Case No. 92-9341
IN THE UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
AMERICAN GEOPHYSICAL UNION; ELSEVIER SCIENCE PUBLISHING CO.;
PERGAMON PRESS, LTD.; SPRINGER-VERLAG, GMBH & CO., K.G.;
JOHN WILEY & SONS, INC. and WILEY HEYDEN, LTD., on behalf
of themselves and others similarly situated,
Plaintiffs and Counter-Claim
Defendants - Appllees,
- v. -
TEXACO INC.,
Defendant-Counter-Claim-
Plaintiff-Appellant.
IN RE TEXACO INC., TEXACO CAPITAL INC., TEXACO CAPITAL N.V.,
Reorganized Debtors.
ACADEMIC PRESS, INC.; ALAN R. LISS, INC.; ALLERTON PRESS INC.;
AMBIENT PRESS LTD.; AMERICAN ASSOCIATION FOR THE ADVANCEMENT
(Caption continued on inside front cover)
ON APPEAL FROM AN INTERLOCUTORY ORDER
OF THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF NEW YORK
BRIEF FOR THE AMERICAN LIBRARY ASSOCIATION,
AMICUS CURIAE, IN SUPPORT OF
REVERSAL OF THE DISTRICT COURT'S DECISION
Of Counsel: INGERSOLL AND BLOCH, CHARTERED
Sherman House
Susan G. Braden 1401 Sixteenth Street, N.W.
Reuben B. Roberston Washington, D.C. 20036
(202) 232-1015
Attorneys for the Amercian
Library Association
Dated: March 4, 1993
(CONTINUATION OF CAPTION FROM PREVIOUS PAGE)
OF SCIENCE; AMERICAN ASSOCIATION OF COST ENGINEERS, INC.; AMERICAN
CHEMICAL SOCIETY; AMERICAN CONFERENCE OF GOVERNMENTAL INDUSTRIAL
HYGIENISTS; AMERICAN INSTITUTE OF PHYSICS; AMERICAN MATHEMATICAL
SOCIETY; AMERICAN MEDICAL ASSOCIATION; AMERICAN SOCIETY FOR
BIOCHEMISTRY AND MOLECULAR BIOLOGY, INC.; AMERICAN SOCIETY FOR
MICROBIOLOGY; ASPEN PUBLISHERS, INC.; ASSOCIATION FOR SYMBOLIC
LOGIC; BIRKHAUSER BOSTON; BLACKWELL SCIENTIFIC PUBLICATIONS, LTD.;
BUREAU OF NATIONAL AFFAIRS, INC.; BUSINESS MONTH CORPORATION;
BUSINESS PUBLISHERS, INC.; BUTTERWORTH & CO. (PUBLISHERS) LTD.;
C.V. MOSBEY COMPANY; CANNING PUBLICATIONS, INC.; CENTER FOR
COMPUTER/LAW; CORNELL UNIVERSITY; CRC PRESS, INC.; DATA PROCESSING
MANAGEMENT ASSOCIATION, INC.; EDITIONS SCIENTIFIQUES ELSEVIERS;
ELSEVIER SCIENCE PUBLISHERS B.V.; ELSEVIER SEQUOIA SA; FEDERATION
OF SOCIETIES FOR COATING TECHNOLOGY; GROVE & STRATTON, INC.;
HARCOURT BRACE JOVANOVICH LIMITED (FORMERLY ACADEMIC PRESS INC.
(LONDON) LTD.); HEMISPHERE PUBLISHING CO.; THE INFORMATION STORE,
INC.; INSTITUTION OF ELECTRICAL ENGINEERS/PETER PEREGRINUS LTD.;
INTERNATIONAL ACADEMY AT SANTA BARBARA, INC.; J. SCHWEITZER VERLAG;
JOHN WILEY & SONS LIMITED; KENNETH MASON PUBLICATIONS LTD.; THE
LAUX COMPANY; LAW & TECHNOLOGY PRESS; LITTLE, BROWN & COMPANY;
MARCEL DEKKER, INC.; MASSACHUSETTS MEDICAL SOCIETY; MBR PRESS,
INC.; MIT PRESS; MUNKSGAARD INTERNATIONAL PUBLISHERS LTD.; MULTI-
SCIENCE PUBLISHING CO. LTD; OPEN-APPLE; PHYSOLOGIA PLANTARUM; PJD
PUBLICATIONS LTD.; PRINCETON UNIVERSITY PRESS; RAVEN PRESS; ROYAL
AUSTRALASIAN ORNITHOLOGIST'S UNION, SCANNING MICROSCOPY
INTERNATIONAL, INC.; SCRIPTA TECHNICA, INC.; SKY PUBLISHING
CORPORATION; SOCIETY OF NAVAL ARCHITECTS AND MARINE ENGINEERS;
SPRINGER-VERLAG NEW YORK INC.; TECHNICAL CONFERENCES, also known as
T/C Press; TECHNOMIC PUBLISHING CO., INC.; TISSUE CULTURE
ASSOCIATION, INC.; TRANSACTION PUBLISHERS; VAN NOSRTRAND REINHOLD;
VCH PUBLISHERS, INC.; VNU BUSINESS PUBLICATIONS INC.; W.B. SAUNDERS
COMPANY; WALTER DE GRUYTER, INC.; WARREN GORHAM & LAMONT, INC.;
WASHINGTON REGULATORY REPORTING ASSOC.; WILLIAMS & WILKINS, INC.;
WOLTERS KLUWER ACADEMIC PUBLISHERS B.V.; AMERICAN GEOPHYSICAL
UNION; ELSEVIER SCIENCE PUBLISHING CO., INC.; PERGAMON PRESS, LTD.;
SPRINGER-VERLAG, GMBH & CO., K.G.; JOHN WILEY & SONS, INCORPORATED;
WILEY HEYDEN, LTD.; HUMAN SCIENCES PRESS INC. PUBLISHING
CORPORATION AND PLENUM PUBLISHING CORPORATION,
Petitioners - Appellees,
- v. -
TEXACO INC.,
Respondent - Appellant.
