Wednesday, January 24, 2007

Of the case for fair use: digital distribution of course materials: Conclusion


Back to Basics: The Underlying Assumptions Redux

It must be apparent from the range of approaches available to the courts, the range of fair use outcomes in the strictly iterative (non-transformational) cases, the closely divided nature of the decisions, the frequent and lengthy dissents, and the way courts tend to be reversed at successive stages of litigation, that fair use functions as a sort of Rorschach test, its outcome reflecting neatly the court’s underlying beliefs about how copyright law should be. Any given use can be characterized by a set of facts, and the court can emphasize among the many facts those that best support its underlying beliefs about whether a particular use should be fair.

This means, for example, that it is of little utility to argue among ourselves whether electronic reserve use of an article is a “transformative” use. It can be, if the court wants the use to be fair. It won’t be, if he court does not want the use to be fair. The task is not to convince the court that a use is transformative, it is to convince the court that it wants the use to be fair.

More generally, it is simply not enough to advocate a specific approach to the four factor analysis – one must first convince the court that a use should be fair, that the public needs to be able to freely make the particular use, or more broadly, freely benefit from the use, and that the social benefit of the use should prevail over the copyright owner’s need to control the use and derive revenue from it. In short, the court must affirmatively believe that enhancing public benefit and use is better than preserving actual or potential copyright owner revenues and control. If a court is so persuaded, the four factors will be made to follow. So persuading the court of the fundamental need for fair use in this context is the task for anyone among us who champions a blanket educational use exemption (the strict logic approach) or a finely nuanced financial hardship educational use exemption (the market dysfunction approach).

Thus, we can urge the use of a different framework from the one used by courts today to evaluate these types of uses, in order to expand fair use in educational contexts. We can explicitly ask courts to emphasize the public interest in our uses and to weigh that benefit against the harm to established markets. But unless we first convince the courts to turn the assumption that underlies the property theory of copyright generally, and market failure theory in particular, on its head -- that is, instead of assuming the owner is entitled to everything he can get, assume students and educators are entitled to freely use others’ works and that owners’ rights do not need any more protection than necessary to fund creation -- we would seem unlikely to prevail.

Is this an argument we are prepared to make? We might consider the consequences if we won: Asserting that all educators and students, or even a financially strapped subset of them, should be able freely to copy and distribute others’ works electronically could seriously undermine the financial support our own scholarly presses derive from permission fees, to say nothing of the financial support the broader community of publishers receives from educators who are in many cases their primary market.[1]

One might also ask as a practical matter, should we defend as fair use by enacting as policy that which we are unlikely to be able to defend in the courtroom? The Sony precedent and the good-faith fair use defense[2] may give universities enough comfort to take the risk, but will the evolution of publishing business models soon obviate the need for reliance on fair use in the Electronic Distribution context anyway?[3] More and more, licensing allows us to comprehensively acquire the rights to use others’ works that we know our faculty and students need. To the extent that licensing fails to meet educators’ needs as it clearly fails for books (few if any are available as aggregated licensed works), should universities instead insist that those who publish books, especially those intended for academic use, make them available in the form of licensed databases of aggregated content, as journal articles are made available today?

Several scholars note that iterative fair uses are important for other reasons besides merely multiplying and distributing copies. Where access to works is impaired by high prices (market dysfunction), many core fair uses (criticism, commentary, and other transformative uses) that might have been made will not be made.[4] Thus, the argument has been made that First Amendment concerns permeate even iterative copying, and that fair use should take account of that fact in the iterative context. But to the extent that this argument can be characterized as a specific example of a dysfunctional market, that is, the price for access is too high, therefore financially strapped users will not gain access, the argument will be vigorously challenged in any court adhering to market failure principles. Ultimately then, although iterative copying may indirectly support First Amendment values, arguments in favor of characterizing it as a fair use on First Amendment grounds will still have to succeed before a court likely to focus only on the iterative event, not the speculative later end result of a possible second transformative, perhaps critical, use.

