Tuesday, April 29, 2008

Photographs of Public Domain works

Tonight in Manhattan, I am participating in a program that raises thorny issues of the scope of copyright in photographs of public domain works of art: are such photographs protectible, and if so under what circumstances and under what theories of copyright? What are the consequences for the publication of art books and journals? Here is the program:

Who Owns This Image?

Art, Access, and the Public Domain after Bridgeman v. Corel

Public Panel Discussion

Cosponsored by

Art Law Committee, New York City Bar Association

College Art Association


Creative Commons


Dr. Theodore Feder, President, Art Resource, Artists Rights Society

Honorable Lewis Kaplan, United States District Judge SDNY

Honorable Pierre Leval, United States Court of Appeals, Second Circuit

Christopher Lyon, Executive Editor, Prestel Publishing

William Patry, Senior Copyright Counsel, Google

Maureen Whalen, Associate General Counsel, J. Paul Getty Trust


Virginia Rutledge, Chair, Art Law Committee, New York City Bar Association,

Vice President and General Counsel Creative Commons

Who owns the Mona Lisa? In Bridgeman Art Library Ltd. v. Corel

Corp. (S.D.N.Y. 1999), Judge Lewis A. Kaplan ruled that exact photographic copies of two-dimensional public domain works of art are not copyrightable under U.S. law, because such images are not original. Yet nearly a decade after that decision, copyright in many such images continues to be asserted.

This program addresses questions currently debated across the worlds of art, publishing, and the law:

Should access to public domain artworks control uses of images of those works? When and how should custodians of public domain artworks exercise control over reproductions of them? How does contract intersect with copyright in the control of image uses? Does the image permissions hurdle play a role in the decline of art publishing, or are the complaints of critics overwrought? What is the nature of the public domain with respect to works of art?


Tuesday, April 29, 2008

6:30 – 8:00 pm


New York City Bar Association

42 W. 44th Street, New York City

The Great Hall

This program is free and open to the public; no reservation required. Seating is limited.

Friday, April 25, 2008

Georgia only occasionally on my mind

The blogosphere was awash last week in stories about a suit filed on April 15th by Oxford University Press against Georgia State University for digital course packs. On the same day the suit was filed, I did a blog about a California opinion, here. Unnoticed in the ensuing brouhaha about the Georgia course pack suit was a ruling on April 18th in an earlier Georgia suit involving the same issue. Here is a link to an April 23d story in the redandblack.com, an independent blog for the University of Georgia, as well as this excerpt:

A federal judge said two University pharmacy professors still are liable for copyright infringement but dismissed the suit against the Board of Regents and College of Pharmacy administrators.

U.S. District Judge Clay Land dismissed Friday charges of trade secret misappropriation - an accusation of stealing and disseminating test questions - and breach of contract against Flynn Warren Jr., part-time clinical professor, and a charge of trade secret misappropriation against Henry Cobb III, clinical associate professor.

The National Association of Boards of Pharmacy brought the case against Warren, Cobb, the Board of Regents and the College of Pharmacy administrators in August, claiming the two professors "copied its copyrighted pharmacy board exam questions and used them in materials for their pharmacy review course," according to court records.


Also in Friday's decision, Land dropped copyright infringement charges against the Board of Regents and College of Pharmacy administrators because they did not intentionally deprive property.

NABP said the college should have stopped Warren from producing review materials after he was investigated in 1995 and agreed to stop copying questions, but Land said the agreement "explicitly states that its prohibitions 'shall not prevent Warren from educational responsibilities associated with his teaching position.'"

Warren and Cobb have until May 8 to reply to the amended complaint by NABP that they can be sued for copyright infringement.

Judge Land’s 25 page opinion is available on Westlaw at National Association of Boards of Pharmacy v. Board of Regents of the University System of Georgia, 2008 WL1805439 (M.D. Ga. April 18, 2008), Docket No. 3:07-CV-084 (CDL). Here are his remarks rejecting the individual professors’ claims of sovereign immunity:

Warren and Cobb contend that although Plaintiff brought suit against them “individually,” Plaintiff's claims against them are actually official capacity claims and that they are entitled to sovereign immunity. Since the State is the real party in interest in a suit against its employees in their official capacities, state employees sued in their official capacities are entitled to sovereign immunity. … However, sovereign immunity “does not protect state employees sued in their individual capacity for employment-related acts.” …

As Warren and Cobb acknowledge, “[t]he general test for determining whether the state is the real party in interest, even though it is not a named defendant, is whether the relief sought against the nominal defendant would in fact operate against the state, especially by imposing liability damages that must be paid out of the public fisc.” …

Furthermore, sovereign immunity only applies “if the judgment must, under all circumstances, be paid out of state funds.” In contrast, the “essence of an individual capacity suit is that the plaintiff is seeking to recover from the individual defendant, who is personally liable for the judgment.” Thus, in Jackson, the Eleventh Circuit found that because the district court's judgment against state employees neither compelled the state to act nor imposed liability upon the state, the employees were not entitled to sovereign immunity. …

Here, Warren and Cobb focus on the fact that their allegedly infringing activities were done in the scope of their employment. As discussed above, however, the test is not whether the acts were done in the course of an employee's official duties but whether a judgment against the employee would in fact operate against the state. …Warren and Cobb baldly assert that relief sought against them would come directly from the State of Georgia, but they do not explain how. Warren and Cobb are both subject to the federal copyright laws. See 17 U.S.C. § 501(a) (“Anyone who violates any of the exclusive rights of the copyright owner ... is an infringer of the copyright.”). A judgment against them may be paid out of their personal funds-not necessarily State funds-because Plaintiff's claims against Warren and Cobb seek to hold Warren and Cobb individually liable for their conduct in violation of federal copyright law. And, to the extent that Georgia has voluntarily agreed to protect Warren and Cobb from liability here, such an agreement would not make Georgia a real party in interest in this action.

The Court concludes that Plaintiff sued Warren and Cobb in their individual capacities and that they are not entitled to sovereign immunity.

The court next rejected the professors’ claims of qualified immunity, holding their conduct was not fair use:

Taken in the light most favorable to Plaintiff, the facts alleged show that Warren and Cobb infringed Plaintiff's copyrighted materials. Plaintiff alleges that Warren and Cobb prepared materials for the PBR course, that the course materials contained 633 sample questions that were “verbatim, nearly verbatim, or substantially similar” to actual NAPLEX questions, which were proprietary and copyrighted, and that the materials were made available for purchase at a cost of $100.00 per set. …

The next question is whether Warren and Cobb's alleged conduct violated clearly established law. “ ‘Clearly established law’ is law that is sufficiently defined so as to provide public officials with ‘fair notice’ that the conduct alleged is prohibited.” … The unlawfulness of the conduct must be apparent in light of preexisting law, but the precise action in question need not have been previously held unlawful. …“Fair notice” of prohibited conduct may be provided in the words of a federal statute or in case law.

Warren and Cobb argue that their alleged conduct did not violate clearly established law because the line between copyright infringement and fair use of copyrighted material is not clear, so they could reasonably believe that the fair use affirmative defense applied to their alleged use of the NAPLEX questions. While the fair use doctrine may not be clear in all circumstances, it is clear-and was clear at the time of the conduct alleged here-that copying, distributing and selling large numbers of secure test questions, such as Plaintiff's NAPLEX questions, is not fair use.

Thursday, April 24, 2008

IFPI and Mussolini’s Italy; Sony and Gracenotes

Here are two unrelated items involving the record industry. The first is about the origins of IFPI, the International Federation of the Phonographic Industry, based in London. IFPI is affiliated with the RIAA. (From 1999 to 2004, the head of IFPI was Jay Berman, former head of RIAA.). Founded in 1933, this is IFPI’s 75th anniversary year, usually an occasion for conspicuous celebration, but no announcement of such festivities have been made public.

Rasmus Fleischer, a doctoral student, has a blog post about IFPI’s origins and about changes in the wikipedia entry on IFPI. Here is the link to his post (HT to Nicklas Lundblad), IFPI was founded in Rome in 1933, and returned to Italy the following year. Even though Mussolini was appointed Prime Minister by King Victor Emmanuel III in 1922 (and Il Duce in 1925) as a result of the attempted coup and the March on Rome of that year, World War II on the European front was still 6 years off, and Italy’s (at least formal) alliance with Hitler’s Germany did not occur until June 10th of the following year, 1940. Italy’s anti-Semitic and other race laws were not passed until 1938.

Still, since 1928 the Fascists had been the only legal party and had been imposing Fascist ideology and symbolism throughout Italy. Wikipedia notes that “The fasces adorned public buildings, Fascist mottos and symbols were displayed on art, and a personality cult was created around Mussolini as the nation's saviour … .” It may be this history that makes IFPI uneasy, even though there is zero evidence of an association of IFPI with the Italian regime. IFPI’s sensitivity nevertheless seems acute: Mr. Fleischer did some investigation into changes on wikipedia’s entry on IFPI, which he details:

Previously, this fact appeared at Wikipedia’s page about the IFPI:

It was formed /…/ during 1933 in Rome, Italy, under the fascist government of Benito Mussolini by companies mainly owned or controlled by General Electric in the United States of America.

In April 2005, someone removed the mentioning of fascism, but the information about where and when the IFPI was founded remained, for anyone with a minimum of historical knowledge to draw her own conclusions.

Until August 25th, 2006. At that date the page was edited thoroughly by someone with the IP-address, erasing any mentioning about any kind of history of the IFPI. Since then, Wikipedia’s page about IFPI has remained like that.

That “someone” who erased the information about the IFPI’s foundation, was evidently an employee at the IFPI’s London headquarters. The IP address can be traced there.

The current relevant section of the entry reads: “The IFPI was formed in Rome in November 1933 to represent ‘the interests of the recording industry worldwide in all fora’ by promoting legislation and copyrights …. .”