TABLE OF CONTENTS
Page
INTEREST OF THE AMERICAN LIBRARY ASSOCIATION . . . . . . . . . . . . . 1
A. Libraries Have Had a Special Historical Role
in Disseminating Published Works . . . . . . . . . . . . . 2
B. The American Library Association Has Been
at the Forefront of the Development of the
Fair Use Doctrine . . . . . . . . . . . . . . . . . . . . 4
ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
I.THE SCOPE OF COPYRIGHT IS LIMITED BY THE
CONSTITUTION AND THE DOCTRINE OF FAIR USE. . . . . . . . . . . . . . . . 7
II.THE DISTRICT COURT'S ANALYSIS IS UNSOUND AND
UNSUPPORTED BY THE RECORD. . . . . . . . . . . . . . . . . . . . . . . . 9
A. The District Court Incorrectly Analyzed the
Purpose and Character of Texaco's Use. . . . . . . . . . . . . . . 10
B. The Nature of the Copyrighted Work Fully
Supports A Finding of Fair Use . . . . . . . . . . . . . . . . . 13
C. The District Court Erred in Applying the
Amount and Substantiality Test . . . . . . . . . . . . . . . . . . 14
D. The District Court Failed to Make a Coherent
Analysis of the Effect on the Market for the
Copyrighted Work . . . . . . . . . . . . . . . . . . . . . . . . . 17
CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
INTEREST OF THE AMERICAN LIBRARY ASSOCIATION
The American Library Association ("ALA") is a non-profit
organization with more than 55,000 members, including libraries,
information specialists, library users, trustees, educators and
friends of libraries. Founded in 1876, ALA is the oldest and
largest national library association in the world. ALA provides
leadership for the development, promotion and improvement of
library and information services. ALA also furthers the work of
librarians by its defense of intellectual freedom and support for
widespread access to information to expand knowledge.
The district court decision in this case, American Geophysical
Union v. Texaco, 802 F. Supp. 1 (S.D.N.Y. 1992) ("Texaco"),
misapplies and significantly erodes the fair use doctrine, a
judicially created defense to copyright infringement that Congress
enacted into law in 1976, which permits the copying of copyrighted
works if certain conditions are met. While Congress has provided
public and special libraries with specific protection for
photocopying of copyrighted materials in Section 108 of the
Copyright Revision Act of 1976 ("the Act"), the scope of the fair
use doctrine conveys far broader and more important protection.
If allowed to stand, the district court's decision will
significantly impair libraries from fulfilling historic and
constitutionally protected obligations and potentially will require
them to assume substantial costs and burdens. In the end, it is
the public's interest in the advancement of learning and expansion
of knowledge that will be injured the most; that loss will be
irreparable. Therefore, ALA respectfully files as amicus to urge
reversal of the decision of the district court.
A. Libraries Have Had a Special Historical Role in
Disseminating Published Works
When our nation was founded, an individual's personal library
was an important measure of one's wealth and standing in society.
R. A. Rutland, "Madison's Bookish Habits," 37 Quarterly Journal of
the Library of Congress No. 2, 176 (Spring 1980). Libraries open
to the public were virtually nonexistent.
James Madison, known as "the father of the Constitution,"
thought a great deal about the importance of and how to make the
scarce published works of the day available to promote the quality
of public knowledge and debate. See generally, A. Koch, "James
Madison and the Library of Congress," 37 Quarterly Journal of the
Library of Congress, No. 2, 159 (Spring 1980). Towards that end,
while serving as a member of the Constitutional Congress, Madison
prepared a list of over 1300 volumes "proper for the use of
Congress," which included histories, political discourse,
philosophy, law and literature. Rutland, supra at 181. Many of
these works were copyrighted. Ibid.
When he became President, Madison authorized the acquisition
of Thomas Jefferson's library, perhaps the finest and most complete
collection in the country at that time, to replace the books and
publications that were destroyed when the British burned the U.S.
