Original brief filed by Texaco, Inc.

  RULE 26.1 STATEMENT

          Texaco Inc. has no parents and has no affiliates that

have issued shares to the public.  The subsidiaries of Texaco

Inc. that are not wholly owned are Four Star Oil & Gas Company,

Caltex Petroleum Corporation, P.T. Caltex Pacific Indonesia,

American Overseas Petroleum Ltd., and Texaco Canada Petroleum

Inc.

                        TABLE OF CONTENTS

                                                             Page

STATEMENT OF JURISDICTION. . . . . . . . . . . . . . .         1

STATEMENT OF ISSUE PRESENTED FOR REVIEW. . . . . . . .         2

STATEMENT OF THE CASE. . . . . . . . . . . . . . . . .         3

A.   The Facts . . . . . . . . . . . . . . . . . . . .         3

     1.   Academic Press and the Journal of Catalysis.         3

          a.   Publication of the 

               Journal of Catalysis. . . . . . . . . .         4

          b.   Sale and Distribution of 

               the Journal of Catalysis. . . . . . . .         5

     2.   Texaco's Research Activities . . . . . . . .         6

     3.   The Reasonable and Customary Practice  . . .          

          of Photocopying. . . . . . . . . . . . . . .         8

     4.   Dr. Chickering's Photocopying of the Eight 

          Articles at Issue. . . . . . . . . . . . . .        11

     5.   The Copyright Clearance Center . . . . . . .        13

B.   The Decisions Below . . . . . . . . . . . . . . .        15

ARGUMENT . . . . . . . . . . . . . . . . . . . . . . .        17

I.   THE STANDARD OF REVIEW. . . . . . . . . . . . . .        18

                                                             Page

II.  DR. CHICKERING'S MAKING OF A SINGLE

     PHOTOCOPY WAS FAIR USE. . . . . . . . . . . . . .        19

     A.   "The Purpose and Character of the Use" . . .        19

          1.   The Use in Question Was for a 

               Scientific Research Purpose . . . . . .        20

          2.   That Dr. Chickering Did Not Make a 

               Transformative Use Does Not Derogate

               from the Scientific Purpose of

               His Copying . . . . . . . . . . . . . .        26

          3.   Dr. Chickering's Copying Was a

               Reasonable and Customary Use. . . . . .        31

     B.   "The Nature of the Copyrighted Work" . . . .        33

     C.   "The Amount and Substantiality of the 

          Portion Used". . . . . . . . . . . . . . . .        34

     D.   "The Effect of the Use upon the Potential 

          Market for or Value of the Copyrighted

          Work". . . . . . . . . . . . . . . . . . . .        35

          1.   Subscriptions and Other Alleged

               Substitutes . . . . . . . . . . . . . .        38

          2.   The Irrelevance of Individual

               Blanket Licenses and the CCC. . . . . .        44

     E.   The Balancing of the Four Statutory Factors 

          Demonstrates that Dr. Chickering's Use 

          Was Fair . . . . . . . . . . . . . . . . . .        52

CONCLUSION     . . . . . . . . . . . . . . . . . . . .        53

STATUTORY ADDENDUM

     Section 107 of the Copyright Act  . . . . . . . .       A-1

     Section 108 of the Copyright Act  . . . . . . . .       A-1

                          TABLE OF AUTHORITIES

                                                            Page

Cases                                                       

Argus, Inc. v. Eastman Kodak Co., 801 F.2d 38 (2d

  Cir. 1986), cert. denied, 479 U.S. 1088 (1987) . . .      42

Arica Inst., Inc. v. Palmer, 970 F.2d 1067 (2d

  Cir. 1992) . . . . . . . . . . . . . . . . . . . . .      18

Association of Am., Medical Colleges v. Cuomo, 928

  F.2d 519 (2d Cir.), cert. denied, 112 S. Ct. 184

  (1991) . . . . . . . . . . . . . . . . . . . . . . .      53

Atari Games Corp. v. Nintendo of America Inc., 975

  F.2d 832 (Fed. Cir. 1992). . . . . . . . . . . . . .      21,28

Baldwin v. Missouri, 281 U.S. 586 (1930) . . . . . . .      51

Basic Books, Inc. v. Kinko's Graphics Corp., 758 F.

  Supp. 1522 (S.D.N.Y. 1991) . . . . . . . . . . . . .      22,23

Berlin v. E.C. Publications, Inc., 329 F.2d 541 (2d

  Cir. 1964) . . . . . . . . . . . . . . . . . . . . .      52

Bruzzone v. Miller Brewing Co., 202 U.S.P.Q. 809

  (N.D. Cal. 1979) . . . . . . . . . . . . . . . . . .      32

Catalano, Inc. v. Target Sales Inc., 446 U.S. 643

  (1980) . . . . . . . . . . . . . . . . . . . . . . .      51

Consumers Union of U.S., Inc. v. General Signal

  Corp., 724 F.2d 1044 (2d Cir. 1983), cert. denied,

  469 U.S. 823 (1984). . . . . . . . . . . . . . . . .      30,34,35,36,

                                                            43,52

Dellar v. Samuel Goldwyn, Inc., 104 F.2d 661 (2d Cir.

  1939). . . . . . . . . . . . . . . . . . . . . . . .      17

Dodsley v. Kinnersley, 27 Eng. Rep. 270, 271 (Ch.

  1761). . . . . . . . . . . . . . . . . . . . . . . .      32

Feist Publications v. Rural Telephone Service Co.,

  111 S. Ct. 1282 (1991) . . . . . . . . . . . . . . .      25

Folsom v. Marsh, 9 F. Cas. 342 (C.C.D. Mass. 1841) . .      17,23,35,36,

                                                            38,45

                                                            Page

Fortnightly Corp. v. United Artists Television, Inc.,

  392 U.S. 390 (1968). . . . . . . . . . . . . . . . .      50

Guccione v. Flynt, 1984 Copr. L. Dec.  25,669

  (S.D.N.Y. 1984). . . . . . . . . . . . . . . . . . .      35

Harper & Row Publishers, Inc. v. Nation Enterprise,

  471 U.S. 539 (1985). . . . . . . . . . . . . . . . .      18,20,31,34,

                                                            35,36,47

Holdredge v. Knight Publishing Corp., 214 F. Supp.

  921 (S.D. Cal. 1963) . . . . . . . . . . . . . . . .      32

Lasercomb Am., Inc. v. Reynolds, 911 F.2d 970

  (4th Cir. 1990). . . . . . . . . . . . . . . . . . .      49

Lish v. Harper's Magazine Foundation, 807 F. Supp.

  1090 (S.D.N.Y. 1992) . . . . . . . . . . . . . . . .      21

Mathieson v. Associated Press, 23 U.S.P.Q.2d 1685

  (S.D.N.Y. 1992). . . . . . . . . . . . . . . . . . .      35,43,48

Maxtone-Graham v. Burtchaell, 803 F.2d 1253 (2d Cir.

  1986), cert. denied, 481 U.S. 1059 (1987). . . . . .      17,18,20,33,

                                                            36,44,47

MCI Commun. v. American Telephone & Telephone Co.,

  708 F.2d 1081 (7th Cir.), cert. denied, 464 U.S.

  891 (1983) . . . . . . . . . . . . . . . . . . . . .      42

Meeropol v. Nizer, 560 F.2d 1061 (2d Cir. 1977),

  cert. denied, 434 U.S. 1013 (1978) . . . . . . . . .      52

New Era Publications Int'l v. Carol

  Publishing Group, 904 F.2d 152 (2d Cir.), cert.

  denied, 111 S. Ct. 297 (1990). . . . . . . . . . . .      18,19,34

Parsons v. Honeywell, Inc., 929 F.2d 901 (2d Cir.

  1991). . . . . . . . . . . . . . . . . . . . . . . .      42

Rogers v. Koons, 960 F.2d 301 (2d Cir.), cert.

  denied, 113 S. Ct. 365 (1992). . . . . . . . . . . .      36

Rosemont Enterprise, Inc. v. Random House, Inc., 366

  F.2d 303 (2d Cir. 1966), cert. denied, 385 U.S.

