Meera Nair

Archive for the ‘Case Reviews’ Category

“the hill to die on”

In Case Reviews, Posts on November 3, 2019 at 8:05 pm

In March of this year, Howard Knopf informed readers of a pending Supreme Court hearing: that of a private company claiming copyright infringement at the hands of a public-service provider in Ontario. The works of contention were land surveys, which are essential documents in terms of establishing boundaries to parcels of land and the rights thereto.

Until the later twentieth century, surveyors would deposit land surveys with the provincial land registry. Individuals could request copies, conditional on payment of a fee. Monies collected remained with the province; surveyors received no further compensation. That system had not attracted any displeasure; however, after the registry was digitized in the 1980s and its services outsourced to a private corporation (Teranet), which had the responsibility for scanning/uploading the surveys into a digital repository and providing copies to the public. Again, receiving a copy required payment of a statutorily prescribed fee. (Generally speaking, Teranet’s operations are shaped by agreements with the province.) Yet surveyors filed a class action lawsuit (led by Keatley Surveying Ltd.) claiming copyright infringement. They lost in the lower courts, but were given leave to appeal to the Supreme Court.

Knopf wrote: “Teranet, which is resisting the payment of additional fees to surveyors beyond that which they were paid originally for doing the survey – has never disputed the notion that copyright subsists in land surveys. Indeed, the two actual parties (Keatley and Teranet) agreed for purposes of this litigation that copyright so subsists, although this crucial issue is far from clear and certainly not obvious.”

In late September, the Supreme Court of Canada issued its decision in Keatley Surveying Ltd. v. Teranet Inc. bringing to an end the surveyors’ twelve-year odyssey to hold Teranet liable for copyright infringement. With unanimity the Supreme Court Justices declared that the land surveys had passed into the realm of Crown copyright, and thus by virtue of the arrangements made between Teranet and the Province of Ontario, no infringement by Teranet had occurred.

Crown copyright is defined in Section 12 of the Copyright Act as:

Without prejudice to any rights or privileges of the Crown, where any work is, or has been, prepared or published by or under the direction or control of Her Majesty or any government department, the copyright in the work shall, subject to any agreement with the author, belong to Her Majesty … (emphasis mine).

But despite the unanimous outcome, opinion was divided among the seven justices. The majority opinion held by four justices, led by Justice Abella, focused on the degree to which the Crown provided direction or imposed control in the preparation or publication of the work. Whereas the minority contingent, comprising three justices, including Chief Justice Wagner, gave weight to the nature of the work produced, that it should serve a public purpose (as one would expect of a government work).

From the Majority: “Relevant indicia of governmental direction or control may include the presence of a statutory scheme transferring property rights in the works to the Crown; a statutory scheme which places strict controls on the form and content of the works; whether the Crown physically possesses the works; whether exclusive control is given to the government to modify the works; the opt‑in nature of the statutory scheme; and the necessity of the Crown making the works available to the public (para. 69).”

From the Minority: “Once a court is satisfied that a work was ‘prepared or published by or under the direction or control’ of the Crown, it must then consider whether, at the time of preparation or publication, the work is a ‘government work’. This entails examining the character and purpose of the work. The work will be a ‘government work’ where the work serves a public purpose and Crown copyright furthers the fulfillment of that purposes. These will be works in which the government has an important interest concerning their accuracy, integrity, and dissemination (para 127).”

This marked the first occasion where the matter of Crown copyright was discussed by the Supreme Court. The Justices were quite direct in suggesting that Parliament revisit the principles and statutory language of the nearly 100-year-old provision. A sentiment also noted in the INDU Report of the Copyright Review (2018-2019), “Several witnesses criticized section 12 of the Act and called for its reform. In fact, no witness supported its continuation, at least in its current form—a rare point of consensus.”

Since the Keatley decision was announced, numerous commentaries have been published. A complete list has been compiled by Amanda Wakaruk; a selection thereof is:

Also, in a podcast that lived up to its billing, Carys Craig detailed the case, and the shortcomings of the outcome in Crown Copyright is NOT Boring. Provided by Stereo Decisis, hosted by Robert Danay and Hilary Young, Craig shares Knopf’s concerns, that it is far from evident that land surveys are eligible for copyright protection.

In Craig’s words, “this is the hill to die on.” She emphasizes that copyright law does not protect ideas or information, and land surveys are an embodiment of information. To provide copyright in a land survey undermines a fundamental tenet of the system of copyright.

That the Court did not address this aspect is disappointing, but nonetheless is irresistible for comment.

If the question –are land surveys eligible for copyright protection– had been raised, presumably, the Court would have started from first principles.

In Canada, copyright ensues when one creates an original work (expression) of a literary, dramatic, artistic or musical nature. While “artistic works” are defined as including “paintings, drawings, maps, charts, plans…,” not all such items are protected. The pivotal requirement is that the creation be “original.”

In 2004, in CCH, the Supreme Court famously declared that originality requires an exercise of skill and judgment that is more than trivial. Shortly thereafter, Teresa Scassa* reminded us that the Court’s words should not be read in isolation but along with the Court’s accompanying language about the importance of having a robust public domain. To do otherwise, runs the risk of extending protection to “original facts,” which Scassa defines as “facts that owe their existence to the exercise of intellectual effort.”

Looking back in more detail to the Court’s ruminations on originality in 2004:

For a work to be “original” within the meaning of the Copyright Act, it must be more than a mere copy of another work.  At the same time, it need not be creative, in the sense of being novel or unique. What is required to attract copyright protection in the expression of an idea is an exercise of skill and judgment. By skill, I mean the use of one’s knowledge, developed aptitude or practised ability in producing the work. By judgment, I mean the use of one’s capacity for discernment or ability to form an opinion or evaluation by comparing different possible options in producing the work. This exercise of skill and judgment will necessarily involve intellectual effort. The exercise of skill and judgment required to produce the work must not be so trivial that it could be characterized as a purely mechanical exercise (para 16).

At that time, the Court was addressing a personal question: did copyright exist in the writings of a judicial decision itself? In answering the question, the Court sought a workable standard, one that fell between the endpoint possibilities of the “sweat of the brow” (on which industriousness is the principle concern) and “creativity.”  Interestingly though, the Court did not give equal attention to defining what creativity is, but, as shown above, was content to focus on what creativity is not—that it need not be “novel or unique.”

However, in the situation at hand, one must ask: what if the intellectual effort is one where novelty should be actively discouraged?

Arguably, a land survey should not be an invitation to novelty—its sole purpose is to establish facts. A land survey is created by data and mathematical/scientific operations. If two independent surveys were commissioned for the same purpose, one would expect that the outcomes would be at least similar, if not identical. And while similarity in two independent, creative works does not deny two separate claims of copyright,** it does not follow that two similar displays of independent skill and judgement must each be granted copyright.

It is at least an article of faith that facts are not protected by copyright. The rationale being, as Scassa writes, “either because they are not considered to be the product of someone’s authorial effort, or because some efforts are made for the common good and not for reward through copyright monopolies.” She provides a compelling rationale regarding the importance in distinguishing between the skill and judgment that gives rise to facts and that which gives rise to a copyright-protected work.

It may be that the difference between these two categories rests on a more precise definition of “creativity,” which I suspect no court will welcome having to define.

But it would have been satisfying to see our highest court give it a try.

* Teresa Scassa, “Original Facts: Skill, Judgement and the Public Domain” (2006) 51 McGill L.J. 253.  For more, “Copyright Reform and Fact-Based Works”, in M. Geist, ed. From “Radical Extremism” to “Balanced Copyright”: Canadian Copyright and the Digital Agenda, (Irwin Law, 2010), 571-597.

** While Sheldon et al. v. Metro-Goldwyn Pictures Corp. et al (1936) is a case from American jurisprudence, Judge Learned Hand’s ruminations on independent but identical creation of an Ode to a Grecian Urn comes to mind.

no permission needed

In Case Reviews, Posts on September 26, 2015 at 7:08 am

On 18 September 2015, MIT Libraries issued an announcement: “Using figures in new scholarly articles just got easier.”

