309: Lights, Camera, Action: Music and Video Licensing 101

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309: Lights, Camera, Action: Music and Video Licensing 101
ACC's Annual Meeting 2013
ACC’s 2013 Annual Meeting
October 27-30, Los Angeles, CA
October 27-30, Los Angeles, CA
Monday, October 28
2:30 PM - 4:00 PM
309: Lights, Camera, Action: Music and
Video Licensing 101
David Barnard
Partner
Lathrop & Gage LLP
Lauren Fisher
Vice President & General Counsel
Vox Media, Inc.
William Heller
Senior Vice President and General Counsel
New York Football Giants, Inc.
Julie Maresca
Sr. V.P. & General Counsel
Motion Picture Licensing Corporation
This material is protected by copyright. Copyright © 2013 various authors and the Association of Corporate Counsel (ACC).
Materials may not be reproduced without the consent of ACC or the copyright holder.
Reprint permission requests should be directed to ACC’s Legal Resources Department at [email protected]
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Faculty Biographies
Session 309
David Barnard
David Barnard is a first-chair trial lawyer. He has litigated patent, trademark, false
advertising, copyright, trade secret and other commercial disputes in different courts
throughout the nation. He has litigated with and against most of the top IP firms in the
country.
Mr. Barnard also provides IP business counseling to a wide range of companies,
including clients in intellectual property, entertainment, manufacturing, financial
institutions, engineering, biotech, Internet, marketing and media. He has handled matters
as diverse as maintaining, growing and enforcing a Fortune 100 company's trademark
portfolio; copyright fair use analysis and advice; attracting venture capital; creating
company-wide intellectual property identification and protection programs;
noninfringement and freedom of operation opinions; creating comprehensive employee
trade secret protection programs; licensing; assisting nationally syndicated media clients
with liability risk management; and advising film makers on intellectual property
clearance, marketing and distribution rights.
In 2008, Missouri Lawyers Weekly named Mr. Barnard one of its "Up & Coming"
lawyers under 40. He has appeared in Best Lawyers in America and Missouri/Kansas
Super Lawyers since 2010, and has been described as an "intellectual property wizard" by
the St. Louis Post-Dispatch.
Lauren Fisher
Vice President & General Counsel
Vox Media, Inc.
William Heller
In his role as general counsel for the New York Giants, William Heller is responsible for
all legal affairs of the team and its affiliates, including those that relate to the operation of
MetLife Stadium. From licensing and sponsor and marketing arrangements to labor and
employment issues, his practice as in-house counsel for one of the original and storied
NFL franchises spans all areas of Sports Law.
Julie Maresca
Julie S. Maresca is senior vice president, general counsel and corporate secretary of the
Motion Picture Licensing Corporation (MPLC), an international copyright licensing
agency. Ms. Maresca has been with the MPLC since 2002 and oversees U.S. and
international legal matters. Prior to joining the MPLC, Ms. Maresca worked at Hologic
Europe and the Los Angeles Superior Court.
Ms. Maresca's publications include "Face the Music: Copyright and Audiovisual in Your
Corporation," ACC Docket, Volume 29 Number 10, December 2011: Pages 26-33. In
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addition, she was featured in "Protecting copyrights for films is a picture perfect position"
Cathleen Flahardy, Inside Counsel, December 21, 2012 as well as "Does Your Company
Have a License to Show That Movie?" Catherine Dunn, Corporate Counsel, October 9,
2012.
Ms. Maresca is a member of the Sports and Entertainment Committee of the ACC (2011present); Association of Media & Entertainment Counsel (2012 - present); and the
Entertainment IP/New Media section of the Beverly Hills Bar Association, (2011present).
Ms. Maresca received her BA from Brandeis University, JD from Loyola Law School,
and MBA from SDA Bocconi.
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“LIGHTS, CAMERA, ACTION: Music and Video Licensing ‘101’”
2013 ACC Annual Meeting (Los Angeles, CA); Intellectual Property Track
Monday, October 28, 2013 from 02:30 PM - 04:00 PM.
Session description: The proliferation of music and movie sharing sites make it easier than ever
to add multimedia – motion pictures, television video, and music -- to enhance commercial
advertisements promotions, and communication and training for customers and colleagues. Yet
questions about permissions and licensing persist. This program will offer a 101 class on the
copyright, trademark and right of publicity issues applicable to music and video public
performances and licensing. From ASCAP/BMI/SESAC, to movie and television studios, to
public performance licenses, to synch licenses, and more, this program will provide an overview
of current laws pertaining to music and video licensing and offer practical approaches on when
organizations need to seek permission for reuse. Guidelines on how to go about securing the
necessary permissions, clearances and licenses will be offered.
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Using Third Party Content
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What do you really need to know?

Learning and teaching people how to identify the issues.

Knowing what rights are involved.

Identifying who owns the rights.
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What can you do with it?
Primary Rights Involved

Copyright

Publicity rights

Trademark
Copyright
 Protects “original expression” including published and non-published work.
 Nearly any work fixed in a tangible format.
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Text
Music
Photographs
Video
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Images
Sculpture
Architecture
Sound recording
Copyright liability can have many layers.

For example, a video clip.
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Music rights – two types are both important to remember
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Video – who owns the rights to the footage?
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Synchronization rights – combining music and video – separate right
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Who and what is in the video?
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Composition
Performance
Celebrities?
Artwork?
Clips of another video?
Trademarks?
Any of the foregoing – in original form or modified form
What do copyright laws not protect?

Works not fixed in a tangible form – e.g. extemporaneous speech.

Titles, names, short phrases and slogans.

Ideas, procedures, methods, systems – see patent.

Works consisting entirely of facts/no original authorship – example
telephone book.

Works created by the U.S. Government.
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Works for which copyright has expired.

Works in the public domain.
What exclusive rights does the copyright act confer on the owner?
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Reproduction
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Derivative works
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Distribution
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Public performances
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Public displays

Public performance of sound recordings
Exceptions to copyright protection

Public domain
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Pre-1923
Some works published between 1923 and 1963 - renewal rights.
Fair Use Exception
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Multi-factor test
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Nature of use
Type of work
Amount and substantiality of the portion used
Impact on market
If you don’t sell expression (i.e. media, publisher), forget it for anything that remotely qualifies as advertising. Fair use will rarely apply.

Even when it does apply, it is extremely hard to predict

Frequently exaggerated, misunderstood and misused – be afraid. Be
especially afraid of the recent patchwork of cases on “transformative” use – of growing importance in fair use cases.

Possible examples to discuss – Seuss v. Juice, Grateful Dead, Billy
Graham, Texaco

The panel will discuss fair use in greater detail in some examples later.
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Educational Exception
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Nondistance Learning - Face to Face

Nonprofit – case-by-case

Must be a school

Confined to the classroom

Legally obtained

2002: TEACH Act for distance learning.
Music
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Many types of rights to manage depending on the way you are using the music
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Is the music being provided in a public space?
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Is the music part of a video?
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Are you making copies?
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Are you streaming video?
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How much of the music are you using?
Show chart of various flows of rights, permissions, and money

Complicated

Best place to start is with the publisher – BMI, ASCAP or SESAC

Publisher will license you the rights they have and can help you identify
who owns the rights they do not have – E.g. public performance license,
etc.

Master use rights – necessary to use the music in a media project – resides
with the copyright owner (frequently the record label)

Mechanical rights - making copies – not the publisher – Harry Fox
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Agency
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Synchronization rights – not the publisher – often resides with the
performing artist and/or composer
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Digital performance license – streaming music – SoundExchange
Audiovisual

Ownership of a copy versus right to public use are completely separate

Many types of rights to manage, just like music, depending on use

Public performance – shown to a substantial number of people gathered in person
or via transmission (e.g. the internet)

Type of public performance is important

“incidental” to the business purpose? E.g.’s training, employee movie nights, break room, etc.

Is the use limited to employees or is it open to the public?

Is the media legally obtained?
o Can you break the DRM to capture scenes and videos?
o Can you use what is on YouTube?
o How do you know that employees are correctly obtaining
legal permission to use and distribute? – education,
monitoring and the benefits of a formal policy
o Do you need to obtain the clips directly from the copyright
owner?
o Streaming vs. hard copy distribution

Licenses can be obtained from Copyright Clearance Center
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(www.copyright.com), Criterion Pictures
(www.criterionpicusa.com), Motion Picture Licensing Corporation
(www.mplc.com), or Swank Motion Pictures, Inc.
(www.swank.com).

“large arena” use for public entertainment purposes

Is the media legally obtained?
o Can you use what is on YouTube?
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Where are licenses obtained?
Promotional use?
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Parody

Promotion/sponsors
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Re-tweeting someone else’s tweet with embedded material

