“Fair Use” under U.S. Copyright Law
(IPRinfo Special Issue, September 2006)
Professor of Law and Director,
Intellectual Property, Technology & Media Law Program,
Georgia State University College of Law, Atlanta, GA
Fulbright Scholar and Lecturer,
IPR University Center and Hanken (Fall 2005)
The Copyright Act of 1976 (“the 1976 Act”) provides the author or owner of a work of original expression with the exclusive rights to reproduce, distribute, perform, and display a work, as well as the exclusive right to prepare derivative works. (17 U.S.C. § 106). In general, one who violates any of the enumerated exclusive rights can be held to be liable for copyright infringement in a civil action, and ordered to pay damages. In many cases, the unsuccessful infringer will be responsible for the prevailing party’s costs and attorneys’ fees, as well. (17 U.S.C. § 501 – § 505).
Not all unauthorized uses of copyrighted material, however, are infringements. In certain circumstances, the unauthorized use of a copyrighted work for purposes of scholarly research, news reporting, criticism, commentary, or educational purposes is not considered infringement, but “fair use.” “Fair use,” however, is determined on a case-by-case basis, and there are really no hard and fast rules. It is, therefore, one of the most confusing and unpredictable doctrines in U.S. copyright law.
Concept of “fair use” dates back to the 19th Century
Although “fair use” was not expressly included in U.S. statutory copyright law until it was codified as Section 107 of the Copyright Act of 1976, the doctrine had been part of the judicially created law in the United States for approximately 125 years.
The principle of “fair use” is generally attributed to Justice Story in his opinion in Folsom v. Marsh (1841) , a case dealing with the substantial verbatim appropriation from of the texts of letters written by George Washington that were included in a biography of the First President in order to create a competing biography of Washington. In formulating a test to distinguish permissible takings and uses of copyrightable material from impermissible ones, Justice Story stated:
[A] reviewer may fairly cite largely from the original work, if his design be really and truly to use the passages for the purposes of fair and reasonable criticism. On the other hand, it is as clear, that if he thus cites the most important parts of the work, with a view, not to criticise, but to supersede the use of the original work, and substitute the review for it, such a use will be deemed in law a piracy. (9 F. Cas. at 344-345).
As there was no right to prepare “derivative works” in 1841, Justice Story’s test was really a test for determining whether a work that incorporated another was a substitute in the marketplace, and therefore functioned as a reproduction, or whether it served a different function and market. If the portion taken were used to directly compete with the original, it would infringe. If the portion taken were used as part of criticism or commentary and was not meant to be a substitute, the use was fair.
Copyright Law of 1976 still not explicit on “fair use”
U.S. courts have since followed Justice Story’s general guidance and have engaged in fair use determinations on a case-by-case basis by considering the amount of the copyrighted work that had been taken, the purpose of the use and taking, and whether there was a negative effect on the market for the original work.
During the major “overhaul” of the U.S. copyright statutes that ultimately resulted in the Copyright Act of 1976, Congress decided to expressly include fair use provisions in the federal copyright statutes. In many, if not most, situations at both the federal and state levels in which a common law doctrine is codified, the legislature acts with a degree of specificity to create more certainty and guidance in the law. One would have, therefore, thought that by codifying the fair use doctrine, the U.S. Congress wanted to do the same. The legislative history of Section 107, however, indicates just the contrary. Congress decided to add “fair use” to the new Act in a way that would maintain the status quo. (See, H. Rep. No. 84-1976, pp. 65 – 66; U.S. Code Cong. & Admin. News 1976, p. 5680.)
While the statutory language provides some guidance as to the types of factors to consider, the factors are not exhaustive. There are no consistent rules regarding how much weight to give any factor. The language in Section 107 provides judges who interpret the law plenty of “wiggle room” to essentially arrive at almost any decision in any case.
International agreements have their say on the matter
Moreover, as in any exercise of linguistic interpretation, especially one that deals with a concept so nebulous and illusory as “fairness,” judges will inevitably bring their own values and ideologies into their analyses, consciously or unconsciously. After approximately 30 years of judicial case-by-case interpretation of the fair use provisions in the U.S. Code, there is far too much uncertainty with respect to which uses will be considered to be “fair” and which will infringe.