Capitol during the War of 1812. He also ordered construction of a
building, now part of the Library of Congress, in which to house
this priceless acquisition. Madison wanted this library to be the
principal national repository of copyrighted works and a model for
other libraries. Madison further envisioned libraries as essential
for the dissemination of published works to foster the free flow of
ideas necessary to keep a democracy vibrant. His words to that
effect remain inscribed on the Library of Congress' Madison
Memorial Hall:
Learned institutions ought to be favorite objects
with every free people. They throw that light over
the public mind which is the best security against
crafty and dangerous encroachments on the public
liberty.
Letter from James Madison to W.T. Barry, Lieutenant Governor of
Kentucky (Aug. 4, 1822). While the public today has greater
overall access to information sources than existed in Madison's
time, access to academic, scientific and scholarly publications
continues to exist primarily through libraries.
B. The American Library Association Has Been at the
Forefront of the Development of the Fair Use Doctrine
Because of the special role of libraries in our nation's
heritage, ALA has been at the forefront of development of the fair
use doctrine in the courts, as well as the Congress. In 1972,
ALA participated as an amicus curiae before the United States Court
of Claims, the predecessor of the Federal Circuit, in the ground-
breaking case of Williams & Wilkins Company v. United States, 487
F.2d 1345 (Ct. Cl. 1973), aff'd per curiam by an equally divided
Court, 420 U.S. 376 (1975) ("Williams & Wilkins"). ALA argued in
that case that not-for-profit academic, research and public
libraries should not be liable for copyright infringement under the
fair use doctrine where single photocopies of portions of
copyrighted works were made for scientific and scholarly research.
ALA also was concerned that an adverse holding in that case would
quickly embroil libraries and librarians in
negotiations, administrative matters and legal
actions, the prospects or net effect of which will
force the cessation of traditional library
photocopying and the consequent denial of this
important means of access to recorded knowledge to
scientists, researchers and scholars.
Brief for Amicus ALA at 3, Williams & Wilkins Co. v. United States,
No. 73-68 (Ct. Cl. 1973).
The Court of Claims was persuaded by ALA's argument that
research and scholarship were the primary ends served rather than
commercial exploitation. Accordingly, it held that copying done by
employees of the National Institute of Health, a nonprofit quasi-
governmental entity, qualified for fair use protection because it
served to advance science. Williams & Wilkins, 487 F.2d at 1354.
The Supreme Court affirmed Williams & Wilkins without an opinion,
in the absence of a majority. ALA then turned to the Congress,
which codified the fair use doctrine in Section 107 of the Act.
The Supreme Court first considered the statutory contours of
fair use in Sony Corp. of America v. Universal City Studios, 464
U.S. 417 (1984) ("Sony"). Participating as amicus curiae, ALA
successfully argued for reversal of the Ninth Circuit's decision to
deny copied video recordings the safe harbor of fair use, even when
the copies were made without any commercial motivation and did not
diminish the value of the owner's copyright. Brief for Amicus ALA,
Sony, No. 81-1687 (Sup. Ct. 1984). In particular, ALA argued
against the Ninth Circuit's misguided holding that "intrinsic" uses
of copyrighted materials were not fair use, since that would
profoundly affect the ability of librarians to
serve their patrons effectively [as] [l]ibraries
are the critical link in bringing new information
technologies to the public at large. . . . If the
decision of the Court of Appeals is not reversed,
libraries could be accused of making, or of aiding
and abetting unfair "intrinsic" uses of copyrighted
materials.
Id. at 2.
ARGUMENT
Many of the same concerns presented in Williams & Wilkins and
Sony as to the scope and viability of the fair use doctrine and the
potential impact of the copyright law on libraries throughout the
nation compel ALA to appear before this Court as an amicus in this
case. Held to the specific stipulated facts in which the instant
case arises, the Texaco decision can be read narrowly as simply
denying for-profit corporations and their employees the legal
defense of fair use when single copies are made of eight different
scientific articles in their entirety. As explained more fully
below, rather than applying this Circuit's precedent to the facts
presented by this case, the district court has used this "test
case" to advance its perception of what the law should be. See
generally, Leval, "Toward a Fair Use Standard," 103 Harv. L. Rev.
1105 (1990). In doing so, the district court has exceeded its
jurisdiction and issued an ill-considered decision that must not be
allowed to stand.
I. THE SCOPE OF COPYRIGHT IS LIMITED BY THE CONSTITUTION
AND THE DOCTRINE OF FAIR USE
Many of the deficiencies in the district court's fair use
analysis are derived from a central misperception about the
constitutional limits and purpose of the copyright law. The
district court opined that
The copyright law celebrates the profit motive . .
. The profit motive is the engine that ensures the
progress of science . . . The result is the
progress of science; the means is the profit
motive, which is underwritten by the law of
copyright.
Texaco, 802 F. Supp. at 27 (emphasis in original). The
Constitution and the courts, which initially created the fair use
doctrine, however, approach copyright from a far different
perspective than that of the district court in this case.
The Constitution empowers Congress only
To promote the Progress of Science and useful Arts,
by securing for limited Times to Authors and
Inventors the exclusive Right to their respective
Writings and Discoveries.
