Fair Use in Particular Contexts—Part II

Orthogonal uses

In Unbundling Fair Uses, Pamela Samuelson introduces the concept of “orthogonal uses” to describe a category of uses that do not compete with or substitute for the original work and are therefore more likely to be found fair. These are uses that serve fundamentally different purposes from the original—hence, orthogonal, meaning at right angles or non-overlapping in function. Samuelson contrasts these with uses that are more commercially or functionally aligned with the original, which are more likely to raise concerns about market harm or substitution. Orthogonal uses tend to serve an entirely different audience or entirely different function and self-evidently pose minimal or no threat to the market for the original work. They also often further broader public policy goals.

Evidence

Bond v. Blum 317 F.3d 385 (4th Cir. 2003)

In the early 2000s, William Bond married the recently divorced Alyson Slavin. Alyson Slavin and her ex-husband, William Slavin, were locked in a custody battle in which the ex-husband argued, for reasons that will become apparent, that the Bond-Slavin household was not a suitable environment for the former couple’s three children. Bond had a colorful background: he had been a country club tennis instructor, a bicycle salesman, a bodyguard, and an unpublished author. He was also a self-confessed murderer. Bond’s Self-Portrait of a Patricide: How I Got Away with Murder recounts in horrific detail how, at the age of 17, he planned and carried out the murder of his father with a hammer. As prose, the work apparently had no great appeal, but as evidence that the Bond house might not be the best place for a child to grow up, the book was solid gold. When William Slavin’s legal team introduced the manuscript at a deposition, Bond responded by registering his work with the Copyright Office and bringing an action for copyright infringement against William Slavin and his attorneys. Alyson Slavin’s parents, the Blums, who had been extorted by Bond and feared for their daughter’s safety, were also defendants in the copyright case. The district court held that Blum’s reproduction of the book was fair use and Bond appealed.

Purpose and character of the defendants’ use has nothing whatsoever to do with any interest that the copyright law was designed to protect. The copyright law was never designed to protect content as distinguished from mode of expression. It was certainly never intended to utilize, to keep from the public the ability to state the facts in a document as compared to the mode of expression. Moreover, the effect of defendants’ use on the potential market for value of the copyrighted work is absolutely zero.

Notes and questions

(1) The most surprising thing about Bond v. Blum is that it is not the only reported case involving fair use and murder. In 2005, a District Court in Virginia held that photographer Robert Shell’s copyright interests did not prevent the local police from reproducing a photo Shell had taken of his former assistant. See, Shell v. City of Radford, 351 F. Supp. 2d 510 (W.D. Va. 2005). The police were using the photo to solicit information from the public as they investigated Shell for the murder of said assistant. Shell lost his copyright case and was later convicted of manslaughter.

(2) In Jartech, Inc. v. Clancy, 666 F.2d 403 (9th Cir.1982) the Ninth Circuit found that photos and audio recordings of adult movies taken by agents of the city council for use in a nuisance abatement proceeding were fair use. Jartech stands out from other evidentiary fair use cases because the Ninth Circuit upheld a jury verdict of fair use with almost no discussion of the fair use factors. It simply noted that the defendants had reproduced the work as evidence in the nuisance abatement proceedings and not at all for the work’s “intrinsic purpose” and that as such a finding of fair use was justified.

In this case, the use to which the alleged infringers put the copy is not an intrinsic use. The alleged infringers made abbreviated copies of the films, not for subsequent use and enjoyment, but for evidence to be used in the nuisance abatement proceedings.

It is more common to see courts dutifully, almost ploddingly, work their way through the fair use factors in evidentiary fair use cases. Nonetheless, the decisive factor in evidentiary fair use cases is the fundamental difference between using a work as evidence and using it for its intrinsic purpose, regardless of whether that intrinsic purpose was informational, expressive or entertaining. The district court in Shell explained the difference in purpose as the contrast between using Shell’s photographs “for their evidentiary and investigatory value” and their “expressive content.” In Bond, the court made the same point by noting the copyright defendants’ indifference to the book’s expressive qualities: “The defendants’ use of Bond’s copyrighted manuscript … is indifferent to Bond’s mode of expression.” In another passage the court framed the contrast between using the manuscript as evidence and exploiting “the book’s manner of expression for any purpose, commercial or otherwise.”

(3) Why did the Fourth Circuit allow use of Self-Portrait of a Patricide in Bond v. Blum despite the fact that the entire manuscript was copied?

(4) The plaintiffs in Bond, Shell, and Jartech certainly had interests that were adversely affected by the unauthorized copying, why didn’t those interests carry the day under the fourth fair use factor?

(5) What if a freelance photographer was hired to take crime scene photographs? Would the use of those photos in a related civil case be fair use?

Right of Reply

Hustler Magazine Inc. v. Moral Majority Inc., 796 F.2d 1148 (9th Cir. 1986)

In November 1983, Hustler magazine published a parody of a well-known advertising campaign for Campari. The mock advertisement suggested that Rev. Jerry Falwell’s first sexual experience was with his mother, in an outhouse. Falwell, a fundamentalist preacher and conservative political figure, responded with a lawsuit for defamation and intentional infliction of emotional distress, but that suit ran aground on the First Amendment. See, Hustler Magazine, Inc. v. Falwell, 485 U.S. 46 (1988). Falwell also responded by mailing copies of the offending parody to over 750,000 of his viewers and supporters with a plea for donations to help finance his suit against Hustler and its publisher, Larry Flynt. Falwell and his organizations raised almost one million dollars as a result—roughly a six to one return on the cost of postage at the time. Hustler magazine responded in turn with a lawsuit for copyright infringement.

Superficially, Falwell’s fair use defense did not look promising. Falwell had copied the totality of a highly creative work, without addition, and for commercial gain. Nonetheless, a majority of the Ninth Circuit court of appeals held that the Reverend’s use was fair. The majority saw Falwell’s actions as fair use because he republished the parody for a substantially different purpose. Whereas Hustler had created the work to mock Falwell and to entertain its readers, Falwell reprinted the work so that his readers could witness the outrage that he had endured. Hustler’s use was expressive and entertaining, Falwell’s was illustrative and evidentiary. As the court explained: “Falwell was not selling the parody, but was instead using the parody to make a statement about pornography and Larry Flynt, the publisher of Hustler.”

The court also recognized “the public interest in allowing an individual to defend himself against such derogatory personal attacks.” Falwell reprinted the parody to viscerally demonstrate the nature of the slight he had endured in circumstances where a mere summary would have been inadequate. Although both Hustler and Falwell had communicated the same mock-advertisement to their respective audiences to provoke a reaction, Falwell’s rebuttal purpose was entirely separate from Hustler’s initial expressive aims. Essentially, Falwell copied the magazine’s original expression, not to compete with Hustler’s communication or substitute for it, but to denounce it. As the court explained: “Although the Defendants used the parody for a commercial purpose in the sense that they profited from copying it, they did not actually sell the copies to willing buyers. Instead, the Defendants used the copies to generate moral outrage against their ‘enemies’ and thus stimulate monetary support for their political cause.”

For a similar case, with the same result, see Savage v. Council on American-Islamic Relations, Inc., 2008 WL 2951281 (N.D. Cal. July 25, 2008).

Illustrative and informational uses

There is often a fine line between commentary and criticism that reflects back on the original work or its author and merely illustrative use. The distinction is important because whereas reflective uses that embody commentary and criticism are inherently transformative, the transformativeness of illustrative uses is contingent. Even without some element of commentary or criticism, illustrative uses may qualify as transformative provided that there is a clear enough distinction between the original work’s intrinsic purpose and the illustrative use to which it has been put. Whether this difference in purpose exists depends a great deal on context and also on the purpose for which the plaintiff’s work was created in the first place.

