Claire Corlett

Fish Food, Fish Tanks, and More

William Fisher, CopyrightX: Lecture 9.2, Fair Use: Fair Use Today

Many cases implicating
the fair use doctrine have been decided by the
federal courts since 1976, when section 107 was added
to the federal statute. The most important of those cases are,
of course, the three United States Supreme Court decisions that I
reviewed in the previous segment of this lecture. But those three decisions
leave many issues unresolved. Some but not all of the gaps
left by the Supreme Court have been filled by the
lower court’s rulings. In this segment of the lecture, I’ll try
to describe the shape of the fair use doctrine today. I’ll attempt both to identify the
dimensions of the doctrine that are now reasonably well settled and to highlight
the dimensions that remain contested. For this purpose, I’ll be using the
now familiar map of copyright law. As we’ve seen, courts almost always
analyze their fair use defenses by considering the four
factors listed in section 107. I will follow their lead in this regard. In other words, I will describe to
you what each factor has come to mean and the role it has come to play in
the overall landscape of fair use. The first factor, as you now know,
concerns the purpose and character of the defendant’s activity. The courts look askance
at some kinds of behavior and regard much more favorably
other kinds of behavior. Four subfactors under
this general heading can be distilled from the case law. These so-called subfactors
identify the kinds of things that the courts attend
to when discussing the character of the
defendant’s behavior. The first subfactor is
whether the defendant is engaged in commercial or
non-commercial activities. As you might imagine, the more
commercial the defendant’s conduct, the less likely is the defendant to
be given the benefit of fair use. This subfactor, as we’ve already
seen, figured prominently in the Betamax case. It has been declining
in importance since then but has not disappeared altogether. You might think that the
application of this subfactor would be straightforward,
and often it is. But difficulties arise out of the
ambiguity of the term “commercial.” Courts rarely define
that term explicitly. Most often, they seem tacitly to
assume that “commercial” means revenue generating or perhaps profit making. But occasionally, in
borderline cases, courts will attempt to define
the term more precisely. One such definition can be
found in the Harper & Row case. There, Justice O’Connor
defined “commercial” as “whether the user stands to
profit from the exploitation of the copyrighted material without
paying the customary price.” This would be an altogether
conventional definition but for the term
“customary,” which seems to imply that some potentially
profit-making activities are nevertheless not commercial in character
if it’s not customary for firms engaged in the activity at issue to pay for
access to works of the sort claimed by the plaintiff. It’s unlikely that
Justice O’Connor intended to narrow the meaning of
“commercial” in quite this way. But judicial definitions sometimes
assume lives of their own, and this one has. So for example, the phrase
set forth on your screen can be found in the 11th Circuit’s
opinion in the Letterese case and the Fourth Circuit’s
opinion in the AV case. A much more generous definition
of the term “commercial” can be found in the Ninth Circuit’s
opinion in the Napster case. Now, we’ll discuss
Napster in some detail in the 11th lecture when
we examine, as I said, the doctrine of contributory
copyright infringement. But the basic facts of
the Napster case are undoubtedly familiar to most of you. The Napster file sharing service did not
itself redistribute sound recordings, but it facilitated unauthorized copying
and distribution of sound recordings by its subscribers. One of the issues in
the infringement suit brought against Napster
by the record companies and the music publishers was whether
the conduct of Napster subscribers qualified as fair uses, just as
the conduct of Sony’s customers, as we’ve seen, qualified as
fair uses in the Betamax case. The Ninth Circuit concluded no. One of the steps in the Ninth Circuit’s
analysis that led to this conclusion was the judgment that the behavior
of the individual Napster users should be considered
commercial in character. That highly counter-intuitive finding
rested upon the capacious definition of “commercial” set
forth on your screen. In the Ninth Circuit’s judgment,
the term included, quote, “repeated and exploitative
copying in order to save the expense of
purchasing legitimate copies.” Thus, even though the Napster
users were not making any money, they were engaged in commercial
behavior, said the Ninth Circuit, because they were avoiding paying money. This is an outlier position. It’s far from clear that other
courts in analogous circumstances would follow the Ninth Circuit’s lead. In some fair use cases,
the defendant’s behavior does not give rise directly
to an increased revenue stream but contributes to an overall
process or enterprise whose ultimate objective is
