Fair Use in the US

1 US Legislation

Section 107 of the US Copyright Code entrenches the jurisprudence accumulated up to the 1976 revision and provides that the "fair use of a copyrighted work for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research" does not infringe copyright. Although the US offers an open list of permissible purposes against the Canadian and UK statutes, the caselaw has generally seen similar uses exonerated under fair use. The decision of whether a particular use is fair mandates the consideration of four statutorily entrenched factors.

(a) Four Fair Use Factors

(1) The purpose and character of the use, including whether such use is of a commercial nature or is for non-profit educational purposes

This factor considers whether the use is commercial or should be deemed transformative. More recently, good faith has been noted as a sub-factor.¹ Commercial use is but one factor and against a tide of caselaw is no longer presumptive. In Sony Corp of America v Universal City Studios Inc,² a case concerning the use of the Betamax videotape recorder used for private 'time-shifting' of television programs, the court examined whether the user stood to gain from the use of copyrighted work, not whether the user had actual motive for monetary gain. In this case, time-shifting was found to be a non-commercial use. The court's obiter statement that "every commercial use of copyrighted material is presumptively unfair"³ was later embraced by subsequent courts seeking a bright-line to interpret fair use cases, but was ultimately rejected in Campbell v Acuff-Rose Music Inc.⁴

Acuff-Rose, also known as the "Pretty Woman" case, concerned the parodic use of Roy Orbinson's song by rap group 2 Live Crew. Overruling the lower court, the appellate court relied on the Sony presumption and found that fair use did not exonerate the rap group. However, the Supreme Court later overturned this decision stating that the commercial nature of a work should not be dispositive. Rather, "parody, like any other relevant use, has to work its way through the relevant factors and be judged case by case, in light of the ends of copyright law."⁵ Relying on such a presumption would have distorted fair use and would have been "suggestive of a [US] judicial tendency to establish bright-line rules, evolved from in-built biases or assumptions…⁶ Today, in the US, there is no presumption against fair use if the defendant makes a commercial use. Commercial uses tend to weigh in favour of the plaintiff.⁷ CCH thus goes beyond US fair use, as the commercial nature can be one consideration and must not be one factor always considered.

In Rogers v Koons,⁸ Koons a successful artist sculpted a "String of Puppies" to parody the plaintiff's photograph of eight "Puppies" which had enjoyed wide commercial success. In doing so, he also used an enlarged photocopy of the puppies. The court rejected the parody argument, as Koons could have expressed the parody without directly copying Rogers' work. Koons' work was not commenting directly on the work itself, but rather on a general idea, so there was no need to copy. Also the court found bad faith and copying for profit-making motives.⁹

Basic Books v Kinko Press, is the US "coursepacks" case where uses of copyrighted material for educational purposes by a commercial enterprise were not fair use. The four factors were analyzed. The copying was non transformative and was on a commercial scale. ¹⁰ While it was unclear how much profit Kinko made, the court found it important that Kinko had the intention of making profits.¹¹ And so, its motives were only "purportedly altruistic."¹² This case can be contrasted with Williams & Wilkins where a government department copied articles from medical journals and disseminated them to researchers and personnel who requested them. The court found that the purposes of study and research were acceptable as these were socially useful objectives and not "true to photocopy shops, which reproduce for profit."¹³ Further, the libraries had established fair use guidelines and did not charge a fee.

A court post-CCH could yield similar holdings: accounting for parody and educational uses of works by government departments. In the UK, however, parody would still be prohibited.

(2) The nature of the copyrighted work

For this factor courts consider whether the work is factional or fictional and whether published or unpublished. If there is substantial creativity, this tends to favour the owner.

With respect to unpublished works, Harper & Row Publishers, Inc v Nation Enterprises¹⁴ seemed to have instilled a presumption against fair use for unpublished works which was followed by lower courts. But Congress responded to the publishing industry's concerns and overruled this presumption.¹⁵ In this case, a magazine (the Nation) published unauthorized quotations from former US president Ford's unpublished memoirs. The court analyzed the four factors and denied fair dealing. Specifically, the court reasoned that the author has the right to control the first appearance of the work, as part of the right of first publication which encompasses the choice of whether to publish at all, when, where and in what form.¹⁶ In this case, the court found that Ford's memoirs were subject to a confidentiality agreement and that any article produced from it would need approval. Further, the Nation's "clandestine" publication afforded no opportunity for the author's "creative or quality control" and contained a number of "inaccuracies".¹⁷ The court found that the unauthorized quotations focused on "the most expressive elements of the work, [which] exceeds that necessary to disseminate facts."¹⁸ In Basic Books while the court did not find fair dealing it noted that because the nature of the works was for educational purposes this factor weighed in their favour.¹⁹ The US and UK seem consistent in their interpretation of this factor, against the Canadian approach favouring users disseminating unpublished works.