It is also interesting to note that although the United States is a member of the Berne Convention and also a signatory to the TRIPS Agreement and WIPO Copyright Treaty, there is never any mention of either Article 9(2) of the Berne Convention, Article 13 of the TRIPS Agreement, or anything that even remotely resembles the “three-step test” in United States “fair use” cases or the Copyright Act of 1976.
What is “commercial use?”
Section 107 of the Copyright Act of 1976 provides:Notwithstanding the provisions of sections 106 and 106A, the fair use of a copyrighted work, including such use as reproductions 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 is fair use the following 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;
2) the nature of the copyrighted work;
3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
4) the effect of the use upon the potential market for or value of the copyrighted work.
The fact that a work is unpublished shall not itself bar a finding of fair use if such finding is made upon consideration of all of the above factors.
I will now address the four factors of Section 107, and illustrative cases in turn.
1) The purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes:
1 a) commercial/educational nonprofit distinction
Initially, judges followed the language of the statute and attempted to determine the magnitude of the commercial nature of the defendant’s use. A good way to look at this factor is to imagine a continuum with purely commercial uses on one end and purely educational and non-profit uses on the other end. The character of most uses will fall somewhere along the line, with a greater number falling toward the commercial side. The more commercial the use, the more the factor should favor the plaintiff copyright holder; the more educational the use, the more the factor should favor the defendant.
In many cases, however, instead of concentrating on the ultimate use of the copyrighted work, courts have instead focused on the financial status of the entity doing the copying. For example, in two cases involving the photocopying of materials for academic use by university students and professors, Basic Books, Inc. v. Kinko’s Graphics Corp. (1991) and Princeton University Press v. Michigan Document Services (1997), the respective courts downplayed the fact that that course packets were to be for in classes at non-profit educational institutions and instead classified the use as “commercial” because the actual copying was performed by for-profit business enterprises. The characterization of “commercial” led to findings of infringement in both academic photocopying cases.
The definition of “commercial” is a difficult one. With the exception of pure non-profit organizations, almost every enterprise is in business to at least try to make money. Newspapers are not published solely to inform the public. They are published so that the companies can profit from the sales of advertisements. News reporting is listed in the preamble as an illustration of what could be “fair use.” Is using a portion of a copyrighted work for the purpose of news reporting more “commercial” or more “educational?” How should the commercial/educational nonprofit issue be resolved?
According to the Supreme Court in Harper & Row Pubs., Inc. v. Nation Enterprises (1985), a case involving the unauthorized publication of a miniscule excerpt from an unpublished manuscript of former President Gerald Ford’s memoirs, “[t]he crux of the profit/nonprofit distinction is not whether the sole motive of the use is monetary gain but whether the user stands to profit from exploitation of the copyrighted material without paying the customary price.”
This kind of analysis totally misses the point. If the use is a “fair use,” there is no obligation to pay the “customary price,” or any price at all for that matter, for the use does not infringe.
1 b) Transformative use analysis
In recent years, “transformative use,” a doctrine that is not mentioned at all in the statute, has entered into and has, in fact, dominated the analysis of the first factor. “Transformative Use” was advocated in a law review article penned by Judge Pierre Leval, Toward Developing Fair Use Standard, 103 Harv. L. Rev. 1105 (1990).
Judge Leval believes that if one uses another’s copyrighted material in a way that is sufficiently “transformative” so that the resultant new work serves a different purpose from that of the original, and does not supplant the demand for the original, the use should likely be fair, for the creator of the new work is serving one of the purposes of copyright law, “…to promote the Progress of Science and the useful Arts.” (U.S. Constitution, Art I, §8, cl. 8). Accordingly, the following fair use standard was proposed. The more one engages in a transformative use, the less the other factors, even commercial nature, matter.
Originally, translations were not “derivative works”
Much of the logic in Judge Leval’s article is influenced by Justice Story’s 1841 Folsom v Marsh decision. It is important to note, however, that at the time that Folsom v. Marsh was decided, in 1841, the exclusive rights were limited to the rights of “printing, reprinting, publishing, and vending.” There was no exclusive right to prepare “derivative works”, such as adaptations or translations.