plainly commercial. The courts have not yet worked out a
consistent way of handling such cases. So here are two influential decisions
involving this general issue that resolved it in different ways. The first case is Sega
Enterprises versus Accolade, which was decided by the Court of
Appeals for the Ninth Circuit in 1992. To understand the decision
requires a bit of background. In the context of computer software,
the term “interoperability” refers to the ability of one program
to talk or work with another. An especially important context
involving interoperability concerns the relationship between
operating systems and application programs. The intellectual property
questions implicated by this issue have been examined most thoroughly
by Julie Cohen, who teaches copyright at Georgetown. As Cohen observed in an
article some time ago, there are three main
business models adopted by different groups of
software firms pertaining to the issue of interoperability. The first approach,
exemplified by Microsoft, grants the developers of application
programs free or more or less free access to the interfaces
necessary to render their programs compatible with
a proprietary operating system. The second business model, which
was pursued at least at one time by several game console
manufacturers, including Nintendo, entails permitting the developer
of application programs– in this case, games– to
manufacture and distribute games that would run on a
proprietary operating system console, but only if the game
developers pay license fees. The third strategy, exemplified
by MAI Systems Corporation, repudiates interoperability. Manufacturers adopting
this approach seek to maintain complete control
over application programs as well as their operating systems. The Sega case involved the
second of these three approaches. The plaintiff, Sega,
manufactured and sold game consoles which
included operating systems. A small piece of the
operating system consisted of a bit of code known
as a lockout program. Sega’s own games as well as the
games produced by independent but licensed game
manufacturers included the key necessary to open the
lock on Sega’s system. The defendant in this case, Accolade,
wished to manufacture and distribute games compatible with the Sega system
without obtaining a license from Sega and without paying the
associated license fees. To do this, Accolade
engineers make copies of significant portions
of Sega’s software, used decompilers to ascertain
the crucial piece of source code, and then included the
essential bit in its own games, thereby rendering them
compatible with the Sega system. Sega brought suit asserting,
among other things, that by copying Sega’s software in
the course of this reverse engineering process, Accolade had engaged
in copyright infringement. The Court of Appeals
for the Ninth Circuit ruled that Accolade had indeed
violated section 106(1) of the statute, but it escaped liability
under the fair use doctrine. The central theme in the
Ninth Circuit’s opinion was that Accolade’s purpose was
legitimate and socially beneficial. It’s not altogether
obvious why, unless one believes that increasing the
availability of video games enhances social welfare. But in any event, our
main concern here is with the portion of the
court’s opinion that addresses the nature and character
of the defendant’s activity and specifically whether
Accolade’s conduct should be described as commercial or not. The Ninth Circuit, when
addressing that issue, conceded that Accolade
was a for-profit company and the ultimate ambition
of the challenged behavior was, of course, to enhance
Accolade’s profits. Nevertheless, the Ninth
Circuit refused to classify Accolade’s unauthorized copying
as commercial in character. Here’s the relevant
passage from the opinion. Quote, “Taken together,
these facts indicate that although Accolade’s
ultimate purpose was the release of Genesis-compatible games
for sale, its direct purpose in copying Sega’s code, and thus its direct
use of the copyrighted material, was simply to study the functional
requirements for Genesis compatibility so that it could modify
existing games and make them usable with the Genesis console. Moreover, no other method of studying
those codes was available to Accolade. On these facts, we
conclude that Accolade copied Sega’s code for a legitimate,
essentially non-exploitative purpose and that the commercial
aspects of its use can best be described as
of minimal significance.” OK, that’s one approach. The second case was decided a few
years later by the Court of Appeals for the Second Circuit. The essential facts were as follows. Texaco employed between 400
and 500 researchers nationwide. Their job was to conduct
scientific research in order to develop new products and
technologies in the petroleum industry. Texaco subscribed to
various scientific journals. However, it did not purchase
enough copies of those journals to serve fully the needs
of its many researchers. A custom seems to have
developed within the Texaco facilities under which individual
scientists would either make themselves or ask
to be made for them xerox copies of articles