Distinguishing Core Fair Uses from Iterative Uses

We are now back to where we started: will reduction in the scope of iterative fair use affect the case for core, creative, transformative fair use -- fair use for commentary, criticism, news reporting, parody, artistic expression, scholarship and research? Can core fair uses survive the property premise, that copyright owners are entitled to every cent they can get, with fair use an onerous tax on their revenues? Can they survive if courts forget that a monopoly is not a good thing and that the monopoly, rather than fair use, should be limited to the extent it is needed to achieve a socially beneficial goal that can not be achieved through less drastic means?

Of course, the ultimate fear is that fair uses of every type can be eliminated once it is clearly established that copyright owners are entitled to control any use they are able to charge for. By the mere expedient of raising a price above what a user is willing or able to pay, a copyright owner can discourage or prevent uses he does not like for whatever reason.[5] Who will be able to effectively question whether his reason is that he needs the money to further his creative efforts or that he dislikes the expression contained in a derivative work? Even if unintentional, the result will be the same: fewer, not more, works will be created. Wendy Gordon suggests that even under market failure analysis, uses refused for non-economic reasons should be permitted as fair, although she looks to tort law principles to narrowly draw the limits of the exception.[6] Perhaps it is necessary to look to bodies of law outside copyright to justify fair uses that fully comply with the fair use statute and clearly promote the progress of knowledge where courts have been persuaded to abandon those copyright principles in the first place, in favor of microeconomic analysis with its premise that copyright owners’ rights should be interpreted expansively. If those rights were interpreted as the monopoly they are, fair users might not be disproportionately burdened with the obligation to “justify and excuse” themselves.

Nevertheless, courts have shown more support for core fair uses and conversely, more resistance to the claims of copyright owners in this area.[7] For example, in Bill Graham Archives,[8] the court found that including seven small images of concert posters in a book detailing the phenomenon of the Grateful Dead was a transformative fair use even though the plaintiff copyright owner was willing to license the use and the alleged infringer had paid many other copyright owners for the use of other images included in the Grateful Dead book. The court distinguishes clearly between iterative and transformative uses in its fourth factor analysis. It flatly rejects the idea that one can control transformative uses by offering to charge for them. This holding is very encouraging, especially coming as it does from the Second Circuit, home to the publishing industry. Also encouraging, the Kelly and Field cases discussed supra at footnote xx found that even iterative copying was fair use where it was also transformative in nature and no harm to markets for the originals could be shown.[9] On the other hand, we have precedent in the Sixth Circuit in a case analyzing transformative uses of music (a three-second sample) that is directly at odds with the Second Circuit’s approach.[10]

Additionally, on some occasions when courts have acquiesced to copyright owners’ demands in the creative use context, Congress has stepped in to defend core fair uses such as historical commentary and criticism.[11] Recall also the considerable number of scholars cited at the outset of this article who vigorously defend the fundamental need to protect core fair uses. Unless scholars like Julie Cohen and Rebecca Tushnet are able to change the general perception that iterative copying does not need the protection of the law, the mere possibility of collateral damage to transformative uses is not likely to dissuade courts from concluding that iterative uses are not fair.

The Task for the Educational Community

That copyright owners can defeat particular iterative fair use claims by licensing the use appears to firmly hold sway over courts today. Thus, where markets are reasonably able, even if imperfectly able, to meet educators’ needs for authorized copies of articles and book chapters for their students’ use, courts are unlikely to step in, interfere in the functioning of those markets, and declare unauthorized uses to be fair.[12] I conclude in the face of this trend that universities will find it difficult to prevail on a claim that Electronic Distribution of easily licensable materials is fair use in all cases. Perhaps one may still effectively argue that some such iterative uses are fair, such as those involving occasional use, actual spontaneous use, or more broadly, a first time use, but near-instant permission processes and the real possibility of blanket licenses covering such uses available through the CCC would seem to undermine that argument as well.

On the other hand, it appears that clearly transformative uses cross a dividing line between unfair and fair. With respect to some media at least, there continues to be good precedent indicating that copyright owners cannot control creative uses of modest scope by refusing to permit them, or even by offering to charge for them.[13] Certainly where it is not practically feasible to charge for them, where the market for such uses simply does not and probably cannot exist, fair use prevails even for iterative uses.[14]

If this assessment is accurate, fair use still may safeguard core uses, but if the evolution of copyright law through the twentieth century has taught us anything, it is that fair use in any form will survive only if it has very strong, informed and active advocates. The publishing and entertainment industries can certainly be characterized as having on more than one occasion evidenced a myopic view of their own best interests.[15] But their view will prevail, whether ultimately good for them or not, unless it is countered forcefully and effectively.