For example, in Stowe v. Thomas (1853), the translation of Harriet Beecher Stowe’s famous novel, Uncle Tom’s Cabin, into German was held to not infringe because it was not a “copy” or “reproduction” of the original work.
The statutory rights are different today. Section 106(2) of the 1976 Act grants copyright holders the exclusive right “to prepare derivative works.” A “derivative work” is defined in Section 101 as “a work based upon one or more preexisting works, such as a translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgment, condensation, or any other form in which a work may be recast, transformed, or adapted.”
Under the 1976 Act, the copyright holder has the exclusive statutory right to “transform” a work, yet a doctrine that advocates “transformation” of a work a defense to infringement is gaining strength in the courts. There is an inherent, direct, and seemingly irreconcilable conflict between the copyright holder’s right to prepare derivative works and the latitude given to one who engages in a “transformative use.”
Parody is “fair use” – when sufficiently transformative
The “transformative use” doctrine was cited with approval by the Supreme Court in Campbell v Acuff-Rose (1994), a case involving he issue of whether 2 Live Crew’s parody of the Roy Orbison song, “Pretty Woman” was a fair use. Although the case reversed and remanded based upon legal error and never decided fully on the merits by the Supreme Court, the opinion does contain the language, “the more transformative the new work, the less will be the significance of the other factors, like commercialism, that may weigh against a finding of fair use.”
Since Acuff-Rose decision, every defendant in a copyright infringement case now chants the mantra of “transformative use…transformative use” in an attempt to convince a court that its appropriation of copyrighted material should be “fair use.”
Transformative use has played a major part in several recent parody cases. In SunTrust Bank v. Houghton Mifflin Co. (2001), the Eleventh Circuit held that a THE WIND DONE GONE, parody of the famous Civil War novel, GONE WITH THE WIND, was sufficiently “transformative” to be a fair use, despite acknowledging that the defendant appropriated substantial copyrighted portions of the book.
In Leibovitz v. Paramount Pictures Corp. (1999), the Ninth Circuit held that an advertising photograph showing the body of a pregnant woman and the face of male actor Leslie Nielsen, was a “transformative use” of photographer Annie Leibovitz’s copyrighted photograph of a pregnant actress Demi Moore.
In Mattel, Inc. v. Walking Mountain Prods. (2003), . a series of photographs entitled “Food Chain Barbie,” that depicted an often nude Barbie Doll posed in various positions while being attacked by vintage household appliances was sufficiently “transformative” because it parodied the character Barbie and did not supplant the demand for the original doll.
Change of purpose may turn the use transformative
“Transformative use” does not only apply to parody. A use may be classified as “transformative” if it serves a purpose that is different from that of the original copyrighted work. For example, in Bill Graham Archives v. Dorling Kindersley Ltd. (2006), the reproduction and inclusion of seven Grateful Dead concert posters in a book about the band titled Illustrated Trip was held to be “transformative” because of both the differences in size and purpose of the graphics.
The purpose of the defendant’s use was to help to illustrate and document the progression of concerts that took place during the book’s timeline, while the purpose and character of the use of the original posters themselves was “artistic expression and promotion.” The use of the posters was held to be fair.
A slight physical change is not enough
A change of medium or merely a slight physical change will usually not be viewed as “transformative.” In Rogers v Koon (1992), the artist Jeff Koons created three-dimensional sculptures from a two-dimensional photographic image on a postcard of a couple sitting on a park bench with a “String of Puppies” between then. Despite the change of medium, the purpose of both works was to have aesthetic appeal. The Koons sculptures were held to not be “transformative.”
Most recently, in Clean Flicks of Colorado, LLC v. Sondrbergh (2006), the preparation and sale of copies of altered and edited DVD motion pictures that had been “cleaned-up” and made more “family friendly” for American sensibilities were held to not be acceptable “transformative uses.” The court noted that the defendant did not prepare any new creative works by adding anything original or innovative to the motion pictures.
The defendant merely ran a for-profit commercial venture in which the company removed certain words and images that were allegedly offensive, and provided his customers with unauthorized fixed copies of the edited and “sanitized” motion pictures.
