17 U.S.C. § 107. Limitations on Exclusive Rights: Fair Use
Notwithstanding the provisions of section 106, the fair use of a copyrighted work, including such use by reproduction in copies of 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 --
The fact that a work is unpublished shall not itself bar a finding of fair use if such finding is made upon consideration of all of the above factors.
The fair use doctrine, which Congress codified in the Copyright Act of 1976, initially evolved as a common law defense to copyright infringement. Although the characterization of fair use varies somewhat from one opinion to the next, most courts describe it as an attempt to encourage certain desirable uses of copyrighted material by people who might not have permission from the copyright owner. As the Supreme Court stated in Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 575 (1994):
"From the infancy of copyright protection, some opportunity for fair use of copyrighted materials has been thought necessary to fulfill copyright's very purpose, 'to promote the Progress of Science and useful Arts…' U.S. Cost., Art. I, § 8, cl. 8. For as Justice Story explained, 'in truth, in literature, in science and in art, there are, and can be, few, if any, things, which in an abstract sense, are strictly new and original throughout. Every book in literature, science and art, borrows, and must necessarily borrow, and use much which was well known and used before.' Emerson v. Davies, 8 F. Cas. 615, 619 (No. 4,436) (CCD Mass. 1845)."
Section 107(1)'s list of "favored uses" is non-exclusive and non-determinative; uses other than those listed can qualify as "fair," and the fact that a use falls within one of the enumerated categories does not automatically exempt a defendant from a finding of infringement. Courts evaluating a fair use defense must balance the four factors listed in Section 107. While none of the factors is dispositive, courts often describe the first and the fourth as the most important. As one commentator has explained, "[T]hese factors most implicate the basic policy question of whether an author will have an incentive to create if infringements will be excused under fair use." Maureen A. O'Rourke, Fencing Cyberspace: Drawing Borders in a Virtual World, 82 Minn. L. Rev. 609, 661 (1998).
Religious Technology Center v. Netcom
[The beginning of the court's opinion is excerpted in Section 2 of this module.]
Fair Use Defense
Assuming plaintiffs can prove a violation of one of the exclusive rights guaranteed in section 106, there is no infringement if the defendant's use is fair under section . The proper focus here is on whether Netcom's actions qualify as fair use, not on whether Erlich himself engaged in fair use; the court has already found that Erlich was not likely entitled to his own fair use defense, as his postings contained large portions of plaintiffs' published and unpublished works quoted verbatim with little added commentary.
Although the author has the exclusive rights to reproduce, publicly distribute, and publicly display a copyrighted work under section 106, these rights are limited by the defense of "fair use." 17 U.S.C. s 107. The defense "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., --- U.S. ----, ----, 114 S.Ct. 1164, 1170, 127 L.Ed.2d 500 (1994) (citation omitted). Congress has set out four nonexclusive factors to be considered in determining the availability of the fair use defense: (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. 17 U.S.C. s 107. The fair use doctrine calls for a case-by-case analysis. Campbell, --- U.S. at ----, 114 S.Ct. at 1170. All of the factors "are to be explored, and the results weighed together, in light of the purposes of copyright." Id. at ---- - ----, 114 S.Ct. at 1170-71.
