The Google Book project: is it fair use?

January 5th, 2014 by Barry Sookman Leave a reply »

One of the most important, if not the most important, United States copyright cases decided in 2013 is The Authors Guild, Inc. v Google Inc. 2013 WL 6017130 (S.D.N.Y. Nov.14, 2013). The case has now been appealed to the Second Circuit Court of Appeals by The Authors Guild. The case raises issues of such significance to copyright holders and online service providers that it may well end up as a landmark precedent of the U.S. Supreme Court (assuming of course that certiorari is granted).*

In the Authors Guild case, Judge Chin ruled that the Google Book project was did not infringe copyright as it was covered by a fair use. There is no question that in the absence of fair use, Google would have been liable for copyright infringement. As found by Judge Chin, Google digitally reproduced millions of copyrighted books. It made digital copies available for its Library Project partners to download for any uses that did not violate copyright laws. Google also displayed snippets from the books to the public. It did all of this without license or permission from the copyright owners. Google’s only defense was fair use.

Copyright laws mediate between providing incentives for authors to create and disseminate works while ensuring access to works by members of the public. It achieves these goals by providing authors (and others) with a series of exclusive rights which enable them to control the exploitation of their works and to reap economic benefits from their investments. The exclusive rights are subject to carefully crafted exceptions and limitations which provide, for the most part, uncompensated uses by members of the public.

Fair use is one of these exceptions. The fair use doctrine is codified in § 107 of the Copyright Act, which provides in relevant part as follows:

[T]he fair use of a copyrighted work… 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:

(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.

The Google Books case raises crucial questions about fair use and its place in the copyright framework in the online digital environment including the following questions:

  • What is a “fair” treatment of books and other works created in an analog age? Should their authors have a right to negotiate the details of their digital exploitation in a developing online technological marketplace?
  • Should the transformative nature of digital technologies allow their makers to use fair use to trump exclusive rights?
  • In a rapidly evolving technological age, what counts as a truly ‘transformative’ and should new uses of works for commercial purposes be viewed as tending to be fair or unfair?
  • Is it fair that online service providers should be able to reap all of the commercial benefits of new uses of works without paying for such uses?
  • Should the courts or Congress make policy choices to address copyright issues presented by technological developments?

On appeal appellate courts will need to consider whether Judge Chin erred in considering whether the Google Books project was a fair use. The following questions might well be raised in the appeals.

  1. Did Judge Chin err by improperly imputing to Google the benefit of it’s customers’ transformative and non-commercial activities in support its own commercial purposes?
  2. Did Judge Chin err in his interpretation of what is required for a use to be transformative?
  3. Did Judge Chin err by failing to properly weigh the indirect commercial benefits Google realized by exploiting the works?
  4. Did Judge Chin err by not considering the potential of the market for the works?
  5. Did Judge Chin misapply the fair use framework by not analyzing each act of infringement separately?
  6. Did Judge Chin err by not applying the policies underlying copyright and fair use and United States’ copyright treaty obligations?

I explore each of these questions below. For those readers wanting more details, I refer you to the extensive endnote references at the end of the article.

Did Judge Chin err by improperly imputing to Google the benefit of it’s customers’ transformative and non-commercial activities in support its own commercial purposes?

The first fair use factor in the § 107 test is the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes. The essential inquiry under the first factor can be separated into two parts: whether the new work is transformative and the extent to which the use serves a commercial purpose.[1]

The Google Books project had two aspects (1) digitizing copies of books for the purpose of making them available to the supplying libraries for their purposes, and (2) digitizing copies for indexing, creating a database, and providing snippets to the public in response to search queries.

Judge Chin’s finding that Google’s digitizing copies for the purpose of making them available to the supplying libraries was a fair use is summarized in the passage below:

Similarly, Google is entitled to summary judgment with respect to plaintiffs’ claims based on the copies of scanned books made available to libraries. Even assuming plaintiffs have demonstrated a prima facie case of copyright infringement, Google’s actions constitute fair use here as well. Google provides the libraries with the technological means to make digital copies of books that they already own. The purpose of the library copies is to advance the libraries’ lawful uses of the digitized books consistent with the copyright law. The libraries then use these digital copies in transformative ways. They create their own full-text searchable indices of books, maintain copies for purposes of preservation, and make copies available to print-disabled individuals, expanding access for them in unprecedented ways. Google’s actions in providing the libraries with the ability to engage in activities that advance the arts and sciences constitute fair use.

As can be seen from the above passage, Google’s only activities in relation to this aspect of the project was to provide libraries with digital copies of books. There was no claim that these digital copies themselves were transformative. Nor could they be as a mere conversion of text into a different format, though useful, is not transformative.[2]

Judge Chin’s only finding in relation to the first aspect of the project was that the use of the copies by the libraries gave them a capability to engage in uses that were fair. However, under well-established law, commercial for-profit enterprises have not been able to stand in the shoes of their customers who make non-profit or non-commercial uses and to claim the benefit of their transformative non-commercial activities.[3]  This transposition of purpose has been rejected in numerous situations including:

This long line of cases was summarized by William Patry, Google`s Senior Copyright Counsel, in his multivolume text Copyright law and Practice[14] where he stated “The courts have also properly rejected attempts by for-profit users to stand in the shoes of their customers making nonprofit or noncommercial uses.”[15]

Judge Chin did not consider these authorities under the first factor as they applied to the library portion of the Google Book project. Nor did he apply this line of cases when assessing the balance of the Google Books functionality. In fact, throughout the opinion he did not differentiate the uses made by Google from those made by the service recipients when assessing the purpose and the character of the use factor.

In operating the service Google digitized books. It used the books to create a comprehensive word index of all scanned books. The index linked each word or phrase appearing in each book with all of the locations in the books in which that word or phrase was found. In response to search queries, Google used the copies of the books to display verbatim copies of extracts to users of the service.

Users of Google’s service used the comprehensive index and snippets for a variety of purposes which Judge Chin found to have significant public benefits. Readers, scholars, researchers, and others used the service to find books, engage in data and text mining, and to obtain alerts to the existence of out of print books.

Judge Chin made no distinction between the activities undertaken by Google and those of users, taking them all together in assessing the purpose and character of the use under the first factor.[16]  However, as Mr. Patry observed in his text, it is questionable whether the eventual benefits of an end user are relevant to this portion of the § 107 test.

Did Judge Chin err in his interpretation of what is required for a use to be transformative?

The transformative analysis raises the question of justification for the use.[17] The transformative use principle was formulated by the Supreme Court in Campbell [18] as follows:

The first factor in a fair use enquiry is “the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes.” § 107(1). This factor draws on Justice Story’s formulation, “the nature and objects of the selections made.” Folsom v. Marsh, 9 F. Cas., at 348. The enquiry here may be guided by the examples given in the preamble to § 107, looking to whether the use is for criticism, or comment, or news reporting, and the like, see § 107. The central purpose of this investigation is to see, in Justice Story’s words, whether the new work merely “supersede[s] the objects” of the original creation, Folsom v. Marsh, supra, at 348; accord, Harper & Row, supra, at 562 (“supplanting” the original), or instead adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message; it asks, in other words, whether and to what extent the new work is “transformative.” Leval 1111. Although such transformative use is not absolutely necessary for a finding of fair use…the goal of copyright, to promote science and the arts, is generally furthered by the creation of transformative works. Such works thus lie at the heart of the fair use doctrine’s guarantee of breathing space within the confines of copyright, see, e. g., Sony, supra, at 478-480 (Blackmun, J., dissenting), and 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.

The scope of what uses are transformative has been the subject of conflicting and confusing case law[19] and has not yet been settled by the Supreme Court which only addressed the question in the context of parody.[20]

Since Campbell, some cases have required or found that more than a mere use of a work for a different purpose is required to make the use transformative.[21] The critical inquiry under the first factor is whether the allegedly infringing work “merely supersedes” the original work “or instead adds something new, with a further purpose or different character, altering the first with new meaning or message such as to create “new in-formation, new aesthetics, new insights and understandings.”[22]

Some cases have taken a broader approach not considered in Campbell finding that using a work for a different purpose than the use made by the copyright owner can make that use transformative.  A “transformative” use under these cases does not require that the secondary work transform the original work’s expression to be transformative.[23] It can be one that copies or employs the quoted matter in a different manner or for a different purpose from the original.[24] Photocopying for use in a classroom is a classic example. The Ninth Circuit Kelly v Aririba Soft case which held that a use of a work posted on the Internet by a search engine was transformative is such a case.[25] Another is Perfect 10, Inc. v. Amazon.com in which the Ninth Circuit found Google’s search engine transformative holding that “a search engine provides social benefit by incorporating an original work into a new work, namely, an electronic reference tool.”[26]

The lack of alteration of a work, however, makes the label “transformative use” a messy fit for the doctrine. The “transformative use” label is most apt when a secondary work created by an alleged infringer actually alters the content of a copyrighted work or incorporates that content in an altered way into a new work, such as a parody.[27]

An interpretation of the first factor that considers new digital uses of analog works “transformative” without any requirement that anything be added to the work itself, or that the work itself be transformed, has the potential to greatly expand the scope of the fair use exception. It risks according greater value to the “envelope” containing a creative work than to the creative work itself. Readers have a new way to engage with a copyright work, but no new content is added or subtracted in the Google Books model considered by Judge Chin – there is no actual transformation of the work or creation of a new copyright work from these uses.

