There are many parts of the Copyright Act that go unread, and going unread their relevance is missed. Section 113(c) is one of those sections. The provision reads:
(c) In the case of a work lawfully reproduced in useful articles that have been offered for sale or other distribution to the public, copyright does not include any right to prevent the making, distribution, or display of pictures or photographs of such articles in connection with advertisements or commentaries related to the distribution or display of such articles, or in connection with news reports.
The purpose of the section is to permit those selling lawfully made copies of commercial goods that may have some copyrightable element, like a label, to advertise the goods for sale without running afoul of the copyright law. A recent case seemed like the perfect occasion to apply the provision, but it wasn’t mentioned; instead, fair use was asserted, and denied.
The case is Designer Skin, LLC v. S&L Vitamins, Inc., 2008 WL 2116646 (D. Arizona May 20, 2008)(Docket No. No. CV 05-3699-PHX-JAT). The court gave the following facts:
Designer Skin, LLC is a manufacturer of certain indoor tanning products. It owns a number of registered trademarks in these products and its company name, and also owns the copyright in certain artwork related to its products. Designer Skin distributes its products through independent distributors. The relationship between Designer Skin and its distributors is governed by the terms of a distributorship agreement, which limits the distributors' ability to resell Designer Skin's products. Specifically, the agreement prohibits the distributors from selling Designer Skin's products to anyone other than certain qualifying tanning salons. More specifically, the agreement prohibits the distributors from selling Designer Skin's products to Internet resellers.
S & L Vitamins, Inc. is an Internet reseller: it buys various products in bulk and then resells those products on its websites at discount prices. Since some time near the beginning of 2004, S & L Vitamins has sold Designer Skin products on its websites. S & L Vitamins has obtained all of its Designer Skin products through tanning salons. It has not purchased any of these products directly from a Designer Skin distributor.
On its websites, S & L Vitamins displays thumbnail images of the Designer Skin products for sale and identifies those products by using Designer Skin's trademarks. In addition, S & L Vitamins uses Designer Skin's trademarks in the metatags of its sites and as search-engine keywords. On the current websites at issue, S & L Vitamins has posted a disclaimer stating that it is not affiliated with or authorized by any tanning lotion manufacturers to sell their products.
By suing (inter alia) for infringement of the labels, the case involves, in my opinion, a misuse of copyright to stop lower-priced resellers. (The court granted summary judgment to defendant on plaintiff’s trademark claims). On the copyright claim, plaintiff had registrations only for the artwork on the label and not the text, but no matter, the analysis should have been the same. Defendant also claimed it had taken its own photographs of the labels, but the court analyzed the issue as if it had copied from plaintiff.
Defendant relied on fair use, which the court rejected, regrettably. Here are excerpts from that discussion:
Regarding the first part of the inquiry, the court finds that while S & L Vitamins' use of the renderings has a commercial purpose, the commercial character of the use is “more incidental and less exploitive in nature than more traditional types of commercial use.” S & L Vitamins does not sell copies of the electronic renderings-it sells Designer Skin products. The renderings are used primarily to identify and market these products, to give Internet consumers a representative picture of what they are buying. Thus, S & L Vitamins profits from the use of these images only indirectly.
Regarding the second part of the inquiry, however, the Court finds that S & L Vitamins' use is minimally transformative at best. Citing to Kelly, S & L Vitamins argues that its use of smaller, lower-resolution images is transformative. In Kelly, however, the Ninth Circuit's finding of transformative use was primarily based on the additional fact that the defendant's use “served an entirely different function than [the] original images.” That is not the case here. Both parties use the images for the same reason: to market Designer Skin products to consumers.
Considering both aspects of this factor, the Court finds that the purpose and character of S & L Vitamins' use weighs slightly against fair use.
The electronic renderings at issue in this case were created by Designer Skin's graphic designer. The work product of a graphic designer, like any other artist, is fundamentally creative in nature. With that said, the renderings were not created for any aesthetic or educational purpose but for the functional purpose of selling products. Thus, although creative, the renderings do not seem to be at the core of intended copyright protection…. Nevertheless, because of the clearly creative nature of the work, this factor weighs slightly against fair use.
S & L Vitamins copied the entire work and uses it for the same purpose for which Designer Skin intended it to be used: to identify and market Designer Skin products to consumers. Under these circumstances, the third factor weighs against fair use.
Designer Skin argues that the relevant market is the authorized market for Designer Skin's tanning products. The Court disagrees. The relevant market is… the electronic images themselves. Designer Skin seems to concede that there is no market for these images. Designer Skin sells tanning products, not images of its products. Thus, S & L Vitamins' use of the images has not caused any market harm, and nor could it, regardless of how widespread its use might be. This final factor thus clearly weighs in favor of fair use.
Nonetheless, with three factors weighing against fair use (although two only slightly) and only one weighing in favor of it (albeit the most important one), the Court finds that copying the electronic renderings from Designer Skin's website and pasting them on S & L Vitamins' own sites for the purpose of selling Designer Skin's products is not protected by the fair use doctrine. …
This is a depressing approach to fair use, even a fair use analysis by the numbers. The use of the photographs was to sell lawfully tanning goods: if you are going to let consumers know what the product looks like, you have to show a picture of it, and if you are going to show a picture of it you have to show the whole thing. There was, finally, as the court noted, no harm to any legitimate market for the image. But the fair use issue could have been avoided by relying on Section 113(c), which was created for just such circumstances.