Late last week, YouTube reinstated Progress Illinois' YouTube channel after Fox Television declined to sue for copyright infringement within the 10 day window prescribed by the Digital Millennium Copyright Act (DMCA). 

As we noted in a previous post, the dispute began back in November 2008, when Fox sent a letter to YouTube demanding the takedown of a video, Beavers On Back-Door Pay Raises, that Progress Illinois, an online news site focused on progressive issues, had uploaded to YouTube and embedded in a blog post examining how some Cook County commissioners were using their expense accounts for personal gain.  The video contained a 26-second clip from a Fox Chicago newscast that had aired a week earlier. 

Fox subsequently sent a second letter to YouTube claiming copyright infringement as to two additional videos, Axelrod: Obama Talked to Blagojevich about Senate Seat and Axelrod: "Our Job Is To Come In . . . With Guns Blazing", that included 1-2 minute clips from an interview conducted with President-Elect Obama's adviser David Axelrod on Fox Chicago Sunday that Progress Illinois embedded in a blog post on its website, Axelrod Comments On Open Senate Seat, D.C. Leadership Vacuum.

On December 10, 2008, YouTube removed the two videos containing clips of the Axelrod interview and, later that day, suspended Progress Illinois' YouTube channel "due to repeat copyright offenses."  On January 5, 2009, Progress Illinois sent what it termed a counter-notification to YouTube pursuant to the DMCA, requesting that the three videos be restored and its account reinstated.

Public Citizen, which represented Progress Illinois in the dispute, approached Fox in an effort to resolve the dispute, but was met with a "chilling demand," according to Paul Alan Levy.

As a price of getting the DMCA takedowns lifted, Fox demanded that Progress Illinois waive its fair use rights for all future uses of Fox material.  Fox's position is that the price of making fair use of excerpts from its news broadcasts is that an otherwise non-commercial blogger must allow Fox to run advertisements on the blog as part of the excerpt. . . .

Although Fox has not yet made its arrangements with a third-party, there is great danger here.  If bloggers start giving in to this demand, that will only help Fox enforce the same threat against other bloggers, to the extent that it enables Fox to argue that there is, in fact, a market for small excerpts from its newscasts.  We urge the blogging community to pay close attention to these developments, and come to the defense of the next "weak link" that Fox targets to enforce its approach. 

As Paul notes, Fox appears to believe that because it can receive advertising revenue for short excerpts posted by bloggers, anyone who posts clips without the requisite embedded advertising would not be entitled to invoke fair use because such use would invariably have a negative effect upon the potential market for the copyrighted work. While "the effect of the [infringing] use upon the potential market for or value of the copyrighted work" is only one of the four fair use factors a court would need to weigh in making a fair use determination, it's often given the most weight. 

Indeed, it may very well be that Fox is simply biding its time while it develops this theory.  Ben Sheffner at the Copyright & Campaigns blog points out that Fox is not precluded from bringing a lawsuit against Progress Illinois:

While Fox declined to sue within the 10-14 day DMCA window, that does not mean Progress Illinois is completely out of the woods. I'm not aware of any legal obstacle to Fox suing the site for copyright infringement after the counternotice window closes (as long as the suit is filed within the usual 3-year statute of limitations). I also believe that Fox can still seek an injunction ordering YouTube to remove the videos under 17 USC § 512(j), even if YouTube complied with the requirements necessary to fall within the § 512(c) safe harbor from a claim for monetary damages.

For more information on this dispute, see our legal threats database entry, Fox Television WFLD-TV v. Progress Illinois.