A question for the appellate courts is whether Campbell contemplated that the concept of transformation requires adding something new, with a further purpose or different character, where the original work is altered with new expression, meaning, or message. If these factors are required, a mere use of an unaltered work for a different purpose may not be enough to establish a transformative use, even though the use might still be considered as tending to be fair. If such use is considered transformative or is otherwise weighted as tending to be fair, should such a use for a commercial purpose tend to be as fair as a use where the work is altered? Will it all depend on the circumstances?

Judge Chin found that books were used for different purposes than the uses made by the authors. However, he made no finding that the databases, indexes, or snippets which Google created were original in any copyright sense. Using its automated computer tools Google created an index. This was something new, but there was no finding that this was a new work or a new transformed work in which copyright might subsist. Rather, it would appear that the index was an inevitable outcome of the content of the books as scanned by the automated tools. Judge Chin also did not engage in any analysis to determine whether the index contained any new or original “expression, meaning, or message”. If these elements are required for a transformative use, then the analysis of the Google Book project under the first factor could have been given a different weighting. Further, if a transformative use without alteration of the work should be weighed differently from where the work is altered, as in Campbell, then again the weighting under the first factor might have been different.

Did Judge Chin err by failing to properly weigh the indirect commercial benefits Google realized by exploiting the works?

If and to the extent that Google’s use of the scanned books is not considered to be transformative (such as where it made copies available for library partners), then the fact that Google scanned and used the books for a commercial purpose would weigh heavily against it.[28]

Even if Google’s use is considered to be transformative, that would not be dispositive as its commercial use would still be a factor militating against a finding of fair use.[29]  In his decision, Judge Chin gave very little weight to Google’s for profit use of the books merely noting that it “tends to weigh against a finding of fair use”. He also discounted the benefits Google derived from the draw to its websites from the use of the Google books service finding that Google Books serves “important educational purposes”.[30]

A question for the appellate courts is whether Judge Chin misapplied the importance of Google’s commercial use. His reasons almost write this explicit statutory consideration out of the statute.

In the Sony Betamax case, the majority of the Supreme Court stated that “If the Betamax were used to make copies for a commercial or profitmaking purpose, such use would presumptively be unfair.” In Harper & Row, the Supreme Court re-emphasized how important the commercial/non-profit distinction is stating

The fact that a publication was commercial as opposed to nonprofit is a separate factor that tends to weigh against a finding of fair use. “[E]very commercial use of copyrighted material is presumptively an unfair exploitation of the monopoly privilege that belongs to the owner of the copyright.” Sony Corp. of America v. Universal City Studios, Inc., 464 U. S., at 451. In arguing that the purpose of news reporting is not purely commercial, The Nation misses the point entirely. The crux of the profit/nonprofit distinction is not whether the sole motive of the use is monetary gain but whether the user stands to profit from exploitation of the copyrighted material without paying the customary price.

In Campbell the Court acknowledged that if a commercial factor had the force of a presumption of unfairness, that could render ineligible for fair use certain uses which Congress had clearly contemplated could be fair uses such as the specific illustrations in the statute. It therefore did away with the presumption.[31] But, Campbell did not make the nature and objectives of the user irrelevant even when a use is transformative.[32] It also did not criticize the holding in Harper & Row that the crux of the profit/non-profit distinction is whether the user stands to profit from exploitation of the copyrighted material without paying, including by gaining revenues from the unauthorized copying of the work.[33]

Campbell did not give direction to the courts as to how to weigh the socially beneficial results of transformative conduct (which tends to weigh in favour of fair use) with allegedly infringing uses of works that are the core input and attraction of a commercial service like the Google Books project. Google’s search services are offered to the public for free. However, these services are indirectly paid for through advertisements displayed at Google’s sites. Indirect commercial benefits are generally assessed in the same manner as direct benefits and one might have thought these benefits would have weighed against a finding of fairness.[34] The opinion, however, treats the finding of transformation almost as a presumption that the commercial purpose is to be disregarded in assessing the fairness of the use. In doing so, the court effectively turned what had been a presumption of unfairness into a presumption of fairness. While it may be appropriate in some parody and other types of cases to discount the commercial purpose in assessing fairness, it is quite another thing  to do so in all cases in which some transformative use is shown.

Although not considered in the opinion, Google’s distribution of copies of each scanned book to the providing libraries would also be part of a commercial agreement in which the libraries supplied books in consideration of Google’s promise to supply them with the scanned copies, something they previously did not have and which they could use productively. Judge Chin did not expressly weigh these commercial dealings in his assessment of the first factor. Given that the scanned copies made available to libraries were not transformed in any way, should this use have been weighed heavily against Google?

The opinion also did not address the other uses or potential uses Google may employ the scanned books for including to enhance the functionality of its services and for automated translation, optical character recognition, and voice recognition algorithms. These were referred to in the brief filed by The Authors Guild, but not mentioned in the opinion.

Did Judge Chin err by not considering the potential of the market for the works?

The fourth factor focuses on the effect of the use upon the potential market for or value of the copyrighted work. Fair use, when properly applied, is limited to copying by others which does not materially impair the marketability of the work which is copied. In Harper & Row, the Supreme Court stated that the effect on the market factor “is undoubtedly the single most important element of fair use”.  After Campbell, it remains an important factor in assessing whether the allegedly offending uses are fair.[35]

The inquiry of the effect on the market considers not only the harm of the activities of the user, but what the effects would be if the use should become widespread.[36] Effects upon the potential market for or value of the copyright work can be found where potential licensing revenues are lost, at least where such markets are traditional, reasonable, or likely to be developed.

Judge Chin’s consideration of the fourth factor can be summarized easily. First, the authors did not show that the Google books project would negatively impact the market for books. Second, the project will enhance the sales of books to the benefit of authors.[37]

Judge Chin did not address whether Google’s service, or the widespread adoption of similar services, would undermine any potential for the development of a market including any market for collective licensing, something that has been recognized in the fair use cases.[38]

In addition, other cases have held that the fact a rights holder may benefit from an alleged infringement in some way is an irrelevant consideration. The alleged infringer’s burden is to establish that it had not impaired the market or potential market for their works. [39]

Did Judge Chin misapply the fair use framework by not analyzing each act of infringement separately?

Judge Chin’s conclusion that the Google Books project was protected by fair use was premised on his overall assessment of the project. His analysis never condescended to examining specific aspects of the project or infringements with respect to specific works or even classes of works. His analysis essentially excuses all possible infringements by relying on the overall social benefits of the project. However, in other cases, judges have refused to allow one use that that meets the requirements of a fair use to excuse other infringing conduct that does not.[40] His approach raises questions about the following aspects of the opinion.

The Google Book project consisted of two conceptually different activities. (1) digitizing copies of books for the purpose of making them available to the supplying libraries for their purposes, and (2) digitizing copies of books for indexing, creating a database, and providing snippets to the public in response to search queries. Judge Chin assessed each of these activities together. As pointed out above, however, the purpose and character of the first aspect of the project might weigh heavily against Google because merely digitizing copies of books to give them to libraries is not transformative and there are a long line of cases that have refused to permit the copier to rely on the purposes of users to make out the fair use defense.

The assessment of the fairness of the use was also done without assessing the impacts on each work, even though separate copyrights exist in each work. It is possible that uses for some works may be fair, but uses for others may not be.

Judge Chin justified the overall fairness of the uses by adverting to specific types of books such as those that are out of print or falling apart. He also noted that the books spanned the universe of types including fiction and non-fiction. His assessment of fairness was based on both general advantages that could be gained through the service, as well as specific advantages that would apply to some books, but not others. Had he done an analysis by focusing on the fairness in relation to each of the particular infringements would he have arrived at the same result? Was he required to engage in a work by work analysis given that each work had a separate copyright? Could the fairness associated with scanning an out of print work justify scanning a new book still in print and being actively sold?

Judge Chin had at least two theoretical ways of approaching the fairness assessment. He could have assessed whether the practise or system of the Google Book’s service was for a purpose that was fair or he could have assessed whether each such use was fair. Many test cases go forward with several typical examples of uses that judges specifically analyse. The recent case, Cambridge University Press v. Becker, which addressed the fair use status of e-reserves is a good example.[41] Judge Chin did not adopt this approach. In fact, his fair use assessment did not even consider the specific fair use factors associated with the three books of the representative plaintiffs in the case. Judge Chin implicitly chose the former approach of examining Google’s practice or system as a whole, but his opinion does not contain any support in the case law for such an approach.[42] In fact, decisions dealing with class actions involving copyright, including the opinion of the Second Circuit Court of Appeals which vacated Judge Chin’s decision to certify a class proceeding, suggest that the fair use defense is an individual defense which must be assessed on a case by case basis.[43]

Did Judge Chin err by not applying the policies underlying copyright and fair use and United States’ copyright treaty obligations?