Creative and entertaining versus information and facts
2) The nature of the work
This factor does not get too much attention by the courts and is usually discussed in a paragraph or two. Think of “the nature of the work” as a continuum with purely creative and entertaining works such as music, dance, and fiction on one end and more factual and informational work, such as news stories, information, and non-fiction books on the other. In general, the more creative the work, the less latitude the second user is allowed; the more informational, the more latitude. Because this factor has become less important in recent years, the nature of the work has become almost irrelevant.
In Sony Corp. of America v. Universal City Studios (1984), the programs and motion pictures that were videotaped by the users of the Sony Betamax were certainly creative, yet fair use was found. In SunTrust Bank v. Houghton Mifflin Co. (2001), the underlying work, GONE WITH THE WIND, was most certainly creative fiction, yet fair use was found.
In some cases, however, the categorization is quite strange, often to add emphasis to majority’s position in a case. For example, in Harper & Row v. Nation (1985), Justice O’Connor characterized the 300 word portion that The Nation magazine published from President Ford’s memoirs that dealt directly with his pardon former President Richard Nixon as “mental impressions” and “the manner in which he expressed himself” as opposed to historical facts.
How much is much?
3) The amount and substantiality of the portion used in relation to the copyrighted work as a whole
On its face, the third factor appears to be rather simple to understand. How much of the underlying copyrighted work was used by the alleged infringer? The “substantiality of the portion used” was measured in quantitative terms. The general rule used to be that if one takes too great a quantity of the underlying work, one probably infringes; if one takes just a little bit of the underlying copyright work, it is probably fair. In most cases, common sense was the guide.
In 1985, in Harper & Row Pubs., Inc. v. Nation Enterprises the Supreme Court applied a “qualitative” standard instead of the usual “quantitative” standard to the third factor. The court held that an unauthorized portion comprising 300 words taken from a 200,000 word manuscript of former President Gerald Ford’s memoirs was “qualitatively” substantial because those 300 words were “the heart the matter.”
If 300 words can be “the heart” of an author’s story, why on earth would the original author write another 600 printed pages? How can 0.15 of 1% be the “heart of the matter”? In addition, to buttress the holding of substantiality, Justice O’Connor counted the 300 words that were taken in relation to the size of the defendant’s article as opposed to “the copyrighted work as a whole” as directed by the statute by noting that “the direct takings from the unpublished manuscript constitute at least 13% of the infringing article.”
After Harper & Row, there is Supreme Court precedent holding that a infinitesimally small, yet highly relevant sliver of a copyrighted work can be sufficiently substantial to cause the third factor to favor the copyright holder. The “qualitatively substantial” holding in Harper & Row creates the following problem of “circular reasoning” for defendants in copyright cases:
If a party uses a specific part of a copyrighted work in his or her work, there must have been a good reason. Therefore, although the taking might have be quantitatively insubstantial, it must, by definition, be qualitatively substantial. As a result, in every case, there is the possibility that the portion used might be found to be a substantial taking.
Parody presents a special issue with respect to the “quantitative”/ “qualitative” issue. For a parody to work, (i.e., for the listener, reader, or viewer to understand the parody) the parodist must take at least enough of the underlying work to “conjure up” the work in the minds of an audience. Therefore, in the case of parody, a qualitatively substantial portion, and sometimes a quantitatively substantial portion, must be used.
This was illustrated in the cases involving the parodies of GONE WITH THE WIND, the Annie Leibovitz photograph, or the images of Barbie. In fact, one of the reasons that the Supreme Court reversed and remanded Acuff-Rose v. Campbell (1994), was for the lower courts to further examine the substantiality of the taking, in light of the defendant’s song being a parody.
Defining a “potential market” difficult
4) The Effect of The Use Upon The Potential Market For or Value of The Copyrighted Work.
In Sony Corp. of America v. Universal City Studios, Inc. (1984), the Supreme Court set forth the rule regarding the relationship between commercial uses and market harm.
