The House Subcommittee on Courts, Intellectual Property and the Internet of the Judiciary Committee of the House of Representatives, held a hearing on January 28 on The Scope of Fair Use.

What is Fair Use?

The doctrine of fair use, originally created by the courts, is now codified in §107 of the Copyright Act of 1976. The written testimony of Kurt Wimmer, General Counsel for the Newspaper Association of America, provided an interesting recap of some of the early fair use cases in his written testimony.

Fair use is an affirmative defense to a claim of copyright infringement. To assess whether a particular unauthorized use of a work protected by copyright is fair, courts are using four factors enumerated by §107.

They 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 the copyrighted work as a whole;

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

No single factor is determinative, but the first factor, purpose and character of the use, is usually considered the more important one by the courts, along with the fourth one, commercial use.

A recent Commerce Department Green Paper stated that fair use is “inherently fact-intensive” (p. 21). Indeed, as the fair use defense is a mixed question of law and fact, it may be difficult to predict with certainty the outcome of a particular case. However, one of the witnesses, Professor Peter Jaszi from American University, provided in his written testimony references to two recent scholarly articles demonstrating that fair use may actually be predictable (Professor Jaszi’s written testimony p. 5).

Some Transformative Works…

The first factor plays in defendant’s favor in a copyright infringement suit if his use of the protected work was “transformative.”  A transformative work was defined by the Supreme Court in 1994 as “add[ing] something new, with a further purpose or a different character, altering the first [work] with new expression, meaning or message.”

That is important, as the purpose of copyright, under article I, § 8, cl. 8. of the  U.S. Constitution, is to “promote the progress of science and useful arts.” If the new work is transformative, the other three factors, even the fourth factor, commercialism, carry less weight.

One of the witnesses invited to testify was David Lowery, who has recently published a list of the Fifty Undesirable Lyric Websites, that is, unlicensed lyrics sites publishing songs’ lyrics without seeking permission.

David Lowery, who is also a songwriter, noted in his written testimony that he receives revenues from some sites, but not from others. From his point of view, this unauthorized use competes with the revenue he receives from licensed sites. The site which made top of his list, RapGenius, allows users to annotate and comment on the lyrics posted.

The example of RapGenius is interesting, as it is a lyrics and text annotation site. Users are invited to participate by adding their own comments and explanations about the lyrics posted on the site. Is this copyright infringement, or should this type of work be protected by fair use? Under §106 of the Copyright Act, the owner of the copyright has the exclusive right to prepare derivative works based upon the copyrighted work, but specifically subjects this right to §107.

Derivative work? Transformative work? What RapGenius does could also be described as mass digitization, which in turn may benefit the public by enabling research and comments. For instance, a blog used RapGenius to write a post about the frequency of some words in rap songs. I was interested reading that ‘crouton’, ‘sushi’ and ‘lobster’ are words shunned by rappers…

Anyway, RapGenius has recently entered into a licensing agreement with Universal Music.

But transformative works do not necessarily create a new work, they also may be transformative because they make a new use of prior protected works.

Not all the witnesses were of that opinion however. Professor June Besek from Columbia University expressed her concerns about this interpretation of a ‘transformative’ work,  noting that this “enables new business models, not new works of authorship. “ Kurt Wimmer testified that the transformative use concept has started to ascend since the late Nineties and that this has “unsettled the marketplace.”

New Uses of Protected Works

Of course, the mass digitization project to trump all mass digitization projects is the Google Books case.

In the recent Authors Guild v. Google case, Judge Denny Chin, from the Southern District Court of New York, found that Google’s mass digitization of books for its Google Books Project was “highly transformative,” as it had created “a comprehensive word index that helps readers, scholars, researchers, and others find books.” Judge Chin concluded that “[i]n [his] view, Google Books provides significant public benefits.”

Judge Chin quoted the Bill Graham Archives v. Dorling Kindersly case where the Second Circuit found in 2006 that the unauthorized use of thumbnails images of Grateful Dead posters in a book was fair use.

Kurt Wimmer testified that he did not agree with the court in the Bill Graham case, while Naomi Novik, a bestselling author who founded the Organization for Transformative Works, instead told members of Congress that, in her view, the use of the Grateful Dead posters was transformative, and did not replace the original work, as the chronological timeline of posters allowed readers to easily observe the transformation of their style throughout the years.