  1009 (1967). . . . . . . . . . . . . . . . . . . . .      31,52

Salinger v. Random House, Inc., 811 F.2d 90 (2d

  Cir.), cert. denied, 484 U.S. 890 (1987) . . . . . .      18

Sega Enterprises Ltd. v. Accolade, Inc., 977 F.2d

  1510 (9th Cir. 1992) . . . . . . . . . . . . . . . .      20-21,28

Shapiro, Bernstein & Co. v. P.F. Collier & Son Co.,

  26 U.S.P.Q. 40 (S.D.N.Y. 1954) . . . . . . . . . . .      32

Sinai v. Bureau of Automotive Repair, No. 92-0274-VEW,

  slip. op. (N.D. Cal. Dec. 21, 1992). . . . . . . . .      49

Sony Corp. v. Universal City Studios, Inc., 464 U.S.

  417 (1984) . . . . . . . . . . . . . . . . . . . . .      passim

Stevens Linen Assocs., Inc. v. Mastercraft Corp.,

  656 F.2d 11 (2d Cir. 1981) . . . . . . . . . . . . .      42

Stewart v. Abend, 495 U.S. 207 (1990). . . . . . . . .      47

Teleprompter Corp. v. CBS, Inc., 415 U.S. 394 (1974) .      50

Triangle Publications, Inc. v. Knight-Ridder

  Newspapers, Inc., 626 F.2d 1171 (5th Cir. 1980). . .      31-32,35,36

Twentieth Century Music Corp. v. Aiken, 422 U.S. 151

  (1975) . . . . . . . . . . . . . . . . . . . . . . .      50

United States v. Addyston Pipe & Steel Co., 85 F. 271

  (6th Cir. 1898), aff'd, 175 U.S. 211 (1899). . . . .      51

United States v. Trenton Potteries Co., 273 U.S. 392

  (1927) . . . . . . . . . . . . . . . . . . . . . . .      51

Universal City Studios, Inc. v. Sony Corp., 480 F. 

  Supp. 429 (C.D. Cal. 1979), rev'd, 659 F.2d 963

  (9th Cir. 1981), rev'd, 464 U.S. 417 (1984). . . . .      42

West Pub. Co. v. Mead Data Central, Inc., 799 F.2d 

  1219 (8th Cir. 1986), cert. denied, 479 U.S.

  1070 (1987). . . . . . . . . . . . . . . . . . . . .      40

Williams & Wilkins Co. v. United States, 203 Ct. Cl. 

  74, 487 F.2d 1345 (Ct. Cl. 1973), aff'd by equally

  divided Court, 420 U.S. 376 (1975) . . . . . . . . .      passim

                                                            Page

Wojnarowicz v. American Family Association, 745 F.

  Supp. 130 (S.D.N.Y. 1990). . . . . . . . . . . . . .      35

Wright v. Warner Books, Inc., 953 F.2d 731 (2d Cir.

  1991). . . . . . . . . . . . . . . . . . . . . . . .      17,36,47-48

Wright v. Warner Books, Inc., 748 F. Supp. 105

  (S.D.N.Y. 1990), aff'd, 953 F.2d 731 (2d Cir. 

  1991). . . . . . . . . . . . . . . . . . . . . . . .      48

Statutes

The 1976 Copyright Act:

  Section 102, 17 U.S.C.  102 . . . . . . . . . . . .      30

  Section 106, 17 U.S.C.  106 . . . . . . . . . . . .      52

  Section 107, 17 U.S.C.  107 . . . . . . . . . . . .      passim, A-1

  Section 108, 17 U.S.C.  108 . . . . . . . . . . . .      22, A-1

  Section 111, 17 U.S.C.  111 . . . . . . . . . . . .      50

Act of May 31, 1790, 1st Cong. 2d Sess., 1 Stat. 124

  (1790) . . . . . . . . . . . . . . . . . . . . . . .       51

The Patent Act:

  Section 271, 35 U.S.C.  271 . . . . . . . . . . . .      52

Public Law 102-563 . . . . . . . . . . . . . . . . . .       51

The Judicial Code:

  Section 1292, 28 U.S.C.  1292 . . . . . . . . . . .      2,16

  Section 1331, 28 U.S.C.  1331 . . . . . . . . . . .      1

  Section 1334, 28 U.S.C.  1334 . . . . . . . . . . .      2       

  Section 1338, 28 U.S.C.  1338 . . . . . . . . . . .      1

Statute of Anne, 8 Anne c. 19 (1710) . . . . . . . . .       51

Legislative History

H.R. Rep. No. 1476, 94th Cong., 2d Sess. (1976),

  reprinted in 1976 U.S.C.C.A.N. 5659. . . . . . . . .       22

                                                            Page

Treatises and Other Authorities  

Ball, The Law of Copyright & Literary Property 

  (1944) . . . . . . . . . . . . . . . . . . . . . . .      32

R.C. DeWolf, An Outline of Copyright Law (1925). . . .      32

M. Nicholson, A Manual of Copyright Practice for

  Writers, Publishers and Agents (2d ed. 1970) . . . .      32

A. Weil, American Copyright Law (1917) . . . . . . . .      32

Weinreb, "Fair's Fair:  A Comment on the 

  Fair Use Doctrine," 103 Harv. L. Rev. 1137 (1990). .      32

                 UNITED STATES COURT OF APPEALS

                     FOR THE SECOND CIRCUIT

                             92-9341

AMERICAN GEOPHYSICAL UNION, et al.,

               Plaintiffs-Counter-

               Claim-Defendants-Appellees,

          v.

TEXACO INC.,

               Defendant-Counter-Claim-

               Plaintiff-Appellant.

                          _____________

      ON APPEAL FROM AN INTERLOCUTORY ORDER OF THE UNITED 

   STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK

                _______________  * ______________

                 BRIEF OF APPELLANT TEXACO INC.

                          _____________

                    STATEMENT OF JURISDICTION

          In May, 1985 six scientific and technical publishers,

on behalf of a putative class, sued Texaco claiming copyright

infringement by reason of Texaco's alleged failure to pay

license fees for articles its scientists copied from the

publishers' copyrighted journals.  Jurisdiction was asserted

under 28 U.S.C.  1331, 1338.  (Joint Appendix ("A.") 13). 

Texaco subsequently filed for bankruptcy, and the named

plaintiffs and the putative class members were required by the

Bankruptcy Court to file individual proofs of claim.  The six

original plaintiffs and 78 other publishers filed proofs of

claim alleging copyright infringement, adjudication of which was

then transferred to Judge Leval for determination (A. 160-

72; see, e.g., A. 53).   As a result, the District Court,

pursuant to 28 U.S.C.  1334, had subject matter jurisdiction to

issue the order that is the subject of this appeal.

          This Court has appellate jurisdiction pursuant to 28

U.S.C.  1292(b), the District Court having certified its

interlocutory order for review on October 26, 1992 (A. 143-49),

Texaco having petitioned this Court for permission to appeal on

November 4, 1992, and this Court having granted Texaco's

petition on December 26, 1992.

             STATEMENT OF ISSUE PRESENTED FOR REVIEW

          The issue for review is whether an in-house Texaco

scientist's making of a single photocopy of eight copyrighted

scientific articles to assist him in his scientific research,

where the copy was neither sold nor distributed, is a fair use

within the meaning of 17 U.S.C.  107.  Such copying, in Judge

Leval's words, is "extremely widespread" and has historically

been a "reasonable and customary" use by scientists.  (A. 148,

129).  Indeed, in the only two decisions to address analogous

issues, the courts have held the use fair -- the Supreme Court

in Sony Corp. v. Universal City Studios, Inc., 464 U.S. 417

(1984), with respect to home videotaping for entertainment pur-

poses, and the Court of Claims in Williams & Wilkins Co. v.

United States, 487 F.2d 1345 (Ct. Cl. 1973), aff'd by equally

divided Court, 420 U.S. 376 (1975), with respect to large-scale

photocopying by the National Institutes of Health and the

National Library of Medicine, where the copies were distributed

to for-profit drug companies and to doctors among others for use

in their research.