U.S. CONST., Art. I, 8, cl. 8 (emphasis added). Copyright thus
is a privilege, which extends no further than necessary to provide
a qualified incentive for an individual to commit ideas into public
expression that may then be read, examined, and used by others to
expand on the existing body of knowledge. As the Supreme Court
articulated in Twentieth Century Music Corp. v. Aiken, 422 U.S. 151
(1975):
The limited scope of the copyright holder's
statutory monopoly, like the limited copyright
duration required by the Constitution, reflects a
balance of competing claims upon the public
interest: Creative work is to be encouraged and
rewarded, but private motivation must ultimately
serve the cause of promoting broad availability of
literature, music and the other arts.
Id. at 156 (emphasis added). Justice Stevens, writing for the
Court more recently in Sony, likewise observed that under the
Constitution,
The monopoly privileges that Congress may authorize
are neither unlimited nor primarily designed to
provide a special private benefit. Rather, the
limited grant is a means by which an important
public purpose may be achieved.
464 U.S. at 429. The Sony opinion further underscored this
important historical point, quoting former Chief Justice Hughes in
Fox Film Corp. v. Doyal, 286 U.S. 123, 127 (1932), as follows:
"The sole interest of the United States and the
primary object in conferring the monopoly lie in
the general benefits derived by the public from the
labors of authors."
464 U.S. at 429.
In Rosemont Enterprises, Inc. v. Random House, Inc., 366 F.2d
303 (2d Cir. 1966), cert. denied, 385 U.S. 1009 (1967) ("Rosemont
Enterprises), this Circuit defined the doctrine of fair use as
a "privilege in others than the owner of a
copyright to use the copyrighted material in a
reasonable manner without his consent,
notwithstanding the monopoly granted to the owner"
. . .
The fundamental justification for the privilege
lies in the constitutional purpose in granting
copyright protection in the first instance . . . .
To serve that purpose, "courts in passing upon
particular claims of infringement must occasionally
subordinate the copyright holder's interest in a
maximum financial return to the greater public
interest in the development of art, science and
industry." Berlin v. E.C. Publication, Inc., 329
F.2d 541, 544 (2d Cir. 1964). Whether the
privilege may justifiably be applied to particular
materials turns initially on the nature of the
materials, e.g., whether their distribution would
serve the public interest in the free dissemination
of information and whether their preparation
requires some use of prior materials dealing with
the same subject matter.
366 F.2d at 306-7 (citations omitted, emphasis added).
However, the First Amendment further constrains Article I,
Section 8, Clause 8. This tension has been resolved by application
of the equitable doctrine of fair use, as reflected in Wainwright
Securities, Inc. v. Wall Street Transcript Corp., 558 F.2d 91, (2d
Cir. 1977), cert. denied, 434 U.S. 1014 (1978):
[c]onflicts between interests protected by the
first amendment and the copyright law thus far have
been resolved by application of the fair use
doctrine.
Id. at 95. See also, New Era Publications International, ApS v.
Henry Holt, & Co., 873 F.2d 576, 584 (2d Cir. 1989), cert. denied,
110 S. Ct. 1168 (1990) ("New Era I").
Therefore, copyright conveyed by Article I, Section 8, Clause
8 of the U.S. Constitution is limited not only by its own terms,
but by the First Amendment and the doctrine of fair use, as it has
developed in the case law and by congressional mandate.
II. THE DISTRICT COURT'S ANALYSIS IS UNSOUND AND
UNSUPPORTED BY THE RECORD
ALA's brief examines each of the four factors enumerated in 17
U.S.C. 107, which this Court's de novo review must consider. In
Harper & Row, Publishers, Inc. v. Nation Enterprises, 471 U.S. 539
(1985) ("Nation"), the Supreme Court instructed the lower courts
that fair use must be analyzed on a case-by-case basis because it
is not susceptible to a single, uniform definition:
"[S]ince 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."
Id. at 560, quoting H. R. Rep. No. 1476, 94th Cong., 2d Sess. 65,
reprinted in U.S. Code Cong. & Admin. News 1976, 5659, 5679. This
examination must also include consideration of the overall public
policy considerations inherent in application of an equitable
doctrine. See, e.g., New Era I, 873 F.2d at 589; Weissmann v.
Freeman, 868 F.2d 1313, 1323 (2d Cir. 1989); Maxtone-Graham v.
Burtchaell, 803 F.2d 1253, 1260 (2d Cir. 1986), cert. denied, 481
U.S. 1059 (1987) ("Maxtone-Graham"); accord, Sony, 464 U.S. at 448
& n. 31, 454-56.
A. The District Court Incorrectly Analyzed the Purpose and
Character of Texaco's Use
It has long been recognized in this Circuit that
whether an author or publisher has a commercial
motive . . . is irrelevant to a determination of
whether a particular use of copyrighted material in
a work which offers some benefit to the public
constitutes a fair use.
Rosemont Enterprises, 366 F.2d at 307. See also, Consumers Union
of U.S. v. General Signal Corp., 724 F.2d 1044, 1049 (2d Cir.