The article elaborates, through contracts signed with a number of publishers, MIT authors may use “with appropriate credit, figures, tables and brief excerpts … in the Authorized User’s own scientific, scholarly and educational works.”

The list of publishers reads like a Debrett’s of publishing: Sage, Springer, Taylor & Francis, Wiley and Elsevier. While to some this may be good news, it is disturbing if it means that fair use has been all but formally renounced by prominent academic publishers. To emphasize that, due to contracts agreed upon, permission is no longer needed only reinforces the belief/expectation that permission was needed to begin with.

Even for those MIT authors/authorized users who may avail themselves of those contracts, if desired content is depicted as belonging to another copyright owner, then “permission should be sought.” And what of non-MIT authors?

Entirely missing from the announcement is any recognition and support of exceptions to copyright. True, this is how many publishers operate. But that academic publishers are so unwilling to engage fulsomely with exceptions is more than disappointing. It undercuts the legitimacy of exceptions even though academic publication has almost an endemic claim to unauthorized use as per exceptions provided by law.

Since this pertains to the United States, fair use is the exception of note. Its absence is doubly-perplexing given that fair use has been doing quite well by American courts (for instance, see here) since descending to its nadir toward the end of the twentieth century.

To that point: one day before MIT’s announcement, the United States Court of Appeals for the Eleventh Circuit offered a pertinent reminder that fair use protects unauthorized use of imagery even in matters less noble than those associated to scholarly work. The dispute centred upon an unflattering photograph, used by a third party via a number of blogposts, to lampoon and criticize the person depicted, and the efforts of that person to suppress those uses. Detailed accounts are provided by professor of law Eric Goldman (writing for Forbes) and Kevin Smith (Director for the Office of Scholarly Communication at Duke University).

The Eleventh Circuit affirms what a magistrate and district court had earlier declared, that the uses of the photograph were fair use. The four-factor analysis (as required by American law) was duly followed and might spark some discussion about the fairness of use for those who wish to use a figure, table or excerpt without authorization in a scholarly publication.

Paraphrasing from the decision:

  1. Purpose and character of the work (pages 6-8): The use of the photograph was deemed primarily educational (the author of the blog “sought to warn and educate others about the alleged nefariousness” of the person) and noncommercial (the author of the blog received no remuneration for the posts). The use was also deemed transformative as “… Courts often find such uses [of faithfully reproduced works] transformative by emphasizing the altered purpose or context of the work, as evidenced by the surrounding commentary or criticism.” Thus factor one favours fair use.
  2. Nature of the work (pages 8-9): With reference to American precedent, this factor hinges upon whether the work had been previously published, and, where the work lay on a scale ranging from factual to fantasy. While recognizing that photography is often an artistic endeavor, in this instance the photograph was deemed a capture of a moment – a visual factual record. Further distribution of such works favours fair use.
  3. Amount of the work used (page 10): Too often it is assumed that since an image is used in its entirety, permission must be sought. The Eleventh Circuit firmly discarded that view, “Though ten blog posts reproduced the Photo in its entirety and without alteration, to copy any less of the image would have made the picture useless [to the story]. … As such, the third factor neither weighs for nor against a finding of fair use.”
  4. The effect of the use upon the potential market for the work (pages 11-12): This matter was settled quickly; the complainant had purchased the copyright in the photograph expressly to suppress its future publication, thereby signaling a willful disinterest in any future market. Thus, the contribution of this factor favored fair use.

It is worth pointing out the Eleventh Circuit offered a cogent reminder that market harm must be examined as: “… whether… the use would cause substantial economic harm such that allowing [the use] would frustrate the purposes of copyright by materially impairing … incentive to publish the [prior work].” There is considerable latitude in such assessment.

Particularly as readers were instructed at the outset, that the four factors are to be read together. Therefore, the use of previously published figures, tables, or excerpts that may well be factual in nature, surrounded by commentary or criticism, in support of a new scholarly work (otherwise known as furthering research, education, public wellbeing, etc. — all those matters that go into promoting progress in a society) has a strong probability of being deemed fair.

However, non-MIT authors may have a more difficult time voicing such an argument if the academic publishing community has officially decided such uses are only permitted after contractual discussion. While it is understandable that an institutional press would wish to smooth the way forward for its own authors, and to protect themselves from litigation by other publishers, it would be more laudable if institutional presses could take the path of supporting best practices that fulfill fair use.

Coincidentally, also on 17 September, during an event hosted by American University Washington College of Law, the tenth anniversary of the start of the Best Practices of Fair Use Project was celebrated. Renowned professor of law Peter Jaszi chaired the event, and spoke passionately about the theory behind the project:

When members of a practice community come together …, talk about their fair use rights, and the appropriate employment of those rights in furtherance of their mission, then the record of those conversations and the consensus to which those practitioners come can be in itself a powerful … force for change. It not only documents but it also influences …

Ten years on, with the aid of Jaszi’s colleague/co-author Patricia Aufderheide (Director of the Center for Media & Social Impact), over a dozen fair use best practices’ documents have been developed on a wide range of topics, including documentary film, visual arts, orphan works, poetry, and teaching/research/study. We can only hope that these documents might yet become compulsory reading at every institutional press.

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).

will no one take on Disney?

In Case Reviews on April 24, 2014 at 9:42 pm

Earlier this week, Alex Tabarrok posted “Copyright is out of Control,” at Marginal Revolution. Tabarrok describes a situation whereby an established publisher is wary of using public domain images in books, as the status of public domain does not guarantee an absence of trouble-making from would-be plaintiffs. Tabarrok also describes an inability to use a licensed image:

To illustrate the point that, contrary to what is often argued, a rich person might get more from another dollar than a poor person we have in “Modern Principles a movie still of Scrooge McDuck swimming in money. We think the image speaks for itself but apparently that is a problem. The rights to the photo are–we are told–not the same as the rights to the characters shown within the photo. Thus, even though we have bought and paid for the right to print the photo, to ensure that the use of the characters within the photo falls under fair use we must discuss, comment on and critique the content of the photo in the text.

Tabarrok’s dismal conclusion is:

I am not critiquing our publisher or their lawyers. Bear in mind that this is coming to us from the very highest legal counsel of a multi-billion dollar firm. Thus, I do not doubt that the dangers are real and the legal analysis acute. The problem is copyright law itself.

The reaction to the piece is a quagmire of outrage and confusion, with some commentators protesting the very spectre of a prominent scholar flogging a $250 textbook, and yet wanting free use of an image. Again – according to Tabarrok’s post – the authors’ publisher had purchased a license to use the image. While the industry of educational publishing as a whole leaves much to be desired, what I find more than troubling about this piece is the impression, or lack thereof, it leaves of fair use. Quite likely, there are more details that Tabarrok was unable to include in the post, but clarification is needed.

An outsider reading the post may come away with the view that fair use is not something that is legitimate under appropriate circumstances, but rather a disputed corollary to purchasing a license for re-use of content. Such an interpretation, while no doubt pleasing to many copyright holders and their representatives, would be plain wrong.

Fair use is an exception to each grant of copyright; fair use allows for the use of copyrighted material without seeking authorization from, or making payment to, the copyright holder. The extent of what might be fair use is determined according to the circumstances at hand. Without further information, I can only assume that the extreme timidity of the publisher and its counsel is due to the association of Scrooge McDuck to the Disney Corporation.

As fair use is only of issue if no license was obtained, consider a hypothetical situation where no license for use of the Scrooge McDuck still was purchased. Would Tabarrok and his colleagues have a plausible argument for fair use in the inclusion of this still in their textbook? Case law suggests they would.

The following analysis draws primarily from the U.S. Supreme Court decision Campbell v. Acuff–Rose Music, Inc. (1994) and Appeals Courts’ decisions Bill Graham Archives v. Dorling Kindersley Ltd. (Second Circuit, 2006), Cariou v. Prince, (Second Circuit, 2013) and Dereck Seltzer v. Green Day Inc. (Ninth Circuit, 2013). For the sake of brevity, I have omitted citations.

Fair Use Analysis

According to Section 107:

… In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include: (1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work.