E.g. Snoopy ads for MetLife.
Publicity
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Any time you want to use anything with a celebrity, you should expect that you
will need permission. In some states the right extends to non-celebrities; e.g. New
York.
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Sometimes, non-entertainment celebrities can become such – politicians,
newsmakers (e.g. Octomom), etc.
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Common law and statutory – several states have statutes including California
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Posthumous rights – 70 years past death in California; other states have held that
the right does not survive death.
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Very broad – any aspect of identity - face, name, voice, etc.
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First Amendment protections – very narrow – if you are using the celebrity to
attract attention, you will lose.
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Trademarks
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Does the image or video include another company’s trademark?
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Does the use arguably imply an association, or endorsement?
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Even if not, it can still be dilution – blurring or tarnishment
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Best practice - avoid or get permission
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Special attention to pro sports - uniforms, team, venue, players, etc. can all
require permission
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Specific examples discussion
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1
© 2013 Lathrop & Gage LLP
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FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
DERECK SELTZER,
Plaintiff-Appellant,
v.
GREEN DAY , INC., a corporation;
GREEN DAY TOURING , INC., a
corporation; GREEN DAY , a
partnership; BILLIE JOE
ARMSTRONG , an individual; FRANK
EDWIN WRIGHT , III, an individual,
AKA Tre Cool; MICHAEL RYAN
PRITCHARD , an individual, AKA
Dirnt Mike; WARNER BROS.
RECORDS, INC., a corporation;
INFECT PRODUCTIONS, a partnership;
ROGER STAUB, an individual;
PERFORMANCE ENVIRONMENTAL
DESIGN , a business entity (form
unknown),
Defendants-Appellees.
No. 11-56573
D.C. No.
2:10-cv-02103PSG-PLA
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SELTZER V . GREEN DAY , INC.
DERECK SELTZER,
Plaintiff-Appellant,
v.
GREEN DAY , INC., a corporation;
GREEN DAY TOURING , INC., a
corporation; GREEN DAY , a
partnership; BILLIE JOE
ARMSTRONG , an individual; FRANK
EDWIN WRIGHT , III, an individual,
AKA Tre Cool; MICHAEL RYAN
PRITCHARD , an individual, AKA
Dirnt Mike; WARNER BROS.
RECORDS, INC., a corporation;
INFECT PRODUCTIONS, a partnership;
ROGER STAUB, an individual;
PERFORMANCE ENVIRONMENTAL
DESIGN , a business entity (form
unknown),
Defendants-Appellees.
No. 11-57160
D.C. No.
2:10-cv-02103PSG-PLA
OPINION
Appeal from the United States District Court
for the Central District of California
Philip S. Gutierrez, District Judge, Presiding
Argued and Submitted
February 5, 2013—Pasadena, California
Filed August 7, 2013
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Before: Diarmuid F. O’Scannlain, Stephen S. Trott,
and Richard R. Clifton, Circuit Judges.
Opinion by Judge O’Scannlain
SUMMARY*
Copyright / Fair Use
The panel affirmed the district court’s summary judgment
in favor of the defendants but vacated the district court’s
award of attorneys’ fees in an artist’s action alleging
violations of the Copyright Act and the Lanham Act in a rock
band’s unauthorized use of an illustration in the video
backdrop of its stage show.
The panel held that the video backdrop was a fair use
under the Copyright Act. First, the purpose and character of
the use was transformative because the video altered the
expressive content or message of the illustration, and the use
was not overly commercial. Second, the illustration was a
creative work, but its nature included its status as a widely
disseminated work of street art. Third, the defendants copied
most of the illustration, but it was not meaningfully divisible.
Fourth, the video backdrop did not affect the value of the
illustration.
*
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
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The panel affirmed the grant of summary judgment on
Lanham Act claims on the basis that the artist failed to
establish any trademark rights.
Vacating the district court’s award of attorneys’ fees to
the defendants under the Copyright Act, the panel held that,
despite the defendants’ success on the fair use defense, the
plaintiff did not act objectively unreasonably.
COUNSEL
William Nathan Canby, Rosenfeld, Meyer & Susman, LLP,
Beverly Hills, California argued the cause and filed a brief for
the appellant. With him on the briefs were Todd W. Bonder
and Ryan M. Lapine, Rosenfeld, Meyer & Susman, LLP,
Beverly Hills, California.
Peter J. Anderson, Law Offices of Peter J. Anderson, a P.C.,
Santa Monica, CA, argued the cause and filed a brief for
appellees. With him on the briefs were Bruce Isaacs, Wyman
& Isaacs, LLP, Los Angeles, CA, and Lee S. Brenner and
Keri E. Campbell, Kelley Drye & Warren LLP, Los Angeles,
CA.
OPINION
O’SCANNLAIN, Circuit Judge:
We must decide whether a rock band’s unauthorized use
of an artist’s illustration in the video backdrop of its stage
show was a “fair use” under copyright law.
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I
A
Plaintiff Derek Seltzer is an artist and illustrator. In 2003,
he created Scream Icon, a drawing of a screaming, contorted
face. Seltzer made copies of Scream Icon, including large
posters and smaller prints with adhesive backs, which he has
sold and given away. See Appendix A. Many Scream Icon
posters have been plastered on walls as street art in Los
Angeles and elsewhere. Since then, Seltzer has moved on to
other projects, but at times he has used Scream Icon to
identify himself and his work’s presence by placing it on
advertisements for his gallery appearances, and at some point
he licensed it for use in a music video.
Defendant Roger Staub is a photographer and
professional set-lighting and video designer. In 2008, Staub
photographed a brick wall at the corner of Sunset Boulevard
and Gardner Avenue in Los Angeles which was covered in
graffiti and posters—including a weathered and torn copy of
Scream Icon. See Appendix B. Staub found it “interesting”
and saved this picture in his personal library.
Defendant Green Day is a rock band, and defendants
Billie Joe Armstrong, Michael Pritchard, and Frank Wright
are its musicians. Green Day has sold over 70 million records
worldwide since its debut in 1987. In May of 2009, Green
Day released its eighth studio album, 21st Century
Breakdown. In anticipation of the 2009–10 tour in support of
this album, Green Day engaged defendant Performance
Environment Design (“PED”) to create the lighting,
pyrotechnic effects, and video backdrops for the concert.
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Subsequently, PED arranged for Staub to create the video
backdrops for Green Day’s performances.
B
Staub created a video backdrop for each of the thirty-two
songs on Green Day’s set list. Before making these
backdrops, Staub repeatedly listened to 21st Century
Breakdown and studied the album art, which uses graffiti and
street art as significant visual elements.
One of the songs for which Staub created a backdrop was
the eighth song on the album, entitled “East Jesus Nowhere.”
Staub’s stated goal was to convey the song’s “mood, tone or
themes.” According to Staub, the theme of the song is “the
hypocrisy of some religious people who preach one thing but
act otherwise. . . . The song is about the violence that is done
in the name of religion.”
What Staub ultimately created for this song is the
allegedly-infringing work at the heart of this case, an
approximately four-minute-long video. The video depicts a
brick alleyway covered in graffiti. As “East Jesus Nowhere”
is performed, several days pass at an accelerated pace and
graffiti artists come and go, adding new art, posters, and tags
to the brick alleyway. The graffiti includes at least three
images of Jesus Christ, which are defaced over the course of
the video. Throughout the video, the center of the frame is
dominated by an unchanging, but modified, Scream Icon.
Staub used the photograph he had taken at Sunset and
Gardner, cut out the image of Scream Icon and modified it by
adding a large red “spray-painted” cross over the middle of
the screaming face. He also changed the contrast and color
and added black streaks running down the right side of the
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face. Staub’s image further differs from Scream Icon because
Staub’s original photograph was of a weathered, slightly
defaced, and torn poster. Scream Icon is nonetheless clearly
identifiable in the middle of the screen throughout the video.
Staub’s video backdrop was played behind Green Day
during the performance of “East Jesus Nowhere” at
approximately seventy concerts from July 3, 2009, through
November 12, 2009, and also during Green Day’s
performance of the song at the MTV Video Music Awards on
September 13, 2009. At some point, Seltzer became aware
that Green Day was using his art and on September 24, 2009
he wrote the band an e-mail alerting them to their
unauthorized use stating that he would like to “work out a
resolution to this issue.” Apparently no resolution was
possible, because on November 19, 2009, Seltzer registered
a copyright in Scream Icon, and his counsel sent Green Day
a cease-and-desist letter. Green Day subsequently stopped
using the video backdrop.
C
In March 2010, Seltzer filed the instant action. His First
Amended Complaint alleges direct and contributory copyright
infringement, violations of the Lanham Act, and various state
law claims. After discovery, defendants (collectively, “Green
Day”) moved for summary judgment. They primarily argued
that Staub’s video backdrop was fair use under 17 U.S.C.
§ 107. The district court agreed and granted summary
judgment on all claims.
Green Day then moved for attorneys fees under 17 U.S.C.
§ 505. The district court found that Seltzer’s claims had been
objectively unreasonable and granted the motion in full,
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awarding the defendants a total of $201,012.50. Seltzer
timely appeals both the grant of summary judgment and the
grant of attorney’s fees.
II
The fair use doctrine “permits and requires courts to avoid
rigid application of the copyright statute when, on occasion,
it would stifle the very creativity which that law is designed
to foster.” Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569,
577 (1994) (internal quotation marks omitted).
Consequently, 17 U.S.C. § 107 establishes that fair use of a
copyrighted work is not an infringement of copyright and lays
out four factors to apply when considering whether the use of
a work is “fair”:
(1) the purpose and character of the use,
including whether such use is of a commercial
nature or is for non-profit 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
on the potential market for or value of the
copyrighted work.
17 U.S.C. § 107. These four factors must all be explored, and
all the results evaluated together, in light of the purposes of
copyright. Campbell, 510 U.S. at 578.
Whether Green Day’s use of Seltzer’s Scream Icon
constituted fair use is a mixed question of law and fact that
we review de novo. SOFA Entm’t, Inc. v. Dodger Prods.,
Inc., 709 F.3d 1273, 1277 (9th Cir. 2013). Where no
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material, historical facts are at issue and the parties dispute
only the ultimate conclusions to be drawn from those facts,
we may draw those conclusions without usurping the function
of the jury. Fisher v. Dees, 794 F.2d 432, 436 (9th Cir.
1986). As the Supreme Court held in Harper & Row
Publishers, Inc. v. Nation Enter., “[w]here the district court
has found facts sufficient to evaluate each of the statutory
factors, an appellate court need not remand for further
factfinding but may conclude as a matter of law that the
challenged use does not qualify as a fair use of the
copyrighted work.” 471 U.S. 539, 564 (1985) (internal
alterations and quotation marks omitted). As in Fisher, “[n]o
material historical facts are at issue in this case. The parties
dispute only the ultimate conclusion to be drawn from the
admitted facts.” 794 F.2d at 436.
A
The first factor in the fair use inquiry is “the purpose and
character of the use, including whether such use is of a
commercial nature or is for nonprofit educational purposes.”
§ 107(1). The Supreme Court has stated that the “central
purpose” of this factor is to see “whether and to what extent
the new work is transformative.” Campbell, 510 U.S. at 579.
Works of this type “lie at the heart of the fair use doctrine’s
guarantee of breathing space within the confines of copyright,
and the more ‘transformative’ the new work, the less will be
the significance of other factors.” Id. (internal citations
omitted).
Although transformation is a key factor in fair use,
whether a work is transformative is a often highly contentious
topic. See, e.g., Cariou v. Prince, 714 F.3d 694, 713–14 (2d
Cir. 2013) (Wallace, J., concurring in part and dissenting in
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part) (disagreeing with majority as to whether artists’ use of
certain copyrighted photographs was transformative; would
remand for further fact finding); Monge v. Maya Magazines,
Inc., 688 F.3d 1164, 1185–88 (9th Cir. 2012) (M. Smith, J.,
dissenting) (disagreeing with majority as to whether a
magazine’s publication of wedding photographs was
transformative); Bouchat v. Balt. Ravens Ltd. P’ship,
619 F.3d 301, 320–21 (4th Cir. 2010) (Niemeyer, J.,
dissenting) (disagreeing with majority as to whether the
Baltimore Ravens football team’s use of a “Flying B” logo
was transformative). A leading treatise on this topic has
lamented the frequent misuse of the transformation test,
complaining that it has become a conclusory label which is
“all things to all people.” Melville B. Nimmer & David
Nimmer, 4 Nimmer on Copyright § 13.05[A][1][b], 13168–70 (2011) (internal quotation marks omitted); see also
id. at 13-168–69 (listing cases which have “erroneous[ly]
with[held]” the transformative label).
The plethora of cases addressing this topic means there is
no shortage of language from other courts elucidating (or
obfuscating) the meaning of transformation. To navigate
these treacherous waters, we turn to the most definitive
formulation of the test. The Supreme Court in Campbell
stated that one work transforms another when “the new work
. . . adds something new, with a further purpose or different
character, altering the first with new expression, meaning or
message.” Campbell, 510 U.S. at 579. This understanding
was drawn by the Court in large part from Second Circuit
Judge Pierre Leval’s 1990 article in the Harvard Law Review,
Toward a Fair Use Standard, 103 Harv. L. Rev. 1105 (1990).
In that article, Judge Leval further clarified his understanding
of “transformative” works:
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The use must be productive and must employ
the quoted matter in a different manner or for
a different purpose from the original. A
quotation of copyrighted material that merely
repackages or republishes the original is
unlikely to pass the test; in Justice Story’s
words, it would merely “supersede the
objects” of the original. If, on the other hand,
the secondary use adds value to the
original—if the quoted matter is used as raw
material, transformed in the creation of new
information, new aesthetics, new insights and
understandings—this is the very type of
activity that the fair use doctrine intends to
protect for the enrichment of society.
Id. at 1111.
Applying this understanding, Green Day’s use of Scream
Icon is transformative. Green Day used the original as “raw
material” in the construction of the four-minute video
backdrop. It is not simply a quotation or a republication;
although Scream Icon is prominent, it remains only a
component of what is essentially a street-art focused music
video about religion and especially about Christianity (images
of Jesus Christ appear—and are defaced—several times
during the course of the video).
The message and meaning of the original Scream Icon is
debatable. To us, it appears to be a directionless anguished
screaming face. Seltzer himself testified to his view of the
meaning of the original piece: “It addresses themes of youth
culture, skateboard culture, insider/outsider culture, . . . it’s an
iconic reference to a culture and time in Los Angeles when
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the image was made.” But regardless of the meaning of the
original, it clearly says nothing about religion. With the
spray-painted cross, in the context of a song about the
hypocrisy of religion, surrounded by religious iconography,
Staub’s video backdrop using Scream Icon conveys “new
information, new aesthetics, new insights and
understandings” that are plainly distinct from those of the
original piece. At his deposition, Seltzer seemed to
acknowledge as much, when he stated that Staub’s backdrop
“tainted the original message of the image and [] made it now
synonymous with lyrics, a video, and concert tour that it was
not originally intended to be used with.”
Although the law in this area is splintered, as discussed
above, our conclusion on transformation is generally in line
with other appellate authority on transformative use. In the
typical “non-transformative” case, the use is one which
makes no alteration to the expressive content or message of
the original work. See, e.g., Monge, 688 F.3d at 1176
(magazine publication of photos of secret wedding of
celebrity was not transformative because it did not “alter[] the
first [work] with new expression, meaning or message”)
(second alteration in original); Elvis Presley Enters., Inc. v.
Passport Video, 349 F.3d 622, 629 (9th Cir. 2003) (use of
copyrighted clips of Elvis’s television appearances was not
transformative when the clips were “played without much
interruption, if any, . . . [and] serve[d] the same intrinsic
entertainment value that is protected by Plaintiffs’
copyrights.”), overruled on other grounds as stated in
Flexible Lifeline Sys., Inc. v. Precision Lift, Inc., 654 F.3d
989, 995 (9th Cir.2011) (per curiam); L.A. News Serv. v. CBS
Broad., Inc., 305 F.3d 924, 938 (9th Cir. 2002) (“Merely
plucking the most visually arresting excerpt from LANS’s
nine minutes of footage cannot be said to have added
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anything new.”), as amended 313 F.3d 1093 (9th Cir. 2002);
Ringgold v. Black Entm’t Television, Inc., 126 F.3d 70, 79 (2d
Cir. 1997) (use of a poster as decoration on a TV show not
transformative because it was used for “precisely a central
purpose for which it was created” and defendants had done
nothing with the poster to add anything new).
In contrast, an allegedly infringing work is typically
viewed as transformative as long as new expressive content
or message is apparent. This is so even where—as here—the
allegedly infringing work makes few physical changes to the
original or fails to comment on the original. See, e.g.,
Cariou, 714 F.3d at 708 (artist who altered and incorporated
several copyrighted photographs into a series of paintings and
collages engaged in transformative use as to most of the
paintings because the images were presented with
“fundamentally different aesthetic”); Bill Graham Archives
v. Dorling Kindersley Ltd., 448 F.3d 605, 608–09 (2d Cir.
2006) (use of concert posters in a timeline in a book on the
history of the Grateful Dead was transformative; their use
was as “historical artifacts” rather than for “artistic
expression and promotion”); Blanch v. Koons, 467 F.3d 244,
252–53 (2d Cir. 2006) (artist who incorporated and altered
copyrighted fashion photograph of a pair of women’s legs as
part of a larger work of art engaged in a transformative use);
Kelly v. Arriba Soft Corp., 336 F.3d 811, 818–20 (9th Cir.
2003) (use of exact replicas of artist’s photographs as
“thumbnail images” in a search engine was transformative
because their purpose was completely transformed from their
original use as fine art); L.A. News Serv., 305 F.3d at 938–39
(inclusion of copyrighted clip in video montage, using editing
to increase dramatic effect, was transformative).
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We conclude, therefore, that Green Day’s use of Scream
Icon was transformative. Furthermore, although the statute
instructs us to consider the “commercial nature” of a work
(and Green Day’s concert was undoubtedly commercial in
nature) “the degree to which the new user exploits the
copyright for commercial gain—as opposed to incidental use
as part of a commercial enterprise—affects the weight we
afford commercial nature as a factor.” Elvis Presley Enters.,
349 F.3d at 627. Green Day’s use of Scream Icon was only
incidentally commercial; the band never used it to market the
concert, CDs, or merchandise. Under these circumstances,
the first fair use factor weighs in Green Day’s favor.
B
The second factor that § 107 instructs us to consider is
“the nature of the copyrighted work” which recognizes the
fact that “some works are closer to the core of intended
copyright protection than others.” Campbell, 510 U.S. at 586.
Scream Icon is a creative work, meriting strong protection
under this factor.
Mitigating this factor in favor of Green Day is that we are
instructed to consider the extent to which a work has been
published. Harper & Row Publishers, Inc., 471 U.S. at 564
(“The fact that a work is unpublished is a critical element of
its ‘nature.’”); Kelly, 336 F.3d at 820. “Published works are
more likely to qualify as fair use because the first appearance
of the artist’s expression has already occurred.” Kelly,
336 F.3d at 820. Here, as in Kelly, Scream Icon was widely
disseminated, both on the internet and on the streets of Los
Angeles before Green Day used it in their concerts.
Accordingly, Seltzer controlled the “first public appearance”
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of his work. See Harper & Row Publishers, Inc., 471 U.S. at
564. This tends to weigh in favor of the fair use of that work.
Considering this factor as a whole, it weighs only slightly
in Seltzer’s favor.
C
The third factor looks to the quantitative amount and
qualitative value of the original work used in relation to the
justification for that use. SOFA Entm’t, 709 F.3d at 1279; see
also Campbell, 510 U.S. at 586. This factor captures the fact
that an allegedly infringing work that copies little of the
original is likely to be a fair use. See, e.g., SOFA Entm’t,
709 F.3d at 1279 (holding that Ed Sullivan’s seven-second
introduction of the Four Seasons band was both qualitatively
and quantitatively insignificant). Here, Green Day copied
most of Scream Icon, both quantitatively and qualitatively.
However, unlike an episode of the Ed Sullivan show or a
book manuscript, Scream Icon is not meaningfully divisible.
Given that fact, this court has acknowledged that this factor
will not weigh against an alleged infringer, even when he
copies the whole work, if he takes no more than is necessary
for his intended use. Kelly, 336 F.3d at 820–21. As the
Supreme Court has recognized, this factor necessarily
overlaps somewhat with the first factor—the “extent of
permissible copying varies with the purpose and character of
the use.” Campbell, 510 U.S. at 586–87. Here, as in Kelly,
the use of the entire work was necessary to achieve Green
Day’s “new expression, meaning or message.” Id. at 579; see
also Kelly, 336 F.3d at 821.
Thus, this factor does not weigh against Green Day.
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D
The fourth factor asks what effect the allegedly infringing
use has on the “potential market for or value of the
copyrighted work.” 17 U.S.C. § 107(4). This factor should
consider “the extent of market harm caused by the particular
actions of the alleged infringer [and] also whether
unrestricted and widespread conduct of the sort engaged in by
the defendant would result in a substantially adverse impact
on the potential market for the original.” Campbell, 510 U.S.
at 590 (internal quotation marks and citations omitted).
Where the allegedly infringing use does not substitute for the
original and serves a “different market function,” such factor
weighs in favor of fair use. Id. at 591; SOFA Entm’t,
709 F.3d at 1280.
At Seltzer’s deposition, he repeatedly testified that the
value of his work was unchanged, but that he subjectively did
not care for Green Day’s use of his art. He admitted that no
one had ever told him that he would not buy his work as a
result of Green Day’s use; instead, he claimed that Scream
Icon was “tarnished” for him personally, but he did not view
the piece as having lost any value.
Additionally, Green Day presented evidence that its video
backdrop did not perform the same “market function” as the
original. The original, created six years before Green Day’s
use, was primarily intended as street art. Green Day’s
allegedly infringing use, on the other hand, was never placed
on merchandise, albums, or promotional material and was
used for only one song in the middle of a three hour touring
show. In this context, there is no reasonable argument that
conduct of the sort engaged in by Green Day is a substitute
for the primary market for Seltzer’s art.
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This factor also considers any impact on “traditional,
reasonable, or likely to be developed markets.” Ringgold,
126 F.3d at 81. At some point, according to Seltzer’s
declaration, Scream Icon was used in a music video by a band
named “People.” Seltzer provides no additional information
about this licensing, including how much revenue he earned
as a result, how the music video was used by the band, or
how the music video used Scream Icon. Without further
context, this fact does not suffice to show that Green Day’s
use harmed any existing market or a market that Seltzer was
likely to develop.
Thus, this factor weighs in Green Day’s favor as well.
E
Our evaluation of all four factors inclines us to the
ultimate conclusion that Green Day’s use of Seltzer’s Scream
Icon was fair. The purpose and character of the use was
transformative and not overly commercial. The nature of the
work includes its status as a widely disseminated work of
street art. Green Day’s use of the work was not excessive in
light of its transformative purpose. And Green Day’s use did
not affect the value of the piece or of Seltzer’s artwork in
general. Additionally, we note that factor one and factor four
have “dominated the case law” and are generally viewed as
the most important factors; Green Day wins on both of these
key points. Monge, 688 F.3d at 1171. Therefore, we are
satisfied that the district court did not err in granting
summary judgment on Seltzer’s copyright infringement
claims.
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III
The district court also granted summary judgment to
Green Day on Seltzer’s Lanham Act claims. The Lanham
Act extends liability to any person who “uses in commerce
any word, term, name, symbol, or device . . . which is likely
to cause confusion, or to cause mistake, or to deceive as to the
affiliation, connection or association of such person with
another person . . . .” 15 U.S.C. § 1125(a).
The district court concluded that Seltzer failed to present
evidence showing that he used the image as a mark in the sale
of goods or services—that is, that he failed to establish
trademark rights at all. In order to acquire trademark rights,
the mark must be used in the “ordinary course of trade” on
goods or containers, or, if the nature of the goods makes that
impractical, on documents associated with the goods or their
sale. Brookfield Commc’ns v. West Coast Entm’t Corp.,
174 F.3d 1036, 1051–52 (9th Cir. 1999) (citing 15 U.S.C.
§ 1127).
Seltzer argues that Scream Icon’s placement on certain
advertisements for his appearance at an art gallery show was
sufficient to establish trademark rights. But Seltzer has not
presented any evidence that the use of the mark was
“sufficiently public to identify or distinguish the marked
goods in an appropriate segment of the public mind.” Id. at
1052 (quoting New West Corp. v. NYM Co. of Cal., Inc.,
595 F.2d 1194, 1200 (9th Cir. 1979)). Seltzer has failed to
explain how these advertisements were distributed, who
might have seen them, when they were distributed, to what
shows they were connected and what was sold at those shows,
or any other facts which might be necessary to evaluate
whether Scream Icon is deserving of trademark protection.
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Therefore the district court correctly granted summary
judgment to Green Day on Seltzer’s Lanham Act claims.1
IV
Finally, the district court awarded Green Day over
$200,000 in attorneys fees. A district court’s award of
attorneys fees under 17 U.S.C. § 505 is reviewed for abuse of
discretion. Fantasy, Inc. v. Fogerty, 94 F.3d 553, 556 (9th
Cir. 1996). Under the abuse of discretion standard, the
district court’s findings of fact or its application of the legal
standard to those findings of fact must be “illogical,
implausible, or without support in inferences that may be
drawn from facts in the record.” U.S. v. Hinkson, 585 F.3d
1247, 1251 (9th Cir. 2009) (en banc).
The question presented in a case where a defendant makes
a winning fair use defense is whether the successful defense
of the action furthered the purposes of the Copyright Act.
Mattel Inc. v. Walking Mountain Prods., 353 F.3d 792, 816
(9th Cir. 2003). It is important to recall that the Supreme
Court rejected the so-called British Rule where the loser pays;
rather, attorneys fees are left up to the discretion of the
district court. See Fogerty v. Fantasy, 510 U.S. 517, 533
(1994) (citing 17 U.S.C. § 505). As the district court correctly
recited, courts deciding whether to award attorneys fees can
look to five non-exclusive factors: (1) the degree of success
1
This court has “consistently held that state common law claims of
unfair competition and actions pursuant to California Business and
Professions Code § 17200 are ‘substantially congruent’ to claims made
under the Lanham Act.” Cleary v. News Corp., 30 F.3d 1255, 1262–63
(9th Cir. 1994). W e similarly affirm the district court’s grant of summary
judgment on these claims.
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obtained; (2) frivolousness; (3) motivation; (4) the objective
unreasonableness of the losing party’s factual and legal
arguments; and (5) the need, in particular circumstances, to
advance considerations of compensation and deterrence. See
Fogerty, 510 U.S. at 534 n.19.
Significantly, the district court found that Seltzer’s claim
was objectively unreasonable. In making this finding, the
district court relied on the facts that Seltzer lost at summary
judgment, that three of the four fair use factors were in Green
Day’s favor, and that Seltzer’s deposition testimony
“effectively conceded that the use was transformative.” This
is in reference to Seltzer’s statement at his deposition,
referenced above, that the new work “tainted the original
message” and “devalue[d] the original intent” of Scream
Icon.
But, the mere fact that Seltzer lost cannot establish his
objective unreasonability. See Harris Custom Builders, Inc.
v. Hoffmeyer, 140 F.3d 728, 730 (7th Cir. 1998) (“How the
court ruled, simply put, is not a proper concern [in
determining the availability of § 505 fees].”). Further, we
conclude that Green Day only won on two of the four fair use
factors, rather than three as the district court concluded. And
in any event, Seltzer’s statement at his deposition—which the
district court viewed as a “concession”—only expressed his
opinion and could not concede the transformative nature of
Green Day’s work. See Cariou, 714 F.3d at 707 (“What is
critical is how the work in question appears to the reasonable
observer, not simply what an artist might say about a
particular piece or body of work . . . . Rather than confining
our inquiry to [the artist’s] explanations of his artwork, we
instead examine how the artworks may ‘reasonably be
perceived’ . . .”). Thus, the facts relied on by the district
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court do not lend any meaningful support to the notion that
Seltzer’s case was objectively unreasonable when he brought
it.
This was a close and difficult case. We concluded that
Seltzer’s work was transformed by Green Day’s use. But that
transformation was far from obvious given Green Day’s only
slight alterations to the original. Furthermore, of the
remaining three factors, one was in Seltzer’s favor, one was
in Green Day’s favor, and one was neutral. There is simply
no reason to believe that Seltzer “should have known from
the outset that [his] chances of success in this case were slim
to none.” SOFA Entm’t, 709 F.3d at 1280.
Therefore, we conclude that the district court clearly erred
in finding that Seltzer acted objectively unreasonably, and
vacate the award of attorneys fees.
No. 11-56573 AFFIRMED; No. 11-57160 VACATED
AND REMANDED. All parties to bear their own costs on
appeal.
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APPENDICES
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Page 1
60 F.3d 913, 144 A.L.R. Fed. 745, 1995 Copr.L.Dec. P 27,417, 35 U.S.P.Q.2d 1513
(Cite as: 60 F.3d 913)
United States Court of Appeals,
Second Circuit.
AMERICAN GEOPHYSICAL UNION, et
al., Plaintiffs-Counterclaim-Defendants-Appellees,
v.
TEXACO INC., Defendant-Counterclaim-Plaintiff-Appellant.
In re TEXACO INC., et al., Reorganized
Debtors.
ACADEMIC PRESS, INC., et al., Petitioners-Appellees,
v.
TEXACO INC., Respondent-Appellant.
No. 1479, Docket 92-9341.
Argued May 20, 1993.
Decided Oct. 28, 1994.
Amended Dec. 23, 1994.
Further Amended July 17, 1995.
Publishers of scientific and medical
journals brought copyright infringement
action against corporation that had made
unauthorized copies of copyrighted articles
for use of its researchers. The United States
District Court for the Southern District of
New York, Pierre N. Leval, J., 802 F.Supp.
1, ruled that such copying was not fair use
and certified ruling for interlocutory appeal. The Court of Appeals, Jon O. Newman, Chief Judge, held that corporation's
copying was not fair use.
Affirmed.
Jacobs, Circuit Judge, filed dissenting
opinion.
Opinion, 37 F.3d 881, superseded.
West Headnotes
[1] Copyrights and Intellectual Property
99
53.2
99 Copyrights and Intellectual Property
99I Copyrights
99I(J) Infringement
99I(J)1 What Constitutes Infringement
99k53.2 k. Fair Use and Other
Permitted Uses in General. Most Cited
Cases
Application of fair use doctrine always
depends on consideration of precise facts at
hand. 17 U.S.C.A. § 107.
[2] Copyrights and Intellectual Property
99
12(3)
99 Copyrights and Intellectual Property
99I Copyrights
99I(A) Nature and Subject Matter
99k12 Originality of Work; Creativity
99k12(3) k. Compilations and
Derivative Works; Copies and Reproductions. Most Cited Cases
To extent that compilation of scientific
journal issue involved original work of authorship, publisher possessed distinct copyright in each journal issue as collective
work. 17 U.S.C.A. §§ 101, 103.
[3] Copyrights and Intellectual Property
99
53.2
99 Copyrights and Intellectual Property
99I Copyrights
99I(J) Infringement
99I(J)1 What Constitutes Infringement
99k53.2 k. Fair Use and Other
Permitted Uses in General. Most Cited
Cases
© 2013 Thomson Reuters. No Claim to Orig. US Gov. Works.
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CA
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60 F.3d 913, 144 A.L.R. Fed. 745, 1995 Copr.L.Dec. P 27,417, 35 U.S.P.Q.2d 1513
(Cite as: 60 F.3d 913)
Copyrights and Intellectual Property 99
83(1)
99 Copyrights and Intellectual Property
99I Copyrights
99I(J) Infringement
99I(J)2 Remedies
99k72 Actions for Infringement
99k83 Evidence
99k83(1) k. Presumptions and Burden of Proof. Most Cited
Cases
“Fair use” serves as affirmative defense
to claim of copyright infringement, and
thus party claiming that its secondary use
of original copyrighted work constitutes