1983), cert. denied, 469 U.S. 823 (1984) ("Consumers Union"). The
mere fact that Texaco potentially may derive some remote indirect
commercial gain from its scientists' copying of articles from The
Journal of Catalysis ("Catalysis") does not compel an adverse
finding under 17 U.S.C. 107(1), since Texaco had no interest in
"supplanting" the "right of first" publication. Nation, 471 U.S.
at 562. See also, Maxtone-Graham, 803 F.2d at 1260-62. Accord,
Sega Enterprises Ltd. v. Accolade, Inc., 977 F.2d 1510, 1522-23
(9th Cir. 1992) ("Sega").
The district court erroneously concluded that because the use
within Texaco's commercial environment was not "transformative," it
could not qualify as fair use. Texaco, 802 F. Supp. at 11-13. The
district court's reasoning, however, was based on the flawed
premise that the courts
consistently [express] preference for secondary
uses that [do] not merely copy and offer themselves
as substitutes for the original copyrighted text,
but that used the matter taken from the copyrighted
work for some new objective or purpose.
Id. at 11. It is not surprising that the district court cites no
authority for this proposition. Id. No such extrajudicial value
judgment is found in the case law because the plain language of 17
U.S.C. 107(1) does not speak of "transformative" uses, and the
courts must first and foremost be guided by the language that
Congress used to describe this requisite element of fair use.
Accord, Sony, 464 U.S. at 431 ("The judiciary [should be reluctant]
to expand the protections afforded by the copyright without
explicit legislative guidance").
Since the articles copied by one of Texaco's researchers
consisted primarily of published scientific research, that use fits
closer to the use approved in Williams & Wilkins than the
commercial exploitation of unpublished works disfavored in Nation.
See 17 U.S.C. 107 ("research" is a specific category authorized
in 17 U.S.C. 107 as fair use). Even when commercial gain is
conferred, this Circuit requires that the overall public benefit
resulting from a particular use be considered. MCA Inc. v. Wilson,
677 F.2d 180, 182 (2d Cir. 1981). The Ninth Circuit recently has
strongly endorsed a similar approach in Sega, 977 F.2d at 1523
("Public benefit need not be direct or tangible, but may arise
because the challenged use serves a public interest.") The purpose
of the copied Catalysis articles in this case was for accuracy and
personal convenience, akin to note taking -- a use approved of by
this Circuit in Consumers Union:
where accurate reporting requires use of verbatim
quotations, fair use will be liberally applied.
724 F.2d at 1050. See also, Nation, 471 U.S. at 563; Wright v.
Warner Books, Inc., 953 F.2d 731, 740 (2d Cir. 1991) ("Wright");
Lish v. Harper's Magazine Foundation, 807 F. Supp. 1090, 1095
(S.D.N.Y. 1992) ("Lish") ("where the original text will best report
the facts, copying the original words may be permissible because
the quotation of the factual statement may involve no expressive
content whatsoever"), citing, Newman, "Not the End of History: The
Second Circuit Struggles with Fair Use," 37 J. Copyright Soc'y 12
(1990).
Justice O'Connor, writing for the Court in Nation, carefully
made the point that
The crux of the profit/non-profit distinction is
not whether the sole motive of the use is monetary
gain but whether the user stands to profit from
exploitation of the copyrighted material without
paying the customary price.
471 U.S. at 562. See also, Roy Export Co. Establishment v.
Columbia Broadcasting System, Inc., 672 F.2d 1095, 1104 (2d Cir.),
cert. denied, 459 U.S. 826 (1982). In light of Texaco's increased
purchases of Catalysis subscriptions, it cannot credibly be argued
that consumer demand was diminished in any significant or
meaningful manner or that Texaco sought to avoid paying "the
customary price." In this regard, the district court erred by
failing to give due credit to the propriety of Texaco's conduct.
See e.g., Salinger v. Random House, Inc., 811 F.2d 90, 96 (2d
Cir.), cert. denied, 484 U.S. 890 (1987) ("Salinger"); Maxtone -
Graham, 803 F.2d at 1264; Lish, 807 F. Supp. at 1096-1101. Since
Texaco was a subscriber to Catalysis, and indeed increased its
subscriptions from one to three at the higher $828 per subscription
institutional rate, the purpose and character of its researcher's
copying individual articles thereof does not exhibit bad faith.
Thus, the equities reflect that the purpose and character of
Texaco's use was not unfair. The district court's finding
otherwise should be reversed.
B. The Nature of the Copyrighted Work Fully Supports A
Finding of Fair Use
The district court properly concluded that, because the
material copied by Texaco was essentially factual in nature, "the
nature of the copyrighted work" element supported a finding of fair
use. Texaco, 802 F. Supp. at 16-17. While ALA concurs with this
conclusion, certain assumptions in the district court's reasoning
must be addressed.
Without publishers being willing to assume financial risks of
publication and dissemination, the district court assumes that
"there would be no reason for authors to write [scientific
articles]; even if they did, the articles would fail to achieve
distribution that promoted the progress of science." Id. at 16.
Here, the district court ignored credible and undisputed evidence
that authors of scholarly articles in scientific journals such as
Catalysis are primarily motivated to prepare and submit such works
in order to make a contribution to learning and gain peer
acceptance for their ideas rather than to generate copyright
royalties. See, Schwartz Trial Testimony at pp. 8-9. Moreover, it
is well known that university faculty members typically give away
such research for nominal or even no royalties in order to publish
works which will qualify for tenure or simply promote their ideas.
