Oppose Rehearing

UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
_____________
No. 94-1778
_____________


PRINCETON UNIVERSITY PRESS, MACMILLAN,
INC., and ST. MARTIN’S PRESS, INC.,

Plaintiffs-Appellees,

v.

MICHIGAN DOCUMENT SERVICES, INC.,
and JAMES M. SMITH,

Defendants-Appellants.

 

_____________________________________________

OPPOSITION OF DEFENDANTS-APPELLANTS MICHIGAN
DOCUMENT SERVICES, INC. AND JAMES M. SMITH TO
PLAINTIFFS-APPELLEES PETITION FOR REHEARING AND
SUGGESTION FOR REHEARING EN BANC

_______________________________________________

                              Susan M. Kornfield (P41071)
David G. Chardavoyne (P27034)
Lydia Pallas Loren (P47644)
BODMAN, LONGLEY & DAHLING LLP
Attorneys for Defendants-Appellants
110 Miller, Suite 300
Ann Arbor, Michigan  48104
(313) 761-3780

 

March 12, 1996


TABLE OF CONTENTS

I.THE RECORD AND THE LAW SUPPORT THE PANEL DECISION. 2

II.THE “USE” IN “MULTIPLE COPIES FOR CLASSROOM USE” IS “CLASSROOM USE. “3

III.BOOK SALES AND LICENSING INCOME FROM TRUE DERIVATIVES ARE THE ONLY LEGALLY RELEVANT ECONOMIC MARKETS. 4

 

A.Willingness to Charge Does Not Create an Obligation to Pay. 5B.Multiple Copies For Classroom Use is Not a Derivative Work. 6

C.Making Multiple Copies for Classroom Use Has Been Widespread as Fair Use. 7

IV.TURNING DOWN THE VOLUME ON HYSTERIA. 8

 


TABLE OF AUTHORITIES

Cases

American Geophysical Union v. Texaco, Inc., 60 F.3d 913 (2d Cir. 1995) 5

Basic Books, Inc. v. Kinko’s Graphics Corp., 758 F. Supp. 1532 (S.D.N.Y. 1991) 8-9

Campbell v. Acuff-Rose Music, Inc., 114 S.Ct. 1164 (1994) passim

Community for Creative Non-Violence v. Reid, 490 U.S. 730, 109 S.Ct. 2166 (1989) 3

Feist Publications, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 111 S. Ct. 1282 (1991) 2, 5, 9

Harper & Row Publishers, Inc. v. Nation Enterprises, 471 U.S. 539, 105 S.Ct. 2218 (1985) 4, 6

National Rifle Ass’n of America v. Handgun Control Fed’n, 15 F.3d 559 (6th Cir.), cert. denied, 115 S.Ct. 71 (1994) 4

Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417, 104 S.Ct 774 (1984) passim

Stewart v. Abend, 495 U.S. 207 (1990) 6

Constitution

U.S. Const. art. I, §8, cl.8. 2

Statutes

17 U.S.C. §1071, 3, 8


This Court correctly held that when Congress declared “the fair use of a copyrighted work, including…reproduction in copies…for purposes such as…teaching (including multiple copies for classroom use)…is not an infringement of copyright,” 17 U.S.C. §107, it meant exactly that — the making of multiple copies of an excerpt for classroom use was not an infringement.

The publishers insisted that the Court amend the statute by restricting students and professors from having their personal copies made at their specific direction and at their specific request by a copy shop, when the copies are only substitutes for the reserve reading room at the library, and not substitutes for purchasing the book. The panel refused to create private law for the publishers. No such restriction is in the statute, and such a burden upon the exercise of fair use is contrary to Supreme Court precedent.

Contrary to established law, plaintiffs sought to prohibit the making of “multiple copies for classroom use” if those copies are made by MDS. Their Petition merely reargues issues they have failed to support factually and legally, and should be denied.

This case is not about whether the professors and students may copy these excerpts and assemble them privately for their own educational purposes — the publishers told the panel that they do not contest that issue (Trans. of Oral Arg., Ex. A, p.18); nor do the publishers contest that professors may charge students the per page cost of such copying. Id. at 18-19. Moreover, the publishers conceded that “professors and students may be able to claim a fair use here.” Id. at 21. Thus, this case is only about who may push the button on the copy machine.

I.THE RECORD AND THE LAW SUPPORT THE PANEL DECISION.