The image search cases: Kelly and Perfect 10

In 2003 and 2007, two key court of appeals cases in the Ninth Circuit addressed whether the display of images in the context of a menu of Internet search results violated copyright. See Kelly v. Arriba Soft Corp., 336 F.3d 811 (9th Cir. 2003); Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146 (9th Cir. 2007).

In both Kelly v. Arriba Soft and Perfect 10 v. Amazon, the copyright owners of various photographs sued visual search engines for the way their works were used by those services. At the time at least, Internet search engines that focused on images relied on matching search terms with text associated with images on the Internet. The search engines in Kelly and Perfect 10 worked as follows: if the text associated with an image file was responsive to a user’s search query, the search engine would display a small low-resolution “thumbnail” of the image in a menu of search results, giving the user something like a police lineup of images to choose from. Those thumbnail images were displayed from copies made by the search engine and stored on the search engine’s servers. However, once the user selected a particular thumbnail, the user’s Internet browser would be directed to the original location to retrieve the full-scale image. This distinction matters because under prevailing Ninth Circuit precedent at the time, the search engine could only be held directly liable for copyright infringement for images sourced from its own servers. Directing a user to someone else’s computer system could still qualify as copyright infringement, but only with specific knowledge of the underlying infringement. This distinction is referred to as the “server test”. See Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146 (9th Cir. 2007). See later chapters of this book for the current status of the server test.

In both of the image search cases, Kelly and Perfect 10, the Ninth Circuit found that displaying low-resolution thumbnail images as part of a menu of search results was transformative. In Perfect 10, the court held that the search engine defendant’s use of thumbnails was “highly transformative.” It continued:

These thumbnails were complete copies after a fashion, but their size and quality suggested that they would not substitute for the original images. These same features also made it clear that the thumbnail images were being used as a pointing device toward the original images; an entirely different purpose to the original photos.

In both cases, the use of the thumbnails as pointing devices was deemed to be transformative because that use “served a different function” unrelated to “artistic expression.”

Bill Graham Archives v. Dorling Kindersley Ltd., 448 F.3d 605 (2d Cir 2006)

In 2003 Dorling Kindersley published an illustrated cultural history of the 1960s psychedelic jam band, the Grateful Dead. The 480-page coffee table book, Grateful Dead: The Illustrated Trip, was constructed around an annotated timeline combining over 2000 images with explanatory text. Among these 2000 images were seven concert posters owned by Bill Graham Archives.

The figure below is a representative illustration. On the left is a concert poster for Jefferson Airplane, the Grateful Dead and various others playing at the Hollywood Bowl. As seen on the right hand side of the image, a reduced version of the Hollywood Bowl poster is included in the timeline as one of several items competing for the reader’s attention in collage of images, text, and graphic art. The original Hollywood Bowl poster measured 14 by 21 inches and was reduced to about 1/20th in scale in the defendant’s book.

Although the publisher had initially sought permission from the copyright owner to reproduce the images, the parties were unable to agree on terms and the publisher went ahead regardless. Copyright litigation followed shortly thereafter.

Taking a broad view of transformative use, the trial court in Bill Graham Archives v. Dorling Kindersley Ltd., held that the publisher’s use of the seven original concert posters in a biographical work was transformative, even though the copyrighted images themselves were not the subject of direct commentary or criticism. The district court held that it was sufficient that the works were displayed, not for their original purpose, but to commemorate historic events. On appeal, the Second Circuit agreed.

The Second Circuit held that even where the text of The Illustrated Trip did not comment directly on the concert posters, the works were presented as “historical artifacts graphically representing the fact of significant Grateful Dead concert events.” As such, the defendant’s illustrative use was transformatively different from the original expressive purpose for which the works had been created. As the court explained:

Using a copyrighted work to illustrate or document a historical event is not necessarily transformative. What made the defendant’s use transformative in the Bill Graham Archives case was that its illustrative use was “separate and distinct from the original artistic and promotional purpose for which the images were created.” In contrast, if the original work had been created to document the event, there would be no difference in purpose when the images were used “as historical artifacts to document and represent the actual occurrence of Grateful Dead concert events.” Likewise, the use would not have been transformative if the purpose of the defendant’s illustration was merely to deliver the expressive value of the plaintiff’s original artwork to a new audience. After all, the concert posters were not merely informational, they were also compelling works of graphic design.

The court of appeals was convinced that the defendant’s purpose in reproducing the copyrighted concert posters in The Illustrated Trip was to illustrate key historical events; it was not linked to the work’s original promotional purpose, nor was it simply an attempt to repackage the works for the sake of their intrinsic expressive appeal. This difference in purpose was reinforced by two aspects of the way in which the images were displayed in The Illustrated Trip. First, although the publisher reproduced a complete image of the seven concert posters, it did so on a significantly reduced scale. As the court explained, the reproductions were large enough to allow readers to recognize the historical significance of the posters but “inadequate to offer more than a glimpse of their expressive value.” Second, the posters were blended with a collage of other material in a way that minimized their individual significance. The combined effect of these two features ensured that even though the copyrighted images were copied in their entirety, the visual impact of their artistic expression was significantly limited.

Elvis Presley Enterprises, Inc. v. Passport Video, 349 F.3d 622 (9th Cir. 2003)

Passport Video is a useful counterpoint to Bill Graham Archives. In Passport Video a divided Ninth Circuit court of appeals upheld a lower court ruling that the producers of a 16-hour video documentary about the life of Elvis Presley, The Definitive Elvis, had gone beyond the limits of fair use. The Definitive Elvis included extensive video footage, photos, and music excerpts. The documentary used many copyrighted materials from the Plaintiffs, including clips of Elvis’ television appearances, which range from a few seconds to over a minute, with some clips comprising a large portion of Elvis’ total appearances on specific shows. It also incorporated copyrighted still photos and music as background visuals and audio. This extensive use was not transformative in the eyes of the majority because in large part, the documentary simply rebroadcast the plaintiff’s works for their intrinsic entertainment value. As the majority explained: “The purpose of showing these clips likely goes beyond merely making a reference for a biography, but instead serves the same intrinsic entertainment value that is protected by Plaintiffs’ copyrights.”

Notes and questions

(1) Is there really any difference between Bill Graham Archives and Passport Video that would justify the different fair use rulings?

Sofa Entertainment, Inc. v. Dodger Productions, Inc., 709 F.3d 1273 (9th Cir. 2013)

Jersey Boys was a popular Broadway musical about the 1960s group, the Jersey Boys. The first act of the play closes with a seven-second clip of Ed Sullivan introducing The Four Seasons before a performance on the Ed Sullivan Show—appearing on that influential 1960s television show was a significant turning point in many careers. Sofa Entertainment owned the copyright to historic clips of The Ed Sullivan Show and sued for copyright infringement.

The Ninth Circuit upheld summary judgment in favor of the defendant, principally on the grounds that the use was transformative. After citing Campbell for the proposition that “The central inquiry under the first factor is whether the new work is ‘transformative’”, the court explained:

In light of that conclusion, the rest of the fair use analysis went on to favor the defendants as well. The court found that the original clip was factual and informational in nature, which weighed in favor of fair use; that only seven seconds of a much longer episode were used—just enough to serve the narrative purpose—and that the excerpt did not constitute the “heart” of the work; and that there was no meaningful market harm, as the use neither substituted for the original nor competed with it, and there was no realistic market for licensing such a brief, context-specific clip for dramatic reenactments.