fair use typically carries burden of proof as
to all issues in dispute. 17 U.S.C.A. § 107.
[4] Federal Courts 170B
776
170B Federal Courts
170BVIII Courts of Appeals
170BVIII(K) Scope, Standards, and
Extent
170BVIII(K)1 In General
170Bk776 k. Trial De Novo.
Most Cited Cases
Since fair use is mixed question of law
and fact, Court of Appeals reviews district
court's conclusions on issue de novo, although Court of Appeals accepts district
court's subsidiary findings of fact unless
clearly erroneous. 17 U.S.C.A. § 107.
[5] Copyrights and Intellectual Property
99
56
99 Copyrights and Intellectual Property
99I Copyrights
99I(J) Infringement
99I(J)1 What Constitutes Infringement
99k54 Books or Other Literary
Works
99k56 k. Fair Use in General. Most Cited Cases
Dominant purpose of researcher's use
of photocopied articles from scientific
journal was employer's systematic institutional policy of multiplying available number of copies of pertinent copyrighted articles by circulating journals among employed scientists for them to make copies,
and thus weighed against researcher's employer in determining whether copying was
fair use; photocopying served same purpose for which additional subscriptions
were normally sold or for which photocopying licenses could be obtained. 17
U.S.C.A. § 107(1).
[6] Copyrights and Intellectual Property
99
56
99 Copyrights and Intellectual Property
99I Copyrights
99I(J) Infringement
99I(J)1 What Constitutes Infringement
99k54 Books or Other Literary
Works
99k56 k. Fair Use in General. Most Cited Cases
Scientific journal articles were not
within core of copyright's protective purposes, in determining whether photocopying of those articles was fair use, in view of
articles' factual character. 17 U.S.C.A. §
107(2).
[7] Copyrights and Intellectual Property
99
56
99 Copyrights and Intellectual Property
99I Copyrights
99I(J) Infringement
99I(J)1 What Constitutes In-
© 2013 Thomson Reuters. No Claim to Orig. US Gov. Works.
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60 F.3d 913, 144 A.L.R. Fed. 745, 1995 Copr.L.Dec. P 27,417, 35 U.S.P.Q.2d 1513
(Cite as: 60 F.3d 913)
fringement
99k54 Books or Other Literary
Works
99k56 k. Fair Use in General. Most Cited Cases
Researcher's photocopying of entire
scientific journal articles weighed against
finding of fair use in publisher's copyright
infringement action against researcher's
employer. 17 U.S.C.A. § 107(3).
[8] Copyrights and Intellectual Property
99
56
99 Copyrights and Intellectual Property
99I Copyrights
99I(J) Infringement
99I(J)1 What Constitutes Infringement
99k54 Books or Other Literary
Works
99k56 k. Fair Use in General. Most Cited Cases
Each individual article in scientific
journal constituted entire work for purpose
of fair use analysis. 17 U.S.C.A. §§ 102,
107.
[9] Copyrights and Intellectual Property
99
56
99 Copyrights and Intellectual Property
99I Copyrights
99I(J) Infringement
99I(J)1 What Constitutes Infringement
99k54 Books or Other Literary
Works
99k56 k. Fair Use in General. Most Cited Cases
Publisher of scientific journal demonstrated substantial harm to value of its
copyrights as result of researcher's photocopying of individual journal articles, in
determining whether such copying was fair
use; publisher lost photocopying licensing
revenue as result of copying, and also lost
subscription revenue. 17 U.S.C.A. §
107(4).
[10] Copyrights and Intellectual Property 99
56
99 Copyrights and Intellectual Property
99I Copyrights
99I(J) Infringement
99I(J)1 What Constitutes Infringement
99k54 Books or Other Literary
Works
99k56 k. Fair Use in General. Most Cited Cases
Employer's photocopying of eight articles in scientific journal for its researcher's
archival use was not fair use. 17 U.S.C.A.
§ 107.
*914 Thomas A. Smart, New York City
(Milton J. Schubin, Michael Malina,
Richard A. De Sevo, Kaye, Scholer, Fierman, Hays & Handler, New York City;
Joseph P. Foley, Texaco, Inc. White Plains,
NY, on the brief), for appellant.
Stephen Rackow Kaye, New York City
(Jon A. Baumgarten, James F. Parver,
Christopher A. Meyer, Karen E. Clarke,
Susan L. Hochman, Proskauer Rose Goetz
& Mendelsohn, New York City, on the
brief), for appellees.
(Susan G. Braden, Rueben B. Robertson,
Ingersoll and Bloch, Wash., D.C., submitted a brief for amicus curiae Amer. Library
Ass'n).
(Ritchie T. Thomas, James V. Dick, Susan
Neuberger Weller, Squire, Sanders & Dempsey, Washington, DC, submitted a brief
for amici curiae Ass'n of Research Librar-
© 2013 Thomson Reuters. No Claim to Orig. US Gov. Works.
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60 F.3d 913, 144 A.L.R. Fed. 745, 1995 Copr.L.Dec. P 27,417, 35 U.S.P.Q.2d 1513
(Cite as: 60 F.3d 913)
ies, Amer. Ass'n of Law Libraries, Sp. Libraries Ass'n, Medical Library Ass'n, Amer.
Council of Learned Societies, Nat'l Humanities Alliance, and Ass'n of Academic
Health Sciences Library Directors).
(Lawrence E. Abelman, Jeffrey A. Schwab,
Norman S. Beier, Nancy J. Mertzel, Abelman, Frayne & Schwab, New York City,
submitted a brief for amici curiae Amer.
Auto. Mfrs. Ass'n and Chemical Mfrs.
Ass'n).
Before: NEWMAN, Chief Judge,FN*
WINTER and JACOBS, Circuit Judges.
FN* Chief Judge Newman replaced
the Honorable Charles E. Stewart,
Jr., of the District Court for the
Southern District of New York, sitting by designation, who recused
himself after oral argument.
JON O. NEWMAN, Chief Judge:
This interlocutory appeal presents the
issue of whether, under the particular circumstances of this case, the fair use defense to copyright infringement applies to
the photocopying of articles in a scientific
journal. This issue arises on the appeal of
defendant Texaco Inc. from the July 23,
1992, order of the United States District
Court for the Southern District of New
York (Pierre N. Leval, Judge) holding,
after a limited-issue bench trial, that the
photocopying of eight articles from the
Journal of Catalysis for use by one of
Texaco's researchers was not fair use. See
American Geophysical Union v. Texaco
Inc., 802 F.Supp. 1 (S.D.N.Y.1992).
Though not for precisely the same reasons,
we agree with the District Court's conclusion that this particular copying was not
fair use and therefore affirm.
Background
The District Court Proceedings.
Plaintiffs American Geophysical Union
and 82 other publishers of scientific and
technical journals (the “publishers”)
brought a class action claiming that
Texaco's unauthorized photocopying of articles from their journals constituted copyright infringement. Among other defenses,
Texaco claimed that its copying was fair
use under section 107 of the Copyright
*915 Act, 17 U.S.C. § 107 (1988). Since it
appeared likely that the litigation could be
resolved once the fair use defense was adjudicated, the parties agreed that an initial
trial should be limited to whether Texaco's
copying was fair use, and further agreed
that this issue would be submitted for decision on a written record.
Although Texaco employs 400 to 500
research scientists, of whom all or most
presumably photocopy scientific journal
articles to support their Texaco research,
the parties stipulated-in order to spare the
enormous expense of exploring the photocopying practices of each of them-that one
scientist would be chosen at random as the
representative of the entire group. The scientist chosen was Dr. Donald H. Chickering, II, a scientist at Texaco's research center in Beacon, New York. For consideration at trial, the publishers selected from
Chickering's files photocopies of eight particular articles from the Journal of Catalysis.
In a comprehensive opinion, reported at
802 F.Supp. 1, the District Court considered the statutory fair use factors identified in section 107, weighed other equitable considerations, and held that Texaco's
photocopying, as represented by Chickering's copying of these eight articles did not
constitute fair use. The District Court certi-
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fied its ruling for interlocutory appeal under 28 U.S.C. § 1292(b) (1988).
Essential Facts. Employing between
400 and 500 researchers nationwide,
Texaco conducts considerable scientific research seeking to develop new products
and technology primarily to improve its
commercial performance in the petroleum
industry. As part of its substantial expenditures in support of research activities
at its Beacon facility, Texaco subscribes to
many scientific and technical journals and
maintains a sizable library with these materials. Among the periodicals that Texaco
receives at its Beacon research facility is
the Journal of Catalysis (“ Catalysis ”), a
monthly publication produced by Academic Press, Inc., a major publisher of scholarly journals and one of the plaintiffs in
this litigation. Texaco had initially purchased one subscription to Catalysis for its
Beacon facility, and increased its total subscriptions to two in 1983. Since 1988,
Texaco has maintained three subscriptions
to Catalysis.
Each issue of Catalysis contains articles, notes, and letters (collectively
“articles”), ranging in length from two to
twenty pages. All of the articles are received by the journal's editors through unsolicited submission by various authors.
Authors are informed that they must transfer the copyright in their writings to Academic Press if one of their articles is accepted for publication, and no form of money
payment is ever provided to authors whose
works are published. Academic Press typically owns the copyright for each individual article published in Catalysis, and
every issue of the journal includes a general statement that no part of the publication
is to be reproduced without permission
from the copyright owner. The average
monthly issue of Catalysis runs approximately 200 pages and comprises 20 to 25 articles.
Chickering, a chemical engineer at the
Beacon research facility, has worked for
Texaco since 1981 conducting research in
the field of catalysis, which concerns
changes in the rates of chemical reactions.
To keep abreast of developments in his
field, Chickering must review works published in various scientific and technical
journals related to his area of research.
Texaco assists in this endeavor by having
its library circulate current issues of relevant journals to Chickering when he places
his name on the appropriate routing list.
The copies of the eight articles from
Catalysis found in Chickering's files that
the parties have made the exclusive focus
of the fair use trial were photocopied in
their entirety by Chickering or by other
Texaco employees at Chickering's request.
Chickering apparently believed that the
material and data found within these articles would facilitate his current or future
professional research. The evidence developed at trial indicated that Chickering
did not generally use the Catalysis articles
in his research immediately upon copying,
but placed the photocopied articles in his
files to have them available for later reference as needed. Chickering became aware
of six of the photocopied articles when the
original issues of Catalysis containing the
articles were circulated to him. He learned
*916 of the other two articles upon seeing
a reference to them in another published
article. As it turned out, Chickering did not
have occasion to make use of five of the
articles that were copied.
Discussion
I. The Nature of the Dispute
The parties and many of the amici curi-
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ae have approached this case as if it concerns the broad issue of whether photocopying of scientific articles is fair use, or
at least the only slightly more limited issue
of whether photocopying of such articles is
fair use when undertaken by a research scientist engaged in his own research. Such
broad issues are not before us. Rather, we
consider whether Texaco's photocopying
by 400 or 500 scientists, as represented by
Chickering's example, is a fair use. This includes the question whether such institutional, systematic copying increases the
number of copies available to scientists
while avoiding the necessity of paying for
license fees or for additional subscriptions.
We do not deal with the question of copying by an individual, for personal use in research or otherwise (not for resale), recognizing that under the fair use doctrine or
the de minimis doctrine, such a practice by
an individual might well not constitute an
infringement. In other words, our opinion
does not decide the case that would arise if
Chickering were a professor or an independent scientist engaged in copying and
creating files for independent research, as
opposed to being employed by an institution in the pursuit of his research on the institution's behalf.
[1] Fair use is a doctrine the application
of which always depends on consideration
of the precise facts at hand, see Campbell
v. Acuff-Rose Music, Inc., --- U.S. ----, ----,
114 S.Ct. 1164, 1170, 127 L.Ed.2d 500
(1994); Harper & Row, Publishers, Inc. v.
Nation Enterprises, 471 U.S. 539, 549, 105
S.Ct. 2218, 2225, 85 L.Ed.2d 588 (1985);
Wright v. Warner Books, Inc., 953 F.2d
731, 740 (2d Cir.1991); H.R.Rep. No.
1476, 94th Cong., 2d Sess. 65-66 (1976)
(“no generally applicable definition [of fair
use] is possible, and each case raising the
question must be decided on its own
facts”), and in this case the parties have
helpfully circumscribed the scope of the issue to be decided by tendering for the District Court's decision the facts concerning
the copying of eight particular articles. Our
concern is whether the copying of these
eight articles, as representative of the systematic copying that Texaco encouraged,
was properly determined not to be fair use.
Thus, the many background details stressed
by each side are of only limited relevance
in resolving this specific case.FN1
FN1. Texaco, for example, uses a
significant portion of its initial brief
to expound on photocopying activities in various industries. Similarly,
a large part of the publishers' statement of facts is devoted to a broad
discussion of Texaco's photocopying practices, the social importance
of academic and scientific journals,
and the economics of journal publication and photocopying. These
and other details presented by the
parties are discussed in the District
Court's opinion, 802 F.Supp. at 4-9.
A. Fair Use and Photocopying
We consider initially the doctrine of
fair use and its application to photocopying
of documents. Seeking “to motivate the
creative activity of authors ... by the provision of a special reward,” Sony Corporation of America v. Universal City Studios,
Inc., 464 U.S. 417, 429, 104 S.Ct. 774,
782, 78 L.Ed.2d 574 (1984), copyright law
grants certain exclusive rights in original
works to authors, see 17 U.S.C. §§ 102(a),
106, 201(a). However, the fair use doctrine
“tempers the protection of copyright by allowing ... [the] use [of] a limited amount of
copyrighted material under some circumstances.” Twin Peaks Productions, Inc. v.
Publications International, Ltd., 996 F.2d
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1366, 1373 (2d Cir.1993). Traditionally
conceived as based on authors' implied
consent to reasonable uses of their works,
see Harper & Row, 471 U.S. at 549-50,
105 S.Ct. at 2224-25, or on an exception to
authors' monopoly privileges needed in order to fulfill copyright's purpose to promote the arts and sciences, see Campbell,
510 U.S. at ----, 114 S.Ct. at 1169, the fair
use doctrine has a lengthy and rich common-law history, see William F. Patry, The
Fair Use Privilege in Copyright Law 1-63
(1985) [hereinafter Patry, The Fair Use
*917 Privilege ], and is now codified in
section 107 of the Copyright Act, 17
U.S.C. § 107.FN2
FN2. In full, 17 U.S.C. § 107 reads:
§ 107. Limitation 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;
(2) the nature of 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 the
above factors.
As with the development of other easy
and accessible means of mechanical reproduction of documents, the invention and
widespread availability of photocopying
technology threatens to disrupt the delicate
balances established by the Copyright Act.
See 3 Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 13.05[E][1],
at 13-225 to 13-226 (1994) [hereinafter
Nimmer on Copyright ] (noting that
“unrestricted photocopying practices could
largely undercut the entire law of copyright”); see also Sony, 464 U.S. at 467-68
n. 16, 104 S.Ct. at 801-02 n. 16
(Blackmun, J., dissenting) (recognizing
that the “advent of inexpensive and readily
available copying machines ... has changed
the dimensions” of the legal issues concerning the practice of making personal
copies of copyrighted materials). As a leading commentator astutely notes, the advent
of modern photocopying technology creates a pressing need for the law “to strike
an appropriate balance between the authors'
interest in preserving the integrity of copyright, and the public's right to enjoy the benefits that photocopying technology offers.” 3 Nimmer on Copyright § 13.05
[E][1], at 13-226.
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Indeed, if the issue were open, we
would seriously question whether the fair
use analysis that has developed with respect to works of authorship alleged to use
portions of copyrighted material is precisely applicable to copies produced by
mechanical means. The traditional fair use
analysis, now codified in section 107, developed in an effort to adjust the competing
interests of authors-the author of the original copyrighted work and the author of
the secondary work that “copies” a portion
of the original work in the course of producing what is claimed to be a new work.
Mechanical “copying” of an entire document, made readily feasible and economical by the advent of xerography, see SCM
Corp. v. Xerox Corp., 463 F.Supp. 983,
991-94 (D.Conn.1978), aff'd, 645 F.2d
1195 (2d Cir.1981), cert. denied, 455 U.S.
1016, 102 S.Ct. 1708, 72 L.Ed.2d 132
(1982), is obviously an activity entirely
different from creating a work of authorship. Whatever social utility copying of
this sort achieves, it is not concerned with
creative authorship.
Though we have been instructed to defer to Congress “when major technological
innovations alter the market for copyrighted materials,” Sony, 464 U.S. at 431,
104 S.Ct. at 783, Congress has thus far
provided scant guidance for resolving fair
use issues involving photocopying, legislating specifically only as to library copying, see 17 U.S.C. § 108, and providing indirect advice concerning classroom copying.FN3 See generally 3 Nimmer on Copyright § 13.05[E]. However, we learn from
the Supreme Court's consideration of copying achieved by use of a videotape recorder
that mechanical copying is to be assessed
for fair use purposes under the traditional
mode of analysis, including the four statutory factors of section 107. See Sony, 464
U.S. at 447-56, 104 S.Ct. at 791-96. We
therefore are obliged to apply that analysis
to the photocopying that occurred in this
case.
FN3. See Agreement on Guidelines
for Classroom Copying in NotFor-Profit Educational Institutions,
quoted in Patry, The Fair Use Privilege, at 308, discussed infra, note
5.
B. The Precise Copyrights at Issue
[2] We must first identify precisely the
copyrighted works alleged to be infringed,
*918 since certain arguments made on appeal seem to focus on different works. The
publishers typically hold two separate sets
of copyrights in their journal publications.
As a consequence of the publishers' requirement that authors transfer their copyrights when their articles are accepted for
publication, the publishers usually possess
the copyrights that subsist in each individual article appearing within their journals.
FN4 Moreover, to the extent that the compilation of a journal issue involves an original work of authorship, the publishers
possess a distinct copyright in each journal
issue as a collective work, see 17 U.S.C. §
103; see also 17 U.S.C. § 101 (defining
“compilation” and “collective work”). See
generally Feist Publications, Inc. v. Rural
Telephone Service Co., 499 U.S. 340,
356-61, 111 S.Ct. 1282, 1293-96, 113
L.Ed.2d 358 (1991) (discussing extent of
copyright protection in compilations and
collective works).
FN4. For various reasons, for example, because certain articles are
the work of the United States Government (which makes copyright
protection unavailable, see 17
U.S.C. § 105), the publishers do not
always possess the copyrights for
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all articles within each journal.
From the outset, this lawsuit concerned
alleged infringement of the copyrights in
individual journal articles, copyrights assigned by the authors to the publishers.
More specifically, by virtue of the parties'
stipulation, this case now concerns the
copyrights in the eight articles from Catalysis found in Chickering's files, copyrights
now owned by Academic Press. There are
no allegations that raise questions concerning Academic Press's potential copyrights
in whole issues or annual volumes of Catalysis as collective works.
C. Burdens of Proof and Standard of Review
[3][4] Fair use serves as an affirmative
defense to a claim of copyright infringement, and thus the party claiming that its
secondary use of the original copyrighted
work constitutes a fair use typically carries
the burden of proof as to all issues in the
dispute. See Campbell, 510 U.S. at ----,
114 S.Ct. at 1177. Moreover, since fair use
is a “mixed question of law and fact,”
Harper & Row, 471 U.S. at 560, 105 S.Ct.
at 2230, we review the District Court's conclusions on this issue de novo, though we
accept its subsidiary findings of fact unless
clearly erroneous, see Twin Peaks, 996
F.2d at 1374.
II. The Enumerated Fair Use Factors of
Section 107
Section 107 of the Copyright Act identifies four non-exclusive factors that a
court is to consider when making its fair
use assessment, see 17 U.S.C. § 107(1)-(4).
The District Court concluded that three of
the four statutory factors favor the publishers. As detailed below, our analysis of certain statutory factors differs somewhat
from that of the District Court, though we
are in agreement on the ultimate determin-
ation. Our differences stem primarily from
the fact that, unlike the District Court, we
have had the benefit of the Supreme
Court's important decision in Campbell,
decided after Judge Leval issued his opinion.
A. First Factor: Purpose and Character of
Use
[5] The first factor listed in section 107
is “the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational
purposes.” 17 U.S.C. § 107(1). Especially
pertinent to an assessment of the first fair
use factor are the precise circumstances under which copies of the eight Catalysis articles were made. After noticing six of these
articles when the original copy of the
journal issue containing each of them was
circulated to him, Chickering had them
photocopied, at least initially, for the same
basic purpose that one would normally
seek to obtain the original-to have it available on his shelf for ready reference if and
when he needed to look at it. The library
circulated one copy and invited all the researchers to make their own photocopies. It
is a reasonable inference that the library
staff wanted each journal issue moved
around the building quickly and returned to
the library so that it would be available for
others to look at. Making copies enabled
all researchers who might one day be interested in examining the contents of an article in the issue to have the article *919
readily available in their own offices. In
Chickering's own words, the copies of the
articles were made for “my personal convenience,” since it is “far more convenient
to have access in my office to a photocopy
of an article than to have to go to the library each time I wanted to refer to it.” Affidavit of Donald Chickering at 11
(submitted as direct trial testimony)
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[hereinafter Chickering testimony ]. Significantly, Chickering did not even have occasion to use five of the photocopied articles at all, further revealing that the photocopies of the eight Catalysis articles were
primarily made just for “future retrieval
and reference.” Id.
It is true that photocopying these articles also served other purposes. The most
favorable for Texaco is the purpose of enabling Chickering, if the need should arise,
to go into the lab with pieces of paper that
(a) were not as bulky as the entire issue or
a bound volume of a year's issues, and (b)
presented no risk of damaging the original
by exposure to chemicals. And these purposes might suffice to tilt the first fair use
factor in favor of Texaco if these purposes
were dominant. For example, if Chickering
had asked the library to buy him a copy of
the pertinent issue of Catalysis and had
placed it on his shelf, and one day while
reading it had noticed a chart, formula, or
other material that he wanted to take right
into the lab, it might be a fair use for him
to make a photocopy, and use that copy in
the lab (especially if he did not retain it and
build up a mini-library of photocopied articles). This is the sort of “spontaneous”
copying that is part of the test for permissible nonprofit classroom copying. See
Agreement on Guidelines for Classroom
Copying in Not-For-Profit Educational Institutions, quoted in Patry, The Fair Use
Privilege, at 308.FN5 But that is not what
happened here as to the six items copied
from the circulated issues.
FN5. These guidelines were included in the legislative history of
the 1976 revision of the Copyright
Act, see H.R.Rep. No. 1476, 94th
Cong., 2d Sess. 68-71 (1976),
U.S.Code Cong. & Admin.News
1976, p. 5659, and were endorsed
by the House Judiciary Committee
as “a reasonable interpretation of
the minimum standards of fair use.”
Id. at 72, U.S.Code Cong. & Admin.News 1976, at 5686. Though
these guidelines are not considered
necessarily binding on courts, see
Marcus v. Rowley, 695 F.2d 1171,
1178 (9th Cir.1983), they exist as a
persuasive authority marking out
certain minimum standards for educational fair uses, see Basic Books,
Inc. v. Kinko's Graphics Corp., 758
F.Supp. 1522-36 (S.D.N.Y.1991).
See generally 3 Nimmer on Copyright § 13.05[E][3][a], at 13-226.1
to 13-226.2 (discussing nature and
impact of guidelines); Patry, The
Fair Use Privilege, at 307-09,
404-07 (same).
As to the other two articles, the circumstances are not quite as clear, but they too
appear more to serve the purpose of being
additions to Chickering's office “library”
than to be spontaneous copying of a critical
page that he was reading on his way to the
lab. One was copied apparently when he
saw a reference to it in another article,
which was in an issue circulated to him.
The most likely inference is that he decided
that he ought to have copies of both itemsagain for placement on his shelf for later
use if the need arose. The last article was
copied, according to his affidavit, when he
saw a reference to it “elsewhere.” Chickering testimony at 22. What is clear is that
this item too was simply placed “on the
shelf.” As he testified, “I kept a copy to
refer to in case I became more involved in
support effects research.” Id.
The photocopying of these eight Catalysis articles may be characterized as
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“archival”-i.e., done for the primary purpose of providing numerous Texaco scientists (for whom Chickering served as an example) each with his or her own personal
copy of each article without Texaco's having to purchase another original journal.
FN6 The photocopying “merely *920
‘supersede[s] the objects' of the original
creation,” Campbell, 510 U.S. at ----, 114
S.Ct. at 1171 (quoting Folsom v. Marsh, 9
F.Cas.
342,
348
(No.
4,901)
(C.C.D.Mass.1841)), and tilts the first fair
use factor against Texaco. We do not mean
to suggest that no instance of archival
copying would be fair use, but the first
factor tilts against Texaco in this case because the making of copies to be placed on
the shelf in Chickering's office is part of a
systematic process of encouraging employee researchers to copy articles so as to multiply available copies while avoiding payment.
FN6. In this regard, the District
Court's conclusion that the “primary
aspect” of Texaco's copying was to
multiply copies is accurate, see 802
F.Supp. at 14-15, irrespective of the
evidence (or lack of evidence) concerning the nature and scope of
Texaco's photocopying activity for
its entire population of scientists.
Even if the photocopies of the Catalysis articles in Chickering's files
were the only copies ever made by
Texaco-which, as Texaco stresses,
is all that the evidence developed
below conclusively showed-the
primary objective in making these
single copies was to provide Chickering with his own, additional,
readily accessible copy of the original article. As the District Court
noted, “[I]f Chickering were the
subscriber and sole user of the sub-
scription to Catalysis, and he made
an extra copy of an article for use in
the lab or for marking with scratch
notes, the argument [for a transformative fair use] might have considerable force.” 802 F.Supp. at 14.
Texaco criticizes three aspects of the
District Court's analysis of the first factor.
Relying largely on the Supreme Court's
discussion of fair use in Sony, the District
Court suggested that a secondary user will
“win” this first factor by showing a
“transformative (or productive) nonsuperseding use of the original, or [a] noncommercial use, generally for a socially beneficial or widely accepted purpose.” 802
F.Supp. at 12. The District Court then concluded that Texaco's copying is “neither
transformative nor noncommercial,” id. at
13: not transformative because Texaco
“simply makes mechanical photocopies of
the entirety of relevant articles” and the
“primary aspect” of Texaco's photocopying
is to multiply copies, see id. at 13-15; and
not noncommercial because, though it facilitates research, this research is conducted solely for commercial gain, see id. at
15-16.
Texaco asserts that the District Court
mischaracterized the inquiry under the first
factor and overlooked several relevant considerations. First, Texaco contends that the
District Court inappropriately focussed on
the character of the user rather than the
nature of the use in labeling Texaco's copying as commercial. Texaco claims that its
status as a for-profit corporation has no
bearing on the fair use analysis, and that its
use should be considered noncommercial
since it photocopied articles in order to aid
Chickering's research. Texaco emphasizes
that “research” is explicitly listed in the
preamble of section 107, a circumstance
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that Texaco contends should make its
copying favored under the first factor and
throughout the entire fair use analysis.FN7
FN7. Though Texaco claims that its
copying is for “research” as that
term is used in the preamble of section 107, this characterization might
somewhat overstate the matter.
Chickering has not used portions of
articles from Catalysis in his own
published piece of research, nor has
he had to duplicate some portion of
copyrighted material directly in the
course of conducting an experiment
or investigation. Rather, entire articles were copied as an intermediate
step that might abet Chickering's research.
Second, Texaco contends that the District Court put undue emphasis on whether
its use was “transformative,” especially
since the Supreme Court appears to have
rejected the view that a use must be transformative or productive to be a fair use.
See Sony, 464 U.S. at 455 n. 40, 104 S.Ct.
at 795 n. 40 (“The distinction between
‘productive’ and ‘unproductive’ uses may
be helpful in calibrating the balance [of interests], but it cannot be wholly determinative.”).
Texaco
asserts
that
the
“transformative use” concept is valuable
only to the extent that it focusses attention
upon whether a second work unfairly competes with the original. Texaco states that
in this case, where the photocopies it made
were not sold or distributed in competition
with the original, the nontransformative
nature of its copying should not prevent a
finding of fair use. Texaco also suggests
that its use should be considered transformative: photocopying the article separated it
from a bulky journal, made it more amenable to markings, and provided a document
that could be readily replaced if damaged
in a laboratory, all of which “transformed”
the original article into a form that better
served Chickering's research needs.
Finally, Texaco claims that it should
prevail on the first factor because, as the
District Court acknowledged, the type of
photocopying it conducted is widespread
and has long been considered reasonable
and customary. Texaco stresses that some
courts and commentators regard custom
and common usage as integral to the fair
use analysis. See, e.g., Williams & Wilkins
Co. v. United States, 487 F.2d 1345,
1353-56, 203 Ct.Cl. 74 (1973), aff'd by
equally divided Court, 420 *921 U.S. 376,
95 S.Ct. 1344, 43 L.Ed.2d 264 (1975);
Lloyd L. Weinreb, Fair's Fair: A Comment
on the Fair Use Doctrine, 103 Harv.L.Rev.
1137, 1140 (1990) [hereinafter Weinreb,
Fair's Fair ]. We consider these three lines
of attack separately.
1. Commercial use. We generally agree
with Texaco's contention that the District
Court placed undue emphasis on the fact
that Texaco is a for-profit corporation conducting research primarily for commercial
gain. Since many, if not most, secondary
users seek at least some measure of commercial gain from their use, unduly emphasizing the commercial motivation of a
copier will lead to an overly restrictive
view of fair use. See Campbell, 510 U.S. at
----, 114 S.Ct. at 1174; see also MaxtoneGraham v. Burtchaell, 803 F.2d 1253,
1262 (2d Cir.1986) (noting that if
“commercial” nature of a secondary use is
overemphasized in the analysis, “fair use
would be virtually obliterated”), cert.
denied, 481 U.S. 1059, 107 S.Ct. 2201, 95
L.Ed.2d 856 (1987). See generally 3 Nimmer on Copyright § 13.05[A][1][c], at
13-162 to 13-163 (categorical rule against
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commercial uses unwarranted since this
“would cause the fair use analysis to collapse in all but the exceptional case of nonprofit exploitation”). Though the Supreme
Court had stated in Sony that every commercial use was “presumptively” unfair,
see 464 U.S. at 451, 104 S.Ct. at 793, that
Court and lower courts have come to explain that the commercial nature of a secondary use simply “ ‘tends to weigh
against a finding of fair use.’ ” Campbell,
510 U.S. at ----, 114 S.Ct. at 1174 (quoting
Harper & Row, 471 U.S. at 562, 105 S.Ct.
at 2231); accord Rogers v. Koons, 960 F.2d
301, 309 (2d Cir.), cert. denied, 506 U.S.
934, 113 S.Ct. 365, 121 L.Ed.2d 278
(1992); Sega Enterprises Limited v. Accolade, Inc., 977 F.2d 1510, 1522 (9th
Cir.1992); Maxtone-Graham, 803 F.2d at
1262.
Indeed, Campbell warns against
“elevat[ing] ... to a per se rule” Sony ' s
language about a presumption against fair
use arising from commercial use. 510 U.S.
at ----, 114 S.Ct. at 1174. Campbell discards that language in favor of a more
subtle, sophisticated approach, which recognizes that “the more transformative the
new work, the less will be the significance
of other factors, like commercialism, that
may weigh against a finding of fair use.”
Id. [at ----, 114 S.Ct.] at 1171. The Court
states that “the commercial or nonprofit
educational purpose of a work is only one
element of the first factor enquiry” id. [at ---, 114 S.Ct.] at 1174, and points out that
“[i]f, indeed, commerciality carried presumptive force against a finding of fairness, the presumption would swallow
nearly all of the illustrative uses listed in
the preamble paragraph of § 107....” Id.
We do not mean to suggest that the
District Court overlooked these principles;
in fact, the Court discussed them insightfully, see 802 F.Supp. at 12-13. Rather, our
concern here is that the Court let the forprofit nature of Texaco's activity weigh
against Texaco without differentiating
between a direct commercial use and the
more indirect relation to commercial activity that occurred here. Texaco was not
gaining direct or immediate commercial
advantage from the photocopying at issue
in this case-i.e., Texaco's profits, revenues,
and overall commercial performance were
not tied to its making copies of eight Catalysis articles for Chickering. Cf. Basic
Books, Inc. v. Kinko's Graphics Corp., 758
F.Supp. 1522 (S.D.N.Y.1991) (revenues of
reprographic business stemmed directly
from selling unauthorized photocopies of
copyrighted books). Rather, Texaco's photocopying served, at most, to facilitate
