Copyright Law/Fair Use and Other Exemptions from the Exclusive Rights of the Copyright Owner
All of the rights set forth in section 106 of the Copyright Act are expressly granted “subject to sections 107 through 122.” The latter sections impose a variety of limits on the rights of the copyright owner, in the form of compulsory licenses, complete exemptions from liability, and other privileges such as fair use. A discussion of the jurisprudence that has developed under section 107 dealing with fair use is followed by an overview of sections 108 through 122.
- 1 Fair Use
- 2 Exemptions and Compulsory Licenses
- 2.1 Library copying
- 2.2 First-sale doctrine and direct displays
- 2.3 Educational, nonprofit and other performances and displays
- 2.4 Cable television and other retransmissions
- 2.5 Musical compulsory licenses: recordings and jukeboxes
- 2.6 Sound-recording performance and digital-transmission rights
- 2.7 Other exempted uses
- 3 References
Fair Use[edit | edit source]
The fair use doctrine constitutes perhaps the most significant limitation on the exclusive rights held by a copyright owner. The doctrine was developed by courts in the mid-nineteenth century to privilege what would otherwise have been a copyright infringement. Justice Story’s decision in Folsom v. Marsh, rendered in the Massachusetts federal circuit court in 1841, appears to be the first articulation of the policies underlying fair use. Justice Story opined that quoting copyrighted material in the course of preparing a biography or a critical commentary might be excusable, but not “if so much is taken, that the value of the original is sensibly diminished, or the labors of the original author are substantially to an injurious extent appropriated by another.” He thought it proper to consider “the nature and objects of the selections made” and “the quantity and value of the materials used.” Later courts also placed weight on whether unauthorized quotation of copyrighted material “would serve the public interest in the free dissemination of information” and whether the preparation of the defendant’s work “requires some use of prior materials dealing with the same subject matter.” Although some courts and scholars anchored “fair use” in the plaintiff’s implied consent to quotation, as when excerpts are used in literary criticism or comment, this consent proved to be fictive more often than not.
The more soundly based rationale for the fair use doctrine is the very purpose articulated in the constitutional copyright clause: “to promote the progress of science.” The fair use doctrine comes into play when a too literal enforcement of the copyright owner’s rights would operate to the detriment of the public interest in access to and dissemination of knowledge and culture, and unauthorized copying can be tolerated without significant economic injury to the copyright owner.
The 1976 House Report set forth a number of examples of possible fair uses, as generally understood under the 1909 Act:
quotation of excerpts in a review or criticism for purposes of illustration or comment; quotation of short passages in a scholarly or technical work, for illustration or clarification of the author’s observations; use in a parody of some of the content of the work parodied; summary of an address or article, with brief quotations, in a news report; reproduction by a library of a portion of a work to replace part of a damaged copy; reproduction by a teacher or student of a small part of a work to illustrate a lesson; reproduction of a work in legislative or judicial proceedings or reports; incidental and fortuitous reproduction, in a newsreel or broadcast, of a work located in the scene of an event being reported.
Although it was easy enough to give a variety of readily accepted examples of fair use, it was not so easy to articulate any clear standards or a “litmus test.” “Indeed, since the doctrine is an equitable rule of reason, no generally applicable definition is possible, and each case raising the question must be decided on its own facts.”
Statutory uses and factors[edit | edit source]
In the 1976 Copyright Act, Congress took the bold step of incorporating the fair use doctrine into the statute, of setting forth a number of illustrative fair uses and, most important, of delineating four factors that courts are to consider (possibly along with other factors) when passing upon a fair use defense. Section 107 provides:
Notwithstanding the provisions of section 106, the fair use of a copyrighted work, including such use by reproduction in copies or phonorecords or by any other means specified by that section, for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include—
- the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
- the nature of the copyrighted work;
- the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
- the effect of the use upon the potential market for or value of the copyrighted work.
The fact that a work is unpublished shall not of itself bar a finding of fair use if such finding is made upon consideration of all the above factors.
The drafters of section 107 regarded it as endorsing
the purpose and general scope of the judicial doctrine of fair use, but there is no disposition to freeze the doctrine in the statute, especially during a period of rapid technological change. . . . [T]he courts must be free to adapt the doctrine to particular situations on a case-by-case basis. Section 107 is intended to restate the present judicial doctrine of fair use, not to change, narrow, or enlarge it in any way.
The Supreme Court has held that “fair use is a mixed question of law and fact.” If a district court has found facts sufficient to evaluate each of the statutory factors, the court of appeals may determine, without remand, whether the defendant has made a fair use of copyrighted material as a matter of law.
The opening paragraph of section 107 sets forth a number of illustrative uses that may fall within the fair use privilege. Curiously, the first two Supreme Court decisions that construed section 107 do not appear to comport with the statutory illustrations. In Sony Corp. of America v. Universal City Studios, Inc., the Court sustained a claim of fair use for home videotaping of copyrighted television programs (for more convenient viewing)—a use rather clearly falling outside the enumerated categories. In Harper & Row Publishers, Inc. v. Nation Enterprises, involving a news magazine’s quotations from the soon-tobe-published memoirs of President Ford relating to his pardon of President Nixon—a use falling rather clearly within the enumerated category of news reporting—the Court rejected the defendant’s claim of fair use. In explaining the weight to be given to the listing of uses in the first sentence of section 107, the Court in Harper & Row stated that the enumeration “give[s] some idea of the sort of activities the courts might regard as fair use under the circumstances. . . . This listing was not intended to be exhaustive, . . . or to single out any particular use as presumptively a ‘fair’ use.” The Court made clear that whether a use is fair in particular circumstances “will depend upon the application of the determinative factors, including those mentioned in the second sentence.” Even though the enumerated uses in the first sentence are not dispositive and not even presumptive, they have nonetheless come to play an important role in application of the first of the four factors in the second sentence (“purpose and character of the use”), as later elaborated by the Supreme Court in Campbell v. Acuff-Rose Music, Inc., discussed below.