                      STATEMENT OF THE CASE

          At the suggestion of Judge Leval and the plaintiffs,

the parties agreed to try, on a written record, a "test" case

limited to whether it was fair use for one Texaco scientist -- 

Dr. Donald Chickering -- to make a single copy of eight articles

from issues of the Journal of Catalysis.  (A. 78, 150-58).  The

articles in question were selected by plaintiffs and, as the

parties stipulated, no effort was made "to determine quantita-

tively how much photocopying of copyrighted material, if any,

has taken place" at Texaco.  (A. 188, 79).  Adjudication of

all other issues with respect to the eight articles, as well as

of the fair use and other issues concerning any other articles,

was postponed until the test case was resolved.

A.   The Facts

     1.   Academic Press and the Journal of Catalysis

          Academic Press, a wholly-owned subsidiary of Harcourt

Brace Jovanovich, Inc. ("Harcourt"), is a "major publisher of

scholarly scientific, technical and medical . . . journals,

monographs and books."  (A. 1035, 1123, 3862).  Academic Press

has grown steadily to where it currently publishes 105

scientific and technical journals.  Since 1971, it has

introduced over forty new journals (five in 1990 alone).  (A.

1035-36, 1057, 1124-25, 2297).

          a.   Publication of the Journal of Catalysis

          The Journal of Catalysis ("Catalysis") is published

monthly.  Each issue contains numerous articles, notes and

letters to the editor (collectively, "articles").  (A. 1046,

1130-31).  Every article published in Catalysis is unsolicited;

none is written by an Academic Press employee.  (A. 1061, 1131-

33).  Academic Press has never paid an author for an article. 

Indeed, payment is not even open to negotiation.  (A. 1173-74,

1337-38).

          Authors submit their articles directly to editors,

who, like the authors, are neither paid nor employed by Academic

Press.  (A. 1106a-08, 1134-36, 3779).  The editors "have

complete editorial control and sole discretion over the content

of Catalysis."  (A. 82, 1140-41).  If an editor determines an

article potentially worthy of publication, he will choose

scientists to review it in a process called "peer review."  (A.

1058, 1137, 1361-63, 1386-92, 1399).  Academic Press is not

aware that an article has been submitted to Catalysis until

after the editor and peer reviewers have approved and revised it

for publication.  (A. 1138-40, 1142-44, 3779).

          After the editor's acceptance of an article for publi-

cation, Academic Press' role is ministerial, performing essen-

tially proofreading, printing functions and the like.  (A. 1109-

15, 1144-53, 1169, 3779-80).  Academic Press' only contribution

to the journal's text is the preparation of a table of contents

and subject and author indices.  (A. 1072, 1147).  The only

copyright Academic Press registers with the Copyright Office is

the copyright in the journal issue as a whole.  (A. 1117-18,

1185-86).  An issue of Catalysis contain upwards of 225 pages

and may contain more than 20 articles.  (See, e.g., A. 805,

1777-80, 1791-94).

          b.   Sale and Distribution of 

               the Journal of Catalysis

          Academic Press sells subscriptions to Catalysis at two

rates:  an "institutional" rate charged to institutions (both

profit and non-profit) and an "individual" rate.  (A. 1202-05). 

The institutional rate is double that of the individual rate

because Academic Press is "well aware" that the issues sent to

institutional subscribers "are used by many people" and will be

circulated.  (A. 1205-06, 1209, 3856).  Both prices have

increased substantially since 1972, at a rate more than three

times the increase in the Consumer Price Index, with the

institutional rate going from $112 in 1972 to $888 in 1991.  (A.

3689-90, 3792, 3856).  Given this price rise and the negligible

risk and cost to Academic Press of publishing Catalysis, it is

hardly surprising that Academic Press' profits have consistently

been extraordinary.  (A. 3802, 4230, 4275-76, 4320-21, 4363).

          In addition to yearly subscriptions, Academic Press

offers back issues for sale.  It generally takes two weeks from

receipt of an order for the issue to be shipped.  (A. 1184). 

Back issues are available only for the three-year period follow-

ing publication.  (A. 1234, 3785).  Thereafter, only the entire

volume (containing two or three issues) in which the issue

appeared will be sold.  Although Academic Press also offers

reprints of individual articles, orders for reprints are

accepted only with the author's prior approval, for orders of

one hundred or more, and normally take three weeks to fill.  (A.

1175-76, 1180-83).

     2.   Texaco's Research Activities

          Texaco is an integrated petroleum company engaged in

the exploration, production and refining of crude oil and the

marketing of petroleum products.  It employs hundreds of

scientists and researchers to conduct scientific research at

several locations, including its research center at Beacon, New

York.  Texaco devotes significant resources to scientific

research, spending approximately $37 million a year over the

seven years prior to trial, and subscribing to hundreds of

scientific and technical journals at substantial expense.  (A.

906-07, 932).

          "In order to attract top scientists and engineers as

employees," as Dale Pollart, the General Manager of Texaco's

Beacon facility explained, "it is necessary for Texaco to foster

and encourage an atmosphere of scientific excellence that will

be recognized both inside and outside the corporation."  It is

therefore "essential" that "Texaco's scientists and engineers

actively participate in scientific meetings and symposia,

prepare and present scientific and technical papers at such

meetings, and publish the results of their research in leading

scientific publications."  (A. 932-33, 968-71, 975-77).  Thus,

over the five year period prior to trial, Texaco scientists

published and presented more than 130 papers.  (A. 933-34,

2876). 

          While university scientists generally conduct basic

scientific research and companies concentrate more on applied

science, there is a large area of overlap between the two.  (A.

934, 965-67, 1397-98).  Thus, it is not unusual for Texaco

scientists to work with members of the academic community and to

exchange results of research in areas of common interest as, in

fact, occurred here with respect to two of the articles at

issue.  (A. 460, 469).  Moreover, because academics are inte-

rested in and study the same chemistry as do Texaco's scien-

tists, there is a lively interchange between defendant's

scientists and the academic community from which the public

benefits by the advancement of science.  (A. 934, 965-67). 

Texaco and other corporations also sponsor and finance research

at universities in areas of common scientific interest.  (See A.

948). 

     3.   The Reasonable and Customary Practice of Photocopying

          It is undisputed that, in the words of plaintiffs'

witness, Dr. Elliott, "it is the practice of research scientists

to make, or have made, single photocopies of scientific and

technical journal articles for use in their work."  (A. 727). 

As Judge Leval found, this practice is "extremely widespread"

and historically has been a "reasonable and customary" use.  (A.

148, 129).  When doing research and when reading, writing and

reviewing articles (that, in turn, cite other articles), the

researcher, of necessity, must make constant and repeated refer-

ence to other articles.  As a result, researchers maintain

easily referenced personal files of copies of articles instead

of surrounding themselves with numerous, bulky original volumes

or repeatedly returning to a library to refer to the original

volumes.  (A. 185, 458-70, 584, 727-30, 739-40, 742, 753-54,

790-91, 887, 905, 952-54, 982-83, 985-87, 1037, 1079, 1333-36,

1364-67, 1392).

          It is equally undisputed that the making of single

copies serves functions that the originals do not.  Single

copies facilitate research and writing by making the information

and data in the articles more accessible and reliable.  (A.

1392).  Dr. Chickering and Dr. Elliott agree that, in Dr.

Elliott's words, "[i]t is far more reliable to review scientific

data, especially graphs, charts, diagrams, formulas, equations

and calculations, directly from a photocopy of the article than

from notes because there is an extremely high risk of error in

attempting to transcribe such information."  (A. 459-62, 465-67,

584-85, 588-89, 727-28, 740, 1079-80).  In addition, as

Professor Schwarz, the author of one of the eight articles and a

Professor of Chemical Engineering at Syracuse University,

testified, whether he made a copy for his work when he was

employed by Bell Telephone, Chevron or Exxon, or in the course

of his duties as a professor, he "used the photocopy in the same

manner -- for [his] convenience."  (A. 1335-36).  In particular,

he took copies home to read, which "would be next to impossible"

to do if he attempted to "carry home bound volumes of the

journals . . . in view of their bulk and weight."  (A. 1335). 