Chickering's research, which in turn might
have led to the development of new
products and technology that could have
improved Texaco's commercial performance. Texaco's photocopying is more appropriately labeled an “intermediate use.”
See Sega Enterprises, 977 F.2d at 1522-23
(labeling secondary use “intermediate” and
finding first factor in favor of for-profit
company, even though ultimate purpose of
copying was to develop competing commercial product, because immediate purpose of copying computer code was to
study idea contained within computer program).
We do not consider Texaco's status as a
for-profit company irrelevant to the fair use
analysis. Though Texaco properly contends
that a court's focus should be on the use of
the copyrighted material and not simply on
*922 the user, it is overly simplistic to suggest that the “purpose and character of the
use” can be fully discerned without considering the nature and objectives of the user.
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FN8
FN8. See Patry, The Fair Use Privilege, at 416-17 (noting that the
nature of person or entity engaging
in use affects the character of the
use); Report of the Register of
Copyrights-Library Reproduction of
Copyrighted Works (17 U.S.C. 108)
85 (1983) (explaining that though a
scientist in a for-profit firm and a
university student may engage in
the same photocopying of scholarly
articles to facilitate their research,
“the copyright consequences are
different: [the scientist's] copying is
of a clearly commercial nature, and
less likely to be fair use”) quoted in
Patry, The Fair Use Privilege, at
417 n. 307.
Ultimately, the somewhat cryptic suggestion in section 107(1) to consider
whether the secondary use “is of a commercial nature or is for nonprofit educational purposes” connotes that a court
should examine, among other factors, the
value obtained by the secondary user from
the use of the copyrighted material. See
Rogers, 960 F.2d at 309 (“The first factor
... asks whether the original was copied in
good faith to benefit the public or primarily
for the commercial interests of the infringer.”); MCA, Inc. v. Wilson, 677 F.2d
180, 182 (2d Cir.1981) (court is to consider
“whether the alleged infringing use was
primarily for public benefit or for private
commercial gain”). The commercial/nonprofit dichotomy concerns the unfairness
that arises when a secondary user makes
unauthorized use of copyrighted material to
capture significant revenues as a direct
consequence of copying the original work.
See Harper & Row, 471 U.S. at 562, 105
S.Ct. at 2231 (“The crux of the profit/
nonprofit distinction is ... whether the user
stands to profit from exploitation of the
copyrighted material without paying the
customary price.”).
Consistent with these principles, courts
will not sustain a claimed defense of fair
use when the secondary use can fairly be
characterized as a form of “commercial exploitation,” i.e., when the copier directly
and exclusively acquires conspicuous financial rewards from its use of the copyrighted material. See Harper & Row, 471
U.S. at 562-63, 105 S.Ct. at 2231-32; Twin
Peaks, 996 F.2d at 1375; Rogers, 960 F.2d
at 309; Iowa State University Research
Foundation, Inc. v. American Broadcasting
Companies, Inc., 621 F.2d 57, 61 (2d
Cir.1980); Meeropol v. Nizer, 560 F.2d
1061, 1069 (2d Cir.1977) (examining
whether use was “predominantly for commercial exploitation”), cert. denied, 434
U.S. 1013, 98 S.Ct. 727, 54 L.Ed.2d 756
(1978). Conversely, courts are more willing to find a secondary use fair when it
produces a value that benefits the broader
public interest. See Twin Peaks, 996 F.2d
at 1375; Sega Enterprises, 977 F.2d at
1523; Rosemont Enterprises, Inc. v. Random House, Inc., 366 F.2d 303, 307-09 (2d
Cir.1966), cert. denied, 385 U.S. 1009, 87
S.Ct. 714, 17 L.Ed.2d 546 (1967). The
greater the private economic rewards
reaped by the secondary user (to the exclusion of broader public benefits), the more
likely the first factor will favor the copyright holder and the less likely the use will
be considered fair.
As noted before, in this particular case
the link between Texaco's commercial gain
and its copying is somewhat attenuated: the
copying, at most, merely facilitated Chickering's research that might have led to the
production of commercially valuable
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products. Thus, it would not be accurate to
conclude that Texaco's copying of eight
particular Catalysis articles amounted to
“commercial exploitation,” especially since
the immediate goal of Texaco's copying
was to facilitate Chickering's research in
the sciences, an objective that might well
serve a broader public purpose. See Twin
Peaks, 996 F.2d at 1375; Sega Enterprises,
977 F.2d at 1522. Still, we need not ignore
the for-profit nature of Texaco's enterprise,
especially since we can confidently conclude that Texaco reaps at least some indirect economic advantage from its photocopying. As the publishers emphasize,
Texaco's photocopying for Chickering
could be regarded simply as another
“factor of production” utilized in Texaco's
efforts to develop profitable products. Conceptualized in this way, it is not obvious
why it is fair for Texaco to avoid having to
pay at least some price to copyright holders
for the right to photocopy the original articles.
2. Transformative Use. The District
Court properly emphasized that Texaco's
photocopying was not “transformative.”
After*923 the District Court issued its
opinion, the Supreme Court explicitly ruled
that the concept of a “transformative use”
is central to a proper analysis under the
first factor, see Campbell, 510 U.S. at ---- ----, 114 S.Ct. at 1171-73. The Court explained that though a “transformative use is
not absolutely necessary for a finding of
fair use, ... the more transformative the new
work, the less will be the significance of
other factors, like commercialism, that may
weigh against a finding of fair use.” Id. at ---, 114 S.Ct. at 1171.
The “transformative use” concept is
pertinent to a court's investigation under
the first factor because it assesses the value
generated by the secondary use and the
means by which such value is generated.
To the extent that the secondary use involves merely an untransformed duplication, the value generated by the secondary
use is little or nothing more than the value
that inheres in the original. Rather than
making some contribution of new intellectual value and thereby fostering the advancement of the arts and sciences, an untransformed copy is likely to be used
simply for the same intrinsic purpose as the
original, thereby providing limited justification for a finding of fair use. See Weissmann v. Freeman, 868 F.2d 1313, 1324 (2d
Cir.) (explaining that a use merely for the
same “intrinsic purpose” as original
“moves the balance of the calibration on
the first factor against” secondary user and
“seriously weakens a claimed fair use”),
cert. denied, 493 U.S. 883, 110 S.Ct. 219,
107 L.Ed.2d 172 (1989).FN9
FN9. See also Marcus v. Rowley,
695 F.2d at 1175 (emphasizing that
“a finding that the alleged infringers
copied the material to use it for the
same intrinsic purpose for which
the copyright owner intended it to
be used is strong indicia of no fair
use.”). See generally Leon E.
Seltzer, Exemptions and Fair Use in
Copyright 24 (1978) (noting traditional limit on applicability of fair
use doctrine when reproduction of
original work is done “in order to
use it for its intrinsic purpose-to
make what might be called the
‘ordinary’ use of it”).
In contrast, to the extent that the secondary use “adds something new, with a
further purpose or different character,” the
value generated goes beyond the value that
inheres in the original and “the goal of
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copyright, to promote science and the arts,
is generally furthered.” Campbell, 510 U.S.
at ----, 114 S.Ct. at 1171; see also Pierre N.
Leval, Toward a Fair Use Standard, 103
Harv.L.Rev.
1105,
1111
(1990)
[hereinafter Leval, Toward a Fair Use
Standard ]. It is therefore not surprising
that the “preferred” uses illustrated in the
preamble to section 107, such as criticism
and comment, generally involve some
transformative use of the original work.
See 3 Nimmer on Copyright §
13.05[A][1][b], at 13-160.
Texaco suggests that its conversion of
the individual Catalysis articles through
photocopying into a form more easily used
in a laboratory might constitute a transformative use. However, Texaco's photocopying merely transforms the material object embodying the intangible article that is
the copyrighted original work. See 17
U.S.C. §§ 101, 102 (explaining that copyright protection in literary works subsists in
the original work of authorship “regardless
of the nature of the material objects ... in
which they are embodied”). Texaco's making of copies cannot properly be regarded
as a transformative use of the copyrighted
material. See Steven D. Smit, “ Make a
Copy for the File ...”: Copyright Infringement by Attorneys, 46 Baylor L.Rev. 1, 15
& n. 58 (1994); see also Basic Books, 758
F.Supp. at 1530-31 (repackaging in anthology form of excerpts from copyrighted
books not a transformative use).
Even though Texaco's photocopying is
not technically a transformative use of the
copyrighted material, we should not overlook the significant independent value that
can stem from conversion of original
journal articles into a format different from
their normal appearance. See generally
Sony, 464 U.S. at 454, 455 n. 40, 104 S.Ct.
at 795 n. 40 (acknowledging possible benefits from copying that might otherwise
seem to serve “no productive purpose”);
Weinreb, Fair's Fair, at 1143 & n. 29
(discussing potential value from nontransformative copying). As previously explained, Texaco's photocopying converts
the individual Catalysis articles into a useful format. Before modern photocopying,
Chickering probably would have converted
the original article into a more serviceable
form by taking notes, whether cursory or
*924 extended; FN10 today he can do so
with a photocopying machine. Nevertheless, whatever independent value derives
from the more usable format of the photocopy does not mean that every instance of
photocopying wins on the first factor. In
this case, the predominant archival purpose
of the copying tips the first factor against
the copier, despite the benefit of a more usable format.
FN10. In stating that a handwritten
copy would have been made, we do
not mean to imply that such copying would necessarily have been a
fair use. Despite the 1973 dictum in
Williams & Wilkins asserting that
“it is almost unanimously accepted
that a scholar can make a handwritten copy of an entire copyrighted
article for his own use ...,” 487 F.2d
at 1350, the current edition of the
Nimmer treatise reports that
“[t]here is no reported case on the
question of whether a single handwritten copy of all or substantially
all of a book or other protected
work made for the copier's own
private use is an infringement or
fair use.” 3 Nimmer on Copyright §
1305[E][4][a], at 13-229.
3. Reasonable and Customary Practice.
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Texaco contends that Chickering's photocopying constitutes a use that has historically been considered “reasonable and customary.” We agree with the District Court
that whatever validity this argument might
have had before the advent of the photocopying licensing arrangements discussed
below in our consideration of the fourth
fair use factor, the argument today is insubstantial. As the District Court observed,
“To the extent the copying practice was
‘reasonable’ in 1973 [when Williams &
Wilkins was decided], it has ceased to be
‘reasonable’ as the reasons that justified it
before [photocopying licensing] have
ceased to exist.” 802 F.Supp. at 25.
In amplification of Texaco's arguments,
our dissenting colleague makes two further
points about the first factor analysis that
merit a response. First, the dissent disputes
our characterization of Chickering's use as
“archival” on the ground that such a use
would occur in an institutional setting,
whereas Chickering copied for his personal
use. Second, the dissent contends that
Chickering's use is transformative because
it is an important step in the process of doing research. We think the proper response
to these observations emerges from considering how they would fare if the Texaco
library had sent around entire books, rather
than issues of a journal. Clearly, Chickering (and all the other researchers at the
Beacon facility) would be making archival
use of the circulating books if they made
photocopies of the books for their individual offices and thereby spared Texaco the
expense of buying them all individual
volumes. An individual copies for archival
purposes even if the resulting archive remains in a private office. When a corporation invites such archival copying by circulating items likely to be worth copying
(whether articles or entire books), any dis-
tinction between individual and institutional archiving loses all significance.
Moreover,
the
concept
of
a
“transformative” use would be extended
beyond recognition if it was applied to
Chickering's copying simply because he
acted in the course of doing research. The
purposes illustrated by the categories listed
in section 107 refer primarily to the work
of authorship alleged to be a fair use, not to
the activity in which the alleged infringer
is engaged. Texaco cannot gain fair use insulation for Chickering's archival photocopying of articles (or books) simply because such copying is done by a company
doing research. It would be equally extravagant for a newspaper to contend that because its business is “news reporting” it
may line the shelves of its reporters with
photocopies of books on journalism or that
schools engaged in “teaching” may supply
its faculty members with personal photocopies of books on educational techniques
or substantive fields. Whatever benefit
copying and reading such books might contribute to the process of “teaching” would
not for that reason satisfy the test of a
“teaching” purpose.
On balance, we agree with the District
Court that the first factor favors the publishers, primarily because the dominant
purpose of the use is a systematic institutional policy of multiplying the available
number of copies of pertinent copyrighted
articles by circulating the journals among
employed scientists for them to make copies, thereby serving the same purpose for
which additional subscriptions*925 are
normally sold, or, as will be discussed, for
which photocopying licenses may be obtained.
B. Second Factor: Nature of Copyrighted
Work
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[6] The second statutory fair use factor
is “the nature of the copyrighted work.” 17
U.S.C. § 107(2). In assessing this factor,
the District Court noted that the articles in
Catalysis “are created for publication with
the purpose and intention of benefiting
from the protection of the copyright law,”
and that copyright protection “is vitally necessary to the dissemination of scientific
articles of the sort that are at issue.” 802
F.Supp. at 16. Nevertheless, the Court ultimately concluded that this factor favored
Texaco because the photocopied articles
were essentially factual in nature and the “
‘scope of fair use is greater with respect to
factual than nonfactual works.’ ” Id. at
16-17 (quoting New Era Publications International, ApS v. Carol Publishing
Group, 904 F.2d 152, 157 (2d Cir.), cert.
denied, 498 U.S. 921, 111 S.Ct. 297, 112
L.Ed.2d 251 (1990)).
works, see Weissmann, 868 F.2d at 1325,
nearly every category of copyrightable
works could plausibly assert that broad
copyright protection was essential to the
continued vitality of that category of
works.
On appeal, the publishers stress the
District Court's comments concerning the
importance of broad copyright protection
for journal publications in order to foster
journal production. Further, citing Harper
& Row for the proposition that the creativity of an original work weighs against finding fair use, see 471 U.S. at 563, 105 S.Ct.
at 2232, the publishers also point out that
“the journal articles are expressions of
highly original, creative and imaginative
thinking.”
Ultimately, then, the manifestly factual
character of the eight articles precludes us
from considering the articles as “within the
core of the copyright's protective purposes,” Campbell, 510 U.S. at ----, 114
S.Ct. at 1175; see also Harper & Row, 471
U.S. at 563, 105 S.Ct. at 2232 (“The law
generally recognizes a greater need to disseminate factual works than works of fiction or fantasy.”). Thus, in agreement with
the District Court, we conclude that the
second factor favors Texaco.
Though a significant measure of creativity was undoubtedly used in the creation of the eight articles copied from
Catalysis, even a glance at their content
immediately reveals the predominantly factual nature of these works. FN11
Moreover, though we have previously recognized the importance of strong copyright protection to provide sufficient incentives for the creation of scientific
C. Third Factor: Amount and Substantiality
of Portion Used
[7] The third statutory fair use factor is
“the amount and substantiality of the portion used in relation to the copyrighted
work as a whole.” 17 U.S.C. § 107(3). The
District Court concluded that this factor
clearly favors the publishers because
Texaco copied the eight articles from Catalysis in their entirety.
FN11. Not only are the Catalysis
articles essentially factual in nature,
but the evidence suggests that
Chickering was interested exclusively in the facts, ideas, concepts, or
principles contained within the articles. Though scientists surely employ creativity and originality to develop ideas and obtain facts and
thereafter to convey the ideas and
facts in scholarly articles, it is
primarily the ideas and facts themselves that are of value to other scientists in their research.
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Texaco makes various responses to the
District Court's straightforward conclusion.
First, Texaco claims that this factor is significant only as a means to determine
whether a copy unfairly supersedes demand for the original and should be considered “largely irrelevant” where, as here,
a copy is not sold or distributed. Second,
Texaco claims that, rather than focus on
Texaco's copying of entire articles, it is
more appropriate to consider that Texaco
copied only a very small portion of any
particular issue or volume of Catalysis. Finally, Texaco cites Sony and Williams &
Wilkins for the proposition that the copying
of entire copyrighted works can still constitute fair use. See Sony, 464 U.S. at 449-50,
104 S.Ct. at 792-93; Williams & Wilkins,
487 F.2d at 1353.
[8] Texaco's suggestion that we consider that it copied only a small percentage
of the *926 total compendium of works encompassed within Catalysis is superficially
intriguing, especially since Catalysis is traditionally marketed only as a periodical by
issue or volume. However, as the District
Court recognized, each of the eight articles
in Catalysis was separately authored and
constitutes a discrete “original work[ ] of
authorship,” 17 U.S.C. § 102. As we emphasized at the outset, each article enjoys
independent copyright protection, which
the authors transferred to Academic Press,
and what the publishers claim has been infringed is the copyright that subsists in
each individual article-not the distinct
copyright that may subsist in each journal
issue or volume by virtue of the publishers'
original compilation of these articles. The
only other appellate court to consider the
propriety of photocopying articles from
journals also recognized that each article
constituted an entire work in the fair use
analysis. See Williams & Wilkins, 487 F.2d
at 1353.
Despite Texaco's claims that we consider its amount of copying “minuscule” in
relation to the entirety of Catalysis, we
conclude, as did the District Court, that
Texaco has copied entire works. Though
this conclusion does not preclude a finding
of fair use, it militates against such a finding, see Sony, 464 U.S. at 449-50, 104
S.Ct. at 792-93, and weights the third
factor in favor of the publishers.
Finally, though we are sensitive to
Texaco's claim that the third factor serves
merely as a proxy for determining whether
a secondary use significantly interferes
with demand for the original-a concern
echoed by some commentators, see William W. Fisher III, Reconstructing the Fair
Use Doctrine, 101 Harv.L.Rev. 1661, 1678
(1988) [hereinafter Fisher, Reconstructing
Fair Use ]-we think this factor serves a further end that advances the fair use analysis.
Specifically, by focussing on the amount
and substantiality of the original work used
by the secondary user, we gain insight into
the purpose and character of the use as we
consider whether the quantity of the material used was “reasonable in relation to the
purpose of the copying.” See Campbell,
510 U.S. at ----, 114 S.Ct. at 1175. In this
case, the fact that Texaco photocopied the
eight Catalysis articles in their entirety
weakens its assertion that the overriding
purpose and character of its use was to enable the immediate use of the article in the
laboratory and strengthens our view that
the predominant purpose and character of
the use was to establish a personal library
of pertinent articles for Chickering. Cf. id.
at ----, 114 S.Ct. at 1176 (intimating that
extent of copying can provide insight into
primary purpose of copying).
D. Fourth Factor: Effect Upon Potential
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Market or Value
[9] The fourth statutory fair use factor
is “the effect of the use upon the potential
market for or value of the copyrighted
work.” 17 U.S.C. § 107(4). Assessing this
factor, the District Court detailed the range
of procedures Texaco could use to obtain
authorized copies of the articles that it photocopied and found that “whatever combination of procedures Texaco used, the publishers' revenues would grow significantly.” 802 F.Supp. at 19. The Court concluded that the publishers “powerfully
demonstrated entitlement to prevail as to
the fourth factor,” since they had shown “a
substantial harm to the value of their copyrights” as the consequence of Texaco's
copying. See id. at 18-21.
traditional market for, nor a clearly defined
value of, individual journal articles. As a
result, analysis of the fourth factor cannot
proceed as simply as would have been the
case if Texaco had copied a work that carries a stated or negotiated selling price in
the market.
Prior to Campbell, the Supreme Court
had characterized the fourth factor as “the
single most important element of fair use,”
Harper & Row, 471 U.S. at 566, 105 S.Ct.
at 2233; accord 3 Nimmer on Copyright §
13.05[A][4], at 13-183. However, Campbell 's discussion of the fourth factor conspicuously omits this phrasing. Apparently
abandoning the idea that any factor enjoys
primacy, Campbell instructs that ‘[a]ll
[four factors] are to be explored, and the
results weighed together, in light of the
purposes of copyright.’ [510 U.S. at ----]
114 S.Ct. at 1171.
FN12. We focus on the eight articles to emphasize the special characteristics of articles as distinguished from journal issues or
bound volumes. In doing so, we recognize, as did the District Court,
see 802 F.Supp. at 18 n. 15, that the
fourth factor is concerned with the
category of a defendant's conduct,
not merely the specific instances of
copying. See 3 Nimmer on Copyright § 13.05[A][4], at 13-183 to
13-184 (“[I]t is a mistake to view
[the fourth] factor ... as merely raising the question of the extent of
damages to plaintiff caused by the
particular activities of the defendant. This factor rather poses the issue of whether unrestricted and
widespread conduct of the sort engaged in by the defendant ... would
result in a substantially adverse impact on the potential market for or
value of the plaintiff's present
work.”) (emphasis added).
In analyzing the fourth factor, it is important (1) to bear in mind the precise
copyrighted works, namely the eight journal articles, and (2) to recognize the distinctive nature and history of “the potential
market for *927 or value of” these particular works.FN12 Specifically, though there
is a traditional market for, and hence a
clearly defined value of, journal issues and
volumes, in the form of per-issue purchases
and journal subscriptions, there is neither a
Like most authors, writers of journal
articles do not directly seek to capture the
potential financial rewards that stem from
their copyrights by personally marketing
copies of their writings. Rather, like other
creators of literary works, the author of a
journal article “commonly sells his rights
to publishers who offer royalties in exchange for their services in producing and
marketing the author's work.” Harper &
Row, 471 U.S. at 547, 105 S.Ct. at 2223. In
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the distinctive realm of academic and scientific articles, however, the only form of
royalty paid by a publisher is often just the
reward of being published, publication being a key to professional advancement and
prestige for the author, see Weissmann, 868
F.2d at 1324 (noting that “in an academic
setting, profit is ill-measured in dollars. Instead, what is valuable is recognition because it so often influences professional
advancement and academic tenure.”). The
publishers in turn incur the costs and labor
of producing and marketing authors' articles, driven by the prospect of capturing
the economic value stemming from the
copyrights in the original works, which the
authors have transferred to them. Ultimately, the monopoly privileges conferred
by copyright protection and the potential
financial rewards therefrom are not directly
serving to motivate authors to write individual articles; rather, they serve to motivate publishers to produce journals, which
provide the conventional and often exclusive means for disseminating these individual articles. It is the prospect of such dissemination that contributes to the motivation of these authors.
Significantly, publishers have traditionally produced and marketed authors' individual articles only in a journal format, i.e.,
in periodical compilations of numerous articles. In other words, publishers have conventionally sought to capture the economic
value from the “exclusive rights” to
“reproduce” and “distribute copies” of the
individual articles, see 17 U.S.C. § 106(1)
& (3), solely by compiling many such articles together in a periodical journal and
then charging a fee to subscribe. Publishers
have not traditionally provided a simple or
efficient means to obtain single copies of
individual articles; reprints are usually
available from publishers only in bulk
quantities and with some delay.
This marketing pattern has various consequences for our analysis of the fourth
factor. First, evidence concerning the effect
that photocopying individual journal articles has on the traditional market for
journal subscriptions is of somewhat less
significance than if a market existed for the
sale of individual copies of articles.
Second, this distinctive arrangement raises
novel questions concerning the significance of the publishers' establishment of an
innovative licensing scheme for the photocopying of individual journal articles.
1. Sales of Additional Journal Subscriptions, Back Issues, and Back Volumes.
Since we are concerned with the claim of
fair use in copying the eight individual articles from Catalysis, the analysis under the
fourth factor must focus on the effect of
Texaco's photocopying upon the potential
market for or value of these individual articles. Yet, in their respective discussions of
the fourth statutory factor, the parties initially focus on the impact of Texaco's photocopying of individual*928 journal articles upon the market for Catalysis journals
through sales of Catalysis subscriptions,
back issues, or back volumes.
As a general matter, examining the effect on the marketability of the composite
work containing a particular individual
copyrighted work serves as a useful means
to gauge the impact of a secondary use
“upon the potential market for or value of”
that individual work, since the effect on the
marketability of the composite work will
frequently be directly relevant to the effect
on the market for or value of that individual work.FN13 Quite significantly, though,
in the unique world of academic and scientific articles, the effect on the marketability of the composite work in which indi-
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vidual articles appear is not obviously related to the effect on the market for or
value of the individual articles. Since (1)
articles are submitted unsolicited to journals, (2) publishers do not make any payment to authors for the right to publish
their articles or to acquire their copyrights,
and (3) there is no evidence in the record
suggesting that publishers seek to reprint
particular articles in new composite works,
we cannot readily conclude that evidence
concerning the effect of Texaco's use on
the marketability of journals provides an
effective means to appraise the effect of
Texaco's use on the market for or value of
individual journal articles.
FN13. One reason that the effect on
the marketability of the composite
work is typically relevant is because
the strength of the market for the
composite work will influence the
payment producers will be willing
to give to the author of the individual work for permission to include
that individual work. For example,
if a secondary use of a copyrighted
story adversely affects purchases of
a collection of short stories in
which this story appears, then other
producers of short story collections
will less likely seek to have, or will
pay less to have, that story as part
of their collections. In this way, the
market for or value of the story has
clearly been affected by the secondary use.
These considerations persuade us that
evidence concerning the effect of Texaco's
photocopying of individual articles within
Catalysis on the traditional market for
Catalysis subscriptions is of somewhat limited significance in determining and evaluating the effect of Texaco's photocopying
“upon the potential market for or value of”
the individual articles. We do not mean to
suggest that we believe the effect on the
marketability of journal subscriptions is
completely irrelevant to gauging the effect
on the market for and value of individual
articles. Were the publishers able to
demonstrate that Texaco's type of photocopying, if widespread,FN14 would impair
the marketability of journals, then they
might have a strong claim under the fourth
factor. Likewise, were Texaco able to
demonstrate that its type of photocopying,
even if widespread, would have virtually
no effect on the marketability of journals,
then it might have a strong claim under this
fourth factor.
FN14. Properly applied, the fourth
factor requires a court to consider
“not only ... particular actions of the
alleged infringer, but also ‘whether
unrestricted and widespread conduct of the sort engaged in by the
defendant ... would result in a substantially adverse impact on the potential market’ for the original.”
Campbell, 510 U.S. at ----, 114
S.Ct. at 1177 (quoting 3 Nimmer on
Copyright § 13.05[A][4] ). Accord
Harper & Row, 471 U.S. at 568-69,
105 S.Ct. at 2234-35; Rogers, 960
F.2d at 312.
On this record, however, the evidence
is not resounding for either side. The District Court specifically found that, in the
absence of photocopying, (1) “Texaco
would not ordinarily fill the need now being supplied by photocopies through the
purchase of back issues or back volumes ...
[or] by enormously enlarging the number
of its subscriptions,” but (2) Texaco still
“would increase the number of subscriptions somewhat.” 802 F.Supp. at 19. FN15
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This moderate conclusion concerning*929
the actual effect on the marketability of
journals, combined with the uncertain relationship between the market for journals
and the market for and value of individual
articles, leads us to conclude that the evidence concerning sales of additional journal
subscriptions, back issues, and back
volumes does not strongly support either
side with regard to the fourth factor. Cf.
Sony, 464 U.S. at 451-55, 104 S.Ct. at
793-95 (rejecting various predictions of
harm to value of copyrighted work based
on speculation about possible consequences of secondary use). At best, the
loss of a few journal subscriptions tips the
fourth factor only slightly toward the publishers because evidence of such loss is
weak evidence that the copied articles
themselves have lost any value.
FN15. Texaco assails the conclusion that, without photocopying, it
would
increase
subscriptions
“somewhat” as an improper inference unsupported by the evidence.
Though we accept Texaco's assertion that additional subscriptions
provide an imperfect substitute for
the copies of individual articles that
scientists need and prefer, we cannot conclude that the District
Court's factual finding that “Texaco
would add at least a modest number
of subscriptions,” 802 F.Supp. at
19, is clearly erroneous.
First, though Texaco claims that
there is no reliable evidence suggesting that photocopying served
to facilitate journal circulation,
the evidence concerning Texaco's
routing practices supports the District Court's inference that,
without photocopying, Texaco
will need a greater number of subscriptions to insure the prompt
circulation of journals. Second, as
discussed in connection with the
first statutory factor, the dominant
reason for, and value derived
from, the copying of the eight particular Catalysis articles was to
make them available on Chickering's shelf for ready reference
when he needed to look at them.
Thus, it is reasonable to conclude
that Texaco would purchase at
least a few additional subscriptions to serve this purpose, i.e., to
provide certain researchers with
personal copies of particular articles in their own offices.
2. Licensing Revenues and Fees. The
District Court, however, went beyond discussing the sales of additional journal subscriptions in holding that Texaco's photocopying affected the value of the publishers' copyrights. Specifically, the Court
pointed out that, if Texaco's unauthorized
photocopying was not permitted as fair use,
the publishers' revenues would increase
significantly since Texaco would (1) obtain
articles from document delivery services
(which pay royalties to publishers for the
right to photocopy articles), (2) negotiate
photocopying licenses directly with individual publishers, and/or (3) acquire some
form of photocopying license from the
Copyright Clearance Center Inc. (“CCC”).
FN16 See 802 F.Supp. at 19. Texaco
claims that the District Court's reasoning is
faulty because, in determining that the
value of the publishers' copyrights was affected, the Court assumed that the publishers were entitled to demand and receive licensing royalties and fees for photocopying. Yet, continues Texaco, whether the
publishers can demand a fee for permission
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to make photocopies is the very question
that the fair use trial is supposed to answer.
FN16. The CCC is a central clearing-house established in 1977
primarily by publishers to license
photocopying. The CCC offers a
variety of licensing schemes; fees
can be paid on a per copy basis or
through blanket license arrangements. Most publishers are registered with the CCC, but the participation of for-profit institutions
that engage in photocopying has
been limited, largely because of uncertainty concerning the legal questions at issue in this lawsuit. The
CCC is fully described in the District Court's opinion. 802 F.Supp. at
7-9. A more extended discussion of
the formation, development, and effectiveness of the CCC and its licensing schemes is contained in
Stanley M. Besen & Sheila Nataraj
Kirby, Compensating Creators of
Intellectual Property: Collectives
that Collect (1989).
However, not every effect on potential
licensing revenues enters the analysis under the fourth factor.FN17 Specifically,
courts have *930 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, 510 U.S. at ----, 114 S.Ct. at 1178
(“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, 471
U.S. at 568, 105 S.Ct. at 2235 (fourth
factor concerned with “use that supplants
any part of the normal market for a copyrighted work”) (emphasis added) (quoting
S.Rep. No. 473, 94th Cong., 1st Sess. 65
