Meera Nair

second circuit stays on message

In Case Reviews on June 15, 2014 at 1:54 pm

Last week, the United States Court of Appeals for the Second Circuit added to an already-healthy body of American affirmative decisions concerning fair use. In this instance, Authors Guild, Inc. v. HathiTrust, the scanning of entire books to allow for a full-text search of the content was given resounding support. In the process, the judges further explored the nuance of the commercial and transformative considerations inherent to discussion of fairness. Moreover, as Pamela Samuelson observes and Kevin Smith draws explicit attention to, the decision shows a coalescing of opinion with respect to transformative use among multiple circuits. The end result is strong guidance in the United States, and a discussion which benefits any jurisdiction that must mediate between control and use of copyrighted works, via the language of fairness.

Like the Google Books project (see here for my coverage of that district court decision), the roots of this case were established in 2004 with a scanning project in partnership with Google. Briefly, several American research universities arranged to have their library book holdings scanned and stored in electronic form. HathiTrust was established to operate the HathTrust Digital Library (HDL); currently, over 80 colleges, universities and non-profit organizations can apply full text search capability to over 10 million works spanning a myriad of languages and subject matter. But, unlike Google Books, snippets of content are not made available; instead, members can only obtain bibliographic and referential information. Exception is made only for the print-disabled; under such circumstances, content is provided.

It is more than curious that authors and their representatives should take issue with this venture; any project that enables people to find information about books, become interested in them, and possibly acquire them, would seem to be of benefit to authors. Apparently not so. The Authors Guild and its allies brought litigation forward. Losing on the grounds of fair use at the district court in 2012, the Guild pressed on with an appeal. And now that too has been declared a loss. James Grimmelmann, (Professor of Law, University of Maryland) succinctly evaluates the decision:

… mass digitization to make a search engine is fair use, and so is giving digital copies to the print-disabled. The opinion on appeal is sober, conservative, and to the point; it is the work of a court that does not think this is a hard case.

But the fun is in the details. As readers likely know, four factors come into consideration with fair use.

(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes

Consistent with other fair use decisions of the past few years, transformative use is a key determinant. As such, the meaning of transformative was the necessary starting point. The judges turned to the American standard bearer of fair use case law, Campbell v. Acuff-Rose (1994) which draws from the writings of Pierre Leval (attorney and subsequent judge):

A use is transformative if it does something more than repackage or republish the original copyrighted work. The inquiry is whether the work “adds something new, with a further purpose or different character, altering the first with new expression, meaning or message . … [T]he more transformative the new work, the less will be the significance of other factors that may weigh against a finding of fair use” (p.16-17).

Set upon this language, the analysis gets off to a brisk start:

The creation of a full‐text searchable database is a quintessentially transformative use. …  the result of a word search is different in purpose, character, expression, meaning, and message from the page (and the book) from which it is drawn (p.18).

The decision includes a plethora of examples of transformative uses, taken not only from the corpus of the Second Circuit but also from the Ninth and Fourth Circuits (p.19).

(2) The nature of the copyrighted work

This factor can be troublesome by virtue of the vagueness of the language. Whether the source of copying was unpublished or published, whether the work was creative or utilitarian, have been fodder for discussion. But as fair use has evolved, this factor is likely to be set aside when transformative use is established (p.20).

(3) The amount and substantiality of the portion used in relation to the copyrighted work as a whole

The Judges remind their readers that the position of the Second Circuit is: “[t]here are no absolute rules as to how much of a copyrighted work may be copied and still be considered a fair use (p.20).” As sufficient precedent exists which sanction the copying of entire works; they do not have to dwell too much upon this issue:

In order to enable the full‐text search function, the Libraries, as we have seen, created digital copies of all the books in their collections. Because it was reasonably necessary for the HDL to make use of the entirety of the works in order to enable the full‐text search function, we do not believe the copying was excessive (p.20-21).

Adjudication of fairness sets bounds to words like necessary and reasonable by virtue of the use the source work was put to. It is increasingly unlikely that any future court will be swayed by mere quantification of the amount used.