contained in the print journals that the scientist might find
useful in their own research. The publishers and copyright
owners of the articles challenged this practice
as copyright infringement. Texaco’s primary line of defense
for this behavior was fair use. The Court of Appeals
for the Second Circuit ultimately sided with the publishers
and rejected the fair use defense. The step in the court’s analysis
with which we are primarily concerned here involves whether the behavior of
the scientists qualified as commercial. The Court of Appeals
equivocated on this point. Unlike the Ninth Circuit,
the Second Circuit did not discount altogether
the profit-making objective of the company as a whole. However, it too accorded
some weight to the fact that the immediate objective
of the scientists was research. Here’s the key passage in
the Second Circuit’s opinion. Quote, “In this particular case, the
link between Texaco’s commercial gain and its copying is somewhat attenuated,
the copying at most merely facilitating Chickering’s research–”
Chickering was one of the scientists– “that might
have led to the production of commercially-valuable products. 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 emphasized,
Texaco’s photocopying for Chickering could be regarded simply as
another factor of production utilizing 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.” So where does the combination
of these two cases leave us? The answer is, unfortunately,
without clear guidance. When employees within
a for-profit enterprise engage in unauthorized copying
whose immediate purpose might be characterized as research
or study, the employer may be able to contend that it should
not be hit with the label “commercial.” But how much latitude it
will be given on this score is, unfortunately, hard to predict. As I said, the question of
whether a defendant’s behavior is commercial or
non-commercial in character remains a significant part
of the fair use inquiry. However, that subfactor is
being eclipsed increasingly by the second subfactor
highlighted on your screen, which asks whether the defendant’s
behavior is transformative. As we saw, this theme was highlighted
by the United States Supreme Court in the Campbell case. Since the Campbell decision,
the issue of transformativeness has grown further in importance. Today, it’s fair to say that
defendants unable to persuade a court that their
activities are transformative are unlikely to prevail
on fair use grounds, whereas defendants who are able to
assume the mantle of transformativeness are quite likely to prevail. As one might expect,
litigants now spend much of their time struggling
over who has the better of the argument on this issue. Unfortunately, as we will see,
there remains significant ambiguity concerning the possible meaning or
meanings of the term “transformative.” This uncertainty destabilizes
fair use analyses and increases the notorious
unpredictability of the doctrine as a whole. The only dimension of
this issue that is clear cut concerns the status of parody. It’s now well settled that
parodies, even bad parodies, do qualify as transformative uses. Plaintiffs no longer contended parodies
of their works are not transformative. Instead, plaintiffs seek to persuade
tribunals that, in borderline cases, the defendants’ works do
not constitute parodies. Much hinges on this issue. When evaluating disputes of
this sort, courts commonly make reference to the
definitions of parody that were offered by the
Supreme Court in Campbell. You’ve seen these definitions
once before in this lecture. Here they are again. Quote, “Modern dictionaries describe a
parody as a ‘literary or artistic work that imitates the characteristic style
of an author or work for comic effect or ridicule’ or as a ‘composition
in prose or verse in which the characteristic turns of thought and
phrase in an author or class of authors are imitated in such a way as to
make them appear ridiculous.’ For the purposes of copyright law, the nub
of the definitions 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.” The ambit of this definition is
perhaps best illustrated by example. Annie Liebovitz, as you likely know, is
a famous and accomplished photographer. In 1991, she took a nude photograph
of the pregnant Demi Moore which appeared on the cover of the
August 1991 issue of Vanity Fair magazine. The photo plainly alluded to
Botticelli’s Birth of Venus. Here’s a closeup. In 1994, Paramount Pictures began to
promote its upcoming movie Naked Gun 33 1/3. One of its posters included
this composite photo of Leslie Nielsen, the star of the film. Liebovitz brought a
copyright infringement suit. Interestingly, Paramount conceded that
its poster violated Liebovitz’s rights under section 106 but
sought refuge in fair use. The district court granted summary
judgment for the defendant, and the Court of Appeals affirmed. A key step in the Court
of Appeals analysis was a determination that
the poster constituted a parody of the Demi Moore photo. The court justified that
determination in the following terms. Quote, “Being different from