Supreme Court fair use jurisprudence[edit | edit source]
The Supreme Court has decided several cases involving the application of the fair use doctrine and section 107 of the Copyright Act. Despite some initial inconsistencies, the Court’s jurisprudence has crystallized and come to provide intelligible and useful guidelines for analysis. In Sony Corp. of America v. Universal City Studios, Inc., decided in 1984, the Court, dividing 5 to 4, reviewed the statutory factors somewhat hurriedly and found that home videotaping of copyrighted television programs, for more convenient time-shifting purposes, constituted a fair use. The Court held that the first factor supported fair use because the home viewer taped the program for personal and noncommercial use. The Court majority in fact announced that “every commercial use of copyrighted material is presumptively an unfair [use]” and also presumptively demonstrates a likelihood of economic harm to the copyright owner (the fourth statutory factor); “but if [the copying] is for a noncommercial purpose, the likelihood must be demonstrated.” The Court acknowledged that, even though typically the entire program was taped (the third factor), this was not particularly damaging to the fair use contention because the program had in any event been broadcast free to the public. Finally, upon examination of the factual record, the Court concluded that there was inadequate evidence that home taping for time-shifting purposes would have any material adverse impact upon the market for the plaintiffs’ programming, either in its initial exhibition or in later exhibition on television (reruns) or even potentially in motion picture theaters. The four dissenters strongly disagreed with respect to the application and conclusion of the four-factor analysis.
The Court divided again (6 to 3) the following year in Harper & Row Publishers, Inc. v. Nation Enterprises. There, the defendant publisher of The Nation magazine secured a purloined copy of the manuscript of President Ford’s memoirs, about to be published by Harper & Row and excerpted in Time magazine; the defendant broke its story about the Ford pardon of Richard Nixon and quoted verbatim some 300 words from the unpublished manuscript. The Court traced the development of the fair use doctrine and noted its nearly nonexistent application to unpublished works under prior copyright law. It rejected the defendant’s claim that First Amendment concerns warranted contracting the scope of copyright and concluded, instead, that First Amendment interests are already protected under copyright doctrines such as fair use and the idea–expression dichotomy. The Court also rejected the contention that works of public figures are entitled to lesser copyright protection, and ruled against fair use.
The Court acknowledged that news reporting was one of the stipulated uses in section 107, but invoked the presumption from the Sony case against commercial uses such as The Nation’s so that the defendant bore the burden of proving its use to be fair (typically by showing no adverse market impact upon the plaintiff’s work). As to the second statutory factor, the Court conceded that “the law generally recognizes a greater need to disseminate factual works than works of fiction or fantasy,” but it concluded that The Nation had copied more than merely objective facts. Moreover, “the fact that a work is unpublished is a critical element of its ‘nature’,” a “key, though not necessarily determinative factor” against fair use. Although a relatively small part of the Ford manuscript was copied, it comprised a large part of the article in The Nation and, most significantly, was qualitatively among the most important parts of the manuscript, containing the “most powerful passages,” the “dramatic focal points” of great “expressive value.” The Court characterized the fourth statutory factor—effect upon the potential market for the copyrighted work—as “undoubtedly the single most important element of fair use.” It pointed out that the “scooping” by The Nation caused Time to cancel its contract with Harper & Row to publish excerpts. Moreover, “[t]his inquiry must take account not only of harm to the original but also of harm to the market for derivative works,” for the statute refers to adverse effect upon the “potential market” for the work.
Thus, after Sony and Nation, it appeared that there would be a compelling case against fair use should the record show a commercial use by the defendant, or a potentially significant adverse economic impact on the copyrighted work, or an unpublished copyrighted work. Indeed, as to the latter element, a number of court of appeals decisions gave such great weight, in cases involving biographies, to the unpublished nature of letters, diaries and the like—the core source materials of historical and biographical writings—that Congress stepped in in 1992 to add a new closing sentence to section 107: “The fact that a work is unpublished shall not itself bar a finding of fair use if such finding is made upon consideration of all the above factors.” In its most recent foray into the waters of fair use, the Supreme Court used an arguably unappealing set of facts to dispel some misconceptions from the earlier cases and to establish important guidelines that have since informed the analysis of the lower courts. In Campbell v. Acuff-Rose Music, Inc., a rap group named 2 Live Crew—after requesting and being denied permission to record a rap parody of the well-known rock song by Roy Orbison, “Oh, Pretty Woman”—recorded it anyway, borrowing the distinctive opening guitar pattern, mimicking the opening “Pretty Woman” phrase in each verse, and adding, to the rhythm of the original, somewhat salacious lyrics. The court of appeals ruled against fair use, relying heavily upon what clearly appeared to be the Supreme Court cases strongly disfavoring commercial uses and the copying of the “heart” of a copyrighted work.
The Supreme Court unanimously reversed. It held that parody— poking fun at an earlier copyright-protected work, as distinguished from poking fun at some extrinsic happening or individual (satire)—is a form of “criticism or comment” listed in the first sentence of section 107; but that sentence is meant to give only “general guidance” about uses commonly found to be fair. As to the four statutory factors, they must not “be treated in isolation, one from another. All are to be explored, and the results weighed together, in light of the purposes of copyright.”
In examining the first factor, the Court downgraded the importance of the defendants’ “commercial use,” noting that essentially all fair use claims (and the uses enumerated in the first sentence) are made in the for-profit context of publishing and broadcasting. The key issue is whether the defendant has made a “transformative” use: not one that merely supersedes the objects of the earlier work by copying it, but that “adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message.” A court must inquire “whether a parodic character may reasonably be perceived,” and no attention should be given to whether it is in good or bad taste (an issue that had been mooted in earlier decisions in the lower courts). As to the second factor, a court must determine whether the copyrighted work falls close “to the core of intended copyright protection” because it is creative (rather than essentially factual): the exemplar “Oh, Pretty Woman” was said to do so. The court of appeals had emphasized the third factor, and the taking of the qualitative “heart” of that song, but the Supreme Court—although it acknowledged that “quality and importance” of the copied material should count as well as quantity—observed that the lower court had failed to take account of the special nature of parody. “When parody takes aim at a particular original work, the parody must be able to ‘conjure up’ at least enough of that original to make the object of its critical wit recognizable. . . . [T]he heart is . . . what most readily conjures up the song for parody, and it is the heart at which parody takes aim. Copying does not become excessive in relation to parodic purpose merely because the portion taken was the original’s heart.”