The second story involves Sony buying Gracenotes, according to Forbes, for $260 million. According to Scott Jones’ website:

The Gracenote Media Database has information for approximately 55 million tracks and over four million CDs. It has been used by more than 150 million individuals worldwide totaling six billion searches over the past eight years. In 2006, the company penned a deal allowing Gracenote to become one of the first companies to offer legal downloads of millions of song lyrics.

Gracenote licenses access to its database and other services to online music services and hardware providers that enable individual users to explore the world of digital entertainment. Gracenote's content delivery engine provides the ability to aggregate and deliver rich third-party content that is directly related to music as it is playing. Gracenote became the Web's first "music browser" by allowing its licensees (including RealNetworks and Yahoo!) to recognize MP3s as well as CDs and to receive information about artists on the screen while users listen to music. By providing player partners, application developers and device makers the ability to serve targeted content in context to the music listening experience, Gracenote enables its partners to generate new revenue streams.

Gracenotes also has a Video Id service, called VideoIDSM, a fingerprinting technology, and counts Apple among its clients.

Wednesday, April 23, 2008

Preemption and Public Utility Hearing Transcripts

On March 31st, Chief Judge of the Middle District of Pennsylvania Yvette Kane issued an opinion on the copying of public utility hearing transcripts, Chase v. Public Utility Commission of Pennsylvania, 2008 WL 906491 (M.D. Pa. March 31, 2008), Docket No. 1:05-CV-2375. There is much to commend in the opinion, and much that is unfortunate, especially the result.

Pro se Plaintiff had requested a copy of a hearing transcript from the PUC, at the cost of copying. The PUC replied that plaintiff could view the transcript and take notes, but that it “was not permitted to make you copies from the transcript.” The “not permitted” language was circular, since the PUC was free to make its own policies about the making of copies, but chose to enter into a contract with a private reporting company that vested in the company the exclusive right to make such copies. The company charged the public a copying fee of $2.80 per page. Such arrangements are common in many areas of public life, including court transcripts in federal court. That they are common does not make them lawful or good policy even if lawful.

There is one unusual twist in the Pennsylvania PUC situation, contractual language in the agreement with the reporting agency stating “[A]fter 5 years, transcripts will be deemed to have entered the public domain. As such, the Commonwealth shall have the right to provide copies of any transcripts 5 years old or older to any interested person for the amount per page rate as fixed by the Commonwealth.”

Plaintiff sought a declaratory judgment challenging the contract as preempted under Section 301 of the Copyright Act and as violative of the First Amendment. The initial inquiry by the court was one of standing, and here the court inched up to agreeing with plaintiff that through 42 U.S.C. section 1983, Section 301 of the Copyright Act “guarantees an individual right to copy works in the public domain by restricting the state’s ability to create a ‘monopoly.’” The PUC did not disagree. The Court , however, didn’t take the plunge, which would have been quite noteworthy. Instead, it found standing based on the Supreme Clause, holding: “It is well-established that a plaintiff may seek injunctive and declaratory relief to invalidate a state regulation that is preempted by federal law.” Despite winning the standing victory, plaintiff lost the merits war.

On the merits, the Court engaged in the classic two-prong express (that is, statutory) analysis: did the subject matter fall within the scope of copyright, and if so were the rights at issue equivalent to those granted in Section 106 of the Copyright Act. The Court’s opinion started out well enough, rejecting the PUC’s argument that the subject matter prong of the preemption was not satisfied because the hearing transcripts were not protectible; appropriately, the Court held that Section 301 also preempts unoriginal material of a general type that can be protected: a bunch of people reading written statements and responding to questions and answers is no different from interviews, which are protected. Here the lack of protection was a matter of policy – the same one that should apply to statutes. (See the earlier wacka wacka huna kuna blog on Oregon here).

It is at the equivalent rights prong of the preemption analysis that the opinion falters. The PUC agreed that its policy “confers a form of proprietary right in the transcripts to the reporting Agency,” a concession forced by the above-quoted language of the contract which acknowledged a 5 year copyright in the reporting agency. It is in addressing this fact – and the ability of citizens to view the transcript at the PUC and to take notes – that the Court went off the rails by relying on ProCD Inc. v. Zeidenberg, 86 F.3d 1447 (7th Cir. 1996), Judge Easterbrook’s infamous shrink-wrap license opinion. The enforceability of shrink-wrap licenses and the ability of a state to create a copyright interest in public officials’ hearings bear no resemblance to each other. The similarity the PUC Court found was that as in ProCD the right created by the PUC was allegedly a contractual right, not a right established by law. But this equation is false: it was the PUC’s law (or regulation) that was being challenged; the case was not a contract action by the Reporting Agency against the consumer, which is the correct analog to ProCD. Plaintiff was challenging what even the PUC admitted was the creation of a 5 year exclusive right to make photocopies of the transcripts, and in this respect, the argument that citizens could view the transcript at the PUC’s offices (viewing is not a right granted under the Copyright Act), or take notes (fair use) is irrelevant.

Tuesday, April 22, 2008

Which Act Applies to What?

Given the three year statute of limitations bar, there are only two relevant omnibus Copyright Acts relevant in litigation arising under 17 U.S.C.: (1) the 1909 Act (as amended), and, the 1976 Act (as amended). The easiest approach to the question of which act to apply would be to simply apply the 1909 Act to all questions about works created between March 1909 and December 31, 1977 (when that act was in effect), and to apply the 1976 Act to all works created on or after January 1, 1978. But even this simple approach has problems: what about works created before January 1, 1978, but not published or registered? Those works were previously protected under state law. One couldn’t say, “OK, for these works, state law will continue to apply” because Section 301 preempts equivalent state law.

There are lots of other questions too: how about the compulsory licenses? Should the Section 111 cable compulsory license and the Section 115 mechanical compulsory license (to name two prominent ones enacted in 1976) apply only to works created on or after January 1, 1978? That would be extremely difficult to administer, certainly in the case on Section 111. Or, how about damages? Should the statutory damages in Section 504 – which are quite different from their 1909 Act predecessors – only apply to works created on or after January 1, 1978? That would be easy to administer, but it would not be what Congress intended. How about the display right, which was granted only in the 1976 Act, or the limited right of public performance granted to sound recordings in Section 106(6)?

How about work for hire and joint authorship, which again were different under the 1909 Act, or, formalities, like notice? How about divisibility? Lets say a work was created under the 1909 Act, but the transfer in question – an exclusive license for a particular Section 106 right– was granted after January 1, 1978. The 1909 Act, with its principal of non-divisibility, precluded the assignment of less than the whole of the work as a license, meaning among other things that the licensee did not have standing to sue without joining the original copyright owner. Does an exclusive licensee of a 1909 Act have standing to sue today for infringement of the work? The Second Circuit has held yes, in Roth v. Pritikin, 710 F.2d 934, 938 (2d Cir. 1983). See also Essex Music, Inc. v. ABKCO Music & Records, 743 F. Supp. 237, 240-241 (S.D.N.Y. 1990).

Last summer, though, Judge Stephen Wilson of the Central District of California, in Nafal v. Shawn Carter (Beoynce’s maybe husband), 2007 WL 5022506 (C.D. Cal. Aug. 3, 2007)(No. CV 05-2480SVWPJWX), based on what he saw as Ninth Circuit precedent, held to the contrary, and adding insult to injury, loaded on this extra standing hurdle: “Even if Plaintiff is designated as a co-owner of an exclusive license, he could not join without joining” the original copyright owner and the other co-owners of the exclusive license. (p. *10).

There is no support in the statute for either proposition; as to the second one, Section 501(b) states plainly: “The legal or beneficial owner of an exclusive right under a copyright is entitled, subject to the requirements of section 411, to institute an action for any infringement of that particular right committed while he or she is the owner of it.” Under 1 USC section 1 – the very beginning of federal statutes, “In determining the meaning of any Act of Congress, unless the context indicates otherwise— words importing the singular include and apply to several persons, parties, or things.” This means “the legal owner of an exclusive license” also means “legal owners of an exclusive license.” One may say, “ah, but this means all legal owners,” but such a restriction is not found in the statute, and is contrary to legislative history stating Congress's intent to permit one joint owner of the whole to sue without joining the other joint owner. Since “copyright” under the 1976 Act is merely ownership of all or one or more exclusive rights, the distinction drawn by Nafal v. Carter is insupportable.

I have previously blogged about the death of divisibility; Nafal v. Carter is just another nail in the coffin. BTW, my answer to all the other questions is this: compliance with formalities, work for hire and joint authorship questions are governed by the Act in effect when the work was created, all the other questions (e.g., rights granted, applicability of compulsory licenses, damages) are governed by the Act in effect when the cause of action arose.

Thursday, April 17, 2008

Oregon goes wacka wacka huna kuna

The State of Oregon appears to be taking a novel position: that it has copyright in its statutes. The story comes from Ars Technica, here. Nate Anderson writes:

The State of Oregon takes exception to Web sites that republish the state's Revised Statutes in full, claiming that the statutes contain copyrighted information in the republication causes the state to lose money it needs to continue putting out the official version of the statutes. Oregon's Legislative Counsel, Dexter Johnson, has therefore requested that legal information site Justia remove the information or (preferably) take out a paid license from the state.

The prohibition on copyright in government works in Section 105 of the United States Code only applies to works of the United States government. States are free to protect works that their employees create as a statutory matter, but that hardly ends the matter. There are public policy grounds for not protecting works too, and the status of laws as commands has long been recognized as one such ground. Here, for example is an excerpt from an 1886 opinion, Banks & Bros. v. West Pub. Co., 27 F. 50 (C.C.D. Minn. 1886).