The panel opinion correctly followed the Supreme Court’s fair use frame-work,[ FN 1 ] which embodies the following tenets: (1) the purpose of copyright law is the promotion of learning, which is fulfilled by fair use; U.S. Const. art. I, §8, cl.8., Campbell v. Acuff-Rose Music, Inc., 114 S.Ct. 1164, 1169 (1994); (2) the primary purpose of copyright is not the protection of financial interests of authors or publishers, Feist Publications, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 111 S.Ct. 1282, 1290 (1991); (3) copyright owners do not possess the right to control all uses of their works, and specifically do not possess the right to control a fair use, Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417, 432, 104 S.Ct 774, 784 (1984); and (4) when a use is fair, the demands of copyright owners are irrelevant. See Campbell, 114 S.Ct. at 1174 1175 n.18; Sony, 464 U.S. at 432.

The panel was faithful to this framework and to the record. The panel considered the uncontested affidavits of the professors who excerpted the works at issue and of hundreds of other professors, authors, and students. It considered that “the publishers declined at oral argument to argue that the professors and students may not copy these excerpts and assemble them privately for their own educational purposes.” (Opinion 13). The panel appropriately disregarded the unsupported assertions of the publishers. The decision is solid and well-reasoned, and should not be reheard.

II.THE “USE” IN “MULTIPLE COPIES FOR CLASSROOM USE” IS “CLASSROOM USE.”

The publishers tried to obscure the first fair use factor by suing and directing arguments against MDS (not the professors or students), hoping the Court would disregard the classroom use of the excerpts. However, the panel’s consideration of the use by the students and professors is not only proper, it is required.

First, §107 recognizes that to have “multiple copies for classroom use” one must make multiple copies. Congress declined to adopt bright-line rules for making multiple copies for classroom use, and declined to impose restrictions as to who could make the multiple copies. The publishers ask this Court to give them what Congress denied them.[ FN 2 ] However, “[s]trict adherence to the language and structure of the [Copyright] Act is particularly appropriate where, as here, a statute is the result of a series of carefully crafted compromises.” Community for Creative Non-Violence v. Reid, 490 U.S. 730, 748 n.14, 109 S.Ct. 2166, 2177 n.14 (1989). Here, the panel opinion noted that:

The copying in this case is not a use unto itself; it is the mechanical component of the process that makes the material available for classroom use. The language of the statute, “including multiple copies for classroom use,” requires us to consider copying as an integral part of “teaching.” Therefore, we consider both the mechanical production of the copies and the classroom use of the excerpts in evaluating “the purpose and character of the use” and its commercial or nonprofit educational nature. (Op. 12-13).

Second, the Supreme Court in Sony held that a proper fair use analysis required the Court to focus on the nonprofit, personal use of the work in the hands of the user, not the commercial activity of the named defendant. Thus, where users can legally make a copy, a for-profit entity can assist them in making that copy.[ FN 3 ]

Third, in National Rifle Ass’n of America v. Handgun Control Fed’n, 15 F.3d 559 (6th Cir.), cert. denied, 115 S.Ct. 71 (1994), this Court determined that the copying and use of a list of legislators was a fair use. This Court focused on the educational and first amendment uses of the list in the hands of the defendant and its members, and disregarded the mechanics as to who made the copies of the list for their use. Had the plaintiff sued just the copyshop, this Court would not have been fooled into ignoring the nonprofit uses merely because a fee was charged for the copying.

Here, the panel was not fooled into ignoring the classroom use of the excerpts by the publishers’ repeated use of the word “commercial.” The panel knew that MDS’s fees were for services:

Here, MDS obtains a profit by providing a service. MDS charges on a per-page basis, regardless of content; MDS does not extract an extra fee for reproducing materials that are copyrighted. MDS does not “exploit” copyrighted material within the meaning of Harper & Row, 471 U.S. at 562, because its fee does not turn on the content of the materials, copyrighted or not, that it copies. (Op. 13).


III.BOOK SALES AND LICENSING INCOME FROM TRUE DERIVATIVES ARE THE ONLY LEGALLY RELEVANT ECONOMIC MARKETS.

As to the fourth statutory factor, the publishers face two insurmountable problems. First, the record shows not one lost book sale as a result of defendants’ activities in this case (Op. 18). Second, the record shows that the use of excerpts results in the purchase of more books (Op. 19), and the record further illustrates that coursepacks are supplements to books required by the professor, such as the nine books assigned by Prof. Dawson. (R.54 Decl. Dawson ¶2, Joint App. 1231-32.) Since making multiple copies for classroom use is a type “of copying that courts and Congress most commonly had found to be fair uses,” Campbell, 114 S.Ct. at 1170 (footnote omitted), the publishers attempted to control fair use without calling it fair use. They conjured up a new kind of harm: “lost permission fees.” The panel was not deceived.

A.Willingness to Charge Does Not Create an Obligation to Pay.

When a use is fair, no permission need be sought or obtained. Id. at 1174 n.18. The panel understood the distinction between a demand for payment and a legal entitlement to be paid:[ FN 4 ]

 

The right to permission fees is precisely what is at issue here. It is circular to argue that a use is unfair, and a fee therefor required, on the basis that the publisher is otherwise deprived of a fee (Op. 18).