As for the fourth factor, and any adverse market impact that was to be “presumed” under Sony by virtue of the defendants’ commercial use, the Campbell decision significantly altered the standard: A presumption of market harm is not applicable to a case involving something beyond “verbatim copying of the original in its entirety,” and thus not to a “transformative” work, particularly for a parody which serves a “different market function.” The Court remanded to allow the lower court to consider further evidence of market harm (flowing from rap-music substitution and not from parodic criticism), the amount of copyrighted material taken and what the defendants added to it, and other elements noted by the Court in its opinion.
With its decision in Campbell, the Supreme Court on the one hand diluted the helpful litigative presumptions of the earlier cases and emphasized the complementary and interactive nature of the four statutory factors, but pointed toward the “transformative” standard and potential adverse market harm as of central importance to fair use analysis. The Court also noted that in cases of parody and other critical works, in which there is infringement, and a fair use defense is found unpersuasive, an injunction need not automatically issue; the public’s interest in the publication of the later work and the interest of the copyright owner may both be protected by an award of damages.
Fair use and the creation of new works[edit | edit source]
With the Supreme Court jurisprudence in mind, it is useful to divide the lower court decisions dealing with fair use into two categories: those in which the defendant has borrowed for the purpose of creating a new work, and those in which the defendant has made and disseminated what are substantially copies of an earlier work with the aid of new technologies. In the former situation, the more permissive attitude toward “transformative” works would be expected to result in more frequent findings of fair use. This has in fact been the case, although the Supreme Court’s emphasis in Campbell v. Acuff-Rose Music, Inc. upon the case-by-case determination of fair use claims, and the interwoven nature of the four statutory factors, makes confident predictions of case outcomes all but impossible.
The courts have indeed given great weight to the transformative aspects of an otherwise infringing work, under the first fair use factor, although the decisions do not form an altogether coherent pattern and there are often inconsistencies in assessing whether a work is indeed transformative (which is essentially another name for a derivative work based on the copyrighted work).
Examples are several courts of appeals cases involving alleged transformative works in the nature of parodies. The Ninth Circuit, rejecting a fair use defense, held that it was not transformative to use the well-known “Cat in the Hat” poem of Dr. Seuss as the basis for a fully rewritten poem telling the story of the O.J. Simpson criminal trial. The Second Circuit also held against a fair use defense on the part of the publisher of a 132-page book containing some 643 newly written trivia questions designed to test its readers’ recollection of scenes and events from the Seinfeld television series; among other things, the court noted that the trivia game “is not critical of the program, nor does it parody the program; if anything, [it] pays homage to Seinfeld.” The court also found that the “trivia” market niche is one that the producers of Seinfeld might well wish to develop for themselves in the future. On the other hand, that same court held transformative and a fair use a photograph combining the head of a middle-aged male comic actor with a nude pregnant female body meant to duplicate the Annie Leibovitz cover for Vanity Fair magazine showing the actress Demi Moore—even though the doctored photograph was used in an advertisement and only marginally “commented” upon the Leibovitz original. And in Suntrust Bank v. Houghton Mifflin Co., decided in 2001, the Eleventh Circuit upheld the fair use defense of The Wind Done Gone (TWDG) against an infringement claim by the owners of copyright in the classic novel Gone With the Wind (GWTW). The former novel borrowed 18 characters from GWTW, made only transparent changes in the character names, and for much of the book recounted many of the same incidents—but altogether altered the virtues and vices of the white and the black characters, and made concomitant alterations in the story line, so that “the institutions and values romanticized in GWTW are exposed as corrupt in TWDG.” The court characterized TWDG as a parody in the sense of critical commentary, despite the fact that it lacked a comedic tone and did not take the form of scholarly or journalistic commentary.
In an influential decision arising in a quite different context— reverse engineering (and thus copying) a computer program embodied in a game console—the Ninth Circuit in Sega Enterprises, Ltd. v. Accolade, Inc. upheld the defense of fair use. The defendant’s purpose was to create an “intermediate copy” which served as the basis for analysis of the program and ultimately for the design of compatible video games. Reverse engineering was the only practicable way for the defendant to discover unprotectible elements (e.g., ideas and methods of operation) that were embedded in the copyrightable “object code” that operated the game console; to rule otherwise would have allowed the plaintiff to preclude public access to its ideas and functional concepts, in violation of the core policies of copyright law.
Because section 107 states that in ruling upon a defense of fair use, the factors considered by the court “shall include” the four already fully discussed here, courts have regularly introduced additional considerations into their analysis. For example, courts have inquired into the “amount and substantiality of the portion used” not only “in relation to the copyrighted work as a whole,” but in relation to the defendant’s work as well. The Supreme Court, in Harper & Row Publishers, Inc. v. Nation Enterprises, pointed out that the 300 words copied from President Ford’s 450-page book constituted 13% of the infringing article. Courts have tended to be more lenient when the unauthorized use was “incidental,” that is, when the copyright-protected work was captured as part of a larger permissible reproduction or performance, such as a song partially heard in television news footage of a festival event. The Second Circuit Court of Appeals gave thorough consideration to the doctrine of “incidental use”—and the de minimis doctrine more generally in copyright—in a case in which a poster of a copyrighted artwork was incorporated in the set of a television program and fleetingly shown. The court nonetheless ruled against fair use. Some courts have counted it against a defendant invoking fair use that he or she behaved in an ethically objectionable fashion—as exemplified by the Supreme Court’s reference to the “purloined manuscript” in Nation—although the Court just as readily held in Campbell that the defendants’ having ignored the copyright owner’s denial of a license to record was immaterial, and that whether “parody is in good taste or bad does not and should not matter to fair use.”
Fair use and new technologies of copying and dissemination[edit | edit source]
The four factors set forth in section 107 have been applied not only in cases in which the defendant creates a new derivative work but also when it seeks to employ new technologies that permit the efficient duplication and dissemination of the copyrighted work. The fair use defense is then embedded within an assertion that the rights of the copyright owner should be counterbalanced by the public interest in increasingly inexpensive access and resulting intellectual enrichment that the new technologies can afford. Key cases have involved videotaping of copyrighted television programs, photocopying of literary materials useful in education, and Internet reproduction and transmission of all manner of copyrightable works (particularly musical sound recordings).