[I]t is a maxim of universal application that every man is presumed to know the law, and it would seem inherent that freedom of access to the laws, or the official interpretation of those laws, should be co-extensive with the sweep of the maxim. Knowledge is the only just condition of obedience. The laws of Rome were written on tablets and posted, that all might read, and all were bound to obedience. The act of that emperor who caused his enactments to be written in small letters, on small tablets, and then posted the latter at such height that none could read the letters, and at the same time insisted upon the rule of obedience, outraging as it did the relations of governor and governed under his own system of government, has never been deemed consistent with or possible under ours. This claim seems to rest upon the idea that the state, as an entity independent of its citizens, or as a whole combined of all its individuals, has a property right in the laws and judicial opinions outside of and beyond that vested separately in each citizen. I conceive this to be an error. Each citizen is a ruler,—a lawmaker,—and as such has the right of access to the laws he joins in making and to any official interpretation thereof. If the right of property enters into the question, he is a part owner, and as such cannot be deprived of equal access by his co-owners. Could a majority of a legislative assembly debar the minority from participation in the deliberations or a knowledge of the action of the assembly? The majority may bind the minority to the action it determines, but cannot withhold knowledge thereof. So, the majority of the citizens of a state—in a larger sense, the law-makers—may determine the conduct of all; but can knowledge of what is determined be withheld? This, of course, is more emphatically true as to the statutes, but also true as to judicial opinions, which, though not laws, are official interpretations of law. The mere judgment for or against the plaintiff of course decides the case; but that often furnishes little insight into the questions considered and determined. The opinions, at least those of the highest tribunal, are always considered as official interpretations of law, both statute and common, and as such binding upon all citizens. The same argument which supports the state's claim of property in judicial opinions supports that of property in statutes. The state pays the judges, and therefore owns the product of their official toil. The same is true as to legislators.

A more recent case is the Fifth Circuit’s en banc panel in Veeck v. Southern Building Code Congress International, Inc., 293 F.3d 791 (5th Cir. 2002). Veeck involved adoption by municipalities of privately developed building codes, but the result is even more compelling when, as in Oregon, state statutes created from scratch by state employees are at issue. Oregon should rein its its wayward Legislative Counsel.

Wednesday, April 16, 2008

The Dalek Chronicles

U.S. audiences may not be familiar with the "Dr Who" series, which first appeared from 1963 to 1989, and was relaunched in 2005. Dr. Who travels in his space and time-ship (called the Tardis) which looks like a blue Police box from the outside. Dr. Who goes on explorations with friends, solves problems and does justice. The Daleks, introduced in the second Dr. Who series (and designed for the BBC by Raymond Cusick), are said by wikipedia to have captured the spirit of British cultural identity with their catch phrases; one such catch phrase, lost on U.S. audiences, is "Hiding behind the sofa whenever the Daleks appear." Wikipedia also gives some further background (and sound samples too):

A Dalek (pronunciation "DAH-leck", IPA: /ˈdɑːlək/) is a member of a fictional extraterrestrial race of mutants from the British science fiction television series Doctor Who. Daleks are grotesque mutated organisms from the planet Skaro, integrated within a tank-like mechanical casing. The resulting creatures are a powerful race bent on universal conquest and domination, utterly without pity, compassion or remorse (as all of their emotions were removed except hate).They are also, collectively, the greatest alien adversaries of the Time Lord known as the Doctor. Their most famous catchphrase is "EX-TER-MI-NATE!", with each syllable individually screeched in a frantic electronic voice.

As Mr. Justice Norris observes, the Daleks "were some of the most engaging and enduring creations of the fertile mind of the later Terry Nation, though the conceit he used was that he simply learned of their existence through his discovery of 'The Dalek Chronicles", which he translated. More was learned of their origins and mode of existence as they featured in further episodes of 'Dr. Who', and there grew up around them a separate narrative and lore which developed not only through television, but also through novelisations, comic strips, audio plays and the publication of books and "annuals."

Mr. Nation died in 1997. During his life, he entered into various agreements in 1964 and 1965 relating to various Dalek books and characters with Souvenir, a company owned by Paul Fishman, whose father had been an acquaintance of Mr. Nation's. After Mr. Nation's death, Mr. Fishman conceived of various Dalek projects. Mr. Fishman has another company called JHP, which supposedly suceeded to Souvenir's rights and it is the plaintiff in the case. In 2002, the BBC published a book called "The Dalek Survival Guide," available here on amazon.com UK for 7 pounds, which is probably US$99 at this point. Mr. Fishman alleged that this book infringed rights formerly owned by Souvenir and now allegedly owned by JHP.

Mr. Justice Norris' opinion involved a very close reading of the various agreements to see what was conveyed, and it is worth noting here a difference between UK and US law. Under UK law, exclusive licensees must join the original copyright owner (CDPA section 102(1)), something not true under U.S. law, but which explains why the Estate was a named party (but only in name). JHP had originally alleged infringement of text and graphic images, but at trial limited to claim to text, but this still left the question of what text was assigned to Souvenir. Mr. Justice Norris limited the agreement to the particular text subject to the agreement, holding: "I regard it as inherently improbable that Terry Nation should have thought of transferring the absolute property in the copyright of his proposed work at a time when he was actively involved in the creative development of the Daleks for further television scripts .... ." (para 13). In other words, plaintiff was "not the owner of the copyright in the text of 'The Dalek Book' but under the 1964 agreement was and is the holder of an exclusive license to publish it in book form." This is a distinction that, I believe means the copyright in plaintiff did not reach so far as the preparation of different works.

The rest of the opinion would also be baffling to U.S. lawyer: the honorable (or honourable) judge asks: "Now that JHP (as exclusive licensee of the right to publish [specified books] has commenced proceedings against [the] BBC[] in respect of infringements of that right, can [he] BBC[] avail itself as a matter of law of any defence which would have been available had the infringement proceedings been brought by the estate of Terry Nation (as owner of the copyright)?" (para 21) I confess to not understanding why this was discussed since no such suit had been brought, but the court held the BBC would have prevailed (para 26). And we are only halfway through the opinion, which then went off into considering an alternative claim of copying, "in case I am wrong on my primary ground."

In all, for U.S. readers, a difficult opinion, but the bottom line is that Dr. Who and the BBC are free to pursue justice in the entertainment forum, no doubt as Mr. Nation intended.

Tuesday, April 15, 2008

State Sovereign Immunity and State Employees

Congress’s efforts to hold states and their instrumentalities liable for copyright infringement are well documented and completely unsuccessful, due to the right-wing’s dominance of the Supreme Court. Much like Charlie Brown in the comic strip Peanuts who fails every time when the football is put down, the Court has cynically moved the goal posts for Congress in being able to enact legislation abrogating states sovereign immunity. If ever the label judicial activist was apt, it has been apt since the days of the Rehnquist Court, when the Court actively sought out cases to show Congress the contempt with which they are held by the Court – and the Rehnquist Court was a piker compared to the Roberts Court. But it is what it is, and there is no way for Congress to ever win in this battle, other than cutting back the Court’s funding back to the Justices themselves and stripping the Court of all but mandatory jurisdiction. (And how great would that be!).

The enduring nature of states’ sovereign immunity has taken a new twist though in a February opinion from the Southern District of California, Marketing Information Masters, Inc. v. The Board of Trustees of the California State University, by Judge John A. Houston, Civil No. 06cv1682 JAH. The opinion is not on Westlaw, and the court’s website uses the extremely public-unfriendly Pacer; the opinion is available, though, along with a discussion, at Stanford University’s fair use blog, here, with an article by Mary Minow.

The court held that Congress had not managed to abrogate the states’s sovereign immunity (surprise, surprise, surprise, Gomer), but there nevertheless is one surprise: the court, while dismissing the case against the university, allowed it to forward against the individual university employee who was involved in the copying, Mr. Rauch. The court’s discussion on this point is brief, and no doubt chilling to state employees:

Based on the [amended complaint], which includes allegations that Rauch personally engaged in the infringing behavior, the Court finds Plaintiff seeks relief from Rauch in his individual capacity as well as his official capacity. Accordingly. Rauch is not entitled to sovereign immunity from the suit seeking relief against him in his individual capacity.

Monday, April 14, 2008

The New Perverted Reverse Value Theory of Copyright

Candidates for a unified theory justifying copyright in all its manifestations include the value of the copyright owner’s efforts in creating the work. This value can take a natural rights form – the value of genius – but it can also take the more mundane Lockean agricultural form – copyright owners are the sowers of their intellectual labor.

The value theory of copyright rightfully has considerable appeal. One can even correlate the value theory to fundamental concepts of copyright like originality: where the copyrighted owner has added expression, that expression is protectible; when expression hasn’t been added, there is no protection. The correlation breaks down in areas like ideas, which while perhaps the most innovative and valuable part of a given work will nevertheless remain unprotected; the value theory has to rely on other theories to explain the exclusion of protection for ideas. And the pure value of labor also leads to protection for sweat of the brow. The value theory is both over- and underinclusive and therefore cannot play the role of a unified theory.

There is also a reverse value theory, one that has been invoked sketchily in the past, but has now been officially launched on a grand scale in the UK. The reverse theory is the subject of this post. In the past, courts have on occasion found infringement based merely on the fact of copying: if defendant went to the trouble to copy something from plaintiff, then the copied material had value to defendant, and defendant should lay claim to recovering the lost value. This was approach represented a negation of the originality requirement and of the requirement that what is taken be a substantial amount of expression; but for those judges who preferred moral simplicity to substantive law, the copied=value=infringement approach proved irresistible. Note that the value spoken of was the value to defendant, not plaintiff. The portion taken could have been quite insignificant to plaintiff’s work, another reason the approach conflicted with general principles of copyright law, which bases infringement on the importance of the portion taken to plaintiff’s, not defendant’s work.

The new reverse value approach does to consumers what the infringement approach did to defendants, and then some. On January 8th of this year, the British UKIPO launched a consultation process as a follow-up to the December 6, 2006 Gowers report. One of the recommendations in the report (see page 2, paragraph 6) was this:

It is proposed to create a new exception that would allow consumers to make a copy of a work that they legally own, so that they can make it accessible in another format for playback on a device in their lawful possession. The exception would apply to personal or private use. The owner would not be permitted to share it more widely (for example in a file sharing system or on the internet). Multiple copying would not be allowed.

The proposed exception is very narrow. The consumer would have to own a legal copy. The format (and perhaps space)-shifting would have to a one-off and for personal use, and the copy would have to made for a device the consumer legally possesses. There are certainly more liberal approaches to format-shifting one could propose, but as approaches go, if personal use means anything it has to fall within this modest proposal.