Moreover, a scientist can make notes on a copy which he cannot

on the glossy paper of the original.  (A. 579-80).  Copying also

facilitates dissemination of scientific information because, as

Drs. Schwarz and Elliott testified, it is considerably easier to

write an article by using photocopies of sources than to take

detailed notes or have to refer to original volumes.  (A. 730,

742, 754, 789-91, 798-800, 1335-36, 1369, 1370-73, 1390-92).

          Researchers also take copies of articles into the

laboratory, as did Dr. Chickering, to refer to their data and

graphs while conducting or evaluating experiments and to avoid

errors in transcription and in the misapplication of equations

or data.  (A. 458-62, 465-68, 584-85, 740, 753).  Originals, by

contrast, cannot be used in this manner because of the risk that

the equipment and chemicals in the laboratory might accidentally

ruin them.  (A. 463, 729, 740-41).  Thus, even where a scientist

has a personal subscription to a journal, he will make copies of

the articles he wishes to save or to use in the laboratory.  (A.

728, 740-41, 1079-80, 1335-36).

           Making single photocopies of articles also performs a

time-shifting function.  As Dr. Pollart explained, since "what

you really want out of that article is the knowledge, the know-

how, the information that is there, . . . [i]f you couldn't make

a photocopy at the time you read the article," instead of

"studying" and "interpreting" the photocopied article later, you

would have to do so at the time you read the original.  (A. 972-

73).

          In short, as Professor Schwarz testified, "I believe

that my colleagues and my students and the students of my

colleagues view photocopying as an important and essential

aspect of their education."  (A. 1378).  Copying, in Dr.

Schwarz's words, "is being done by the public as a natural

[act], much like breathing . . . ."  (A. 1379).  In fact, the

unlicensed copying of articles is "commonplace" by researchers

and editors in the course of writing, peer reviewing and editing

articles that are published in Catalysis and journals published

by other plaintiffs who are challenging copying in this suit. 

(A. 798-800).  Indeed, Dr. Schwarz testified that the editors of

Catalysis have sent him photocopies of articles in other

journals referenced in manuscripts they requested him to peer

review.  (A. 1386-90).  Scientists, of course, are not alone in

photocopying.  Lawyers, judges and even publishers copy

comparable materials for convenience.  As the executive director

of one of the plaintiffs put it in explaining why he made

photocopies without the permission of the copyright holder,

"[e]verybody photocopies copyrighted material."  (A. 1417).

     4.   Dr. Chickering's Photocopying of the Eight 

          Articles at Issue

          Dr. Chickering, who has a Ph.D. in Chemical Engineer-

ing, is himself the co-author of a journal article written while

employed at Beacon.  (A. 449, 454-55).  Since joining Texaco in

1981, he has worked on several projects in the field of

catalysis -- the study of catalysts.  (A. 450-53).  Throughout

his tenure at Texaco, Dr. Chickering has had his name on the

routing lists for Catalysis and other scientific and technical

journals that he believed would be particularly relevant to his

work or that otherwise would be of professional interest to

him.  (A. 457).  Texaco's Beacon facility purchased one

subscription to Catalysis until 1983, when it increased the

number to two.  It went to three subscriptions in 1988.  (A.

803).  Most subscribers to Catalysis purchase only one copy. 

(A. 1187).

          The circumstances surrounding the photocopying and use

of the single photocopies at issue -- four articles, two letters

to the editor and two notes, which range in length from 2+ to 16

pages -- were not contested by plaintiffs.  Nor did plaintiffs

take issue with the reasons Dr. Chickering testified for the

copying.  Six of the articles were copied when Catalysis was

circulated to him.  The other two copies were made for him by

the Beacon library since they were contained in issues from

prior years.  (A. 458-69).

          In brief, Dr. Chickering made single copies of the

articles for his individual use to facilitate his research. 

(A. 457-60).  Thus, he copied articles to refer to their

figures, equations or graphs in the laboratory in order to test

the accuracy of his results or to calibrate the apparatus he was

working with.  (A. 459-62).  In addition, he did not want to run

the risk of error in transcribing the information by hand or of

destroying or ruining the original in the laboratory.  (A. 459-

63, 465-67).  The articles are short, and virtually every page

contains figures, equations and graphs.  Although he made some

of the copies for future reference, because of the direction of

his research, he ended up not using or referring to five of the

eight articles.  (A. 460-61, 464-65, 469).  With respect to one

of the articles, Dr. Chickering travelled to Syracuse University

to meet with the author -- Dr. Schwarz -- to discuss the

apparatus described in the article.  (A. 460).  Dr. Schwarz

testified that "[s]uch give and take and professional

cooperation is necessary for research and the advancement of

science."  (A. 1338-39).  He explained that he used photocopies

in writing the article and that he "ha[s] no objection to any

person, whether he or she works for a university, a non-profit

institution or a for-profit corporation, photocopying, without

charge, any of my articles for his or her personal use or

convenience."  (A. 1337-38).

          Significantly, Dr. Chickering did not cause more than

one copy to be made of any of the articles in question.  (A.

457-58).  Equally undisputed, neither Dr. Chickering nor Texaco

published, sold or otherwise distributed any of the single

copies of the articles.

     5.   The Copyright Clearance Center

          The Copyright Clearance Center ("CCC") is a clearing

house some publishers established to accept license payments for

photocopying.  From 1981 to 1983, the time during which Dr.

Chickering did most of his copying, the CCC offered one license,

the transactional reporting system ("TRS").  The TRS covered

less than a third of the copies made from scientific and

technical journals at major petroleum companies, and, in the

CCC's own words, "was not effectively meeting the needs of

substantial segments of both the user and copyright owner

communities."  (A. 2031; see also A. 238-39, 310-12, 337, 360-

65, 2054-55, 2060-61, 3728-74, 3807, 3850).  The CCC thus

concluded that the TRS was not suited to large companies like

Texaco.  (A. 2054-55, 3848).

          The CCC's blanket license, the Annual Authorizations

Service ("AAS"), which was developed later as a result of the

TRS' admitted failure, also did not provide coverage for all

articles.  (See, e.g., A. 348-54, 2020-21, 4304-06; see also

A. 4328-29, 4337).  More fundamentally, under both the TRS and

the AAS, users are charged for photocopying all copies even

though the publishers admit they do not own the copyrights in

all of the articles and even though some of the articles are in

the public domain.  When companies were not quick to accept

the AAS, the publishers sued Texaco in the hope that the "fright

of a suit" and "accompanying class action" would "jar" other

companies into action.  (A. 3808).  Indeed, it was only after

Texaco was sued with much fanfare "to provide an example for

other industries and to encourage . . . others to join" that

additional companies began signing up for the AAS.  (A. 3853-55,

3885; see A. 182-83).  Nonetheless, as of 1990, only 19% of

Fortune 500 companies were CCC licensees, and fewer than 20 of

the 84 claimants in this action had taken licenses, even though

publishers, like Texaco (and lawyers and judges), also make

copies.  (A. 176-83, 357-58, 877-81, 896-99, 1251-55, 1257-58,

1296-97, 1417-22, 2326, 3686, 4230-31, TEX-190).

          As for revenues, while the CCC has received some $9.6

million under the TRS and another $18 million under AAS, it

disbursed only $4.2 million to publishers, with the balance

going to cover costs.  (A. 4346-47). 

B.   The Decisions Below 

          Without analyzing the circumstances surrounding the

copying of any of the eight articles, and rarely referring to

any part of the "voluminous submitted record" (A. 146), Judge

Leval held that Dr. Chickering's copying was not fair use.  On

the first of the four fair use factors -- "the purpose and char-

acter of the use" -- the court found in plaintiffs' favor since

Dr. Chickering did not use the copies to create a new

copyrighted work and, although he used the copies "to assist in

socially valuable scientific research" and Texaco did "not

resell the copies," Dr. Chickering's ultimate purpose was "to

improve Texaco's commercial performance."  (A. 99, 105).  On the

second factor -- the "nature of the copyrighted work" -- the

court held in Texaco's favor since the articles were factual and

scientific.  (A. 106-08).  The third factor -- "the amount and

substantiality of the portion used" -- went to plaintiffs on the

ground that Dr. Chickering copied the entire articles

(notwithstanding, for example, that one "article" was no more

than a 2+-page letter to the editor in an issue of 203 pages). 

