(posted by Peter Hirtle; cross-posted from http://blog.librarylaw.com)

Earlier this fall I wrote about what I called "the other coursepack case" (in Michigan, as opposed to the Georgia State case).  Partial summary judgment has been granted, and it is a mixed bag for educational fair use.

In the decision, the judge rejected all of the defenses that the defendant, Excel Copying, put forward.  First, the court rejected, as I suspected it would, the argument that the licenses secured by the University of Michigan library authorized the copying. 

It also rejected the stronger argument that Excel engaged in no direct infringing activity itself, since it was the students, and not Excel, that made the copies.  The court found that because Excel "is the source of the reproduction," it had the same liability as if it had made the reproductions.  Excel gathered the material, collated and numbered the copies, assisted students who were having trouble copying, and did everything except actually push the "start" button on the photocopy machine.  The court therefore concluded that Excel, and not the students, made the copies.  Furthermore, it found that lending the master copy of the course pack to the students violated the publishers' distribution right - even though there is no discussion in the opinion as to whether the master is itself a legal copy, and hence could be loaned under the first sale doctrine.

Lastly, the court completely rejected a fair use argument.  It accepted the reasoning of the majority in the Michigan Document Services (MDS) case that fair use was not applicable.  Because Excel is a commercial operation, the purpose of the copying was not educational.  As to the second factor, the court ignored the informational character of the readings, but said that since they were creative, it ruled against fair use.  ("The nature of the material is certainly creative, which militates against a finding of fair use.")  Of course, to be protected by copyright, a work must be creative.  If the court's reasoning were followed, the second factor must always weigh against fair use.  The court found that the third factor, the amount of the use, also weighed against the defendant, since the professors had selected the excerpts, which means that they must have substance.  Again, if one accepted this reasoning, it would be hard to know when an excerpt selected for a class could ever be a fair use.  Finally, on the fourth factor, the court found that because Excel does not pay licensing fees when its competitors do, the market for the copyrighted works is harmed.

I suppose that it should come as no surprise that in its fair use analysis, the court clung closely to the decision in MDS.  (It is also telling that the one commentator on MDS that it cited was Doug Lichtman of UCLA.  While I greatly enjoy his podcasts, he does seem to believe that if a use can be licensed, there should be no fair use.  Fair use should only apply in those situations, such as criticism or parody, when it is unlikely a license could be secured.) 

I was more surprised by the conclusion that because Excel enabled students to make copies, it was directly responsible for that copying.  To the eyes of this non-lawyer, this would seem to be a classic case of contributory, not direct, infringement. 

It makes me wonder as well about the potential liability of libraries.  It is common for libraries to receive from a faculty member a copy of a course pack and place it on reserve (much as faculty members provided copies of their course packs to Excel).  If a student then borrowed that course pack and copied it on a library photocopy machine, would the library be liable?  Section 108(f) of the Copyright Act protects libraries from charges of contributory infringement for copying done by patrons on library equipment, but could this decision be extended to suggest that libraries, just like Excel, have direct, not contributory, liability  for infringing copies made by students?  If so, the "safe harbor" of 108(f) would evaporate.  The court did concede that if a student secured a copy of a course pack from a friend "or other third party," brought it to a commercial copy shop, and made the copy, the copy shop may not be liable for copyright infringement.  Perhaps a library could be "a third party."

The potential good news for fair use in the decision rests more in what the court did not decide.  First, as with the MDS decision, by focusing on the commercial nature of Excel's copying, the court left open the question of the legality of similar copying conducted by a not-for-profit educational institution.  We will have to wait for a decision in the Georgia State case to see how that plays out.  Second, the court acknowledged MDS's contention that copying by students is problematic and may not be a fair use, but it chose not to address that issue as well.

All in all, this case seems to be one more rejection of the plain language of the fair use statute, which indicates that multiple copies for classroom use are not infringements of copyright. 

(Note: Mary Minow also briefly discusses this case.  There is also a very useful discussion that echoes many of the same points I make on the Exclusive Rights blog.  PH)