(3) The amount and substantiality of the portion used in relation to the copyrighted work as a whole.

This factor leads to a sliding scale: as the dealing goes above a de minimis use it more likely goes against fair use. Courts still focus on what and not how much is used–the quality over the quantity of the taking is critical. In Basic Books entire chapters were copied and meant to stand alone therefore both quantitively and qualitatively significant.In Harper & Row the court focused on quantity and quality: though insubstantial, the extracts were the "heart of the book."²⁰ In Acuff-Rose, 2 Live Crew departed from the 'heart' and produced distinctive lyrics. Though when weighed with the character of use, entire works may be fair use. On the whole, as in Canada and the UK this factor seems like the least significant.

(4) The effect of the use upon the potential market for or value of the copyrighted work.

Harper & Row signaled this last factor as the single most important factor especially if the use becomes widespread and undermines the author's potential market (since for the court the purpose of copyright is also to provide incentive to authors).²¹ Some lower courts have followed this dictum.²² Still, it is difficult for courts to anticipate the curtailment of the potential market as it can be like gazing in a crystal ball.²³

In Basic Books the purchase of the coursepacks was found to undermine the need to purchase full texts. The court also held that this would impact out-of-print books whose licence fees constituted a significant source of income.²⁴ Generally, in parody it is difficult that the work will act as a market substitute, as parody and the original serve different market functions.²⁵ But in Rogers v Koons there was a presumption that the sculpture would harm the plaintiff's future market.²⁶ And on an earlier motion for summary judgment in Acuff-Rose, the absence of evidence on the effect of the parody on the nonparody market (eg Orbison's market) caused the defendant to lose.²⁷ In the US, market substitute is therefore a very important factor, in the UK, the most important and in Canada not as important and when considered CCH appears to place the onus of proof on the plaintiffs.

Irrespective of the US's statutory entrenchment of the four factors, it is still very difficult to determine a fair dealing and assess which if any factor is determinative.
In other words, each of the four US statutory criteria require mandatory consideration in every case. As Acuff-Rose held there are no bright lines, few presumptions, and there must be a sensitive balancing of interests. Some argue that these criteria may enhance predictability but have reduced the flexibility available to the US court; others maintain that there is no predictability, it is difficult to articulate what fair use is, but that there is flexibility with emerging technologies.²⁸ Ultimately, not all factors have to be fair for the end use to be fair and similarly, some factors can be fair but the end result is an unfair use.

(b) "Other" Fair Use Factors

In the recent case of Basic Books, the court considered other factors, besides the enumerated four factors:

(1) Monopolistic and competitive practices

In Basic Books, the defendant Kinko created a new "nationwide business" allied to the publishing industry by usurping the plaintiff's copyrights and profits.²⁹ Kinko had two hundred stores across the country and it was difficult for the plaintiff to challenge the defendant. Kinko asserted that the plaintiffs misused their copyrights and monopolized the industry in an effort to thwart the copying market and restrain competition.³⁰ While Kinko advanced anecdotal evidence that there were unreasonable delays, undue response times and high costs in obtaining copyrighted materials for the courses, the court found no clear evidence. Importantly, the court implied that had there been such evidence, then this would have weighed in favour of fair use. The court seems to leave this door open for future cases. That is, fair dealing may be found if the defendant is able to show that the plaintiff engaged in monopolistic practices. In CCH, this factor was considered though the plaintiff had the burden of proof and failed to meet it.

(2) Industry practices and institutional policies

In Basic Books, the court noted that the defendant had violated "Classroom Guidelines" prohibiting the use of anthologies. Moreover, the court observed that the defendant had not advanced evidence that an instructor would be disabled without the use of the coursepacks. The court considered Williams & Wilkins where the library copying was subject to guidelines within fair use and did not charge a fee.³¹ Following institutional guidelines within fair dealing is also very important in CCH as the court relied heavily on the Great Library's Access Policy for a finding of fairness. So, if the defendant can show adherence to policies within fair dealing/fair use this factor will likely weigh strongly in their favour.