See generally, S. Bennett and N. Matheson, "Scholarly Articles:
Valuable Commodities for Universities," Chronicle of Higher
Education 1 (May 27, 1992). Ironically, university libraries in
particular are the largest purchasers of scientific journals and
make up the primary market for such research and scholarship.
Ibid. Therefore, libraries and library users, particularly those
in the academic community, should certainly be among the prime
beneficiaries of the fair use doctrine, in light of the "nature of
the copyrighted work."
C. The District Court Erred in Applying the Amount
and Substantiality Test
The Supreme Court has held that even copying a copyrighted
work in its entirety does not preclude a finding of fair use. See
Sony, 464 U.S at 449-50. This Circuit in Maxtone-Graham held that
There are no absolute rules as to how much of a
copyrighted work may be copied and still be
considered fair use.
803 F.2d at 1263. See also, Wright, 953 F.2d at 738; accord, Sega,
977 F.2d at 1526. This Circuit has acknowledged that this factor
has "both a quantitative and a qualitative component." New Era
Publications International v. Carol Publishing Group, 904 F.2d 152,
158 (2d. Cir. 1990).
Although Catalysis' publisher registered entire issues with
the U.S. Copyright Office, the record reflects that the individual
articles contained therein were not registered. Without citation
to any evidence or authority, however, the district court concluded
that "Each article, note or letter published in Catalysis is a
separately authored work, protected by a copyright." Texaco, 802
F. Supp. at 17 (emphasis added). Catalysis, however, clearly is a
"collective work," which is defined in the Act as
a periodical issue. . ., in which a number of
contributions, constituting separate and
independent works in themselves, are assembled into
a collective whole.
17 U.S.C. 101. By law, the copyright for a compilation or
collective work extends only to the material contributed by the
author of the work, e.g., the collection and assembling of pre-
existing materials or data that are selected, coordinated, or
arranged in such a way that the resulting work as a whole
constitutes an original work. Id. The evidence is undisputed that
Texaco copied only unregistered articles, not entire issues of
Catalysis. Therefore, plaintiffs do not -- even to this day --
have a properly registered copyright in the material that was
actually copied, a prerequisite for bringing an infringement
action. While the defective registration may still be curable
at this juncture, see e.g., Computer Associates Intern., Inc. v.
Altai, Inc., 775 F. Supp. 544, 555-57 (E.D.N.Y. 1991) (Pratt, J.),
aff'd in part and rev'd on other grounds, No. 91-7893, Slip op. at
4770 (2d Cir. Dec. 17, 1992), the underlying policy judgment made
by the district court in glossing over this statutory requirement
is most troubling, since it subsumes substantive jurisdiction and
standing. Nevertheless, the district court sua sponte excused the
publisher from complying with the statutory registration
requirements established by Congress on grounds of presumed
burdensomeness
it would involve gigantic expense and inconvenience
to register separately each of the 20 odd items
that appear in an individual issue.
Texaco, 802 F. Supp. at 17. The publishers' perceived burden,
however, pales beside the one that the district court readily would
impose on libraries, particularly non-public ones. To avoid even
the potential threat of liability, such libraries either would be
required to succumb to the unregulated royalty structure designed
and imposed by the Copyright Clearance Center ("CCC") or to
assume the burden of ascertaining the employment status and intent
of every library user who wishes to make a copy, as well as the
ultimate purpose to which the copy would be put. Placing aside the
affront to individual constitutional rights, the administrative and
financial burdens required to conduct such interrogations would
seriously impair the principal work of libraries. The district
court's subsumed judgment that libraries rather than publishers
should bear these burdens, is patently inconsistent with the
underlying purpose of copyright, i.e., to enhance knowledge. For
these reasons, the district court's findings as to amount and
substantially of copying should be reversed.
D. The District Court Failed to Make a Coherent Analysis of
the Effect on the Market for the Copyrighted Work
The Supreme Court has made it clear that the effect on the
market "is undoubtably the single most important element of fair
use." Nation, 471 U.S. at 566. This inquiry should focus on
whether if the challenged use
"should become widespread, it would adversely
affect the potential market for the copyrighted
work," by diminishing potential sales, interfering
with market ability, or usurping the market.
Sega, 977 F.2d at 1523, quoting Sony, 464 U.S. at 451.
This Circuit also has made it clear that the proper inquiry
concerns the potential market for the copyrighted work. Salinger,
811 F.2d at 99. As it also explained in Consumers Union
The theory behind the copyright law is that
creation will be discouraged if demand can be
undercut by copiers. Where the copy does not
compete in any way with the original, this concern
is absent.
724 F.2d at 1051 (emphasis added). Texaco's copying, however, did
not "usurp" the market, as was done in Nation and Salinger, nor did
it affect the limited monopoly conveyed by copyright.
