from the keep-an-eye-on-this-one dept
Last summer we wrote about an interesting case involving the latest evolution of copyright trolling, involving Jon Nicolini, who some copyright troll watchers may recognize from his participating in an earlier generation of copyright trolling, when he was a sketchy "forensic expert" for copyright trolling firm CEG TEK. These days, Nicolini runs his own firm, Okularity, which appears to have created a new form of copyright trolling. According to the lawsuit, rather than file lawsuits as the pressure point (as was common in the past), Okularity sends a ton of DMCA takedown notices to social media companies, and then once your account gets taken down, Nicolini pounces and demands huge sums to rescind the notices, so you can get back your account.
As we wrote over the summer, one of Okularity's targets was the well known Paper Magazine, put out by the publisher Enttech Media Group. Enttech said that Okularity sought to have Paper Magazine's Instagram account shut down, and then offered to "settle," demanding a pretty massive sum in the process. The lawsuit alleged violations of DMCA 512(f) which is the (unfortunately) mostly toothless part of the DMCA that is supposed to allow those on the receiving end of bogus DMCA takedowns to fight back. In practice, however, courts have mostly rejected all 512(f) claims, or made it so they're basically impossible to do anything useful with. Because of that, any time we see a 512(f) claim that has legs, we pay attention.
The original complaint also tried to argue that Okularity violated the RICO statute, and long time readers here know what we think of RICO claims. While there did appear to be some unauthorized practice of law happening, there didn't seem to be nearly enough to make a RICO claim -- because there's basically never enough to make a RICO claim. We predicted that the RICO claim would get tossed out, but that the 512(f) claim might live on.
Turns out, we were right.
While the case has had some twists and turns, this week the judge tossed out the RICO claims, but is allowing the 512(f) claims to move forward. Nicolini and Okularity had argued that Enttech's lawyer, Robert Tauler, should face Rule 11 sanctions for ignoring evidence regarding their fair use analysis, but the court rejected those as well. Tauler did have to file a third amended complaint, however, to get to this point, as the court did find the first two complaints somewhat deficient.
But on the key point -- 512(f) -- the court notes that the case can continue, even under the confused Lenz standard in the 9th Circuit, that basically said (1) DMCA filers have to "subjectively" consider fair use to be a "good faith" filing, but (2) automated takedowns may be okay... because we say so. Nikolini and Okularity argued that they do consider fair use before sending notices, while Enttech argued the notices appeared to be totally automated. The court basically says -- Enttech has met the initial burden that the case can move forward.
One key point of contention in this: the takedown letters sent by Okularity do contain a "discussion of infringement and fair use," Okularity claims that shows that it does consider fair use. Enttech responded that every single notice Okularity sends contains an exact copy of this discussion, suggesting no actual analysis is done, and it's just a cut-and-paste. This point is what the judge focused in on:
ENTTech’s allegation that the DMCA notices contained an analysis of
infringement and fair use presents a question of first impression with respect to
the standard for pleading a claim under § 512(f). Is it sufficient for ENTTech to
allege that, notwithstanding the takedown notices’ explicit and extensive fairuse
analysis, Defendants did not actually or sufficiently consider fair use before
issuing the takedown notices? At first blush, the fact that the DMCA takedown
notices contain fair-use analyses—even if those analyses are identical and pro
forma—seems to satisfy the requirement to “consider” fair use before issuing a
takedown notice. See Lenz, 815 F.3d at 1154. The presence of the purported
fair-use analysis in each takedown notice also distinguishes this case from Lenz
where the plaintiff alleged that the defendant did not consider fair use at all. Cf.
id.
Is ENTTech required to allege additional facts, in view of the appearance
that Defendants considered fair use? For example, must ENTTech allege
evidentiary facts concerning Defendants’ analytical process or subjective state of
mind (the type of facts which, in most cases, are not available to a plaintiff before
discovery is taken)? Does the Iqbal/Twombly plausibility standard require
ENTTech to aver its own analysis of fair use to support an inference that
Defendants merely paid “lip service” to the consideration of fair use? Cf. id.
at 1163. Having considered these questions, the Court concludes that
ENTTech’s allegations in the TAC are sufficient at this stage of the litigation.
The court points out that the ruling in Lenz supports allowing this case to move forward, saying that it's a factual question whether or not the takedown notice sender had a "good faith belief" that the notice was legit, and therefore, it's up to a jury to decide.
Although Lenz involved a motion for summary judgment, that decision is
nevertheless instructive with respect to the issue presently before the Court.
Lenz supports the conclusion that the question of whether a copyright owner
formed a subjective good faith belief that an alleged infringer’s copying of the
work did not constitute fair use is, in most instances, a factual issue that is not
appropriate for resolution on a motion to dismiss. “Because the DMCA
requires consideration of fair use prior to sending a takedown notification,” the
Ninth Circuit held that “a jury must determine whether [the defendant’s]
actions were sufficient to form a subjective good faith belief about the [allegedly
infringing] video’s fair use or lack thereof.” Id. at 1154. In response to the
arguments in the dissenting opinion regarding the propriety of granting
summary judgment, the Lenz panel majority explained that the relevant question
was “whether the analysis [the defendant] did conduct of the [alleged infringing
material] was sufficient, not to conclusively establish as a matter of law that the
. . . use of the [copyrighted material] was fair, but to form a subjective good faith
belief that the video was infringing on [the] copyright.” Id. at 1154 n.3.
Therefore, because it is generally a factual issue whether the analysis that
the defendant did conduct of the alleged infringing material was sufficient, see
id., it necessarily follows that to plead a claim under § 512(f), it is enough for
ENTTech to allege that Defendants did not consider fair use (sufficiently or at
all) before issuing the takedown notices. And that is exactly what ENTTech
alleges here. Requiring ENTTech to allege more would effectively impose a
heightened pleading standard, see Fed. R. Civ. P. 9(b), and no authority holds
that claims under § 512(f) must be pleaded with particularity. Thus, although
it may be advisable for a plaintiff like ENTTech to aver additional facts (such as
its own analysis of fair use) to support the allegation that a defendant’s fair use
analysis was merely pro forma, the Court cannot conclude that ENTTech is
required to plead such facts in order to state a plausible claim for relief under
§ 512(f).
In the grand scheme of things, this is only a small step forward, but it is a step forward for 512(f) -- a part of the law that rarely ever sees any positive news. This doesn't mean that Enttech is likely to win, but it does mean that the courts may crack the door open just ever so slightly in letting people and companies fight back against abusive DMCA notices.
Filed Under: 512f, copyright, copyright trolling, dmca, extortion, jon nicolini, paper magazine, shakedown
Companies: enttech, okularity