Comments on this process of the consultation closed last Tuesday. One of those submitting comments was the Music Business Group (MBG), a coalition of UK music publishers, record labels, and licensing organizations. Here is the link. The MBG takes a negative view of the proposed exception, that is unless its members get a license fee. But how to justify such a license fee for consumers making a single copy from a lawfully owned copy on to a lawfully possessed device for personal use? Here is the MBG’s introductory bulletin points on this effort:

 Unquestionably, there is value produced by the ability to format shift for both consumers and commercial enterprises which directly arises from the transferability of music
 It is imperative that creators and performers should benefit from this value; ultimately it is their creativity which underpins the entire value chain
The only solution which achieves this goal is a flexible and market-led approach based upon a business-to-business relationship.
(page 3).

At this point, some readers might be confused: what is the value produced by consumers? Aren’t those who use copyrighted works without permission or payment usually described as parasites, pirates, or thieves, and hardly as value-creators? And haven’t we been told for years that it is consumers, especially via P2P file sharing, that is the cause of the record industry’s decline?

Behind the MBG’s new approach is a plan to pervert language in order to achieve an otherwise politically unacceptable result. The plan began in the summer of 2007, with what was called the Value Recognition Strategy (referred to in MBG’s submission to the UKIPO). The strategy was prepared by Capgemini consultants (no surprise there: copyright, like political campaigns, is now the province of focus group generated slogans and messaging), and is designed to examine the “value gap,” which is defined as the amount of decline in UK record sales since 2004. A private study conducted by Capgemini for copyright owners, and discussed here at the UK Register website is said to have revealed that “format changes and price pressure from discounted CDs on sale in supermarkets, are most to blame for this ‘value gap.” Format changes here refers to the unbundling of albums into per song sales, and not to the format shifting proposed in the UKIPO exception, although as we shall see the two are very much related in the MBG’s view. The article in the Register states:

Capgemini calculates that of £480m lost to the industry since 2004, £368m was the result of format changes: principally the unbundling of the CD into an "a la carte" selection of digital songs. Of the remainder, 18 per cent was lost to piracy. And that suggests that simply going after illegal downloaders won't save the British music business.

So what is the Value Recognition Strategy, then? To go after iTunes as the Register article notes, but that means not shutting it down – since the site is licensed -- but instead getting a cut of the revenue iTunes generates. There have been efforts to do this in the past, under the same value approach. For example, there have been efforts to obtain a cut of the profits from the sale of iPods. One head of a U.S. music company was quoted as saying with respect to this effort, “We felt that any business that’s built on the bedrock of music we should share in.”

This statement is indicative of why the corporate music industry is on its death bed: after the industry insisted in preserving a business model that consumers didn’t want (album sales), it fought the business model consumers do want (per song downloads) resulting in a flight to unauthorized services that gave consumers what they wanted (P2P), and then when someone else came along and saved the industry from itself by creating an authorized way to get consumers to pay (iTunes), the industry now insists that it is being ripped off, that it is being deprived of “value” that belongs to it.

Apple’s iTunes business was built from scratch by a technology company, not by an entertainment company, not a consumer electronics company (or a hybrid like Sony), and not by a traditional retailer – indeed, it bears noting that the traditional record store chains in the United States – based on the sale of albums -- are out of business, and the few foreign ones (e.g., Virgin) that remain, remain because they sell video DVDs and clothing. In February 2008, a mere five years after the launch of iTunes, Apple has become the word’s largest source of music purchases (surpassing Wal-Mart), and it did so by sinking its own money and creativity into hardware and software, none of which any copyright owner contributed to, and by developing a business model that copyright owners had fought tooth-and-nail. Nor apparently is it enough for copyright owners that they reportedly get 70% of all iTunes sales with no development costs, no overhead costs, no server costs, and without bearing any of the expenses of Apple’s technical work. Even more: on the record labels’ side of production, the 70% of iTunes revenue they are receiving is made off of a product that requires no packaging, warehousing, shipping or other associated costs.

So, back to the value recognition strategy and the MBG’s submission to the UKIPO. That submission is the public face of what has previously been private, and it is not a pretty sight: faced with its own consultant’s conclusion that only 18% of the songs on iPods and other such devices are “pirated,” the industry wants to save it self from its own failures by getting a second license fee; recall that the UKIPO’s proposal was limited to making one copy from a lawfully owned copy for personal use. The industry got paid once for sale of the lawful copy and now wants a second bite at the same apple (pun intended). And why? Why because the market for iTunes and the ability to transfer DRM-free copies demonstrates that consumers “value” getting what they want; because they “value” getting what they want, that value belongs to the music industry.

What am I talking about, you may ask? The MBG states on page 13, paragraph 20, “Consumers enjoy and value the transferability of music.” Note the word value here. But what does the word mean? The MBG submission explains on the next two pages, paragraphs 28-30:

28. Another way of approaching the question is to ask how much less value would consumers attach to devices – MP3 players, computer hard drives, CD and DVD burners – if music were not transferable?
29. In 2003 Sony introduced digital music versions of its Walkman player, called the “Network” Walkman. Sony’s players were initially compatible only with Sony’s proprietary music format. In order to move tracks from CD to the Sony ATRAC3 players, customers were forced to use specific Sony software.
30. Purchasers of Sony Network Walkman players were not easily able to play podcasts, tracks copied from friends’ hard drives, tracks downloaded from filesharing networks and so on. Eventually, in August 2007, Sony responded to the business failure and announced that future players would support the more common Windows Media and MP3 formats as well as AAC which is used in the iTunes store and jukebox. “By going open-standard, Sony will increase customer choice and make its audio players more versatile,” said [a Sony representative]. “We did something perfectly simple. We listened to what our customers want.”

Of course, it took Sony four years to listen to what it customers wanted, a period of time in which iTunes was developed and came to dominate the field. But the conclusion the MBG draws from this experience is not what you would think: Sony’s failure to listen its customers shows that customers valued something different than what Sony valued, and therefore, as a direct result of Sony listening to its customers, Sony’s customers now possess value that Sony should recapture.

I am not exaggerating, which is why I quoted all of paragraphs 28-30. Most people, and hopefully government policy makers, would think the existing situation is a win-win: Sony sells more machines and Sony music, and consumers get what they want. But that is not how the MBG sees things. They see the Sony experience as an example of what is wrong with the music industry: now that consumers have what they want, through lawful sales from Sony, Sony is losing value to its customers. This “imbalance” as MBG describes it can only be corrected through a new levy on customers for having the audacity of forcing Sony to give them what they want.

In short, the “value” the MBG is demanding that the UK government recognize through the imposition of a new levy is the market place value that Sony willingly gave to its customers, and which it trumpeted as an example of listening to those customers. From customers’ perspective, this is surely an unusual way to lose through winning. The new levy approach, the MBG concludes “provides a future proof, yet easy to manage system that is responsive to market realities … .” (page 17, paragraph 42).

The imposition of a levy for the making of one personal copy of a lawfully purchased work for format-shifting is not even remotely a market reality, much less responsive to one. Instead, the MBG’s proposal seeks to create an obligation that doesn’t and should never exist: even counter-reformation opponents of limitations and exceptions have to acknowledge that in the drafting of Article 9(2) of the Berne Convention in 1967, private use exceptions were common in national laws. The MBG’s proposed levy is to create value for copyright owners where none exists: in the past, the industry made money by reselling consumers the same product over and over again: 78s to 45s; 45s to tape; tape to CD, and most importantly all of them in album format, a proven bad value to consumers. The incredible amounts of ink spilled about and suits filed over the Mp3 format have little to do its with digital format, and everything to do with breaking down the single business model that has sustained the music industry for many decades, album sales. It is the decline in album sales that the industry’s own Value Recognition Strategy acknowledges is responsible the principal decline in the industry’s income, not file sharing and certainly not format shifting.

What this means to me is not that consumers have captured value that belongs to the industry, but rather that consumers have long been deprived of the value of their money, and are finally beginning to get something close to the true value of the product being sold. It is that market reality that scares the you-know-what out of the MBG, and that forced it to turn to a consultant to come up with a theory to sell to government policy makers as an example of the sky is falling from yet another effort to blame consumers for the industry’s own shortcomings. The proposed solution by MBG is an attempt to obtain a government-mandated subsidy by consumers of an industry that is finally being forced to give consumers what they want. There is no value for policy makers in mandating such an undeserved subsidy. And, as a policy matter, the theory on which it is based, namely that every unauthorized use by consumers is the misappropriation of value properly owned by copyright owners, has no limit; it applies to book reviews, news stories, quotations, parodies, the first sale doctrine, and a limitless term of protection (note the connection between the value theory and the concurrent effort at term extension for sound recordings in the UK and Europe). Even Blackstone’s view of property as the sole, despotic dominion of the owner never reached this far.

Hopefully the UKIPO will reject the proposed levy and the theory out of hand. Rejection would be a valuable lesson.

Thursday, April 10, 2008

Are copyright lawyers worth more than other lawyers?

When it comes to awarding attorneys fees to the prevailing party under an authorizing statute (like 17 USC 505), courts apply a variety of factors. One, like that for obscenity, is a community-standards approach: what is the prevailing rate in the relevant community for attorneys? Due to cost of living variances, an attorney in South Dakota is likely to charge less than one in Manhattan, all other things being equal. Specialists also get to charge more, at least when they are doing specialist work. But are there differences in rates within the same community for difference types of specialists, and if so, how do copyright lawyers stack up to their colleagues?

That was an issue in Astro-Med, Inc. v. Plant, an April 3,2008 opinion from the U.S. court in the District of Rhode Island, 2008 WL 919674 No. CA 06-533 ML, by Judge David L. Martin, USMJ. Two of plaintiff’s attorneys requested a rate of $365 an hour; defendant objected. The customary fee in Rhode Island (that is the community standard) was said to be between $225 to $325, so plaintiffs were asking top dollar. This is the rate plaintiff was said to have been charged by its lawyers, and plaintiff argued this fact ended the inquiry. The court disagreed, citing FRCP 37 for a “reasonableness” approach; for example, plaintiff could have agreed to have paid its lawyer an unreasonable amount, perhaps in the hope of getting most of it eventually footed by defendant.

