Section 106 of the Copyright Act grants copyright holders certain exclusive rights over their original works, including the right “to reproduce the copyrighted work in copies or phonorecords (a phonorecord is defined by the United States copyright Act of 1976 to be a material object that embodies sounds)” and the right “to display the copyrighted work publicly.” See 17 USC Section 106.
As codified in the Copyright Act, “the fair use of a copyrighted work…for purposes such as criticism, comment, news reporting, teaching…, scholarship, or research, is not an infringement of copyright.” See 17 USC Section 107.
To determine whether a particular use is fair use, courts engage in a case-by-case evaluation using four statutory factors in light of the purposes of copyright. See Bill Graham Archives v. Dorling Kindersley Ltd., 448 F.3d 605, 608 (2d Cir. 2006).
The factors to be considered 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.
Although a court must weigh all the factors, the first – in particular a use’s “trans formativeness” – is most important and “has a significant impact on the remainder of the fair use inquiry”. See Graham v. Prince, 265 F. Supp. 3d (SDNY 2017) at 380.
Fair use is a “mixed question of fact and law,” necessitating “an open-ended and context-sensitive inquiry.” See Graham v. Prince, 265 F. Supp. 3d at 376.
Cases in which trans formativeness can be determined by doing a side-by-side comparison of the original work and the secondary use are particularly appropriate for early determination. See Prince, 265 F. Supp. 3d at 377. Prince, 265 F. Supp. 3d at 377 describes trans formativeness as whether “the allegedly offending use of the original work alters the first work with new expression, meaning, or message”.
The more transformative the new work, the less will be the significance of other factors, like commercialism, that may weigh against a finding of fair use. See Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 569, 114 S. Ct. 1164, 127 L. Ed. 2d 500 (1994).
The fair use doctrine “allows for transformative works that further the public discourse (written or spoken communication or debate) and the free exchange of ideas in order to promote science and the arts.” See Baraban v. Time Warner, Inc., No. 99-CV-1569, 2000 U.S. Dist. LEXIS 4447, 2000 WL 358375 at 2 (SDNY Apr. 6, 2000).
To determine whether the secondary use is transformative, the “question is whether the new work merely supersedes (take the place of a person or thing previously in authority or use) 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.” See Authors Guild v. Google, Inc., 804 F.3d 202, 214 (2d Cir. 2015).
A transformative use is one that communicates something new and different from the original or expands its utility, thus serving copyright’s overall objective of contributing to public knowledge. See Authors Guild v. Google, Inc., 804 F.3d 202, 214 (2d Cir. 2015).
A secondary use “can be transformative in function or purpose [even] without altering or actually adding to the original work.” See Swatch Grp. Mgmt. Servs. Ld. V. Bloomberg L.P., 756 F.3d 73, 84 (2d Cir. 2014).
Moreover, “courts have frequently afforded fair use protection to the use of copyrighted material in biographies, recognizing such works as forms of historic scholarship, criticism, and comment that require incorporation of original source material for optimum treatment of their subjects.” See Bill Graham, 448 F.3d at 609.
An example is the case of Bill Graham, where the defendant published a coffee table book about the Grateful Dead that contained unlicensed images of concert posters as part of a timeline of the band’s history. The timeline runs continuously throughout the book, chronologically combining approximately 2000 images representing the band’s history with explanatory text; among the images were seven copyrighted concert posters displayed in reduced form with captions describing the concerts that were associated with the posters.
The Second Circuit held that inclusion of these posters for a historical purpose constituted fair use. The court first emphasized that the defendant’s “purpose in using the copyrighted images at issue in its biography of the Grateful dead is plainly different from the original purpose for which they were created,” because the posters “fulfilled the dual purposes of artistic expression and promotion,” whereas the defendant used the “images as historical artifacts to document and represent the actual occurrence of the Grateful Dead concert events.” The Court next considered how the images were used for scholarship, noting that no “less a recognition of biographical value is warranted in this case simply because the subject made a mark in pop culture rather than some other area of human endeavor.” Finally, the Court found that the manner in which the images displayed in the book strengthened the transformative nature of the use. The book reproduced the posters in a reduced size, in combination with textual material and graphical artwork, and the posters represented an “inconsequential portion” of the book.
The commercial/nonprofit dichotomy concerns the unfairness that arises when a secondary user makes unauthorized use of copyrighted material to capture significant revenues as a direct consequence of copying the original work. See Am. Geophysical Union v. Texaco Inc., 60 F.3d 913, 922 (2d Cir. 1994).
However, because nearly all fair uses of copyrighted works are conducted for profit, the Second Circuit has cautioned that “the more transformative the new work, the less will be the significance of the commercial sub-factor.” See Prince, 265 F. Supp. 3d at 382.
The nature of the copyrighted work considers whether the work is expressive or creative, with a greater leeway being allowed to a claim of fair use where the work is factual or informational, and whether the work is published or unpublished, with the scope of fair use involving unpublished works being considerably narrower. See Cariou, 714 F.3d at 709-10.
The nature of the copyrighted work may be of limited usefulness where the creative work of art is being used for a transformative purpose. See Authors Guild, 804 F.3d at 220.
Amount and Substantiality of the Portion of the Copyrighted Work Used: Although it has never been ruled that the copying of an entire work favors fair use, such copying does not necessarily weigh against fair use because copying the entirety of a work is sometimes necessary to make a fair use of the image. See Bill Graham, 448 F.3d at 613. This inquiry must take into account that ‘the extent of permissible copying varies with the purpose and character of the use’. See Campbell, 510 U.S. at 586-87.
Effect of the Use Upon the Market for or Value of the Original: this analysis is concerned with “whether the secondary use usurps (take a position of power or importance illegally or by force) the market of the original work.” See Blanch, 467 F.3d at 258.
It “focuses on whether the copy brings to the marketplace a competing substitute for the original, or its derivative, so as to deprive the rights holder of significant revenues because of the likelihood that potential purchasers may opt to acquire the copy in preference to the original.” See Authors Guild, 804 F.3d at 223.
The more transformative the secondary use, the less likelihood that the secondary use substitutes for the original. See Prince, 265 F. Supp. 3d at 384.
If use of the copyrighted work falls within a transformative market, the owner of the copyright does not suffer market harm due to the loss of license fees. See Bill Graham, 448 F.3d at 615.
With respect to the “traditional market”, a court must “look at the impact on potential licensing revenues for traditional, reasonable, or likely to be developed markets,” not, simply, that the owner of the accused work failed to pay licensing fee. See Bill Graham, 448 F.3d at 614.
The advantage of engaging Pendulum Legal PC in Copyright Law is that we will make a detailed assessment in relation to the available evidence of the likelihood of the court making a finding of transformative use and Fair Use. This is where we have a mature and experienced outlook of the practical applications of the relevant law. Your case will be managed in an efficient and cost-effective manner.
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