(1975)); see also Mathieson v. Associated
Press, 23 U.S.P.Q.2d 1685, 1690-91, 1992
WL 164447 (S.D.N.Y.1992) (refusing to
find fourth factor in favor of copyright
holder because secondary use did not affect
any aspect of the normal market for copyrighted work).
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, see, e.g., Campbell,
510 U.S. at ----, 114 S.Ct. at 1178; Harper
& Row, 471 U.S. at 568-69, 105 S.Ct. at
2234-35; Twin Peaks, 996 F.2d at 1377;
DC Comics, Inc. v. Reel Fantasy, Inc., 696
F.2d 24, 28 (2d Cir.1982); United Telephone Co. of Missouri v. Johnson Publishing Co., Inc., 855 F.2d 604, 610 (8th
Cir.1988).
FN17. As Texaco notes and others
have recognized, a copyright holder
can always assert some degree of
adverse affect on its potential licensing revenues as a consequence
of the secondary use at issue simply
because the copyright holder has
not been paid a fee to permit that
particular use. See Leval, Toward a
Fair Use Standard, at 1124 (“By
definition every fair use involves
some loss of royalty revenue because the secondary user has not
paid royalties.”); Fisher, Reconstructing Fair Use, at 1671 (noting
that in almost every case “there will
be some material adverse impact on
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a ‘potential market’ ” since the secondary user has not paid for the
use). Thus, were a court automatically to conclude in every case that
potential licensing revenues were
impermissibly impaired simply because the secondary user did not
pay a fee for the right to engage in
the use, the fourth fair use factor
would always favor the copyright
holder. See Leval, Toward a Fair
Use Standard, at 1125; Fisher, Reconstructing Fair Use, at 1672.
For example, the Supreme Court recently explained that because of the
“unlikelihood that creators of imaginative
works will license critical reviews or lampoons” of their works, “the law recognizes
no derivative market for critical works,”
Campbell, 510 U.S. at ----, 114 S.Ct. at
1178. Similarly, other courts have found
that the fourth factor will favor the secondary user when the only possible adverse effect occasioned by the secondary use
would be to a potential market or value that
the copyright holder has not typically
sought to, or reasonably been able to, obtain or capture. See Twin Peaks, 996 F.2d
at 1377 (noting that fourth factor will favor
secondary user when use “filled a market
niche that the [copyright owner] simply
had no interest in occupying”); Pacific and
Southern Co. v. Duncan, 744 F.2d 1490,
1496 (11th Cir.1984) cert. denied, 471 U.S.
1004, 105 S.Ct. 1867, 85 L.Ed.2d 161
(1985) (noting that the fourth factor may
not favor copyright owner when the secondary user “profits from an activity that
the owner could not possibly take advantage of”).FN18
FN18. The Supreme Court's holding
in Sony implicitly recognizes limits
on the concept of “potential market
for or value of the copyrighted
work.” Despite Justice Blackmun's
dissenting view that the copying of
television programs to enable
private viewing at a more convenient time, i.e., “time-shifting,” deprived copyright holders of the ability to exploit the “sizable market”
of persons who “would be willing
to pay some kind of royalty” for the
“privilege of watching copyrighted
work at their convenience,” Sony,
464 U.S. at 485, 104 S.Ct. at 811,
the majority found that the copyright holders “failed to demonstrate
that time-shifting would cause any
likelihood of non-minimal harm to
the potential market for, or the
value of, their copyrighted works.”
Id. at 456, 104 S.Ct. at 796. The
Court thus implicitly ruled that the
potential market in licensing royalties enunciated by Justice Blackmun
should be considered too insubstantial to tilt the fourth fair use factor
in favor of the copyright holder.
Thus, Texaco is correct, at least as a
general matter, when it contends that it is
not always appropriate for a court to be
swayed on the fourth factor by the effects
on potential licensing revenues. Only an
impact on potential licensing revenues for
traditional, reasonable, or likely to be developed markets should be legally cognizable when evaluating a secondary use's
“effect upon the potential market for or
value of the copyrighted work.”
Though the publishers still have not established a conventional market for the direct sale and distribution of individual articles, they have created, primarily through
the CCC, a workable market for institutional users to obtain licenses for the right to
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produce their own copies of individual articles via photocopying. The District Court
found that many major corporations now
subscribe to the CCC systems for photocopying licenses. 802 F.Supp. at 25. Indeed, it appears from the pleadings, especially Texaco's counterclaim, that Texaco
itself has been paying royalties to the CCC.
See Complaint ¶ 38; First Counterclaim ¶
71. Since the Copyright Act explicitly
provides that copyright holders have the
“exclusive rights” to “reproduce” and
“distribute copies” of their works, see 17
U.S.C. § 106(1) & (3), and since there currently exists a viable market for licensing
these rights for individual journal articles,
it is appropriate that potential licensing
revenues for photocopying be considered
in a fair use analysis.
Despite Texaco's claims to the contrary,
it is not unsound to conclude that the right
to seek payment for a particular use tends
to *931 become legally cognizable under
the fourth fair use factor when the means
for paying for such a use is made easier.
This notion is not inherently troubling: it is
sensible that a particular unauthorized use
should be considered “more fair” when
there is no ready market or means to pay
for the use, while such an unauthorized use
should be considered “less fair” when there
is a ready market or means to pay for the
use. The vice of circular reasoning arises
only if the availability of payment is conclusive against fair use. Whatever the situation may have been previously, before the
development of a market for institutional
users to obtain licenses to photocopy articles, see Williams & Wilkins, 487 F.2d at
1357-59, it is now appropriate to consider
the loss of licensing revenues in evaluating
“the effect of the use upon the potential
market for or value of” journal articles. It
is especially appropriate to do so with re-
spect to copying of articles from Catalysis,
a publication as to which a photocopying
license is now available. We do not decide
how the fair use balance would be resolved
if a photocopying license for Catalysis articles were not currently available.
In two ways, Congress has impliedly
suggested that the law should recognize licensing fees for photocopying as part of
the “potential market for or value of”
journal articles. First, section 108 of the
Copyright Act narrowly circumscribes the
conditions under which libraries are permitted to make copies of copyrighted
works. See 17 U.S.C. § 108. Though this
section states that it does not in any way
affect the right of fair use, see id. §
108(f)(4), the very fact that Congress restricted the rights of libraries to make copies implicitly suggests that Congress views
journal publishers as possessing the right to
restrict photocopying, or at least the right
to demand a licensing royalty from nonpublic institutions that engage in photocopying. Second, Congress apparently
prompted the development of CCC by suggesting that an efficient mechanism be established to license photocopying, see
S.Rep. No. 983, 93d Cong., 2d Sess. 122
(1974); S.Rep. No. 473, 94th Cong., 1st
Sess. 70-71 (1975); H.R.Rep. No. 83, 90th
Cong., 1st Sess. 33 (1968). It is difficult to
understand why Congress would recommend establishing such a mechanism if it
did not believe that fees for photocopying
should be legally recognized as part of the
potential market for journal articles.
Primarily because of lost licensing revenue, and to a minor extent because of lost
subscription revenue, we agree with the
District Court that “the publishers have
demonstrated a substantial harm to the
value of their copyrights through
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[Texaco's] copying,” 802 F.Supp. at 21,
and thus conclude that the fourth statutory
factor favors the publishers.
E. Aggregate Assessment
[10] We conclude that three of the four
statutory factors, including the important
first and the fourth factors, favor the publishers. We recognize that the statutory
factors provide a nonexclusive guide to
analysis, see Harper & Row, 471 U.S. at
560, 105 S.Ct. at 2230, but to whatever extent more generalized equitable considerations are relevant, we are in agreement
with the District Court's analysis of them.
See 802 F.Supp. at 21-27. We therefore
agree with the District Court's conclusion
that Texaco's photocopying of eight particular articles from the Journal of Catalysis
was not fair use.
Though we recognize the force of many
observations made in Judge Jacobs's dissenting opinion, we are not dissuaded by
his dire predictions that our ruling in this
case “has ended fair-use photocopying with
respect to a large population of journals,”
60 F.3d at 938-39, or, to the extent that the
transactional licensing scheme is used,
“would seem to require that an intellectual
property lawyer be posted at each copy machine,” id. at 937-38. Our ruling does not
consider photocopying for personal use by
an individual. Our ruling is confined to the
institutional, systematic, archival multiplication of copies revealed by the record-the
precise copying that the parties stipulated
should be the basis for the District Court's
decision now on appeal and for which licenses are in fact available. And the claim
that lawyers need to be stationed at copy
machines is belied by the ease with which
music royalties have been collected and
distributed for performances at thousands
of cabarets, without the attendance of *932
intellectual property lawyers in any capacity other than as customers. If Texaco
wants to continue the precise copying we
hold not to be a fair use, it can either use
the licensing schemes now existing or
some variant of them, or, if all else fails,
purchase one more subscription for each of
its researchers who wish to keep issues of
Catalysis on the office shelf.
Conclusion
The order of the District Court is affirmed.FN19
FN19. Though neither the limited
trial nor this appeal requires consideration of the publishers' remedy if
infringement is ultimately found,
we note that the context of this dispute appears to make ill-advised an
injunction, which, in any event, has
not been sought. If the dispute is
not now settled, this appears to be
an appropriate case for exploration
of the possibility of a court-imposed
compulsory license. See Campbell,
510 U.S. at ---- n. 10, 114 S.Ct. at
1171 n. 10; 3 Nimmer on Copyright
§ 13.05[E][4][e], at 13-241 to
13-242.
JACOBS, Circuit Judge, dissenting:
The stipulated facts crisply present the
fair use issues that govern the photocopying of entire journal articles for a scientist's
own use, either in the laboratory or as part
of a personal file assisting that scientist's
particular inquiries. I agree with much in
the majority's admirable review of the facts
and the law. Specifically, I agree that, of
the four nonexclusive considerations bearing on fair use enumerated in section 107,
the second factor (the nature of the copyrighted work) tends to support a conclusion
of fair use, and the third factor (the ratio of
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the copied portion to the whole copyrighted work) militates against it. I respectfully dissent, however, in respect of the
first and fourth factors. As to the first
factor: the purpose and character of Dr.
Chickering's use is integral to transformative and productive ends of scientific research. As to the fourth factor: the adverse
effect of Dr. Chickering's use upon the potential market for the work, or upon its
value, is illusory. For these reasons, and in
light of certain equitable considerations
and the overarching purpose of the copyright laws, I conclude that Dr. Chickering's
photocopying of the Catalysis articles was
fair use.
A. Purpose and Character of the Use
The critical facts adduced by the majority are that Dr. Chickering is a chemical
engineer employed at a corporate research
facility who keeps abreast of developments
in his field by reviewing specialized scientific and technical journals, and who
photocopies individual journal articles in
the belief that doing so will facilitate his
current or future professional research. 60
F.3d at 915. I agree with the majority that
the immediate goal of the photocopying
was “to facilitate Chickering's research in
the sciences, an objective that might well
serve a broader public purpose.” 60 F.3d at
922-23. The photocopying was therefore
integral to ongoing research by a scientist.
In my view, all of the statutory factors organize themselves around this fact. The
four factors listed in section 107 (and reviewed one by one in the majority opinion)
are considerations that bear upon whether a
particular use is fair; but those factors are
informed by a preamble sentence in section
107 that recites in pertinent part that “the
fair use of a copyrighted work, including
such use by reproduction in copies ... for
purposes such as ... scholarship, or re-
search, is not an infringement of copyright.”
“[T]here is a strong presumption that
factor one favors the defendant if the allegedly infringing work fits the description
of uses described in section 107.” Wright v.
Warner Books, Inc., 953 F.2d 731, 736 (2d
Cir.1991). Much of our fair use case law
has been generated by the use of quotation
in biographies, a practice that fits “
‘comfortably within’ the[ ] statutory categories ‘of uses illustrative of uses that can
be fair.’ ” New Era Publications Int'l, ApS
v. Carol Pub. Group (New Era II), 904
F.2d 152, 156 (2d Cir.) (quoting Salinger v.
Random House, Inc., 811 F.2d 90, 96 (2d
Cir.), cert. denied, 484 U.S. 890, 108 S.Ct.
213, 98 L.Ed.2d 177 (1987)), cert. denied,
498 U.S. 921, 111 S.Ct. 297, 112 L.Ed.2d
251 (1990). The photocopying of journal
articles as part of ongoing scientific research fits just as squarely within the scope
of these illustrative fair uses. This court has
stated on several occasions: “ ‘[I]f a book
falls into one of these categories [i.e., *933
criticism, scholarship or research], assessment of the first fair use factor should be at
an end....’ ” Wright, 953 F.2d at 736
(quoting New Era II, 904 F.2d at 156
(quoting New Era Publications Int'l, APS v.
Henry Holt & Co., 884 F.2d 659, 661 (2d
Cir.1989) (Miner, J., concurring in denial
of rehearing in banc))). This is so “even
though, as will often be the case,” the
copyist “ ‘anticipates profits.’ ” Wright,
953 F.2d at 736-7 (quoting New Era II, 904
F.2d at 156 (quoting Salinger, 811 F.2d at
96)).
The majority recognizes that photocopying puts the articles into a “a useful
format,” 60 F.3d at 923, for use in a laboratory, where the bound volume or whole
journal would be cumbersome and subject
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to damage, and that “these purposes might
suffice to tilt the first fair use factor in favor of Texaco if these purposes were dominant.” 60 F.3d at 919. This view modifies
the district court's conclusion that fair use
might allow the photocopying of whole articles for use in the laboratory “if the original were copied onto plastic paper so that it
could be used in a wet environment, onto
metal so that it would resist extreme heat,
onto durable archival paper to prevent deterioration, or onto microfilm to conserve
space....” American Geophysical Union v.
Texaco Inc. 802 F.Supp. 1, 14 (1992). The
majority notes, however, that Dr. Chickering “did not even have occasion to use five
of the photocopied articles at all,” 60 F.3d
at 919, and emphasizes that Dr. Chickering's photocopying was done to assemble a
personal file used, in Dr. Chickering's
phrase, for “future retrieval and reference.”
60 F.3d at 919. The majority calls this the
“predominant archival purpose of the copying,” 60 F.3d at 924, and therefore not in
the nature of research. In my view, the research function is far broader than the majority opinion and the district court opinion
contemplate.
Replication of laboratory experiments
is of course a form of scientific research,
but it is not the whole or main part of it.
Often, a researcher needs to know what
others have thought and done in order to
steer clear of repetition and dead ends, to
evaluate theories and hypotheses for possible theoretical development or commercial application, to give credit to others,
and much else. None of this requires a scientist to enter a laboratory. In any event, to
describe Dr. Chickering's file as “archival,”
as the majority does, is a misnomer: an
archive is ordinarily a bulk of documents
accumulated by a bureaucratic process and
serving as a resource for public or institu-
tional reference. By contrast, Dr. Chickering's personal file contains articles available for reference to assist the memory,
curiosity and ongoing inquiries of a single
researcher. As such, it is part of a transformative process of scientific research that
has a long history.
The majority concludes that the photocopying was “done for the primary purpose
of providing Chickering with his own personal copy of each article,” dismissively
rejecting (in a footnote) Texaco's argument
that the true, and fundamental, purpose for
the photocopying was research:
Though Texaco claims that its copying is
for “research” as that term is used in the
preamble of section 107, this characterization might somewhat overstate the matter. Chickering has not used portions of
articles from Catalysis in his own published piece of research, nor has he had
to duplicate some portion of copyrighted
material directly in the course of conducting an experiment or investigation.
Rather, entire articles were copied as an
intermediate step that might abet Chickering's research.
60 F.3d at 920 n. 7. In my view, it is no
overstatement to call this process research.
I have difficulty thinking of anything else
to call it.
The scientific method, properly conceived, is much more than a system of repeated laboratory experimentation. Rather,
it is a dynamic process of “planned cooperation of scientists, each of whom uses and
continues the investigations of his predecessors....” Edgar Zilsel, “The Sociological
Roots of Science,” in Hugh F. Kearney, ed.
Origins of the Scientific Revolution, 97
(1968). The scientific journal is an essential tool in this incremental, ongoing, trans-
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formative process. The physicist Peter L.
Kapitza has noted the central role that
journals play in it:
[T]he fundamental factor determining the
collective work of scientists is the organization of information exchange. The
more effectively this is carried out, the
greater *934 its scale and the more intensively science develops. The most effective method of scientific information
up to date [sic] appears to be its dissemination through periodicals, since one can
most widely and quickly communicate
the scientific achievements in this way to
a large number of interested scientists.
Peter L. Kapitza, Experiment, Theory,
Practice, 173 (1980). Today there are some
200,000 scientific journals published
worldwide. Id. at 174.
A use that is reasonable and customary
is likely to be a fair one. See Harper &
Row Publishers, Inc. v. Nation Enterprises,
471 U.S. 539, 550, 105 S.Ct. 2218, 2225,
85 L.Ed.2d 588 (1985) (“the fair use doctrine was predicated on the author's implied
consent to ‘reasonable and customary’
use”). The district court, the majority and I
start from the same place in assessing
whether Dr. Chickering's photocopying is a
reasonable and customary use of the material: making single photocopies for research
and scholarly purposes has been considered
both reasonable and customary for as long
as photocopying technology has been in
existence. See Williams & Wilkins Co. v.
United States, 487 F.2d 1345, 1355-56, 203
Ct.Cl. 74 (1973), aff'd by an equally divided court, 420 U.S. 376, 95 S.Ct. 1344,
43 L.Ed.2d 264 (1976). The majority
quotes the district court's short answer to
this important insight: “To the extent the
copying practice was ‘reasonable’ in 1973
[when Williams & Wilkins was decided], it
has ceased to be ‘reasonable’ as the reasons
that justified it before [photocopying licensing] have ceased to exist.” 802 F.Supp.
at 25. I do not agree at all that a reasonable
and customary use becomes unfair when
the copyright holder develops a way to exact an additional price for the same
product. Moreover, I view the advent of the
CCC as an event that bears analytically
upon the distinct question of whether Dr.
Chickering's use supersedes the original
(the fourth factor). I therefore reach an issue-reasonable and customary use-not explored by the district court or by the majority.
Consider what Dr. Chickering actually
does with scientific journals. As a research
scientist, he routinely sifts through the
latest research done by his peers, much of
which is printed in journals such as Catalysis. He determines which articles potentially assist his specific trains of thought
and lines of inquiry, and he photocopies
them. Relative to the volume of articles in
each issue, his photocopying is insubstantial. He then files the articles for possible
future use or study. As the majority observes, “[b]efore modern photocopying,
Chickering probably would have converted
the original article into a more serviceable
form by taking notes, whether cursory or
extended; today he can do so with a photocopying machine.” 60 F.3d at 923-24. The
majority's footnote 10, appended to this
passage, questions whether or not a scholar's handwritten copy of a full work is
“necessarily” a fair use. As the majority
adds, however, Williams & Wilkins says:
[I]t is almost unanimously accepted that a
scholar can make a handwritten copy of
an entire copyrighted article for his own
use, and in the era before photoduplication it was not uncommon (and not seri-
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ously questioned) that he could have his
secretary make a typed copy for his personal use and files. These customary
facts of copyright-life are among our
givens.
Williams & Wilkins, 487 F.2d at 1350.
What Dr. Chickering does is simply a technologically assisted form of note-taking,
such as has long been customary among researchers: the photocopy machine saves
Dr. Chickering the toil and time of recording notes on index cards or in notebooks,
and improves the accuracy and range of the
data, charts, and formulas he can extract
from the passing stream of information; but
the note-taking purpose remains the same.
The anthropologist Bruno Latour spent
two years studying scientists at the Salk Institute for Biological Sciences. During the
course of his study, he conducted anthropological observations of a neurobiologist
working on an article for a journal. This
scientist's desk was littered with copies of
journal articles authored by other scientists:
Xeroxed copies of articles, with words
underlined and exclamation marks in the
margins, are everywhere. Drafts of articles in preparation intermingle with diagrams*935 scribbled on scrap paper, letters from colleagues and reams of paper
spewed out by the computer in the next
room; pages cut from articles are glued to
other pages; excerpts from draft paragraphs change hands between colleagues
while more advanced drafts pass from office to office being altered constantly, retyped, recorrected, and eventually
crushed into the format of this or that
journal.
Bruno Latour and Steve Woolgar,
Laboratory Life: The Social Construction
of Scientific Facts, 49 (1979). One essential step toward this drafting process is the
accumulation over time of the journal articles that reflect the current state of knowledge that the journal author seeks to advance. Latour confirms that the photocopying of journal articles, and the use of them,
is customary and integral to the creative
process of science.
The majority emphasizes that, as it
happened, Dr. Chickering did not “use” the
photocopied articles because, in five out of
eight instances, he filed them away. There
is nothing odd about making notes one
does not immediately use, or that one may
never consult again. Photocopies, which to
Dr. Chickering are the functional counterpart of notes, are used (or not, as the case
may be) in the same way. Dr. Chickering's
filing away of these photocopies does not
subvert his claim of fair use. Like the majority, I am convinced that his deposit of
the photocopied articles in his personal
file, pending his personal use of them in
the future, is an important fact bearing
upon fair use; but the dominant significance of that fact, under the first factor of
section 107, is that (whether he “uses”
them or files them) the articles are not resold or retailed in any way. If the copies
were sold by Dr. Chickering, that would be
a telling-possibly determinative-fact. What
Dr. Chickering has done reinforces the
view that his photocopying was not commercial in purpose or character.
The majority recognizes that, while the
photocopying of the Catalysis articles was
“not technically a transformative use,”
there is “significant independent value” in
converting the articles to a photocopied
format. 60 F.3d at 923. Nevertheless, the
majority concludes that this transformative
process does not militate in favor of fair
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use because of the “predominant archival
purpose”. In my view, however, the
“archival purpose” is just a step in the process of taking and keeping notes, which
should ordinarily entail no transformation
of the material. Good notes, being as precise and copious as time allows, do not aspire to transform the original text, but are
useful in research only to the extent that
they faithfully record the original. Such
notes, however, are important raw material
in the synthesis of new ideas. Accordingly,
I find the nature and purpose of the use to
be fully transformative.
The majority emphasizes passim that
the photocopying condemned here is
“systematic” and “institutional”. These
terms furnish a ground for distinguishing
this case from the case that the majority expressly does not reach: the copying of
journal articles by an individual researcher
outside an institutional framework. For all
the reasons adduced above, I conclude that
the institutional environment in which Dr.
Chickering works does not alter the character of the copying done by him or at his instance, and that the selection by an individual scientist of the articles useful to that
scientist's own inquiries is not systematic
copying, and does not become systematic
because some number of other scientists in
the same institution-four hundred or fourare doing the same thing.
First, the majority's reliance on
Texaco's institutional framework does not
limit the potentially uncontrolled ramifications of the result. Research is largely an
institutional endeavor nowadays, conducted by employees pursuing the overall
goals of corporations, university laboratories, courts and law firms, governments and
their agencies, think-tanks, publishers of
newspapers and magazines, and other kinds
of institutions. The majority's limitation of
its holding to institutional environments
may give comfort to inventors in bicycle
shops, scientists in garage laboratories,
freelance book reviewers, and solo conspiracy theorists, but it is not otherwise meaningful.
The majority's reliance on the systematic character of the photocopying here also
seems to me erroneous. The majority
deems *936 Texaco's photocopying systematic because Texaco uses circulation
lists to route a copy of each journal issue to
the scientists interested in the field. The
majority, however, ignores the one determinative issue: whether the decision to photocopy individual articles is made by the
individual researcher, as Dr. Chickering
did here. Journal issues may be systematically circulated to all scientists in a given
group, rather than (say) at random, but the
circulation of journal issues is not photocopying, systematic or otherwise. The
journal issues circulated by Texaco are
procured by subscription. Once Texaco receives the subscription copies from the
publisher, Texaco is free to circulate them
in-house so that they can be seen by as
many scientists as can lay eyes on them.
This circulation of copies allows individual
scientists to select individual articles for
copying. The majority opinion, which
leaves open the idea that this practice may
comport with copyright law if done by an
individual scientist, does not explain why it
is impermissible when done by more than
one.
The nature and purpose of the use is not
affected by Texaco's size or institutional
nature, or by Texaco's circulation of its
subscription journals to its scientists. I
therefore find that this factor weighs
clearly in favor of Texaco.
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B. Effect Upon Potential Market or
Value
In gauging the effect of Dr. Chickering's photocopying on the potential market
or value of the copyrighted work, the majority properly considers two separate
means of marketing: (1) journal subscriptions and sales, and (2) licensing revenues
and fees.
come as no surprise to the publisher of
Catalysis, which charges double the normal
subscription rate to institutional subscribers. The publisher must therefore assume that, unless they are reading Catalysis for pleasure or committing it to memory,
the scientists will extract what they need
and arrange to copy it for personal use before passing along the institutional copies.
(1) Subscriptions and sales. The majority makes clear that, considered solely in
terms of journal subscriptions and sales,
this factor is a toss-up that may tip in the
publisher's favor, but only after teetering
for a while: “At best, the loss of a few
journal subscriptions tips the fourth factor
only slightly toward the publishers because
evidence of such loss is weak evidence that
the copied articles themselves have lost
any value.” 60 F.3d at 929. The majority
pointedly observes that no evidence is
offered that the photocopying at issue here,
“if widespread, would impair the marketability of journals....” 60 F.3d at 928. Since
Dr. Chickering's use maximizes the utility
of a Catalysis subscription for the only
audience it is ever likely to capture, I do
not consider that the failure of proof in this
respect is an oversight by the publishers or
their able counsel.
(2) Licensing Revenues and Fees. The
majority states that “[o]nly an impact on
potential licensing revenues for traditional,
reasonable, or likely to be developed markets should be legally cognizable when
evaluating a secondary use's ‘effect upon
the potential market for or value of the
copyrighted work.’ ” 60 F.3d at 930. That
statement of the law, with which I fully
agree, supports the conclusion that the
availability of a CCC license has little to
do with fair use. The Supreme Court, in
Harper & Row, held that this fourth factor
addresses “ ‘use that supplants any part of
the normal market for a copyrighted
work....’ ” 471 U.S. at 568, 105 S.Ct. at
2235 (quoting S.Rep. No. 473, 94th Cong.,
1st Sess. 65 (1975)). The Court has more
recently declared, in considering the fair
use ramifications of parody, that “[t]he
market for potential derivative uses includes only those that creators of original
*937 works would in general develop or license others to develop.” Campbell v.
Acuff-Rose Music, Inc., 510 U.S. 569, ----,
114 S.Ct. 1164, 1178, 127 L.Ed.2d 500
(1994). One factor deemed to make parody
eligible for treatment as a fair use is that
copyright holders do not ordinarily license
artistic criticisms of their own works.
However, even if authors were to seek to
license these secondary works, it is not
clear that they would succeed, because the
Court found the secondary works to be a
fair use: “when ... the second use is trans-
As to the individual articles photocopied by Dr. Chickering, I agree with the
majority-as I read the opinion-that one cannot put a finger on any loss suffered by the
publisher in the value of the individual articles or in the traditional market for subscriptions and back issues. The district
court found that Texaco would not purchase back-issues or back volumes in the
numbers needed to supply individual copies of articles to individual scientists.
Finally, the circulation of Catalysis
among a number of Texaco scientists can
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formative, market substitution is at least
less certain, and market harm may not be
so readily inferred.” Id. at ----, 114 S.Ct. at
1177.
In this case the only harm to a market is
to the supposed market in photocopy licenses. The CCC scheme is neither traditional nor reasonable; and its development
into a real market is subject to substantial
impediments. There is a circularity to the
problem: the market will not crystallize unless courts reject the fair use argument that
Texaco presents; but, under the statutory
test, we cannot declare a use to be an infringement unless (assuming other factors
also weigh in favor of the secondary user)
there is a market to be harmed. At present,
only a fraction of journal publishers have
sought to exact these fees. I would hold
that this fourth factor decisively weighs in
favor of Texaco, because there is no normal market in photocopy licenses, and no
real consensus among publishers that there
ought to be one.
The majority holds that photocopying
journal articles without a license is an infringement. Yet it is stipulated that (a) institutions such as Texaco subscribe to numerous journals, only 30 percent of which
are covered by a CCC license; (b) not all
publications of each CCC member are
covered by the CCC licenses; and (c) not
all the articles in publications covered by
the CCC are copyrighted. It follows that no
CCC license can assure a scientist that photocopying any given article is legal. I will
separately consider the Transactional Reporting Service (the per-copy transactional
license) and the Annual Authorization Service (the blanket license). I confine my discussion here to scientists, although I note
that the record reflects CCC's intention to
pursue licensing arrangements in other sec-
tors as well.
Under a transactional license, the user
must undertake copyright research every
time an article is photocopied. First, one
must consult a directory to determine
whether or not the publisher of the journal
is a member of the CCC. If it is, one must
ascertain whether the particular publication
is one that is covered by the CCC arrangement, because not all publications of participating publishers are covered. Then one
must somehow determine whether the actual article is one in which the publisher actually holds a copyright, since there are
many articles that, for such reasons as government sponsorship of the research, are
not subject to copyright. The production
director of plaintiff Springer-Verlag testified at trial that it is almost impossible to
tell which articles might be covered by a
copyright. Since even an expert has difficulty making such a determination, the
transactional scheme would seem to require that an intellectual property lawyer
be posted at each copy machine. Finally,
once it is determined that the specific article is covered, the copyist will need to record in a log the date, name of publication,
publisher, title and author of article, and
number of pages copied.
It may be easier to hand copy the material. The transactions costs alone would
compel users to purchase a blanket license.
However, if (as the majority holds) three of
the fair use factors tip in favor of the publishers even without considering the market
for license fees, a blanket license offers
Texaco no safe harbor. Individual publishers remain free to stand upon the rights
conferred in this Court's opinion, and negotiate separate licenses with separate terms,
or sell offprints and refuse any license at
all. Unless each publisher's licensing rights
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are made to depend upon whether or not
that publisher participates in the CCC, we
have the beginnings of a total market failure: with many thousands of scientific publications in circulation, a user cannot negotiate licensing fees individually with numerous publishers-unless it does nothing
else. For many publications, licenses are
