In a huge victory for user-generated content providers and fair use advocates, a U.S. district judge has ruled that copyright holders must consider whether uses of their material are fair before sending takedown notices to sites that post the content. Judge Jeremy Fogel delivered the ruling for the U.S. District Court of the Northern District of California.

Pennsylvania resident Stephanie Lenz posted a video of her toddler dancing on YouTube so friends and family could view it. YouTube received a take-down notice from Universal a few days later that claimed infringement, because a song for which they hold the copyright, Prince's "Let's Go Crazy," plays in the background of the video and Lenz did not have permission to use it.

Lenz sued Universal for the right to use the song, because it constituted fair use of the copyrighted material. Fair use was first codified in the Copyright Act of 1970, and later, applied to digital media in the Digital Millennium Copyright Act.

For an otherwise infringing use of copyrighted material to be considered a fair use, the court considers four factors: whether the purpose of the use was commercial, the nature of the original work, what amount of the original work was used, and whether the new use devalues the original in the marketplace.

In ruling that Lenz's use was fair, Fogel shifted the burden in this contentious issue back to copyright holders, especially large corporate copyright holders. Companies like Universal had become accustomed to getting complete compliance from YouTube and other video hosting sites when they sent take-down notices. Content creators were afraid to post mash-ups and other work on sites like YouTube, for fear that it would be taken down and that they might even get in legal trouble.

Now you can expect such blanket take-down notices to ebb, as Universal and others must now establish that a use is not fair before demanding take-down.

It's not that advertisers are likely to rush to buy in front of user-generated content now that one sticky legal issue is resolved, but the ruling is one step toward legitimizing this avenue to reach millions of consumers. 

- Pete [1]