an original does not inevitably comment on the original. Nevertheless, the ad–” meaning the
poster– “is not merely different. It differs in a way that
may reasonably be perceived as commenting through ridicule on
what a viewer might reasonably think is the undue self-importance conveyed
by the subject of the Liebovitz photograph. A photographer posing
a well-known actress in a manner that calls to
mind a well-known painting must expect or at least tolerate
a parodist’s deflating ridicule. Apart from ridiculing
pretentiousness, the ad might also reasonably be perceived
as interpreting the Liebovitz photograph to extol the beauty
of the pregnant female body and, rather unchivalrously, to express
disagreement with this message. The district court
thought such a comment was reasonably to be perceived from the
contrast between a serious portrayal of a beautiful woman taking great pride
in the majesty of her pregnant body and a ridiculous image of a smirking,
foolish-looking pregnant man,” close quote. A very similar analysis
underlay the determination five years later by the Ninth
Circuit Court of Appeals that a series of photos
by Thomas Forsythe constituted parodies of Mattel’s
copyrighted character Barbie. Here’s a familiar image of Barbie. Mattel owns copyrights
to parts of this figure– specifically, in the court’s words,
quote, “to the unadorned Superstar Barbie head and parts of the figure,
including revisions to the hands, feet, neck, shoulder, and
buttocks,” close quote. Forsythe, without permission, took a
series of photos of naked Barbie dolls. Here are some of Forsythe’s photos. The Ninth Circuit, when the
case arrived at its doorstep, concluded that Forsythe’s photos
plainly qualified as parodies. Quote, “Mattel, through
impressive marketing, has established Barbie as the ideal
American woman and a symbol of American girlhood for many. As abundantly evidenced in the
record, Mattel’s advertisements show these plastic dolls
dressed in various outfits, leading glamorous lifestyles, and
engaged in exciting activities. To sell its product,
Mattel uses associations of beauty, wealth, and glamour. Forsythe turns this
image on its head, so to speak, by displaying
carefully-positioned, nude, and sometimes frazzled-looking Barbies
in often ridiculous and apparently dangerous situations. His lighting, background,
props, and camera angles all serve to create a context
for Mattel’s copyrighted work that transform Barbie’s meaning. Forsythe presents the viewer with
a different set of associations and a different context
for this plastic figure. In some of Forsythe’s photos, Barbie
is about to be destroyed or harmed by domestic life in the
form of kitchen appliances yet continues displaying her well-known
smile, disturbingly oblivious to her predicament. As perpetrated in some of
Forsythe’s photographs, the appliances are
substantial and overwhelming, while Barbie looks defenseless. In other photographs, Forsythe conveys
a sexualized perspective of Barbie by showing the nude doll in
sexually-suggestive contexts. It’s not difficult to see the
commentary that Forsythe intended or the harm that he perceived in
Barbie’s influence on gender roles and the position of women
in society,” close quote. An important procedural
issue lurks in this passage. The Ninth Circuit is not interested
in what the public at large thinks of Forsythe’s photos. Indeed, it approved the
trial court’s refusal to consider a survey that Mattel
had commissioned on the issue. Why? Because, quote, “the issue of whether a
work is a parody is a question of law, not a matter of public
majority opinion,” close quote. OK, so those are two cases in
which the defendant successfully invoked the privileged
status of parodies. To repeat, parodies are not per se
entitled to the fair use defense, but attaining that status
helps you a great deal. In part because of the
importance of this issue, courts are not always so
receptive to defendants’ claims that their works constitute parodies. For example, the Second Circuit brushed
aside the contention of Jeffrey Koons that when he used this
photograph as the reference work for this painted wooden
sculpture he meant to mock the conventional,
saccharine character of the photo. The court rejected Koons’ claim that his
work was a parody of the plaintiff’s. Its rejection was based
in part on the fact that the photograph in the
upper left of this slide was not widely known to the public,
and thus most viewers of the sculpture would not know what it was aimed at. But in addition, the
court was not persuaded that the sculpture meant
to critique the photo. Quote, “The problem in the
instant case is that even given that String of Puppies
is a satirical critique of our materialistic society,
it is difficult to discern any parody of the
photograph Puppies itself. We conclude, therefore, that this
first factor of the fair use doctrine cuts against a finding of fair use. The circumstances of this case indicate
that Koons’ copying of the photograph Puppies was done in bad faith
primarily for profit-making motives and did not constitute a
parody of the original work.” The same court was similarly unimpressed
