextual elements of the speech -- including whether speech was public or private, the speech's audience, and the speech's purpose -- was inherently relevant to the overall analysis of whether speech was actually commercial and, thus, exempt from consideration.
The court in Filmon.com stated that, under Section 425.16(e)(4), an analysis of whether a statement was "in furtherance of" free speech "in connection with a public issue" must consider the content and context of the defendants' statement because an evaluation of just one would be limited and insufficient. The court noted that "in an age of easy public access to previously private information through social media and other means, context allows us to assess the functional relationship between a statement and the issue of public interest on which it touches -- deciding, in the process, whether it merits protection under a statute designed to 'encourage continued participation in matters of public significance.'" See also Sedgwick Claims Mgmt. Servs. v. Delsman, 2009 U.S. Dist. LEXIS 61825 (N.D. Cal. 2009).
Post-Filmon.com, defendants' burden is heightened to now include this fourth nondeterminative factor, resulting in an analysis of the following factors: (1) the identity of the speaker, (2) the identity of the audience, (3) the statement's intended purpose, and (3) the statement's commercial nature -- (i) whether speech was private or public, (ii) the speech's audience, (iii) the speech's purpose.
Although the contextual analysis has been heightened, the burden shift remains the same. Once the defendant has shown that their speech was in fact protected under the U.S. or California Constitution as a right to petition or as free speech, the plaintiff must overcome their burden by showing they can succeed on the merits of their claim with evidence admissible at trial. If the plaintiff cannot overcome this burden, Section 425.16(c) provides for damages, including, attorney fees and costs. Further, if the defendant can also show the plaintiff brought the SLAPP motion with the intent to harass and silence instead of to resolve a legal claim, Section 425.18 allows the party to file a motion to dismiss via SLAPPback. However, if the court finds that such SLAPPback was itself frivolous or intended to delay, the court will award costs and reasonable attorney fees to the prevailing plaintiff.
Damages for anti-SLAPP liability are similar to those imposed on copyright holders who issue takedown notices prior to forming subjective good faith beliefs that the copyrighted material was used unfairly or knowingly misrepresenting such fair use considerations. As such, in both situations, would-be plaintiffs are on notice to diligently consider both fair use and anti-SLAPP defenses prior to bringing such suits.
A New SLAPP Analysis Framework
Borrowing from the similar, well-established fair use analysis and the recent edification regarding anti-SLAPP in Filmon.com, a framework for a SLAPP analysis has presented itself to help would-be plaintiffs and their attorneys in evaluating whether to bring a SLAPP suit.
Without additional clarification, "continued participation" in matters of public issue or concern (i.e., the requirement to determine whether a statement contributes to, engages in, or furthers, adds to, public conversation on the public issue) can be evaluated similarly to that of the analysis of purpose and character used in the fair use setting. For example, if a defendant's statement amounts to illustrations or support of a point being made, criticism, comment, or news reporting, it can then be easily determined the statement actually contributes to or furthers public conversation on the issue. Thus, fair use analysis can act as a point of reference when dealing with SLAPP suits.
Both fair use and SLAPP must consider commercial use and nature, however, in neither circumstance will the finding be dispositive. Again, a similar fair use analysis can help to guide difficult SLAPP motions.
Conclusion
Just as a post-Lenz would-be plaintiff is on notice to consider, in subjective good faith, whether their copyrighted work was used pursuant to fair use before issuing takedown notices, post-Filmon.com, a would-be plaintiff must consider both context and content of statements before filing a SLAPP suit. The burden is on would-be plaintiffs, who now have notice to and must engage in somewhat tedious legwork, to respectively consider fair use and anti-SLAPP protections, to ensure they have good faith, legitimate claims and avoid liability for damages.