First Factor: Purpose and Character of the Use
The first statutory factor looks to the purpose and character of the defendant's use. Netcom's use of plaintiffs' works is to carry out its commercial function as an Internet access provider. Such a use, regardless of the underlying uses made by Netcom's subscribers, is clearly commercial. Netcom's use, though commercial, also benefits the public in allowing for the functioning of the Internet and the dissemination of other creative works, a goal of the Copyright Act. See Sega v. Accolade, 977 F.2d 1510, 1523 (9th Cir.1992) (holding that intermediate copying to accomplish reverse engineering of software fair use despite commercial nature of activity; considering public benefit of use). The Campbell Court emphasized that a commercial use does not dictate against a finding of fair use, as most of the uses listed in the statute are "generally conducted for profit in this country." --- U.S. at ----, 114 S.Ct. at 1174. Although Netcom gains financially from its distribution of messages to the Internet, its financial incentive is unrelated to the infringing activity and the defendant receives no direct financial benefit from the acts of infringement. Therefore, the commercial nature of the defendant's activity should not be dispositive. Moreover, there is no easy way for a defendant like Netcom to secure a license for carrying every possible type of copyrighted work onto the Internet. Thus, it should not be seen as "profit[ing] from the exploitation of the copyrighted work without paying the customary prices." Harper & Row, Publishers, Inc. v. Nation Enterprises, 471 U.S. 539, 562, 105 S.Ct. 2218, 2231, 85 L.Ed.2d 588 (1985). It is undisputed that, unlike the defendants in Playboy and Sega, Netcom does not directly gain anything from the content of the information available to its subscribers on the Internet. See supra part I.B.3.b. Because it does not itself provide the files or solicit infringing works, its purpose is different from that of the defendants in Playboy and Sega. Because Netcom's use of copyrighted materials served a completely different function than that of the plaintiffs, this factor weighs in Netcom's favor, see Hustler Magazine, Inc. v. Moral Majority, Inc., 606 F.Supp. 1526, 1535 (C.D.Cal.1985), aff'd, 796 F.2d 1148 (9th Cir.1986), notwithstanding the otherwise commercial nature of Netcom's use.
Second Factor: Nature of the Copyrighted Work
The second factor focuses on two different aspects of the copyrighted work: whether it is published or unpublished and whether it is informational or creative. Plaintiffs rely on the fact that some of the works transmitted by Netcom were unpublished and some were arguably highly creative and original. However, because Netcom's use of the works was merely to facilitate their posting to the Usenet, which is an entirely different purpose than plaintiffs' use (or, for that matter, Erlich's use), the precise nature of those works is not important to the fair use determination. See Campbell, --- U.S. at ----, 114 S.Ct. at 1175 (finding creative nature of work copied irrelevant where copying for purposes of parody); Hustler Magazine, 606 F.Supp. at 1537; 3 NIMMER ON COPYRIGHT s 13.05[A][a], at 13- 177 ("It is sometimes necessary, in calibrating the fair use defense, to advert to the defendant's usage simultaneously with the nature of the plaintiff's work.").
Third Factor: Amount and Substantiality of the Portion Used
The third factor concerns both the percentage of the original work that was copied and whether that portion constitutes the "heart" of the copyrighted work. Harper & Row, 471 U.S. at 564-65, 105 S.Ct. at 2232-33. Generally, no more of a work may be copied than is necessary for the particular use. See Supermarket of Homes v. San Fernando Valley Board of Realtors, 786 F.2d 1400, 1409 (9th Cir.1986). The copying of an entire work will ordinarily militate against a finding of fair use, although this is not a per se rule. Sony, 464 U.S. at 449-450, 104 S.Ct. at 792-793.
Plaintiffs have shown that Erlich's postings copied substantial amounts of the originals or, in some cases, the entire works. Netcom, of course, made available to the Usenet exactly what was posted by Erlich. As the court found in Sony, the mere fact that all of a work is copied is not determinative of the fair use question, where such total copying is essential given the purpose of the copying. Id. (allowing total copying in context of time-shifting copyrighted television shows by home viewers). For example, where total copying was necessary to carry out the defendants' beneficial purpose of reverse engineering software to get at the ideas found in the source code, the court found fair use. Sega v. Accolade, 977 F.2d at 1526-27. Here, Netcom copied no more of plaintiffs' works than necessary to function as a Usenet server. Like the defendant in Sega v. Accolade, Netcom had no practical alternative way to carry out its socially useful purpose; a Usenet server must copy all files, since the prescreening of postings for potential copyright infringement is not feasible. 977 F.2d at 1526. Accordingly, this factor should not defeat an otherwise valid defense.
Fourth Factor: Effect of the Use upon the Potential Market for the Work
The fourth and final statutory factor concerns "the extent of market harm caused by the particular actions of the alleged infringer" and " '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, --- U.S. at ----, 114 S.Ct. at 1177 (quoting 3 NIMMER ON COPYRIGHT s 13.05[A] ) (remanding for consideration of this factor). Although the results of all four factors must be weighed together, id. at ----, 114 S.Ct. at 1171, the fourth factor is the most important consideration, 3 NIMMER ON COPYRIGHT s 13.05[A], at 13-188 to -189 (citing Harper & Row, 471 U.S. at 566, 105 S.Ct. at 2233), 13-207 (observing that fourth factor explains results in recent Supreme Court cases).