by the efforts of the defendants in the Castle Rock case, which I
discussed in the preceding lecture, to establish that their trivia book
was a parody of the Seinfeld television series. The defendant argued, our trivia book,
quote, “is a quintessential example of a critical text of
the TV environment, exposing all of the show’s nothingness
to articulate its true motive forces and its social
and moral dimensions.” The court was unmoved. Quote, “Any transformative purpose
possessed by the defendant’s book is slight to nonexistent. We reject the argument that it was
created to educate Seinfeld viewers or to criticize, expose, or
otherwise comment upon Seinfeld. The book’s purpose, as
evidenced definitively by the statements of the book’s
creators and by the book itself, is to repackage Seinfeld to entertain
Seinfeld viewers,” close quote. OK. So to repeat, parodies definitively
qualify as transformative under factor number one. What about a defendant’s work
that criticizes a plaintiff’s work but does not mock it? These too are highly likely to
be treated as transformative. Here’s an example. One of John Lennon’s most
famous songs is “Imagine.” Portions of its lyrics are
critical of organized religion. Here’s an excerpt. It isn’t hard to do. Nothing to kill or die
for, and no religion too. Imagine all the people– In this case, the defendant,
without permission, included this segment of Lennon’s recording
of the song in a movie that defended theories of intelligent design
and criticized theories of evolution. The Southern District of
New York ruled that the use of the excerpt from Lennon’s
song was transformative because its purpose was, quote, “to
criticize what the filmmakers see as the naivete of John
Lennon’s views,” close quote, and the court went on to rule
in the defendant’s favor. That non-parody criticism
counts as transformative is not quite so clear as the proposition
that parody counts as transformative. Indeed, at least one case,
the Free Republic decision decided by the Central
District of California in 2000, seems to stand for
the opposite position. But the privileged status of criticism
nowadays approaches that of parody. Beyond this point, the
meaning of “transformative” becomes increasingly
contested and murky. Here’s a graphic
representation of the nature of the ongoing debate on this front. Parody, as we’ve seen,
clearly qualifies. A work by a defendant that
criticizes the plaintiff’s work is also highly likely to
qualify as transformative. Outside of this central
zone, there are currently four main competing interpretations
of “transformation.” The first treats works
that physically modify the plaintiff’s work as transformative. The second equates the term
“transformative” with “socially beneficial.” The third attaches the term
“transformative” to works by defendants that
have purposes that are different from the purposes
of the plaintiff’s works. And the fourth associates
the term “transformative” with creative uses of plaintiff’s works. This diagram intentionally depicts
these interpretations as overlapping because, as you might
imagine, some works will qualify as transformative
under more than one interpretation. But in its current form, the
diagram is misleading to the extent it suggests that each
category has crisp boundaries. In truth, they’re all matters of degree. For example, one defendant’s work
might be slightly socially beneficial, while another might be strongly so. Thus, a more accurate
depiction would recognize that each category varies in
density– strong near the core, weaker near the edges. If one maps onto this diagram the
leading cases involving fair use, the result would look
something like this. I’ve tried, by locating
each case or set of cases, to suggest which and how many of
the meanings of “transformative” they might qualify for. The colors of the case names
indicate who won or was favored. In the green cases, the defendant
prevailed– in other words, the court either ruled
in the defendant’s favor or indicated the fair use was likely. In the red cases, the plaintiff
prevailed in the same sense. In the black cases, the issue
of fair use was never resolved. Some of these cases
you already know about. Others I will discuss
later, and still others will be addressed in the
classes and seminars that accompany this lecture series. One of the functions of this map
is to suggest the relative strength of these four competing interpretations
within the current case law. For a while, the physical
modifications approach seemed to have a significant
following, but it has since faded. Why? Most likely because
this interpretation is hard to reconcile with the
proposition that, as you know, copyright owners enjoy under
section 106(2), the right to control the making
of derivative works. Thus, as you’ll notice, many
of the cases within this zone are red, meaning that the
fair use defense failed. More popular is the
second approach, which looks to the degree to which
a defendant’s conduct can be thought of as socially beneficial. However, you’ll also see
some red cases in this zone. More popular still is the
different purposes approach. Most of the cases in this zone,