Notes and questions

(1) Bill Graham Archives and the Jersey Boys case were decided prior to the Supreme Court’s decision in Andy Warhol Foundation v. Goldsmith. Would reproducing copyrighted concert posters in The Illustrated Trip to illustrate key historical events still be fair use today? Would using seven seconds of the Ed Sullivan Show “as a biographical anchor”?

Fair use in new markets

The Sony Betamax Case

The Sony Betamax was the first mass-market Video Cassette Recorder or VCR. The Betamax went on sale in 1975 and a year later Universal City Studios, Inc., and Walt Disney Productions, filed a law suit alleging that consumers used the device to infringe their copyrights; they also alleged that Sony Corporation, the manufacturer of the device, was responsible for any copyright infringement made possible by the new machine. The Supreme Court’s decision in Sony has two distinct components: the first examined whether consumer time-shifting of broadcast television for later viewing was fair use or copyright infringement; the second concerned the manufacturer’s liability for a technology which had both infringing and non-infringing uses. This following extract focuses on the fair use status of unauthorized time-shifting.

Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417 (1984)

Justice Stevens delivered the opinion of the Court

Even unauthorized uses of a copyrighted work are not necessarily infringing. An unlicensed use of the copyright is not an infringement unless it conflicts with one of the specific exclusive rights conferred by the copyright statute. Twentieth Century Music Corp. v. Aiken, 422 U.S., at 154-155. Moreover, the definition of exclusive rights in § 106 of the present Act is prefaced by the words “subject to sections 107 through 118.” Those sections describe a variety of uses of copyrighted material that “are not infringements of copyright” “notwithstanding the provisions of section 106.” The most pertinent in this case is § 107, the legislative endorsement of the doctrine of “fair use.”²⁹

That section identifies various factors that enable a court to apply an “equitable rule of reason” analysis to particular claims of infringement. Although not conclusive, the first factor requires that “the commercial or nonprofit character of an activity” be weighed in any fair use decision. If the Betamax were used to make copies for a commercial or profitmaking purpose, such use would presumptively be unfair. The contrary presumption is appropriate here, however, because the District Court’s findings plainly establish that time-shifting for private home use must be characterized as a noncommercial, nonprofit activity. Moreover, when one considers the nature of a televised copyrighted audiovisual work, § 107(2), and that time-shifting merely enables a viewer to see such a work which he had been invited to witness in its entirety free of charge, the fact that the entire work is reproduced, see § 107(3), does not have its ordinary effect of militating against a finding of fair use.

This is not, however, the end of the inquiry because Congress has also directed us to consider “the effect of the use upon the potential market for or value of the copyrighted work.” § 107(4). The purpose of copyright is to create incentives for creative effort. Even copying for noncommercial purposes may impair the copyright holder’s ability to obtain the rewards that Congress intended him to have. But a use that has no demonstrable effect upon the potential market for, or the value of, the copyrighted work need not be prohibited in order to protect the author’s incentive to create. The prohibition of such noncommercial uses would merely inhibit access to ideas without any countervailing benefit.

Thus, although every commercial use of copyrighted material is presumptively an unfair exploitation of the monopoly privilege that belongs to the owner of the copyright, noncommercial uses are a different matter. A challenge to a noncommercial use of a copyrighted work requires proof either that the particular use is harmful, or that if it should become widespread, it would adversely affect the potential market for the copyrighted work. Actual present harm need not be shown; such a requirement would leave the copyright holder with no defense against predictable damage. Nor is it necessary to show with certainty that future harm will result. What is necessary is a showing by a preponderance of the evidence that some meaningful likelihood of future harm exists. If the intended use is for commercial gain, that likelihood may be presumed. But if it is for a noncommercial purpose, the likelihood must be demonstrated.

In this case, respondents failed to carry their burden with regard to home time-shifting. The District Court described respondents’ evidence as follows:

“Plaintiffs’ experts admitted at several points in the trial that the time-shifting without librarying would result in ‘not a great deal of harm.’ Plaintiffs’ greatest concern about time-shifting is with ‘a point of important philosophy that transcends even commercial judgment.’ They fear that with any Betamax usage, ‘invisible boundaries’ are passed: ‘the copyright owner has lost control over his program.’” 480 F. Supp., at 467.

Later in its opinion, the District Court observed:

“Most of plaintiffs’ predictions of harm hinge on speculation about audience viewing patterns and ratings, a measurement system which Sidney Sheinberg, MCA’s president, calls a ‘black art’ because of the significant level of imprecision involved in the calculations.” Id., at 469.

There was no need for the District Court to say much about past harm. “Plaintiffs have admitted that no actual harm to their copyrights has occurred to date.”

On the question of potential future harm from time-shifting, the District Court offered a more detailed analysis of the evidence. It rejected respondents’ “fear that persons ‘watching’ the original telecast of a program will not be measured in the live audience and the ratings and revenues will decrease,” by observing that current measurement technology allows the Betamax audience to be reflected. Id., at 466. It rejected respondents’ prediction “that live television or movie audiences will decrease as more people watch Betamax tapes as an alternative,” with the observation that “[t]here is no factual basis for [the underlying] assumption.” It rejected respondents’ “fear that time-shifting will reduce audiences for telecast reruns,” and concluded instead that “given current market practices, this should aid plaintiffs rather than harm them.” Ibid. And it declared that respondents’ suggestion that “theater or film rental exhibition of a program will suffer because of time-shift recording of that program” “lacks merit.”

After completing that review, the District Court restated its overall conclusion several times, in several different ways. “Harm from time-shifting is speculative and, at best, minimal.” “The audience benefits from the time-shifting capability have already been discussed. It is not implausible that benefits could also accrue to plaintiffs, broadcasters, and advertisers, as the Betamax makes it possible for more persons to view their broadcasts.” “No likelihood of harm was shown at trial, and plaintiffs admitted that there had been no actual harm to date.” “Testimony at trial suggested that Betamax may require adjustments in marketing strategy, but it did not establish even a likelihood of harm.” “Television production by plaintiffs today is more profitable than it has ever been, and, in five weeks of trial, there was no concrete evidence to suggest that the Betamax will change the studios’ financial picture.”

The District Court’s conclusions are buttressed by the fact that to the extent time-shifting expands public access to freely broadcast television programs, it yields societal benefits. In Community Television of Southern California v. Gottfried, 459 U.S. 498 (1983), we acknowledged the public interest in making television broadcasting more available. Concededly, that interest is not unlimited. But it supports an interpretation of the concept of “fair use” that requires the copyright holder to demonstrate some likelihood of harm before he may condemn a private act of time-shifting as a violation of federal law.

When these factors are all weighed in the “equitable rule of reason” balance, we must conclude that this record amply supports the District Court’s conclusion that home time-shifting is fair use. In light of the findings of the District Court regarding the state of the empirical data, it is clear that the Court of Appeals erred in holding that the statute as presently written bars such conduct.

In summary, the record and findings of the District Court lead us to two conclusions. First, Sony demonstrated a significant likelihood that substantial numbers of copyright holders who license their works for broadcast on free television would not object to having their broadcasts time-shifted by private viewers. And second, respondents failed to demonstrate that time-shifting would cause any likelihood of nonminimal harm to the potential market for, or the value of, their copyrighted works. The Betamax is, therefore, capable of substantial noninfringing uses. Sony’s sale of such equipment to the general public does not constitute contributory infringement of respondents’ copyrights.

* * *

“The direction of Art. I is that Congress shall have the power to promote the progress of science and the useful arts. When, as here, the Constitution is permissive, the sign of how far Congress has chosen to go can come only from Congress.” Deepsouth Packing Co. v. Laitram Corp., 406 U.S. 518, 530 (1972).

One may search the Copyright Act in vain for any sign that the elected representatives of the millions of people who watch television every day have made it unlawful to copy a program for later viewing at home, or have enacted a flat prohibition against the sale of machines that make such copying possible.