In this hypothetical situation, a reasoned argument for fair use might include the following:

(1) purpose and character of the use

The reference to commercial or non-profit is of little concern in this instance. Courts have noted that the “crux of this distinction” lies in whether the party using the copyrighted material profits from the use. In this case, the image is hidden within the textbook; it does not serve as an advertisement for the book. Even if students are aware that the book includes such an image; it is unlikely that they would purchase the book purely on that basis.

Moreover, the fact that the publisher is a commercial entity is not a bar to a finding of fair use. The prevailing principle of the exception is the principle that guides the system of copyright as a whole; namely, does it further the progress of the Arts and Sciences, as specified in the U.S. Constitution? To answer that question, in terms of the first factor, greater weight has to be afforded to:  “the purpose and character of the use.”

The notion of transformative use is fast becoming a guide to any examination of the purpose and character of a work. As courts have grappled with balancing the rights of copyright owners versus those of copyright users, the notion of transformation has been given both precision and latitude. The prevailing language asks the question: “whether the new work merely supersede[s] the objects of the original creation, or instead adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message?”

In this situation, the use of the still is not for the purposes of entertainment. (Nor is it to serve as the basis for appropriation art; nor is it necessary that textbook authors comment upon Scrooge McDuck.) The photograph is engaged for a new purpose – that of resonating with a reader’s baser instincts concerning money.

Disney characters are ubiquitous to the modern world; even in its poorest corners, the duck, the mouse, the dog, etc. are recognizable. Appealing to symbols that are embedded in peoples’ childhood experiences is a means to invoking underlying thoughts. While some might favour a quotation of text to accomplish that task, visual imagery is equally eligible to that favour. Indeed, the corporate sector takes great pains to make images and stories they own, integral to everyday experience. Yet they too rely on past creations. In fact, this particular still might be unique to the purpose sought; the nomenclature of Scrooge McDuck is directly traceable to Charles Dicken’s character of Ebeneezer Scrooge. Thus, this still does double-duty in its evocation of a miserly tycoon.

(2) nature of the copyrighted work

It has been suggested that the more creative a work is, the higher the standard needed for fair use to prevail. That the still image is a creative work, and thus deserving of protection, is without doubt. But mitigating this aspect is the extent to which the work has been published. The character of Scrooge McDuck was first published in 1947. (As an aside, it was created by Carl Barks and licensed to the Disney Corporation. Throughout this discussion, both the real and the hypothetical, it has been assumed that Disney has the exclusive license to all imagery of the character. But if use of the still was actually challenged by Disney, it would have to prove that ownership.) Published many times over in comic book and audio-visual genres, Scrooge McDuck’s copyright owner has controlled first publication. This tends to favour a later fair use.

(3) the amount and substantiality of the copyrighted work used

There is no doubt that the entire still has been used. But as multiple cases have emphasized, while no court has ever indicated that copying an entire work would sanction fair use, courts have recognized that sometimes such copying is necessary to make fair use of a work. The amount permissible is a consequence of what the work is and what the use is. Images fall within this category of necessarily-complete copies. While novels, lyrics, or perhaps even poems, may be divisible into representative snippets, images do not lend themselves to meaningful divisibility.

Moreover, the manner by which the entire image is incorporated into the book is likely to be different from the original form of the still. Textbooks will not devote large areas to glossy reproductions of an image; usually an image is reproduced in a small size and with lesser resolution.

(4) the effect of the use

In fair use’s darker days, the impact on market was given unduly wide interpretation and prominence. Any use was deemed an impact on the market and negated fair use as a whole. Fortunately, American courts have since recognized the circularity of those earlier pronouncements. A more nuanced approach of contemporary courts has led to the conclusion: “Where the allegedly infringing use does not substitute for the original and serves a ‘different market function,’ such factor weighs in favor of fair use.” As noted earlier, the manner by which the still is reproduced in a book will not physically serve the market for stills. That the still is being employed to serve a transformative use, indicates a different market function.

And perhaps most crucial; the fact that the publisher in this instance has been willing to pay for licensed content in the past does not negate its ability to practice fair use in the future.

Beyond analysis

With a more than reasonable claim to fair use, it might seem a mystery as to why any legal counsel to such a well-heeled publisher should reject using the still. But it may not be that mysterious. Academic presses are not well-known as advocates for better use of exceptions within the law, or preventing abuse by the law. And if a lawyer has been charged to protect the wellbeing of such a client, doing nothing with licensed content or avoiding any seemingly-precarious involvement of fair use, might seem the optimal strategy.

But this conduct is deleterious to the well-being of a larger constituency, namely all those who would seek to make legitimate use of copyrighted material. The viability of the exception is bolstered when people use it, and diminished when the exception is passed over in favour of unnecessary licensing or passive acquiescence to those who would like nothing better than effectively absolute control in the name of copyright.

Few authors or publishers could withstand even the hint of a copyright lawsuit. But surely a “multi-billion” dollar publishing house with expert legal counsel and highly respected authors under its wing could engage in fair use as appropriate to their business undertakings.

Google Books – another fair use illustration

In Case Reviews on November 16, 2013 at 10:34 pm

No doubt, readers have already taken in the good news: on 14 November 2013, the Google Books Project was deemed fair use by Judge Denny Chin of the Southern District of New York. Hailed as a stunning victory for libraries and their patrons, the visually disabled, and continued high-tech innovation, the details almost seem mundane – of course displaying snippets of a work is not a violation of copyright. That the law should uphold common sense seems only appropriate.

Yet this was a story that began with an uncertain ending. At its outset in 2004, the actions of Google struck many as audacious. The Google Books project necessarily involved scanning entire books. While there was always an argument for legitimate fair use – library books were scanned with permission from libraries, the majority of books were out of print, only snippets would be displayed, Google did not engage in any direct profiteering from its action, etc. – the dialogue of copyright did not yet embrace nuanced examinations of copying with open consideration of public benefit. To some, once a copy is made without permission, the copyright owner’s rights have been infringed and heads should roll.

If the Author’s Guild had successfully shutdown Google Books at the start, the public benefits of the project would never have seen the light of day. And it was those benefits that Judge Chin emphasized in his decision, even before providing the analysis of fair use. Paraphrasing some of the key elements from his list (starting on page 9): 

  • “Google Books provides a new and efficient way for readers and researchers to find books. … It provides a searchable index linking each word in any book to all books in which that word appears.” Chin emphasizes that Google Books has become an essential research tool and part of our information society landscape.
  •  “Google Books greatly promotes a type of research referred to as ‘data mining’ or ‘text mining.’” Chin pays particular attention to the brief prepared by Matthew L. Jockers, Matthew Sag and Jason Schultz on behalf of Digital Humanities and Law Scholars, and extolls the merits of the newer form of scholarship.
  • “Google Books expands access to books.” Chin draws attention to the “traditionally underserved populations,” and points out that not only are the books themselves more easily found but that “digitization facilitates the conversion of books to audio and tactile formats, increasing access for individuals with disabilities.” He also champions the “remote and underfunded libraries that need to make efficient decisions as to which resources to procure for their own collections or through interlibrary loans.”
  •  “Google Books helps to preserve books and give them new life.” Chin is clearly aware that older, and potentially out-of-print, books are falling apart. Scans will at least preserve the content.
  •  And, quite apart from merit of the project with respect to reading, research, under-served populations and preservation, “Google Books benefits authors and publishers.” With any selection of a snippet, users are easily connected to sellers of the books thereby increasing the potential for sales.

Of course, Chin does not omit the examination of fair use; he performs the analysis with ease and clarity.  Before, and after, he reminds us that the listed four factors need not be the only consideration in questions of fair use. He emphasizes that they are only a general guidance and that there might be other considerations. Although, for the purposes of this case, he only needed the traditional four factors:

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

While fair use analysis allows for consideration of any purpose and character, American case law has long emphasized that transformative uses are fair. Chin has no difficulty assessing Google’s Book Project as transformative. “Google Books digitizes books and transforms expressive text into a comprehensive word index that helps readers, scholars, researchers, and others find books (p.19).” Pointing to past successful arguments of fair use in the use of thumbnail images, Chin writes: “The display of snippets of text for search is similar to the display of thumbnail images … [to] help users locate books and determine whether they may be of interest (p.20).” And, with recourse to a fair use standard-bearer, the work of Judge Pierre Laval, Chin concludes the first factor by saying, “[Google Books] adds value to the original … [through] the creation of new information, new aesthetics, new insights and understandings (p.21).”