(A. 109-10, 507, 804).  The court also awarded to plaintiffs the

fourth factor -- "the effect of the use upon the potential

market for or value of the copyrighted work" even though it

concluded that neither back issues, back volumes nor additional

subscriptions were "practicable" alternatives to photocopies (A.

113).  Judge Leval reasoned that, because, in his view, the CCC

would accept, "at a reasonable cost and burden to Texaco,"

payment for the copies, Academic Press was therefore entitled to

such money.  (A. 115).  

          Two days after rendering his opinion, Judge Leval

amended it by adding a two-page footnote, holding that, even if

Dr. Chickering's purpose in making the copies was viewed as

"research" and, as a result, the first fair use factor should be

awarded to Texaco, plaintiffs would still prevail.  (A. 140-41). 

In other words, the court adopted what amounts to a per se rule: 

any copying of a CCC-registered article -- whether or not for a

commercial purpose and regardless of its length (A. 82) -- is

ipso facto not fair use.

          In his order granting Texaco's motion for

certification under  1292(b) -- which plaintiffs did not oppose

-- Judge Leval found that, given the "enormous differences of

opinion" on the subject of fair use, the absence of "controlling

precedent," and the fact that the Court of Claims' decision in

Williams & Wilkins, which has the "closest fact pattern," "is

arguably in tension with this court's decision," "I can only

conclude that there is substantial ground for a difference of

opinion" as to whether the decision was correct and that,

"agree[ing]" with both parties, "there is a strong public

interest in having prompt appellate review of the fair use issue

presented in this case."  (A. 147-49).

                            ARGUMENT

          Beginning with Justice Story's seminal decision in

Folsom v. Marsh, 9 F. Cas. 342, 344 (C.C.D. Mass. 1841)

(No. 4,901), the courts have consistently acknowledged the

unique complexity and difficulty of fair use analysis.  See,

e.g., Dellar v. Samuel Goldwyn, Inc., 104 F.2d 661, 662 (2d Cir.

1939); A. 91-92, 147-48.  It is a measure of this complexity and

difficulty that Justice Story's formulation (9 F. Cas. at 348)

does not differ much from the 1976 codification by Congress in

Section 107 of the Copyright Act, 17 U.S.C.  107 (which is

reprinted in the Statutory Appendix to this brief).

          Notwithstanding the apparent specificity of Section

107's four factors, application of the fair use doctrine "is not

a mechanical determination," but remains an "equitable rule of

reason," requiring a "case-by-case balancing of complex

factors."  Sony Corp. v. Universal City Studios, Inc., 464 U.S.

417, 448 (1984); Wright v. Warner Books, Inc., 953 F.2d 731, 740

(2d Cir. 1991); Maxtone-Graham v. Burtchaell, 803 F.2d 1253,

1255, 1259 (2d Cir. 1986), cert. denied, 481 U.S. 1059 (1987). 

Here, just as in Williams & Wilkins and Sony, a correct

balancing of the four statutory factors demonstrates that

Dr. Chickering's making of a single photocopy for "basic

research" (A. 79) was a fair use.

                               I.

                     THE STANDARD OF REVIEW

          Fair use has variously been described as a "doctrine,"

"privilege," "concept," and "defense," which "requires a complex

and subtle evaluation of numerous mixed issues of fact and law." 

Harper & Row Publishers, Inc. v. Nation Enters., 471 U.S. 539,

549 (1985); Sony, 464 U.S. at 447-48 & n.31, 454; Maxtone, 803

F.2d at 1258, 1259.  Given its difficulty in application and its

equitable nature, the standard of appellate review is not the

usual "clearly erroneous" rule.  New Era Publications Int'l v.

Carol Publishing Group, 904 F.2d 152, 155 (2d Cir.), cert.

denied, 111 S. Ct. 297 (1990).  Rather, "the district court's

conclusion . . . is open to full review on appeal."  Id. at 155. 

That is, this Court "review[s] de novo this mixed question of

fact and law."  Arica Inst., Inc. v. Palmer, 970 F.2d 1067, 1077

(2d Cir. 1992).  Thus, whether this Court has affirmed or

reversed a trial or preliminary injunction ruling, it has done

so by analyzing the issues anew, as opposed to its normal

deference to verdicts or district court findings.  See, e.g.

Maxtone (affirmance); New Era (reversal); Salinger v. Random

House, Inc., 811 F.2d 90 (2d Cir.) (reversal), cert. denied, 484

U.S. 890 (1987).

                               II.

                  DR. CHICKERING'S MAKING OF A

                  SINGLE PHOTOCOPY WAS FAIR USE

A.   "The Purpose and Character of the Use"

          The Copyright Act expressly provides that the fair use

of a copyrighted work, "including . . . use by reproduction in

copies," for a research purpose does not constitute copyright

infringement.  17 U.S.C.  107 (emphasis added).  Thus, making a

copy for research is favored.  Indeed, "'[i]f a [work] falls

into one of these categories [i.e., criticism, scholarship or

research], assessment of the first fair use factor should be at

an end.'"  New Era, 904 F.2d at 156 (quoting New Era

Publications Int'l v. Henry Holt & Co., 884 F.2d 659, 661 (2d

Cir. 1989) (Miner, J. concurring in the denial of rehearing in

banc), cert. denied, 493 U.S. 1094 (1990)).

          Nonetheless, the district court awarded this factor to

plaintiffs on two grounds:  (1) because Texaco is a for-profit

entity; and (2) because Dr. Chickering's copying was "non-

transformative."  (A. 93-106).  Neither has merit.  The statute

requires the court to focus on the nature and character of the

use (which indisputably was scientific research), not on

Texaco's character as a for-profit user.  As for Judge Leval's

stress on the non-transformative nature of the copying, he

erroneously ignored the importance of such copying to the

advancement of science and knowledge as well as the plain

language of  107, which expressly permits non-transformative

"reproduction in copies" for research purposes.  Moreover, while

acknowledging that photocopying of the type at issue here has

become "extremely widespread" and "reasonable and customary" (A.

148, 129), the district court gave no weight to this critical

fact in evaluating the nature and character of the use.

     1.   The Use in Question Was for a Scientific Research

          Purpose

          The district court committed fundamental error by

deeming the scientific research purpose of Dr. Chickering's

copying legally irrelevant because the "research is being

conducted for commercial gain."  (A. 105).  While copying for a

commercial purpose weighs against a finding of fair use, Harper

& Row, 471 U.S. at 562, the law does not automatically render

copying by a profit-making institution per se unfair.  The

presumption of unfairness that arises from a commercial purpose

can be rebutted by the characteristics of the particular use in

question and "was 'not intended to be interpreted as any sort of

not-for-profit limitation on educational uses of copyrighted

works.'"  Maxtone, 803 F.2d at 1262.  As this Court put it in

Maxtone, "the commercial nature of a use is a matter of degree,

not an absolute, and we find that the educational elements of

[the defendant's book] far outweigh [its] commercial aspects." 

Id.  

          Judge Leval erred in focusing on Texaco's ultimate

profit-making goal and not on the immediate scientific research

purpose of a scientist's copying of eight scholarly articles --

which is light years away from the development, production and

exploitation of any commercial product by Dr. Chickering's

employer.  The Ninth Circuit's recent decision in Sega

Enterprises Ltd. v. Accolade, Inc., 977 F.2d 1510 (9th Cir.

1992), is illustrative.  There, copying a competitor's computer

program in order to understand it and make a competing product

was held a fair use.  In finding that the research nature of the

copying outweighed the defendant's ultimate commercial purpose,

the Court of Appeals reasoned:

          Sega argues that because Accolade copied its

          object code in order to produce a competing

          product, the Harper & Row presumption

          applies and precludes a finding of fair use. 

          That analysis is far too simple . . . .  As

          we have noted, the use at issue was an

          intermediate one only and thus any

          commercial "exploitation" was indirect or

          derivative.

