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Cambridge University Press v. Patton, (C.A. 11th Cir.) October 17, 2014
Finding the District Court's fair use analysis to be in part erroneous, the Court of Appeals reversed the District Court judgment, vacated the injunction and declaratory relief and award of costs and fees, and remanded for further proceedings consistent with the opinion. In this case, Georgia State was sued by Publishers Cambridge University Press, Oxford University Press and Sage Publications for its permissive use of e-reserves without payment of copyright fees. The District Court had found largely for Georgia State in a 350 page opinion after the University revised its copyright policy. See Cambridge University Press et al v. Georgia State University et al, CV-01425 (U.S. Dis. Ct. Northern Dist. Georgia) May 11, 2012.
On appeal, the 11th Circuit reconsidered the fair use analysis performed by the District Court. The central issue in the case was under what circumstances Georgia State must pay permission fees to post digital copies of excerpts of Plantiffs' works on the e-reserve system. The first 44 pages of the decision are just a recap of the facts of the case and what occurred at the District Court level. The Court of Appeals rejected the 11th Amendment immunity argument as it was not raised by Defendants on cross appeal. The C.A. agreed with Plaintiffs the arithmetic approach used by the District Court was wrong, but found the District Court was right in looking at each use on a case by case basis. However, the Appellate Court did not agree with how the District Court applied the four factors in all instances.
On the first factor, the purpose and character of the use, the A.C. found the use was not transformative, but that the non-profit educational nature of the use favored a finding of fair use. Significantly, the majority held that evaluating any indirect profit to GSU by the failure to pay license fees was not-persuasive under the first factor of the fair use analysis, and could end up being circular. If the copyright owner is " not entitled to charge for the use, there is no customary price to be paid in the first place." (at p. 70)
Potential profit, the Court of Appeals stated, is better addressed in considering the third factor. in analyzing the first factor, the Court of Appeals did not find the use by GSU to be "commercial exploitation". At page 74 the Appellate Court stated its finding that the District Court did not err on analyzing the first factor.
In sum, Congress devoted extensive effort to ensure that fair use would allow for educational copying under the proper circumstances and was sufficiently determined to achieve this goal that it amended the text of the statute at the eleventh hour in order to expressly state it. Furthermore, as described above, allowing latitude for educational fair use promotes the goals of copyright. Thus, we are persuaded that, despite the recent focus on transformativeness under the first factor, use for teaching purposes by a nonprofit, educational institution such as Defendants’ favors a finding of fair use under the first factor, despite the nontransformative nature of the use.
On the second factor, the nature of the copyrighted work, the Appellate Court found some error by the District Court. The finding is found at page 81:
Accordingly, we find that the District Court erred in holding that the second factor favored fair use in every instance. Where the excerpts of Plaintiffs’ works contained evaluative, analytical, or subjectively descriptive material that surpasses the bare facts necessary to communicate information, or derives from the author’s experiences or opinions, the District Court should have held that the second factor was neutral, or even weighed against fair use in cases of excerpts that were dominated by such material. That being said, the second fair use factor is of relatively little importance in this case.
On the third factor, the amount and substantiality of the work used in relation to the whole, the Court of Appeals rejected the 10% approach used by the District Court.
Here, the District Court found that the third factor favored fair use in instances where Defendants copied no more than 10 percent of a work, or one chapter in case of a book with ten or more chapters. Cambridge Univ. Press, 863 F. Supp. 2d at 1243. The District Court’s blanket 10 percent-or-one-chapter benchmark was improper. The fair use analysis must be performed on a case-by-case/work-by-work basis. ***By holding that the third factor favored fair use whenever the amount of copying fell within a 10 percent-or-one-chapter baseline, the District Court abdicated its duty to analyze the third factor for each instance of alleged infringement individually. (pp 83-84)
In looking at arguments made in the case, the Appellate Court, along with the District Court, clearly rejected the Classroom Guidelines. Only the concurring opinion suggested giving these Guidelines any weight. At page 91 the Court of Appeals summarized what the lower court did wrong and what it did right:
Accordingly, we find that the District Court properly considered whether the individual instances of alleged infringement were excessive in relation to Defendants’ pedagogical purpose, properly measured the amounts taken in all cases based on the length of the entire book, and properly declined to tie its analysis under the third factor to the Classroom Guidelines or to the coursepack cases. However, we find that the District Court erred in applying a 10 percent-or-one-chapter safe harbor in it analysis of the individual instances of alleged infringement. The District Court should have analyzed each instance of alleged copying individually, considering the quantity and the quality of the material taken—including whether the material taken constituted the heart of the work—and whether that taking was excessive in light of the educational purpose of the use and the threat of market substitution.
On the fourth factor, the effect of the use upon the potential market, the Court of Appeals looked at two factors, the extent of market harm caused by the alleged infringer, and whether unrestricted and widespread conduct of the sort engaged in by the defendant would result in a substantially adverse effect upon the market.