[Chin refuses to let the mere word “commercial” misdirect the claim of fair use. He points out that Google does not engage in direct commercial behaviour in connection to the snippets of text or the scans. “Even assuming Google’s principal motivation is profit, the fact is that Google Books serves several important educational purposes (p.22).”]

(2) the nature of the copyrighted work

With the majority of the scanned holdings being published books, the availability of the snippets for the public is only an asset to the claim of the fair use.  Drawing from past case law, Chin writes: “Whether or not a work is published is critical to its nature under factor two because the scope of fair use is narrower with respect to unpublished works (p.23).”

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

Chin begins with the reminder that the copying of entire works can be considered fair use. He then easily explains why Google’s entire copies are necessary and, happily enough, would never be available to serve as a substitute for the original:  “… as one of the keys to Google Books is its offering of full-text search of books, full-work reproduction is critical to the functioning of Google Books. Significantly, Google limits the amount of text it displays in response to a search (p.23).”

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

To the complaints voiced by the Author’s Guild that Google Books would negatively impact the market and that the snippets could be collected into a substitutable book, Chin details the lack of logic within their arguments:

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

And, the final rebuttal to the oddity of arguing that exposure would decrease sales:

An important factor in the success of an individual title is whether it is discovered — whether potential readers learn of its existence. Google Books provides a way for authors’ works to become noticed, much like traditional in-store book displays. Indeed, both librarians and their patrons use Google Books to identify books to purchase. Many authors have noted that online browsing in general and Google Books in particular helps readers find their work, thus increasing their audiences. Further, Google provides convenient links to booksellers to make it easy for a reader to order a book. In this day and age of on-line shopping, there can be no doubt but that Google Books improves books sales.

In his concluding remarks, Chin again returns to the merits of Google Books with respect to public benefit. The decision as a whole is only 30 pages and well worth reading.

With the Author’s Guild already positioning itself for appeal, this story is not yet over.  But with such a decisive endorsement of fair use, and keeping in mind that this examination was expressly ordered by the Second Circuit Court of Appeals, the likelihood of this decision being overturned is slim.

Update October 2015

As was to be expected, Google Books met with success at the Second Circuit.  See here for my commentary.

And yet, the saga is not over. The ink was barely dry before the Authors Guild stated its intentions to appeal, claiming that this acceptance of fair use is a “faulty interpretation.” There is an air of desperation about the Authors Guild stance; rather than focusing upon the law, it emphasizes “Most full-time authors live on the perilous edge of being able to sustain themselves through writing as a profession …”

Canadians are accustomed to hearing such emotion as a substitute for argument; in August, Access Copyright heightened its pitch with a distorted assessment of fair dealing and the purported impact upon authors in Canada. As I have written since, and is apropos on both sides of the border, if authors continue to struggle after 300 years of expansion of copyright, “perhaps copyright is neither the problem, nor the solution.”

fair use – more lessons from the United States

In Case Reviews on August 10, 2013 at 8:24 pm

This past week, Sergio Muñoz Sarmiento (writer of Clancoo—the Source for Art & Law) described a paper written by Andrew Gilden & Timothy Greene, titled “Fair Use for the Rich and Fabulous.” They compare two cases of appropriation, tried by the same district and appeals courts, and express relief that some earlier misconceptions of fair use are being resolved. However, they also express concern that célebre seems to factor into the final judgement.

Sarmiento writes, “Those artists that are not as well-known or that opt to side-step the gallery system will in essence become the producers of raw materials for those artists who have the financial resources, marketing savvy, branding, and major gallery representation.” Almost on cue, a day later stories are circulating about another judgement of fair use; this also in favour of appropriation carried out by what appears to be the more established party. In this case a street-art image was incorporated into a set backdrop for a rock band. Graham Bowley, writing for the NY Times, gives the story and the outcome:

A federal appeals court on Wednesday ruled that the rock band Green Day had not infringed the rights of the illustrator and street artist Dereck Seltzer when it incorporated his artwork “Scream Icon” without permission in a video backdrop at its concerts during its 2009 21st Century Breakdown tour.

[Perhaps unintentional, but the NYT headline emphasizes the disparity in stature: “Judge Upholds Green Day’s Right to Use Artist’s Image for Concert”. Again, the “Artist” in question is Dereck Seltzer.]

That fame and fortune might play its part in a decision should not come as a surprise. In all walks of life, the establishment carry an implicit (and sometimes even explicit) advantage over newcomers. Nevertheless, with the Utopian hope that eventually all copyrights will be created equal, exploring this issue is helpful. The root question will always be – how to judge appropriation? This is not an easy question to answer. Fortunately, regardless of one’s own jurisdiction, litigation in the United States means teachable moments for all other countries who endeavor to develop flexible exceptions of their own.

So: Fair Use, Dereck Seltzer and Green Day. What happened?

On Wednesday, 7 August 2013, the Ninth Circuit Court of Appeals filed their opinion that the inclusion of Seltzer’s artwork was sufficiently transformative and supported by the four-factor analysis that shapes decisions of fair use. This followed a district court decision that also decreed fair use.

The story begins with Seltzer’s creation in 2003 of a work titled Scream Icon, “a drawing of screaming, contorted face (p.5).” Seltzer reproduced the work in posters and adhesive prints; some were sold, and some were given away. Many were “plastered on walls as street art in Los Angeles and elsewhere.” Five years later, Richard Staub (later a video designer for Green Day) photographed one such poster, by now somewhat worse for wear, amid a wall covered in street art and graffiti.

The following year Staub was subcontracted to Green Day to create video backdrops for a concert tour to promote a new album titled 21st Century Breakdown. The concerts featured thirty-two songs, each with their own backdrop. Seltzer’s work was modified for a video backdrop towards performance of a song titled “East Jesus Nowhere.” Staub explains that the song reflects “the hypocrisy of some religious people who preach one thing but act otherwise. . . . The song is about the violence that is done in the name of religion (p.6).”

[Seltzer’s original Scream Icon image, and the photograph taken by Staub, are in Appendix A and B of the opinion of the Ninth circuit.]  Writing for the court, Judge Diarmuid F. O’Scannlain explains the transformation:

What Staub ultimately created for this song is the allegedly-infringing work at the heart of this case, an approximately four-minute-long video. The video depicts a brick alleyway covered in graffiti. As “East Jesus Nowhere” is performed, several days pass at an accelerated pace and graffiti artists come and go, adding new art, posters, and tags to the brick alleyway. The graffiti includes at least three images of Jesus Christ, which are defaced over the course of the video. Throughout the video, the center of the frame is dominated by an unchanging, but modified, Scream Icon. Staub used the photograph he had taken at Sunset and Gardner, cut out the image of Scream Icon and modified it by adding a large red “spray-painted” cross over the middle of the screaming face. He also changed the contrast and color and added black streaks running down the right side of the face (p.6).

As to be expected, the case was examined via the four-factor analysis of American Fair Use; see 17 U.S.C. § 107

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

Remarking on the abundance of cases that elucidate or obfuscate the meaning of transformation, the  Court turned to definitive guidance via Campbell v. Acuff-Rose Music, Inc.,  (as influenced by Judge Pierre Leval, see here) to emphasize the importance of bringing forward “a further purpose or different character, altering the first with new expression, meaning or message (p.10).”

Drawing from Seltzer’s remarks that the original work addressed “themes of youth culture, skateboard culture, [and] insider/outsider culture (p.11),” O’Scannlain emphasizes that a new meaning—that of religion—was instilled through the modification and new context of the work:

With the spray-painted cross, in the context of a song about the hypocrisy of religion, surrounded by religious iconography, Staub’s video backdrop using Scream Icon conveys “new information, new aesthetics, new insights and understandings” that are plainly distinct from those of the original piece (p.12).