It may well be that Congress will take a fresh look at this new technology, just as it so often has examined other innovations in the past. But it is not our job to apply laws that have not yet been written. Applying the copyright statute, as it now reads, to the facts as they have been developed in this case, the judgment of the Court of Appeals must be reversed.

It is so ordered.

Notes and questions

(1) Why did the Supreme Court majority hold that users of the Sony Betamax were engaging in fair use?

(2) How far should that reasoning extend to other technologies that facilitate consumer copying? In Recording Indus. Association of Am. v. Diamond Multimedia Sys., Inc., 180 F.3d 1072, 1079 (9th Cir.1999), the Ninth Circuit said that the Diamond Rio mp3 player (a large capacity portable MP3 player that predated the now more famous Apple iPod) “merely makes copies in order to render portable, or ‘space-shift,’ those [music] files that already reside on a user’s hard drive. . . . Such copying is a paradigmatic noncommercial personal use.”

(3) In Fox Broadcasting Co., Inc. v. Dish Network LLC, 747 F.3d 1060 (9th Cir. 2014), the Ninth Circuit affirmed the denial of a preliminary injunction, holding that Fox was not likely to overcome Dish Network’s fair use defense with respect to a digital video recorder that automatically skipped the advertisements in programs its users recorded. The court found that Fox had not demonstrated any harm from on-demand availability and that any harm resulting from the ease of skipping commercials did “not implicate any copyright interest.” The court of appeals explained:

Yet, as the district court held, commercial-skipping does not implicate Fox’s copyright interest because Fox owns the copyrights to the television programs, not to the ads aired in the commercial breaks. If recording an entire copyrighted program is a fair use, the fact that viewers do not watch the ads not copyrighted by Fox cannot transform the recording into a copyright violation.

Do you agree with this reasoning?

More typical new markets cases

Infinity Broadcast Corp. v. Kirkwood, 150 F.3d 104 (2d Cir. 1998)

whether the new work merely supersedes the objects of the original creation[,] or instead adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message; it asks, in other words, whether and to what extent the new work is “transformative.”

the more successful Kirkwood becomes in selling his service to interested parties, the more likely it is that any given broadcast will be retransmitted ... [and] that a subscriber, or the collective action of a plurality of subscribers, will cause Kirkwood to retransmit most or all of a given program.

requires courts to consider not only the extent of market harm caused by the particular actions of the alleged infringer, but also “whether unrestricted and wide-spread conduct of the sort engaged in by the defendant ... would result in a substantially adverse impact on the potential market” for the original.

Notes and questions

(1) If the court could see that the Dial-Up retransmission service had a different purpose to the original broadcasts, and that it was possibly beneficial, why was it not transformative?

A & M Records, Inc. v. Napster, Inc., 239 F.3d 1004 (9th Cir. 2001)

Circuit Judge Beezer

Plaintiffs are engaged in the commercial recording, distribution and sale of copyrighted musical compositions and sound recordings. The complaint alleges that Napster, Inc. (“Napster”) is a contributory and vicarious copyright infringer. The district court preliminarily enjoined Napster “from engaging in, or facilitating others in copying, downloading, uploading, transmitting, or distributing plaintiffs’ copyrighted musical compositions and sound recordings, protected by either federal or state law, without express permission of the rights owner.” We entered a temporary stay of the preliminary injunction pending resolution of this appeal.

Napster facilitates the transmission of MP3 files between and among its users. Through a process commonly called “peer-to-peer” file sharing, Napster allows its users to: (1) make MP3 music files stored on individual computer hard drives available for copying by other Napster users; (2) search for MP3 music files stored on other users’ computers; and (3) transfer exact copies of the contents of other users’ MP3 files from one computer to another via the Internet. These functions are made possible by Napster’s MusicShare software, available free of charge from Napster’s Internet site, and Napster’s network servers and server-side software. Napster provides technical support for the indexing and searching of MP3 files, as well as for its other functions, including a “chat room,” where users can meet to discuss music, and a directory where participating artists can provide information about their music.

Plaintiffs claim Napster users are engaged in the wholesale reproduction and distribution of copyrighted works, all constituting direct infringement. The district court agreed. The district court determined that plaintiffs’ exclusive rights under § 106 were violated: “here the evidence establishes that a majority of Napster users use the service to download and upload copyrighted music. And by doing that, it constitutes—the uses constitute direct infringement of plaintiffs’ musical compositions, recordings.” The district court also noted that “it is pretty much acknowledged by Napster that this is infringement.” We agree that plaintiffs have shown that Napster users infringe at least two of the copyright holders’ exclusive rights: the rights of reproduction, § 106(1); and distribution, § 106(3). Napster users who upload file names to the search index for others to copy violate plaintiffs’ distribution rights. Napster users who download files containing copyrighted music violate plaintiffs’ reproduction rights.

Napster asserts an affirmative defense to the charge that its users directly infringe plaintiffs’ copyrighted musical compositions and sound recordings.

Napster contends that its users do not directly infringe plaintiffs’ copyrights because the users are engaged in fair use of the material. Napster identifies three specific alleged fair uses: sampling, where users make temporary copies of a work before purchasing; space-shifting, where users access a sound recording through the Napster system that they already own in audio CD format; and permissive distribution of recordings by both new and established artists.

The district court considered factors listed in 17 U.S.C. § 107, which guide a court’s fair use determination. … The district court concluded that Napster users are not fair users. We agree. We first address the court’s overall fair use analysis.

This factor focuses on whether the new work merely replaces the object of the original creation or instead adds a further purpose or different character. In other words, this factor asks “whether and to what extent the new work is ‘transformative.’” See Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 579 (1994).

The district court first concluded that downloading MP3 files does not transform the copyrighted work. This conclusion is supportable. Courts have been reluctant to find fair use when an original work is merely retransmitted in a different medium. See, e.g., Infinity Broadcast Corp. v. Kirkwood, 150 F.3d 104, 108 (2d Cir.1998) (concluding that retransmission of radio broadcast over telephone lines is not transformative); UMG Recordings, Inc. v. MP3.com, Inc., 92 F.Supp.2d 349, 351 (S.D.N.Y.) (finding that reproduction of audio CD into MP3 format does not “transform” the work).

This “purpose and character” element also requires the district court to determine whether the allegedly infringing use is commercial or noncommercial. See Campbell, 510 U.S. at 584-85. A commercial use weighs against a finding of fair use but is not conclusive on the issue. Id. The district court determined that Napster users engage in commercial use of the copyrighted materials largely because (1) “a host user sending a file cannot be said to engage in a personal use when distributing that file to an anonymous requester” and (2) “Napster users get for free something they would ordinarily have to buy.” The district court’s findings are not clearly erroneous.

Direct economic benefit is not required to demonstrate a commercial use. Rather, repeated and exploitative copying of copyrighted works, even if the copies are not offered for sale, may constitute a commercial use. See Worldwide Church of God v. Philadelphia Church of God, 227 F.3d 1110, 1118 (9th Cir.2000) (stating that church that copied religious text for its members “unquestionably profited” from the unauthorized “distribution and use of [the text] without having to account to the copyright holder”); American Geophysical Union v. Texaco, Inc., 60 F.3d 913, 922 (2d Cir.1994) (finding that researchers at for-profit laboratory gained indirect economic advantage by photocopying copyrighted scholarly articles). In the record before us, commercial use is demonstrated by a showing that repeated and exploitative unauthorized copies of copyrighted works were made to save the expense of purchasing authorized copies. See Worldwide Church, 227 F.3d at 1117-18; Sega Enters. Ltd. v. MAPHIA, 857 F.Supp. 679, 687 (N.D.Cal.1994) (finding commercial use when individuals downloaded copies of video games “to avoid having to buy video game cartridges”); see also American Geophysical, 60 F.3d at 922. Plaintiffs made such a showing before the district court.