2 Fair Use is "Ill"

Before proceeding to outline some comparative threads among the three jurisdictions, some remarks must be made on the burgeoning body of scholarship, studies and reports criticizing US fair use. Fair use is said to be "ill, though hardly dead yet."³² Many have called on Congress to clarify fair use.³³ There has been no shortage of solutions proposed.³⁴ But to date Congress has resisted changing fair use. The courts have also failed to simplify fair use by attempting to establish bright-line presumptions (1) that commercial uses are unfair,³⁵ (2) favouring plaintiff's unpublished works,³⁶ and (3) more recently, that works must be transformative to constitute fair use.³⁷ Moreover, it is increasingly expensive to mount litigation to clarify the scope of use and some users may be risk-averse to begin with. The American Intellectual Property Law Association estimates the average cost to defend a copyright case to be just under one million US dollars.³⁸

Although fair use's attention to context is certainly salutary, "it is so case-specific that it offers precious little to artists, educators, journalists, Internet speakers, other" who want to use the copyrighted work.³⁹ Google's digitization project of large library collections is a recent sign that in the digital age, issues of fair use have taken on urgency.⁴⁰

The Chilling Effects Report documents the culture of anxiety that now exists as rights holders aggressively attempt to thwart potential fair uses of works.⁴¹ Via private cease-and-desist letters, online service providers frequently cull user materials in order to earn a place in the "safe harbour" zone.⁴² And because the material is removed privately, no court examines the validity in advance of takedown. Further, a recent report from the Brennan Centre for Justice, "Will Fair Use Survive?" identifies in addition to cease-and-desist letters, notice and takedown, narrow industry "fair use guidelines" and an overzealous "clearance culture."⁴³ And more recently, the "Digital Learning Challenge" White Paper focuses specifically on the educational sector, calling for clearer fair use rules. The study reveals that the trend is for educators to clear for fear and license unnecessarily multiple copies of works for classroom use (typically allowed by statute).⁴⁴ Doing so out of excessive caution, when fair use would otherwise apply, is harmful.⁴⁵ There is also extensively documented evidence of burdensome and uneven licensing systems and arrangements within schools.⁴⁶

What is more, there is a clear and negative interface between digital rights management (DRM) technologies and fair use.⁴⁷ For instance, smaller schools (such as elementary and secondary schools) in the US lacking resources (and potentially skills) are precluded from licensing works if they do not comply with DRM requirements imposed by rights holders to begin with.⁴⁸ The implications are that there is less use of content otherwise available and if available, prohibited from access because of the lack of resources. And while educators are generally averse to technological protection measures, they may use them nonetheless to ensure the integrity of their works and attribution of their efforts, and enforcement of how their works may be used. Also, educational institutions themselves, concerned with a return on investment, endorse DRM systems.⁴⁹ As such, rights holders are not the only parties responsible for limiting access to digital works.⁵⁰

The White Paper concludes that the judicial interpretation of the DMCA's anti-circumvention and anti-trafficking provisions to exclude fair use and other copyright exemptions as defences to actions under the DMCA "stripped educational users of their shield against copyright infringement liability…"⁵¹

(a) Limits of TEACH Act

The Technology, Education and Copyright Harmonization Act of 2001 ("TEACH Act") which promised to update educational use exemptions in light of technological developments has not delivered.⁵² The TEACH Act was the product of compromise among the stakeholder community and the result of a full study Congress conducted in 1998.⁵³ The TEACH Act: (1) expanded the types of content that could be used (2) allowed the digitization and short-term retention of content, and (3) eliminated a provision in the US copyright legislation that required students to be physically on location.

Nonetheless, many strictures make the Act unworkable and unreliable and ultimately of little value. While it deals with online learning, it is very specific on what may be used without first obtaining permission.⁵⁴ An educational institution must also be not for profit and accredited.

As the White Paper notes, the user must use technological protection measures (which often necessitate financial resources) and the actual use of technological protection measures "may eviscerate the TEACH Act all together."⁵⁵ The TEACH ACT "failed to create a safe harbor it promised, effectively leaving educations users of digital content without legal recourse to make use of such works."⁵⁶ The White Paper recommends to revise the TEACH ACT.⁵⁷

And so, as it is not meant to alter fair use, fair use seems to be the preferred vehicle of choice in the distance learning environment.⁵⁸ Though as explored fair use comes with its own uncertainties.