With regard to the clause concerning commerciality, came this assessment: “Green Day’s use of Scream Icon was only incidentally commercial; the band never used it to market the concert, CDs, or merchandise (p.14).”  Taken together, the first factor favours Green Day.

2. The nature of the copyrighted work.

Drawing from precedents that compare the creativity of the work against the degree  of first publication enjoyed by the creators, O’Scannlain writes “Scream Icon is a creative work meriting strong protection … [yet] Scream Icon was widely disseminated [by Seltzer], both on the internet and on the streets of Los Angeles before Green Day used it in their concerts (p.14-15).”  On balance, the court decides that the second factor “slightly” favours Seltzer.

3. Amount and substantiality of the portion used in relation to the copyrighted work as a whole.

It is taken as a matter of logic that the less of a work copied, the more likely the copying will be seen as fair. However, courts are increasingly cognizant that copying is to be examined under both qualitative and quantitative assessment. Here the unavoidable starting point is, “Green Day copied most of Scream Icon, both quantitatively and qualitatively (p.15).” But O’Scannlain continues:

“However, unlike an episode of the Ed Sullivan show or a book manuscript, Scream Icon is not meaningfully divisible. … [T]he use of the entire work was necessary to achieve Green Day’s ‘new expression, meaning or message.’”

He concludes the third factor examination with “this factor does not weigh against Green Day.”

4. Effect of the use upon the potential market

In the past, this factor has led to a stunting of fair use (largely because of the flawed view that any use was a licensable use and thus a denial of market). Fortunately, American courts have progressed in their fair use doctrine. Closer attention is paid to the actual market enjoyed by the original creator, and the question raised is whether the newer use serves a different market function?  With this more logical directive, outright piracy where duplicate copies serve the same market cannot be sheltered as fair use (nor should they be) but newer uses of work are given a fairer hearing.

On this factor, O’Scannlain writes:

The original [work] created six years before Green Day’s use, was primarily intended as street art. Green Day’s allegedly infringing use, on the other hand, was never placed on merchandise, albums, or promotional material and was used for only one song in the middle of a three hour touring show. In this context, there is no reasonable argument that conduct of the sort engaged in by Green Day is a substitute for the primary market for Seltzer’s art (p.16).

Curiously though, the documents from both the district and appeals courts indicate that Seltzer had already  licensed Scream Icon for use in a music video. But, he did not provide any information about those terms, or how the work was used by the licensing band. As O’Scannlain points out, the first and fourth factors “dominate case law (p.17)”; why did Seltzer’s counsel not emphasize this point and provide more information? O’Scannlain concludes the analysis by saying “Without further context, this fact does not suffice to show that Green Day’s use harmed any existing market or a market that Seltzer was likely to develop. Thus, this factor weighs in Green Day’s favor as well (p.17).”

And so Fair Use was the outcome. The only bright spot for Seltzer was the appeals court’s decision to overturn the lower court’s insistence that Seltzer was liable for the legal fees of Green Day.

However, discussion should not stop here. From both courts’ examination of the case, it is evident that what bothered Seltzer was precisely the manner by which his work had been transformed. O’Scannlain notes:

At Seltzer’s deposition, he repeatedly testified that the value of his work was unchanged, but that he subjectively did not care for Green Day’s use of his art. He admitted that no one had ever told him that he would not buy his work as a result of Green Day’s use; instead, he claimed that Scream Icon was “tarnished” for him personally… (p.16).

The district court decision gives more detail on this matter; in his deposition Seltzer states that the use made by Staub and Green Day:

… [T]ainted the original message of the image and [ ] made it now synonymous with lyrics, a video, and concert tour that it was not originally intended to be used with….. I make an image, I produce it, I tailor it to my needs, the concept, the content, and then someone comes along, defaces the image, puts a red cross on it. I mean, maliciously devalues the original intent and then shows it to thousands upon thousands of people (p.6).

In the eyes of both courts  Seltzer’s own remarks confirmed the transformative requirement necessary to a successful claim of fair use yet both courts seemed unable to factor in his concerns of artistic integrity.

The difficulty here is that Seltzer’s discomfort is not that of copyright infringement, it is moral rights infringement. These are rights that take ancestry from droits moreaux which means personal or intellectual rights.  To be sure, moral rights are no panacea of clarity, but it is worthy to recognize the emotional connection a person has to his or her work and reputation.

But the United States does not openly observe moral rights; it concedes such personal desires only through the Visual Artists Rights Act (VARA) which addresses: “a restricted category of visual artworks, extends only limited rights, and is subject to loopholes, exclusions, and waiver provisions that substantially erode its powers.”

This leaves most American creators without useful recourse in terms of the law.

One cannot argue that the fair use analysis by the courts was mishandled — it was not.  And yet, the case leaves an unsavoury air in its wake.  The disparity in stature between the parties is glaring. To a reasonable observer, it seems odd that a band who (according to the press coverage and an extensive Wikipedia entry) has sold over 70 million albums worldwide and expanded its presence through musical productions, documentary, and art-shows, could not summon the courtesy to contact the up-and-coming artist and discuss using the work? It is a matter of record that Seltzer “used Scream Icon to identify himself and his work’s presence by placing it on advertisements for his gallery appearances (p.5);”  it seems plausible that Seltzer could have been found.  It is also a matter of record that once he became aware of the use, Seltzer contacted Green Day to  “work out a resolution to this issue (p.7).”  If Seltzer had been presented with an option to license, or perhaps even recognition as the artist of the original work, he may have felt comfortable with the alterations.

The absence of courtesy becomes even more puzzling in light of Green Day’s declared affinity to street artists; showcasing the artworks created for the songs of 21st Century Breakdown at an art exhibition in 2009, musician Billie Joe Armstrong is quoted as saying: “Many of the artists… show their work on the street, and we feel a strong connection to that type of creative expression.”

My sense of puzzlement is answered in part by Sarmiento; he reminds us that the art world can equally fall prey to a weakness of  liberal ideology: “property ownership is ‘bad’ until you have enough financial resources to create and own any kind of property, tangible and intangible.”

But given that courtesy may not be forthcoming from individuals, it is all the more important that courts give consideration to the matter. Regrettably, the inelasticity of the American four-factor analysis does not appear to permit such discussion. Whereas in Canada, when the multi-factor analysis for fairness of use appeared, our Supreme Court Justices were careful to emphasize that the proposed questions were not exhaustive.  Different situations may require different questions (CCH Canadian, para. 60).

Matters of good faith and courtesy are worth discussing.

Update — August 16, 2013  Marc Belliveau of Stewart McKelvey provides the “what if the case had been tried in Canada” analysis; see here.

fair use of Faulkner

In Case Reviews on July 20, 2013 at 9:06 am

A story in circulation yesterday concerned a claim of infringement over the use of nine words in a film. (See Dave Itzkoff of the New York Times here, Holbrook Mohr writing for AP through the Times Colonist here, and Ted Johnson writing for Variety here). The literary estate of William Faulkner objected to the inclusion of Faulkner’s wording from Requiem for a Nun (1950): “The past is never dead. It’s not even past.” Woody Allan, in Midnight in Paris (2011), has a character proclaim: “The past is not dead. Actually, it’s not even past. You know who said that? Faulkner. And he was right. And I met him, too. I ran into him at a dinner party.”

Fair use called out, loud and clear. It is almost beyond belief that the estate thought this case could be won (more on that below). Judge Michael P. Mills, of the Northern District of Mississippi, states the issue and his decision at the outset:

At issue in this case is whether a single line from a full-length novel singly paraphrased and attributed to the original author in a full-length Hollywood film can be considered a copyright infringement. In this case, it cannot.

Making it clear that the estate had provided little in the way of argument, Mills nevertheless considers if fair use is applicable and then proceeds with a fair use analysis. (I avoid most specific details but — spoiler alert — the opinion tells all.)

After accepting evidence that Faulkner’s work is still under copyright, Mills explains that a charge of infringement rests on “substantial similarity,” which “is measured by considering the qualitative and quantitative significance of the copied portion in relation to the plaintiff’s work as a whole.” Beginning with the statutory language of fair use and its four-factor analysis as given in 17 U.S.C. § 107, Mills reminds us that fair use has been defined as: “a privilege in others than the owner of the copyright to use the copyrighted material in a reasonable manner without his consent.” Then he unveils his analysis.