In Sony Corp. of America v. Universal City Studios, Inc., decided by the Supreme Court in 1984, the central issue was whether Sony, the manufacturer of the first commercially successful videotape recorder (VTR), was secondarily liable for alleged infringements on the part of home viewers who taped copyrighted programs and films shown on television for later viewing at more convenient times (“time-shifting”). The Court held—over a forceful dissenting opinion for four Justices— that such home videotaping for private and noncommercial use was a fair use, and that Sony could not be held liable; Sony’s VTRs were capable of being put to “substantial noninfringing uses.” The Court held that noncommercial uses are presumptively fair and presumptively do not adversely affect the market of the copyright owner; and the record showed in any event that there was no such market impact of taping for the purpose of time-shifting. That entire copyrighted programs and films were copied, with no “productive” use (or in today’s terminology, “transformative” use) made by the home viewer, “may be helpful in calibrating the balance, but it cannot be wholly determinative.”
Several influential decisions of lower courts explored the application of the fair use doctrine to photocopying technologies. Two prototype situations were the making and sale by commercial copy-shops of multiple copies of so-called coursepacks compiled by college professors (using copyright-protected material without consent); and the making of single copies of journal articles for individuals employed to do research for commercial entities. Although these activities would appear commonly to advance the public interest, and are mentioned in the first sentence of section 107, indeed quite explicitly (i.e., “teaching (including multiple copies for classroom use), scholarship, or research”), the trend of the few cases is to find these activities not to fall within the fair use privilege. Not surprisingly, there are concurring and dissenting opinions to be reckoned with.
In Basic Books, Inc. v. Kinko’s Graphics Corp., the photoreproduction by the Kinko’s company of teaching materials, using substantial portions of copyrighted books—without securing permission from or paying license fees to the copyright owners—was held by the district court in the Southern District of New York not to be a fair use. The court placed particular weight on the profit-making motive of the defendant. Several years later, in Princeton University Press v. Michigan Document Services, Inc., a sharply divided Sixth Circuit sitting en banc reached the same outcome as the Kinko’s court on similar facts. The majority held, among other things, that the reference in section 107 to “multiple copies for classroom use” was not meant to provide a blanket exemption for such activity (any more than for any of the other activities mentioned there, such as criticism and news reporting); that the for-profit status of the defendant (a negative under the first fair use factor) is not altered by the nonprofit status of the ultimate academic users (teachers and students); that the un“transformed” verbatim duplication of whole chapters and other large portions of the plaintiff–publishers’ books weighed heavily against fair use; and that the photocopying adversely affected not only the publishers’ book sales but also the photocopying royalties that they would otherwise be paid by a by-then thriving licensing and collecting agency (the Copyright Clearance Center). (Three separate dissenting opinions emphasized the weight properly to be accorded to educational uses in the fair use framework in particular and, more generally, in promoting the objectives of copyright.)
The principal decision considering, and rejecting, the fair use defense in connection with single photocopies of short journal articles made to assist researchers is that of the Court of Appeals for the Second Circuit in American Geophysical Union v. Texaco, Inc. Researchers engaged in developing new chemical products for the Texaco company received copies of scientific-journal tables of contents and indicated which articles they wished to read or to retain in their files for future use, so that the articles could be photocopied for them; in most cases, Texaco paid for two or three subscriptions to each journal in order to make the articles more accessible to its research staff. The court (2 to 1) concluded, inter alia, that the use of the photocopies was “archival” and a substitute for purchasing additional subscriptions (or paying photocopying license fees); that it was hardly “transformative”; that the measure for applying the “amount and substantiality” factor in section 107 was the individual journal article and not the entire journal issue (or volume); and that potential lost license fees were to be taken into account because courts should consider “traditional, reasonable, or likely to be developed markets when examining and assessing a secondary use’s ‘effect upon the potential market for or value of the copyrighted work.’”
Of course, perhaps the most powerful new technology of reproduction of copyrighted works is the computer and in particular the Internet. Not surprisingly, fair use defenses have been asserted in this setting. As already noted, the Court of Appeals for the Ninth Circuit held it to be a fair use to “decompile” a computer program in a video game console—thus converting an object-code version into a humanreadable source-code version—in order to unearth unprotectible ideas and methods of operation. The defendant’s purpose was to author video games that would be compatible with, and playable on, the plaintiff’s game console. The same court of appeals also ruled upon the fair use defense asserted by the compiler of a pictorial (as distinguished from textual) database, who included without consent the copyright-protected photographs displayed on a photographer’s website. The court held that small “thumbnail” versions of the photographs could not be enlarged by a computer user with sufficient clarity to result in competitive injury to the photographer; moreover (although the analysis is debatable), the court held the thumbnail versions to be “transformative” because they were meant to be used not for aesthetic purposes but rather to be a part of an exhaustive pictorial database. The database-compiler’s display on its website of full-size photographic images, however, was determined not to be transformative and to threaten economic injury to the plaintiff photographer. Confronted with the question whether so-called peer-to-peer filesharing of copyrighted music recordings is a fair use, however, the Ninth Circuit held that it is not. In A & M Records, Inc. v. Napster, Inc., the Napster website made available free software that could be utilized for the purpose of searching for and copying recordings located on other computer hard-drives, and for the purpose of making accessible to others recordings stored on one’s own computer. The contributory liability of Napster depended upon whether the filesharing computer users were infringing or were engaged in fair uses. Unlike the videotaping of copyrighted television programs for temporary “time-shifting” purposes, found by the Supreme Court to be a fair use, the Ninth Circuit held the Internet-facilitated sharing of music files not to be thus privileged. As for the first factor in section 107, the court found the reproduction and distribution of copyrighted music recordings not to be in any way “transformative”; moreover, the computer user was engaged in a “commercial” use (“[C]ommercial use is demonstrated by a showing that repeated and exploitative unauthorized copies of copyrighted works were made to save the expense of purchasing authorized copies.”). The musical compositions and sound recordings were “creative,” and file transfer “necessarily ‘involves copying the entirety of the copyrighted work.’” Under the fourth factor, the court concluded that Napster causes economic harm to the copyright owners by reducing the sale of music compact disks and by creating obstacles to their attempts to enter the market for the legal digital downloading of music for a fee.