The Google Books case raises critical questions about how the fair use doctrine is to be applied when technological change makes it possible to make new uses of works published in traditional formats. If new uses of works are considered transformative without any requirement for the works to be adapted will this open up a floodgates of new business models where copyrights are used as the primary input without which the service cannot be provided but where the authors and owners receive none of the benefits from these new uses?

In Eldred, the U.S. Supreme Court explained that the economic philosophy behind the Copyright Clause is that rewarding authors for their creative labor and promoting progress redound to the public benefit by resulting in the proliferation of knowledge.

Fair use was traditionally defined as a privilege to use copyrighted material in a reasonable manner without consent. The author’s consent to a reasonable use of copyrighted works had always been implied by the courts as a necessary incident of the constitutional policy of promoting the progress of science and the useful arts, since a prohibition of such use would inhibit subsequent authors from attempting to improve upon prior works and thus frustrate the very ends sought to be attained.[44] Fair use was intended to avoid rigid application of the copyright statute when, on occasion, it would stifle the very creativity which that law is designed to foster.[45]  The privilege exists to satisfy the need in the area of copyright protections for “some opportunity for fair use of copyrighted materials … to fulfill copyright’s very purpose, ‘[t]o promote the Progress of Science and useful Arts’”.[46]

The decision in The Authors Guild case arguably inverts these fundamental first principles in the context of new online uses of works published in traditional formats. Under Judge Chin’s analysis, authors receive no rewards for their creative labors. Further, the decision has the potential to turn an exception premised on reasonable use, required “on occasion” and for “some opportunity” for fair use, into a rule that would effectively deprive authors of control over their works whenever a work is used in a new way, unless perhaps the new use harms the existing market for the work in its old form. It elevates fair use, an exception to infringement that provides no rewards or incentives to authors, over exclusive rights which do.

After considering all of the listed fair use factors, Judge Chin did an overall assessment of the fairness of the project and concluded that it was a fair use. His reasons included a finding that

Google Books provides significant public benefits. It advances the progress of the arts and sciences, while maintaining respectful consideration for the rights of authors and other creative individuals, and without adversely impacting the rights of copyright holders.

Judge Chin’s statement that Google maintained “respectful consideration for the rights of authors and other creative individuals” raises the question as to the fairness of one of the largest and most profitable companies in the world unilaterally scanning and disseminating the contents of millions of authors’ works for a profitable business purpose without according authors the respect of seeking consent or providing them with compensation for the new uses.

If Google is entitled to rely on a fair use defence in this case, will the transformative nature of digital technologies inevitably incent other technology companies to develop new business models that use copyright as a main input for profitable businesses, without consent and payment? If the law develops in his way will fair use still be considered as merely a “privilege” to use works “on occasion” or will fair use become such a broad “user right” that it will diminish the scope of exclusive rights and authors’ control over the use and exploitation of their works?[47]

The potential breadth of the fair use defense under Judge Chin’s opinion also raises questions as to whether the interpretation of the fair dealing defense is consistent with United States’ copyright treaty obligations. Under treaties such as the Berne Convention, TRIPs, and the WIPO Internet Treaties,[48] the Unites States agreed that exceptions and limitations to copyright would be subject to the Three Step test. The test has three conditions, each of which must be met for an exception to be permissible. It must be a “certain special case”, “not conflict with a normal exploitation” of the work or other subject matter, and cannot unreasonably prejudice the legitimate interests of the author (under Berne and WCT), the owner of the right owner (TRIPs), or the performer or of the producer of the phonogram (WPPT).[49]

The first step requires that an exception (including fair use) be a “certain special case”. This condition imposes at least two requirements. The first is a predictability obligation that requires that the exception be clearly defined, known and particularized. It must provide a sufficient degree of legal certainty. The second requirement is that an exception must be finite and limited in scope and application. The exception must be narrow in scope and reach and be specifically focused. It must be the opposite of non-special, i.e. it cannot be a normal case. Some experts argue the exception must also serve some specific and sound public policy objective, for example, public education, public security, freedom of expression, the needs of disabled persons, or the like.[50]

The “normal exploitation” condition covers a usage that the copyright owner would ordinarily expect or seek to exploit. It extends to all forms of exploiting a work which have, or are likely to acquire, considerable economic or practical importance. The exception must not undermine the market for the work; undermine the ways that right holders normally extract economic value from the right; or deprive rights holders of significant or tangible commercial gains.[51]

The third step prevents an exception from causing actual or potential economic detriment such as an unreasonable loss of income. It also extends to cover non-economic interests that are “justifiable” such as those supported by relevant public policies or other social norms that underlie the protection of exclusive rights and moral rights such as controlling uses of works. The “not unreasonably prejudice” wording imposes a requirement of proportionality that implies that there may be conditions placed on the usage that will make any prejudice that is caused “reasonable” such as where there is attribution or in some cases where there is a compulsory licensing or remuneration regime.[52]

As described above, in ruling that the Google Book project is covered by fair use Judge Chin made the following findings concerning how the fair use factors should be applied:

  • In assessing the purpose and character of the use the purposes of the alleged infringer and service recipients can be taken into account. Commercial for profit enterprises like Google can stand in the shoes of their customers making non-profit or non-commercial uses to claim the benefit of their transformative non-commercial activities.
  • In assessing the purpose and character of the use, no alteration of the work is required to make the use transformative. Further, once there is a finding of transformation without alteration, the commercial for profit motives of the service provider can be virtually overlooked.
  • There is no requirement to assess whether a service provider’s conduct may develop into one that could have considerable economic or practical importance to the copyright holder.
  • In assessing the fairness of uses of works, the fairness of a particular dealing with a particular work acts to immunise from scrutiny other potential infringements including infringements of copyrights in other works.
  • Authors and rights holders not only potentially lose control over how their works and other subject matter are used in the digital environment where there is a use for a different purpose than the purpose of the author or rights holder and no actual market harm is shown, but also have no right to receive even reasonable compensation for the uses.

Judge Chin’s interpretation of the fair use framework makes this exception from infringement ill-defined and broad in scope and reach. The breadth of the potential commercial uses and loss of control by rights holders also squarely raises the question as to whether there is unreasonable prejudice to the legitimate interests of authors and other rights holders. The legitimacy question is compounded by the approach Google took to going about the project. It was described by Judge Chin in a prior ruling as a “calculated disregard of authors’ rights”.[53] Google’s Senior Copyright Counsel William Patry called it “chutzpadik” in a blog post published five days before the plaintiffs commenced their action against Google.[54]

No one disputes the social benefits of the Google Books project. They were highlighted by Judge Chin. Google Books is a service that uses works for novel purposes that overall increases their dissemination. But, the question for appellate courts will be whether massive unauthorized copying for a commercial purpose should escape infringement under a “robust” and “flexible” theory of fair use because the uses are new and thus “transformative” and socially beneficial.

The question is not whether projects like Google Books that have social benefits should be encouraged. It is whether authors that invested years of front-end efforts in creating copyright works and to whom the Copyright Clause seeks to incent to continue to make such investments, should have the right to authorize these new uses. It is also, as Judge Chin himself noted in refusing to approve the proposed settlement, that Congress rather than the courts is better suited to decide how best to pursue the Copyright Clause’s objectives,[55] and further that courts should encroach only reluctantly on Congress’s legislative prerogative to address copyright issues presented by technological developments.[56]



* This article has now been published in the Journal of the Copyright Society U.S.A. 61 J. Copyright Soc’y 485 (Spring 2014)

[1] Bouchat v. Baltimore Ravens Ltd, 619 F.3d 301 (4th.Cir.2010)

[2] Infinity Broadcast Corp., 150 F.3d at 108 & n.2, (“Kirkwood points out that he changes the format of the broadcasts so that they are available by telephone rather than radio.  However, as we recognized in Texaco, 60 F.3d at 923, (and as Kirkwood admits in his brief on appeal) a change of format, though useful, is not technically a transformation.”); American Geophysical v Texaco (“The “transformative use” concept is pertinent to a court’s investigation under the first factor because it assesses the value generated by the secondary use and the means by which such value is generated. To the extent that the secondary use involves merely an untransformed duplication, the value generated by the secondary use is little or nothing more than the value that inheres in the original. Rather than making some contribution of new intellectual value and thereby fostering the advancement of the arts and sciences, an untransformed copy is likely to be used simply for the same intrinsic purpose as the original, thereby providing limited justification for a finding of fair use.”, See also, The Associated Press v. Meltwater U.S. Holdings, Inc (S.D.N.Y, march 21, 2013) (A “use of copyrighted material that merely repackages or republishes the original is unlikely to be deemed a fair use” and a “change of format, though useful” is not transformative. Infinity Broadcast Corp., 150 F.3d at 108”).