[1] Textbooks obviously come to mind, but even major journal publishers may count educational markets among their most important.

[2] 17 U.S.C. 504(c)(2)(i). This defense requires the court to remit damages in any case in which the nonprofit educational or library defendant or its employee proves that it reasonably believed that its actions constituted fair use.

[3] Further, publishers’ employment of digital rights management may further moot this whole discussion insofar as it enables unilateral determination of the rights that users enjoy. Fair use is not likely to be among those rights, or if it is, it may only be a rough, algorithmic, no doubt conservative approximation.

[4] For example, Copy This Essay: How Fair Use Doctrine Harms Free Speech and How Copying Serves It, Rebecca Tushnet 114 Yale L. J. 535; The Place of the User in Copyright Law, Julie E. Cohen 74 Fordham L. Rev. 347 (2005).

[5] The recent declaratory judgment action involving the treatment by James Joyce’s estate of scholars’ requests to use materials in research on the author is illustrative. [cite.]

[6] Wendy J. Gordon, Excuse and Justification in the Law of Fair Use: Commodification and Market Perspectives, The Commodification of Information: Social, Political, and Cultural Ramifications, Klewer International 2002; criticized in Lunney’s Fair Use and Market Failure.

[7] Campbell v. Acuff-Rose Music, Inc.; Bill Graham Archives v. Dorling Kindersley Ltd., 448 F.3d 605 (2d Cir. 2006); Sun Trust Bank v. Houghton Mifflin Co.; New Era Publications Int’l v. Carol Publishing Group, 904 F.2d 152 (2d Cir. 1990); Nuñez v. Caribbean International News Corp. (El Vocero de Puerto Rico), 235 F.3d 18 (1st Cir. 2000); cf. Harper & Row, Publishers v. Nation Enterprises, 471 U.S. 539 (1985).

[8] Bill Graham Archives v. Dorling Kindersley Ltd., 448 F.3d 605 (2d Cir. 2006).

[9] Kelly v. Arriba Soft; Field v. Google. These were also, however, cases where requiring the defendants to take a license, that is, ruling that their uses were not fair, would have been impractical as there is no way such a license could be implemented in the framework of Internet search engine functioning. There was, in other words, a massive market failure *and* a transformative use. Digital Distribution can not easily claim either. Both of these cases appear to confirm the hypothesis that if a court wants to find a use fair, it will, and the four factors can be made to follow.

[10] Bridgeport (criticized). It may be that courts may justifiably take different approaches to this issue depending on the sector of the content industry involved (suggested by Bill McGevern in discussions May, 2006). The sector-specific “best practices” that seem to be developing in response to over-aggressive permissioning of every inclusion, no matter how small, would support the view that there are different standards from sector to sector. Documentary film makers are taking concrete steps towards stronger recognition of fair use rights (cite to Best Practices) while the music industry does not appear to even contemplate such moves.

[11] New Era Publications Int’l ApS v. Henry Holt & Co., 873 F.2d 576 (2d. Cir. 1989), cert denied, 493 U.S. 1094 (1990); Salinger v. Random House, Inc., 811 F.2d 90 (2d Cir.), cert denied, 484 U.S. 890 (1987); followed in 1992 by an amendment to 17 U.S.C. 107 to clarify that the unpublished nature of a copyrighted work does not bar a finding of fair use.

[12] This “stepping in and interfering” in the market is precisely what we must urge that courts do if we are to argue that all or some part of Electronic Distribution is fair use.

[13] Suntrust; Bill Graham Archive.

[14] Kelly v. Arriba Soft; Field v. Google; Perfect 10 v. Google (RAM copy).

[15] L. Ray Patterson, What’s Wrong with Eldred? An Essay on Copyright Jurisprudence, 10 J. Intell. Prop. L. 345.

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