This conclusion was confirmed in a lawsuit directly against a home-computer user who downloaded more than 1,300 recorded songs, claiming that this was a fair use because it merely allowed her to “sample” songs with a view toward possible purchase. The Court of Appeals for the Seventh Circuit concluded that the fourth statutory factor cut heavily against the defendant, in view of the lost revenues for the copyright owner resulting from displaced broadcasting royalties and fees for lawful Internet sampling and downloading. It has also been held not to be a fair use for a website operator (“My MP3.com”) to reproduce on its computer servers tens of thousands of compact disks of popular music. These disks could be played over the computer, at or away from home, by subscribers who accessed the website and “proved” there that he or she already owned the CD or would purchase it from a cooperating online retailer; the avowed objective was to allow “place-shifting” of one’s own recordings to a variety of locations in a convenient listening format. The court found a commercial use (through the selling of advertising for the MP3.com website), a nontransformative use, copying of creative recordings in their entirety, and injury to the market for such computerbased access to music that was “likely to be developed” by plaintiff recording companies.
The fair use defense was considered and also rejected, outside the context of music dissemination by the Internet, in a case in which the text of copyright-protected newspaper articles was duplicated in full as a springboard for public commentary on a “bulletin board” website. Despite the nonprofit and “public-benefit” nature of the copying, and the “predominantly factual” nature of the newspaper articles copied, the court found that the Internet copying was not transformative, that it was full-text, and that it diverted potentially paying users from the newspaper’s website and other licensed providers.
Exemptions and Compulsory Licenses[edit | edit source]
Library copying[edit | edit source]
Section 108 gives to certain libraries the right, despite section 106(1), to make single copies and phonorecords of copyrighted works, subject to certain conditions. Most significantly, the library must be open to the public or to specialized researchers, and the copying must not be for commercial advantage. The reproduction must serve one of these purposes: preservation and security of an unpublished work; replacement of a copy or record that is damaged, deteriorating, lost or stolen (when an unused replacement is unavailable on the market); furnishing a single periodical article or a “small part” of a larger work to a person using it for private study, scholarship or research; furnishing to a person for such private use a copy or record of an “entire work, or . . . a substantial part of it” if the work is not available at a fair price.
The library’s privileges under section 108 are lost if it “is aware or has substantial reason to believe that it is engaging in the related or concerted reproduction or distribution of multiple copies or phonorecords of the same material” or if it “engages in the systematic reproduction or distribution of single or multiple copies or phonorecords” of articles or “small parts” of works for private use. Thus, if a faculty member, instead of making 150 photocopies of a copyrighted article for her entire class, instructs the students to approach the library separately with requests for individual copies, the library will no doubt be found to have “substantial reason to believe” that it is engaging in the “related or concerted reproduction” of multiple copies of the same copyrighted material. There are other limitations on the library privilege as well, as set out in detail in section 108.
A library can insulate itself altogether against liability for copying done independently on the premises by library users. It need only provide a photocopy machine for unsupervised use by library patrons and place a notice on the machine that the making of copies is subject to the copyright law.
Section 108 has provided guidance to the library community. In effect, it provides a list of “fair uses” that libraries may make of copyrighted materials to preserve their collections and serve their patrons. Section 108 was updated in 1998 to make a number of the copying privileges set forth above available “in digital format” as well as in traditional facsimile form. There appear to be no reported decisions construing section 108.
First-sale doctrine and direct displays[edit | edit source]
Despite the exclusive right of the copyright owner to sell or otherwise dispose of copies and phonorecords, the first-sale doctrine (discussed in Exclusive Rights of the Copyright Owner § First-sale doctrine), set forth in section 109(a), gives an immunity to subsequent owners who transfer title (or lend) to others. And despite the exclusive right of public display, the owner of a copy is free by virtue of section 109(c) to display it “to viewers present at the place where the copy is located.” Section 109(b) in turn limits the first-sale doctrine by barring the commercial renting of musical recordings and computer software. Congress’s concern was with speedy, inexpensive, and fully accurate duplication by the overnight borrower.
Educational, nonprofit and other performances and displays[edit | edit source]
Section 110 exempts a variety of public performances and displays, typically in the context of educational and other nonprofit uses. Section 110(1) exempts face-to-face classroom performances of copyrighted works for teaching purposes in a nonprofit educational institution.
Section 110(2) as originally enacted in 1976 exempted performances of nondramatic musical and literary works through transmissions on what was then known as instructional television, i.e., basically a nonprofit school transmitting to classrooms or to students whose disabilities prevented them from getting to a classroom. With the advent of the Internet, however, and a fuller appreciation of its extraordinary (and interactive) capabilities for reaching students, even in their homes, with a mix of text, sound, graphics and film, the original text of section 110(2) became unduly confining. In 2002 Congress amended the Copyright Act by enacting the so-called TEACH (Technology, Education and Copyright Harmonization) Act, which enlarges the statutory exemption for uses of copyrighted works in what is now known as “digital distance education”—while attempting to protect the copyright owner against the hazards of unauthorized digital retransmissions. Section 110(2) still shelters transmissions by governmental bodies and accredited nonprofit educational institutions, but it now exempts not only the performance of a nondramatic literary or musical work but also “reasonable and limited portions of any other work” (i.e., dramatic works, motion pictures, television programs) or “display of a work in an amount comparable to that which is typically displayed in the course of a live classroom session.” Exempted transmissions by an educational institution must be at the direction of an instructor, an integral part of instructional activities and “directly related and of material assistance” thereto, and they must be limited to students officially enrolled in the pertinent course. Moreover, the transmitting institution must, inter alia, apply “technological measures” that prevent students from retaining the copyrighted works “for longer than the class session” and that also prevent “unauthorized further dissemination” by the students to others (known as downstream transmissions). Section 110(3) exempts certain uses of copyrighted works in the course of religious services.
Section 110(4), a particularly significant provision, largely continues the approach of the 1909 Act toward nonprofit performances of music, and adds other nondramatic works (speeches, lectures, poetry). The subsection is elaborate, but its basic thrust is to exempt live performances of such works when there is no commercial purpose, when the performers are not being paid, and when there is no admission charge—or when any admission proceeds “are used exclusively for educational, religious, or charitable purposes and not for private financial gain, except where the copyright owner has served notice of objection to the performance” under certain circumstances stipulated in the subsection. It is this exemption that shelters performances of music and readings of literature in school assembly programs, in amateur performances in public parks, and at school literary and athletic events. The exemption does not apply to performances on college radio stations, for these are “transmissions” that are expressly excluded from the section 110(4) exemption. Nor does this particular exemption apply to nonprofit performances of copyrighted dramatic literary or musical works (i.e., plays, operas, musicals).