simply not available. As to those, Dr.
Chickering has the choice of *938 hand
copying, typescript, or the photocopying of
selected pages only.
The blanket license fares no better. The
CCC license cannot confer absolution for
the photocopying of articles published by
non-members of the CCC. Nor can the participating publishers properly collect fees
for the photocopying of articles for which
they do not hold the copyright. The district
court found that there is currently a viable
market for licensing, chiefly for the following reasons:
(a) “[M]any of the largest corporations
involved in research have become licensees under a CCC Annual Authorization.” 802 F.Supp. at 24. However, until
this case is decided, companies have had
little choice but to become licensees or
defendants.
(b) The CCC has developed an Annual
Authorization arrangement that “permits
free copying without any administrative
burden of recordkeeping or reporting.”
Id. That system works, however, only if
one ignores the rights of publishers who
are non-members of the CCC.
(c) “[P]ublishers and individual users
have ... developed private annual licensing agreements. For example, AT & T
Bell Labs, in addition to its membership
in the CCC, has over 200 agreements
with publishers covering photocopying
with respect to some 350 journals that are
not registered with the CCC. Furthermore, publishers have extended photocopying licenses to document delivery
services.” Id. at 24-25.
These developments “(and the other
parallel steps taken by the owner-user communities)”, satisfy the district court that
“[r]easonably priced, administratively tolerable licensing procedures are available....” Id. at 25.
It is hard to escape the conclusion that
the existence of the CCC-or the perception
that the CCC and other schemes for collecting license fees are or may become
“administratively tolerable”-is the chief
support for the idea that photocopying
scholarly articles is unfair in the first place.
The majority finds it “sensible” that a use
“should be considered ‘less fair’ when
there is a ready market or means to pay for
the use.” 60 F.3d at 931. That view is sensible only to a point. There is no technological or commercial impediment to imposing a fee for use of a work in a parody, or
for the quotation of a paragraph in a review
or biography. Many publishers could probably unite to fund a bureaucracy that would
collect such fees. The majority is sensitive
to this problem, but concludes that “[t]he
vice of circular reasoning arises only if the
availability of payment is conclusive
against fair use.” 60 F.3d at 931. That vice
is not avoided here. The majority expressly
declines to “decide how the fair use balance would be resolved if a photocopying
license for Catalysis articles were not currently available.” 60 F.3d at 931.
Moreover, the “important” fourth factor, 60
F.3d at 931, tips in favor of the publishers
(according to the majority) “[p]rimarily because of lost licensing revenue” and only
“to a minor extent” on the basis of journal
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sales and subscriptions. 60 F.3d at 931.
I do not agree with the majority that the
publishers “have created, primarily through
the CCC, a workable market for institutional users to obtain licenses for the right to
produce their own copies of individual articles via photocopying.” 60 F.3d at 930. By
the CCC's admission, in its correspondence
with the Antitrust Division of the Justice
Department, “the mechanism for the negotiation of a photocopy license fee is often
not even in place.... Nor can it be said that
CCC's current licensing programs have adequately met the market's needs.” FN1
There is nothing workable, and there is no
market.
FN1. Letter from R. Bruce Rich,
Weil, Gotshal & Manges (as counsel to CCC) to Thomas H. Liddle,
Antitrust Division, United States
Department of Justice (February 2,
1992) (filed as part of supplementation of record, pursuant to motion
granted on October 12, 1993).
Even if the CCC is or becomes workable, the holder of a CCC blanket license is
not thereby privileged to photocopy journal
articles published by non-members of the
CCC, as to which articles there is no
“ready market or means to pay for the fair
use”. See 60 F.3d at 931. This Court has
ended fair-use photocopying with respect
to a large population*939 of journals, but
the CCC mechanism allows fair-use photocopying only of some of them. The facts
before us demonstrate that the holder of a
blanket license must still deal separately
with CCC-member Bell Labs as to certain
hundreds of its publications. With respect
to the journals for which the publishers do
not market licenses, users will either (a) research which publications are in this category and copy them longhand, in
typescript or in partial photocopy, or (b) ignore our fair-use doctrine as unworkable.
Neither option serves scientific inquiry or
respect for copyright. In any event, it
seems to me that when a journal is used in
a customary way-a way that the authors
uniformly intend and wish-the user should
not be subjected on a day to day basis to
burdens that cannot be satisfied without a
team of intellectual property lawyers and
researchers.
The fourth factor tips decidedly in
Texaco's favor because there is no appreciable impairment of the publishing revenue from journal subscriptions and sales; because the publisher captures additional revenue from institutional users by charging a
double subscription price (and can presumably charge any price the users will pay);
and because the market for licensing is
cumbersome and unrealized.
C. Equitable Considerations
The fair use doctrine is an “equitable
rule of reason.” Sony Corp. of America v.
Universal City Studios, 464 U.S. 417, 448
& n. 31, 104 S.Ct. 774, 792 & n. 31, 78
L.Ed.2d 574 (1984). Applying the doctrine
requires a case-by-case review that includes the four factors listed in section
107; but the statutory list is not exhaustive
or exclusive. See Harper & Row, 471 U.S.
at 549, 105 S.Ct. at 2225. The purpose of
this equitable rule is “ ‘to avoid rigid application of the copyright statute when, on
occasion, it would stifle the very creativity
which that law is designed to foster.’ ”
Harper & Row, 471 U.S. at 550 n. 3, 105
S.Ct. at 2225 n. 3 (quoting Iowa State University Research Foundation, Inc. v. American Broadcasting Cos., 621 F.2d 57, 60
(2d Cir.1980)).
“ ‘[T]he author's consent to a reasonable use of his copyrighted works ha[s] al-
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ways been implied by the courts as a necessary incident of the constitutional policy
of promoting the progress of science and
the useful arts, since a prohibition of such
use would inhibit subsequent writers from
attempting to improve upon prior works
and thus ... frustrate the very ends sought
to be attained.’ ” Harper & Row, 471 U.S.
at 549, 105 S.Ct. at 2225 (quoting H. Ball,
Law of Copyright and Literary Property
260 (1944)). “[T]he fair use doctrine [is]
predicated on the author's implied consent
to ‘reasonable and customary’ use when he
release[s] his work for public consumption....” Id. at 550, 105 S.Ct. at 2225. All
facts bearing upon the terms of that consent
are germane to this analysis.
The single fact that evidences the fair
use expectation of the people whose creativity Congress seeks to stimulate, is that
they give away their copyright in order to
promote their work, their ideas and their
reputations. The district court found that
the “publishers do not pay authors money
to publish their articles....” American Geophysical, 802 F.Supp. at 26. The majority
finds, “[n]o form of money payment is ever
provided to authors whose works are published.” 60 F.3d at 915; see also id. at 928
(“[P]ublishers do not make any payment to
authors for the right to publish their articles
or to acquire their copyrights....”).
This is not to say, however, that the authors derive no benefit from the use of their
works. To the contrary: “[T]he authors derive benefit from the publication of their
works far more important than any small
royalty the traffic might bear.” American
Geophysical, 802 F.Supp. at 26. The authors of scientific articles work and publish
in order to gain distinction, appointment,
resources, tenure. But they seek and derive
absolutely no direct cash benefit from pub-
lication. It seems to me that this fact is of
great importance: it means that, so long as
the copyright system assures sufficient revenue to print and distribute scientific journals, the level of copyright revenue is not
among the incentives that drive the authors
to the *940 creative acts that the copyright
laws are intended to foster.
As to this issue, the majority adopts the
district court's view that it is “irrelevant”
because the authors have assigned the
copyright to publishers who risk capital to
achieve the wide dissemination of the articles that the authors want and need. 802
F.Supp. at 27. The district court greatly
overstates the case in concluding that
“[o]nce an author has assigned her copyright, her approval or disapproval of photocopying is of no further relevance.” Id. As
a commercial proposition, that is unassailable. But equitable considerations under
the copyright law justify an inquiry into the
incentives for creating the work-here, the
scientific journal articles. See Harper &
Row, 471 U.S. at 550 n. 3, 105 S.Ct. at
2225 n. 3 (equitable rule of reason permits
inquiry into whether “rigid application of
the copyright statute ... would stifle the
very creativity which that law is designed
to foster.”). “ ‘The immediate effect of our
copyright law is to secure a fair return for
an ‘author's' creative labor. But the ultimate aim is, by this incentive, to stimulate
artistic creativity for the general public
good.’ ” Fogerty v. Fantasy, Inc., 510 U.S.
517, ----, 114 S.Ct. 1023, 1029, 127
L.Ed.2d 455 (1994) (quoting Twentieth
Century Music Corp. v. Aiken, 422 U.S.
151, 156, 95 S.Ct. 2040, 2044, 45 L.Ed.2d
84 (1975)). To that end, we are reminded
that:
“The primary objective of copyright is
not to reward the labor of authors, but
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(Cite as: 60 F.3d 913)
‘[t]o promote the Progress of Science and
useful Arts.’ To this end, copyright assures authors the right to their original
expression, but encourages others to
build freely upon the ideas and information conveyed by a work.”
Id. at ----, 114 S.Ct. at 1030 (quoting
Feist Publications, Inc. v. Rural Telephone
Service Co., 499 U.S. 340, 349-50, 111
S.Ct. 1282, 1290, 113 L.Ed.2d 358 (1991)).
The CCC's licensing fees unquestionably benefit the copyright holders, but no
argument has been made that this additional revenue will fuel scientific creativity.
According to Kapitza, “[e]very 10-15
years, the number of journals doubles and
it has now reached the imposing number of
200,000.” Experiment, Theory, Practice at
174. This proliferation of journals has been
accomplished through sales and subscriptions. Clearly, the incentives currently in
place for journal publishing assure a fair
return, or else we would not see the exponential growth in scientific journals reported by Kapitza. Under the current system,
publishers sell journals and subscriptions.
They can, and do, charge institutional users
more money, and are free to charge what
they like.
Since the copyright laws seek to stimulate creativity, we should consider the incentives chiefly from the perspective of the
authors and scientists. It has been recognized by this Court that in the scientific
community, “what is valuable [to the authors] is recognition because it so often influences professional advancement and
academic tenure.” Weissmann v. Freeman,
868 F.2d 1313, 1324 (2d Cir.), cert. denied,
493 U.S. 883, 110 S.Ct. 219, 107 L.Ed.2d
172 (1989). From their point of view, then,
what is truly important is the wide dissemination of their works to their colleagues.
The incentives for scientific publication
have been in place since the project of science began to be perceived as a cooperative venture more than three centuries ago.
See E. Zilsel, “The Sociological Roots of
Science,” in Hugh F. Kearney, ed., Origins
of the Scientific Revolution, at 97 (1968)
(“In his Nova Atlantis Bacon depicted an
ideal state in which technological and scientific progress is reached by planned cooperation of scientists, each of whom uses
and continues the investigations of his predecessors and fellow workers.”). FN2 Scientists communicate through *941 journals, and use them to stake claims to new
ideas, disseminate their ideas, and advance
their careers and reputations. These
“authors have a far greater interest in the
wide dissemination of their work than in
royalties....” American Geophysical, 802
F.Supp. at 27. That, evidently, is why they
do not seek or expect royalties, and that is
why licensing fees cannot be expected to
increase or diminish their creativity or their
drive to publish. The majority's ruling on
fair use will add to the cost, time and effort
that scientists spend to scan, keep and use
journal articles, and will therefore tend to
diminish the only reward that the authors
seek from publication.
FN2. The Royal Society of London,
founded in 1662, was the first to
give institutional validity to the Baconian principles of verified experimentation and public reporting of
theories and experimental results.
See William Eamon, “From the
Secrets of Nature to Public Knowledge,” reprinted in David C. Lindberg and Robert S. Westman, eds.
Reappraisals of the Scientific Revolution, at 349-57 (1991). The
“ideal of cooperative research” allowed scientists to approach their
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(Cite as: 60 F.3d 913)
work more methodically, and the
project of science evolved into the
system of experimentation, reporting, verification, and modification
that is the scientific method. Id. The
first scientific journal, Philosophical Transactions, was published in
London in the 1660s. A. Rupert
Hall, The Revolution in Science,
1500-1700, 230-31 (1983). The
publisher,
Henry
Oldenburg,
“created the scientific journal and
the scientific paper as a means of
communication,”
providing
a
vehicle for international communication between scientists about the
results of their experiments. Id. at
231. In Philosophical Transactions,
“[f]requent controversies over moot
theoretical issues directed experimental interest to the testing of the
conflicting theories; new hypotheses were broadcast; recent scientific works were critically reviewed; and plans for initiating research along certain lines were
made public.” Robert K. Merton,
Science, Technology & Society in
Seventeenth Century England, 224
(1978).
an ‘author's' creative labor. But the ultimate aim is, by this incentive, to stimulate
artistic creativity....’ ”) (quoting Twentieth
Century Music, 422 U.S. at 156, 95 S.Ct. at
2044); Harper & Row, 471 U.S. at 546,
105 S.Ct. at 2223 (“The rights conferred by
copyright are designed to assure contributors to the store of knowledge a fair return
for their labors.”). More fundamentally, Dr.
Chickering's photocopying is part of a creative enterprise that Dr. Chickering conducts in common with the authors of the
articles. For that reason, and the others
stated in this dissent, I conclude that Dr.
Chickering's photocopying of isolated
journal articles to assist his own research
inquiries is fair use.
C.A.2 (N.Y.),1994.
American Geophysical Union v. Texaco
Inc.
60 F.3d 913, 144 A.L.R. Fed. 745, 1995
Copr.L.Dec. P 27,417, 35 U.S.P.Q.2d 1513
END OF DOCUMENT
Nowhere in the case law is there support for the proposition that the monopoly
granted by copyright is designed to ensure
the holder a maximum economic return;
rather, the law's purpose is to balance competing interests-assuring the author a fair
return, while permitting creative uses that
build upon the author's work. See, e.g., Fogerty, 510 U.S. at ----, 114 S.Ct. at 1029
(“While it is true that one of the goals of
the Copyright Act is to discourage infringement, it is by no means the only goal
of that Act.... ‘The immediate effect of our
copyright law is to secure a fair return for
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(Cite as: 109 F.3d 1394)
United States Court of Appeals,
Ninth Circuit.
DR. SEUSS ENTERPRISES, L.P.,
Plaintiff–Appellee,
v.
PENGUIN BOOKS USA, INC., a corporation; Dove Audio, Inc., a corporation, Defendants–Appellants.
No. 96–55619.
Argued and Submitted Oct. 10, 1996.
Decided March 27, 1997.
Holder of copyrights and trademarks
for children's books brought action against
publisher that intended to publish parody
of O.J. Simpson murder trial written in
style of books' author. The United States
District Court for the Southern District of
California, Napoleon A. Jones, Jr., J.,
entered preliminary injunction, 924
F.Supp. 1559, and publisher appealed. The
Court of Appeals, O'Scannlain, Circuit
Judge, held that: (1) publisher's book was
substantially similar to copyrighted work;
(2) book was not fair use; (3) whether book
infringed trademark presented serious
questions for litigation, as required for preliminary injunctive relief; and (4) injunction entered was not overbroad.
Affirmed.
West Headnotes
[1] Federal Courts 170B
815
170B Federal Courts
170BVIII Courts of Appeals
170BVIII(K) Scope, Standards, and
Extent
170BVIII(K)4 Discretion of
Lower Court
170Bk814 Injunction
170Bk815 k. Preliminary
injunction; temporary restraining order.
Most Cited Cases
Court of Appeals may reverse preliminary injunction only if district court abused
its discretion or based its decision on erroneous legal standard or on clearly erroneous findings of fact.
[2] Copyrights and Intellectual Property
99
51
99 Copyrights and Intellectual Property
99I Copyrights
99I(J) Infringement
99I(J)1 What Constitutes Infringement
99k51 k. Nature and elements
of injury. Most Cited Cases
“Analytic dissection” used to determine
if there is similarity of ideas between copyrighted work and allegedly infringing work
focuses on isolated elements of each work
to exclusion of other elements, combination of elements, and expressions therein.
17 U.S.C.A. § 102(b).
[3] Copyrights and Intellectual Property
99
51
99 Copyrights and Intellectual Property
99I Copyrights
99I(J) Infringement
99I(J)1 What Constitutes Infringement
99k51 k. Nature and elements
of injury. Most Cited Cases
Substantial similarity between works
may be found in copyright infringement
case whenever work shares significant similarity in protected expression, both on objective, analytical level and subjective,
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Cal. Daily Op. Serv. 2215, 97 Daily Journal D.A.R. 4075
(Cite as: 109 F.3d 1394)
audience-response level. 17 U.S.C.A. §
102(b).
[4] Copyrights and Intellectual Property
99
55
99 Copyrights and Intellectual Property
99I Copyrights
99I(J) Infringement
99I(J)1 What Constitutes Infringement
99k54 Books or Other Literary
Works
99k55 k. In general. Most
Cited Cases
Book telling story of famous murder
trial was substantially similar to copyrighted children's book on objective and
subjective level, as required to establish
copyright infringement; book appropriated
image of one of the characters from the
children's book on front and back covers
and 13 times in text. 17 U.S.C.A. § 102(b).
[5] Copyrights and Intellectual Property
99
51
99 Copyrights and Intellectual Property
99I Copyrights
99I(J) Infringement
99I(J)1 What Constitutes Infringement
99k51 k. Nature and elements
of injury. Most Cited Cases
Analytic dissection is not appropriate
when conducting subjective or “intrinsic
test” used to determine whether works are
substantially similar in copyright infringement case. 17 U.S.C.A. § 102(b).
[6] Copyrights and Intellectual Property
99
56
99 Copyrights and Intellectual Property
99I Copyrights
99I(J) Infringement
99I(J)1 What Constitutes Infringement
99k54 Books or Other Literary
Works
99k56 k. Fair use in general. Most Cited Cases
Book telling story of famous murder
trial in same style as that used by author of
copyrighted children's books was not likely
to be fair use; book did not hold author's
style up to ridicule or make effort to create
transformative work, and was admittedly
commercial. 17 U.S.C.A. § 107.
[7] Copyrights and Intellectual Property
99
85
99 Copyrights and Intellectual Property
99I Copyrights
99I(J) Infringement
99I(J)2 Remedies
99k72 Actions for Infringement
99k85 k. Preliminary injunction. Most Cited Cases
Preliminarily enjoining infringing parody was not prior restraint in violation of
First Amendment free speech guarantee.
U.S.C.A. Const.Amend. 1.
[8] Trademarks 382T
1081
382T Trademarks
382TIII Similarity Between Marks;
Likelihood of Confusion
382Tk1081 k. Factors considered in
general. Most Cited Cases
(Formerly 382k334.1 Trade Regulation)
Eight factors used to analyze likelihood
of confusion question in trademark infringement cases are as follows: strength of
mark; proximity of goods; similarity of
marks; evidence of actual confusion; mar-
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Cal. Daily Op. Serv. 2215, 97 Daily Journal D.A.R. 4075
(Cite as: 109 F.3d 1394)
keting channels used; type of goods and
degree of care likely to be exercised by
purchasers; defendant's intent in selecting
mark; and likelihood of expansion of
product lines. Lanham Trade-Mark Act, §
43(a)(1)(A), 15 U.S.C.A. § 1125(a)(1)(A).
book likely intended to draw consumer attention to book. Lanham Trade-Mark Act,
§
43(a)(1)(A),
15
U.S.C.A.
§
1125(a)(1)(A).
[9] Trademarks 382T
382T Trademarks
382TVIII Violations of Rights
382TVIII(D) Defenses, Excuses, and
Justifications
382Tk1521 Justified or Permissible Uses
382Tk1524 Expressive Use;
Commentary
382Tk1524(2) k. Parody or
satire. Most Cited Cases
(Formerly 382k375.1 Trade Regulation)
1704(2)
382T Trademarks
382TIX Actions and Proceedings
382TIX(F) Injunctions
382Tk1701 Preliminary or Temporary Injunctions
382Tk1704 Grounds and Subjects of Relief
382Tk1704(2) k. Infringement in general. Most Cited Cases
(Formerly 382k620 Trade Regulation)
Trademarks 382T
1704(9)
382T Trademarks
382TIX Actions and Proceedings
382TIX(F) Injunctions
382Tk1701 Preliminary or Temporary Injunctions
382Tk1704 Grounds and Subjects of Relief
382Tk1704(9) k. Similarity; likelihood of confusion. Most Cited
Cases
(Formerly 382k620 Trade Regulation)
Whether book telling story of famous
murder trial in same style as that used by
author of children's books with similar
titles and characters was confusingly similar was serious question for litigation, and
balance of hardships favored trademark
holder, as required for preliminary injunctive relief in trademark infringement action;
trademarks involved were widely recognized, proximity and similarity between
marks and infringing items were substantial, and publishers of allegedly infringing
[10] Trademarks 382T
1524(2)
Claim that book telling story of famous
murder trial in style of children's book author was parody was not defense of trademark infringement claim if parody created
consumer confusion. Lanham Trade-Mark
Act, § 43(a)(1)(A), 15 U.S.C.A. §
1125(a)(1)(A).
[11] Copyrights and Intellectual Property 99
85
99 Copyrights and Intellectual Property
99I Copyrights
99I(J) Infringement
99I(J)2 Remedies
99k72 Actions for Infringement
99k85 k. Preliminary injunction. Most Cited Cases
Preliminary injunction enjoining sale of
entire book which was likely to infringe
copyrighted children's book was not overbroad, although only front and back cover
illustrations were likely to be infringing,
where stitching and binding of infringing
book had already been completed, so that
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(Cite as: 109 F.3d 1394)
publisher could no longer alter final
product to eliminate infringing elements.
*1396 Vincent Cox, Leopold, Petrich &
Smith, Los Angeles, California, for defendants-appellants.
Alexander H. Rogers and Cathy Ann Bencivengo, Gray Cary Ware & Freidenrich,
San Diego, California, for plaintiff-appellee.
Appeal from the United States District
Court for the Southern District of California. Napoleon A. Jones, Jr., District Judge,
Presiding. D.C. No. CV–96–0302–NAJ.
Before O'SCANNLAIN, T.G. NELSON,
and HAWKINS, Circuit Judges.
OPINION
O'SCANNLAIN, Circuit Judge:
We must decide whether a poetic account of the O.J. Simpson double murder
trial entitled The Cat NOT in the Hat! A
Parody by Dr. Juice, presents a sufficient
showing of copyright and trademark infringement of the well-known The Cat in
the Hat by Dr. Seuss.
I
Penguin Books USA, Inc. (“Penguin”)
and Dove Audio, Inc. (“Dove”) interlocutorily appeal the district court's preliminary injunction prohibiting the publication
and distribution of The Cat NOT in the
Hat! A Parody by Dr. Juice, a rhyming
summary of highlights from the O.J.
Simpson double murder trial, as violating
copyrights and trademarks owned by Dr.
Seuss Enterprises, L.P. (“Seuss”), particularly from the book The Cat in the Hat.
Seuss, a California limited partnership,
owns most of the copyrights and trade-
marks to the works of the late Theodor S.
Geisel, the author and illustrator of the
famous children's educational books written under the pseudonym “Dr. Seuss.”
Between 1931 and 1991, Geisel wrote, illustrated and published at least 47 books
that resulted in approximately 35 million
copies currently in print worldwide. He authored and illustrated the books in simple,
rhyming, repetitive language, accompanied
by characters that are recognizable by and
appealing to children. The characters are
often animals with human-like characteristics.
In The Cat in the Hat, first published in
1957, Geisel created a mischievous but
well meaning character, the Cat, who continues to be among the most famous and
well recognized of the Dr. Seuss creations.
The Cat is almost always depicted with his
distinctive scrunched and somewhat
shabby red and white stove-pipe hat. Seuss
owns the common law trademark rights to
the words “Dr. Seuss” and “Cat in the
Hat,” as well as the character illustration of
the Cat's stove-pipe hat. Seuss also owns
the copyright registrations for the books
The Cat in the Hat, The Cat in the Hat
Comes Back, The Cat in the Hat Beginner
Book Dictionary, The Cat in the Hat Songbook, and The Cat's Quizzer. In addition,
Seuss has trademark registrations for the
marks currently pending with the United
States Trademark Office. Seuss has licensed the Dr. Seuss marks, including The
Cat in the Hat character, for use on clothing, in interactive software, and in a theme
park.
In 1995, Alan Katz and Chris Wrinn,
respectively, wrote and illustrated The Cat
NOT in the Hat! satirizing the O.J.
Simpson double murder trial. Penguin and
Dove, the publishers and distributors, were
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(Cite as: 109 F.3d 1394)
not licensed or authorized to use any of the
works, characters or illustrations owned by
Seuss. They also did not seek permission
from Seuss to use these properties.
Seuss filed a complaint for copyright
and trademark infringement, an application
for a temporary restraining order and a preliminary injunction FN1 after seeing an advertisement*1397 promoting The Cat NOT
in the Hat! prior to its publication. The advertisement declared:
FN1. “To obtain a preliminary injunction, the moving party must
show either (1) a combination of
probable success on the merits and
the possibility of irreparable injury,
or (2) that serious questions are
raised and the balance of hardships
tips sharply in its favor. These formulations are not different tests but
represent two points on a sliding
scale in which the degree of irreparable harm increases as the probability of success on the merits decreases. Under either formulation,
the moving party must demonstrate
a significant threat of irreparable injury, irrespective of the magnitude
of the injury.” Big Country Foods,
Inc. v. Board of Educ., 868 F.2d
1085, 1088 (9th Cir.1989) (internal
citations omitted).
Wickedly clever author “Dr. Juice” gives
the O.J. Simpson trial a very fresh new
look. From Brentwood to the Los
Angeles County Courthouse to Marcia
Clark and the Dream Team. The Cat Not
in the Hat tells the whole story in rhyming verse and sketches as witty as
Theodore [sic] Geisel's best. This is one
parody that really packs a punch!
Seuss alleged that The Cat NOT in the
Hat! misappropriated substantial protected
elements of its copyrighted works, used six
unregistered and one registered Seuss
trademarks, and diluted the distinctive
quality of its famous marks. Katz subsequently filed a declaration stating that
The Cat in the Hat was the “object for [his]
parody” and portions of his book derive
from The Cat in the Hat only as “necessary
to conjure up the original.”
Seuss filed suit under the enforcement
provisions of the Copyright Code, 17
U.S.C. §§ 501–02; the Lanham Act, 15
U.S.C. § 1125(a); the Federal Trademark
Dilution Act of 1995, 15 U.S.C. §
1125(c)(1); and the California Unfair Competition Statute, § 17200 et seq. and §
14330. The district court denied the request
for the temporary restraining order, but it
set a hearing date for the preliminary injunction. Penguin and Dove went forward
with the production schedule. Seuss incorporated additional infringement claims
from other Dr. Seuss texts-Horton Hatches
the Egg and One Fish Two Fish Red Fish
Blue Fish-in its request for injunctive relief. On March 21, 1996, the district court
granted Seuss' request for a preliminary injunction. About 12,000 books, at an expense of approximately $35,500, had been
printed to date but now were enjoined from
distribution. Penguin and Dove brought a
motion for reconsideration and Katz filed a
second declaration admitting to drawing
from the other two Dr. Seuss works. Seuss
then withdrew its claim regarding an illustration from Horton for purposes of its motion for injunctive relief.
[1] While the district court modified its
order in reconsidering these new claims, it
did not dissolve the preliminary injunction.
The court found that Seuss had demonstrated: (1) a strong likelihood that Katz
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(Cite as: 109 F.3d 1394)
and Wrinn had taken substantial protected
expression from The Cat in the Hat but not
from Horton or One Fish Two Fish; (2) a
strong likelihood of success on the copyright claim raising a presumption of irreparable harm; (3) a strong likelihood of
success on the parody as fair use issue; (4)
serious questions for litigation and a balance of hardships favoring Seuss on the
trademark violations; and (5) a minimal
likelihood of success on the federal dilution claim. Penguin and Dove timely appealed.FN2
FN2. Under the applicable standard
of review, we may reverse the grant
of the preliminary injunction only if
the district court abused its discretion or based its decision on an erroneous legal standard or on clearly
erroneous findings of fact. See Does
1–5 v. Chandler, 83 F.3d 1150,
1152 (9th Cir.1996); Miller v. California Pac. Med. Ctr., 19 F.3d 449,
455 (9th Cir.1994) (en banc).
II
We must first determine whether The
Cat NOT in the Hat! infringes on Seuss'
rights under the Copyright Act of 1976, 17
U.S.C. § 106. Seuss, as the owner of the
Dr. Seuss copyrights, owns the exclusive
rights (1) to reproduce the copyrighted
work; (2) to prepare derivative works
based on the copyrighted work; (3) to distribute copies or phonorecords of the copyrighted work to the public; (4) to perform
the work publicly; and (5) to display the
copyrighted work publicly. § 106. Seuss alleges that Penguin and Dove made an unauthorized derivative work of the copyrighted works The Cat in the Hat, The Cat
in the Hat Comes Back, The Cat's Quizzer,
The Cat in the Hat Beginner Books Dictionary, and The Cat in the Hat's Song
Book in violation of §§ 106 and 501.
*1398 To prove a case of copyright infringement, Seuss must prove both ownership of a valid copyright and infringement
of that copyright by invasion of one of the
five exclusive rights. See Brown Bag Software v. Symantec Corp., 960 F.2d 1465,
1472 (9th Cir.) cert. denied, 506 U.S. 869,
113 S.Ct. 198, 121 L.Ed.2d 141 (1992).
First, Seuss is the owner of the Dr. Seuss
copyrights and holds valid copyright registration certificates. Second, Katz admitted
that the “style of the illustrations and lettering used in [The Cat NOT in the Hat! ]
were inspired by [The Cat in the Hat ]. ...”
To satisfy the infringement test, Seuss must
demonstrate
“substantial
similarity”
between the copyrighted work and the allegedly infringing work. “Substantial similarity” refers to similarity of expression, not
merely similarity of ideas or concepts. See
17 U.S.C. § 102(b).
[2][3] Most courts have used some
form of bifurcated test to demonstrate
“substantial similarity,” inquiring first if
there is copying and second if an audience
of reasonable persons will perceive substantial similarities between the accused
work and protected expression of the copyrighted work. This court's two-part test for
substantial similarity finds its roots in Sid
& Marty Krofft Television Prods., Inc. v.
McDonald's Corp., 562 F.2d 1157, 1164
(9th Cir.1977). In Krofft, the first question
is labeled the “extrinsic” test and asks if
there is similarity of ideas. “Analytic dissection” is allowed.FN3 The second Krofft
question is labeled the “intrinsic” test and
asks if an “ordinary reasonable person”
would perceive a substantial taking of protected expression. At this stage, “analytical
dissection” is not appropriate. The Krofft
formulation has been criticized by certain
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(Cite as: 109 F.3d 1394)
leading commentators. See 3 M. Nimmer &
D. Nimmer, Nimmer on Copyright §
13.03[E][3] (rev. ed.1996). Penguin and
Dove rely on those criticisms to make their
case against the copyright infringement
claims. FN4 We have recently modified the
Krofft test, bringing it more in line with the
test followed in other circuits. See, e.g.,
Apple Computer Inc. v. Microsoft Corp., 35
F.3d 1435, 1442–43 (9th Cir.1994) (“As it
has evolved, however, the extrinsic test
now objectively considers whether there
are substantial similarities in both ideas
and expression, whereas the intrinsic test
continues to measure expression subjectively.... [W]e use analytic dissection to determine the scope of copyright protection
before works are considered ‘as a whole.’
”) (citation omitted); Shaw v. Lindheim,
919 F.2d 1353, 1357 (9th Cir.1990)
(clarifying that “the two tests are more
sensibly described as objective and subjective analyses of expression. ...”) (emphasis
in original).
FN3. “Analytic dissection” focuses
on isolated elements of each work
to the exclusion of the other elements, combination of elements,
and expressions therein.
FN4. The district court observed:
“Dr. Seuss has produced evidence
that protected elements of three
copyrighted works were incorporated into Penguin's book. Penguin
responds that none of these examples of use could constitute infringement. Citing Professor Nimmer, Penguin argues that copyright
infringement exists only in two
forms: ‘comprehensive non-literal
similarity’ and ‘fragmented literal
similarity.’ Comprehensive nonliteral similarity would be a para-
phrasing of an entire work; fragmented literal similarity would be a
verbatim or near-verbatim copying
of a small part of a work. Only
these types of takings, Penguin argues, warrant a finding of infringement. The Court declines to follow
Professor Nimmer's categories.”
The court then concluded: “In the
Ninth Circuit, the issue is whether
the works are substantially similar.
Substantial similarity may be found
whenever the works share significant similarity in protected expression both on an objective, analytical
level and a subjective, audience-response level.” The district court
correctly portrayed the state of
Ninth Circuit law on this issue.
[4] “The Cat in the Hat” is the central
character in the original work, appearing in
nearly every page of the Dr. Seuss work
(26 times). Penguin and Dove appropriated
the Cat's image, copying the Cat's Hat and
using the image on the front and back covers and in the text (13 times). We conclude
that substantial similarity exists on an objective and subjective level (see attachments # 1 and # 2). Penguin and Dove,
however, maintain that they have not infringed on any one of Seuss' exclusive
rights of copyright because The Cat NOT
in the Hat! employed elements of the copyrighted work that are either uncopyrightable or that have fallen into the public domain.
*1399 [5] Penguin and Dove's argument is based on an analytic dissection of
the following elements: (1) infringement
cannot be based on the title of the parody