The panel’s analysis is supported by Feist, 111 S.Ct. 1282, where the Supreme Court disregarded the publishers’ market for licensing their copyrighted listings and ruled that such a market was not one which the publishers had a legal right to control. The Court was not influenced by the fact that federal courts had recognized the publishers’ claims to a “market,” and revenues derived therefrom, for seventy years.

B.Multiple Copies For Classroom Use is Not a Derivative Work.

Having failed to show any injury to their market for sales of the works, the publishers claimed entitlement to lost permission fees, and stated that the Supreme Court recognizes their markets for licensing multiple copies for classroom use. They are wrong.

In Harper & Row, Publishers, Inc. v. Nation Enterprises, 471 U.S. 539, 105 S.Ct. 2218 (1985), the market injured by the publication of portions of a stolen, unpublished manuscript was the market for a derivative work — serialization rights. In Stewart v. Abend, 495 U.S. 207, 110 S.Ct. 1750 (1990), the injury was to the market for a derivative work — a motion picture version of a book. In Campbell, the relevant market was for a derivative work — a new musical arrangement — and not any claim to the fair use parody “market.” Id. at 1178. Thus, the cases on which the publishers rely require that the licensing revenue that can be considered as fourth factor harm must be from derivative works.

The making of multiple copies for classroom use is not a derivative work. As the panel noted, “[t]he plaintiffs did not demonstrate that the coursepacks affected the market for the original copyrighted works or the potential market for derivative works, such as published anthologies…” (Op. 18).[ FN 5 ] The Supreme Court recognized that the straight photocopying of multiple copies for classroom use was the “obvious statutory exception” to any insistence that a fair user add new authorship in order to claim the right of fair use. Id. at 1171 n.11.

The publishers’ circular reasoning leaves no role for courts in a fourth factor analysis, because then a copyright owner could always prevail by asserting a system to collect fees for the use at issue. This is nonsense. Since the publishers are entitled to no revenue for a fair use, whether a use is fair cannot be determined if the Court starts from the premise that a fee not paid is a fee “lost.”

C.Making Multiple Copies for Classroom Use Has Been Widespread as Fair Use.

The publishers hope courts will help them impose restrictions upon the exercise of fair use, so that people will fear exercising their rights and will fear assisting fair users. The publishers paint an apocalyptic picture of what will happen if the making of multiple copies for classroom use becomes widespread. However, the only “widespread” practice for the making of multiple copies for classroom use was precisely the type of services provided by MDS. The markets claimed by the publishers as “longstanding” are simply their departments for derivative works — foreign language editions, paperback versions, etc. — and only after the 1991 Kinko’s decision and threats of ruinous litigation, did some copy shops begin paying permission fees. MDS is one of 4,500 copyshops in the U.S. who, for twenty years, has assisted professors and students in the exercise of their fair use rights, without paying permission fees and without the kind of harm predicted by the publishers today. R.54 Decl. Ternes ¶2-6, 15, JA 1042-44, 1048, R.54 Decl. Smith ¶16, 21, JA 1056, 1058-59.

IV.TURNING DOWN THE VOLUME ON HYSTERIA.

The publishers turn to wild speculation, devoid of support in the record. They predict “unrestrained copying,” as if the panel abolished the factors set forth in §107 and overruled the Supreme Court (Pet. 1). They accuse the panel of permitting the taking of “the best” of any book, (Pet. 6), a concept rejected by the Supreme Court in Campbell and contradicted factually by the professors who selected the excerpts. (R.61 Ex.A, Decl. Dawson ¶4, Kinder ¶3, Lieberman ¶5, JA 1233, 1252, 1238-39). They talk about “disincentives” for new works of authorship, but cannot explain how their argument makes any sense when they do not object to these copies being made by students or professors, without any payment of fees whatsoever. The publishers cannot cloak their real agenda — control over the fair use market — in the garb of the laudable “incentives to create.”

The publishers are shocked that the panel did not adopt the opinion in Basic Books, Inc. v. Kinko’s Graphics Corp., 758 F. Supp. 1532 (S.D.N.Y. 1991) (“Kinko’s“). While that decision has been useful as a club to extract permission fees from educators, students, and copyshops for fair uses, the Supreme Court has rejected the entire legal framework on which Kinko’s was based, from the “every commercial use is presumptively unfair” to “transformative use is required even in the making of multiple copies for classroom use” to the old “heart of the work” argument. Campbell, 114 S.Ct. at 1173-74, 1171 n.11, 1175-77. Further, the facts in Kinko’s are not the facts before this Court (e.g., the Kinko’s excerpts replaced the books, professors received financial incentives from Kinko’s, and Kinko’s failed to show that excerpts increased book sales). Far from being the “leading case,” Kinko’s is irrelevant and wrong, and this panel was correct to ignore it.