[3] Zomba Enterprises, Inc. v. Panorama Records, Inc., 491 F.3d 574 (6th.Cir.2007) (Panorama’s primary argument was that their karaoke packages which copied music “encourage creativity, and often commentary” among their end-users, and accordingly qualify as “transformative works.”  The court rejected the argument stating: ” More importantly though, the end-user’s utilization of the product is largely irrelevant; instead, the focus is on whether alleged infringer’s use is transformative and/or commercial.”); Leadsinger, Inc. v. BMG Music Publishing 512 F.3d 522 (9th. Cir. 2008) (Leadsinger, a karaoke device manufacturer, filed a complaint for declaratory judgment against music publishers claiming that it was entitled to print or display song lyrics in real time with song recordings in its karaoke devices. It claimed its purpose was fair because its users used the devices to learn song lyrics. This was rejected by the court stating: “Though Leadsinger alleges that its use of lyrics helps consumers to understand the song lyrics and that “the words facilitate parental control over objectionable song words,” “the ultimate use to which the customer puts[a copyrighted work] is irrelevant. . . . L.A. News Serv. v. Tullo, 973 F.2d 791, 797 (9th Cir.1992); see Harper & Row Publishers, 471 U.S. at 562, 105 S.Ct. 2218 (“The crux of the profit/non-profit distinction is . . . whether the [vendor] stands to profit from exploitation of the copyrighted material without paying the customary price.”); Zomba Enters., 491 F.3d at 582-83 (“[T]he enduser’s utilization of the product is largely irrelevant. . . .”). Leadsinger’s basic purpose remains a commercial one—to sell its karaoke device for profit. And commercial use of copyrighted material is “presumptively an unfair exploitation of the monopoly privilege that belongs to the owner of the copyright.” Sony Corp. of Am., 464 U.S. at 451, 104 S.Ct. 774.”); Fox Broadcasting Company Inc. v  Dish Network, L.C.C. 905 F. Supp. 2d 1088 (C.D.Cal.2012) affirmed 723 F.3d 1067 (9th.Cir.2013) (Dish makes copies of TV programming to provide its AutoHop feature to provide a high-quality commercial skipping product. The court concluded these uses were not transformative because “they do not alter their originals “with new expression, meaning, or message.”  Campbell, 510 U.S. at 579, 114 S.Ct. 1164.” ” The fact that consumers ultimately use AutoHop in conjunction with PTAT for private home use, a fair use under Sony, does not render the intermediate copies themselves a fair use as well.  See Los Angeles News Service v. Tullo, 973 F.2d 791, 797 (9th Cir.1992) (emphasizing that the defendant’s unauthorized commercial copying was not necessarily a fair use merely because his clients used the copies for “research, scholarship, and private study,” which themselves are fair uses). ”

[4] In Princeton University Press v. Michigan Document, 99 F. 3d 1381 (6th.Cir.1996), the defendant, Michigan Document Services, a commercial copyshop reproduced substantial segments of copyrighted works of scholarship, bound the copies into “coursepacks,” and sold the coursepacks to students for use in fulfilling reading assignments given by professors at the University of Michigan. The copyshop argued that its use was fair, inter alia, by claiming that the uses were transformative and that it could stand in the shoes of its customers whose uses were non-commercial and likely a fair use. The court rejected the contention that the verbatim copying, even when juxtaposed with excerpts from other books could be transformative. It also rejected the claim that the copyshop could claim its use was non-commercial merely because its customers use was non-commercial, relying on the text written by William Patry, Fair Use in Copyright Law:

It is true that the use to which the materials are put by the students who purchase the coursepacks is noncommercial in nature.  But the use of the materials by the students is not the use that the publishers are challenging.  What the publishers are challenging is the duplication of copyrighted materials for sale by a for-profit corporation that has decided to maximize its profits — and give itself a competitive edge over other copyshops—by declining to pay the royalties requested by the holders of the copyrights.

The defendants’ use of excerpts from the books at issue here was no less commercial in character than was The Nation magazine’s use of copyrighted material in Harper & Row, where publication of a short article containing excerpts from the still unpublished manuscript of a book by President Ford was held to be an unfair use. Like the students who purchased unauthorized coursepacks, the purchasers of The Nation did not put the contents of the magazine to commercial use — but that did not stop the Supreme Court from characterizing the defendant’s use of the excerpts as “a publication [that] was commercial as opposed to nonprofit….” Harper & Row, 471 U.S. at 562, 105 S.Ct. at 2231…

The defendants argue that the copying at issue here would be considered “nonprofit educational” if done by the students or professors themselves…

As to the proposition that it would be fair use for the students or professors to make their own copies, the issue is by no means free from doubt.  We need not decide this question, however, for the fact is that the copying complained of here was performed on a profit-making basis by a commercial enterprise.  And “[t]he courts have … properly rejected attempts by for-profit users to stand in the shoes of their customers making nonprofit or noncommercial uses.”  Patry, Fair Use in Copyright Law, at 420 n. 34. As the House Judiciary Committee stated in its report on the 1976 legislation,

“[I]t would not be possible for a non-profit institution, by means of contractual arrangements with a commercial copying enterprise, to authorize the enterprise to carry out copying and distribution functions that would be exempt if conducted by the non-profit institution itself.”  H.R.Rep. No. 1476, 94th Cong., 2d Sess. at 74 (1976), U.S.Code Cong. & Admin.News 5659, 5687-88.

[5] In Basic Books, Inc. v. Kinko’s Graphic Corp., 758 F. Supp. 1522, (S,D.N.Y 1991), publishers sued Kinko’s for copying excerpts from books without permission. The court rejected the fair use defense concluding that “The use of the Kinko’s packets, in the hands of the students, was no doubt educational. However, the use in the hands of Kinko’s employees is commercial.  Kinko’s claims that its copying was educational and, therefore, qualifies as a fair use.  Kinko’s fails to persuade us of this distinction.”[5]

[6] See also, Blackwell Publishing, Inc. et al v , v. Excel Research Group, LLC 661 F. Supp. 2d 786 (E.D.Mich. 2009)

[7] In Los Angeles News Service v. Tullo, 973 F. 2d 791 (9th Cir.1992). Los Angeles News Service (“LANS”) recorded newsworthy events on videotape and licensed television stations and networks to use all or segments of the unedited (“raw”) footage in edited broadcast news stories. Audio Video Reporting Services (“AVRS”) provided a video “news clipping” service:  It monitored television news programs, recorded them on videotape and sold copies of all or segments of the tapes to interested individuals and businesses. LANS videotaped the sites of an airplane crash and a train wreck and licensed certain Los Angeles-area television stations to use them on news programs.  AVRS made video recordings of these news programs, which included portions of LANS’s footage, and marketed the recordings.

AVRS argued that the purpose of its use was fair because its clients used the tapes for “research, scholarship and private study,” and therefore AVRS’s use must be considered fair in light of Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417 (1984). The Ninth Circuit characterized the use as commercial by focusing only on the purpose of AVRS and not its customers.

Unlike the claim against the VTR distributors involved in Sony, LANS’s claim against AVRS is not that AVRS is vicariously liable for alleged infringements by its customers but that it is directly liable for its own infringements.  The difference is crucial: Under Sony, a VTR owner who tapes a copyrighted movie broadcast over a public television station to watch at home at a later time is protected by the fair use doctrine, but a VTR owner who tapes the movie to sell copies to others without the copyright owner’s consent is subject to a range of civil and criminal sanctions…The fact that the VTR owner’s customer buys the tape to watch the movie at home at a convenient time will not shield the VTR owner from liability; the ultimate use to which the customer puts the tape is irrelevant, as is the use AVRS’s customers make of the tapes AVRS sells.

AVRS’s purposes are “unabashedly commercial.”  Pacific & S. Co., Inc. v. Duncan (“Duncan”), 744 F.2d 1490, 1496 (11th Cir. 1984) (“Of course, every commercial exchange of goods and services involves both the giving of the good or service and the taking of the purchase price.  The fact that [the defendant] focuses on the giving rather than the taking cannot hide the fact that profit is its primary motive for making the exchange.”)…

[8] In Los Angeles News Serv. v. Reuters Television Intern., 149 F. 3d 987 (9th.Cir.1998), the TV news agency Reuters obtained video tape copies of LANS footage and transmitted it to subscribers who rebroadcast the footage. The court found that the transmission of unedited copies not to be transformative. Further, it found Reuters’ use to be an unfair commercial use and re-iterated that whether its use was a fair use was a distinct question from whether its subscribers’ broadcasts of the works were fair.

Although defendants’ service does have a news reporting purpose, its use of the works was not very transformative. Reuters copies footage and transmits it to news reporting organizations; Reuters does not explain the footage, edit the content of the footage, or include editorial comment. “Although such 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 994*994 finding of fair use.” Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 579, 114 S.Ct. 1164, 127 L.Ed.2d 500 (1994) (citations omitted).