especially recent cases, you’ll see are green. The last approach finds as yet only
modest support in the case law, although it figures more
strongly in scholarship. We’ll return to this
fourth option when we discuss cultural theory
in the next lecture. So that’s where things currently
stand with respect to transformation. Because of the prominent place of this
issue in modern fair use doctrine, the struggle over the
meaning of this term will likely continue for some time. I’ve devoted disproportionate
attention to the first two subfactors of factor number one because
they’re particularly important. The current status of
the other subfactors and of the second and third
factors in the list in section 107 can be described much more quickly. You’ll recall that Justice
O’Connor in Harper & Row decreed that fair use presupposes,
quote, “good faith and fair dealing,” close quote. As you might expect, lower
courts give that statement some weight, but as it
turns out, not much. Here’s a representative
statement by the Second Circuit. Quote, “Just how much weight
within the first factor should a court place on
this subfactor of bad faith? Campbell provides support
for the proposition that while the good or
bad faith of a defendant generally should be
considered, it generally contributes little to fair use analysis. We believe this analysis further
supports our conclusion that a finding of bad faith is not to be weighed
very heavily within the first fair use factor and cannot be made
central to fair use analysis. The Court recognized the continuing
relevance of Harper & Row but clarified that the bad faith
subfactor can be de-emphasized and will not be dispositive of
the first factor or fair use.” The Harper & Row opinion
also included a statement suggesting that
customary activities were more likely to qualify as
fair than unconventional ones. Quote, “The fair use doctrine was
predicated,” said Justice O’Connor, “on the author’s implied consent
to reasonable and customary use when he released his work
for public consumption.” This perspective associates
the concept of fair use with a implicit license
issued by a copyright owner. Some scholars– for example, Lloyd
Weinreb in an influential article in the Harvard Law Review–
have endorsed this perspective. But it has little following
currently in the case law, in part because so many
fair use cases nowadays involve new technologies as to which
custom is essentially irrelevant. If the first statutory factor
focuses on the defendant, the second focuses on the plaintiff. The basic idea here is that
some kinds of copyrighted works deserve stronger protections against
unauthorized activities than do others. The way this is achieved
is by making it harder for defendants to assert
fair use when they make unauthorized uses of
the former than the latter. So what kinds of works are
more deserving of protection? There are two well-recognized answers to
that question and one additional answer that is implicit in the case law
but not expressly recognized. The two well-established
variables are A, unpublished works get more
protection than published works, and B, creative works get more
protection than factual ones. The Second Circuit’s
decision in the Blanch case summarizes these two variables nicely. Quote, “Two types of distinctions as
to the nature of the copyrighted work have emerged that have figured
in the decisions evaluating the second factor–
one, whether the work is expressive or creative, such as a
work of fiction, or more factual, with a greater leeway being
allowed to a claim of fair use where the work is factual
or informational; and two, whether the work is
published or unpublished, with the scope for fair use involving
unpublished works being considerably narrower.” Close quote. This point bears emphasis,
because it’s not often recognized. Not all works, it turns out, enjoy
the same degree of protection. The closer you are to
the bottom left corner of this diagram, the
stronger your legal shields. The closer you are to the upper right
corner, the weaker your shields. The implicit supplement
to these two variables is that, in practice,
computer software seems to get less protection than
other sorts of copyrighted works. In other words, in the software context,
defendants have an easier road to hoe. The third factor is the least surprising
component of modern fair use doctrine. The more you take from a plaintiff’s
work, the weaker, in general, is your fair use defense. As from the Harper & Row case,
the inquiry under this factor is both quantitative and qualitative. If you take a small slice but it’s a
very important part of the plaintiff’s work, you’re in trouble on this front. Note that, at least
ostensibly, it doesn’t matter whether the slice you take
forms a large or small portion of your own work. It’s only relevant whether it’s a large
and important part of the plaintiff’s. The only thing that’s
surprising about this variable is how often it does not prove decisive. Think of the cases we’ve
considered thus far. In the Betamax case, the
VCR users were making verbatim copies of