In that case, defendant had published a 480-page coffee table book about the story of the Grateful Dead, using a timeline format through the book which combined more that 2000 images in thumbnail format presented chronologically. Plaintiffs sued over the unauthorized use of seven images.

The Second Circuit emphasized in its first fair use factor reasoning that the work was a biography. Since §107 cites scholarship and research as one of the possible categories of fair use, the nature of the work played in defendant’s (and fair use) favor.

Here, 2,000 images were at stake, a rather modest number. Could  mass digitization be fair use?

Professor June Besek expressed concerns in her written testimony about whether fair use should indeed protect “copying the full contents of millions of works” (emphasis by Professor Besek, p. 3 of her testimony).

For Professor Besek, fair use is “extraordinarily expanding” as copying the content of millions of works may now qualify as fair use, and advised Congress to address the issue of mass digitization which, she believes, “is skewing the law.” Professor Besek concluded her written testimony by suggesting that “Congress might separately address the problems of mass digitization, including whether authors should be compensated for publicly beneficial uses” noting that, right now, compensation is not an option under §107.

A recent Southern District of New York case, cited by Kurt Wimmer in his written testimony, found that Meltwater, a SaaS offering news monitoring services to its clients, had infringed the copyright of the Associated Press when it scraped AP news from online sources using automated computer algorithms. The SDNY did not find the use transformative, as it did not add ”any commentary or insight in its News Reports.”  Instead, Meltwater was acting as a substitute.

However, Professor Jaszi testified that the recent mass digitization cases from the SDNY Google Book cases were “excellent examples“ of the fair use doctrine “fulfilling its purpose.”

Do We Need a Fair Use Reform?

Professor Jaszi does not believe so, stating that “fair use is working.” He warned Congress in his written testimony that “tweaks or improvements… could have serious and adverse unintended consequences” and would discourage new creativity (p.7 of Prof. Jaszi’s testimony).

However, he also testified that fair use could use legislative support, for instance by exempting non-commercial creators of derivative work from potential statutory damages, as this chills the exercise of free speech. Indeed, defendants may be taking a gamble when deciding to go to court, instead of merely taking down the allegedly infringing work after having been contacted by the copyright owner of the original work,as they risk having to pay statutory damages

Professor Jaszi cited while testifying the January 27, 2014 Second Circuit decision, Swatch Group v. Bloomberg, where the Second Circuit found that the unauthorized publication by Bloomberg of a sound recording of a conference call to discuss Swatch’s recently released earning report with investment analysts was fair use.

The Second Circuit held there that:

“[i]n the context of news reporting and analogous activities, moreover, the need to convey information to the public accurately may in some instances make it desirable and consonant with copyright law for a defendant to faithfully reproduce an original work rather than transform it. In such cases, courts often find transformation by emphasizing the altered purpose or context of the work, as evidenced by surrounding commentary or criticism”

The public interest to access information was thus served. In this case, no copyrightable work was created, but useful knowledge has been disseminated, and that benefits the public.

Should Fair Use Law be Updated?

Professor Jaszi does not believe that fair use needs to be updated to adapt to “the new conditions of digital information exchange” as the doctrine is flexible enough to adapt to new practices such as remixes or mass digitization (written testimony p. 6). Kurt Wimmer does not believe the law needs to be changed either, and wrote that the NAAA “believes that the courts, rather than Congress, should … be the appropriate forum for resolving issues surrounding fair use” (written testimony p. 6).

In her written testimony, Naomi Novik urged Congress “to resist any suggestion of narrowing fair use, including by trying to replace it with licensing.”

However, Professor Besek warned in her written testimony that “[a]n increasingly expansive fair use exception risks violating each of the [TRIPS Three Step Test]” as stated by Annex 1C, article 13 of the TRIPS:

“Members shall confine limitations or exceptions to exclusive rights to certain special cases which do not conflict with a normal exploitation of the work and do not unreasonably prejudice the legitimate interests of the right holder.”

It remains to be seen if Congress will undertake reforming fair use law.

Image is courtesy of Flickr user R.B. Boyer pursuant to a  CC BY-SA 2.0 license.

by