The test that was set forth for analyzing the effect on the potential market seemed quite clear. If the intended use was for commercial gain, a likelihood of harm to the future market was presumed. The burden would then be on the defendant to show that there was not a likelihood of market harm. If the use was for a noncommercial purpose, such as an educational or personal use, the burden was on the copyright holder to establish by a preponderance of the evidence that there was a likelihood of harm to the actual or potential market.
In Sony, the off-the-air videotaping was held to be a non-commercial use. Based upon that holding, the motion picture studios had the burden of showing market harm. They could not meet that burden, and the home videotaping was held to be fair use.
The following year, in Harper & Row, the Supreme Court stated that the fourth factor was considered to be “undoubtedly the single most important element of fair use” (471 U.S. at 567) and quoted directly from Sony that “every commercial use of copyrighted material is presumptively an unfair exploitation of the monopoly privilege that belongs to the owner of the copyright.” (471 U.S. at 562, citing Sony, 464 U.S. at 451). The presumption could not be overcome. Time Magazine had entered into a license agreement to publish excerpts from the book. After being “scooped” by The Nation, Time, Inc., cancelled the contract and refused to pay the full license fee.
In 1994, in Campbell v. Acuff-Rose, the Supreme Court, repudiated its earlier presumption of market harm based upon a commercial use, and even held that it was legal error for the Court of Appeals to apply such a presumption.
It is clear that in 1994, the Supreme Court, with five Justices who were appointed after Sony and Harper & Row, decided to interpret Section 107(1) differently from the way a majority of their predecessors interpreted it in 1984 and 1985. It was, however, doctrinally dishonest and disingenuous for the Supreme Court to have claimed that it had not previously held that a finding of “commercial use” created a presumption of a likelihood of market harm.
By 1994, courts were considering the “transformative” nature of the work in the first factor, along with whether the work was commercial. In order for the Supreme Court to apply the rule “the more transformative the new use, the less will be the importance of the other factors, even commercialism…” their earlier rule that “every commercial use is presumptively unfair” had to go. Most of the “transformative use” cases involve commercial uses, as opposed to educational, personal, or non-profit uses.
At present, the fourth factor presents several additional problems. What is the market? What is the “potential market”? With 20/20 hindsight analysis, anything is a potential market. For example, in Castle Rock Entertainment v. Carol Publishing Group (1998), the publisher of “The Seinfeld Aptitude Test” or ” The SAT” , a book of trivia questions about the American television show “Seinfeld” was sued for copyright infringement by the producers of the series. The defendants argued that Castle Rock did not show any harm to the market from the publication of The SAT, and that there was no evidence that they had any interest in publishing television trivia books.
Despite the lack of actual harm or even interest in producing a similar product, the court held that “THE SAT substitutes for a derivative market that a television program copyright owner such as Castle Rock would in general develop or license to others.” In contrast, in SunTrust Bank v. Houghton Mifflin (2001), no harm to the potential market was found because the estate of Margaret Mitchell would never agree at any time to license rights to make a sequel to GONE WITH THE WIND that is told from the vantage point of an African-American slave who was the half-sister of Scarlet O’Hara and in which the character of Ashley Wilkes was gay.
Internet search engines a challenge to the fair use doctrine
In some cases, minor differences in the facts of seemingly similar cases lead courts to reach different fair use determinations. Two recent cases dealing with Internet image search engines illustrate this point. In Kelly v. Arriba Soft Corp (2003),. the plaintiff was a professional photographer whose primary market was photographic images of the American West.
He sued a search engine, ArribaSoft (now known as ditto.com) for copyright infringement for displaying reproductions of photographs from his website as small “thumbnails” in its image search results. The court held that the display of the thumbnails was transformative and therefore “fair use” because it primarily served the purpose other than that of the original photographs.
The use of the copyrighted images by the search engine functioned primarily as a utilitarian tool to locate and facilitate easier access to images on Internet web sites, not as a medium for displaying photographs. There was, therefore, no overlap or substitution in the marketplace. In contrast, Central District of California, arrived at a completely different result in Perfect 10 v. Google, Inc. (2006), based upon a slight difference in the facts. In Perfect 10, thumbnail sized reproductions of images from the plaintiff’s “adult” website were displayed in the results of Google’s image search.
