Carta de Error! Copyright Takedown Notice To iTunes May Give Rise to Misrepresentation Liability

by Foley Hoag LLP - Trademark, Copyright & Unfair Competition
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carta de errorSection 512(f) of the Digital Millennium Copyright Act makes parties who issue copyright takedown notices liable for any “knowing” misrepresentations in those notices. However, the Ninth Circuit in Rossi v. Motion Picture Ass’n of America, and other courts, have interpreted the term “knowing” narrowly, causing many to wonder if Section 512(f) has much practical application.

In a recent article for the ABA’s Landslide Magazine, I argued that, irrespective of Rossi, there are still several fact patterns that create a serious risk of liability under Section 512(f), and one of them was the copyright contract dispute. Put simply, if you issue a takedown notice complaining that someone’s online use of your work is infringing, and it later turns out that you signed a contract which is interpreted to allow that very use, your knowledge of that contract may be sufficient to charge you with a “knowing” misrepresentation. Put even more simply, a takedown notice is not a good place to hash out a contract dispute.

Carta De Error

Just such a dispute appears to be going on in Distribuidora De Discos Karen v. Guerra. Prior to 2006, Dominican musician Juan Luis Guerra recorded music for the Discos Karen label, allegedly under a “work for hire” agreement (under which he produced such infectious tracks as Carta de Amor from the 1990 release Bachata Rosa, which is advertised as the best selling album in the history of the Dominican Republic). In 2006, the parties signed a new agreement which released Guerra from his recording obligations and gave him certain “administrative rights” with respect to royalties, but confirmed that Discos Karen owned the copyright in the sound recordings. The agreement allegedly also confirmed that Discos Karen owned the copyright in the underlying compositions, or at the very least had an unfettered license to exploit them.

After executing the new contract, Discos Karen promptly made arrangements with Apple to distribute Guerra’s music on iTunes. But in 2011, apparently unhappy with the revenues he was receiving from this arrangement, Guerra sued Discos Karen in Florida, requesting an accounting and a declaration of his rights under the 2006 contract.

In the midst of these disputes, Guerra’s lawyer sent a takedown notice to iTunes, using an Apple online form. In order to use the form, the lawyer had to subscribe to a statement swearing to a good faith belief that the disputed use was not authorized. In addition, Guerra’s notice stated:

I represent Juan Jan Luis Guerra, who is the publisher of the musical compositions on this release. No license has been issued.

Following this notice, Apple removed Guerra’s songs from iTunes (don’t worry, they’ve since been restored). This prompted Discos Karen to file suit in the Southern District of New York, alleging that the notice was a knowing misrepresentation, and thus subject to liability under section 512(f) of the DMCA. Guerra moved to dismiss, but the Court denied the motion.

“Under this Section”

Guerra offered two basic arguments as to why the Section 512(f) misrepresentation claim should be dismissed.  First, he argued that Section 512(f) applies only to notices issued “under this section,” i.e., under Section 512. Guerra urged that his own takedown notice was so technically deficient that it should not be considered to have issued “under this section.”  For example, it lacked detailed contact information for Guerra’s attorney and failed to specify the precise location of the disputed songs, elements required by the statute.

The Court rejected this argument. “At some point a takedown notice may be so deficient that it is utterly unrecognizable as a takedown notice” and therefore could not be subject to Section 512(f) liability, but the Court ruled that Guerra’s notice had not been so defective as to reach that point. “If we held otherwise,” the Court stated, “then a person could submit a slightly deficient takedown notice with impunity.”

“At the Direction of a User”

Guerra’s second grounds for dismissal gave the Court pause. Based on the statutory language, Guerra argued that a Section 512(f) misrepresentation is only actionable if the infringement in question was placed online “at the direction of a user.” For example, the infringing cat video uploaded to YouTube by your sister is unquestionably put there “at the direction of a user,” not at the direction of YouTube. But who decides what songs are going to be put on iTunes?

The Court turned to the iTunes contract between Apple and Discos Karen, but that didn’t resolve the issue. It was not clear, for example, whether the catalogue of songs listed in the contract were those Apple was required to sell or those Discos Karen was required to deliver. Moreover, although Apple may exercise both editorial and automated technical control over iTunes generally, the Court held that the key issue is whether, as a practical matter, Apple actually organizes uploaded music manually or deliberately decides how to promote it. Because this issue could not be decided on the facts stated in the complaint, the Court denied the motion to dismiss.

The parties are now conducting discovery. In addition to related cases in Florida and the Dominican Republic, Discos Karen has also filed a separate lawsuit in the Southern District of New York against Guerra and the Universal Music Group, alleging the distribution of CDs and DVDs containing compositions subject to the 2006 agreement.

 

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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