(b) Reasons for Optimism: Best Practices

The White Paper notes some grounds for optimism as (1) it views "educational uses" under the fair use doctrine to be likely permissible, and (2) there are virtually no decisions that apply fair use directly to educational defendants who made educational use of their contents. The only cases are those of commercial "coursepack" publishers, but not of the teachers making nonprofit educational uses of content.⁵⁹ A high profile case where New York University was the defendant was settled in 1983 before any decision was reached.⁶⁰ The White Paper posits that this near-total absence of lawsuits against educators, "may suggest that rights holders have tacitly accepted that the appropriate construction of the fair use doctrine leaves significant room for educational uses of content, or that they fear a negative public reaction if they sue educators."⁶¹ Indeed, some universities encourage that professors rely on the fair use doctrine for one-time or first uses of copyrighted material.⁶² But the cases of comfort are limited, and the vast majority of users (from teachers, librarians, lawyers and educational administrators) face fear and anxiety over acceptable uses of content.⁶³

Some of these stakeholders are trying to clarify the scope of fair use through self-help.⁶⁴ Particularly, stakeholders have come together to establish best practices at the university and industry-specific levels. The most successful and comprehensive initiative is a recent one from the documentary film-makers' industry.⁶⁵ Diverse stakeholders from the creators to the producers to the insurers have come together and developed a statement on "Best Practices in Fair Use." This 2005 document has been well-received and there is evidence that other industries are following suit.⁶⁶ These initiatives are most promising since clarification, understanding and respect for copyright use, creation and dissemination will best occur at the grass-roots level. Parties directly involved in the industry and therefore presumably more knowledgeable can formulate best practices. As in the film-makers' case, the insurers who will have been involved in this consensus-building can then confidently "sign off" and generate more possibilities for a greater variety of works for the public. These best practices can be thus applied by the creators to insurers of copyright and, eventually, as interpretive aids by the judges in the courts in the benefit of the public at large.

In the US, attempts to agree on industry-wide guidelines for fair use have failed. The most prominent example was the Commission on Fair Use (CONFU) which met regularly throughout the 1990s.⁶⁷ This ambitious attempt at a blanket approach indicates that more tailor-made cultural-specific solutions are necessary and attainable for fair use of copyrighted works.

