The uses and abuses of the differences between the law on the books and the law in action (with a particular emphasis on copyright overclaiming)

It’s pretty obvious law and behavior often diverge. In some cases, that divergence arises from ambiguity and the realities of human relationships. How do you respond when a valued customer arguably breaches his contract with your client? Quite possibly, if not likely, your client will be better served by ignoring the breach of the written obligation and keeping the customer satisfied. As Charles L. Knapp, Nathan M. Crystal, and Harry G. Prince write in the preface (pdf) to the casebook I use in my Contracts course:

[I]n real life there is likely to be not just one answer to a client’s problem but a whole range of possible answers, some of which are clearly wrong, but many of which are at least plausibly right, in varying degrees. Living with ambivalence and uncertainty is not always pleasant, but the ability to do so is surely a more necessary lawyering skill than mastering the niceties of citation form.

Some lawyers and clients, however, abuse this gap between law and behavior. I am not referring to the everyday, harmless disregard of the “rules.” How often do you obey the speed limit? But, as Judge Richard Posner writes, this “dichotomy long noted by legal thinkers between the law on the books and the law in action” is a particular problem in copyright law. Often the mere threat of an infringement action can extract money from someone using copyrighted material in a legitimate way. The problem, of course is exacerbated considerably because the copyrights to so much of our media are owned by corporate conglomerates. Who is going to fight Disney, even if he’s right? Another problem is the widespread ignorance in the media about copyright. As Posner writes:

The result is a systematic overclaiming of copyright, resulting in a misunderstanding of copyright’s breadth. Look at the copyright page in virtually any book, or the copyright notice at the beginning of a DVD or VHS film recording. The notice will almost always state that no part of the work can be reproduced without the publisher’s (or movie studio’s) permission. This is a flat denial of fair use. The reader or viewer who thumbs his nose at the copyright notice risks receiving a threatening letter from the copyright owner. He doesn’t know whether he will be sued, and because the fair use doctrine is vague, he may not be altogether confident about the outcome of the suit. The would-be fair user is likely to be an author, movie director, etc. and he will find that his publisher or studio is a strict copyright policeman. That is, since a publisher worries about expansive fair uses of the books he publishes, he doesn’t want to encourage such uses by permitting his own authors to copy from other publishers’ works. So you have a whole “law in action” law invented by publishers, including ridiculous rules such as that any quotation of more than two lines of a poem requires a copyright license.

Universal Music recently was, at least for the moment, slapped down in a particularly absurd instance of copyright overclaiming. Universal sought to remove Stephanie Lenz’s 29 second video of her son dancing to Prince’s “Let’s Go Crazy” from YouTube via a takedown notice under the Digital Millennium Copyright Act (the “DMCA”). Lenz in turn sued Universal on the grounds that in sending the takedown notice Universal knowingly misrepresented that Lenz’s video was infringing. Remarkably, Universal argued that a copyright holder need not consider whether the use of copyrighted material is legitimate fair use before sending a takedown notice. The DMCA provides, however, that a copyright owner can send a takedown notice only if he has “a good faith belief that use of the material in the manner complained of is not authorized by the copyright owner, its agent, or the law.” If use of copyrighted material constitutes fair use, it is “authorized by the law.” And there is no question that determining fair use can be a difficult and complicated determination. But not in not in Stephanie Lenz’s case — here’s the “offending” video:

Thus, it should be no surprise that U.S. Federal District Court Judge Jeremy Fogel rejected Universal’s argument that, before sending a takedown notice to YouTube, it did not need to even consider whether the presence of Prince’s “Let’s Go Crazy” in the video was a fair use . Accordingly, the judge refused to grant Universal’s motion to dismiss Lenz’s case. In his decision (pdf), Judge Fogel wrote:

An allegation that a copyright owner acted in bad faith by issuing a takedown notice without proper consideration of the fair use doctrine thus is sufficient to state a misrepresentation claim pursuant to . . . the DMCA. Such an interpretation of the DMCA furthers both the purposes of the DMCA itself and copyright law in general. In enacting the DMCA, Congress noted that the “provisions in the bill balance the need for rapid response to potential infringement with the end-users [sic] legitimate interests in not having material removed without recourse.”

Not everyone has the guts of Stephanie Lenz. That’s a problem. The Universals of this world have all the money. Recently, the Electronic Frontier Foundation noted that another “federal judge denied copyright infringement allegations from Universal . . . affirming an eBay seller’s right to resell promotional CDs that he buys from secondhand stores.”