We also note that the definition of a financially motivated transaction for the purposes of criminal copyright actions includes trading infringing copies of a work for other items, “including the receipt of other copyrighted works.” See No Electronic Theft Act (“NET Act”), Pub.L. No. 105-147, 18 U.S.C. § 101 (defining “Financial Gain”).

Works that are creative in nature are “closer to the core of intended copyright protection” than are more fact-based works. See Campbell, 510 U.S. at 586. The district court determined that plaintiffs’ “copyrighted musical compositions and sound recordings are creative in nature which cuts against a finding of fair use under the second factor.” We find no error in the district court’s conclusion.

“While ‘wholesale copying does not preclude fair use per se,’ copying an entire work ‘militates against a finding of fair use.’” Worldwide Church, 227 F.3d at 1118 (quoting Hustler Magazine, Inc. v. Moral Majority, Inc., 796 F.2d 1148, 1155 (9th Cir.1986)). The district court determined that Napster users engage in “wholesale copying” of copyrighted work because file transfer necessarily “involves copying the entirety of the copyrighted work.” We agree. We note, however, that under certain circumstances, a court will conclude that a use is fair even when the protected work is copied in its entirety. See, e.g., Sony Corp. v. Universal City Studios, Inc., 464 U.S. 417, 449-50 (1984) (acknowledging that fair use of time-shifting necessarily involved making a full copy of a protected work).

“Fair use, when properly applied, is limited to copying by others which does not materially impair the marketability of the work which is copied.” Harper & Row Publishers, Inc. v. Nation Enters., 471 U.S. 539, 566-67 (1985). “[T]he importance of this [fourth] factor will vary, not only with the amount of harm, but also with the relative strength of the showing on the other factors.” Campbell, 510 U.S. at 591 n. 21. The proof required to demonstrate present or future market harm varies with the purpose and character of the use:

A challenge to a noncommercial use of a copyrighted work requires proof either that the particular use is harmful, or that if it should become widespread, it would adversely affect the potential market for the copyrighted work. . . . If the intended use is for commercial gain, that likelihood [of market harm] may be presumed. But if it is for a noncommercial purpose, the likelihood must be demonstrated.

Sony, 464 U.S. at 451 (emphases added).

Addressing this factor, the district court concluded that Napster harms the market in “at least” two ways: it reduces audio CD sales among college students and it “raises barriers to plaintiffs’ entry into the market for the digital downloading of music.” [The court summarized the district court’s treatment of the expert evidence.] The district court cited both the Jay and Fine Reports in support of its finding that Napster use harms the market for plaintiffs’ copyrighted musical compositions and sound recordings by reducing CD sales among college students. The district court cited the Teece Report to show the harm Napster use caused in raising barriers to plaintiffs’ entry into the market for digital downloading of music. The district court’s careful consideration of defendant’s objections to these reports and decision to rely on the reports for specific issues demonstrates a proper exercise of discretion in addition to a correct application of the fair use doctrine. Defendant has failed to show any basis for disturbing the district court’s findings.

We, therefore, conclude that the district court made sound findings related to Napster’s deleterious effect on the present and future digital download market. Moreover, lack of harm to an established market cannot deprive the copyright holder of the right to develop alternative markets for the works. See L.A. Times v. Free Republic, 54 U.S.P.Q.2d 1453, 1469-71 (C.D.Cal.2000) (stating that online market for plaintiff newspapers’ articles was harmed because plaintiffs demonstrated that “[defendants] are attempting to exploit the market for viewing their articles online”); see also UMG Recordings, 92 F.Supp.2d at 352 (“Any allegedly positive impact of defendant’s activities on plaintiffs’ prior market in no way frees defendant to usurp a further market that directly derives from reproduction of the plaintiffs’ copyrighted works.”). Here, similar to L.A. Times and UMG Recordings, the record supports the district court’s finding that the “record company plaintiffs have already expended considerable funds and effort to commence Internet sales and licensing for digital downloads.” 114 F.Supp.2d at 915. Having digital downloads available for free on the Napster system necessarily harms the copyright holders’ attempts to charge for the same downloads.

Judge Patel did not abuse her discretion in reaching the above fair use conclusions, nor were the findings of fact with respect to fair use considerations clearly erroneous. We next address Napster’s identified uses of sampling and space-shifting.

Napster maintains that its identified uses of sampling and space-shifting were wrongly excluded as fair uses by the district court.

a. Sampling

Napster contends that its users download MP3 files to “sample” the music in order to decide whether to purchase the recording. Napster argues that the district court: (1) erred in concluding that sampling is a commercial use because it conflated a noncommercial use with a personal use; (2) erred in determining that sampling adversely affects the market for plaintiffs’ copyrighted music, a requirement if the use is noncommercial; and (3) erroneously concluded that sampling is not a fair use because it determined that samplers may also engage in other infringing activity.

The district court determined that sampling remains a commercial use even if some users eventually purchase the music. We find no error in the district court’s determination. Plaintiffs have established that they are likely to succeed in proving that even authorized temporary downloading of individual songs for sampling purposes is commercial in nature. The record supports a finding that free promotional downloads are highly regulated by the record company plaintiffs and that the companies collect royalties for song samples available on retail Internet sites. Id. Evidence relied on by the district court demonstrates that the free downloads provided by the record companies consist of thirty-to-sixty second samples or are full songs programmed to “time out,” that is, exist only for a short time on the downloader’s computer. In comparison, Napster users download a full, free and permanent copy of the recording. The determination by the district court as to the commercial purpose and character of sampling is not clearly erroneous.

The district court further found that both the market for audio CDs and market for online distribution are adversely affected by Napster’s service. As stated in our discussion of the district court’s general fair use analysis: the court did not abuse its discretion when it found that, overall, Napster has an adverse impact on the audio CD and digital download markets. Contrary to Napster’s assertion that the district court failed to specifically address the market impact of sampling, the district court determined that “even if the type of sampling supposedly done on Napster were a non-commercial use, plaintiffs have demonstrated a substantial likelihood that it would adversely affect the potential market for their copyrighted works if it became widespread.” The record supports the district court’s preliminary determinations that: (1) the more music that sampling users download, the less likely they are to eventually purchase the recordings on audio CD; and (2) even if the audio CD market is not harmed, Napster has adverse effects on the developing digital download market.

Napster further argues that the district court erred in rejecting its evidence that the users’ downloading of “samples” increases or tends to increase audio CD sales. The district court, however, correctly noted that “any potential enhancement of plaintiffs’ sales . . . would not tip the fair use analysis conclusively in favor of defendant.” We agree that increased sales of copyrighted material attributable to unauthorized use should not deprive the copyright holder of the right to license the material. See Campbell, 510 U.S. at 591 n. 21 (“Even favorable evidence, without more, is no guarantee of fairness. Judge Leval gives the example of the film producer’s appropriation of a composer’s previously unknown song that turns the song into a commercial success; the boon to the song does not make the film’s simple copying fair.”); see also L.A. Times, 54 U.S.P.Q.2d at 1471-72. Nor does positive impact in one market, here the audio CD market, deprive the copyright holder of the right to develop identified alternative markets, here the digital download market. See id. at 1469-71.