                          *     *     *

          [A]lthough Accolade's ultimate purpose was

          the release of [competitive] games for sale,

          its direct purpose in copying Sega's code,

          and thus its direct use of the copyrighted

          material was simply to study the functional

          requirements for Genesis compatibility so

          that it could modify existing games and make

          them usable with the Genesis console.  (Id.

          at 1522).

Accord, Atari Games Corp. v. Nintendo of Am. Inc., 975 F.2d 832,

842-44 (Fed. Cir. 1992).

          As Judge Lasker recently explained, "[t]he question

under factor one is the purpose and character of the use, not of

the alleged infringer."  Lish v. Harper's Magazine Found., 807

F. Supp. 1090, 1101 (S.D.N.Y. 1992).  Thus, he ruled the

defendant publisher could not avoid the commercial nature of the

sale of the copy as part of its magazine on the grounds that it

is owned by a non-profit organization and operates at a loss. 

Id. at 1100-01.  The converse is equally so:  The research

nature of Dr. Chickering's use may not be avoided because he

works for a profit-making corporation.  See also Basic Books,

Inc. v. Kinko's Graphics Corp., 758 F. Supp. 1522, 1531-32

(S.D.N.Y. 1991) (commercial sale of excerpts of photocopied

books not a non-profit educational use merely because purchasers

ultimately used materials in classrooms). 

          In this connection, it is significant that the

Congress that enacted  107 simultaneously passed

Section 108(a), which permits libraries to make single

photocopies of articles for researchers if, inter alia, the

copies are made "without any purpose of direct or indirect

commercial advantage."  The legislative history reveals that

photocopying by libraries of profit-making institutions, absent

any "systematic effort to substitute photocopying for

subscriptions or purchases, would be covered by section 108,

even though the copies are furnished to the employees of the

organization for use in their work."  H.R. Rep. No. 1476, 94th

Cong., 2d Sess. 75 (1976), reprinted in 1976 U.S.C.C.A.N. 5659,

5689.  That is because such copying "would ordinarily not be

considered 'for direct or indirect commercial advantage,' since

the 'advantage' referred to in this clause must attach to the

immediate commercial motivation behind the reproduction or

distribution itself, rather than to the ultimate profit-making

motivation behind the enterprise in which the library is

located."  Id. (emphasis added).  While the application of 

108(a) to the copies at issue was not the subject of the fair

use trial (A. 150), Congress' interpretation of the phrase

"direct or indirect commercial advantage" in a related section

of the same statute is compelling evidence that the pertinent

inquiry under  107(1) is whether the direct use in question had

an immediate commercial motivation, i.e., sale or distribution,

and not whether the user is a for-profit entity.

          Courts consider the defendant's profit motive

important "because the alleged infringing work competes in the

same market as the copyrighted work, thus making the 'commerci-

ality' more harmful to the copyright holder."  Basic Books, Inc.

v. Kinko's Graphic Corp., supra, 758 F. Supp. at 1532.  Indeed,

the fair use test codified in  107 arose as a method of deter-

mining whether a second author's work embodied so much of the

original as to compete unfairly with it and deprive the original

author of a sale.  Folsom v. Marsh, supra, 9 F. Cas. 342.  Here,

neither Dr. Chickering nor Texaco sold or distributed any of the

eight copies in question.  The direct use of the copies was no

more commercial than that at issue in Williams & Wilkins, 487

F.2d 1345 (Ct. Cl. 1983), aff'd by equally divided Court, 420

U.S. 376 (1975).  There, the Court of Claims held that it was

fair use for the National Institutes of Health ("NIH") library

and the National Library of Medicine ("NLM") to provide, on a

wide scale basis, copies of scientific and technical articles to

for-profit drug companies and "physicians or other medical

personnel . . . in connection with medical research. . . ."  Id.

at 1349; 203 Ct. Cl. at 153-54.  There, as here, the "copied

articles [we]re scientific studies useful to the requesters in

their work" and the "scientific researchers and practitioners"

"ha[d] no purpose to reduplicate them for sale or other general

distribution."  Id. at 1354.  Similarly, here, as in William &

Wilkins:

          [S]cientific progress, untainted by any

          commercial gain from the reproduction, is

          the hallmark of the whole enterprise of

          duplication.  There has been no attempt to

          misappropriate the work of earlier

          scientific writers for forbidden ends, but

          rather an effort to gain easier access to

          the material for study and research. (Id. at

          1354) (emphasis added).

          Texaco and Dr. Chickering no more sought to gain com-

mercially from the reproduction of copies than did the

scientists at for-profit drug companies and the practicing

doctors who received copies in Williams & Wilkins.  Indeed, if

the test were whether the user was a for-profit entity, or stood

ultimately to gain financially from the research -- not whether

the direct use in question was a commercial exploitation of the

work -- the Williams & Wilkins court could not have ruled as it

did since both drug companies and doctors seek profits.

          Judge Leval's emphasis on Texaco's ultimate for-profit

business also ignores the overwhelming record evidence of the

important role copies like Dr. Chickering's play in scientific

research.  (See pp. ____, supra).  As the Supreme Court stated

recently in Feist Publications v. Rural Telephone Service Co.,

111 S. Ct. 1282, 1290 (1991):

          The primary objective of copyright is not to

          reward the labor of authors, but "[t]o pro-

          mote the Progress of Science and useful

          Acts."  [U.S. Const.] Art. I,  8 cl.8.  To

          this end, copyright assures authors the

          right to their original expression, but

          encourages others to build freely upon the

          ideas and information conveyed by a work.

          (Id.) (emphasis added).

For more than three decades scientists have used single

photocopies to assist them in studying and understanding the

complex equations, graphs and scientific ideas and information

contained in scholarly scientific articles and to build upon

them.  This copying plainly assists in the dissemination of

knowledge and in advancing the goals of copyright.  

          The direct use here was no more commercial than the

off-air videotaping of television shows that the Supreme Court

held was a fair use in Sony.  As Justice Stevens put it,

"[t]ime-shifting for private home use must be characterized as

noncommercial, nonprofit activity."  446 U.S. at 449.  Judge

Leval's analysis leads to the bizarre result that fair use

favors copying for personal entertainment, but not for

scientific research -- a use specifically mentioned in  107.

     2.   That Dr. Chickering Did Not Make a Transformative Use

          Does Not Derogate from the Scientific Purpose of His

          Copying

          The district judge reasoned that Texaco should be

deprived of credit for the scientific purpose of

Dr. Chickering's copying because he merely studied and used the

copies in his research and laboratory and did not make transfor-

mative use of them.  (A. 99-104).  In Sony, the Supreme Court

authoritatively rejected as "erroneous" the Ninth Circuit's view

that fair use applies only to transformative or "productive"

uses, "i.e., when copyrighted material is reproduced for [other

than its] intrinsic use.'"  464 U.S. at 427 n.9 (quoting 659

F.2d at 971-72); id. at 455 n.40.  Justice Stevens explained

that  107 "does not identify any dichotomy between productive

and nonproductive" uses.  Id. at 455 n.40.  Rather, "Congress

has plainly instructed us that fair use analysis calls for a

sensitive balancing of interests" (id.):

          The distinction between "productive" and

          "unproductive" uses may be helpful in cali-

          brating the balance, but it cannot be wholly

          determinative.  Although copying to promote

          a scholarly endeavor certainly has a

          stronger claim to fair use than copying to

          avoid interrupting a poker game, the

          question is not simply two-dimensional. 

          (Id.) (emphasis added).

          Even Justice Blackmun in dissent acknowledged that the

productive/nonproductive dichotomy was not dispositive.  His

point of disagreement with the majority was the "crucial differ-

ence" between the "researcher or scholar whose own work depends

on the ability to refer to and quote the works of prior

scholars" and the "ordinary user," such as a consumer who

videotapes a television program for his "sole benefit":

          When the scholar user forgoes the use of a

          prior work, not only does his own work

          suffer, but the public is deprived of his

          contribution to knowledge.  The scholar's

          work, in other words, produces external

          benefits from which everyone profits.  (Id.

          at 477-78). 

Justice Blackmun went on to acknowledge that each of the uses

listed in  107 -- which include "research" -- "is a productive

use, resulting in some added benefit to the public beyond that

produced by the first author's work."  464 U.S. at 478 (emphasis

in original).