The central question under the fourth factor is not whether Defendants’ use of Plaintiffs’ works caused Plaintiffs to lose some potential revenue. Rather, it is whether Defendants’ use—taking into account the damage that might occur if “everybody did it”—would cause substantial economic harm such that allowing it would frustrate the purposes of copyright by materially impairing Defendants’ incentive to publish the work.** We agree with the District Court that the small excerpts Defendants used do not substitute for the full books from which they were drawn. “Plaintiffs offered no trial testimony or evidence showing that they lost any book sales in or after 2009 on account of any actions by anyone at Georgia State.” Cambridge Univ. Press, 863 F. Supp. 2d at 1217. Thus, the District Court did not err in finding that “Defendants’ use of small excerpts did not affect Plaintiffs’ actual or potential sales of books.” Id. at 1236. (pp 93-94)***We note that it is not determinative that programs exist through which universities may license excerpts of Plaintiffs’ works. In other words, the fact that Plaintiffs have made paying easier does not automatically dictate a right to payment. “[A] copyright holder can always assert some degree of adverse [effect] on its potential licensing revenues as a consequence of the secondary use at issue simply because the copyright holder has not been paid a fee to permit that particular use.” Texaco, 60 F.3d at 929 n.17 (citations omitted). The goal of copyright is to stimulate the creation of new works, not to furnish copyright holders with control over all markets. Accordingly, the ability to license does not demand a finding against fair use.(page 95)
The Appeals Court went on to note that absent evidence to the contrary, if a copyright holder has not made a license available to use a particular work in a particular manner, the inference is that the author or publisher did not think that there would be enough such use to bother making a license available. At page 98, in refuting plaintiffs argument the Court noted " Plaintiffs may not had off a defense of fair use by complaining that every potential licensing opportunity represents a potential market for purposes of the fourth fair use factor. " The AC found the District Court applied the fourth factor correctly as it took licensing availability into account. A final sum up of the what the District Court did right and wrong, in the opinion of the Court of Appeals can be found at pages 110-111.
In sum, we hold that the District Court did not err in performing a work-by-work analysis of individual instances of alleged infringement in order to determine the need for injunctive relief. However, the District Court did err by giving each of the four fair use factors equal weight, and by treating the four factors mechanistically. The District Court should have undertaken a holistic analysis which carefully balanced the four factors in the manner we have explained.
The District Court did not err in holding that the first factor—the purpose and character of the use—favors fair use. Although Defendants’ use was nontransformative, it was also for nonprofit educational purposes, which are favored under the fair use statute. However, the District Court did err in holding that the second fair use factor—the nature of the copyrighted work—favors fair use in every case. Though this factor is of comparatively little weight in this case particularly because the works at issue are neither fictional nor unpublished, where the excerpts in question contained evaluative, analytical, or subjectively descriptive material that surpasses the bare facts, or derives from the author’s own experiences or opinions, the District Court should have held that the second factor was neutral or even weighed against fair use where such material dominated.
With regard to the third factor—the amount used in relation to the copyrighted work as a whole—the District Court erred in setting a 10 percent-or-one-chapter benchmark. The District Court should have performed this analysis on a work-by-work basis, taking into account whether the amount taken—qualitatively and quantitatively—was reasonable in light of the pedagogical purpose of the use and the threat of market substitution. However, the District Court appropriately measured the amount copied based on the length of the entire book in all cases, declined to give much weight to the Classroom Guidelines, and found that the Defendants’ educational purpose may increase the amount of permissible copying.
With regard to the fourth factor—the effect of Defendants’ use on the market for the original—the District Court did not err. However, because Defendants’ unpaid copying was nontransformative and they used Plaintiffs’ works for one of the purposes for which they are marketed, the threat of market substitution is severe. Therefore, the District Court should have afforded the fourth fair use factor more significant weight in its overall fair use analysis.
Some will lament the loss of the 10% guidelines, if only because we know not every professor is going to sit down and read Pierre N. Leval, Toward a Fair Use Standard, 103 Harv. L. Rev. 1105 (1990) before making copies. See Joseph Storch (in house counsel at SUNY) on this very issue: Why we need Bright Lines, October 20, 2104. As he notes: "When intellectual property law experts cannot agree, we should not expect our history and math faculty to do justice to the fair use analysis each time." For another summary of the case see Publishers Win Reversal of Court Ruling that Favored E-Reserves at Georgia State U in the Chronicle of Higher Education by Jennifer Howard. See also the Copyright Librarian analysis by Nancy Sims on the case.
Authors Guild v. Hathi Trust, (C.A. 2nd Cir.) June 10, 2014
The Hathi Trust digital library partnership involved 13 libraries creating a repository of fully scanned books (scanned by Google) that could be used for three purposes:
- Topical Searching. The general public can search for particular terms across all digital copies in the repository. Unless the copyright holder authorizes broader use, the search results show only the page numbers on which the search term is found within the work and the number of times the term appears on each page.
- · Access for individuals with Print Disabilities. Member libraries can provide patrons with print disabilities access to the full text of all scanned works. A “print disability” is any disability that prevents a person from effectively reading printed material. Blindness is one example, but print disabilities also include those that prevent a person from physically holding a book or turning pages.
- · The HDL permits members to create a replacement copy of the work, if the member already owned an original copy, the member’s original copy is lost, destroyed, or stolen, and a replacement copy is unobtainable at a “fair” price elsewhere.
The 2nd Circut Court of Appeals upheld the opinion of the SDNY, finding that the doctrine of fair use permitted full text searchs, security was such that a risk of hacking was minimal, access to patrons with print disabilities and replacement copies was also fair use, although the 2nd Circuit did not find access for those with disablities transformative, it was still a fair use. US author groups were generally found to not have standing to sue, but foreign authors' group did have standing. The case was sent back to the lower court to decide standing on the long term preservation argument.The orphan works part of the project, currently on hold, was not ripe for adjudication. For a full summary of the case, see the article in the Chronicle of Higher Education titled Hathi Trust Digital Library Wins Latest Round in Battle with Authors.