Joho the Blog » The economics of accusation: Penalty for false DMCA claims is low

The economics of accusation: Penalty for false DMCA claims is low

Here’s how DMCA take-down notices work: Let’s say you post a video of a silent, purple, evening rainfall to YouTube under the title “Purple Rain.” Big Mean Co. owns the rights to Prince’s song of that name and notices your post’s title when it does a routine sweep of YouTube. It automatically generates a notice to YouTube saying that you’ve violated copyright. YouTube takes down the video and notifies you. Being a clever person, you go to and send a counter-notification to YouTube, saying that your title actually has nothing to do with the Prince song. YouTube puts your movie back up.

But, the DMCA – the act that outlines this process – allows you to go further. In order to discourage the Big Mean Companies from using a “when in doubt, send a take-down notice” strategy, papering the YouTubes of the world with millions of false claims, you have the right to bring an action against Big Mean for damages. The question is: What are the guidelines for those damages? Will they be substantial enough to actually discourage Big Mean Companies? Or will they be so trivial that the “when in doubt, send a take-down notice” becomes the economically smart strategy?

Eric Goldman reports that a judge has ruled. Here’s my I-am-not-a-lawyer attempt to understand it.

In this particular case, Universal Music sent a take-down claim for a YouTube video of a baby dancing to Prince’s “Let’s Go Crazy.” The poster said the video was fair use. The judge agreed. Now the judge has ruled that the poster does not have to prove economic loss in order to get compensated for damages. And, Universal should pay the legal fees for responding to the takedown notice (i.e., telling YouTube that the video actually doesn’t infringe on copyright). But, if you decide to go further and sue for damages, it’s up to the judge (according to this ruling) to decide if the take-down notice contained “knowing and material” misrepresentations. Eric says, “most judges probably will exercise their discretion favorably towards a winning … plaintiff, but it’s not an automatic award.” And, if you lose, you could be ordered to pay the defendant’s legal fees.

Which means, as far as I can tell, that after you (the poster) get the takedown reversed and sue Big Mean for damages, unless you’ve suffered actual economic harm, the best you’re going to get is coverage of your legal fees (maybe). Plus, if you lose, you may be paying for Big Mean’s lawyers’ time.

Sounds like a victory for the “when in doubt” strategy and for Big Mean Companies everywhere.


I asked my friend Wendy Seltzer to check my explanation over. She says it’s basically right, but adds:

This ruling doesn’t change the basic calculation, that plaintiffs’ lawyers could take these cases on contingency and win their fees for a successful 512(g) complaint — it’s just under a different provision in the Copyright Act. Even regular copyright has a fee-shifting provision different from the standard “American rule” that parties bear their own fees and costs.

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3 Responses to “The economics of accusation: Penalty for false DMCA claims is low”

  1. Joho the Blog » The economics of accusation: Penalty for false DMCA claims is low…

    Joho the Blog » The economics of accusation: Penalty for false DMCA claims is low…

  2. Looks like someone at Techdirt must have read your post –

  3. [...] this means is not too much different from DMCA claims: The accused is forced to prove they’re innocent, there’s not a very good system in [...]

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