The next step was to figure out what was reasonable under the circumstances, a step determined figuring out the prevailing market rates for those “in the community for similar services by lawyers of reasonably comparable skill, experience and reputation.” And it is here that one had to look for the type of case it was. The case at hand wasn’t a copyright case, but the court looked to a recent opinion in a copyright case in the same district by Magistrate Judge Lincoln D. Almond in a copyright infringement action involving one of the same lawyers; in that case he had been awarded $365 an hour, Mag Jewelry Co., Inc. v. Cherokee, Inc., et al., C.A. No. 04-174T, slip op. at 7 (D.R.I. Dec. 26, 2007). Judge Almond also noted that the case before him “involve [d] an analysis of prevailing market rates for copyright litigators,” id., and that the plaintiff had itself “described the area of copyright infringement law as a specialty and a complex area of law,” id. (internal quotation marks omitted).

The case at hand, even though involving one of the same attorneys was for an alleged breach of an employment agreement and the alleged misappropriation of trade secrets. The Court held, “While the latter claim may involve a degree of complexity somewhat greater than that found in routine business litigation, overall the action is not on a par with copyright infringement litigation. Thus, the Court concludes that a reasonable hourly rate for Attorney Scott is $325.00 per hour. As Attorney Duffy's experience is comparable to that of Attorney Scott, the Court also fixes his hourly rate of compensation at $325.00. “

So there you have it, a lawyer trying a copyright case can be awarded more per hour than when he tries a trade secret case.

Wal-Mart learns a painful copyright lesson

The Wall Street Journal had a front page story by Gary McWilliams yesterday entitled "Candid Camera: Troves of Videos Vexes Wal-Mart." The story doesn't use the word copyright, but copyright is the key element of the story. The story begins:

For nearly 30 years, Wal-Mart Stores Inc. employed a video-production company ... to capture footage of its top executives, sometimes in unguarded moments. Two years ago, the retailing giant stopped using the tiny company. At first, the decision threw Flagler Productions Inc. into a panic. Now's its Wal-Mart that's squirming. In recent months, Flagler has opened its trove of some 15,000 Wal-Mart tapes to the outside world, with an eye toward selling clips. The material is proving irresistible to everyone from business historians and documentary filmmakers to plaintiffs lawyers and union organizers.

Careful readers might way, well what does the contract say? But there was no contract according to the story. Instead, the outside company was "hired on a handshake." In the story a Wal-Mart spokesperson is quoted as saying "It's difficult to understand how [Flagler] could now sell to third parties material we paid it to produce on our behalf. Needless to say, we did not pay Flagler Productions to tape internal meetings with this in mind." To copyright lawyers, its quite easy to understand. Flagler was not an employee of Wal-Mart, had no independent work-for-hire agreement, and such an agreement wouldn't have worked anyway since it is only contributions to audiovisual works that are covered under the second prong of the definition of work for hire in Section 101, and not the audiovisual work as a whole. Finally there was no transfer of rights.

There have been a number of cases where commissioning parties in such situations wake up and smell the coffee too late. One is Quintanilla v. Texas Television Inc., 139 F.3d 494 (5th Cir. 1998); another is the fabulously named Easter Seal Society for Crippled Children and Adults of Louisiana, Inc. v. Playboy Enterprises, Inc., 815 F.2d 323 (5th Cir. 1987). Wholly aside from copyright issues, though, one has to question the judgment of company officials in what they did on the films. In 2005, suit was filed on behalf of a 12 year boy injured by a gas can purchased from Wal-Mart that exploded. I have absolutely no views on the merits of the case, but in one of the tapes made by Flagler, Wal-Mart managers are said to be giving parody testimonials about the same brand of gas can, with one manager joking, "I torched it. Boom! Fired right up." Although this took place before the suit was filed, not surprisingly, plaintiff's attorney has requested that the tape be entered into evidence in the trial.

Tuesday, April 08, 2008

Swinging for the Bleachers and Striking Out

Given that Section 301 of the Copyright Act preempts equivalent state law causes of actions and remedies, state courts can not hear claims brought directly under the Copyright Act, or what are really copyright claims dressed up in the sheep’s clothing of a state claim, like unfair competition via mere copying of a work (protected or not). But does this mean that state courts can’t hear any issues in which adjudication an issue under the Copyright Act is raised?

For example, let’s say plaintiff sues defendant in state court for libel. The alleged libel is copyright infringement. Defendant says he is not guilty of libel because although he copied plaintiff’s work without permission, his copying was fair use. Say this is the sole issue in the case. In order to determine whether plaintiff’s state libel claim succeeds, the court (or jury) will be deciding a question that is purely one of federal copyright law. Can the court (or jury) do this? See Mitcham v. Board of Regents, University of Texas Systems, 670 S.W.2d 371 (Tex. App. Texarkana 1984).

This sort of issue was presented recently in Leslie v. Texas Collegiate Baseball League, Ltd., 2008 WL 898935 (N.D. Tex. April 3, 2008)( Civil Action No. 3:07-CV-1582-D)(Sidney Fitzwater, J.) As noted by the court, defendant had earlier sued plaintiff in state court “alleging breach of contract, tortious interference with contract, and an illegal group boycott. TCBL also sought declaratory and injunctive relief to prevent plaintiffs from using certain trademarks and marketing techniques that TCBL allegedly developed. TCBL's claims in the state action rely exclusively on state law.”

Plaintiff then filed suit in federal court under the federal Declaratory Judgment Act, seeking a declaration that they did not breach or unlawfully terminate the contracts at issue, that their conduct did not violate the federal Sherman Act, and that their use of the marketing concepts and designs in question is protected by the Copyright Act and the federal Lanham (trademark) Act. Defendant moved to dismiss, crying foul (or balk).

The court agreed with defendant, noting both that declaratory judgment was discretionary, and that “plaintiffs' claims based on the Copyright Act and the Lanham Act are essentially defenses to TCBL's state-law claim for injunctive and declaratory relief, and plaintiffs do not argue that these defenses are unavailable in the state action.”

Monday, April 07, 2008

Judge Selya and Gallimaufry

Senior Judge Bruce Selya of the First Circuit Court of Appeals is famous for his colorful language in his opinions. See this article in Boston.com. His latest opinion involves the well-known dispute between the three founders of ConnectU against Mark Zuckerberg, (opinion here, or at 2008 WL 902185 (1st Cir. April 3, 2008)), the founder of Facebook. The Alley Insider blog reported yesterday the case was settled.

Among other unusual words, Judge Selya employs “gallimaufry,” as in

The complaint linked the three Founders with the LLC and asserted a gallimaufry of state-law claims arising from the alleged misappropriation and unauthorized use of the LLC's confidential source code and business plan.

Merriam-Webster online defines the term as a hodgepodge, derived from a Middle French (circa 1556) word “galimafree,” meaning stew. Judge Selya was referring to a messy jurisdictional issue: plaintiffs had originally sued under diversity jurisdiction – for a gallimaufry of state claims – rather than under the Copyright Act – which would have given the trial court federal question jurisdiction – because they didn’t have a certificate of registration and thus didn’t comply with 17 USC 411(a). Before defendants filed a responsive pleading, though, plaintiffs received the certificate, and then filed – as a matter of right – an amended pleading including the copyright claim, and basing jurisdiction solely on federal question jurisdiction, with the state claims alleged as supplemental. Defendants (a year later!) filed a motion to dismiss for lack for subject matter jurisdiction asserting that because the parties were not allegedly diverse, there was no jurisdiction in the original complaint, and therefore (they claimed), the suit should be dismissed. The issue was important for statute of limitations reasons. Oddly, this was apparently a case of first impression at the appellate level. The district court granted defendants’ motion, but the court of appeals reversed.

Plaintiffs argued

that the district court erroneously regarded the original complaint as controlling for the purpose of gauging subject matter jurisdiction. In its view, the amended complaint, filed as of right under Federal Rule of Civil Procedure 15(a), superseded the original complaint and rendered it functus officio. The[y] argue[] that the district court erroneously regarded the original complaint as controlling for the purpose of gauging subject matter jurisdiction. In its view, the amended complaint, filed as of right under Federal Rule of Civil Procedure 15(a), superseded the original complaint and rendered it functus officio.

Defendants argued

that an action originally filed under diversity jurisdiction-like this one-must, in line with longstanding Supreme Court precedent, live or die from a jurisdictional standpoint as of the time of filing regardless of subsequent changes in either the facts or the underlying jurisdictional allegations.

The court of appeals sided with plaintiffs, bases on a statement in Rockwell International Corp. v. United States, 127 S.Ct. 1397 (2007), that “when a plaintiff files a complaint in federal court and then voluntarily amends the complaint, courts look to the amended complaint to determine jurisdiction.” This conclusion was no doubt aided by the fact that plaintiffs had a cause of action for infringement at the time the original complaint was filed, but didn’t plead it because they hadn’t received the certificate yet.

Lest one think all this to be mere technicalities, can it be a coincidence that a settlement was announced three days after the opinion came down? and what would Judge Selya say?

Judge Posner’s “How Judges Think”

To call Judge Richard Posner prolific is an obvious and trite truism. I have a whole shelf devoted to his books (I have 15 of his 24 books), and am proud to add his most recent one, “How Judges Think,” available here, at amazon.com for $19.77, and here, at Barnes and Noble.com ($21.56 members, $23.96 non-members). At a talk at Columbia University School of Law on March 11th, Judge Posner is reported to have joked, “I was thinking of calling the book Do Judges Think? or Which Judges Think?” If those in attendance had read the book before hand, though, they would have seen that it is law professors, not judges, who come in for criticism (other than former Israeli Supreme Court Justice Aharon Barak, who is excoriated once again -- in chapter 12 for “judicial cosmopolitanism").