Reuters used the works for a commercial purpose, providing the works to other news reporting organizations in exchange for an annual fee. While a commercial use does not by itself preclude a defense of fair use, “every commercial use of copyrighted material is presumptively an unfair exploitation of the monopoly privilege that belongs to the owner of the copyright.” Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 451, 104 S.Ct. 774, 78 L.Ed.2d 574 (1984). Further, “[t]he crux of the profit/non-profit distinction is … whether the user stands to profit from exploitation of the copyrighted material without paying the customary price.” Harper & Row, 471 U.S. at 562, 105 S.Ct. 2218. LANS normally charges customers for the privilege of copying portions of its works. The district court did not err in finding that this factor weighed in favor of LANS.…

“Although defendants’ service does have a news reporting purpose, its use of the works was not very transformative. Reuters copies footage and transmits it to news reporting organizations; Reuters does not explain the footage, edit the content of the footage, or include editorial comment. “Although such 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 994*994 finding of fair use.” Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 579, 114 S.Ct. 1164, 127 L.Ed.2d 500 (1994) (citations omitted).

[9] The Associated Press v. Meltwater U.S. Holdings, Inc. (S.D.N.Y, March 21, 2013). Meltwater, an electronic news clipping service provider contended that the purpose of its use was fair, inter alia, because its business relates to news reporting and research. The court rejected the claim noting that its customers performed the reporting and research.

Nor is Meltwater’s taking of copyrighted material more defensible because its business relates to news reporting and research — two of the purposes of the fair use doctrine captured in the statute’s preamble.  The news reporting and research upon which Meltwater relies was not done by Meltwater but by AP; the copyrighted material that Meltwater has taken is the news reporting and research that AP labored to create.

While commercial Internet news clipping services like Meltwater perform an important function for their clients, the public interest in the existence of such commercial enterprise does not outweigh the strong public interest in the enforcement of the copyright laws or justify allowing Meltwater to free ride on the costly news gathering and coverage work performed by other organizations.  Moreover, permitting Meltwater to avoid paying licensing fees gives it an unwarranted advantage over its competitors who do pay licensing fees…

Based on the undisputed facts in this record, Meltwater provides the online equivalent to the traditional news clipping service.  Indeed, Meltwater has described itself as adding “game-changing technology for the traditional press clipping market.”  There is nothing transformative about that function.  See, e.g., Video Pipeline, Inc. v. Buena Vista Home Entm’t, Inc., 342 F.3d 191, 199 (3d Cir. 2003) (clip previews of movies); Nihon, 166 F.3d at 72 (abstracts of news articles); Infinity Broadcast Corp., 150 F.3d at 108 (radio monitoring service); Los Angeles News Service v. Tullo, 973 F.2d 791, 797, 799 (9th Cir. 1992) (video news clipping service.); Pacific and Southern Co., Inc. v. Duncan, 744 F.2d 1490, 1496 (11th Cir. 1984) (TV news clipping service).

[10] Pacific & S. Co. v. Duncan, 744 F.2d 1490, 1496 (11th Cir. 1984), 39 cert. denied, 471 U.S. 1004 (1985) (“The purpose and character of TV News Clips’ use of WXIA’s work heavily influences our decision in this case.  TV News Clips copies and distributes the broadcast for unabashedly commercial reasons despite the fact that its customers buy the tapes for personal use. The district court characterized TV News Clips as a “full-fledged commercial operation.”  572 F.Supp. at 1189 n. 1.  TV News Clips denies that its activities have a commercial purpose; instead, it says that its purpose is “private news reporting,” meant to provide the public with a record of news reports.  Of course, every commercial exchange of goods and services involves both the giving of the good or service and the taking of the purchase price.  The fact that TV News Clips focuses on the giving rather than the taking cannot hide the fact that profit is its primary motive for making the exchange.”); Georgia Television v. TV News Clips of Atlanta, 718 F. Supp. 939 (N.D. Georgia 1989) (TV News Clips, a commercial enterprise that videotaped television news programs, a practice known as news monitoring, and edited the news videotapes for its customers, to provide a news clipping service. They argued that their operation was consistent with the videotaping for personal use that the Supreme Court approved in Sony Corporation of America v. Universal City Studios, Inc., 464 U.S. 417 (1984) and that they were merely agents for individuals or corporations whose home videotaping for personal, noncommercial use was authorized by the Sony decision. The court rejected this characterization of the purpose stating that defendants’ videotaping WSB-TV broadcasts is for a commercial purpose and that TV News Clips is a commercial operation.)

[11] In Infinity Broadcast Corp. v.Kirkwood, 150 F. 3d 104 (2nd.Cir.1998), the operator of the broadcaster CBS Radio, claimed infringement against a service that enabled subscribers (for a fee) to listen over the telephone to contemporaneous radio broadcasts in remote cities, including broadcasts by Infinity-owned stations. Kirkwood argued that the purpose of the use was fair because its customers used the broadcast for information rather than entertainment purposes. The Second Circuit rejected the claim that the change in the format or the difference in purpose of the transmissions was a transformation stating that “difference in purpose is not quite the same thing as transformation, and Campbell instructs that transformativeness is the critical inquiry under this factor”. The court agreed with the District Court which had found “Kirkwood’s retransmissions leave the character of the original broadcasts unchanged.  There is neither new expression, new meaning nor new message.” 965 F.Supp. at 557.  In short, there is no transformation.” The Second Circuit also expressly rejected the argument that any transformative use of the broadcasts by Kirkwood`s customers was relevant to whether Kirkwood`s own transmissions were transformative stating:

Kirkwood argues that Dial-Up’s users transform the broadcasts by using them for their factual, not entertainment, content.  However, it is Kirkwood’s own retransmission of the broadcasts, not the acts of his end-users, that is at issue here and all Kirkwood does is sell access to unaltered radio broadcasts.[11]

[12] In US v. ASCAP, 599 F. Supp. 2d 415 (S.D.N.Y.2009), the dispute was over whether ASCAP had the right to collect royalties for previews containing clips of music. The court rejected the argument that by providing previews it was engaging in a fair use activity that its customers might be engaging in stating: “By contrast, applicant’s use of previews, for the purpose of allowing its customers to sample a ringtone or ringback tone before purchasing it, cannot fairly be described as “criticism, comment, news reporting, teaching… scholarship, or research.” 17 U.S.C. § 107.”)

[14] (BNA 1994), p.728 footnote 38 and p.737-739xx

[15] According to William Patry:

“In exonerating the Sony Corporation from a claim of contributory infringement for marketing its Betamax video cassette recorder to consumers in order to permit them to tape copyrighted works, the Supreme Court relied on the absence of direct infringement due to its finding that consumers’ taping was fair use. Subsequent to the Sony decision, other defendants have attempted to expand dramatically the Court’s ruling to excuse their direct unauthorized reproduction and sale of copies to consumers. These defendants assert that because the ultimate use by consumers allegedly is for noncommercial purposes, their use is also noncommercial.

Most courts have fortunately rejected this argument.  Commercial entities making unauthorized copies and selling those copies are engaged in commercial use regardless of whether the purchaser is a for-profit or non-profit institution or a consumer.  As the Eleventh Circuit aptly observed in Pacific & Southern Co. v. Duncan:

Of course, every commercial exchange of goods or services involves both the giving of the good or service and the purchase price.  The fact that [defendant] focuses on the giving rather than the taking cannot hide the fact that profit is its primary motive for making the exchange.

By contrast, in Lewis Galoob Toys, Inc. v. Nintendo of America, Inc., the Ninth Circuit distorted the first fair use factor for the benefit of a for-profit corporation marketing speed-up kits of popular home audiovisual games, by analyzing the corporation’s use from the perspective of the consumer:” family’s use of the Game Genie for private home enjoyment must be characterized as a non-commercial, nonprofit activity.  …Their use of the Game Genie…therefore is presumptively fair…Whether a consumer’s use of a commercially marketed product is noncommercial (and no use is, in any event, presumptively fair) does not change the status of the manufacturer’s activity as commercial, nor give the commercial defendant any special advantage.  More simply put, commercial users do not stand in the shoes of their customer or consumers.”

[16] This can be seen from the following portions of the decision where he addresses the purpose and character of the use factor.

Google’s use of the copyrighted works is highly transformative. Google Books digitizes books and transforms expressive text into a comprehensive word index that helps readers, scholars, researchers, and others find books. Google Books has become an important tool for libraries and librarians and cite-checkers as it helps to identify and find books. The use of book text to facilitate search through the display of snippets is transformative. See Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146, 1168 (9th Cir. 2007) (holding that use of works — “thumbnail images,” including copyrighted photographs — to facilitate search was “transformative”); Kelly v. Arriba Soft Corp., 336 F.3d 811 (9th Cir. 2003) (same); see also Bill Graham Archives, 448 F.3d at 609-11 (holding that display of images of posters in 480-page cultural history of the Grateful Dead was transformative, explaining that “[w]hile the small size [of the images of the posters] is sufficient to permit readers to recognize the historial significance of the posters, it is inadequate to offer more than a glimpse of their expressive value”). The display of snippets of text for search is similar to the display of thumbnail images of photographs for search or small images of concert posters for reference to past events, as the snippets help users locate books and determine whether they may be of interest. Google Books thus uses words for a different purpose — it uses snippets of text to act as pointers directing users to a broad selection of books.