Section 110(5) is designed to shelter the playing of radios and televisions in order to create a pleasant atmosphere in restaurants, retail establishments, doctors’ offices and the like. Subsection 110(5)(A) has been a part of the statute since its enactment in 1976. It was designed by Congress to endorse the Supreme Court’s decision in Twentieth Century Music Corp. v. Aiken, holding that the undefined word “performance” in the 1909 Act did not reach the use of simple loudspeakers to amplify radio sounds in a small fast-food restaurant. Subsection 110(5)(A) shelters the “communication of a transmission” from a radio or television set “of a kind commonly used in private homes.” Absent this exemption, the broad definition given in section 101 to the right of “public performance” would make it an infringement for a doctor, barber, or bartender to have copyrighted music or dramatic programming emanating from a radio or television set placed in a waiting room, shop, or tavern. With the exemption, simply turning on the set does not infringe. In a situation in which most of some 2,500 retail clothing and shoe stores (all owned by the same parent company) operated a radio receiver with two attached shelf speakers to play music broadcasts, the exemption for a “single” receiving apparatus within each store was deemed to apply. The exemption is lost, however, if sound-amplification equipment not commonly found in a home is utilized, or if a direct charge is made to see or hear the transmission, or if the transmission “is further transmitted to the public.” The exemption applies only to works already being transmitted through a broadcast; it does not embrace, for example, the doctor’s playing of music in her waiting room from a compact-disk player.
Section 110(5)(B) was added to the statute in 1998 as the Fairness in Music Licensing Act, with a stormy history before and since. As something of a quid pro quo for the 20-year extension of the copyright term, which was designed largely to assist the music industry, restaurant and retail-store owners prevailed upon Congress to enlarge the so-called “home-style equipment” exemption just described—and to exempt the “communication by an establishment of a transmission” from radio or television of nondramatic music in a larger area. The music may lawfully be played throughout an eating and drinking establishment of less than 3,750 square feet, and other retail establishments of less than 2,000 square feet—and also throughout even larger establishments based on certain limits as to the number of loudspeakers (even commercial rather than home-style equipment) and television sets. This obviously represents a significant incursion upon the exclusive publicperformance rights of music copyright owners, and was in fact challenged by foreign songwriters and music publishers as a violation of U.S. treaty obligations. A dispute resolution panel of the World Trade Organization held section 110(5)(B) to be inconsistent with the Berne Convention, but the United States has yet to make revisions needed to avoid trade sanctions.
Subsections 110(6) through 110(10) exempt certain public performances at state fairs, at stores promoting the sale of records of the copyrighted work or of the radio or television sets communicating the works, in transmissions for the blind or other handicapped persons, and at social functions organized by nonprofit veterans or fraternal organizations. Section 110(11), added to the Copyright Act in 2005, exempts the “making imperceptible,” within a private household, of “limited portions” (i.e., sex, profanity, or violence) of a motion picture being viewed there, provided no fixed copy of the altered film is made.
Cable television and other retransmissions[edit | edit source]
Section 111 creates a compulsory license for cable television retransmissions of copyrighted programs that are shown on broadcast television. (Otherwise, such retransmission would be an infringing “public performance” of the program.) The section is extremely elaborate and complex, and does not lend itself to easy summarization.
Section 111 grants a complete exemption from liability for cable systems that bring broadcast programming to subscribers who are near the broadcast source (i.e., within the “must carry” area as set out by the Federal Communications Commission) or that are at a sufficiently great distance that the broadcast programming can be received only by cable. If, however, the cable system carries broadcast signals into distant but already served television markets, the compulsory license applies. The cable operator may do so, but it must pay a royalty for the privilege of this compulsory license. The royalty is based principally on the system’s receipts and the amount of distantly-originated nonnetwork programming that the cable system retransmits to its subscribers. (The statute in effect assumes that the copyright owner has already been fully compensated by the television network for the broadcasts that are viewed wherever the network is accessible, whether through the originating broadcast or through cable retransmissions.) The statute as enacted in 1976 set forth certain royalty rates, which have since been increased by the Copyright Royalty Tribunal (CRT) and, since the CRT’s abolition, these rates are now subject to modification by the Copyright Royalty Judges. The cable system must forward regular statements of account and royalty fees to the Copyright Office, to be later distributed so as to provide fair recompense to owners of copyrighted material retransmitted over cable systems. A cable system that fails to comply with the requirements of the compulsory license provisions of section 111 will be fully liable for copyright infringement. Section 111 also exempts from liability the relaying, by a hotel or apartment house, of sounds emanating from a radio or television broadcast into the private lodgings of guests or residents, without any direct charge therefor.
Sections 119 and 122 give satellite transmitters of television broadcasts to private “dish” owners a compulsory license similar to that provided for cable systems under section 111. The compulsory-royalty payments collected from ordinary cable systems and satellite systems have generated for owners of copyrighted television programs between $180 million and $210 million for each of the years since 1988.
Musical compulsory licenses: recordings and jukeboxes[edit | edit source]
Section 115, as already discussed, sets forth the compulsory license for the manufacture and distribution of phonorecords of nondramatic musical works (as distinguished from the sound recordings, the recorded performances of those musical works). Once the music copyright owner allows the distribution in the United States of one recorded version, then any other performers and recording companies may make and distribute their own (“cover”) recordings, upon the payment of royalties and compliance with other statutory obligations. Beginning in 1978 with 2.75 cents per recording of a copyright-protected work, the compulsory royalty that must be paid by the record manufacturer gradually increased by administrative action to 8.5 cents per record (or 1.65 cents per minute of playing time, whichever was larger) during the period 2004–2005, and became 9.1 cents (or 1.75 cents per minute) on January 1, 2006. These rates pertain to each recording of each copyrighted musical composition, rather than, say, per-recording of the total 10 or 15 tracks on the typical compact disk. The compulsorylicense format and rates apply not only to disks and tapes sold to record purchasers in retail establishments but also to the so-called “digital phonorecord deliveries” that can be transmitted through the Internet. Whichever the distribution medium, the recording company invoking the compulsory license is required by the statute to make regular periodic accountings and royalty payments; in the typical situation, these licenses and payments are monitored by the Harry Fox Agency in New York City.