No blog can do justice to the vast scope and insights contained in this very important book, a book that provides us with the benefit of Judge Posner’s 27 years on the bench (he was appointed to the 7th circuit in 1981), and a lifetime of being one of the world’s great thinkers. There are important chapters on the Supreme Court as a political court (10), comprehensive constitutional theories (11), the judicial environment (5), economic and influences on judging (6), judges as legislators (3,4), theories of judicial behavior (1), and external and internal constraints on judges (5,7). As interesting as these are, it is the most pragmatic aspects of the book that I will mostly focus on, for it is these sections where Judge Posner is explaining what judges do. I focus on chapter 8, “Judges are not law professors,” but please also see chapter 9, “Is pragmatic adjudication inescapable?”

Judge Posner begins chapter 8 by stating “academic critique of judges and judges has little impact these days on judicial behavior.” (p.204). As he notes, judges “do not care greatly what law professors think of them”(p.205), not because of judicial hubris (god forbid such a thing exist!), but because:

Many judges think that academics do not understand the aims and pressures of judicial work and that as a result much academic criticism of judicial performance is captious, obtuse, and unconstructive. This sense is shared by appellate judges, engaged in quasi-scholarly work of opinion writing, including appellate judges appointed from the professioriat. (p.205)

The feeling is mutual, though, as Judge Posner notes that few academics care about judges other than Supreme Court justices. I would add that too many academics don’t respect the work that judges do, certainly at the trial courts. To level this out, I would add that the same criticisms Judge Posner makes about academics should be directed toward federal judges in their all too often contemptuous attitudes toward Congress, even though both federal judges and members of Congress are generalists and have distinct pressures. And I would throw academics into this mix on this point: I have made a careful study of the legislature process for about 25 years, and having been a professional drafter of statutes for some of that time, I can say that other than those very few law review articles written by former congressional staffers, the hundreds of articles and books I have read by prominent scholars of statutory interpretation bear no resemblance to the work I did professionally, and as a consequence, are of zero utility other than in furthering academic careers.

Judge Posner wisely notes that the primary audience for appellate judges like himself is the other judges on the panel, whereas the primary audience for academics is other academics. (p. 206). I would add that the primary audience for legislation is other members of Congress, and not, as judges are wont to think, judges; certainly when I was drafting a statute, I wanted it to be clear in the event it was ever litigated, but my first goal was getting enough votes to get the bill passed, and in a form that expressed the policy objectives that led to the initiative in the first place: recognition of this legislative reality leads, by the way to purposive interpretation of which Judge Posner (although he would call himself a pragmatist) is an excellent practitioner. Legislatures act in response to problems—legal, political, social, cultural, or all of these—and since at least the 1584 opinion of the Barons of the Court of Exchequer in Heydon's case, 76 Eng. Rep. 637 (Ct. Exchequer 1584) which stated that “the office of all the judges is always to make such construction as shall suppress the mischief, advance the remedy, and to suppress subtle inventions and evasion for continuance of the mischief and evasion … and to add force and life to the cure and remedy, according to the true intent of the makes of the Act pro bono publico,” courts have attempted to interpret statutes consistent with their perception of the legislature's purpose. (Since Justice Scalia has come along, a few judges differ about where one finds evidence of Congress's purpose, but that's a different issue).

Examining the purpose of the law to be applied in a case – whether statutory-based or common law-based is also the advice Judge Posner gives to those who argue before him, and I was delighted to see that the example he chose to illustrate this was a case I argued before him, Ty, Inc. v. Publications International, Ltd., 292 F.3d 512 (7th Cir. 2002):

Deciding a case, moreover, is judging a contest, though, pace Chief Judge Roberts, it is not like umpiring a baseball game. A contest, a dispute, does not have the form of an article topic, even when the topic has a binary form. A law review article might take a position pro or con whether intellectual property rights have been construed too broadly and should be cut back. But the abstractness of such an issue would set it apart from a dispute over whether the publication of an unauthorized photograph of a copyrighted Beanie Baby (a “soft sculpture” in copyright jargon) is a “fair use” when the photograph is part of a guide for collectors of Beanie Babies. The judge is wont to ask himself in such a case what outcome would be the more reasonable, the more sensible, bearing in mind the range of admissible considerations in deciding a case, which include but are not exhausted by statutory language, precedents, and the other conventional materials of judicial decision making, but also including common sense, policy preferences, and often much else besides. (page 207).

When I argued that case, I had been a copyright lawyer for about 20 years, and had published a treatise on fair use 17 years before, as well as a number of law review articles on fair use. My brief was not, however, a theoretical exposition on fair use, but rather, as Judge Posner, observed, an effort to explain what outcome was the more reasonable, and made more sense. In large part, as an advocate, your freedom of action is determined by what side you are on and what the facts are. In the next appellate fair use case I argued – and lost – in the Second Circuit, Bill Graham Archives v. Dorling Kindersley Ltd., 448 F.3d 60 (2d Cir. 2006), my brief was equally pragmatic, and the tone even more conversational than in the Ty case, the outcome on the facts of that case that seemed the most reasonable to the court was to rule for the other side, and I can understand why they thought so: my efforts to explain why I thought the outcome I favored was more reasonable simply didn't resonate, as was painfully evident at oral argument. It is true that the panel might have the outcome differently, or more narrowly, for there are many different styles of judging. Some judges are Talmudic in their parsing of statutory language or precedent; some are deconstructionists, taking everything apart and putting it back together in a way that makes sense to them; and some, like Judge Posner try to figure out what is the most pragmatic result, guided by the factors he listed in the above quote, and then write an opinion that is straightforward in explaining why the result is the most pragmatic -- as compared to falsely pretending the result was dictated by an external force (e.g., the statute or precedent).

The Ty case is a great example of his approach: his opinion reads like a time-line of his thought processes, the end of which is – “oh yeah, there are these statutory factors in section 107, but they aren’t helpful here.” To me, in the case of fair use, his approach is what Congress intended – common law judging of a common law doctrine -- and not, as others might think, a failure to “follow” the statute. It is purposive judging (which is not the same thing as ad hoc judging or what the legal realists or the Crits assert judges do), and it not only has been around since at least 1584, it will be with us for a long time in the future. We have Judge Posner to thank for once again for spelling it out for us. Buy the book and learn from it.

Friday, April 04, 2008

A Pale Appeal

Last December I did a post on a successful claim by Matthew Fisher of the band Procol Harum that he was a co-author of their song "A Whiter Shade of Pale." The Court of Appeal just reversed, decision here. Lord Justice Mummery's opinion for the appeals court noted the declaratory nature of the claim rather than one to prevent future uses or a claim of infringement, something not possible given the other defendants were co-authors. On this point, he voted not to disturb the trial court's holding on ownership, but this was of no practical benefit to plaintiff since he voted to allow the appeal (that is reverse) on the grounds of excessive and inexcusable delay, as well as an irrevocable implied license by acquiescence. Mr. Justice David Richards disagreed on this final point, as regards a claim for profits sharing (he did agree on injunctive relief), noting there is under UK law (unlike U.S. copyright law as interpreted by the courts), no limitations bar on claims to copyright. It was left to Sir Paul Kennedy to cast the deciding vote with Lord Justice Mummery.

Thursday, April 03, 2008

The recent making available cases

There have been three opinions in six weeks on the suits brought by RIAA in which the issue of the alleged making available right as well as infringement of the distribution right have been raised. They are not the first opinions, nor will they be the last, but they are interesting in their own right, and are noteworthy because the judges involved took the time to address the issues seriously and thoughtfully.

The first was Atlantic Recording Corp. v. Brennan, 534 F. Supp.2d 278 (D. Conn. February 13, 2008), a short opinion by Judge Janet Bond Arterton on plaintiff’s motion for a default judgment, an unusual procedural posture. Judge Atherton declined to grant the motion because she thought defendant might have a valid defense that there needs to be an actual distribution of a copy to violate the distribution right,” and that as pled plaintiff’s claim might not be able to satisfy that requirement.

The second opinion is Elektra Entertainment Group, Inc. v. Denise (sic) Barker, Case No. 05-CV-7340 (S.D.N.Y. March 31), an opinion by Judge Kenneth Karas. The opinion was issued on a Rule 12(b)(6) motion to dismiss for failure to state a claim; the issue therefore was whether the claim satisfied the Rule 8 pleading requirements. The court first held that the complaint adequately alleged defendant had used a P2P network, and that plaintiff had alleged, “Defendant did distribute (and/or made available) Plaintiff’s protected works. This is sufficient under Rule 8.” Nor did Defendant seem to contest that point; rather she argued that she was not liable “merely by making the copyrighted recordings available. In particular, Defendant argues that Plaintiffs cannot establish a violation of their distribution rights without alleging an actual transfer of Plaintiff’s works by Defendant.”

The court went astray in my opinion in its interpretation of “distribute” in Section 106(3), which it held to be synonymous with the term “publication.” The term “publication” is defined in relevant part as “the distribution of copies or phonorecords of a work to the public by sale or other transfer of ownership, or by rental, lease, or lending.” But this doesn’t mean the logic flows the opposite direction, that a distribution is also a publication. But since the court held it did, the court was also stuck with holding that the offer to distribute a phonorecord is also a distribution, and the court’s discomfort with this obvious anomaly led it to place practical limits on its holdings, limits that don’t mesh with equation of distribution of publication, including finding that plaintiffs had not adequately stated a claim of further distribution, i.e., that plaintiffs had not adequately made out a making available. The court’s ruling nevertheless leaves open the possibility that having a work in a shared folder without authorization for it being there might be infringing, even if no one ever downloads it from that file.

Blessedly, the court rejected the assertion of a separate authorization right. The court did not reach EFF's argument that the distribution right does not ever apply to digital transmissions.

