Transcript Fair Use - Berkeley Law

Fair Use
Intro to IP – Prof Merges
2.28.2012
Wendy Gordon: Fair Use as
Market Failure
Harper & Row v. Nation
• Gerald Ford Memoir
• Clear and definite financial harm: loss of
$12,500 payment by Time Magazine
• Held: Reversed, Not Fair Use
“Implied Consent” Theory – p. 595
• Does this hold up in subsequent cases?
• Compare: classic defense of fair use for
criticism, e.g., book reviews
Unpublished Nature of Work
• P. 595: Author’s right to control
prepublication of works, creative control and
financial returns . . .
• True for all time? What about long
unpublished works?
Authorial control
“Publication of an author’s expression
before he has authorized its
dissemination seriously infringes
the author’s right to decide when
and whether it will be made public,
a factor not present in fair use of
published works.” – p. 595
First Amendment Defense
• Fair Use should be informed by First
Amendment
• First Amendment protection built into
copyright in idea/expression dichotomy
• First Amendment argument would eliminate
market for political memoirs, etc.
Commercial Use
• Commercial uses are presumptively not fair
uses
• Effect on the market as key factor
• “Market Failure” theory of fair use – p.597
1992 Amendment
“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unpublished shall not itself bar a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.” – Sec. 107
Sec. 107. Limitations on Exclusive
Rights: Fair Use
Notwithstanding the provisions of sections 106
and 106A, the fair use of a copyrighted work,
including such use by reproduction in copies
or phonorecords or by any other means
specified by that section, for purposes such
as criticism, comment, news reporting,
teaching (including multiple copies for
classroom use), scholarship, or research, is
not an infringement of copyright.
The 4 Factors
(1) the purpose and character of the use, including
whether such use is of a commercial nature or is
for nonprofit educational purposes;
(2) the nature of the copyrighted work;
(3) the amount and substantiality of the portion
used in relation to the copyrighted work as a
whole; and
(4) the effect of the use upon the potential market
for or value of the copyrighted work.
Sony Part II
[W]e need only consider whether on
the basis of the facts as found by
the district court a significant
number of [uses of the Betamax]
would be noninfringing.
IPNTA 5th at 608
• [T]he District Court’s findings
plainly establish that timeshifting for private home use
must be characterized as a
noncommercial, nonprofit
activity.
Effect on the Market
• Court notes that Universal does not
represent all copyright holders whose works
are copied by the BetaMax
• Some copyright owners grant permission to
copy, others do not
• Fair Use preempts a market here . . .
1992 Amendment
“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.” – Sec. 107
AGU v. Texaco
• Copying of academic journal articles
• Exhaustive analysis of 4 factors
The 4 Factors
(1) the purpose and character of the use, including
whether such use is of a commercial nature or is
for nonprofit educational purposes;
(2) the nature of the copyrighted work;
(3) the amount and substantiality of the portion
used in relation to the copyrighted work as a
whole; and
(4) the effect of the use upon the potential market
for or value of the copyrighted work.
Texaco: Factor 1
• Purpose and character of the Use
• Here: personal archival copies
• Possibly helpful to Texaco: protect originals
from chemicals in the lab
Factor 1: Commercial Use?
[C]ourts 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 fromits use of the copyrighted material.
. . . Conversely, courts are more willing to find a
secondary use fair when it produces a value that
benefits the broader public interest …. P. 614.
Factor 1: Transformative Use
[T]hough 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.’’ [Campbell
v Acuff-Rose] at 1171. – IPNTA 5th, 615
The District Court properly
emphasized that Texaco’s
photocopying was not
‘‘transformative.’’ After 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,
114 S. Ct. at 1171- 73.
Factors 2 and 3
• Nature of Copyrighted work: factual (not in ©
“core”) – favors defendant Texaco
• Amount and substantiality of portion used:
entire articles (favors plaintiffs)
Factor 4: Effect on Market/Value
• This is the heart of the Texaco case; relevant in
many settings
• [T]here is neither a 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.
Judge Newman opinion
• “[I]t 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.”
• -- IPNTA 5th p. 619
Wendy Gordon: Fair Use as
Market Failure
IPNTA 5th ed. at 620
• Would a well-functioning licensing market—
such as that envisioned by the CCC and
encouraged by Judge Newman—serve to
promote both primary and cumulative
creativity? Or would it simply add another
transaction cost to scientific research?
IPNTA 5th ed. – p. 621
• Does the existence of licensing transactions
vindicate Professor Merges’ conjecture about
strong property rules producing effective
licensing institutions? To the extent that
licensing markets function well—i.e.,
producing efficient, low-cost access to
scholarly works—is fair use needed?
2 Live Crue
Campbell v. Acuff-Rose Music, Inc.
• Facts
• Procedural posture
– Dist Ct—commercial no bar/conjure up test/no
market impact
– C of A—commercial presumption (Sony); heart
theft (Harper)
• Souter sets the stage
– Must consider all 4 factors
– It is always a case by case analysis
– Footnote 10- damages instead of injunction
Campbell v. Acuff-Rose Music, Inc.
• Four factors
– Factor 1: Nature of the work: parody special
– Amount & substantiality of portion used- the
heart or all – tied to Factors 1 and 4
– Market effect--- D & others, includes derivative
market, Sony presumption? Lethal parody’s
impact?
Beneficial impact like song in a movie?
• Holding: This Parody was a fair use
Campbell v. Acuff-Rose Music, Inc.
• Transformative use favored, though not required
• Parody is a transformative use
• Parody must criticize Plaintiff’s © ‘ d work, not
society
• Courts will not recognize derivative market for
critical works, but supplanting a derivative market
for rap non-parody cuts against fair use
• Commercial not presumptively unfair
• No presumption of market harm from commercial
nature of use unless mere duplication for
commercial purposes
Transformative Use
• The [Campbell] 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 1171.
Because many parodies lampoon the original, the
authors of the original are often unwilling to
permit a parody to be prepared at any price.
Robert Merges has described this reluctance as
the ‘‘bargaining breakdown’’ problem—
noneconomic factors prevent the parties from
agreeing to what might be an efficient license
(in purely economic terms). See Robert Merges,
Are YouMaking Fun of Me? Notes on Market
Failure and the Parody Defense in Copyright, 21
AIPLA Q.J. 305 (1993). Cf. Richard Posner, When
Is Parody Fair Use?, 21 J. Legal Stud. 79 (1992).
Bill Graham Archive v. DorlingKindersley Press
• Tickets and posters – images of Dead shows
• Incorporated into Defendant’s book
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. … 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. – IPNTA 5th p. 637
Transformative works vs. market
orientation
• Biographical book is different type of
work; BUT
• There was a negotiation here; DK used
the posters after it broke down
• Better to enforce © and encourage
private bargaining?
Lennon v. Premise Media
• 15 second excerpt from “Imagine”
• Incorporated into film about creationism and
“academic freedom”
• "I'm extremely gratified to hear that Yoko Ono's
attempts to silence our little film have not
succeeded and that free speech is still alive and
well in America," noted Stein. "There is a culture
war going on in this country, but the numbers are
with the traditionalists. While a few Americans
may be interested in films like Bill Maher's
Religulous, Expelled is the kind of film that most
mainstream/traditionalists Americans are going
to most resonate with and we are looking forward
to great numbers when the DVD comes out."
Companion Case
• New York State Supreme Court, Aug. 13, 2008
• Preliminary Injunction for Capitol Records
denied