We find no error in the district court’s factual findings or abuse of discretion in the court’s conclusion that plaintiffs will likely prevail in establishing that sampling does not constitute a fair use.

b. Space-Shifting

Napster also maintains that space-shifting is a fair use. Space-shifting occurs when a Napster user downloads MP3 music files in order to listen to music he already owns on audio CD. Napster asserts that we have already held that space-shifting of musical compositions and sound recordings is a fair use. See Recording Indus. Ass’n of Am. v. Diamond Multimedia Sys., Inc., 180 F.3d 1072, 1079 (9th Cir.1999) (“Rio [a portable MP3 player] merely makes copies in order to render portable, or ‘space-shift,’ those files that already reside on a user’s hard drive. . . . Such copying is a paradigmatic noncommercial personal use.”). See also generally Sony, 464 U.S. at 423 (holding that “time-shifting,” where a video tape recorder owner records a television show for later viewing, is a fair use).

We conclude that the district court did not err when it refused to apply the “shifting” analyses of Sony and Diamond. Both Diamond and Sony are inapposite because the methods of shifting in these cases did not also simultaneously involve distribution of the copyrighted material to the general public; the time or space-shifting of copyrighted material exposed the material only to the original user. In Diamond, for example, the copyrighted music was transferred from the user’s computer hard drive to the user’s portable MP3 player. So too Sony, where “the majority of VCR purchasers . . . did not distribute taped television broadcasts, but merely enjoyed them at home.” Conversely, it is obvious that once a user lists a copy of music he already owns on the Napster system in order to access the music from another location, the song becomes “available to millions of other individuals,” not just the original CD owner.

c. Other Uses

Permissive reproduction by either independent or established artists is the final fair use claim made by Napster. The district court noted that plaintiffs did not seek to enjoin this and any other noninfringing use of the Napster system, including: chat rooms, message boards and Napster’s New Artist Program. Plaintiffs do not challenge these uses on appeal.

We find no error in the district court’s determination that plaintiffs will likely succeed in establishing that Napster users do not have a fair use defense.

Notes and questions

(1) Why is the result in Sony different to that in Napster and Kirkwood?

(2) Notice that in Sony, the plaintiffs apparently failed to offer convincing evidence of market harm but that Napster held that file-sharing harmed both the present market for CDs and the potential market for digital downloads that the plaintiffs had not really taken advantage of. The courts in these cases are not just making an empirical assessment of real-world markets, they are deciding what uses of copyrighted works should be the subject of market transactions. In some cases, these markets might not even exist yet or in their infancy, in others they may be well developed. Does the fact that the rights holder is deliberately leaving the market unfulfilled mean that what would otherwise be infringement should be fair use?

(3) Did file sharing really harm the market for recorded music? In addition to some fairly obvious intuition about substitution, the weight of empirical analysis strongly suggests it did. Justin Hughes and Michael D. Smith reviewed this evidence and how it has been received in the law review literature in a 2024 law review article. They found that the law literature disproportionately cites studies that show no harm from piracy, despite the majority of peer-reviewed research to the contrary. Of the 34 studies on the topic reviewed by Hughes and Smith, legal scholars tended to favor a single “no harm” study by Oberholzer-Gee and Strumpf, often ignoring the broader body of evidence. They attribute this disconnect to confirmation bias, citation cascades, insensitivity to peer review, and a tendency to present “balanced” views even when the evidence heavily favors one side. See, Justin Hughes & Michael D. Smith, Do Copyright Law Professors Pay Attention to Economists? – How Empirical Evidence on the Effects of Copyright Piracy Does (Not) Appear in Law Literature, 47 Columbia Journal of Law & the Arts 165 (2024).

(4) Part of the reason Napster was so popular in 1999 and 2000 before it was shut down was that there was no significant legal platform for MP3 downloads at the time. That market was essentially left void until the launch of the Apple iTunes Store on April 28, 2003. The recording industry’s reluctance to enter the digital distribution market seems like a classic case of the “Innovator’s Dilemma.” As Professor Clayton Christensen explains in his famous book by that name, companies that are heavily invested in the status quo are often disinclined to pursue new technologies that will disrupt an existing market. This is not because they fail to recognize the potential of the new technology, but rather because they appreciate that the new technology will cannibalize the market share of existing offerings.

American Geophysical Union v. Texaco, Inc., 60 F.3d 913 (2d Cir. 1994)

In the 1990s, American Geophysical Union and other scientific publishers who held copyrights to various scientific and technical journals sued Texaco Inc., a major oil company that maintained a private, for-profit corporate library and research facility, where its scientists and engineers routinely made photocopies of individual articles from scientific journals for their research purposes. The company subscribed to many scientific journals, but scientists would photocopy articles to keep in their personal files for future reference and research.

The case centered on Texaco’s systematic and institutionalized practice of photocopying copyrighted journal articles. Texaco employees would photocopy complete articles from journals the company legitimately subscribed to. The employees kept these copies in personal files for ongoing research projects and used the copies for their scientific and commercial research work. Although the copying was carried out by individual scientists, the court treated it as a corporate practice undertaken in furtherance of Texaco’s commercial research operations.

The Second Circuit held that Texaco’s systematic photocopying of journal articles did not constitute fair use and therefore infringed the plaintiffs’ copyrights. Both the district court, in an opinion by then-Judge Pierre Leval, and the Second Circuit majority emphasized that Texaco’s use was commercial and nontransformative. Notably, the court held that the use was commercial and not transformative because Texaco was using the articles for their original purpose (scientific research). The fact that photocopying made the articles more convenient to use in laboratories, offices, or at home did not alter their purpose or character and therefore did not render the use transformative.

When it turned to the fourth fair use factor (effect on the market for or value of the copyrighted work), the court acknowledged that there was no traditional market for individual journal articles—publishers typically only sold complete journal subscriptions and authors weren’t directly paid for articles. The court also acknowledged earlier precedent holding that similar photocopying by a government research library constituted fair use, most notably Williams & Wilkins Co. v. United States, a decision affirmed by an equally divided Supreme Court. In response to that decision, Congress encouraged the academic publishing industry to develop collective licensing mechanisms for photocopying.

However, the court determined that the publishers had since established a viable licensing market through the Copyright Clearance Center (CCC) that allowed institutional users to obtain photocopying licenses. The Texaco litigation was widely understood as a test case intended to encourage compliance with that emerging licensing regime. The court concluded that Texaco’s systematic photocopying caused substantial harm to the publishers’ copyrights because Texaco could have obtained authorized copies through document delivery services, direct licensing agreements, or CCC licenses, all of which would have generated significant additional revenue for the publishers. Although the Second Circuit did not believe Texaco’s copying would materially reduce journal subscriptions, it found that the loss of photocopying license revenue constituted cognizable market harm under the fourth factor.

The court did not think this framing of market effect was circular:

It is indisputable that, as a general matter, a copyright holder is entitled to demand a royalty for licensing others to use its copyrighted work, see 17 U.S.C. § 106 (copyright owner has exclusive right “to authorize” certain uses), and that the impact on potential licensing revenues is a proper subject for consideration in assessing the fourth factor.

However, not every effect on potential licensing revenues enters the analysis under the fourth factor. Specifically, courts have recognized limits on the concept of “potential licensing revenues” by considering only traditional, reasonable, or likely to be developed markets when examining and assessing a secondary use’s “effect upon the potential market for or value of the copyrighted work.” See Campbell (“The market for potential derivative uses includes only those that creators of original works would in general develop or license others to develop.”); Harper & Row (fourth factor concerned with “use that supplants any part of the normal market for a copyrighted work”). Applying this framework, the Second Circuit held that institutional photocopying licenses constituted such a traditional, reasonable, or likely-to-be-developed market.

Thus, Texaco stands for the proposition that established or emerging permissions markets for photocopying may be taken into account in evaluating fair use, even where the market consists of licenses created in response to widespread copying practices rather than long-standing modes of exploitation.