Similarly, Google Books is also transformative in the sense that it has transformed book text into data for purposes of substantive research, including data mining and text mining in new areas, thereby opening up new fields of research. Words in books are being used in a way they have not been used before. Google Books has created something new in the use of book text — the frequency of words and trends in their usage provide substantive information.

Google Books does not supersede or supplant books because it is not a tool to be used to read books. Instead, it “adds value to the original” and allows for “the creation of new information, new aesthetics, new insights and understandings.” Leval, Toward a Fair Use Standard, 103 Harv. L. Rev. at 1111. Hence, the use is transformative.

[17] P Leval, “Toward a Fair Use Standard” (1989–1990) 103 Harvard Law Review 1105

[19] Seltzer v. Green Day, Inc. 725 F.3d 1170 (9th.Cir.2013) “A leading treatise on this topic has lamented the frequent misuse of the transformation test, complaining that it has become a conclusory label which is “all things to all people”… The plethora of cases addressing this topic means there is no shortage of language from other courts elucidating (or obfuscating) the meaning of transformation.”

[20] See, N Weinstock Netanel, “Making Sense of Fair Use” (2011) 15 Lewis and Clark Law Review 715, P Samuelson, “Unbundling Fair Uses” (2009) 77 Fordham Law Review 2537

[21] Infinity Broadcast Corp (that “difference in purpose is not quite the same thing as transformation, and Campbell instructs that transformativeness is the critical inquiry under this factor”.); Cariou v. Prince, 714 F. 3d 694 (2d Cir. 2013) (“The law imposes no requirement that a work comment on the original or its author in order to be considered transformative, and a secondary work may constitute a fair use even if it serves some purpose other than those (criticism, comment, news reporting, teaching, scholarship, and research) identified in the preamble to the statute. Id. at 577; Harper & Row, 471 U.S. at 561. Instead, as the Supreme Court as well as decisions from our court have emphasized, to qualify as a fair use, a new work generally must alter the original with “new expression, meaning, or message.” Campbell, 510 U.S. at 579; see also Blanch, 467 F.3d at 253 (original must be employed “in the creation of new information, new aesthetics, new insights and understandings” (quotation marks omitted)); Castle Rock, 150 F.3d at 142”); UMG Recordings, Inc. v. MP3. Com, Inc., 92 F. Supp. 2d 349 (S.D.N.Y.2000) (“Regarding the first factor — “the purpose and character of the use” — defendant does not dispute that its purpose is commercial, for while subscribers to My. MP3.com are not currently charged a fee, defendant seeks to attract a sufficiently large subscription base to draw advertising and otherwise make a profit. Consideration of the first factor, however, also involves inquiring into whether the new use essentially repeats the old or whether, instead, it “transforms” it by infusing it with new meaning, new understandings, or the like. See, e.g., Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 579, 114 S.Ct. 1164, 127 L.Ed.2d 500 (1994)Castle Rock, 150 F.3d at 142; See also Pierre N. Leval, “Toward a Fair Use Standard,” 103Harv. L.Rev. 1105, 111 (1990). Here, although defendant recites that My.MP3.com provides a transformative “space shift” by which subscribers can enjoy the sound recordings contained on their CDs without lugging around the physical discs themselves, this is simply another way of saying that the unauthorized copies are being retransmitted in another medium — an insufficient basis for any legitimate claim of transformation, See, e.g., Infinity Broadcast Corp. v. Kirkwood, 150 F.3d 104, 108 (2d Cir.1998) (rejecting the fair use defense by operator of a service that retransmitted copyrighted radio broadcasts over telephone lines); Los Angeles News Serv. v. Reuters Television Int’l Ltd., 149 F.3d 987 (9th Cir.1998) (rejecting the fair use defense where television news agencies copied copyrighted news footage and retransmitted it to news organizations), cert. denied, 525 U.S. 1141, 119 S.Ct. 1032, 143 L.Ed.2d 41 (1999); see also American Geophysical Union v. Texaco Inc., 60 F.3d 913, 923 (2d Cir.), cert. dismissed, 516 U.S. 1005, 116 S.Ct. 592, 133 L.Ed.2d 486 (1995)Basic Books, Inc. v. Kinko’s Graphics Corp., 758 F.Supp. 1522, 1530-31 (S.D.N.Y.1991); see generally Leval, supra, at 1111 (repetition of copyrighted material that “merely repackages or republishes the original” is unlikely to be deemed a fair use).”); Video Pipeline, Inc. v. Buena Vista Home Entm’t, Inc., 342 F.3d 191  (3d Cir. 2003) (“Finally, we note that Video Pipeline’s clip previews — to reiterate, approximately two-minute excerpts of full-length films with movie title and company trademark shown — do not add significantly to Disney’s original expression. Video Pipeline itself asserts, and the District Court found, 192 F.Supp.2d at 337, that the clip previews involved no new creative ingenuity.” The Court did recognize that deciding which scene or scenes to include in a clip preview requires some creative choice. Id. But as Video Pipeline disclaims the use of any creative ingenuity, we have no difficulty viewing those decisions as involving creativity only in a theoretical, and most narrow, sense. Hence, it is dubious what “new expression, meaning, or message” Video Pipeline has brought to its copies. Campbell, 510 U.S. at 579, 114 S.Ct. 1164”).

[22] Castle Rock Entm’t, Inc. v. Carol Publ’g Grp., Inc., 150 F.3d 132 (2d Cir.1998); Seltzer v Green Day (“Although the law in this area is splintered, as discussed above, our conclusion on transformation is generally in line with other appellate authority on transformative use. In the typical “non-transformative” case, the use is one which makes no alteration to the expressive content or message of the original work. See, e.g., Monge, 688 F.3d at 1176 (magazine publication of photos of secret wedding of celebrity was not transformative because it did not “alter[] the first [work] with new expression, meaning or message”) (second alteration in original); Elvis Presley Enters., Inc. v. Passport Video,349 F.3d 622, 629 (9th Cir. 2003) (use of copyrighted clips of Elvis’s television appearances was not transformative when the clips were “played without much interruption, if any, . . . [and] serve[d] the same intrinsic entertainment value that is protected by Plaintiffs’ copyrights.”), overruled on other grounds as stated in Flexible Lifeline Sys., Inc. v. Precision Lift, Inc., 654 F.3d 989, 995 (9th Cir.2011) (per curiam);L.A. News Serv. v. CBS Broad., Inc., 305 F.3d 924, 938 (9th Cir. 2002) (“Merely plucking the most visually arresting excerpt from LANS’s nine minutes of footage cannot be said to have added anything new.”), as amended 313 F.3d 1093 (9th Cir. 2002); Ringgold v. Black Entm’t Television, Inc., 126 F.3d 70, 79 (2d Cir. 1997) (use of a poster as decoration on a TV show not transformative because it was used for “precisely a central purpose for which it was created” and defendants had done nothing with the poster to add anything new).)”

[23] Castle Rock Entm’t, Inc.

[24] AV ex rel. Vanderhye v. iparadigms, LLC, 562 F. 3d 630 (4th.Cir.2009) (“Plaintiffs also argue that iParadigms’ use of their works cannot be transformative because the archiving process does not add anything to the work — Turnitin merely stores the work unaltered and in its entirety. This argument is clearly misguided. The use of a copyrighted work need not alter or augment the work to be transformative in nature.”); Associated Press v. Meltwater (“By the same token, even though it could be said that a search engine merely “repackages” the original work, Infinity Broadcast Corp., 150 F.3d at 108 & n.2., and does not transform it in the sense of adding “new expression, meaning or message,” Campbell, 510 U.S. at 579, that does not mean that its taking is ineligible for protection under the fair use defense. Where a defendant’s use “is plainly different from the original purpose” for which the work was created, that use may be transformative. Bill Graham Archives, 448 F.3d at 609 (approving reproduction of a small image of poster along a timeline in a biography)).”, Bouchat v. Baltimore Ravens Ltd. (4th. Cir. Dec. 17, 2013)

[25] Kelly v. Arriba Soft Corp., 336 F. 3d 811 (9th Cir.2003) (“This case involves more than merely a retransmission of Kelly’s images in a different medium. Arriba’s use of the images serves a different function than Kelly’s use — improving access to information on the internet versus artistic expression. Furthermore, it would be unlikely that anyone would use Arriba’s thumbnails for illustrative or aesthetic purposes because enlarging them sacrifices their clarity. Because Arriba’s use is not superseding Kelly’s use but, rather, has created a different purpose for the images, Arriba’s use is transformative.”)