The final decision, also handed down on March 31st, is London-Sire v. Does, by Judge Nancy Gertner of the U.S. District Court of Massachusetts. Her opinion has wrinkles not found in the first two, particularly a motion to quash subpoenas to learn defendants’ identities, an issue I will pass over. Of great interest in Judge Gertner’s rejection of the distribution versus publication equation adopted by Judge Karas. She held that “the defendants cannot be liable for violating the plaintiff’s distribution right unless a ‘distribution’ actually occurred. This of course merely shifts the inquiry into what constitutes a distribution, and here I respectfully think the court confused the reproduction and distribution rights. Certainly it is true as the court held that electronic files are material objects when fixed in a tangible medium of expression, like stored on someone’s computer. But this doesn’t mean that the transmission of a file is either a distribution or a distribution of a copy, as the court thought (see pages 36-37).

The court recognized that the reproduction and distribution rights are different, but I fail to see how that recognition played out in the court’s decision: how is the transmission of a work the distribution of a copy? I have no problem with holding the first person liable for making an unauthorized copy, nor with holding the second person liable for making one too via plaintiff’s transmission, nor do I have any problem with holding the second person liable for making an unauthorized copy via plaintiff’s transmission even if plaintiff’s copy was lawful. And I understand why copyright owners want to stop people from putting works in share folders so that they whole world can have access to and therefore make unauthorized copies. My issue is that they can still sue the person who retrieves the copy (and the first person if his or her copy was unlawful); but the law shouldn’t be mucked up to go after the first person where the first person possesses a lawful copy. The consequences for such a making available right go well beyond the facts of these cases.

The only thing clear from these cases is that the issues will be with us for a long time.

Wednesday, April 02, 2008

Fair Use, the Three-Step Test, and the Counter-Reformation

There is a counter-reformation movement afoot in the world of copyright. The purpose of the movement is to chill the willingness of countries to enact fair use or liberal fair dealing provisions designed to genuinely further innovation and creativity, rather than, as is currently the case, merely to give lip service to those concepts as the scope of copyright is expanded to were-rabbit size.

The counter-reformation movement is presently at the stage of a whispering campaign, in which ministries in countries are told that fair use (and by extension possible liberal fair dealing provisions) violate the "three-step" test. And who wants to violate the three-step after all? The appeal by counter-reformation forces to external and abstract concepts like the three-step test is a time-worn tactic: when you can't win on the merits, shift the debate elsewhere to grounds on which you think you can win. Given that few ministry officials are experts in copyright law, much less arcana like the three-step test, these appeals -- made by those who claim to be such experts -- can be effective. They shouldn't be. National governments should make policy decisions based on the merits of the proposals, free from such scare tactics. The three-step test is not a bar to a single proposal of which I am aware.

The biggest of the three-step scare tactics is that Section 107 of the U.S. Copyright Act is incompatible with the test. Baloney. WIPO and European copyright experts testified before the U.S. Congress during the hearings on U.S. adherence to Berne, hearings that spanned four years: 1985, 1986, 1987, and 1988: there was no lack of time or opportunity to raise any concerns. Congress even went to Geneva and convened a round table discussion there on November 25 and 26, 1987 with WIPO and European copyright experts, the sole purpose of which was to determine which parts of U.S. law needed to be amended to permit Berne adherence. Not once at this round table or during four years of hearings were the words "fair use" ever raised by a foreign expert who appeared before Congress nor did any domestic witness (of whom there were many dozens) consider there to be a potential problem. (A transcript of the round table is reproduced in the House Hearings: "Berne Convention Implementation Act of 1987, Serial No. 50, 100th Congress, 1st & 2d sessions 1135- 1213(1987, 1988)). I can say from direct experience of having been involved in these efforts at the Copyright Office that I never heard a single European expert claim there was a compatibility issue with fair use.

In addition to Director General Arpad Bogsch who was the lead witness in the very first congressional hearing (before the Senate on May 16, 1985), the following foreign experts participated in the round table: Mr. Shahid Alikhan, Mr. Gyorgy Boytha, Mr. Jean-Louis Comte, Mrs. Mialgros De Corral, Professor Dr. Dittrich, Mr. Mayer Gabay, Mr. Roland Grossbacher, Professor Gunnar Karnell, Mr. Jukka Liedes, Mrs. Margaret Moller, Dr. Werner Rumphorst, Mr. Victor Tarnofksy, Professor Dr. Dirk W.F. Verkade, and Mr. Jean-Alexis Ziegler. If any of these illustrious experts had any thoughts on fair use, they were not expressed publicly.

The following testimony, given by then WIPO Director General Arpad Bogsch (he was DG for 25 years, from 1973 to 1997) to the U.S. Senate may surprise many:

The only real difference -- and that has nothing to do with the level of protection -- that makes the U.S. law incompatible with the Berne Convention consists in the notice and registration requirements. One can solve that in two ways: make compliance with those two requirements voluntary rather than mandatory -- for any work, or make compliance with those requirements voluntary only for foreign works that would have to be protected under the Berne Convention.
May 16, 1985 hearing, page 10).

When Dr. Bogsch was asked about the compatibility of U.S. limitations and exceptions, the only one he thought might be a problem was the Section 116 jukebox license, and even here, he testified, "I would say it could be regarded as a matter of not sufficient importance from an economic viewpoint, so that nobody would be very excited about it, even if you don't change your law." (page 14). Nor can one say Dr. Bogsch was simply unfamiliar with U.S. law. Although he was a native of Hungary, he had worked in the U.S. Copyright Office, obtained an American law degree, and became a U.S. citizen. (See an obituary of him here).

So why now, 23 years after Dr. Bogsch's testimony, is the issue of fair use compatibility being raised with national ministries? If there really was a problem, why wasn't the issue taken to a WTO panel rather than the pathetically minor amendment to Section 110(5) that was taken to a WTO panel ? Why wasn't the obvious lack of moral rights in the U.S. objected to? Why wasn't the U.S. failure to provide retroactive protection to foreign works as required by the Berne Convention complained about, a failure that existed from 1988 to 1995? Why single out fair use 23 years after Dr. Bogsch testified that the only incompatibilty issues were notice and registration? The answer is obvious.

The three-step itself is under attack too, and is being cast as a rigid limitation on limitations, rather than as a recognition that copyright rights only go so far. There is an excellent book on the three-step test, Martin Seftleben's "Copyright, Limitations, and the Three-Step Test: Analysis of the Three-Step Test in International and EC Copyright Law," published by Kluwer Law International in 2004 and available here. Mr. Senftleben was a student of the great Dutch copyright scholar Bernt Hugenholtz who just co-authored a major piece on the issue, available here. In addition to the counter-reformation revisionism about the compatibility of Section 107, there is counter-reformation revisionism about the three-step test.

The test is found in Article 9(2) of the 1971 Paris text of the Berne Convention, and reads:

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.

The three steps are (1) certain special cases which (2) do not conflict with a normal exploitation of the work, and (3) do not unreasonably prejudice the legitimate interests of the author. Counter-reformation forces act as if Article 9(2) is a centerpiece of the Convention, something essential to the goals of ensuring that authors' rights aren't eroded by those thieves and pirates who insist on using the author's work without permission. Not true: the three-step test is a very recent addition to the Berne Convention, which was founded in 1888. The provision was proposed in the 1967 Stockholm protocol and then included in the 1971 Paris text, only 14 years before WIPO General Bogsch testified before Congress on U.S. adherence to the Convention. As Mr. Senftleben points out in his insightful chapter 3 ("The Contextual Background to the Three-Step Test"), the introduction of the three-step test was part of a deal, the deal being providing formal recognition to the reproduction right: "The feasibility of the plan to attain the formal recognition of a general right of reproduction, however, depended on whether or not the Conference would succeed in finding a satisfactory formulation for possible limitations." (page 47).

That formula depended on recognition of a vast variety of existing national limitations on rights; this issue raised what Senftleben calls the "dualism inherent in the three-step test" (pages 81-82). It is this dualism that the counter-reformation forces wish to obliterate. As Senftleben points out

Article 9(2) BC was distilled from typical features of the described extensive list of limitations that existed in 1967. The 1965 Committee of Governmental experts unequivocally took the view that in the course of the preparatory work for the Stockholm conference that 'the main difficulty was to find a formula which would allow of exceptions, bearing in mind the exceptions already in many domestic laws.

What were those exceptions? A study group found 14 common limitations: republication of public speeches; quotations; copying of school books and chresomathies; copying of newspaper articles; reporting current events; ephemeral recordings; copying for private use; reproduction by copying in libraries; reproduction on special characters for the use of the blind; copying of sound recordings of literary works for the use of the blind; copying of the text of songs; taking pictures of sculptures on permanent display in public places; use of artistic works used as background in films and TV programs; and reproductions in the interests of public safety. (Senftleben p. 48).

Current efforts to use the three-step test as a sword rather than a shield might well deny some of these uses as qualifying under the three-step test. The phenomenon of the three-step as a sword should be understood as part of a larger picture, in which copyright has become an absolute property right, what Blackstone (an advocate of copyright as a natural right) hyperbolically called an individual's "sole and despotic dominion ... over the external things in the world, in total exclusion of the right of any individual in the universe." This very recent phenomenon has led to what Professor Neil Netanel has rightly described as “spawn[ing] a vicious cycle. It reinforces the view that copyright owners are intrinsically entitled to control and reap the full value of each and every use of copyright-protected expression, thus smoothing the way to still further expansion.” Copyright's Paradox p. 55.

The attacks on fair use and the transmogrification of the three-step test are an essential part of this cycle: it is not enough to have vast rights: corporate content owners see a need to eliminate any limitations on those rights too, and one must hand it to them for their Karl Rove strategy of going after your opponent's strong points, rather than his weak ones. But unlike John Kerry, we need not and should stand by and let limitations and exceptions be swift-boated. Mr. Sentfleben points out that the origins of the three-step lie not only in the necessity of preserving existing limitations as a quid pro quo for the formal recognition of the reproduction right, but that the formulation chosen for the three-step was not an enumerated list of such existing uses, but rather abstract criteria. As Mr. Senftleben points out: "A comparison of the various observations made by the members countries elicits the specific quality of the abstract formula...: due to its openness, it gains the capacity to encompass a wide range of exceptions and forms a proper basis for the reconciliation of contrary opinions." (page 51). That sounds a lot like fair use.