How do we know when a market will be “considered traditional, reasonable, or likely to be developed”?

Non-transformative uses in the public interest

Providing Access to the Print-Disabled

Providing access to the print-disabled is a non-transformative use, but it is nonetheless a preferred use under current fair use law.

In 2004, the Internet search engine company Google began scanning and digitizing the collections of a number of academic libraries with the aim of making their contents searchable in the same way Internet websites are searchable. One of the incentives for libraries to participate in this program was that they received their own digital versions of any item in their collection that Google had scanned.

The Google Books project led to a complicated class action lawsuit filed by the Authors Guild in 2005. In 2011, the Authors Guild filed a second lawsuit taking aim against the academic libraries that had partnered with Google. Those libraries had centralized their digital collections under the umbrella of a new organization called the HathiTrust. One of the features of the HathiTrust that the Authors Guild objected to was that the HathiTrust digital library allowed member libraries to provide students with print disabilities access to the full text of copyrighted works.

Authors Guild v. HathiTrust, 755 F.3d 87 (2d Cir.2014)

Circuit Judge Barrington D. Parker

The HDL allows member libraries to provide patrons with certified print disabilities access to the full text of copyrighted works. A “print disability” is any disability that prevents a person from effectively reading printed material. Blindness is one example, but print disabilities also include those that prevent a person from physically holding a book or turning pages. To use this service, a patron must obtain certification of his disability from a qualified expert. Through the HDL, a print-disabled user can obtain access to the contents of works in the digital library using adaptive technologies such as software that converts the text into spoken words, or that magnifies the text. Currently, the University of Michigan’s library is the only HDL member that permits such access, although other member libraries intend to provide it in the future.

The HDL also provides print-disabled patrons with versions of all of the works contained in its digital archive in formats accessible to them. In order to obtain access to the works, a patron must submit documentation from a qualified expert verifying that the disability prevents him or her from reading printed materials, and the patron must be affiliated with an HDL member that has opted-into the program. Currently, the University of Michigan is the only HDL member institution that has opted-in. We conclude that this use is also protected by the doctrine of fair use.

[The court’s general discussion of fair use is omitted] In applying the Factor One analysis, the district court concluded that “the use of digital copies to facilitate access for print-disabled persons is a transformative” use. This is a misapprehension; providing expanded access to the print disabled is not “transformative.”

As discussed above, a transformative use adds something new to the copyrighted work and does not merely supersede the purposes of the original creation. See Campbell, 510 U.S. at 579. The Authors state that they “write books to be read (or listened to).” By making copyrighted works available in formats accessible to the disabled, the HDL enables a larger audience to read those works, but the underlying purpose of the HDL’s use is the same as the author’s original purpose.

Indeed, when the HDL recasts copyrighted works into new formats to be read by the disabled, it appears, at first glance, to be creating derivative works over which the author ordinarily maintains control. See 17 U.S.C. § 106(2). As previously noted, paradigmatic examples of derivative works include translations of the original into a different language, or adaptations of the original into different forms or media. See id. § 101 (defining “derivative work”). The Authors contend that by converting their works into a different, accessible format, the HDL is simply creating a derivative work.

It is true that, oftentimes, the print-disabled audience has no means of obtaining access to the copyrighted works included in the HDL. But, similarly, the non-English-speaking audience cannot gain access to untranslated books written in English and an unauthorized translation is not transformative simply because it enables a new audience to read a work.

This observation does not end the analysis. “While a transformative use generally is more likely to qualify as fair use, ‘transformative use is not absolutely necessary for a finding of fair use.’” Swatch Group v. Bloomberg L.P., 756 F.3d 73, 84, (2d Cir.2014) (quoting Campbell, 510 U.S. at 579). We conclude that providing access to the print-disabled is still a valid purpose under Factor One even though it is not transformative. We reach that conclusion for several reasons.

First, the Supreme Court has already said so. As Justice Stevens wrote for the Court: “Making a copy of a copyrighted work for the convenience of a blind person is expressly identified by the House Committee Report as an example of fair use, with no suggestion that anything more than a purpose to entertain or to inform need motivate the copying.” Sony Corp. of Am., 464 U.S. at 455 n. 40.

Our conclusion is reinforced by the legislative history on which he relied. The House Committee Report that accompanied codification of the fair use doctrine in the Copyright Act of 1976 expressly stated that making copies accessible “for the use of blind persons” posed a “special instance illustrating the application of the fair use doctrine....” House Report at 73 (1976). The Committee noted that “special [blind-accessible formats] ... are not usually made by the publishers for commercial distribution.” Id. In light of its understanding of the market (or lack thereof) for books accessible to the blind, the Committee explained that “the making of a single copy or phonorecord by an individual as a free service for a blind persons [sic] would properly be considered a fair use under section 107.” Id. We believe this guidance supports a finding of fair use in the unique circumstances presented by print-disabled readers.

Since the passage of the 1976 Copyright Act, Congress has reaffirmed its commitment to ameliorating the hardships faced by the blind and the print disabled. In the Americans with Disabilities Act, Congress declared that our “Nation’s proper goals regarding individuals with disabilities are to assure equality of opportunity, full participation, independent living, and economic self-sufficiency for such individuals.” 42 U.S.C. § 12101(7). Similarly, the Chafee Amendment illustrates Congress’s intent that copyright law make appropriate accommodations for the blind and print disabled. See 17 U.S.C. § 121.

Through the HDL, the disabled can obtain access to copyrighted works of all kinds, and there is no dispute that those works are of the sort that merit protection under the Copyright Act. As a result, Factor Two weighs against fair use. This does not preclude a finding of fair use, however, given our analysis of the other factors. Cf. Davis v. Gap, Inc., 246 F.3d 152, 175 (2d Cir.2001) (“The second statutory factor, the nature of the copyrighted work, is rarely found to be determinative.”).

Regarding Factor Three, as previously noted, the HDL retains copies as digital image files and as text-only files, which are then stored in four separate locations. The Authors contend that this amount of copying is excessive because the Libraries have not demonstrated their need to retain the digital image files in addition to the text files.

We are unconvinced. The text files are required for text searching and to create text-to-speech capabilities for the blind and disabled. But the image files will provide an additional and often more useful method by which many disabled patrons, especially students and scholars, can obtain access to these works. These image files contain information, such as pictures, charts, diagrams, and the layout of the text on the printed page that cannot be converted to text or speech. None of this is captured by the HDL’s text-only copies. Many legally blind patrons are capable of viewing these images if they are sufficiently magnified or if the color contrasts are increased. And other disabled patrons, whose physical impairments prevent them from turning pages or from holding books, may also be able to use assistive devices to view all of the content contained in the image files for a book. For those individuals, gaining access to the HDL’s image files — in addition to the text-only files — is necessary to perceive the books fully. Consequently, it is reasonable for the Libraries to retain both the text and image copies.

The fourth factor also weighs in favor of a finding of fair use. It is undisputed that the present-day market for books accessible to the handicapped is so insignificant that “it is common practice in the publishing industry for authors to forgo royalties that are generated through the sale of books manufactured in specialized formats for the blind.” “The number of accessible books currently available to the blind for borrowing is a mere few hundred thousand titles, a minute percentage of the world’s books. In contrast, the HDL contains more than ten million accessible volumes.” When considering the 1976 Act, Congress was well aware of this problem. The House Committee Report observed that publishers did not usually make their books available in specialized formats for the blind. House Report at 73, 1976. That observation remains true today.

Weighing the factors together, we conclude that the doctrine of fair use allows the Libraries to provide full digital access to copyrighted works to their print-disabled patrons.