because it is “clear, as a matter of statutory
construction by the courts (as well as
Copyright Office regulations), that titles
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may not claim statutory copyright.” Nimmer on Copyright, § 2.6, at 2–185–187
(footnotes omitted); (2) the design of the
lettering of the words used in the accused
work cannot be found to infringe, because
Congress decided not to award copyright
protection to design elements of letters. Id.
§ 2.15, at 2–178.6; (3) the poetic meter
used in Cat in the Hat known as anapestic
tetrameter is no more capable of exclusive
ownership than its well-known counterpart,
iambic pentameter; (4) no claim of ownership may be based on the whimsical poetic
style that employs neologisms and onomatopoeia. See v. Durang, 711 F.2d 141, 143
(9th Cir.1983); and (5) the visual style of
illustration using line drawing, coloring,
and shading techniques similar to those
used in The Cat in the Hat are not copyrightable. See Midler v. Ford Motor Company, 849 F.2d 460 (9th Cir.1988).FN5
However, this kind of analytic dissection is
not appropriate when conducting the subjective or “intrinsic test” (asking if an
“ordinary reasonable person” would perceive a substantial taking of protected expression) under Krofft. Penguin and Dove's
contentions on this issue are thus unavailing.
FN5. We do not rule on the merits
of each dissected element.
As for the objective analysis of expression, the district court's preliminary injunction was granted based on the back cover
illustration and the Cat's Hat, not the
typeface, poetic meter, whimsical style or
visual style. For these reasons, we conclude that the court's findings that Penguin
and Dove infringed on Seuss' copyrights
are not clearly erroneous.
III
[6] Even if Seuss establishes a strong
showing of copyright infringement on
these facts, Penguin and Dove maintain
that the taking would be excused as a parody under the fair use doctrine. Fair use is
an “equitable rule of reason,” Sony Corp.
of America v. Universal City Studios, Inc.,
464 U.S. 417, 448, 104 S.Ct. 774, 792, 78
L.Ed.2d 574 (1984), requiring careful balancing of multiple factors “in light of the
purposes of copyright.” Campbell v.
Acuff–Rose Music, Inc., 510 U.S. 569, 578,
114 S.Ct. 1164, 1171, 127 L.Ed.2d 500
(1994). The fair use defense “permits
courts to avoid rigid application of the
copyright statute when, on occasion, it
would stifle the very creativity which that
law is designed to foster.” Iowa State Univ.
Research Found., Inc. v. American Broadcasting Cos., 621 F.2d 57, 60 (2d
Cir.1980).
In § 107 of the 1976 Copyright Act,
Congress laid down four factors to be considered and weighed by the courts in determining if a fair use defense exists in a
given case: (1) the purpose and character of
the accused use; (2) the nature of the copyrighted work; (3) the importance of the
portion used in relation to the copyrighted
work as a whole; and (4) the effect of the
accused use on the potential market for or
value of the copyrighted work. 17 U.S.C. §
107. Congress viewed these four criteria as
guidelines for “balancing the equities,” not
as “definitive or determinative” tests.
H.R.Rep. No. 94–1476, 94th Cong., 2d
Sess. 65 (1976), reprinted in 1976
U.S.C.C.A.N. 5659, 5679. Congress observed that “since the doctrine [of fair use]
is an equitable rule of reason, no generally
applicable definition is possible.” Id. The
four fair use factors “are to be ... weighed
together, in light of the objectives of copyright ‘to promote the progress of science
and the useful arts.’ ” Id. We now examine
each factor.
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A
The first factor in a fair use inquiry is
“the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational
purposes.” § 107(1). While this inquiry
does not specify which purpose might
render a given use “fair,” the preamble to §
107 provides an illustrative, though not
limitative,
listing
which
includes
“criticism, comment, news reporting,
teaching (including multiple copies for
classroom use), scholarship, or research.”
*1400 § 107. Under this factor, the inquiry
is whether The Cat NOT in the Hat! merely
supersedes the Dr. Seuss creations, or
whether and to what extent the new work is
“transformative,” i.e., altering The Cat in
the Hat with new expression, meaning or
message.
Parody is regarded as a form of social
and literary criticism, having a socially significant value as free speech under the First
Amendment. This court has adopted the
“conjure up” test where the parodist is permitted a fair use of a copyrighted work if it
takes no more than is necessary to “recall”
or “conjure up” the object of his parody.
See MCA, Inc. v. Wilson, 677 F.2d 180,
184 (2d Cir.1981); Warner Bros., Inc. v.
American Broadcasting Cos., 523 F.Supp.
611, 617 (S.D.N.Y.), aff'd, 654 F.2d 204
(2d Cir.1981); Walt Disney Prods. v. Air
Pirates, 581 F.2d 751, 757 (9th Cir.1978),
cert. denied, 439 U.S. 1132, 99 S.Ct. 1054,
59 L.Ed.2d 94 (1979). Accordingly, the
critical issue under this factor is whether
The Cat NOT in the Hat! is a parody.FN6
See Acuff–Rose, 510 U.S. at 582, 114 S.Ct.
at 1173 (“The threshold question when fair
use is raised in defense of parody is whether a parodic character may reasonably be
perceived.”).
FN6. The district court concluded
that Penguin and Dove may not employ the four-factor fair use analysis
if the infringing work is not a parody. The application of this presumption is in error. The Supreme
Court has thus far eschewed bright
line rules, favoring a case-by-case
balancing.
We first examine the definition of parody.FN7 The parties disagree over the appropriate interpretation of Acuff–Rose 's
holding with respect to the definition of
parody under the fair use exception. The
Supreme Court of the United States in the
Acuff–Rose case held that a rap group's version of Ray Orbison's song “Oh, Pretty
Woman” was a candidate for a parody fair
use defense.FN8 Justice Souter, the opinion's author, defined parody:
FN7. Because debate still surrounds
the proper definition of parody following Acuff–Rose, we briefly explore the word itself for guidance.
Parody is one of four types of
satire: diatribe, narrative, parody
and burlesque. Highet, The Anatomy of Satire 13–14 (1962). The
term has as its etymology the word
“parodia” with the literal translation
of “a song sung beside something.”
FN8. Our analysis does not take into account whether The Cat NOT in
the Hat! is in good or bad taste. As
Justice Holmes explained, “[i]t
would be a dangerous undertaking
for persons trained only to the law
to constitute themselves final judges
of the worth of [a work], outside of
the narrowest and most obvious
limits.” Acuff–Rose, 510 U.S. at
582, 114 S.Ct. at 1173 (quoting
Bleistein v. Donaldson Lithograph-
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(Cite as: 109 F.3d 1394)
ing Co., 188 U.S. 239, 251, 23 S.Ct.
298, 300, 47 L.Ed. 460 (1903)).
For the purposes of copyright law, the
nub of the definitions, and the heart of
any parodist's claim to quote from existing material, is the use of some elements
of a prior author's composition to create a
new one that, at least in part, comments
on that author's works.... If, on the contrary, the commentary has no critical
bearing on the substance or style of the
original composition, which the alleged
infringer merely uses to get attention or
to avoid the drudgery in working up
something fresh, the claim to fairness in
borrowing from another's work diminishes accordingly (if it does not vanish),
and other factors, like the extent of its
commerciality, loom larger.
Id. at 580, 114 S.Ct. at 1172 (citations
omitted). The Court pointed out the difference between parody (in which the
copyrighted work is the target) and satire
(in which the copyrighted work is merely
a vehicle to poke fun at another target):
“Parody needs to mimic an original to
make its point, and so has some claim to
use the creation of its victim's (or collective victims') imagination, whereas satire
can stand on its own two feet and so requires justification for the very act of
borrowing.” Id. As Justice Kennedy put it
in his concurrence: “The parody must target the original, and not just its general
style, the genre of art to which it belongs,
or society as a whole (although if it targets the original, it may target those features as well).” Id. at 597, 114 S.Ct. at
1180. The Second Circuit in Rogers v.
Koons, 960 F.2d 301, 310 (2d Cir.1992),
also emphasized that unless the plaintiff's
copyrighted work is at least in part the
target of the defendant's satire, then the
defendant's work is not a “parody” in the
legal sense:
*1401 It is the rule in this Circuit that
though the satire need not be only of the
copied work and may ... also be a parody
of modern society, the copied work must
be, at least in part, an object of the parody, otherwise there would be no need to
conjure up the original work.... By requiring that the copied work be an object
of the parody, we merely insist that the
audience be aware that underlying the
parody there is an original and separate
expression, attributable to a different
artist.
Similarly, the American Heritage Dictionary defines “parody” as a “literary or
artistic work that broadly mimics an author's characteristic style and holds it up
to ridicule.”
We now turn our attention to The Cat
NOT in the Hat! itself. The first two pages
present a view of Los Angeles, with particular emphasis on the connection with
Brentwood, given the depiction of the news
camera lights. The story begins as follows:
A happy town
Inside L.A.
Where rich folks play
The day away.
But under the moon
The 12th of June.
Two victims flail
Assault! Assail!
Somebody will go to jail!
Who will it be?
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(Cite as: 109 F.3d 1394)
Oh my! Oh me!
The third page reads: “One Knife? /
Two Knife? / Red Knife / Dead Wife.”
This stanza no doubt mimics the first poem
in Dr. Seuss' One Fish Two Fish Red Fish
Blue Fish: “One fish / two fish / red fish /
blue fish. Black fish / blue fish / old fish /
new fish.” For the next eighteen pages,
Katz writes about Simpson's trip to Chicago, the noise outside Kato Kaelin's room,
the bloody glove found by Mark Fuhrman,
the Bronco chase, the booking, the hiring
of lawyers, the assignment of Judge Ito, the
talk show interest, the comment on DNA,
and the selection of a jury. On the hiring of
lawyers for Simpson, Katz writes:
A plea went out to Rob Shapiro
Can you save the fallen hero?
And Marcia Clark, hooray, hooray
Was called in with a justice play.
A man this famous
Never hires
Lawyers like
Jacoby–Meyers.
When you're accused of a killing scheme
You need to build a real Dream Team.
Cochran! Cochran!
Doodle-doo
Johnnie, won't you join the crew?
Cochran! Cochran!
Deedle-dee
The Dream Team needs a victory.
These stanzas and the illustrations
simply retell the Simpson tale. Although
The Cat NOT in the Hat! does broadly
mimic Dr. Seuss' characteristic style, it
does not hold his style up to ridicule. The
stanzas have “no critical bearing on the
substance or style of” The Cat in the Hat.
Katz and Wrinn merely use the Cat's stovepipe hat, the narrator (“Dr.Juice”), and the
title (The Cat NOT in the Hat! ) “to get attention” or maybe even “to avoid the
drudgery in working up something fresh.”
Acuff–Rose, 510 U.S. at 580, 114 S.Ct. at
1172. While Simpson is depicted 13 times
in the Cat's distinctively scrunched and
somewhat shabby red and white stove-pipe
hat, the substance and content of The Cat
in the Hat is not conjured up by the focus
on the Brown–Goldman murders or the
O.J. Simpson trial. Because there is no effort to create a transformative work with
“new expression, meaning, or message,”
the infringing work's commercial use further cuts against the fair use defense.FN9
Id. at 578, 114 S.Ct. at 1171.
FN9. Penguin and Dove emphasize
that the Court in Acuff–Rose held
that it was error to rule that the
commercial, profit-making nature
of the defendant's exploitation created a presumption of no fair use
defense, overshadowing the other
factors to be weighed as to fair use.
We agree. However, the district
court's problem with the fair use defense on these facts was not with
the commercial nature of the accused work. The court found that
The Cat NOT in the Hat! was not
entitled to a parody fair use defense
because it failed to target the original work.
*1402 B
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(Cite as: 109 F.3d 1394)
The second statutory factor, “the nature
of the copyrighted work,” § 107(2), recognizes that creative works are “closer to the
core of intended copyright protection” than
informational and functional works, “with
the consequence that fair use is more difficult to establish when the former works are
copied.” Acuff–Rose, 510 U.S. at 586, 114
S.Ct. at 1175. While this factor typically
has not been terribly significant in the
overall fair use balancing, the creativity,
imagination and originality embodied in
The Cat in the Hat and its central character
tilts the scale against fair use.
C
The third factor asks whether “the
amount and substantiality of the portion
used in relation to the copyrighted work as
a whole,” § 107(3), are reasonable in relation to the purpose of the copying. This
factor really raises the question of substantial similarity discussed in the preceding
section, rather than whether the use is
“fair.” The district court concluded that
“The Cat in the Hat” is the central character, appearing in nearly every image of The
Cat in the Hat. Penguin and Dove appropriated the Cat's image, copying the Cat's
Hat and using the image on the front and
back covers and in the text (13 times). We
have no doubt that the Cat's image is the
highly expressive core of Dr. Seuss' work.
Under this factor, we also turn our attention “to the persuasiveness of a parodist's justification for the particular copying
done, and the enquiry will harken back to
the first of the statutory factors, for, as in
prior cases, we recognize that the extent of
permissible copying varies with the purpose and character of the use.” Acuff–Rose,
510 U.S. at 586, 114 S.Ct. at 1175. Katz
and Wrinn insist that they selected The Cat
in the Hat as the vehicle for their parody
because of the similarities between the two
stories: Nicole Brown and Ronald Goldman were surprised by a “Cat”
(O.J.Simpson) who committed acts contrary to moral and legal authority. The prosecution of Simpson created a horrible
mess, in which the defense team seemed to
impose “tricks” on an unwilling public,
resulting in a verdict that a substantial segment of the public regarded as astonishing.
Just as The Cat in the Hat ends with the
moral dilemma of whether the children
should tell their mother about their visitor
that afternoon, Katz and Wrinn maintain
that The Cat NOT in the Hat! ends with a
similar moral dilemma:
JUICE
+ST
JUSTICE
Hmm ... take the word JUICE.
Then add ST.
Between the U and I, you see.
And then you have JUSTICE.
Or maybe you don't.
Maybe we will.
And maybe we won't.
‘Cause if the Cat didn't do it?
Then who? Then who?
Was it him?
Was it her?
Was it me?
Was it you?
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(Cite as: 109 F.3d 1394)
Oh me! Oh my!
Oh my! Oh me!
The murderer is running free.
In their Opening Brief, Penguin and
Dove characterize The Cat NOT in the Hat!
(“Parody”) as follows:
The Parody is a commentary about the
events surrounding the Brown/Goldman
murders and the O.J. Simpson trial, in the
form of a Dr. Seuss parody that transposes the childish style and moral content
of the classic works of Dr. Seuss to the
world of adult concerns. The Parody's author felt that, by evoking the world of
The Cat in the Hat, he could: (1) comment on the mix of frivolousness and
moral gravity that characterized the culture's reaction to the events surrounding
the Brown/Goldman murders, (2) parody
the mix of whimsy and moral dilemma
created by Seuss works such as The Cat
in the Hat in a way that implied that the
work was too limited to conceive the possibility of a real trickster “cat” who creates mayhem along with his friends
Thing 1 and Thing 2, and then *1403 magically cleans it up at the end, leaving a
moral dilemma in his wake.
We completely agree with the district
court that Penguin and Dove's fair use defense is “pure shtick” and that their posthoc characterization of the work is
“completely unconvincing.”
D
The fourth fair use factor is “the effect
of the use upon the potential market for or
value of the copyrighted work.” § 107(4).
Under this factor, we consider both the extent of market harm caused by the publication and distribution of The Cat NOT in the
Hat! and whether unrestricted and widespread dissemination would hurt the potential market for the original and derivatives
of The Cat in the Hat. The Second Circuit
has characterized this factor as calling for
the striking of a balance “between the benefit the public will derive if the use is permitted and the personal gain the copyright
owner will receive if the use is denied. The
less adverse effect that an alleged infringing use has on the copyright owner's
expectation of gain, the less public benefit
need be shown to justify the use.” MCA,
Inc. v. Wilson, 677 F.2d 180, 183 (2d
Cir.1981) (citations omitted). The good
will and reputation associated with Dr.
Seuss' work is substantial. Because, on the
facts presented, Penguin and Dove's use of
The Cat in the Hat original was nontransformative, and admittedly commercial, we
conclude that market substitution is at least
more certain, and market harm may be
more readily inferred.
Since fair use is an affirmative defense,
Penguin and Dove must bring forward favorable evidence about relevant markets.
Given their failure to submit evidence on
this point, instead confining “themselves to
uncontroverted submissions that there was
no likely effect on the market for the original,” we conclude that “it is impossible
to deal with the fourth factor except by recognizing that a silent record on an important factor bearing on fair use disentitle[s]
the proponent of the defense,” Penguin and
Dove, to relief from the preliminary injunction. Acuff–Rose, 510 U.S. at 590–594, 114
S.Ct. at 1177–1179.
In light of the fair use analysis, we conclude that the district court's finding that
Seuss showed a likelihood of success on
the merits of the copyright claim was not
clearly erroneous.FN10
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(Cite as: 109 F.3d 1394)
FN10. This court can affirm the
grant of the preliminary injunction
based on the copyright or trademark
infringement claims.
IV
[7] We next examine whether serious
questions for litigation and a balance of
hardships favoring Seuss exist on the federal trademark and unfair competition
claims.FN11
FN11. We reject outright Penguin
and Dove's claim that the injunction
in this case constitutes a prior restraint in violation of free speech
guaranteed by the United States
Constitution.
See,
e.g.,
Anheuser–Busch, Inc. v. Balducci Publications, 28 F.3d 769 (8th
Cir.1994) (First Amendment did not
protect parodist from liability for
likelihood of confusion that existed
between ad parody in humor
magazine and trademarks.); Silverman v. CBS, Inc., 870 F.2d 40, 49
(2d. Cir.), cert. denied, 492 U.S.
907, 109 S.Ct. 3219, 106 L.Ed.2d
569 (1989) ( “Trademark protection
is not lost simply because the allegedly infringing use is in connection with a work of artistic expression.”); Dallas Cowboys Cheerleaders, Inc. v. Pussycat Cinema, Ltd.,
604 F.2d 200, 206 (2d Cir.1979)
(“The prohibition of the Lanham
Act is content neutral, and therefore
does not arouse the fears that trigger
the application of constitutional
‘prior
restraint’
principles.”)
(citations omitted).
A
The issue in trademark infringement actions is not the alleged appropriation of
Seuss' creative expression, but rather, the
likelihood of confusion in the market place
as to the source of Penguin and Dove's The
Cat NOT in the Hat!. “Likelihood of confusion” is the basic test for both common law
trademark infringement and federal statutory trademark infringement.FN12 3 J.
Thomas McCarthy, McCarthy on Trademarks and Unfair Competition, § 23.01[1]
(rev. ed.1994). A federal claim under Lanham Act *1404 § 43(a) for infringement of
an unregistered mark is triggered by a use
which “is likely to cause confusion, or to
cause mistake, or to deceive as to the affiliation, connection, or association” of The
Cat NOT in the Hat! with Seuss' The Cat in
the Hat. Lanham Act § 43(a), 15 U.S.C. §
1125(a)(1)(A).
FN12. “The law of unfair competition has its roots in the commonlaw tort of deceit: its general concern is with protecting consumers
from confusion as to source.”
Bonito Boats, Inc. v. Thunder Craft
Boats, Inc., 489 U.S. 141, 157, 109
S.Ct. 971, 980, 103 L.Ed.2d 118
(1989).
[8] The eight-factor Sleekcraft test is
used in the Ninth Circuit to analyze the
likelihood of confusion question in all
trademark infringement cases, both competitive and non-competitive. AMF Inc. v.
Sleekcraft Boats, 599 F.2d 341 (9th
Cir.1979).FN13 The eight factors are as
follows: (1) strength of the mark; (2) proximity of the goods; (3) similarity of the
marks; (4) evidence of actual confusion;
(5) marketing channels used; (6) type of
goods and the degree of care likely to be
exercised by the purchaser; (7) defendant's
intent in selecting the mark; (8) likelihood
of expansion of the product lines. Id. at
348–49.
FN13. The Ninth Circuit test for
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(Cite as: 109 F.3d 1394)
likelihood of confusion also has
been described as a six-factor test in
J.B. Williams Co. v. Le Conte Cosmetics, Inc., 523 F.2d 187, 191 (9th
Cir.1975), cert. denied, 424 U.S.
913, 96 S.Ct. 1110, 47 L.Ed.2d 317
(1976); Century 21 Real Estate
Corp. v. Sandlin, 846 F.2d 1175,
1179 (9th Cir.1988); and a fivefactor test in Rodeo Collection, Ltd.
v. West Seventh, 812 F.2d 1215,
1217 (9th Cir.1987). We use the
eight-factor Sleekcraft test in this
case simply to be over-inclusive.
See Eclipse Assocs., Ltd. v. Data
General Corp., 894 F.2d 1114,
1118 (9th Cir.1990) (These factors
are “helpful guidelines ... not meant
to be requirements or hoops that a
district court need jump through to
make the determination.”).
These factors are to be considered in
reaching a decision on the issue of likelihood of confusion.FN14 However, “[n]o
mechanistic formula or list can set forth in
advance” the variety of elements that comprise the market context from which likelihood of confusion must be determined. Restatement (Third) of Unfair Competition §
21, comment a (1995). The Sleekcraft court
noted that this “list is not exhaustive” and
“[o]ther variables may come into play depending on the particular facts presented.”
Sleekcraft, 599 F.2d at 348 n. 11.
FN14. There are at least three types
of proof of likelihood of confusion:
(1) survey evidence; (2) evidence of
actual confusion; and (3) an argument based on an inference arising
from a judicial comparison of the
conflicting marks themselves and
the context of their use in the marketplace. In a close case amounting
to a tie, doubts are resolved in favor
of the senior user—Seuss.
[9] We agree with the district court's
findings that under Sleekcraft many of the
factors for analysis of trademark infringement were indeterminate and posed serious
questions for litigation. First, Penguin and
Dove do not dispute that the Cat's stovepipe hat, the words “Dr. Seuss,” and the
title “The Cat in the Hat” are widely recognized trademarks.FN15 Second and third,
the proximity and similarity between the
marks and the infringing items are substantial: figures on the front and back of the infringing work; the Cat's stove-pipe hat; the
narrator (“Dr. Seuss” versus “Dr. Juice”);
and the title (The Cat in the Hat versus The
Cat NOT in the Hat! ). Below is one example:
FN15. Ownership of the protectible
marks is undisputed. Penguin and
Dove do not dispute that Seuss
owns the common law rights and
pending federal registrations to the
trademarks.
*1405
<- Image delivery not included with current Options setting. ->
—————
Fourth, there is no evidence of actual
confusion. Because The Cat NOT in the
Hat! has been enjoined from distribution,
there has been no opportunity to prove confusion in the market place. Fifth, the marketing channels used are indeterminate.
Sixth, the use of the Cat's stove-pipe hat or
the confusingly similar title to capture initial consumer attention, even though no actual sale is finally completed as a result of
the confusion, may be still an infringement.
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Cal. Daily Op. Serv. 2215, 97 Daily Journal D.A.R. 4075
(Cite as: 109 F.3d 1394)
See Mobil Oil Corp. v. Pegasus Petroleum
Corp., 818 F.2d 254, 257–58 (2d
Cir.1987). Seventh, Penguin and Dove's
likely intent in selecting the Seuss marks
was to draw consumer attention to what
would otherwise be just one more book on
the O.J. Simpson murder trial. Eighth and
last, the likelihood of expansion of the
product lines is indeterminate.
B
[10] Even if Seuss establishes a likelihood of confusion, Penguin and Dove argue that their identical and confusingly
similar use of Seuss' marks is offset by the
work's parodic character. In a traditional
trademark infringement suit founded on the
likelihood of confusion rationale, the claim
of parody is not really a separate “defense”
as such, but merely a way of phrasing the
traditional response that customers are not
likely to be confused as to the source,
sponsorship or approval. Mutual of Omaha
Ins. Co. v. Novak, 648 F.Supp. 905, 910
(D.Neb.1986), aff'd, 836 F.2d 397 (8th
Cir.1987). “Some parodies will constitute
an infringement, some will not. But the cry
of ‘parody!’ does not magically fend off
otherwise legitimate claims of trademark
infringement or dilution. There are confusing parodies and non-confusing parodies.
All they have in common is an attempt at
humor through the use of someone else's
trademark. A non-infringing parody is
merely amusing, not confusing.” McCarthy
on Trademarks, § 31.38[1], at 31–216 (rev.
ed.1995).
In several cases, the courts have held,
in effect, that poking fun at a trademark is
no joke and have issued injunctions. Examples include: a diaper bag with green
and red bands and the wording “Gucchi
Goo,” allegedly poking fun at the wellknown Gucci name and the design mark,
Gucci Shops, Inc. v. R.H. Macy & Co., 446
F.Supp. 838 (S.D.N.Y.1977); the use of a
competing meat sauce of the trademark
“A.2” as a “pun” on the famous “A.1”
trademark, Nabisco Brands, Inc. v. Kaye,
760 F.Supp. 25 (D.Conn.1991). Stating
that, whereas a true parody will be so obvious that a clear distinction is preserved
between the source of the target and the
source of the parody, a court found that the
“Hard Rain” logo was an infringement of
the “Hard Rock” logo. In such a case, the
claim of parody is no defense *1406
“where the purpose of the similarity is to
capitalize on a famous mark's popularity
for the defendant's own commercial use.”
Hard Rock Cafe Licensing Corp. v. Pacific
Graphics, Inc., 776 F.Supp. 1454, 1462
(W.D.Wash.1991).
C
We are satisfied that the district court's
determinations on the existence of serious
questions for litigation and a balance of
hardships favoring Seuss are not clearly erroneous. First, the district court properly
found that serious questions exist for litigation because many of the factors for analysis of trademark infringement (i.e. likelihood of confusion) were indeterminate.
Second, the good will and reputation associated with The Cat in the Hat character
and title, the name “Dr. Seuss,” and the
Cat's Hat outweigh the $35,500 in expenses
incurred by Penguin.
V
[11] Finally, we examine whether the
injunction constitutes an abuse of discretion because it is overbroad. The district
court's order enjoins defendants “from directly or indirectly printing, publishing, delivering, distributing, selling, transferring,
advertising or marketing the book The Cat
NOT in the Hat! A Parody by Dr. Juice. ”
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Cal. Daily Op. Serv. 2215, 97 Daily Journal D.A.R. 4075
(Cite as: 109 F.3d 1394)
Because only the back cover illustration
and the Cat's stovepipe hat were deemed
infringing by the district court, Penguin
and Dove argue that the court should not
have enjoined the entire book. However,
they created the all-or-nothing predicament
in which they currently find themselves.
Even though the book had not yet been
bound when Seuss initiated this action,
Penguin and Dove still went forward with
their production schedule and completed
the stitching and binding. As a result, the
publisher can no longer alter the final
product to eliminate the infringing elements. Penguin and Dove's decision left the
court no choice but to enjoin the entire
book.
27,611, 42 U.S.P.Q.2d 1184, 25 Media L.
Rep. 1641, 97 Cal. Daily Op. Serv. 2215,
97 Daily Journal D.A.R. 4075
END OF DOCUMENT
After carefully reviewing the record
and considering all of the arguments on appeal, we find no reason to disturb the district court's carefully crafted and wellreasoned injunction order.
VI
For the foregoing reasons, we affirm
the district court's order granting a preliminary injunction prohibiting the publication
and distribution of the infringing work.
AFFIRMED.
*1407 Attachment #1
<- Image delivery not included with current Options setting. ->
*1408 Attachment #2
<- Image delivery not included with current Options setting. ->
C.A.9 (Cal.),1997.
Dr. Seuss Enterprises, L.P. v. Penguin
Books USA, Inc.
109 F.3d 1394, 1997 Copr.L.Dec. P
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(Cite as: 448 F.3d 605)
United States Court of Appeals,
Second Circuit.
BILL GRAHAM ARCHIVES, PlaintiffAppellant,
v.
DORLING KINDERSLEY LIMITED,
Dorling Kindersley Publishing, Inc. and
RR Donnelley & Sons Company, Defendants-Appellees.
Docket No. 05-2514-CV.
Argued Jan. 4, 2006.
Decided May 9, 2006.
Background: Holder of copyright on seven posters of famous music group sued
publishers of biographical book, claiming
that reproductions of posters, reduced in
size and distributed with others throughout
book, constituted copyright violation. The
United States District Court for the Southern District of New York, George B.
Daniels, J., 386 F.Supp.2d 324, granted
summary judgment in favor of publishers.
Copyright holder appealed.
Holding: The Court of Appeals, Restani,
Circuit Judge, held that publishers had
made fair use of posters.
Affirmed.
West Headnotes
[1] Copyrights and Intellectual Property
99
89(2)
99 Copyrights and Intellectual Property
99I Copyrights
99I(J) Infringement
99I(J)2 Remedies
99k72 Actions for Infringement
99k89 Judgment
99k89(2) k. Summary
Judgment. Most Cited Cases
Although issue of fair use is mixed
question of law and fact, court may resolve
issues of fair use at summary judgment
stage where there are no genuine issues of
material fact as to such issues. 17 U.S.C.A.
§ 107.
[2] Copyrights and Intellectual Property
99
64
99 Copyrights and Intellectual Property
99I Copyrights
99I(J) Infringement
99I(J)1 What Constitutes Infringement
99k64 k. Pictorial, Graphic,
and Sculptural Works. Most Cited Cases
Purpose and character of use made of
posters of famous music group in biographical book strongly favored determination
that doctrine of fair use precluded copyright infringement; use was transformative,
tying posters into historic events in life of
group, posters were greatly reduced in size
for inclusion on pages throughout book,
and posters were not used to directly attract
sales of book. U.S.C.A. Const. Art. 1, § 8,
cl. 8; 17 U.S.C.A. § 107(1).
[3] Copyrights and Intellectual Property
99
53.2
99 Copyrights and Intellectual Property
99I Copyrights
99I(J) Infringement
99I(J)1 What Constitutes Infringement
99k53.2 k. Fair Use and Other
Permitted Uses in General. Most Cited
Cases
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(Cite as: 448 F.3d 605)
Crux of profit/nonprofit distinction, for
purposes of assessing fair use, is not
whether sole motive of use is monetary
gain, but whether user stands to profit from
exploitation of copyrighted material
without paying customary price. 17
U.S.C.A. § 107.
99 Copyrights and Intellectual Property
99I Copyrights
99I(J) Infringement
99I(J)1 What Constitutes Infringement
99k64 k. Pictorial, Graphic,
and Sculptural Works. Most Cited Cases
[4] Copyrights and Intellectual Property
99
12(1)
Amount and substantiality of use made
of posters of famous music group in biographical book strongly favored determination that doctrine of fair use precluded
copyright infringement; reduced size reproductions of posters in their entirety displayed minimal image size and quality necessary to ensure reader's recognition of
posters as historical artifacts of group's
concert events. U.S.C.A. Const. Art. 1, § 8,
cl. 8; 17 U.S.C.A. § 107(3).
99 Copyrights and Intellectual Property
99I Copyrights
99I(A) Nature and Subject Matter
99k12 Originality of Work; Creativity
99k12(1) k. In General. Most
Cited Cases
Creative expression for public dissemination falls within core of copyright's protective purposes.
[5] Copyrights and Intellectual Property
99
64
99 Copyrights and Intellectual Property
99I Copyrights
99I(J) Infringement
99I(J)1 What Constitutes Infringement
99k64 k. Pictorial, Graphic,
and Sculptural Works. Most Cited Cases
Nature of use made of posters of famous music group in biographical book
slightly favored determination that doctrine
of fair use did not preclude copyright infringement; although posters were creative
works, purpose of book publisher's use was
to emphasize posters' historical rather than
creative value. U.S.C.A. Const. Art. 1, § 8,
cl. 8; 17 U.S.C.A. § 107(2).
[6] Copyrights and Intellectual Property
99
64
[7] Copyrights and Intellectual Property
99
64
99 Copyrights and Intellectual Property
99I Copyrights
99I(J) Infringement
99I(J)1 What Constitutes Infringement
99k64 k. Pictorial, Graphic,
and Sculptural Works. Most Cited Cases
Impact on potential licensing revenues,
of use made of posters of famous music
group in biographical book, favored determination that doctrine of fair use precluded copyright infringement; use was
transformative, and inclusion in reduced
form together with hundreds of other images, in 480-page book about group, was
not use that copyright holder was likely to
make of posters. U.S.C.A. Const. Art. 1, §
8, cl. 8; 17 U.S.C.A. § 107(4).
[8] Copyrights and Intellectual Property
99
64
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99 Copyrights and Intellectual Property
99I Copyrights
99I(J) Infringement
99I(J)1 What Constitutes Infringement
99k64 k. Pictorial, Graphic,
and Sculptural Works. Most Cited Cases
Publishers of biographical book on
famous music group made fair use of copyrighted posters, when posters were reduced
in size and scattered, together with hundreds of other images, in 480-page volume;
purpose and character of use was transformative, amount taken was not excessive,
there were no license opportunities lost,
and only factor weighing against fair use
was creative nature of posters, blunted
somewhat by their prior publication.
U.S.C.A. Const. Art. 1, § 8, cl. 8; 17
U.S.C.A. § 107.
*606 William F. Patry (Paul M. Fakler, on
the brief), Thelen Reid & Priest LLP, for
Plaintiff-Appellant.
Richard Dannay (Thomas Kjellberg, on the
brief), Cowan, Liebowitz & Latman, P.C.,
for Defendants-Appellees.
Before: KEARSE and RAGGI, Circuit
Judges, and RESTANI,FN* Judge.
FN* The Honorable Jane A. Restani, Chief Judge of the United
States Court of International Trade,
sitting by designation.
RESTANI, Judge.
This appeal concerns the scope of
copyright protection afforded artistic concert posters reproduced in reduced size in a
biography of the musical group the Grateful Dead. Asserted copyright holder Bill
Graham Archives, LLC (“BGA” or
“Appellant”)*607 appeals from a judgment
of the District Court for the Southern District of New York dismissing, on motion
for summary judgment, its copyright infringement action against Dorling Kindersley Limited, Dorling Kindersley Publishing, Inc., and R.R. Donnelley & Sons Company (collectively “DK” or “Appellees”).
We review the district court's grant of summary judgment de novo, and we agree with
the court that DK's reproduction of BGA's
images is protected by the fair use exception to copyright infringement.
BACKGROUND
In October of 2003, DK published
Grateful Dead: The Illustrated Trip (“Illustrated Trip ”), in collaboration with Grateful Dead Productions, intended as a cultural history of the Grateful Dead. The resulting 480-page coffee table book tells the
story of the Grateful Dead along a timeline