Openness and toleration of diverse approaches have been an important hallmark of the Berne Convention, given its desire to include both civil law and common law countries, as well as developed countries and lesser developed countries. That same openness and toleration of diverse approaches -- so under attack today in the new TRIPS trade world of IP -- is what led Dr. Bogsch to approve of U.S. adherence to the Berne Convention, adherence where fair use was so obviously compatible with the letter, spirit, and history of the three-test step that not a single WIPO official or foreign copyright expert ever mentioned it in the four years U.S. adherence was being debated and eagerly sought. In a response to a question from Senator Mathias about the attitude of other Berne members, Dr. Bogsch replied, "They ardently desire it. They would welcome it without qualification." (May 16, 1985 p. 12). Without question they desired adherence in compliance with Berne's requirements, but the U.S., like any country, was entitled to rely on the opinion of the Director General of the organization administering the treaty as to what steps were necessary to comply. And Dr. Bogsch gave his opinion, an opinion in which the only limitation mentioned was the jukebox compulsory license, a limitation Dr. Bogsch though was of no moment. There was no mention of fair use, because no one thought fair use was incompatible with the three-step test.

The current counter-reformation movement should therefore be seen as the ahistorical effort it is. National governments are free to craft laws that serve their own needs and policies, including liberal limitations and exceptions.

Postscript Added on April 6, 2008

The great Israeli scholar Orit Fischman kindly pointed out to me that in 1996, a number of countries, as part of the TRIPs process, asked each other questions about their laws. The United States was asked many questions on a wide variety of topics, but only three dealt with fair use, and even then the questions were about specific applications. The EU asked about parody, Australia asked about a case on speed-up kits and a case about photocopying, and New Zealand asked about commercial research and scholarly uses. Here is the link to the entire document. It is worth pointing out that no country has filed an objection since the U.S. gave its answers. Here are the questions and the answers, with the answers in italics.


1. Under 17 U.S.C. § 107, the United States permits "fair use" of a copyrighted work. Please explain how the fair use doctrine, as it has been broadly applied and interpreted by US courts, particularly in connection with a "parody" that diminishes the value of a work, is consistent with TRIPS Article 13, given the obligation to "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".

The fair use doctrine of US copyright law embodies essentially the same goals as Article 13 of TRIPS, and is applied and interpreted in a way entirely congruent with the standards set forth in that Article. Fair use was his to rically developed as a safety valve to the exclusive rights granted by copyright, permitting limited and reasonable uses without permission or payment - precisely those types of uses which do not interfere with the copyright owner's normal exploitation of the work or unreasonably prejudice his or her rights. The classic example of fair use is the quotation in a book review of portions of the book being reviewed. The copyright owner ordinarily does not prepare reviews of his own work, and the impact on his interests will ordinarily be minimal. If, on the other hand, so much material is quoted that the review will substitute for purchases of the book in the marketplace, the use will not be considered fair.

The articulation of this concept that was developed by the courts over the years and codified in the Copyright Act in 1976 (17 U.S.C. § 107) identifies four fac to rs that courts must examine in determining whether a use is fair: (1) the purpose and character of the use, including whether such use is of 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 balancing of the four fac to rs represents a means of evaluating whether in fact the use in question conflicts with a normal exploitation of the work and unreasonably prejudices the copyright owner's interests. The Supreme Court has stated that the fourth fac to r, which specifically focuses on the impact on potential market exploitation of the work, is the most important. See Harper & Row, Publishers, Inc. v. Nation Enterprises, 471 U.S. 539, 566 (1985). Other factors may be considered as well, allowing a flexible and sensitive calibration of the impact of the particular use under the circumstances.

In applying the fair use doctrine, the courts have consistently refused to excuse uses that go to o far and interfere with the copyright owner's normal markets for the work. See, e.g., Harper & Row, Publishers, Inc. v. Nation Enterprises, 471 U.S. 539 (1985); American Geophysical Union v. Texaco, Inc., 37 F.3d 881 (2d Cir. 1994); Pacific & Southern Co. v. Duncan, 744 F.2d 1490 (11th Cir. 1984); Basic Books, Inc. v. Kinko's Graphic Corp., 758 F. Supp. 1522 (S.D.N.Y. 1991). Those uses that have been permitted have generally involved productive and non-commercial uses of limited amounts of material from the copyrighted work. See, e.g., Arica Institute, Inc. v. Palmer, 970 F.2d 1067 (2d Cir. 1992); Wright v. Warner Books, Inc., 953 F.2d 731 (2d Cir. 1991); Triangle Pub., Inc. v. Knight-Ridder Newspapers, Inc., 626 F.2d 1171 (5th Cir. 1980).

In response to the specific question about parody, it is important to understand that not all parodies qualify as fair use under US law. Rather, each parody is dealt with on a case-by-case basis, applying the factors set out in Section 107 in a manner that takes in to account the nature of parody. Thus, the US Supreme Court has held that the purpose and character of parody involves both criticism and humour, giving it social and cultural value, and that a parody, in order to be effective, must necessarily take enough of the copyrighted work to make the object of the parody recognizable. Campbell v. Acuff-Rose Music, Inc., 114 S.Ct. 1164 (1994). Not all humorous works that draw on pre-existing works will enjoy the benefit of this more lenient application of the fair use factors, however; the defendant's work must qualify as a true parody, targeting and commenting on the copyrighted work rather than simply using it as a vehicle for unrelated comment. Id. at 1172.

In examining the fourth fair use factor, the effect on the actual and potential market for or value of the copyrighted work, the Supreme Court held that any negative impact caused solely by the critical aspect of a parody could not be considered. Id. at 1178. This analysis is consistent with TRIPS Article 13, since any such lessening of public interest in the copyrighted work does not constitute "unreasonable prejudice" to "legitimate interests" of the copyright owner - rather, it is equivalent to the lessening of public interest that may result from a scathing review. This type of harm should not be actionable by a copyright owner; otherwise only flattering commentary or benign parody is likely to be permissible. In contrast, harm to the market for other adaptations of the copyrighted work will clearly weigh against a finding of fair use. Id.

[Follow-up question ]

The US answer equates the likely effect of a critical parody of a work with that of a scathing review. The answer also suggests that a much greater part of the copyright work will be reproduced in the parody than in the review. Unlike a review, therefore, exploitation of the parody could apparently replace any desire to exploit the copyright work.

How does the US justify this possibility given the requirement in TRIPS Article 13 that limitations and exceptions to exclusive rights should not conflict with a normal exploitation of the work?

If exploitation of a parody is of a nature that it replaces any desire to exploit the copyright work, the fourth fair use factor applied by the courts will weigh strongly against the defendant, and the use will not be considered fair. As noted in our original answer to this question, the Supreme Court of the United States has specifically directed the lower courts to consider the effect of the parody on the market for other adaptations of the work, in applying the fair use factors. As a result, the right holder's ability to control the exploitation of copies or adaptations of the work is protected.


1. Please explain, having regard to the decisions in Sega Enterprises v Accolade, Inc. and Prince to n University Press v Michigan Document Services Inc. and any similar cases whether and how the US law of fair use complies with Article 9(2) of the Berne Convention and Article 13 of TRIPS.

In the United States' written responses to the first set of questions posed by the European Commission, we explained why the doctrine of fair use complies with Berne Article 9(2) and TRIPS Article 13. Please see our answer to the Commission's question 1

As to the two cases referred to in Australia's question :

In Sega Enterprises v. Accolade, Inc., 977 F.2d 1510 (9th Cir. 1992), the court applied the doctrine of fair use to the specific facts of the case before it. As explained in our discussion of fair use generally, courts are required to balance several fac to rs in light of all the facts and circumstances. The Sega court did exactly that. This narrow holding based on the particular facts in the case is a defensible judgement for the purposes of the exceptions permitted under the TRIPS Agreement

The decision in the other case, Princeton Univ. Press v. Michigan Document Servs., 74 F.3d 1512 (6th Cir. 1996), has been vacated. Princeton Univ. Press v. Michigan Document Servs., reh'g en banc granted, vacated, stay granted 74 F.3d 1528 (6th Cir. 1996).


1. In respect to the reply to the European Communities and their Member States on fair use (their question 1), please clarify how practice, especially case law, has affected the use of works in respect to teaching, research, and scholarship. In particular, how open ended is the multiple copying right for teaching, does research encompass any commercial research, and what is encompassed by scholarship?

It is important to understand that the purposes listed in the first sentence of Section 107, which include teaching, scholarship, or research, do not automatically qualify a use as a fair use, but are simply examples of the types of purposes that are likely to qualify as fair. See Twin Peaks Prods., Inc. v. Publications Int'l, Ltd., 996 F.2d 1366, 1374 (2d Cir. 1993). Each use must still be examined in light of the four statutory factors found in Section 107. Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 127 L. Ed. 2d 500, 514-515 (1994).

Accordingly, extensive multiple copying for the purposes of teaching has been held to fall outside the scope of the fair use doctrine and to constitute an infringement of copyright in the works copied. See Basic Books, Inc. v. Kinko's Graphic Corp., 758 F. Supp. 1522 (S.D.N.Y. 1991), noted in our original answer to the question from the European Communities. Guidelines as to the permissible amount and timing of such copying, negotiated by the educational and publishing sectors, are set out in the legislative history to the Copyright Act. H.R. Rep. No. 94-1476, 94th Cong., 2d Sess. 68-70 (1976).

Additionally, a leading case held that the copying of journal articles by a commercial researcher did not qualify as fair use. See American Geophysical Union v. Texaco, Inc., 37 F.3d 881 (2d Cir. 1994), noted in our original answer to the question from the European Communities

Finally, the label of "scholarship" in itself will not resolve the fair use issue, and there is no established definition of the term. If a particular use is designed to advance knowledge, this should be an aspect of the purpose and character of the use that weighs in favour of a fair use determination.