Notes and questions

(1) If providing print-disabled patrons with full digital access to books was not transformative, why does the court think it is still fair use?

(2) The Chafee Amendment. The Second Circuit in Authors Guild v. HathiTrust noted that in light of its holding on fair use it did not need to consider whether the disability-access use is protected under the Chafee Amendment, 17 U.S.C. § 121. Under the Chafee Amendment, “authorized entities” are permitted to reproduce or distribute copies of a previously published, nondramatic literary work in specialized formats exclusively for use by the blind or other persons with disabilities. Under § 121(d)(1), an “‘authorized entity’ means a nonprofit organization or a governmental agency that has a primary mission to provide specialized services relating to training, education, or adaptive reading or information access needs of blind or other persons with disabilities.”

In the district court, Judge Baer had held that the ADA reproduction and distribution of their collections to print-disabled individuals was part of the “primary mission” of the libraries of educational institutions. Thus, each library was a potential “authorized entity” under the Chafee Amendment. HathiTrust, 902 F.Supp.2d at 465. As a result, the district court concluded (at 465) that:

The provision of access to previously published non-dramatic literary works within the HDL fits squarely within the Chafee Amendment, although Defendants may certainly rely on fair use ... to justify copies made outside of these categories or in the event that they are not authorized entities.

Educational Fair Uses

Since the Statute of Anne, one of the essential purposes of copyright has been the “encouragement of learning” and the dissemination of knowledge. There is a strong tradition in American fair use jurisprudence of favoring educational uses. The text of section 107 itself highlights the importance Congress placed on educational use: among the six statutory examples are “teaching (including multiple copies for classroom use), scholarship, or research” and this preference is reinforced by the consideration in the first factor of whether a use is for “nonprofit educational purposes.”

17 U.S. Code § 107 - Limitations on exclusive rights: Fair use

Notwithstanding the provisions of sections 106 and 106A, the fair use of a copyrighted work, including such use by reproduction in copies or phonorecords or by any other means specified by that section, for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include—

(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; … (emphasis added)

The extent to which fair use justifies copying extracts of published works as part of student course materials has been contested for some time. Such practices were widespread at the time the 1976 Act was passed and are clearly supported by the legislative history but changes in technology (especially electronic course reserves) and market structure (the availability of new licensing options) have destabilized any consensus that existed in the background of the 1976 Act.

Although it is not an education case, American Geophysical Union v. Texaco, Inc., 60 F.3d 913 (2d Cir. 1994) is a pivotal case to add to our context here. Texaco is discussed earlier in this book.

In Basic Books, Inc. v. Kinko’s Graphics Corp., 758 F. Supp. 1522 (S.D.N.Y. 1991) the district court rejected a commercial copyshop’s argument that the copying of various extracts from copyrighted works for college student course materials was justified under the fair use doctrine. The court found the fact that certain excerpts represented 5 to 14 percent of the whole work to weigh against the defendant, and the fact that other excerpts represented 16 to 28 percent of the whole work weighed heavily against the defendant.

Similarly, in Princeton University Press v. Michigan Document Services, Inc., 99 F.3d 1381 (6th Cir. 1996) (en banc) the Sixth Circuit held that a commercial copyshop was not entitled to a fair use defense when it reproduced substantial portions of copyrighted academic works and sold the copies in bound, paper coursepacks to students for use in courses at the University of Michigan. In Princeton University Press, the court found that extracts ranging from 5 to 30 percent of the works in question weighed against fair use. The Sixth Circuit also found that although the students’ use of the copies was noncommercial, the copy shop used the copies for sale in the course of their for-profit business.

In the long-running Georgia State University (GSU) copyright case, Cambridge University Press v. Patton, three publishing houses sued GSU and various university officials for adopting a policy that allowed GSU professors to place book excerpts on electronic course reserve for the use by students as part of their course materials. The three publishers initially sued with respect to a larger set of books, but after encountering difficulty establishing that they in fact owned the rights in question, the case was narrowed to 74 individual works. Of those 74, the district court found only five had been excerpted beyond the bounds of fair use.

In Cambridge Univ. Press v. Patton, 769 F.3d 1232 (11th Cir. 2014), the Eleventh Circuit provided significant guidance as to how the fair use factors should be applied in photocopying cases and in the new context of electronic reserves, but it eschewed the notion that there can be generally applicable quantitative guidelines that determine whether a use is fair. On remand the district court continued to take a formulaic approach to fair use, although with certain adjustments to appease the Eleventh Circuit. In Cambridge University Press v. Albert, 906 F.3d 1290 (11th Cir. 2018) the Eleventh Circuit again faulted the district court for taking an overly mathematical approach to fair use and also for giving insufficient weight “to the severe threat of market substitution” in a case of non-transformative copying. The district court erred in utilizing a quantitative rubric (25% for factor one; 5% for factor two; 30% for factor three and 40% for factor four). Instead, the court was directed to make a qualitative assessment of the four factors combined without a mathematical formula at any step of its analysis.

Judge Evans delivered her third and final ruling in the GSU Copyright Case on March 2, 2020. In the end, the plaintiffs prevailed in only 10 of the 48 infringement claims still at issue. See Cambridge University Press v. Becker, 446 F. Supp. 3d 1145 (N.D. Ga. 2020). On September 29, 2020, Judge Evans declared GSU to be the prevailing party in the litigation (after all, they had prevailed in 89/99 claims brought to trial). However, the judge did not order the plaintiffs to pay GSU’s attorney fees as she had done earlier in the litigation. The court declined to order the sweeping and intrusive injunction proposed by the publishers, and simply ordered GSU administrators to “maintain copyright policies which are not inconsistent with the rulings of United States Court of Appeals for the 11th Circuit in this case,” and to inform all GSU professors in writing of the rulings.

The scope of fair use for educational copies remains quite uncertain.

Access Alone Is Not Enough

Hachette Book Group, Inc. v. Internet Archive, 115 F.4th 163 (2d Cir. 2024)

While Sony was decided before “transformative” became a term of art, the apparent reasoning was that a secondary use may be a fair use if it utilizes technology to achieve the transformative purpose of improving the efficiency of delivering content without unreasonably encroaching on the commercial entitlements of the rights holder.

In Sony, the “apparent reasoning was that a secondary use may be a fair use if it utilizes technology to achieve the transformative purpose of improving the efficiency of delivering content without unreasonably encroaching on the commercial entitlements of the rights holder” because the improved delivery was to one entitled to receive the content. Id. at 661 (quoting TVEyes, 883 F.3d at 177). Still, we determined that the use in ReDigi was not transformative. Id. The website provided “neither criticism, commentary, nor information about” the original music files, nor did it “deliver the content in more convenient and usable form to one who has acquired an entitlement to receive the content.” Id. Instead, it effectively “provide[d] a market for the resale of digital music files, which . . . compete[d] with sales of the same recorded music by the rights holder.” Id. For that reason, the first fair use factor favored the plaintiffs. Id.

I worked hard to earn the financial security that I now have and which enables me to earn a living from my pen without fear of poverty. And, as my agent reminds me, the royalty revenues I receive from the sales of books I have written are precious and must be closely guarded because this is ultimately going to generate the money that supports me in old age. . . .

When I went on the Internet Archive’s website and saw that scans of my books were being distributed to anybody who wanted them for free — without my permission or any payment — I was appalled. I found the experience so viscerally upsetting that I could not stay on the website for long. It was like I had gone to a pawn shop and seen my stolen possessions on sale.

Notes and questions

(1) Can a nonprofit actor ever prevail on fair use grounds if its use is non-transformative but clearly aimed at broader public benefit? What does this case tell us about the significance of “public benefits” in fair use cases? Is this consistent with cases like Google v Oracle?