(i) Purpose and character of the use.  This determines whether the later work moves forward from the original work, “… with new expression, meaning, or message; it asks, in other words, whether and to what extent the new work is transformative.” Comparing Faulkner’s book to Allen’s movie, Mills is explicit in the dissimilarity of the two uses of the nine words. The time, setting and characters are not at all the same, and the intent of the wording conveys an entirely different argument: “On one hand is a serious attempt to save someone from the death penalty, and on the other is a fiancé trying to get a leg up in a fleeting domestic dispute.” The shift in genre and medium (serious literature to romantic comedy, book to film) coupled with the “miniscule  amount borrowed” essentially decides the case. The transformative element is so great as to “[diminish] the significance of considerations such as commercial use that would tip to the detriment of fair use.”

(ii) Nature of the copyrighted work.  Faulkner’s estate attempted to resist the applicability of fair use to excerpts from the book, on grounds that a precedent setting case (Campbell v. Acuff-Rose Music, Inc.) had upheld fair use in application to parody but Allen’s movie was not a parody of Faulkner’s book. Mills is not distracted by the misdirection: “The court declines to determine whether or not [the movie’s] use constitutes a parody because it has found the work to be highly transformative under the first factor, whether parody or not.”

(iii) Amount and substantiality of the portion used in relation to the copyrighted work as a whole.  Faulkner’s estate had argued that while the work was not quantitatively significant, the use was infringement because of the qualitative nature of the wording: “[it] describes the essence of [the book].” Mills does not agree, saying that the argument addressed the qualitative merit of a theme, not the expression of the theme. Themes, like ideas, are not copyrightable–only their expressions are. In this case, expressions of the theme occur several times throughout the book and thus the copied words represented only “a fragment of the idea’s expression.” Mills then adds this gem: “This analysis is not influenced by the quote’s subsequent fame as a succinct expression of the theme. Qualitative importance to society of a nine-word quote is not the same as qualitative importance to the originating work as a whole.”

(iv) Effect of the use upon the potential market.  Mills indicates that in light of analysis of the first factor, this is moot. Mills could have stopped there but goes on to say:

The court is highly doubtful that any relevant markets have been harmed by the use in [the film]. How Hollywood’s flattering and artful use of literary allusion is a point of litigation, not celebration, is beyond this court’s comprehension. The court, in its appreciation for both William Faulkner as well as the homage paid him in Woody Allen’s film, is more likely to suppose that the film indeed helped the plaintiff and the market value of [the book] if it had any effect at all.

And now this gets interesting. Mills writes that the estate had anticipated providing evidence that it usually licenses Faulkner’s content and that Allen’s use of the nine words would “adversely impact [the estate’s] ability to exploit for its financial benefit its property rights [in the book].” Mills response is unsympathetic: “The court is doubtful that any discovery to this effect will prove fruitful since the court does not consider a copyright holder to be entitled to licensing fees for fair use of his or her work.”

The estate had also attempted to argue that since other copyrighted material had been licensed for use in the film, the same treatment should apply. Mills is not impressed here either:

This court’s inquiry is whether the use of Faulkner’s quote is fair use, not whether the rest of the work used in the film would have required a license agreement. Such considerations would require several detailed inquiries into the fair use of several other works. The court notes the obvious distinction between the use of Cole Porter and Pablo Picasso’s work at the outset, however: they are used in their entirety while [Faulkner’s work] is by fragment only. Thus, the court finds this consideration to be irrelevant.

All in all, the estate’s claim rested not upon the law, but on the expectation of achieving a license. And this was not an isolated event.

Last fall, when the estate began legal action against Midnight in Paris, it also began proceedings against Northrop Grumman (a defense contractor) for its use of Faulkner’s work. The company had used fourteen words from Faulkner’s article titled “On Fear” (published in Harper’s in 1956). The wording (“we must be free not because we claim freedom, but because we practice it”) was attributed to Faulkner and appeared in a Fourth of July advertisement on the company’s web page. At the time, Alison Flood writing for The Guardian gave more details of “On Fear”; it is a reflection on the aftermath of a U.S. Supreme Court decision ordering the desegregation of schools.

While the unauthorized association of Faulkner to a defense contractor might be unpalatable to the estate, that is a claim of moral rights infringement, not copyright. (This is problematic for Americans as the United States does not observe moral rights in the manner that many other countries do.) The context and details of Northrop Grumman’s use are different but the behavior of the estate again smacks of rent-seeking. On that occasion, the estate seemed to get what it wanted; the dispute was privately settled with no details released.  Randi W. Singer and Olivia J. Greer covered this story for Intellectual Property Magazine in February 2013.

Canadians may be pleased to know that all of Faulkner’s published texts entered our life+fifty public domain on January 1, 2013.  In jurisdictions of lengthier term, they remain under lock and key, save for fair use and fair dealing.

A glimpse into the life of William Faulkner (1897-1962); Nobel laureate (1949)

In 1956 The Paris Review published an interview with Faulkner. Conducted by Jean Stein, early in their conversation she asks for Faulkner’s views of himself as a writer:

If I had not existed, someone else would have written me, Hemingway, Dostoyevsky, all of us. Proof of that is that there are about three candidates for the authorship of Shakespeare’s plays. But what is important is Hamlet and A Midsummer Night’s Dream, not who wrote them, but that somebody did. The artist is of no importance. Only what he creates is important, since there is nothing new to be said. Shakespeare, Balzac, Homer have all written about the same things, and if they had lived one thousand or two thousand years longer, the publishers wouldn’t have needed anyone since.

Race relations and civil rights were prominent in Faulkner’s stories and his life.  In light of what is happening in the United States today, readers may be interested in this passage from On Fear:

If the facts as stated in the Look magazine account of the Till affair are correct, this remains: two adults, armed, in the dark, kidnap a fourteen-year-old boy and take him away to frighten him. Instead of which, the fourteen-year-old boy not only refuses to be frightened, but, unarmed, alone, in the dark, so frightens the two armed adults that they must destroy him…. What are we Mississippians afraid of?

Kirtsaeng – Part III

In Case Reviews on April 14, 2013 at 10:40 am

In Part I and Part II of my Kirtsaeng saga, I detailed an American Supreme Court decision that addressed control of copyrighted works, after works have been transacted in sale according to the law. Two clauses of the American Copyright Act were in opposition; a right of control, to ban importation of copyrighted works acquired outside the United States collided with the limitation of control imposed by the doctrine of first sale. The majority opinion, written by Justice Breyer, decreed that first sale applies if the copies were legitimately produced and sold, irrespective of geographical consideration. In this case, the textbooks entering the United States were made and purchased in accordance with the publisher’s subsidiary organization for production and sales in Asia.

The importation ban allows publishers to more easily segment their markets. Similar books may be sold in different regions at different prices, without fear that cheaper copies would be resold in the United States undermining the American market. Publishers price their works according to the constraints of their target markets; higher-priced American books simply will not sell in lower-income countries. Thus those books are produced with lesser quality (i.e. cheaper paper, no colour images, etc. ) and priced with an eye to cost recovery. Which means the revenue from foreign market productions does not serve to reduce the costs incurred at home.

According to the brief submitted by Wiley (and similar language is found in the brief submitted by the Association of American Publishers) the development costs of a textbook are significant and are paid for by domestic market sales. If domestic wholesalers (i.e. campus bookstores or Costco) could import cheaper books and resell them, publishers’ revenues will severely decline, leaving little to fund the production of new books. “The likely result of Kirtsaeng’s proposal would be reduced access to educational materials around the world, with little corresponding benefit for American students (Wiley, p.49).”

Which raises the question of why bother to sell to foreign markets at all? If the sales only cover printing and distribution there seems little incentive to supply to those markets. A possible answer is that publishers are concerned with providing access to “educational materials around the world.” But altruism gives way to pragmatism; if consumers cannot afford the high-priced American textbook, piracy is likely to occur. And Wiley notes that “‘governments have been more responsive in dealing with piracy cases when textbooks are priced at a level that local students can afford.’ (Wiley, p.47).”