Netcom argues that there is no evidence that making accessible plaintiffs' works, which consist of religious scriptures and policy letters, will harm the market for these works by preventing someone from participating in the Scientology religion because they can view the works on the Internet instead. Further, Netcom notes that the relevant question is whether the postings fulfill the demand of an individual who seeks to follow the religion's teachings, and not whether they suppress the desire of an individual who is affected by the criticism posted by Erlich. Netcom argues that the court must focus on the "normal market" for the copyrighted work, which in this case is through a Scientology-based organization. Plaintiffs respond that the Internet's extremely widespread distribution--where more than 25 million people worldwide have access--multiplies the effects of market substitution. In support of its motion for a preliminary injunction against Erlich, plaintiffs submitted declarations regarding the potential effect of making the Church's secret scriptures available over the Internet. Plaintiffs point out that, although the Church currently faces no competition, groups in the past have used stolen copies of the Church's scriptures in charging for Scientology-like religious training. See, e.g., Bridge Publications, Inc. v. Vien, 827 F.Supp. 629, 633-34 (S.D.Cal.1993); Religious Technology Center v. Wollersheim, 796 F.2d 1076, 1078-79 (9th Cir.1986), cert. denied, 479 U.S. 1103, 107 S.Ct. 1336, 94 L.Ed.2d 187 (1987). This evidence raises a genuine issue as to the possibility that Erlich's postings, made available over the Internet by Netcom, could hurt the market for plaintiffs' works.
In balancing the various factors, the court finds that there is a question of fact as to whether there is a valid fair use defense. Netcom has not justified its copying plaintiffs' works to the extent necessary to establish entitlement to summary judgment in light of evidence that it knew that Erlich's use was infringing and had the ability to prevent its further distribution. While copying all or most of a work will often preclude fair use, courts have recognized the fair use defense where the purpose of the use is beneficial to society, complete copying is necessary given the type of use, the purpose of the use is completely different than the purpose of the original, and there is no evidence that the use will significantly harm the market for the original. This case is distinguishable from those cases recognizing fair use despite total copying. In Sony, the home viewers' use was not commercial and the viewers were allowed to watch the entire shows for free. In Sega v. Accolade, the complete copying was necessitated to access the unprotectable idea in the original. Here, plaintiffs never gave either Erlich or Netcom permission to view or copy their works. Netcom's use has some commercial aspects. Further, Netcom's copying is not for the purpose of getting to the unprotected idea behind plaintiffs' works. Although plaintiffs may ultimately lose on their infringement claims if, among other things, they cannot prove that posting their copyrighted works will harm the market for these works, see Religious Technology Center v. Lerma, 897 F.Supp. 260, ---- (E.D.Va. August 30, 1995) (finding fair use defense exists where no separate market for works because Scientologists cannot effectively use them without the Church's supervision); Religious Technology Center v. F.A.C.T.NET, Inc., 901 F.Supp. 1519, 1522-26 (D.Colo. September 15, 1995) (finding no showing of a potential effect on the market for plaintiffs' works), fair use presents a factual question on which plaintiffs have at least raised a genuine issue of fact. Accordingly, the court does not find that Netcom's use was fair as a matter of law.
Comments, notes, and questions
How does the court's fair use analysis sit with its assessment of direct, contributory, and vicarious infringement? If the defendant can establish facts sufficient to show fair use, won't it avoid liability anyway based on the standards established by the court?
REAL-WORLD HYPOTHETICAL:Los Angeles Times v. Free Republic.
In September 1998, the Los Angeles Times and two other news organizations filed suit against Free Republic and its principal organizer, alleging copyright infringement and a number of other claims. Free Republic operates an anti-government, politically conservative web site whose users frequently incorporate some or all of plaintiffs' newspaper articles into postings on the site. The users then provide commentary on the substance -- and sometimes the tone -- of the articles. Indeed, Free Republic's readers sometimes use the articles to illustrate the liberal bent of the popular press.
You have just been assigned to work on the Free Republic's defense to plaintiffs' copyright infringement claims. After reviewing the site to get a sense of its flavor, what arguments can you think of that support your client's case? How confident do you feel about your position?