entire copyrighted works and yet were found to
have engaged in fair use. In Harper & Row, by contrast,
the Nation took some 300 words from Ford’s vastly larger
manuscript and still lost. We come finally to factor number four. For many years, this was said
to be the most important factor. Today, it may have to play
second fiddle to factor number one and the transformativeness
inquiry in particular, but it’s still given great weight. The core idea is straightforward. The greater the injury
sustained by the plaintiff as a result of the defendant’s
conduct, the less likely it is that the defendant’s
conduct will be deemed fair. But as we’ll see,
complexities and conflicts lie just under the
surface of that statement. The first guideline when applying this
factor is that not all kinds of what might be considered injuries count. In particular, it’s now
reasonably clear that four types of what might be considered
losses by the plaintiff are excluded from consideration. First, a plaintiff cannot claim that he
suffered economic harm because he was prevented from charging the
defendant a license fee. Among the reasons that foregone
license fees from the defendant are excluded from the analysis is
that otherwise the fourth factor would always favor the plaintiff,
which was plainly not Congress’ intent. Second, loss of revenue resulting
from the plaintiff’s inability to charge the defendant
or others for the right to make transformative uses of the
plaintiff’s work also do not count. As you can see, this subfactor
dovetails with the first factor. It reinforces the privileged
position within the fair use calculus of transformative uses. To illustrate, a plaintiff cannot assert
under the auspices of the fourth factor that he suffers economic losses because
of his inability to charge parodists fees. Third, as we saw in the Campbell case,
plaintiffs cannot assert as economic injuries diminution in their markets
resulting from defendants’ criticism or ridicule of their works. The borderline question, the
answer to which is not yet clear, concerns injuries arising from
what might be called tarnishment of the plaintiff’s
work– in other words, corrosion as result of the defendant’s
conduct of the positive associations that the plaintiff’s work has
in the minds of consumers. Finally, at least one court has
held that a plaintiff can only complain of injuries to the market
for the copyrighted work at issue in the case, not collateral
injuries to other copyrighted works owned by the plaintiff. These exclusions are important, but they
leave many opportunities for plaintiffs to identify economic harms. In particular plaintiffs may
count under the fourth factor not only damage to the existing
markets for the copyrighted works but also damage to, quote, “potential
markets,” close quote, for the work, and they may also claim
injuries that have not yet occurred as a result of
the defendant’s behavior but that will occur if the defendant’s
conduct becomes widespread. The most important and fraught word
in this formula is “potential.” As I say, it’s now clear that
injuries to potential markets count in the plaintiff’s favor. What’s unclear is what
constitutes a potential market. One can find in the case
law a broad spectrum of approaches to this key question. Near one extreme is the
position apparently taken by the Ninth Circuit in the Galoob case. Potential markets consist of
markets that the plaintiff has developed or is likely to develop. This approach would exclude,
for example, markets that the plaintiff lacks the
technical capacity to exploit or that are within the
defendant’s control. Near the opposite extreme is
the position that, as we saw, was taken by Justice Blackmun
dissenting in the Betamax case. Any group of people who would pay
for access to the plaintiff’s work constitute a potential market,
even if the plaintiff is unable or uninterested
in exploiting that market and even if the market would not
exist but for the defendant’s initiative or technological innovation. In between these positions are
several intermediate options. The formulation that seems to
appear most often in the case law is the one listed on the
third tier on the chart. The markets cognizable under
the fourth factor include, quote, “traditional, reasonable,
or likely to be developed markets,” close quote. But some courts expressly
or implicitly adopt positions more favorable to plaintiffs
or more favorable to defendants. A possible explanation for why this
crucial issue remains unresolved is that no court has
convincingly connected its stance on this question to any of the
underlying theories of copyright. Until that happens,
litigants and judges will struggle to define the set
of harms that plaintiffs may point to when resisting
fair use defenses. This concludes our examination of
the current state of the fair use doctrine in the United States. In the final segment of
the lecture, I will briefly examine the ways in which some other
countries address the kinds of issues that here in the US are
handled using section 107. Your job will then be to decide
which approach is optimal.

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