          The plain language of  107 itself specifically

contemplates that some non-transformative uses are fair since it

lists "use by reproduction in copies" for "purposes such as

. . . research" as an example of a fair use.  It is difficult to

conceive how a copy can be used in research, as expressly

contemplated by  107, without being a non-transformative use. 

For if it were used transformatively, it would become "criti-

cism," "comment," or "scholarship," all of which involve

creation of new works. 

          Nevertheless, the non-transformative use test is

helpful in determining whether a work sold in competition with

the copyrighted work is unfairly competing with it and depriving

it of a sale.  The lack of transformative use is often

conclusive evidence that the second author is unfairly

superseding the demand for the original.  But where the copy is

not sold or distributed in competition with the original, but

(as here) merely used by the copier for study, non-

transformative use by a for-profit user does not definitively

indicate that the original use has been superseded.

          Here, the copies were not sold or distributed in

competition with the original and fulfilled a different

function.  As Judge Leval acknowledged (A. 101-02, 112-13),

Dr. Chickering wanted a copy, not the original, because it

enabled him to take materials into the laboratory and avoid

mistakes in taking notes regarding difficult and complex

calculations and equations.  He wanted a photocopy, and not the

original, because he wanted to mark it up with notes or

thoughts.  While finding "some merit" to the argument that Dr.

Chickering's use was not superseding, Judge Leval nevertheless

rejected it, contending that it would only be convincing if the

copying had been done to transfer text on to a different

material, such as microfilm to preserve space.  (A. 101-02). 

The district judge does not explain why preserving space is more

worthy of fair use protection than advancing scientific

research.  The only apparent answer is the trial court's

ambiguous statement that "the three subscriptions to Catalysis

are serving the needs of hundreds of scientists" and thus "the

principal feature of the photocopying is its capacity to give

numerous scientists their own copy based on Texaco's purchase of

an original."  (A. 102) (emphasis added).  Texaco's

"transformative use" is, according to Judge Leval, "overshadowed

by the primary aspect for the copying, which is to multiply

copies."  (A. 102) (emphasis added).  

          To the extent that Judge Leval meant that several

scientists independently may have decided to copy the same or

different articles from editions of Catalysis on different

occasions, thereby "multiplying" copies, that does not mean that

the demand for the original had been superseded or reduced.  On

the contrary, Texaco increased its subscriptions to Catalysis. 

(See pp. ___, supra).  If, however, the district court had in

mind that "hundreds" of scientists used Catalysis and made

copies from it, there is no record support, for plaintiffs

specifically eschewed any attempt to quantify the amount of

copying at Texaco and made no effort to do so with respect to

Catalysis.  Nor is there any evidence that Texaco ever copied

the same article twice.  Finally, as to Dr. Chickering's intent,

his primary and only purpose was to further his scientific

research.

          Dr. Chickering also copied the articles, as in Sony,

to time-shift their use to a later date by filing them away for

future reference.  Although once again acknowledging that

Texaco's "argument has some force," Judge Leval distinguished

Sony on the ground that Texaco's alleged use of three subscrip-

tions to Catalysis for "hundreds" of scientists is "a far cry"

from the single copy involved in Sony.  (A. 122-23).  The

"distinction" does not withstand analysis.  On the one hand,

there is no evidence that anyone other than Dr. Chickering

copied the eight articles at issue.  On the other, even if other

Texaco scientists had made an undetermined number of copies of

the eight articles, that pales in comparison to the undetermined

number of viewers who videotaped the specific copyrighted

broadcasts at issue in Sony.

          In addition, the copying at issue should be favored

under the first factor because Dr. Chickering copied the

articles in question for access to the ideas and information

contained therein, not the articles' expression of those ideas. 

It is axiomatic that copyright protects the expression of ideas,

not the ideas themselves.  17 U.S.C.  102(a)-(b).  Dr. Chicker-

ing wished to duplicate precisely the complex mathematical equa-

tions and formulas in the articles, because that was the only

way accurately to compare the data from his experiments with the

published data.  This concern for accuracy is a recognized basis

for fair use.  Consumers Union of U.S., Inc. v. General Signal

Corp., 724 F.2d 1044, 1049 (2d Cir. 1983), cert. denied, 469

U.S. 823 (1984).  (See also A. 102-03).  While once again recog-

nizing that the argument has "some merit," Judge Leval rejected

it because "Dr. Chickering and his colleagues do not only copy

the formulas, graphs and tables,"  but the entire article.  (A.

104).  That, of course, ignores the fact that virtually every

page of the articles in question contains equations, charts or

formulas of interest to a research scientist which are difficult

to copy accurately by hand.  (See A. 474-535).

          Moreover, where the article is not being sold or

distributed in competition with the original and does not

substitute for it, that the entire article has been copied lacks

significance.  Copying an entire article to use in the

laboratory no more displaces the original than does copying a

page or two from it.

     3.   Dr. Chickering's Copying Was a Reasonable

          and Customary Use

          As Judge Leval acknowledged, photocopying of the type

engaged in by Dr. Chickering is "extremely widespread" and

historically has been "reasonable and customary . . ."  (A. 129,

148).  Not only scientists, but lawyers and judges, too, make

unlicensed single copies of copyrighted articles and cases for

their work as do many of the publishers who sued Texaco.  (A.

877-81, 896-99, 1251-55, 1257-58, 1417-22).  Justice O'Connor

explained in Harper & Row that the fair use doctrine is

predicated on "the author's implied consent to 'reasonable and

customary use' when he released his work for public

consumption. . . ."  471 U.S. at 550.  In Williams & Wilkins,

the Court of Claims, in determining that the making of single

copies of articles was fair use, was influenced by the fact that

the practice was a long-standing and customary one.  487 F.2d at

1353, 1355-56.  Indeed, as far back as 1761, an English court

found that the printing of one-tenth of a book by Samuel Johnson

in a magazine was fair use based upon "custom and usage." 

Dodsley v. Kinnersley, 27 Eng. Rep. 270, 271 (Ch. 1761).  And

numerous commentators have described fair use as a use that is

"reasonable and customary."  

          While Judge Leval stated that "Texaco's strongest

arguments may be that photocopying has become 'reasonable and

customary,'" he inexplicably did not discuss this factor under

the nature and character of the use; elsewhere in his opinion he

concluded that the existence of the CCC undermined the perti-

nence of the reasonable and customary use argument.  (A. 129-30,

132).  The court below nowhere explains why custom and practice

can be changed by the vehicle of self-help and a class action

lawsuit.  It has long been the practice for biographers to quote

excerpts from their subject's works in their biographies and for

reviewers to quote excerpts of an article or book in their

reviews.  Should a reviewer be required to pay a CCC-licensing

fee if he is quoting from a CCC-registered publication because

the publisher is willing to accept such a fee and has

purportedly made it easy to report and pay?  Does the

publishers' willingness to accept a fee for such a reasonable

and customary use transform it into an unfair use?  Why does a

long-standing and accepted practice cease to be a fair use

merely because some publishers (but not all) wish to license it

and have brought a test case designed to change the status quo?

          There is no evidence in this record that the custom

and practice of making single copies has changed appreciably. 

As of 1983, the CCC by its own estimate licensed fewer than 5%

of the copies made, and it was only after the publishers sued

Texaco with much fanfare and publicity that some large

corporations began accepting an annual license from the CCC. 

(A. 336, 2031, 3807-08, 3853-55, 3885-86).  Nevertheless, only

19% of Fortune 500 companies have signed up with the CCC and

fewer than 20 of the 84 publisher plaintiffs in this case have

taken licenses to copy even though they indisputably make copies

too.  (See pp. __, supra).  That the publishers wish to change

the custom and practice, and are seeking to use this lawsuit to

do so, does not mean that what has occurred for decades is no

longer reasonable or customary, and hence unfair.