[26] Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146 (9th Cir.2007)

[27] American Institute of Physics v. SCHWEGMAN LUNDBERG & WOESSNER, PA 2013 WL 4666330 (D.Minn.ug. 30, 2013) (“This conclusion does not change merely because the “copying” Schwegman engaged in did not alter the content of the Articles. That lack of alteration may make the label “transformative use” a messy fit for Schwegman’s use since the “transformative use” label is most apt when a secondary work created by an alleged infringer actually alters the content of a copyrighted work or incorporates that content into a new work, such as a parody. See, e.g., Campbell, 510 U.S. at 572–73 & 579–83 (describing how the rap group 2 Live Crew had used aspects of Roy Orbison’s rock ballad “Oh, Pretty Woman” in creating a parody of the original and analyzing the critical aspects of 2 Live Crew’s new work). But reproduction of an original without any change can still qualify as a fair use when the use’s purpose and character differs from the object of the original, such as photocopying for use in a classroom.”)

[28] Video Pipeline, Inc. v. Buena Vista Home Entm’t, Inc., 342 F.3d 191  (3d Cir. 2003) (“the District Court correctly concluded that Video Pipeline’s clip previews lack any significant transformative quality. Thus, the commercial nature of the clip previews weighs more strongly against Video Pipeline’s use. Campbell, 510 U.S. at 580, 114 S.Ct. 1164 (If “the alleged infringer merely uses [the original work] to get attention or to avoid the drudgery in working up something fresh, the claim to fairness in borrowing from another’s work diminishes accordingly (if it does not vanish), and other factors, like the extent of its commerciality, loom larger.”)

[29] Campbell v. Acuff-RoseKelly v. Arriba Soft Corp., 336 F. 3d 811 (9th.Cir.2003)

[30] He stated the following:

It is true, of course, as plaintiffs argue, that Google is a for-profit entity and Google Books is largely a commercial enterprise. The fact that a use is commercial “tends to weigh against a finding of fair use.” Harper & Row, 471 U.S. at 562; accord Campbell, 510 U.S. at 585. On the other hand, fair use has been found even where a defendant benefitted commercially from the unlicensed use of copyrighted works…

Here, Google does not sell the scans it has made of books for Google Books; it does not sell the snippets that it displays; and it does not run ads on the About the Book pages that contain snippets. It does not engage in the direct commercialization of copyrighted works. See 17 U.S.C. § 107(1). Google does, of course, benefit commercially in the sense that users are drawn to the Google websites by the ability to search Google Books. While this is a consideration to be acknowledged in weighing all the factors, even assuming Google’s principal motivation is profit, the fact is that Google Books serves several important educational purposes.

[31] The Court stated:

“The language of the statute makes clear that the commercial or nonprofit educational purpose of a work is only one element of the first factor enquiry into its purpose and character. Section 107(1) uses the term “including” to begin the dependent clause referring to commercial use, and the main clause speaks of a broader investigation into “purpose and character.” As we explained in Harper & Row, Congress resisted attempts to narrow the ambit of this traditional enquiry by adopting categories of presumptively fair use, and it urged courts to preserve the breadth of their traditionally ample view of the universe of relevant evidence. 471 U. S., at 561; House Report, p. 66. Accordingly, the mere fact that a use is educational and not for profit does not insulate it from a finding of infringement, any more than the commercial character of a use bars a finding of fairness. If, indeed, commerciality carried presumptive force against a finding of fairness, the presumption would swallow nearly all of the illustrative uses listed in the preamble paragraph of § 107, including news reporting, comment, criticism, teaching, scholarship, and research, since these activities “are generally conducted for profit in this country.” Harper & Row, supra, at 592 (Brennan, J., dissenting). Congress could not have intended such a rule, which certainly is not inferable from the common-law cases, arising as they did from the world of letters in which Samuel Johnson could pronounce that “[n]o man but a blockhead ever wrote, except for money.”…

Sony itself called for no hard evidentiary presumption. There, we emphasized the need for a “sensitive balancing of interests,” 464 U. S., at 455, n. 40, noted that Congress had “eschewed a rigid, bright-line approach to fair use,…and stated that the commercial or nonprofit educational character of a work is “not conclusive…but rather a fact to be “weighed along with other[s] in fair use decisions,” id., at 449, n. 32 (quoting House Report, p. 66). The Court of Appeals’s elevation of one sentence from Sony to a per se rule thus runs as much counter to Sony itself as to the long common-law tradition of fair use adjudication. Rather, as we explained in Harper & Row, Sony stands for the proposition that the “fact that a publication was commercial as opposed to nonprofit is a separate factor that tends to weigh against a finding of fair use.” 471 U. S., at 562. But that is all, and the fact that even the force of that tendency will vary with the context is a further reason against elevating commerciality to hard presumptive significance. The use, for example, of a copyrighted work to advertise a product, even in a parody, will be entitled to less indulgence under the first factor of the fair use enquiry than the sale of a parody for its own sake, let alone one performed a single time by students in school…”

[32] American Geophysical Union v. Texaco Inc., 60 F. 3d 913 (2nd.Cir.1994)

[33] American Geophysical Union v. Texaco Inc.,  “Consistent with these principles, courts 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 from its 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…The greater the private economic rewards reaped by the secondary user (to the exclusion of broader public benefits), the more likely the first factor will favor the copyright holder and the less likely the use will be considered fair.“

[34] US v. ASCAP, 599 F. Supp. 2d 415 (S.D.N.Y.2009) (“We address the commercial nature of applicant’s use of previews below. Regarding the exploitation of copyrighted works for commercial gain, applicant asserts that “the fact that [applicant] does not charge for previews is further evidence that [applicant]’s use is not exploitive of the copyrighted works as would be the case, for instance, if [applicant] were in the business of selling previews to others for direct financial gain.”… However, while applicant may not receive a direct financial gain by providing previews to its customers free of charge, “[applicant] admits that its use is indirectly commercial.”… This Court does not find the distinction between direct and indirect financial gain dispositive of a determination of whether applicant’s deliberate use of copyrighted ASCAP music is exploitive.”); Roy Export Co. v. Columbia Broad. Sys. Inc., 503 F.  Supp. 1137 (S.D.N.Y. 1980), aff`d 672 F.2d 1095 (2d Cir. 1982) (“Nor does CBS’ emphasis on the unsponsored nature of the show establish that CBS did not use the films for commercial exploitation, since common experience suggests that CBS stood to gain at least indirect commercial benefit from the ratings boost which it had reason to hope would (and in fact did) result from the special.”)

[36] Harper & Row

[37] Judge Chin stated:

The fourth factor is “the effect of the use upon the potential market for or value of the copyrighted work.” 17 U.S.C. § 107(4). Here, plaintiffs argue that Google Books will negatively impact the market for books and that Google’s scans will serve as a “market replacement” for books. (Pl. Mem. at 41). It also argues that users could put in multiple searches, varying slightly the search terms, to access an entire book. (9/23/13 Tr. at 6).

Neither suggestion makes sense. Google does not sell its scans, and the scans do not replace the books. While partner libraries have the ability to download a scan of a book from their collections, they owned the books already — they provided the original book to Google to scan. Nor is it likely that someone would take the time and energy to input countless searches to try and get enough snippets to comprise an entire book. Not only is that not possible as certain pages and snippets are blacklisted, the individual would have to have a copy of the book in his possession already to be able to piece the different snippets together in coherent fashion.

To the contrary, a reasonable fact finder could only find that Google Books enhances the sales of books to the benefit of copyright holders. An important factor in the success of an individual title is whether it is discovered—whether potential readers learn of its existence. (Harris Decl. ¶ 7 (Doc. No. 1039)). Google Books provides a way for authors’ works to become noticed, much like traditional in-store book displays. (Id. at ¶¶ 14–15). Indeed, both librarians and their patrons use Google Books to identify books to purchase. (Br. of Amici Curiae American Library Ass’n at 8). Many authors have noted that online browsing in general and Google Books in particular helps readers find their work, thus increasing their audiences. Further, Google provides convenient links to booksellers to make it easy for a reader to order a book. In this day and age of on-line shopping, there can be no doubt but that Google Books improves books sales.

[38] American Geophysical Union v. Texaco Inc., 60 F. 3d 913 (2nd.Cir.1994)

[39] Sony Betamax (dissent) (“First, an infringer cannot prevail merely by demonstrating that the copyright holder suffered no net harm from the infringer’s action. Indeed, even a showing that the infringement has resulted in a net benefit to the copyright holder will not suffice. Rather, the infringer must demonstrate that he had not impaired the copyright holder’s ability to demand compensation from (or to deny access to) any group who would otherwise be willing to pay to see or hear the copyrighted work.”); Campbell  (“Even favorable evidence, without more, is no guarantee of fairness. Judge Leval gives the example of the film producer’s appropriation of a composer’s previously unknown song that turns the song into a commercial success; the boon to the song does not make the film’s simple copying fair”); Ringgold v. Black Entm’t Television, Inc., 126 F.3d 70  (2d Cir. 1997) (“Even if the unauthorized use of plaintiff’s work in the televised program might increase poster sales, that would not preclude her entitlement to a licensing fee. See DC Comics, 696 F.2d at 28.”)