As originally enacted, section 116 of the Copyright Act of 1976 provided another compulsory license relating to nondramatic musical works (but not for sound recordings)—this one for public performances through jukeboxes or, in the language of the statute, “coinoperated phonorecord players.” From 1909 through 1977, jukebox operators had been the beneficiaries of what was known as the “jukebox exemption.” Jukebox performances, heard at penny arcades in 1909, had become a billion-dollar industry in the 1970s, and Congress took a much-contested step in the 1976 Act by stripping the industry of its total exemption, and affording jukebox operators a compulsory license upon payment to the Copyright Office of an annual fee of $8 per jukebox to cover all of the music recordings placed in the box during the year. The now-defunct Copyright Royalty Tribunal (CRT) gradually increased the per-box annual royalty to $63 effective in 1986. The CRT distributed the royalties to the performing rights societies— ASCAP, BMI and SESAC—which in turn redistributed them to their respective songwriter and music-publisher members.
Because of doubts that the jukebox compulsory license conformed with U.S. obligations under the Berne Convention concerning publicperformance rights of music copyright owners, section 116 was modified by Congress effective March 1, 1989. Congress now expresses a preference for freely negotiated licenses for jukebox plays; owners of nondramatic music copyrights and owners of coin-operated phonorecord players “may negotiate and agree upon the terms and rates of royalty payments for the performance of such works and the proportionate division of fees paid among copyright owners” (in effect insulating such coordinated treatment from antitrust liability). Only if such negotiations are unsuccessful is there to be resort to the compulsorylicense royalty structure, with rates and distributions determined by the Copyright Royalty Judges appointed by the Librarian of Congress. Since 1990, voluntary agreements have in fact been negotiated between ASCAP, BMI, and SESAC on one side and the Amusement and Music Operators Association on the other, so that the jukebox compulsory license has essentially been a dormant “back-up” arrangement since that time.
Sound-recording performance and digital-transmission rights[edit | edit source]
Section 114 reiterates the exclusive right of the copyright owner to reproduce (by direct dubbing) the sounds of a sound recording, but expressly provides that an independently fixed imitation of those sounds will not constitute an infringement. Nor will it infringe to give a public performance of the sound recording by playing it in a face-toface setting (such as by a DJ in a disco) or through an analog transmission (such as in a radio broadcast).
Since 1995, however, it has been an exclusive right of the soundrecording copyright owner, under section 106(6), “to perform the copyrighted work publicly by means of a digital audio transmission” such as to a subscriber to a digital-audio radio service or, most significantly, to an Internet user. (Such public performances of the musical works that are covered by separate copyrights are regulated by other statutory provisions.) Despite the broad language of this grant to the sound-recording copyright owner, elaborate provisions in subsections 114(d) through 114(j) provide for certain limitations upon this “digital audio transmission” right. For example, there is a complete exemption for nonsubscription digital transmissions (free digital radio broadcasts, not yet commonplace); and a compulsory license—with royalty rates to be set, absent successful private negotiation, by the Copyright Royalty Judges—is afforded for most subscription transmissions and for most Internet transmissions (most commonly through the “streaming” or “webcasting” of copyrighted sound recordings). In the compulsorylicense situations, the license will be lost if the transmissions are of a nature that pose a significant risk of digital copying, by the subscriber or Internet user, that would substitute for direct purchases of the recordings (such as when the transmitting entity makes available an advance listing of its record plays or when it plays within a three-hour period several selections from the same sound recording or featured artist).
Other exempted uses[edit | edit source]
Section 112 gives persons entitled to make certain public performances or displays, pursuant to contract or statutory provisions, the additional right to make an “ephemeral recording” of the copyrighted work simply for the purpose of facilitating the performance or display, provided the recordings are promptly thereafter destroyed.
Section 113, as already discussed, allows certain uses of pictorial, graphic, and sculptural works, particularly as they relate to useful articles.
Section 117(a) exempts certain reproductions of computer programs that would otherwise violate subsections 106(1) or 106(2). The “owner” of a copy of a computer program (e.g., one who purchases the program for use in one’s home or business) may make a copy or adaptation of the program for “archival purposes” (as a safeguard against damage or destruction) or when such reproduction or adaptation is “an essential step in the utilization of the computer program in conjunction with a machine.” The latter exemption—which most typically allows the program-copy owner and computer operator to load the program (e.g., as encoded on a disk) into the computer in order to use it for its intended purpose—is needed because loading from a medium of storage into computer memory is technically the making of a “copy” of the copyrighted program. For much the same reason, Congress found it to be an unobjectionable use of a computer program—and so created an express exemption in section 117(c)—“for the owner or lessee of a machine to make or authorize the making of a copy of a computer program if such copy is made solely by virtue of the activation of a machine that lawfully contains an authorized copy of the computer program, for purposes only of maintenance or repair of that machine,” subject to certain limited restrictions.
Section 118 as written in 1976 gave to public radio and television broadcasters a compulsory license to perform nondramatic music and to display works of art upon the payment of certain royalties. This format was later subordinated by section 118(b) to license agreements voluntarily negotiated between such “public broadcast entities” and such music and graphic copyright owners. These agreements— expressly sheltered by section 118 from the antitrust laws—may establish “the terms and rates of royalty payments and the proportionate division of fees paid among” those owners. Failing such voluntary agreements, the Copyright Royalty Judges, appointed by the Librarian of Congress, are to set terms and rates.
Finally, section 120 provides for certain exemptions to the exclusive rights of copyright owners of “architectural works,” including the right to photograph such works from public places, and the right of the owner of a copyright-protected building to make alterations to it, and even to destroy it.
References[edit | edit source]
- 9 F. Cas. 342 (C.C.D. Mass. 1841) (No. 4,901).
- Id. at 348.
- Rosemont Enters. v. Random House, Inc., 366 F.2d 303 (2d Cir. 1966).