running continuously through the book,
chronologically combining over 2000 images representing dates in the Grateful
Dead's history with explanatory text. A
typical page of the book features a collage
of images, text, and graphic art designed to
simultaneously capture the eye and inform
the reader. Plaintiff BGA claims to own the
copyright to seven images displayed in Illustrated Trip, which DK reproduced
without BGA's permission.
Initially, DK sought permission from
BGA to reproduce the images. In May of
2003, the CEO of Grateful Dead Productions sent a letter to BGA seeking permission for DK to publish the images. BGA
responded by offering permission in exchange for Grateful Dead Productions'
grant of permission to BGA to make CDs
and DVDs out of concert footage in BGA's
archives. Next, DK directly contacted BGA
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seeking to negotiate a license agreement,
but the parties disagreed as to an appropriate license fee. Nevertheless, DK proceeded with publication of Illustrated Trip
without entering a license fee agreement
with BGA. Specifically, DK reproduced
seven artistic images originally depicted on
Grateful Dead event posters and tickets.
FN1 BGA's seven images are displayed in
significantly reduced form and are accompanied by captions describing the concerts
they represent.
FN1. The disputed images appear as
follows: (1) on page 76, a concert
poster for the Grateful Dead, Jefferson Airplane, and Big Brother and
the Holding Company playing at the
Hollywood Bowl; (2) on page 103,
a concert poster for the Grateful
Dead, Jefferson Airplane, and Sons
of Champlin playing at the Winterland Arena; (3) on page 130, a picture of the front and back of a concert ticket for a show at the Fillmore Theatre, reused for a Grateful
Dead concert at the Winterland
Arena; (4) on page 254, a concert
poster for Grateful Dead shows at
the Warfield Theatre; (5) on page
361, a concert poster for a Grateful
Dead show at the Oakland Coliseum; (6) on page 397, a concert
poster for a Grateful Dead show on
New Year's Eve; and (7) on page
421, a fake in-house poster for a
New Year's Eve 1993 concert.
When DK refused to meet BGA's postpublication license fee demands, BGA filed
suit for copyright infringement. BGA
sought to enjoin further publication of Illustrated Trip, the destruction of all unsold
books, and actual and statutory damages.
The parties cross-moved for summary
judgment, with the primary issue before the
district court being whether DK's use of
BGA's images constituted fair use under
the Copyright Act of 1976, 17 U.S.C. § 101
et seq. (“Copyright Act”). After applying
the statutory fair use balancing test, the district court determined that DK's reproduction of the images was fair use and granted
DK's motion for summary judgment.
DISCUSSION
Section 106 of the Copyright Act grants
copyright holders a bundle of exclusive
*608 rights, including the right to
“reproduce the copyrighted work in copies,” and the right “to prepare derivative
works based upon the copyrighted work.”
17 U.S.C. § 106. For purposes of the motion, the district court assumed plaintiff
possessed these rights in the contested images and there is no dispute that copying
the images was not authorized by plaintiff.
The issue before us on appeal, as it was in
the district court, is whether DK's unauthorized use of BGA's copyrighted images
is fair use.
The fair use doctrine is a statutory exception to copyright infringement. Section
107 of the Copyright Act permits the unauthorized use or reproduction of copyrighted
work if it is “for purposes such as criticism, comment, news reporting, teaching
..., scholarship, or research.” 17 U.S.C. §
107. Whether such “fair use” exists involves a case-by-case determination using
four non-exclusive, statutorily provided
factors in light of the purposes of copyright. Harper & Row, Publishers, Inc. v.
Nation Enters., 471 U.S. 539, 549, 105
S.Ct. 2218, 85 L.Ed.2d 588 (1985). The
factors are: (1) “the purpose and character
of the use;” (2) “the nature of the copyrighted work;” (3) “the amount and substantiality of the portion used in relation to
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the copyrighted work as a whole;” and (4)
“the effect of the use upon the potential
market for or value of the copyrighted
work.” 17 U.S.C. § 107. “The ultimate test
of fair use ... is whether the copyright law's
goal of promoting the Progress of Science
and useful Arts would be better served by
allowing the use than by preventing it.”
Castle Rock Entm't, Inc. v. Carol Publ'g
Group, 150 F.3d 132, 141 (2d Cir.1998)
(internal citations and quotation marks
omitted).
pression, meaning, or message.” Campbell
v. Acuff-Rose Music, Inc., 510 U.S. 569,
579, 114 S.Ct. 1164, 127 L.Ed.2d 500
(1994) (internal citations and quotation
marks omitted) (alteration in original).
[1] In this case, the district court concluded that the balance of fair use factors
weighs in favor of DK. Although the issue
of fair use is a mixed question of law and
fact, the court may resolve issues of fair
use at the summary judgment stage where
there are no genuine issues of material fact
as to such issues. Wright v. Warner Books,
Inc., 953 F.2d 731, 735 (2d Cir.1991). As
there are no genuine issues of material fact
here, we review the district court's legal
conclusions de novo. New Era Publ'ns Int'l,
ApS v. Carol Publ'g Group, 904 F.2d 152,
155 (2d Cir.1990). We agree with the district court that DK's use of the copyrighted
images is protected as fair use.
Here, the district court determined that
Illustrated Trip is a biographical work, and
the original images are not, and therefore
accorded a strong presumption in favor
*609 of DK's use. In particular, the district
court concluded that DK's use of images
placed in chronological order on a timeline
is transformatively different from the mere
expressive use of images on concert
posters or tickets. Because the works are
displayed to commemorate historic events,
arranged in a creative fashion, and displayed in significantly reduced form, the
district court held that the first fair use
factor weighs heavily in favor of DK.
I. Purpose and Character of Use
[2] We first address “the purpose and
character of the use, including whether
such use is of a commercial nature or is for
nonprofit educational purposes.” 17 U.S.C.
§ 107(1).FN2 Most important to the court's
analysis of the first factor is the
“transformative” nature of the work. See
Pierre N. Leval, Toward a Fair Use Standard, 103 Harv. L.Rev. 1105, 1111 (1990).
The question is “whether the new work
merely supersede[s] the objects of the original creation, or instead adds something
new, with a further purpose or different
character, altering the first with new ex-
FN2. Obviously, the use here is of a
general commercial nature rather
than a non-profit nature, but the inquiry is both a broader one and a
narrower one than may appear at
first glance as will be explained.
Appellant challenges the district court's
strong presumption in favor of fair use
based on the biographical nature of Illustrated Trip. Appellant argues that based on
this purported error the district court failed
to examine DK's justification for its use of
each of the images. Moreover, Appellant
argues that as a matter of law merely placing poster images along a timeline is not a
transformative use. Appellant asserts that
each reproduced image should have been
accompanied by comment or criticism related to the artistic nature of the image.
We disagree with Appellant's limited
interpretation of transformative use and we
agree with the district court that DK's actu-
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al use of each image is transformatively
different from the original expressive purpose. Preliminarily, we recognize, as the
district court did, that Illustrated Trip is a
biographical work documenting the
30-year history of the Grateful Dead.
While there are no categories of presumptively fair use, see Campbell v. AcuffRose Music, Inc., 510 U.S. at 584, 114
S.Ct. 1164, courts have frequently afforded
fair use protection to the use of copyrighted
material in biographies, recognizing such
works as forms of historic scholarship, criticism, and comment that require incorporation of original source material for optimum treatment of their subjects. See 17
U.S.C. § 107 (stating that fair use of a
copyrighted work “for purposes such as
criticism, comment ... [or] scholarship ... is
not an infringement of copyright”); Am.
Geophysical Union v. Texaco, Inc., 60 F.3d
913, 932 (2d Cir.1994) (Jacobs, J., dissenting) (noting that “[m]uch of our fair use
case law has been generated by the use of
quotation in biographies, a practice that fits
comfortably within the[ ] statutory categories of uses illustrative of uses that can be
fair”) (internal quotation marks omitted)
(alteration in original); Salinger v. Random
House, Inc., 811 F.2d 90, 96 (2d Cir.1987)
(holding that quotation of Salinger's letters
in a biography could be considered criticism, scholarship, and research, which are
among the illustrative statutory categories
of fair use enumerated in 17 U.S.C. § 107).
No less a recognition of biographical value
is warranted in this case simply because the
subject made a mark in pop culture rather
than some other area of human endeavor.
See Twin Peaks Prods., Inc. v. Publ'ns
Int'l, Ltd., 996 F.2d 1366, 1374 (2d
Cir.1993) (noting that a work that comments about “pop culture” is not removed
from the scope of Section 107 simply because it is not erudite).
In the instant case, DK's purpose in using the copyrighted images at issue in its
biography of the Grateful Dead is plainly
different from the original purpose for
which they were created. Originally, each
of BGA's images fulfilled the dual purposes of artistic expression and promotion.
The posters were apparently widely distributed to generate public interest in the
Grateful Dead and to convey information
to a large number people about the band's
forthcoming concerts. In contrast, DK used
each of BGA's images as historical artifacts
to document and represent the actual occurrence of Grateful Dead concert events
featured on Illustrated Trip 's timeline.
In some instances, it is readily apparent
that DK's image display enhances the *610
reader's understanding of the biographical
text.FN3 In other instances, the link
between image and text is less obvious;
nevertheless, the images still serve as historical artifacts graphically representing the
fact of significant Grateful Dead concert
events selected by the Illustrated Trip 's
author for inclusion in the book's timeline.
FN4 We conclude that both types of uses
fulfill DK's transformative purpose of enhancing the biographical information in Illustrated Trip, a purpose separate and distinct from the original artistic and promotional purpose for which the images were
created. See Elvis Presley Enters., Inc. v.
Passport Video, 349 F.3d 622, 628-29 (9th
Cir.2003) (finding the use of television
clips to be transformative where “the clips
play for only a few seconds and are used
for reference purposes while a narrator
talks over them or interviewees explain
their context in Elvis' career,” but not to be
transformative where the clips “play
without much interruption, [and t]he purpose of showing these clips likely goes
beyond merely making a reference for a
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biography, but instead serves the same intrinsic entertainment value that is protected
by Plaintiffs' copyrights”); see also Hofheinz v. A & E Television Networks, Inc.,
146
F.Supp.2d
442,
446-47
(S.D.N.Y.2001) (ruling that unauthorized
inclusion of copyrighted film clips in actor's biographical film was protected fair
use because the biography “was not shown
to recreate the creative expression reposing
in plaintiff's [copyrighted] film, [but] for
the transformative purpose *611 of enabling the viewer to understand the actor's
modest beginnings in the film business”).
In sum, because DK's use of the disputed
images is transformative both when accompanied by referencing commentary and
when standing alone, we agree with the
district court that DK was not required to
discuss the artistic merits of the images to
satisfy this first factor of fair use analysis.
FN3. For example, BGA claims
copyright infringement of a concert
poster image, reproduced on page
254 of Illustrated Trip, depicting
two skeletons flanking the Warfield
Theatre. The reader is expected to
view this image together with the
text on pages 254 and 255 under the
caption, “The Warfield/Radio City
Shows,” and with a non-contested
image on page 255, depicting two
skeletons flanking the Radio City
Music Hall. In this instance, the text
specifically comments on the poster
image, explaining:
The Dead's real 15th anniversary
celebration in 1980 spanned two
months, two coasts, and eventually two albums .... The bicoastal
settings for the shows were very
different-San Francisco's Warfield
Theatre was an intimate house of
2,400 seats, while New York
City's Radio City Music Hall was,
well, Radio City-but the Dead's
performances in both produced
some of the most treasured moments of the band's early '80s
period .... The [Dead's] otherwise
brilliant Radio City run was
marred by a bizarre dispute
between the band and Radio
City's management. The latter objected to promotional posters
showing the inevitable skeletons
flanking the venerable venue.
Evidently not well versed in
Grateful Dead iconography, the
Radio City execs interpreted the
posters as a coded message that
the band thought that Radio City's
days were numbered, and they
slapped the band with a milliondollar lawsuit. The misunderstanding was quickly cleared up.
The author uses images to enhance the reader's understanding
of the statement that Radio City
Music Hall executives were unfamiliar with Grateful Dead iconography by displaying nearly
identical
concert
promotion
posters for the Warfield Theatre
and the Radio City Music Hall.
FN4. For example, BGA claims
copyright infringement of a concert
poster image, reproduced on page
103 of Illustrated Trip, promoting a
concert at the Winterland Arena.
The reader is expected to view this
image together with an entry on the
timeline for October 24, 25, and 26,
accompanying text describing the
shows, and a quotation from Bill
Graham to the audience on Sat-
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urday, October 25. The text describes the show as follows:
Hot Tuna, Jefferson Airplane, and
Sons of Champlin play all three
nights. On Saturday Stephen Stills
may have played on “Turn on
Your Lovelight.” Sunday marks
the last “Doin' that Rag.”
While the concert poster image
does not necessarily enhance the
reader's understanding of the text,
it serves as a recognizable representation of the concert. It also
documents concert information
and provides notable historic details, such as the fact that, at this
relatively early stage of its career,
the Grateful Dead received second
billing to Jefferson Airplane.
This conclusion is strengthened by the
manner in which DK displayed the images.
First, DK significantly reduced the size of
the reproductions. See Kelly v. Arriba Soft
Corp., 336 F.3d 811, 818-20 (9th Cir.2003)
(finding online search engine's use of
thumbnail-sized images to be highly transformative). While the small size is sufficient to permit readers to recognize the historical significance of the posters, it is inadequate to offer more than a glimpse of
their expressive value. In short, DK used
the minimal image size necessary to accomplish its transformative purpose.
Second, DK minimized the expressive
value of the reproduced images by combining them with a prominent timeline, textual
material, and original graphical artwork, to
create a collage of text and images on each
page of the book. To further this collage effect, the images are displayed at angles and
the original graphical artwork is designed
to blend with the images and text. Overall,
DK's layout ensures that the images at issue are employed only to enrich the
presentation of the cultural history of the
Grateful Dead, not to exploit copyrighted
artwork for commercial gain. See Hofheinz,
146 F.Supp. at 446.
Third, BGA's images constitute an inconsequential portion of Illustrated Trip.
The extent to which unlicensed material is
used in the challenged work can be a factor
in determining whether a biographer's use
of original materials has been sufficiently
transformative to constitute fair use. See
Craft v. Kobler, 667 F.Supp. 120, 129
(S.D.N.Y.1987) (Leval, J.) (finding biography of Stravinsky to be unfair in part
because the takings were numerous and
were the “liveliest and most entertaining
part of the biography”). Although our circuit has counseled against considering the
percentage the allegedly infringing work
comprises of the copyrighted work in conducting third-factor fair use analysis, see
NXIVM Corp. v. Ross Inst., 364 F.3d 471,
480 (2d Cir.2004), several courts have
done so, see, e.g., Harper, 471 U.S. at
565-66, 105 S.Ct. 2218 (finding the fact
that quotes from President Ford's unpublished memoirs played a central role in the
allegedly infringing magazine article, constituting 13% of that article, weighed
against a finding of fair use); Salinger, 811
F.2d at 98-99 (finding the fact that letters
are quoted or paraphrased on approximately 40% of the book's 192 pages weighs
against fair use). We find this inquiry more
relevant in the context of first-factor fair
use analysis.
In the instant case, the book is 480
pages long, while the BGA images appear
on only seven pages. Although the original
posters range in size from 13" x 19" to
more than 19" x 27," the largest reproduc-
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tion of a BGA image in Illustrated Trip is
less than 3" x 4 1/2 ," less than 1/20 the
size of the original. And no BGA image
takes up more than one-eighth of a page in
a book or is given more prominence than
any other image on the page. In total, the
images account for less than one-fifth of
one percent of the book. This stands in
stark contrast to the wholesale takings in
cases such as those described above, and
we are aware of no case where such an insignificant taking was found to be an unfair
use of original materials.
[3] Finally, as to this first factor, we
briefly address the commercial nature of Illustrated Trip. See Harper, 471 U.S. at
*612 562, 105 S.Ct. 2218 (stating that the
fact that the purpose of a new use is commercial weighs against finding fair use).
Even though Illustrated Trip is a commercial venture, we recognize that “nearly all
of the illustrative uses listed in the preamble paragraph of § 107 ... are generally
conducted for profit ....” Campbell, 510
U.S. at 584, 114 S.Ct. 1164 (internal quotation marks omitted). Moreover, “[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.” Harper, 471 U.S. at 562, 105 S.Ct.
2218. Here, Illustrated Trip does not exploit the use of BGA's images as such for
commercial gain. Significantly, DK has not
used any of BGA's images in its commercial advertising or in any other way to promote the sale of the book. Illustrated Trip
merely uses pictures and text to describe
the life of the Grateful Dead. By design,
the use of BGA's images is incidental to
the commercial biographical value of the
book.
Accordingly, we conclude that the first
fair use factor weighs in favor of DK because DK's use of BGA's images is transformatively different from the images' original expressive purpose and DK does not
seek to exploit the images' expressive value
for commercial gain.
II. Nature of the Copyrighted Work
[4] The second factor in a fair use determination is “the nature of the copyrighted work.” 17 U.S.C. § 107(2). To resolve this inquiry the court considers “the
protection of the reasonable expectations of
one who engages in the kinds of creation/
authorship that the copyright seeks to encourage.” Leval, supra, at 1122.
“[C]reative expression for public dissemination falls within the core of the copyright's
protective purposes.” Campbell, 510 U.S.
at 586, 114 S.Ct. 1164.
[5] The district court determined that
the second factor weighs against DK because the images are creative artworks,
which are traditionally the core of intended
copyright protection. Nevertheless, the
court limited the weight it placed on this
factor because the posters have been published extensively. Appellant agrees that
the district court properly weighed the
second factor against DK, although it questions the lesser protection given to published works. Appellees counter that because the images are mixed factual and creative works and have been long and extensively published, the second factor tilts toward fair use.
We agree with the district court that the
creative nature of artistic images typically
weighs in favor of the copyright holder.
We recognize, however, that the second
factor may be of limited usefulness where
the creative work of art is being used for a
transformative purpose. See Campbell, 510
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U.S. at 586, 114 S.Ct. 1164 (stating that
the second factor is not “likely to help
much in separating the fair use sheep from
the infringing goats” in cases involving
transformative copying of “publicly
known, expressive works”). This is not a
case such as Ringgold v. Black Entm't Television, Inc., 126 F.3d 70 (2d Cir.1997), in
which we held that the creative work was
being used for the same decorative purpose
as the original. Here, we conclude that DK
is using BGA's images for the transformative purpose of enhancing the biographical
information provided in Illustrated Trip.
Accordingly, we hold that even though
BGA's images are creative works, which
are a core concern of copyright protection,
the second factor has limited weight in our
analysis because the purpose of DK's use
was to emphasize the *613 images' historical rather than creative value.
III. Amount and Substantiality of the
Portion Used
The third fair use factor asks the court
to examine “the amount and substantiality
of the portion used in relation to the copyrighted work as a whole.” 17 U.S.C. §
107(3). We review this factor with reference to the copyrighted work, not the infringing work. New Era, 904 F.2d at 159.
The court must examine the quantitative
and qualitative aspects of the portion of the
copyrighted material taken. Campbell, 510
U.S. at 586, 114 S.Ct. 1164.
[6] The district court determined that
even though the images are reproduced in
their entirety, the third fair use factor
weighs in favor of DK because the images
are displayed in reduced size and scattered
among many other images and texts. In
faulting this conclusion, Appellant contends that the amount used is substantial
because the images are copied in their en-
tirety. Neither our court nor any of our sister circuits has ever ruled that the copying
of an entire work favors fair use. At the
same time, however, courts have concluded
that such copying does not necessarily
weigh against fair use because copying the
entirety of a work is sometimes necessary
to make a fair use of the image. See Kelly,
336 F.3d at 821 (concluding that images
used for a search engine database are necessarily copied in their entirety for the
purpose of recognition); Nunez v. Caribbean Int'l News Corp., 235 F.3d 18, 24 (1st
Cir.2000) (concluding that to copy any less
than the entire image would have made the
picture useless to the story). Adopting this
reasoning, we conclude that the third-factor
inquiry must take into account that the “the
extent of permissible copying varies with
the purpose and character of the use.”
Campbell, 510 U.S. at 586-87, 114 S.Ct.
1164.
Here, DK used BGA's images because
the posters and tickets were historical artifacts that could document Grateful Dead
concert events and provide a visual context
for the accompanying text. To accomplish
this use, DK displayed reduced versions of
the original images and intermingled these
visuals with text and original graphic art.
As a consequence, even though the copyrighted images are copied in their entirety,
the visual impact of their artistic expression is significantly limited because of
their reduced size. See Kelly, 336 F.3d at
821 (concluding that thumbnails are not a
substitute for full-size images). We conclude that such use by DK is tailored to
further its transformative purpose because
DK's reduced size reproductions of BGA's
images in their entirety displayed the minimal image size and quality necessary to
ensure the reader's recognition of the images as historical artifacts of Grateful Dead
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concert events. Accordingly, the third fair
use factor does not weigh against fair use.
IV. Effect of the Use upon the Market
for or Value of the Original
The fourth factor is “the effect of the
use upon the potential market for or value
of the copyrighted work.” 17 U.S.C. §
107(4). The court looks to not only the
market harm caused by the particular infringement, but also to whether, if the challenged use becomes widespread, it will adversely affect the potential market for the
copyrighted work. Harper, 471 U.S. at
568, 105 S.Ct. 2218. This analysis requires
a balancing of “the benefit the public will
derive if the use is permitted and the personal gain the copyright owner will receive
if the use is denied.” MCA, Inc. v. Wilson,
677 F.2d 180, 183 (2d Cir.1981).
*614 [7] In the instant case, the parties
agree that DK's use of the images did not
impact BGA's primary market for the sale
of the poster images. Instead, we look to
whether DK's unauthorized use usurps
BGA's potential to develop a derivative
market. Appellant argues that DK interfered with the market for licensing its
images for use in books. Appellant contends that there is an established market for
licensing its images and it suffered both the
loss of royalty revenue directly from DK
and the opportunity to obtain royalties
from others.
“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, and that the impact
on potential licensing revenues is a proper
subject for consideration in assessing the
fourth factor.” Texaco, 60 F.3d at 929
(citations omitted). We have noted,
however, that “were a court automatically
to conclude in every case that potential li-
censing revenues were impermissibly impaired simply because the secondary user
did not pay a fee for the right to engage in
the use, the fourth fair use factor would always favor the copyright holder.” Id. at 930
n. 17 (emphasis added); see Princeton
Univ. Press v. Mich. Document Servs., 99
F.3d 1381, 1387 (6th Cir.1996) (stating
that a copyright holder must have a right to
copyright revenues before finding that a
failure to pay a license fee equals market
harm); Leval, supra, at 1124 (stating that
“[b]y definition every fair use involves
some loss of royalty revenue because the
secondary user has not paid royalties”); 4
Melville B. Nimmer & David Nimmer,
Nimmer on Copyright § 13.05[A][4] (2005)
(stating that “it is a given in every fair use
case that plaintiff suffers a loss of a potential market if that potential is defined as the
theoretical market for licensing the very
use at bar”). Accordingly, we do not find a
harm to BGA's license market merely because DK did not pay a fee for BGA's
copyrighted images.
Instead, we look at the impact on potential licensing revenues for “traditional,
reasonable, or likely to be developed markets.” Texaco, 60 F.3d at 930. In order to
establish a traditional license market, Appellant points to the fees paid to other
copyright owners for the reproduction of
their images in Illustrated Trip. Moreover,
Appellant asserts that it established a market for licensing its images, and in this case
expressed a willingness to license images
to DK. Neither of these arguments shows
impairment to a traditional, as opposed to a
transformative market.FN5 See Leval,
supra, at 1125 (explaining that “[t]he
fourth factor disfavors a finding of fair use
only when the market is impaired because
the ... material serves the consumer as a
substitute, or, ... supersedes the use of the
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original”) (internal quotation marks omitted).
FN5. To the contrary, had the book
been commercially successfulwhich it was not-it might have
garnered interest in the original images in full size because the reduced
images have such minimal expressive impact. An afficionado might
seek more than a “peek.”
Here, unlike in Texaco, we hold that
DK's use of BGA's images is transformatively different from their original expressive purpose.FN6 In a case such as this, a
*615 copyright holder cannot prevent others from entering fair use markets merely
“by developing or licensing a market for
parody, news reporting, educational or other transformative uses of its own creative
work.” Castle Rock, 150 F.3d at 146 n. 11.
“[C]opyright owners may not preempt exploitation of transformative markets ....” Id.
Moreover, a publisher's willingness to pay
license fees for reproduction of images
does not establish that the publisher may
not, in the alternative, make fair use of
those images. Campbell, 510 U.S. at 585 n.
18, 114 S.Ct. 1164 (stating that “being
denied permission to use [or pay license
fees for] a work does not weigh against a
finding of fair use”). Since DK's use of
BGA's images falls within a transformative
market, BGA does not suffer market harm
due to the loss of license fees.
FN6. Texaco may also be distinguished because in that case we
found that scientific researchers'
copying of scientific journal articles
caused those journals to lose license
revenues, because the researchers
were looking to their own copies of
the articles rather than downloading
them from online databases such as
Lexis, which paid the journals a license fee. See 60 F.3d at 929-32. In
other words, Texaco involved direct
evidence that the allegedly infringing use would cause the owner
to lose license revenues derived
from a substantially similar use.
Here, in contrast, BGA's direct
evidence of its license revenues
involves a use that is markedly
different from the use by DK. The
licenses BGA sold to other publishers were for substantially less
transformative uses of its posters:
full-page, prominently displayed
reproductions of BGA's images,
with little discussion of the images or their historical context,
much less any compilation of other related works into a coherent
whole. Indeed, one of the images
BGA points to was used as the
cover of a book. DK's use of
BGA's images is markedly more
original than the other uses that
BGA has licensed and BGA thus
has not shown direct evidence of
significant lost license revenue
from the uses at issue here.
V. Balance of Factors
[8] On balance, we conclude, as the district court did, that the fair use factors
weigh in favor of DK's use. For the first
factor, we conclude that DK's use of concert posters and tickets as historical artifacts of Grateful Dead performances is
transformatively different from the original
expressive purpose of BGA's copyrighted
images. While the second factor favors
BGA because of the creative nature of the
images, its weight is limited because DK
did not exploit the expressive value of the
images. Although BGA's images are copied
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in their entirety, the third factor does not
weigh against fair use because the reduced
size of the images is consistent with the author's transformative purpose. Finally, we
conclude that DK's use does not harm the
market for BGA's sale of its copyrighted
artwork, and we do not find market harm
based on BGA's hypothetical loss of license revenue from DK's transformative
market.
CONCLUSION
For the foregoing reasons, we conclude
that DK's use of BGA's copyrighted images
in its book Illustrated Trip is fair use. Accordingly, we AFFIRM.
C.A.2 (N.Y.),2006.
Bill Graham Archives v. Dorling Kindersley Ltd.
448 F.3d 605, 2006 Copr.L.Dec. P 29,179,
78 U.S.P.Q.2d 1764, 34 Media L. Rep.
1782
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INITIAL LICENSING/PERMISSION QUESTION CHECKLIST
A.
What type of content is being used?
1.
How often is your company using the content?
2.
How extensively is your company using the content?
B.
Is the content your company wants to use copyright protected?
C.
Who owns the various rights in the content?
D.
What rights does your company need in order to use the content?
1.
Does your company need exclusive or non-exclusive rights to the
content?
2.
What other terms of use does your company need (e.g. length of
use, changing content, etc.)?
3.
international, etc.)
E.
F.
acquired?
G.
Where will the content be used (e.g. territory, region, domestic,
What is the most cost effective way to obtain the required rights?
1.
Annual license for material
2.
Pay-per-use
How should your company properly memorialize the rights it
Other considerations for your company to consider
1.
Are video clips being embedded into content or are they links to
the content on a website (e.g. YouTube, NBC.com, etc.)?
2.
Other considerations to include?
COMMON NEEDS BASED ON CONTENT USED
A.
Your company’s project includes: Music Recorded by Someone Else
(e.g. “Sound Recording”), you may need:
1.
Public performance license for the music composition. Can be
obtained from BMI (www.bmi.com), ASCAP (www.ascap.com), or SESAC
(www.sesac.com).
2.
Master use license from the copyright owner of the sound
recording. Can be obtained directly from the copyright owner (usually the record label).
3.
Digital audio performance license of the sound recording, only if
your company intends to distribute the sound recording in a digital format (e.g. allowing
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users to play on-demand or downloading “Baba O’Riley” by The Who). Can be obtained from SoundExchange (www.soundexchange.com)
a.
Required in addition to the public performance license and
master use license.
4.
Mechanical license only if your company intend to make and
distribute copies of the sound recording. Can be obtained from the Harry Fox Agency
(www.harryfox.com).
B.
Your company’s project includes: Music recorded on behalf of your
company, you may need:
1.
Public performance license for the music composition. Can be
obtained from BMI (www.bmi.com), ASCAP (www.ascap.com), or SESAC
(www.sesac.com).
2.
Release from the performers you hire to perform the song, after
obtain the public performance license.
3.
Good option to lower costs for your company.
C.
Your company’s project includes: Video or video clips from movies,
or TV shows, you may need:
1.
Public performance license for the video content. Can be obtained
from Copyright Clearance Center (www.copyright.com), Criterion Pictures
(www.criterionpicusa.com), Motion Picture Licensing Corporation (www.mplc.com), or
Swank Motion Pictures, Inc. (www.swank.com).
2.
Publicity license from actors in the film only if a person's name,
picture, likeness or voice (and sometimes other elements of persona) is used in
advertising or promotion (paid media insertion for the promotion of the sale of goods or
services) or for any purposes of trade (products and merchandise). Can be obtained from
the actor/personality.
3.
Should also consider if the video is embedded into your company’s material or if it is merely a link to the video, which is played from another source (e.g.
YouTube).
D.
Your company’s project includes: Video or video clips that contain
music recorded by someone else, you will need:
1.
Public performance license for the video content (see above).
2.
Publicity license from actors in the film only if a person's name,
picture, likeness or voice (and sometimes other elements of persona) is used in
advertising or promotion (paid media insertion for the promotion of the sale of goods or
services) or for any purposes of trade (products and merchandise). Can be obtained from
the actor/personality.
E.
Your company’s project includes: Sports footage, recounts, or images
from sporting events:
2
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1.
You must obtain permission from the athlete whose name,
likeness, signature, or voice you wish to use.
2.
Other issues arise around sports clearances – the athlete's uniform,
team, and athletic venues like the Superbowl, may need to be cleared separately. Can be
obtained from the individual organization controlling the event (e.g. NFL, NBA, etc.)
3.
If you are using a photograph or videotape of an athlete, you may
have to obtain separate rights from the photographer or videographer.
3
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