The district court did not even bother to define the universe
of existing Catalysis customers or the scope of that publication's
potential market. Absent such analysis, it is impossible to deduce
any potential market that may be foreclosed by Texaco's copying or
to conclude from the evidence that it had any affect on Catalysis,
other than an insignificant or de minimus one. Nevertheless, the
district court was persuaded that, but for Texaco's copying, it
would "need to provide" its researchers with additional copies of
Catalysis which would "substantially supplement the revenues of the
copyright owning publishers." Texaco, 802 F. Supp. at 18. Of
course, the district court does not reveal the number of additional
subscriptions that it would require Texaco to buy in order to avoid
liability.
The district court also concludes that Texaco would
"nonetheless continue to provide its scientists with copies, so
long as there exists a means of doing so that is not excessively
expensive or burdensome. . . ." Id. Nothing in the record
supports that assumption nor does the district court provide any
insight as to what it believes "excessive expense" or "burdensome"
means.
Instead, the district court repeated plaintiffs argument that
Texaco
could purchase additional subscriptions; it could
purchase back issues or back volumes; it could
order tear sheets from document delivery services
that purchase subscriptions; it could order
photocopies from document services that make copies
and license agreements with the plaintiff-
publishers and pay royalties to the publishers for
all copies made; it could negotiate a license
directly with a particular publisher to pay a
blanket fee for the right to make photocopies at
will; or, alternatively, Texaco could photocopy
articles as needed for its scientists by operating
under the TRS or AAS licensed services offered by
the CCC.
Id. None of these options would appear to be a realistic
alternative since the copy was made by Texaco's researcher for
accuracy, as well as his personal convenience. As the district
court even acknowledged, "what a scientist needs is a photocopy,"
not complete back volumes, back issues and the like. Id. (emphasis
in original).
Of direct concern to ALA is that Texaco could make a
reasonable business judgment and choose to close its in-house
library, deciding that the cost of providing 400-500 scientists
with secondary research materials in-house was too high. Thus,
Texaco's management could require its scientists to obtain any such
research from other sources, including public libraries. While the
district court at least recognized that this route could be
pursued, it does not acknowledge or consider the burden this would
shift to libraries. Texaco, 802 F. Supp. at 22.
The most revealing defect in the district court's analysis of
the effect on the market is its failure to acknowledge that the
Constitution does not guarantee publishers profitability; it merely
provides authors with a limited incentive to creative in order to
serve a larger societal goal -- the enhancement of knowledge. See,
U.S. CONST. Art. I, 8, cl. 8. Yet, the district court was not
constrained from leaping over this hurdle concluding that the
publishers "powerfully demonstrated entitlement" to prevail as to
the effect of Texaco's copying on the market for the copyrighted
work. Texaco, 802 F. Supp. at 18.
For these additional reasons, the district court's conclusion
that Catalysis' market was adversely affected by Texaco's copying
is incorrect and should be overruled.
CONCLUSION
In effect, this Circuit has been asked to hold that copying
factual research, which ultimately may benefit a commercial entity,
is presumptively not fair use. If that holding becomes the law of
this Circuit, how do libraries protect themselves from even
potential liability other than barring users from copying
information, which may even remotely result in a benefit to a for-
profit entity? How do libraries conduct this inquiry without a
direct assault on constitutionally and statutorily protected rights
to privacy? How do libraries pay for this inquiry? Certainly the
publishers who will directly profit from such a scheme, including
the coalition members listed in the caption of this case, do not
propose to reimburse libraries for the direct and indirect costs
they would impose. Their objective is to use libraries, which are
undoubtably the largest purchasers of copyrighted works,
particularly of scientific research, to further increase publisher
profits by making libraries accede to the highly questionable CCC
arrangement and police library patrons --- goals far from Madison's
mind when he looked to libraries to promote learning and expand
knowledge to foster democracy.
Clearly the continued viability of the fair use doctrine is an
essential pre-requisite to our nation's libraries being able to
fulfill the unique and important role that the Constitution's
author envisioned and intended for libraries in a free society.
The wisdom of James Madison's words, written over two hundred years
ago, is still valid today.
Knowledge Will Forever Govern Ignorance: And A
People Who Mean To Be Their Own Governors, Must Arm
Themselves With The Power Which Knowledge Gives.
Letter from James Madison to W.T. Barry, Lieutenant Governor of
Kentucky (August 4, 1822).
Texaco's copying of research articles, under the facts as
stipulated by parties in this litigation, should be accorded the
defense of fair use by this Circuit as the benefits to society from
the "use" in this case, far outweigh any remote pecuniary benefit
to Texaco, without denigrating or devaluing the limited monopoly
that Catalysis enjoys in any way. Because of the scholarship of
former Judge Learned Hand this Circuit has long been recognized as
one of the leading courts concerning the law of copyright.
This Circuit previously has utilized the fair use doctrine to
"avoid rigid application of the copyright statute when, on
occasion, it could stifle the very creativity which that law is
designed to foster." Iowa State Univ. Research Found., Inc. v.
American Broadcasting, 621 F.2d 57, 60 (2d Cir. 1980). See also,
Consumers Union, 724 F.2d at 1048. It should again do so by
applying the fair use doctrine in this case and reverse the
district court's opinion.