[40] Bouchat v. Baltimore Ravens Ltd., 619 F.3d 301(“This appeal arises from an action Bouchat filed to enjoin defendants’ depictions of the copyrighted logo in season highlight films and in the Ravens corporate lobby. The district court found that defendants’ depictions of the logo were a fair use and entered judgment against Bouchat. We reverse in part because defendants cannot establish a fair use defense for the depictions of the logo in the highlight films, where the logo use is non-transformative and commercial.”); Associated Press v. Meltwater U.S. Holdings, Inc., 12 Civ. 1087 DLC, 2013 WL 1153979, at *16 (S.D.N.Y. Mar. 21, 2013) (“Finally, Meltwater seeks to defend its copying of the Registered Articles by pointing out that it used the content it takes from the Internet to also provide its subscribers with services like Dashboard Analytics. Meltwater argues that this use of the material constitutes a transformative use. This lawsuit does not challenge the display of any of Meltwater’s analytics to its subscribers. AP has not argued that the analysis of its publicly available content through these tools violates it rights. The display of that analysis — whether it be a graphic display of geographic distribution of coverage or tone or any other variable included by Meltwater — is an entirely separate service, however, from the publishing of excerpts from copyrighted articles. The fact that Meltwater also offers a number of analysis tools does not render its copying and redistribution of article excerpts transformative.”)

[41] University Press v. Becker, 863 F. Supp. 2d 1190 (N.D. Georgia 2012)

[42] In Canada an organization seeking to rely on the fair dealing defense can satisfy that its purpose was fair either by showing that each dealing is fair, or that it had a practice or system in place that was fair. See CCH Canadian Ltd. v. Law Society of Upper Canada, [2004] 1 S.C.R. 339

[43] Authors Guild, Inc. v. Google Inc., 721 F. 3d 132 (2nd.Cir.2013) (“See, e.g., FPX, LLC v. Google, Inc., 276 F.R.D. 543, 551 (E.D.Tex. 2011) (denying plaintiffs’ request for class certification “because of the fact-specific inquiries the court would have to evaluate to address [defendants’] affirmative defenses [including fair use of trademarks]”); Vulcan Golf, LLC v. Google Inc., 254 F.R.D. 521, 531 (N.D.Ill.2008) (“The existence of affirmative defenses [such as fair use of trademarks] which require individual resolution can be considered as part of the court’s analysis to determine whether individual issues predominate under Rule 23(b)(3).””); Football Association premier League Limited v YouTube No. 07 Civ. 3582 (LDS). (S.D.N.Y.2013) (“Here to make resolutions which advance the litigation will require the court to determine, for each copyrighted work claimed to have been infringed, whether a copyright holder gave notices containing sufficient information to permit the service provider to identify and locate the infringing material so that it could be taken down. That requires individualized evidence. Further, the analysis required to determine “fair use,” and other defenses, is necessarily specific to the individual case.”)

[45] “As we have explained, ‘[t]he economic philosophy behind the [Copyright] [C]lause … is the conviction that encouragement of individual effort by personal gain is the best way to advance public welfare through the talents of authors and inventors.’ … Accordingly, copyright law celebrates the profit motive, recognizing that the incentive to profit from the exploitation of copyrights will redound to the public benefit by resulting in the proliferation of knowledge. … The profit motive is the engine that ensures the progress of science. … Rewarding authors for their creative labor and ‘promot[ing] … Progress’ are thus complementary…” Eldred v. Ashcroft, 65 U.S.P.Q.2d 1225 (U.S. Sup. Ct. 2003). Per Ginsburg J

[46] Campbell v. Acuff–Rose Music

[47] Already, there are predictions by Public Knowledge that the decision will lead to the digitation of content of all types including news, image, video, audio, book, software, social media and other online materials for the creation of archives and search engines, all without compensation to copyright owners for the exploitation of these works

[48] Berne Convention for the Protection of Literary and Artistic Works (“Berne”), Agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPS”), World Intellectual Property Organization Copyright Treaty (“WCT”) and the World Intellectual Property Organization Performances and Phonograms Treaty (“WPPT”) (together the “WIPO Treaties”).

[49] Berne Article 9(2) “It shall be a matter for legislation in the countries of the Union to permit the reproduction of such works in certain special cases, provided that such reproduction does not conflict with a normal exploitation of the work and does not unreasonably prejudice the legitimate interests of the author.” TRIPs Article 13 “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.”; WCT Article 10 “(1) Contracting Parties may, in their national legislation, provide for limitations of or exceptions to the rights granted to authors of literary and artistic works under this Treaty in certain special cases that do not conflict with a normal exploitation of the work and do not unreasonably prejudice the legitimate interests of the author. (2) Contracting Parties shall, when applying the Berne Convention, confine any limitations of or exceptions to rights provided for therein to certain special cases that do not conflict with a normal exploitation of the work and do not unreasonably prejudice the legitimate interests of the author.” Article 16 WPPT “(1) Contracting Parties may, in their national legislation, provide for the same kinds of limitations or exceptions with regard to the protection of performers and producers of phonograms as they provide for, in their national legislation, in connection with the protection of copyright in literary and artistic works. (2) Contracting Parties shall confine any limitations of or exceptions to rights provided for in this Treaty to certain special cases which do not conflict with a normal exploitation of the performance or phonogram and do not unreasonably prejudice the legitimate interests of the performer or of the producer of the phonogram.”

[50] Mihály Ficsor, Guide to the Copyright and Related Rights Treaties Administered by WIPO and Glossary o Copyright and Related Rights Terms (Geneva: WIPO, 2003), Mihály Ficsor, The Law of Copyright and the Internet (2002),  Jörg Reinbothe and Silke von Lewinski, The WIPO Treaties 1996. Butterworths Lexis Nexis, London, 2002, Sam Ricketson & Jane C. Ginsburg, International Copyright and Neighbouring Rights: The Berne Convention and Beyond (Oxford: Oxford University Press, 2006), Martin R. F. Senftleben, Copyright, Limitations, and the Three-step Test, Kluwer Law International, 2004, Barry Sookman “The SAC Proposal for the Monetization of the File haring of Music in Canada: Does it Comply with Canada’s International Treaty Obligations related to Copyright?” (2008), 1 Osgoode Hall Rev.L.Pol’y 101, Barry B. Sookman and Daniel G.C. Glover, “Why Canada Should Not Adopt Fair Use”, (2009), 2 Osgoode Hall Rev.L.Pol’y 139, WTO Panel Report on United States – Section 110(5) of the US Copyright Act, WTO Doc. WT/DS160/R (15 June 2000), WTO Panel Report on Canada – Patent Protection of Pharmaceutical Products, WTO Doc. WT/DS114/R (7 April 2000)

[51] ibid

[52] ibid

[53] Authors Guild v. Google Inc., 770 F. Supp. 2d 666 (S.D.N.Y.2011) “As one objector put it: “Google pursued its copyright project in calculated disregard of authors’ rights. Its business plan was: `So, sue me.'” (Objection of Robert M. Kunstadt to Proposed Settlement 3, ECF No. 74).”

[54] The Patry Blog, September 15, 2005, archived and available at http://web.archive.org/web/20051214021801/http:/williampatry.blogspot.com/2005/09/scanning-documents.html and summarized by Devlin Hartline in a blog post “Google’s “Chutzpadik” Book Scanning”, http://lawtheories.com/?p=792

[55] Authors Guild v. Google Inc., 770 F. Supp. 2d 666 (S.D.N.Y.2011) “The questions of who should be entrusted with guardianship over orphan books, under what terms, and with what safeguards are matters more appropriately decided by Congress than through an agreement among private, self-interested parties. Indeed, the Supreme Court has held that “it is generally for Congress, not the courts, to decide how best to pursue the Copyright Clause’s objectives.” Eldred v. Ashcroft, 537 U.S. 186, 212, 123 S.Ct. 769, 154 L.Ed.2d 683 (2003); accord Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 429, 104 S.Ct. 774, 78 L.Ed.2d 574 (1984) (“[I]t is Congress that has been assigned the task of defining the scope of the limited monopoly that should be granted to authors or to inventors in order to give the public appropriate access to their work product.”).”

[56] Ibid “As alluded to above, the Copyright Clause of the Constitution grants Congress the power “[t]o promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.” U.S. Const. art. I, § 8, cl. 8. The Supreme Court has recognized that courts should encroach only reluctantly on Congress’s legislative prerogative to address copyright issues presented by technological developments: “Sound policy, as well as history, supports our consistent deference to Congress when major technological innovations alter the market for copyrighted materials.” Sony, 464 U.S. at 431, 104 S.Ct. 774.”

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