However, as the Guild took issue with the copies made to achieve technological efficiency and disaster preparedness, the Judges were required to devote some time to what ought to be routinely accepted by now – that copying happens when infrastructure is predicated upon digital technology:

 HDL’s services are offered to patrons through two servers, one at the University of Michigan (the primary server) and an identical one at the University of Indiana (the “mirror” server) … According to the HDL executive director, the “existence of a[n] [identical] mirror site allows for balancing the load of user web traffic to avoid overburdening a single site, and each site acts as a back‐up … in the event that one site were to cease operation (for example, due to failure caused by a disaster, or even as a result of routine maintenance).” (p.21)

The use of two encrypted tape backups was also deemed an appropriate precaution, should disaster bring about large-scale data loss at both servers.

(4) The effect of the use upon the potential market for or value of the copyrighted work

Here, the judges’ language bodes particularly well for fair users, but not so well for the larger avarice of some copyright holders:

…  it is important to recall that the Factor Four analysis is concerned with only one type of economic injury to a copyright holder: the harm that results because the secondary use serves as a substitute for the original work…. In other words, under Factor Four, any economic “harm” caused by transformative uses does not count because such uses, by definition, do not serve as substitutes for the original work (emphasis mine, p.22).

Thus, despite the Guild’s claim that the use of each book represents a lost license-to-search-the-book, the judges determined that no economic harm has been inflicted as full-text search capability is not a substitute for the original works.

Grimmelmann observes the lack of reference to American Geophysical (1996) but its ghost is there. That case contributed greatly to fair use’s dysfunctional period in the United States, when any use was deemed unfair because it could have been licensed. (Canada has avoided such circular reasoning; our Supreme Court nipped that in the bud with its insistence during CCH Canadian (2004) that the presence of a license was irrelevant to a decision of fair dealing.)

The route by which the Court rebuts the lost-license argument is puzzling. In the initial explanation of the four factors (p.16-17), the fourth factor is deemed the “most important” (citing Harper & Row v. Nation (1985)—the famous scooping from Gerald Ford’s as-of-then-unpublished memoir). But in its analysis, the Court quickly invokes Campbell’s reminder that only secondary uses that poach the market for the original are subject to censure. Given, as Smith notes, that Campbell is the leading Supreme Court decision, the Second Circuit took an odd route to get there.

But it is hard to believe that the trio of judges were casual or careless in the composition of their decision. In judicial opinion, words are chosen with the utmost of care. Which invites the question: why this route?

Campbell also ushered in a change in procedure; when examining potential fair use, judges must avoid imposing a hierarchy among the four factors. To return to a hierarchy of factors would seem either dangerous, or at least ill-advised. Or, this might be a calculated effort on the part of the Second Circuit to irrevocably consign any apparition of American Geophysical to the dustbins of history.

The Second Circuit has worked diligently towards rehabilitating fair use, to make it a robust exception. Notably, in two key decisions in 2006 (Bill Graham Archives v. Dorling-Kindersley and Blanch v. Koons), less attention was paid to market consideration, with a conspicuous disinterest in adding to licensing revenue even when mechanisms of licensing existed. Yet, that message does not appear to have been widely received. Perhaps the Second Circuit has decided to make their message more explicit by deliberately invoking the earlier edict that the market reigns supreme, but under the strict boundary of the original market.

Given that Second Circuit’s jurisdiction includes the nerve-centre of American publishing, this could have significant ramifications. At the very least, it ought to give the Authors Guild something to reflect upon before the Guild moves ahead on the Google Books Appeal. [see update below]

With a nod to the late Lyman Ray Patterson, the events that gave rise to copyright and fair use were the competitive (or anti-competitive) actions of professional publishers. Copyright’s reach only extended to the regulation of sales of substantially similar works. Effectively, the Authors Guild gave the Second Circuit a reason to offer up language that ensures future market consideration must expressly reject rent-seeking behavior and only support copyright holders when a new work trespasses into the same market as that of the original work.

The four factor analysis concerning the provision of works for the print-disabled was also handled well and the provision deemed fair use. It would be nicer though, if everyone could simply say it is the right thing to do, and leave it at that. With the anniversary of the Marrakesh Treaty approaching, there is more to come on the subject of making copyrighted works accessible to print-disabled communities everywhere.

Update July 11 The Authors Guild appears intent on pursuing the appeal against Google Books. Readers may recall that this scanning project was deemed fair use at its district court hearing. The Authors Alliance has a nice post describing their support for Google Books (with a link to their amicus brief).

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