As in Kelly, the thumbnail images on the Google site also directed users to the websites that contained the original images. Although the court recognized the differences in purposes, Google’s display of the “thumbnail” images was found to have a negative effect on the potential market for the copyrighted works and was not a “fair use”. Perfect 10 had created an active commercial market for downloads of the images to be displayed on the screens of mobile telephones and other hand-held devices.
The court reasoned that by having access to the thumbnails of the photos through the search engine, fewer people would be willing to pay a fee to download and view similarly sized images.
The two cases together illustrate a basic problem with the current state of “fair use” in the United States. After reading the opinion from the Court of Appeals for the Ninth Circuit that the collection, reproduction, and display of thumbnail images of photographs in Arriba’s search engine results was “transformative” and “fair use” it would have been perfectly reasonable for Google to have assumed that it would be immune from infringement for displaying thumbnail images in its search results, as well.
In the Internet age, how can one who wishes to use a copyrighted work in a way that has been held to not infringe know of all of the uses and markets of all copyright owners? How can one predict the relative values that a specific court will place on “transformative use” vis-à-vis market harm? As mentioned earlier, how can one even know what a court will determine is the relevant “potential market”?
A wonderful – but unpredictable – tool
In theory, “fair use” is a wonderful tool that, in certain circumstances, allows people to incorporate portions of others’ copyrighted works in the innovative preparation of new works to benefit the members of the public by exposing them to additional creative works or new technologies.
“Fair use” helps to “promote the Progress of Science and the useful Arts” and can be a means of free expression.
While the broadening of fair use has been applauded by many, others view the expansion of “fair use” beyond scholarship and criticism and comment as the ticket for a free ride on the accomplishments of others. “Fair use” determinations are inconsistent and uncertain. Given the “all or nothing at all” nature of the “fair use”/infringement determination, if one who uses another’s work reasons or guesses correctly that the use will be fair, he will not have to pay for the use of the copyrighted work.
If, on the other hand, however, one who uses another’s work reasons or guesses incorrectly, he may be liable for substantial damages, costs, and attorneys’ fees, and on top of that have any further reproduction, distribution, display, or performance of the newly created work enjoined.
It is much easier to advise someone regarding what absolutely may not be done and almost certainly will be infringement than it is regarding what might be “fair use.” If you, the reader, are confused, you are not alone. Given the state of “fair use” law, it is not surprising that so many opinions are split decisions, reversals of lower courts, or both.
Cases referred to in the article:
Folsom v. Marsh, 9 F. Cas. 342 (CC Mass. 1841)
Harper& Row Pubs., Inc. v. Nation Enterprises, 471 U.S. 539, 564 (1985)
Basic Books, Inc. v. Kinko’s Graphics Corp., 758 F. Supp. 1522 (S.D.N.Y. 1991)
Princeton University Press v. Michigan Document Services, 99 F.3d 1381 (6th Cir. 1996), cert. denied, 520 U.S. 1156 (1997)
Stowe v. Thomas, 23 F. Cas. 201 (C.C.E.D.Pa. 1853)
Campbell v Acuff-Rose, 510 U.S. 569 (1994)
SunTrust Bank v. Houghton Mifflin Co., 269 F.3d 1258 (11th Cir. 2001), reh’g denied, 275 F.3d 58 (11th Cir. 2001)
Mattel, Inc. v. Walking Mountain Prods., 353 F.3d 792 (9th Cir. 2003)
Bill Graham Archives v. Dorling Kindersley Ltd., 448 F.3d 605 (9th Cir. 2006)
Rogers v Koons, 960 F.2d 301 (2d Cir. 1992), cert. denied, 506 U.S. 934 (1992)
Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417 (1984)
Castle Rock Entertainment v. Carol Publishing Group, 150 F.3d 132 (2d Cir. 1998)
Kelly v. Arriba Soft Corp., 336 F.3d 811 (9th Cir. 2003)
Perfect 10 v. Google, Inc., 416 F. Supp.2d 828 (C.D. Cal. 2006)
Clean Flicks of Colorado, LLC v. Soderbergh, 79 U.S.P.Q.2d 1302 (D.C. Colo. 2006).