In making their argument, Wiley makes constant reference to a study by the Governmental Accountability Office (College Textbooks — Enhanced Offerings Appear to Drive Recent Price Increases, 2005). Wiley does not endorse all the findings and points to concerns expressed by the Association of American Publishers but: “nonetheless believes that the report’s summary of the many factors that bear on pricing in different countries provides useful context for the Court (Wiley, p.7).” In fact, the Association disagreed with the study almost in its entirety, objecting to the data used, the methodology, and the tone of the report (GAO 2005, p.38-43). Their concerns were addressed by the authors of the report, who emphasized the objective of the study was not to assign blame to publishers but to better understand how publishing practices (and the factors influencing those practices) affect the cost of college textbooks (GAO 2005, p.26-28).

The data used within the report spanned 1986-2004 and thus does not serve to reflect pricing today. That said, the principle reason cited for the heightened expense of books is the need to provide more than just a textbook (this might still play a part in pricing today and invites further study):

While many factors affect textbook pricing, the increasing costs associated with developing products designed to accompany textbooks, such as CDROMs and other instructional supplements, best explain price increases in recent years. Publishers say they have increased investments in developing supplements in response to demand from instructors (GAO 2005, p.i).

Returning to the Kirtsaeng dilemma, the challenges for the publishers to produce quality textbooks at home and abroad, while acknowledged by Justice Breyer, did not shift the focus of the case. He writes:

Wiley and the dissent claim that a nongeographical interpretation will make it difficult, perhaps impossible, for publishers (and other copyright holders) to divide foreign and domestic markets. We concede that is so. A publisher may find it more difficult to charge different prices for the same book in different geographic markets. But we do not see how these facts help Wiley, for we can find no basic principle of copyright law that suggests that publishers are especially entitled to such rights (p.31).

Breyer even goes so far as to indicate that giving the publishing sector the legislative power to divide markets would bring in an undercurrent of antitrust behavior:

We have found no precedent suggesting a legal preference for interpretations of copyright statutes that would provide for market divisions. … To the contrary, Congress enacted a copyright law that (through the “first sale” doctrine) limits copyright holders’ability to divide domestic markets. And that limitation is consistent with antitrust laws that ordinarily forbid market divisions…. Whether copyright owners should, or should not, have more than ordinary commercial power to divide international markets is a matter for Congress to decide (p.32)

And that is where American copyright debate is heading. The last significant changes to the American regime of copyright took place in 1998; with the Digital Millennium Copyright Act and the Copyright Term Extension Act. The last revision of the entire Act was in 1976. Maria Pallante (U.S. Registrar of Copyright) is calling for a complete overhaul of the law; Mike Masnick, writing for TechDirt on 18 March 2013, gave a comprehensive review and analysis of her early proposals. No doubt lobbyists of all stripes are gearing up for debate; the publishing community is sure to seek modification of first sale.

In the meantime, questions of importation are part and parcel of looming international trade agreements. Canada is eager to join the TransPacific Partnership Agreement (TPP), despite having no recourse to negotiating any of its terms. In November 2011, members of the Program on Information Justice and Intellectual Property provided a sobering analysis of the agreement from the perspective of the public interest. On the matter of market segmentation, the TPP would remove the flexibility of nations to import copyrighted works from the supplier (and country) of their choice, a flexibility that benefits consumers and is consistent with existing World Trade Organization regulations.

Kirtsaeng – Part II

In Case Reviews on March 31, 2013 at 2:09 pm

The potential consequences of a geographical interpretation of first sale were what engaged me in my last post. In the Kirtsaeng decision, Justice Stephen Breyer gives due consideration to those risks and writes: “Neither Wiley nor any of its many amici deny that a geographical interpretation could bring about these ‘horribles’—at least in principle. Rather, Wiley essentially says that the list is artificially invented.”

Breyer limits his reference to that single word, but commentators (listed in the last post) all made reference to a “parade of horribles,” each being careful to make the reference in quotation marks. A casual Canadian reader, while aware that the phrase must have some distinctive meaning, is lost as to what it actually is. Indeed to anyone from Vancouver, “parade of horribles” conjures up images of the Parade of Lost Souls, of Commercial Drive fame, where Halloween revellers in ghoulish costumes happily followed the parade’s motto: “Honour the Dead and Wake the Living” (which may not be entirely inappropriate). But clearly something else was to be inferred here.

In an article dated to 1 July 2012 Ben Zimmer, writing for the Boston Globe, explains that the expression is rooted in nineteenth century satires of seventeenth century military parades in New England. Later adopted as a “legal-world insult,” the expression is used to “dismiss opponents’ concerns about a ruling’s negative effects.” Zimmer identifies an early proponent of the phrase as Thomas Reed Powell. Born in 1880, Powell attended Harvard Law School and went on to become a prominent legal observer. “One of his favorite expressions was ‘parade of imaginary horribles,’ which appeared in his writing as early as 1921.”  Zimmer also observes:

The expression, and the scorn for the opposition that it carries, are holding strong in the legal world, much to the chagrin of Justice Antonin Scalia, the Supreme Court’s foremost language kvetcher. In a 1990 law review article, Scalia listed “the familiar parade of horribles” as one of the “canards of contemporary legal analysis.” More often than not, Scalia feels, countering the doubts of dissenters as a “parade of horribles” is lazy reasoning: It’s still up to the writer of an opinion to explain “why all of the untoward results asserted to follow from the principle the court is adopting indeed do not follow.”

Returning to the case at hand, the phrase appears in the brief representing the position of Wiley. Their last argument calling for a geographically-based reading of first sale is titled: “Kirtsaeng’s Parade of Horribles is Speculative and Unpersuasive.” According to the publisher, “Kirtsaeng’s arguments depend on his assumption that the copyright owner could impose restrictions on downstream purchasers even after having authorized the sale of a particular copy in the United States.” Kirtsaeng’s argument (the brief is here) is that a geographical reading of first sale renders copyright owners with the capability of imposing “restrictions on downstream purchasers” – that is the crux of the dispute.

In any case, parade of horribles next appears in the dissent included with the majority opinion. Penned* by Justice Ruth Ginsburg, she writes: “The Court’s parade of horribles, however, is largely imaginary. Congress’ objective in enacting [the] importation prohibition can be honored without generating the absurd consequences hypothesized in the Court’s opinion.” In Part V-B-1 of the dissent, Ginsburg argues that “Copyright law and precedent … erect barriers to the anticipated horribles.” As illustration of how the horribles will not come to pass, seeking permission, implied license and fair use are all offered. But the principle argument by the publisher and echoed by Ginsberg, was that no such suits were likely to happen. From the dissent:

Most telling in this regard, no court, it appears, has been called upon to answer any of the Court’s “horribles” in an actual case. Three decades have passed since a federal court first published an opinion reading [first sale] as applicable exclusively to copies made in the United States. … Yet Kirtsaeng and his supporting amici cite not a single case in which the owner of a consumer good authorized for sale in the United States has been sued for copyright infringement after reselling the item or giving it away as a gift or to charity. The absence of such lawsuits is unsurprising. Routinely suing one’s customers is hardly a best business practice.

However, Breyer reminds all that “the law has not been long settled on this matter.” A geographical interpretation of first sale achieved favour at a Court of Appeal only through the Kirtsaeng/Wiley dispute. Meaning support from a higher court is less than two years old. Breyer writes:

The fact that harm has proved limited so far may simply reflect the reluctance of copyright holders so far to assert geographically based resale rights. They may decide differently if the law is clarified in their favor. … Thus, we believe that the practical problems that petitioner and his amici have described are too serious, too extensive, and too likely to come about for us to dismiss them as insignificant.