The panel appropriately disregarded the publishers’ bright line, page-counting approach to fair use, following instead the Supreme Court’s focus on whether “the coursepack merely supersedes the copyrighted work, ‘fulfilling demand for the original.'” (Op. 15 quoting Campbell). The panel correctly found that plaintiffs “offered no factual evidence in this regard.” Id.[ FN 6 ]

The publishers insist (without, of course, any factual support) that the panel opinion will bring scholarship, writing, and publishing to a screeching halt. The Supreme Court has rejected such dire predictions from these very same publishers. In an amicus brief filed with the Supreme Court in Sony, the publishers asserted that if home videotaping were found to be a fair use, the emerging market for video sales and rentals would be destroyed. (Available in LEXIS “Genfed”/”Briefs.”) The Supreme Court, unmoved by the doomsday rhetoric, held that home videotaping was a fair use, and the fourteen billion dollar video market in the U.S. is alive and well.

So, too, the exercise of fair use rights in the coursepack market has resulted in the increase in authorship and publishing during the twenty years that coursepacks were created without the unlawful imposition of copying fees. Just as the Supreme Court disregarded mere predictions in Sony in favor of evidence from creators of broadcasted works, the panel opinion appropriately considered the evidence in the record establishing that the use of excerpts was an incentive to create new works. (Op. 19-20).

Having no evidence from authors and having failed to counter the avalanche of support from authors for defendants, the publishers simply declare the panel opinion a threat to new authorship. Their predictions are contradicted by the record and repudiated by the history of fair use adjudication. They are offered solely to manipulate their audience, as a substitute for proof.

CONCLUSION

The panel opinion stands with the leading Supreme Court cases in bringing clarity and analytical depth into fair use adjudication.[ FN 7 ] It rejected unsubstantiated rhetoric and remained committed to enforcing the law enacted by Congress in light of the facts in the record. The Petition for rehearing with a suggestion for rehearing en banc should be denied.

Respectfully Submitted,

BODMAN, LONGLEY & DAHLING LLP
Date: March 12, 1996
______________________________

Susan M. Kornfield (P41071)
David G. Chardavoyne (P27034)
Lydia Pallas Loren (P47644)
Attorneys for Defendants-Appellants


Footnotes

Footnote 1 The critical role of this framework is set forth in the amicus curiae Brief of Concerned Professors of Copyright Law, filed October 11, 1994, Prof. L. Ray Patterson, lead attorney.

Footnote 2 The publishers urge that bright-line rules of safe harbor provisions in a committee report are relevant. Since those provisions state that they are a minimum and not a maximum of fair use, the panel was correct to ignore them and to note that the Supreme Court has consistently refused to allow legislative history to amend the plain language of a statute. (Op. 10).

Footnote 3 The panel correctly noted that a fee for services did not outweigh the educational use by the educators and students. Even a purely commercial use could never be a bar to finding fair use. Campbell, 114 S.Ct. at 1174.

To avoid their concession that professors could have made copies of the excerpts and charged the students the per-page cost of such copying, the publishers cite cases in which either the copying displaced the sale of the entire original work, and/or cases that arose under the 1909 Copyright Act and involved the creation of a derivative work. (Pet. 5-6 n.1).

Footnote 4 American Geophysical Union v. Texaco, Inc., 60 F.3d 913 (2d Cir. 1995) (“Texaco”) does not support the publishers. First, the court declared that the use at issue was not typically found to be a fair use but was “nonuse” (archiving for the creation of an employee library). Second, it did not involve the copying of excerpts. Third, the court made it clear that the decision had nothing to do with educational fair use. Id. at 916.

Footnote 5 MDS does not create or publish anthologies. As the panel opinion notes, all selection and arrangement of content is determined by the professors (Op. 13) and the materials are not sold to the public. (Op. 3).

Footnote 6 A page-counting approach has been conclusively rejected by the Supreme Court. First, the publishers may not complain about portions of a book in which they do not own copyright, Feist, 111 S.Ct. 1282, and they did not own copyright in one third of the alleged “30%” excerpt. (That excerpt contains pages of public domain data and third party poetry, cartoons, photographs, and direct quotations.) Second, the “quantity and value of the materials used” are related to the “purpose of the copying,” Campbell, 114 S.Ct. at 1175, and the record showed that only so much of the work was used as necessary to expose the students to ideas, principles, concepts, and other noncopyrightable elements. Op. 16. Third, Campbell emphasizes use of a “reasonable” amount of material, weighing together all the fair use factors.

Footnote 7 The Georgia Attorney General issued an opinion on fair use (Ex. B), citing the panel opinion as additional support for his conclusion. Those knowledgeable about educational fair use are not alarmed by a holding that fair use is still legal.