Respectfully submitted,
Susan G. Braden
INGERSOLL AND BLOCH, CHARTERED
1401 Sixteenth Street, N.W.
Washington, D.C. 20036
(202) 232-1015
Attorney for The American
Library Association
Of Counsel:
Reuben B. Robertson
INGERSOLL AND BLOCH, CHARTERED
1401 Sixteenth Street, N.W.
Washington, D.C. 20036
(202) 232-1015
Attorney for The American Library
Association
FOOTNOTES
1. Reflecting the diversity of its membership, ALA has eleven
functional divisions: American Association of School Libraries;
Association of College and Research Libraries; Public Library
Association; Association of Specialized and Cooperative Library
Agencies; American Library Trustee Association; Association of
Library Collections and Technical Services; Association of Library
Service to Children; Library Administration and Management
Association; Library and Information Technology Association;
Reference and Adult Services Division and Young Adult Library
Services Association.
2. Pub. L. 94-553, Title I, 101, 17 U.S.C. 101 et seq. (Oct.
19, 1976). Under the statute, the rights of a libraries or
archives, or employees thereof acting within the scope of their
employment, to reproduce and distribute copies of copyrighted works
are limited to "no more than one copy of a work" and are subject to
three specific overall conditions: (1) the copying or distribution
must be "made without any purpose of direct or indirect commercial
advantage"; (2) the collections of the library or archives must be
open to the public or available not only to affiliated researchers
but also to "other persons doing research in a specialized field";
and (3) "notice of copyright" must be included. 17 U.S.C. 108(a).
3. Should this Court decide to affirm any aspect of the district
court's decision, ALA respectfully requests that this Court's
decision specifically distinguish any such holding to minimize any
potential adverse impact on libraries for the reasons discussed
herein.
4. For a detailed historical perspective of ALA's role prior to
1972, particularly in formulating the "Gentlemen's Agreement" of
1935, a policy statement designed to define what constituted fair
use of library copying of both copyrighted and non-copyrighted
works, see L. C. Tepper, "Copyright Law and Library Photocopying:
A Historical Survey," 84 Law Library Journal 341, 346-49 (1992).
5. Section 107 of the Act establishes that the fair use of a
copyrighted work is not an infringement and further provides the
following guidance:
In determining whether the use made of a work in
any particular case is a fair use the factors to be
considered shall include --
(1) the purpose and character of the use,
including whether such use is of a commercial
nature or is for non-profit educational purposes;
(2) the nature of the copyrighted work;
(3) the amount and substantiality of the
portion used in relation to the copyrighted work as
a whole; and
(4) the effect of the use on the potential
market for or value of the copyrighted work.
17 U.S.C. 107 (emphasis added).
6. The district court noted that Catalysis was offered at an
institutional rate, which Texaco paid, that was double the price of
an individual subscription. Texaco, 802 F. Supp. at 7. The
district court's analysis failed to acknowledge that the existence
of these two rates in part reflects the publisher's inherent
recognition that it is likely that copies will be made of such
publications by institutional subscribers, or their users, thereby
justifying the substantial differential between institutional and
individual subscription rates.
7. The fact that the authors of these articles may have agreed to
transfer their rights to the publisher, Texaco, 802 F. Supp. at 6,
does not affect the publisher's obligations regarding registration,
which remain.
Moreover, ALA questions exactly what standing plaintiffs have
even to assert the claims that district court adjudicated. Does
the district court have the power simply "to assume" critical
jurisdictional facts, without opening the door to advisory
opinions, not authorized by law? Where is affirmative proof in the
record that these authors had proper and exclusive legal authority
to transfer their rights? Without such proof, this decision should
be vacated as a matter of law. See Lujan v. Defenders of Wildlife,
119 L. Ed. 2d. 351, 364-65 (1992) (the party invoking federal court
jurisdiction must establish each element of standing by specific
affirmative evidence).
8. Among the most troubling aspects of the district court's
decision is its inherent endorsement of CCC and its publisher's set
fee structure. Texaco, 802 F. Supp. at 24-26. While some of ALA's
members have joined CCC, the majority have not. Even if CCC
membership were obtained, libraries and their users would still
remain in peril, as not all publications are registered with CCC.
Moreover, the "reasonableness" of CCC's unregulated fee structure
is far from settled. Before embracing CCC, the district court
should bear in mind the warning of the Ninth Circuit in Sega:
an attempt to monopolize [a] market by making it
impossible for others to compete runs counter to
the statutory purpose of promoting creative
expression and cannot constitute a strong equitable
bases for resisting the invocation of the fair use
doctrine.
977 F.2d at 1524. Yet the district court's decision would appear
to place libraries at risk if they fail to pay fees demanded by
CCC. Texaco, 802 F. Supp. at 13-14 n.13.
9. For example, if Texaco's employee went to a public library,
should it require that he disclose his employer, the nature of his
research, whether the research is for profit, or whether it is
close to fruition? Should that library keep records of the
responses? Who has the right to see them? What if the library
user were an employee of a public university; of a private
university? What if he were employed by a profit-making company,
but was conducting his research under a government contract?
Public libraries should not be placed in the position of making
judgments as to the lawfulness of photocopying based upon their
view of the commerciality of the copier's motivations.