Between Wiley and Kirtsaeng, this case was fought on two fronts. For Kirtsaeng and its amici (friends of the court), the issue was the dilution of the limit of first sale. In response to that risk, libraries, museums, advocacy groups and many more parties offered articulate and well-reasoned arguments. Arguments not easily rejected by a “canard of legal analysis.” But from the perspective of Wiley and its supporters, the issue was not the role of first sale, but another section of Title 17, one which prohibits unauthorized imports. §106(a)(1) states “Importation into the United States, without the authority of the owner of copyright under this title, of copies or phonorecords of a work that have been acquired outside the United States is an infringement of the exclusive right to distribute copies or phonorecords … .”

For copyright owners, such a prohibition provides a mechanism by which markets can be divided into domestic and international segments, with varying products and pricing as desired by the copyright holder. Wiley argued that allowing first sale to apply to copies made outside the United States deprives the prohibition of meaningful effect. And that this will have negative consequences for publishers:

… there is a reason why Congress chose in 1976 to permit segmentation of international markets: It is both common practice and economically efficient for companies to sell their products in different countries at different prices, and in different forms, based on differing conditions in the relevant marketplaces. The market for college textbooks provides an excellent example.

With the disparity of income levels between the United States and developing nations, Wiley states:

If publishers were to price these textbooks at the same level as the U.S. editions, then the result would either be less widespread access to quality educational materials, or at least fewer legitimate copies of the textbooks as consumers unable to afford them turn instead to piracy.

To address market segmentation, my Kirtsaeng saga must run to a third post.

* For those curious as to how the Justices aligned on this case, the syllabus (headnote) gives the answer: “Breyer,  J., delivered the opinion of the Court, in which Roberts, C. J., and Thomas, Alito, Sotomayor, and Kagan, JJ., joined. Kagan, J., filed a concurring opinion, in which Alito, J., joined. Ginsburg, J., filed a dissenting opinion, in which Kennedy, J., joined, and in which Scalia, J., joined except as to Parts III and V–B–1.”

Update – April 2, 2013:  CBC describes the defeat of first sale in a New York District Court. ReDigi, an online market place for used iTunes songs, was deemed in violation of copyright. The court denied ReDigi’s reliance on first sale in part because of first sale’s seeming ineligibility in the digital sphere. (Fortunately, the Canadian Supreme Court insists that copyright be read in a technologically neutral fashion.) While the circumstances of this case differ from Kirtsaeng, a common theme is: should copyright owners have the means to control downstream uses of their works after receiving compensation for a sale conducted in accordance with copyright law?

Kirtsaeng – Part I

In Case Reviews on March 27, 2013 at 8:25 pm

Last week the United States Supreme Court handed down its decision on Kirtsaeng v. Wiley, a decision favourable to libraries, consumers, and, notably, capitalists. At issue was a foundational element of market operations: the right to resell property free of constraint by the original owner of the property. In this case, a foreign graduate student attending an American university arranged for the lawful purchase of textbooks in his home country, which he then resold in the United States. The publisher claimed infringement.

The case makes for good reading, not only as it illustrates (and rebuts) a disturbing effort on the part of an academic press to claim larger rights than copyright actually affords, but also because of the elegance of the language of rebuttal. The majority opinion, written by Justice Stephen Breyer, leaves no doubt that the argument of the publisher is ill-conceived. Breyer’s erudite prose also raises the story to something far more enjoyable than merely bewildering references to sections and subsections.

The grant of copyright under Title 17 (the United States’ Copyright Act) includes an extensive list of exclusive rights reserved for copyright owners, rights that allow for significant control of copyrighted work and subsequent copies. However, those rights are subject to a few limitations; one such limitation being that of First Sale: “the owner of a particular copy or phonorecord lawfully made under this title … is entitled, without the authority of the copyright owner, to sell or oth­erwise dispose of the possession of that copy or phonorecord.”

For a body of law that involves much arcane language, “first sale” is refreshingly transparent. With the proviso that the property transferred was lawfully made, “first sale” literally indicates where a copyright owner’s control stops: at the conclusion of the first transfer of the property. Clearly, pirated copies do not enjoy the shelter of first sale. But the property under question was not an outcome of piracy; these books were produced in accordance with the publisher’s wishes, by the publisher’s subsidiary organization for the Asian market.

The case hinged upon the meaning of five words: “lawfully made under this title”. The publisher asserted that the limitation of first sale did not apply to copies manufactured outside the United States. But as a significant amount of book printing is carried out overseas, such an interpretation has ramifications far beyond this case.

Imagine a not improbable scenario: a consumer purchases a new book in the United States (unaware that it was manufactured on foreign soil) and later gives away some books, including the foreign production, to a charitable organization collecting books, toys and other household items. A used bookstore then acquires the book from the charity and sells it to another consumer who eventually donates the book to a library. Not surprisingly, the library loans the book to its patrons. If the location of the book’s manufacture becomes the determinant of first sale, all actions after the first purchase become suspect.

To any ordinary individual, it is beyond belief that the United States Congress intended this outcome. Yet, the publisher’s interpretation was shared by lower Courts and the United States Solicitor General. Breyer acknowledges those views and then writes:

The geographical interpretation, however, bristles with linguistic difficulties. It gives the word “lawfully” little, if any, linguistic work to do. (How could a book be unlawfully “made under this title”?) It imports geography into a statutory provision that says nothing explicitly about it.

Breyer spends considerable time exploring the meaning of those five words, dryly observing: “…  neither ‘under’ nor any other word in the phrase means ‘where’”. He determines that “lawfully made under this title” means that to enjoy the limit of first sale, the manufacture must have met the requirements of American law. In other words, when a copyright holder authorizes the foreign production, location does not render first sale inapplicable. Alerting readers to the entirety of his analysis, Breyer writes: “We believe that geographical interpretations create more linguistic problems than they resolve. And considerations of simplicity and coherence tip the purely linguistic balance in Kirtsaeng’s, nongeographical, favor.”

Breyer then examines the past and present language of the exception of first sale, the common law history of first sale, and, the challenge a geographic reading of first sale would pose to other conditions within Title 17 that specifically reject geography (i.e.,“§104 of the Act itself says that works ‘subject to protection under this title’ include unpublished works ‘without regard to the nationality or domicile of the author,’…”). Following the linguistic and legal analyses, Breyer considers the social practices that have been built upon the exception of first sale. With reference to a myriad of briefs submitted to the Court, Breyer uncovers a range of activities taken for granted today that would have been cloaked in fear and uncertainty if the publisher’s arguments had prevailed.

Briefly, library collections in the United States contain some 200 million foreign produced works; “How are the libraries to obtain permission to distribute these millions of books? How can they find, say, the copyright owner of a foreign book, perhaps written decades ago?” Art museums would be at risk if they choose to display foreign-made art, i.e. the 20th century works of René Magritte, Henry Matisse and Pablo Picasso. Even the works of American Cy Twombly would be affected, given that Twombly took up residence in Italy in 1957. And used-book dealers have  “operated … for centuries under the assumption that the ‘first sale’ doctrine applies.”

Libraries, museums and used-bookstores are at the forefront of the dissemination necessary for copyright to live up to its American constitutional mandate of furthering the progress of the arts and sciences. To impede such accepted practices of operation is troubling, to say the least. And yet, that is only one aspect of the problems created by a geographical reading of first sale. The very functioning of a consumer culture is at risk. A truly fearsome prospect was raised by technology companies and retailers; a loss of first sale means potential disruption to the resale of any consumer item that has copyrighted material within it and is manufactured abroad. At the top of the list were items which rely on software, including automobiles, mobile phones, tablets and computers. Yet, even this list is modest – the reality is that “over $2.3 trillion worth of foreign goods were imported in 2011.” Given that packaging materials contain copyrighted work, the potential reach of copyright holders into legitimate market operations is almost beyond comprehension.

My next post will continue this story. Included are the publisher’s efforts to paint these potential consequences as merely a “parade of horribles”, market segmentation, and how Canada might be affected should the site of production become a consideration in the handling of lawfully made products. In the meantime, the 6-3 opinion, delivered by Justice Stephen Breyer is here; Jennifer Howard covered the story for The Chronicle of Higher Education, and detailed analyses are available from Kenneth Crewes, Director of the Copyright Advisory Office for Columbia Law School, Howard Knopf of Excess Copyright, and Kevin Smith, Scholarly Communications Officer for Duke University.