Notes

1 This was not the case initially eg in Sony Corp of America v Universal City Studios Inc 464 US 417 (SCt 1984) ("Sony") where motive was not a factor.
2 ibid.
3 ibid 451.
4 510 US 569 (SCt 1994) ("Acuff-Rose").
5 Harper & Row (n 26) 1172.
6 Craig (n 96) 128.
7 ibid 125. This was the real intention of the court to set up a "balancing of the fair use factors".
8 Rogers v Koons 960 F 2d 301 (2d Cir 1992).
9 ibid 310.
10 "The effort utilized in this case was questionable at best and the level of judgment practically non-existent." 758 F Supp 1522 (NY Dt 1991) ("Kinko") 1529.
11 ibid.
12 ibid. "The insistence that theirs [motives] are educational concerns and not profitmaking ones boggles the mind."
13 cited in Kinko (n 150)1535; this can be contrasted with American Geophysical Union v Texaco 37 F3d 882 (2d Cir 1994): a class action by 82 scientific publishers against Texaco for copying its works to which it subscribed without paying royalties.
14 Harper & Row (n 26) 546.
15 Fair Use of Unpublished Works Publ No 102-492 (1992) 102d Cong 2d Sess., 106 Sat 3145 codified at 17 USC 107.
16 Harper & Row (n 26) 562.
17 ibid.
18 ibid.
19 Kinko (n 26) 1533.
20 Harper & Row (n 26) 565. In the case of parody, Harper & Row found this factor not very helpful because the parody necessarily must "go to the original's 'heart' since the 'heart' is what conjured up the song for parody; ibid 586-89; eg first line of lyrics and characteristic opening bass riff.
21 "More important, to negate fair use one need only show that if the challenged use 'should become widespread, it would adversely affect the potential market for the copyrighted work.' Harper& Row (n 26) 567 following Sony (n 141) 451 [emphasis in original]; isolated instances of infringements "become in the aggregate a major inroad on copyright that must be prevented." Harper & Row (n 26) 567
22 eg Arica Inst Inv v Palmer 970 F2d 1067 (2nd Cir 1992) 1078; Los Angeles News Serv v Tullo, 973 F 2d 791 at 798 (9th Cir 1992); Cable/Home Communication Corp v Network Prods Inc 902 F.2d 829 at 845 (11th Cir 1990).
23 Nunez v Caribbean Intern News Corp 235 F3d 18 (1st Cir 2000) on market of photographs. Though it is clear that bootlegged CDs or software unfair. US v Slater 348 F3d 666, 669 (where there was no abuse of discretion in refusing to instruct on fair use in criminal trial concerning unauthorized distribution of software).
24 Kinko (n 150) 1534.
25 Relying on Sony (n ) 451; Harper & Row (n 26) 590-594.
26 Rogers(n 148) 312. An example is raised on a movie adaptation of a book impacting the potential market of selling the book's adaptation rights.
27 Harper & Row (n 148) 590-594.
28 eg C Correa "Fair Use in the Digital Era" (Unesco Paris 2000). http://webworld.unesco.org/infoethics2000/documents/paper_correa.rtf (29 June 2007)
29 Kinko (n 150) 1534.
30 ibid.1538.
31 ibid.1535 citing Williams & Wilkins (n 67).
32 W Gordon "Keynote Fair Use: Threat or Threatened" (2004-2005) 55 Case W Reserve LRev 912 arguing that overbroad contract rules and the DMCA are the true threats to fair use.
33 MW Carroll "Fixing Fair Use" "Fixing Fair Use". North Carolina Law Review, Vol. 85, 2007 available at SSRN: 4.
34 Jessica Litman proposing an unfair competition standard for infringement; Michael Madison thinks that fair use should be re-written with more flexibility so that social practices that can benefit from fair use inform the analysis. See Carroll (n 173) 11 for about a half page footnote detailing all of these sources.
35 Presumption arose in Sony (n 141).
36 Congress amendment: "The fact that a work is unpublished shall not itself bar a finding of fair use" 17 USC s 107 (2000) see discussion in Gordon (n 172) 910.
37 Acuff-Rose (n 144) seconded Sony's rejection, along with recent cases such as Nunez (n 163) exonerating nontransformative or exact copies of works.
38 Cited in White Paper (n 24) 57.
39 D Nimmer "Fairest of them All' and other Fairy Tales of Fair Use" (2003) 66 Law & Contemp Probs 263, 280 "had Congress legislated a dartboard rather than the four fair use factors… it appears that the upshot would be the same."
40 In Author's Guild et al v Google (filed September 20, 2005 in NY DCt) Google is arguing fair use in defence.
41 Chilling Effects (n 24) eg merely providing a link to content on another website.
42 s 512 of the Digital Millennium Copyright Act ("DMCA") Pub L No 105-304, 112 Stat 2860 (Oct 28, 1998) provides "safe harbour" from copyright infringement.
43 M Heins and T Beckles "Will Fair Use Survive?" New York Brennan Center for Justice 2005 « http://www.fepproject.org/policyreports/WillFairUseSurvive.pdf »
44 White Paper (n 24) 57 documenting: "Comment of the University of Texas System, « http://www.copyright.gov/disted/comments/init020.pdf » at 5 indicating that the University seeks licenses for all copyrighted material, for lack of confidence in protections provided by fair use; but see Comment of the University of North Carolina at Chapel Hill provided in White Paper (n 24) indicating that the university encourages professors to take advantage of the fair use doctrine for one-time or first uses of copyrighted material.
45 White Paper (n 24) 58.
46 ibid 60-63.
47 Much scholarship exists eg S Blythe "The US Digital Millennium Copyright Act and the EU Copyright Directive: Comparative Impact on Fair Use" (2006) 8 Tul JTech and Intell Prop 111, 129.
48 White Paper (n 24) 52.
49 ibid. 54.
50 Here it is noteworthy that a Creative Commons type licence is used increasingly to achieve these means.
51 White Paper (n 24) s 4.2.4. on Educational Impact.
52 H.R. Rep. No. 94-1476.
53 Berkman Center for Internet and Society at Harvard Law School "Digital Learning and Legal Background Paper: The TEACH ACT–The Impact of Copyright and Compromise on Digital Distance Education" at « http://cyber.law.harvard.edu/home/dl_teachact » (18 June 2007).
54 R Fry "Copyright Issues in E-learning" (2004) 3:2 Copyright and New Media Newsletter. See also « http://www.lib.ncsu.edu/scc/legislative/teachkit/ » (19 June 2007)
55 White Paper (n 24) 34.
56 ibid. 54.
57 ibid. 71.
58 NC State University "The TEACT Tool Kit" « http://www.lib.ncsu.edu/scc/legislative/teachkit/ » (29 June 2007)
59 White Paper (n 24) 38.
60 ibid.
61 ibid.
62 ibid. for comment by University of North Carolina at Chapel Hill.
63 ibid. 39.
64 Documentary Filmmakers' Statement of Best Practices in Fair Use (Center for Social Media American University November 18, 2005) 9-10.
65 ibid.
66 Harvard Internet & Society Conference "Knowledge Beyond Authority" (Harvard University June 1 2007) « http://www.is2k7.org/working-groups »
67 Internationally, the International Federation of Libraries Associations has also looked at issue; see generally http://www.ifla.org/ (29 June 2007).

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