- U.S. Const. Art. I, § 8, cl. 8.
- See generally Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569 (1994).
- H.R. Rep. No. 94-1476, at 65 (1976).
- This final sentence was added in 1992, to deal with the issue raised in several thenrecent court of appeals decisions involving biographers’ and historians’ use of unpublished letters, diaries and the like.
- H.R. Rep. No. 94-1476, at 66 (1976).
- Harper & Row Publishers, Inc. v. Nation Enters., 471 U.S. 539, 560 (1985).
- 464 U.S. 417 (1984).
- 471 U.S. 539 (1985).
- Id. at 561 (citations omitted).
- Id. (citing S. Rep. No. 94-473, at 62 (1975)). A court of appeals had concluded, shortly before, that consideration of at least the four factors in the second sentence was a mandated part of the fair use analysis, by pointing out Congress’s use of the phrase “shall include” in that sentence. Pacific & S. Co. v. Duncan, 744 F.2d 1490 (11th Cir. 1984). See also Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 581 (1994) (“[P]arody, like any other use, has to work its way through the relevant factors, and be judged case by case, in light of the ends of the copyright law.”).
- 464 U.S. 417 (1984).
- Id. at 451.
- 471 U.S. 539 (1985).
- Id. at 563.
- Id. at 564.
- Id. at 554.
- Id. at 566.
- Id. at 568.
- E.g., Salinger v. Random House, Inc., 811 F.2d 90 (2d Cir. 1987). Compare New Era Pubs. Int’l v. Henry Holt & Co., 873 F.2d 576 (2d Cir.), reh’g en banc denied, 884 F.2d 659 (2d Cir. 1989), with New Era Pubs. Int’l v. Carol Publ’g Group, 904 F.2d 152 (2d Cir. 1990).
- Stewart v. Abend, 495 U.S. 207 (1990), involved what the Court found to be the unauthorized marketing by the copyright owners of the well-known motion picture Rear Window, over the objection of the owner of copyright in the short mystery story upon which the film was based. The Court rejected the fair use defense: “[A]ll four factors point to unfair use. ‘This case presents a classic example of an unfair use: a commercial use of a fictional story that adversely affects the story owner’s adaptation rights.’” Id. at 238.
- 510 U.S. 569 (1994).
- Id. at 578. The Court, through Justice Souter, gave credit to Justice Story, and Folsom v. Marsh, 9 F. Cas. 342 (C.C.D. Mass. 1841) (No. 4,901), discussed supra, for fashioning decisional criteria that were essentially incorporated by Congress in section 107 nearly 150 years later.
- Id. at 579.
- Id. at 588.
- Id. at 591.
- 510 U.S. 569 (1994).
- Dr. Seuss Enters., L.P. v. Penguin Books USA, Inc., 109 F.3d 1394 (9th Cir. 1997).
- Castle Rock Entm’t, Inc. v. Carol Publ’g Group, Inc., 150 F.3d 132, 145 (2d Cir. 1998) (quoting lower court).
- Leibovitz v. Paramount Pictures Corp., 137 F.3d 109 (2d Cir. 1992).
- 268 F.3d 1257 (11th Cir. 2001) (preliminary injunction denied).
- Id. at 1267.
- 977 F.2d 1510 (9th Cir. 1992).
- 471 U.S. 539 (1985).
- Italian Book Corp. v. ABC, 458 F. Supp. 65 (S.D.N.Y. 1978). But see Schumann v. Albuquerque Corp., 664 F. Supp. 473 (D.N.M. 1987) (broadcast of entire copyrighted songs had “entertainment value”).
- Ringgold v. Black Entm’t T.V., Inc., 126 F.3d 70 (2d Cir. 1997) (holding use “decorative” rather than “transformative”).
- NXIVM Corp. v. Ross Inst., 364 F.3d 471 (2d Cir. 2004).
- Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 582 (1994).
- 464 U.S. 417 (1984).
- Id. at 455 n.40.
- 758 F. Supp. 1522 (S.D.N.Y. 1991).
- 99 F.3d 1381 (6th Cir. 1996) (en banc).
- 60 F.3d 913 (2d Cir. 1994).
- Id. at 930.
- Sega Enters., Ltd. v. Accolade, Inc., 977 F.2d 1510 (9th Cir. 1992).
- Kelly v. Arriba Soft Corp., 280 F.3d 934 (9th Cir. 2002). But compare Perfect 10 v. Google, Inc., 416 F. Supp. 2d 828 (C.D. Cal 2006) (Google’s display of thumbnail photos is not a fair use, in light of its profit motive and the adverse impact on potential royalties from cellphone use).
- Id. at 944.
- Id. at 947.
- Id. at 948.
- 239 F.3d 1004 (9th Cir. 2001).
- Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417 (1984).
- Napster, 239 F.3d at 1015.
- Id. at 1016 (quoting the district court in Napster, 114 F. Supp. 2d 896, 912 (N.D. Cal. 2000)).
- BMG Music v. Gonzalez, 430 F.3d 888 (7th Cir. 2005). The court noted that the Supreme Court had assumed in Metro-Goldwyn-Mayer Studios Inc. v. Grokster, Ltd., 125 S. Ct. 2764 (2005), that the file-sharers there were directly infringing the copyright in the music and sound recordings. BMG Music, 430 F.3d at 889.
- UMG Recordings, Inc. v. MP3.Com, Inc., 92 F. Supp. 2d 349 (S.D.N.Y. 2000).
- Los Angeles Times v. Free Republic, 54 U.S.P.Q.2d 1453 (C.D. Cal. 2000).
- 422 U.S. 151 (1975).
- Edison Bros. Stores, Inc. v. Broadcast Music, Inc., 954 F.2d 1419 (8th Cir. 1992).
- Sailor Music v. Gap Stores, 668 F.2d 84 (2d Cir. 1982); Broadcast Music, Inc. v. United States Shoe Corp., 678 F.2d 816 (9th Cir. 1982).
- See Exclusive Rights of the Copyright Owner.
- See 37 C.F.R. § 255.3.
- The phrase is defined in section 115(d).
- See Exclusive Rights of the Copyright Owner.
- See The Subject Matter of Copyright.
- Vault Corp. v. Quaid Software Ltd., 847 F.2d 255 (5th Cir. 1988).