B.   "The Nature of the Copyrighted Work"

          Given the undisputed facts that the articles are

published and that they are, as Judge Leval put it,

"'essentially factual in nature,'" he correctly held that the

"second factor favors Texaco."  (A. 108, quoting Maxtone, 803

F.2d at 1263).  See, e.g., Harper & Row, 471 U.S. at 563; New

Era, 904 F.2d at 157; Consumers Union, 724 F.2d at 1049;

Williams & Wilkins, 487 F.2d at 1354.

C.   "The Amount and Substantiality of the Portion Used"

          This factor is useful in determining whether a second

user's sale unfairly supersedes the demand for the original. 

The greater the use the more likely the subsequent sale is

unfair.  But where, as explained in connection with the first

and fourth fair use factors (see pp. __, supra, pp. __, infra),

the copy is not sold or distributed and has not been used to

substitute for subscriptions, this factor is largely irrelevant.

          In all events, while Dr. Chickering copied all of the

eight articles, only two of which exceeded ten pages in length

(see p. __ n.4, supra), it is also undisputed that the "work"

that Academic Press offers for sale is a yearly journal

subscription, that it neither sells individual articles nor

makes reprints reasonably available, and that it did not regis-

ter copyrights in any of the eight articles, but only in the

issues as a whole.  Viewed in this light, the "amount and sub-

stantiality of the portion used in relation to the copyrighted

work as a whole" is minuscule -- on average, 0.26% of the pages

published in Catalysis during the subscription year in which the

articles were published (or 1.62% of the pages in the volume and

3.46% of the pages in the issue).  (A. 804-05).

          Alternatively, as Judge Leval concluded (but see pp.

__, infra), each article could be viewed as a separate work. 

But even that would not compel a holding for plaintiffs.  For,

as this Court, citing Williams & Wilkins with approval, explain-

ed in Maxtone, "[i]n some instances, copying a work wholesale

has been held to be fair use."  803 F.2d at 1263.  And, of

course, the courts in Sony and Williams & Wilkins held that the

copying of the "entire" copyrighted works at issue was fair use. 

464 U.S. at 449-50; 487 F.2d at 1353.

D.   "The Effect of the Use upon the Potential 

     Market for or Value of the Copyrighted Work"

          For the copyright holder to succeed on this factor,

the defendant's use must "'materially impair the marketability

of the work which is copied.'"  Harper & Row, 471 U.S. at 567. 

That is, there must be evidence of a "demonstrable" or "signifi-

cant" effect.  Rogers v. Koons, 960 F.2d 301, 312 (2d Cir.),

cert. denied, 113 S. Ct. 365 (1992); Wright, 953 F.2d at 739;

Maxtone, 803 F.2d at 1264.  See Folsom, 9 F. Cas. at 348 ("the

value of the original is sensibly diminished") (emphasis added). 

As the Supreme Court explained in Sony, "a use that has no

demonstrable effect upon the potential market for, or the value

of, the copyrighted work need not be prohibited in order to

protect the author's incentive to create."  464 U.S. at 450.  In

addition, the courts have required that the "copyright holder

establish[] with reasonable probability the existence of a

causal connection" -- "a cogent explanation of the logical link"

between the defendant's use and "the alleged harm to the

copyright."  Harper & Row, 471 U.S. at 567; Triangle

Publications, Inc. v. Knight-Ridder Newspapers, Inc., supra, 626

F.2d at 1177.

          The fourth statutory factor bears a close relationship

to the first factor's purpose and character inquiry.  The less

commercial the direct use of the copy in question, the less

likely it is to compete with the original and unfairly deprive

the copyright owner of a sale.  As this Court explained in

Consumers Union:  

          The theory behind the copyright laws 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).

          Thus, the same facts indicating that the purpose and

character of the use should tip in Texaco's favor, also show

that Dr. Chickering's use did not have a "demonstrable" or

"significant" effect on the value of the copyrights in question. 

Because Dr. Chickering's copying served a different function

than the original subscription, was not sold in competition with

it, and was not used to avoid or reduce the number of

subscriptions Texaco needed, Academic Press was not unfairly

deprived of a sale.

          Judge Leval acknowledged that Texaco is "substantially

correct" that, if it had to stop making photocopies, it "would

not replace those photocopies by purchasing additional subscrip-

tions or by purchasing back issues and back volumes" because

"[s]uch purchases would not serve the necessary ends."  (A.

113).  He further accepted Texaco's contention "that Academic

Press does not offer reprints on terms convenient to the needs

of Texaco's individual scientists as reprints may be purchased

only with a minimum order of 100 copies."  (A. 113). 

Nevertheless, he found this did not significantly undermine

plaintiffs' position because, "although I accept Texaco's

contentions that it would not replace its scientists' individual

copies by vastly increasing the number of subscriptions, the

evidence supports the inference that, if Texaco stopped

photocopying," it would increase the number of subscriptions

"somewhat," and (1) could obtain copies of articles from

document delivery services, (2) negotiate blanket licenses with

individual publishers, and (3) use a CCC license from which the

publishers would gain revenue.  (A. 113-14) (emphasis added).

          As demonstrated below, the record simply does not

support an inference that, if Texaco could not copy, it would

significantly increase its number of journal subscriptions.  Nor

are document delivery services a realistic alternative to

photocopies.  As for blanket licenses from individual publishers

and licenses from the CCC, Judge Leval's conclusions in this

regard turn fair use on its head by reversing the inquiry from

whether the "value of the original is sensibly diminished" by

the use in question (Folsom, 9 F. Cas. at 348 (emphasis added)),

into whether the value could be increased if the user were

required to pay for the use.  Under that theory, all uses are

ipso facto unfair because the value of a copyrighted work can

always be increased by the copyright holder's willingness to

accept a fee for its use.  Congress obviously did not intend the

fourth statutory factor to produce this absurd result and to

effectively eliminate "fair use."

     1.   Subscriptions and Other Alleged Substitutes

          Judge Leval found that "Texaco's contentions are

substantially correct (although perhaps slightly overstated)"

that "complete issues (or, a fortiori, complete volumes) are far

too bulky to be kept in scientist's files or even used

conveniently," and that Texaco would not replace photocopies "by

purchasing numerous additional subscriptions."  (A. 112-13).  He

nevertheless concluded that, if Texaco stopped photocopying, it

would increase the number of subscriptions "somewhat."  (A.

114).  He speculated that "it seems likely that Texaco would add

at least a modest number of subscriptions to Catalysis" if

photocopying were barred.  (A. 114).  These speculations plainly

do not rise to the level of the "demonstrable" harm required by

the fourth factor.  In any event, they are belied by the record.

          To begin with, Judge Leval agreed that "what a

scientist needs is a photocopy, and that need would not be

served by additional subscriptions," thus "mak[ing] complete

issues of the journal impracticable."  (A. 112-13) (emphasis in

original).  Indeed, as Dr. Chickering testified, regardless of

the number of subscriptions Texaco had to Catalysis, he would

have copied the eight articles.  That is because, as all of the

witnesses agreed, copies serve a different function than the

originals.  (A. 457-58, 579-80, 593-94, 754, 788-92, 794, 798-

800, 953-56, 1403-04, 1407-09).  The simple fact is that no

company or university would purchase separate subscriptions for

each researcher or professor.  Nor would multiple subscriptions

serve the need for easy, quick reference to photocopies.  As the

court stated in Williams & Wilkins:

          It is . . . wholly unrealistic to expect

          scientific personnel to subscribe regularly

          to large numbers of journals which would

          only occasionally contain articles of

          interest to them.  Nor will libraries

          purchase extensive numbers of whole

          subscriptions to all medical journals on the

          chance that an indeterminate number of

          articles in an indeterminate number of

          issues will be requested at indeterminate

          times.  The result of a flat proscription on

          library photocopying would be, we feel sure,

          that medical and scientific personnel would

          simply do without, and have to do without,

          many of the articles they now desire, need,

          and use in their work.  (487 F.2d at 1357).

In short, if photocopying were prohibited, researchers would do

what Drs. Pollart and Elliott testified they did before the

advent of the modern photocopier -- they would either do without

or take detailed notes.  (A. 740-41, 775-77, 783-84, 886, 957-

58).  The contention that Texaco would substitute subscriptions

for photocopies makes as much sense as arguing that a law firm

or judge would purchase an additional copy of F.2d or F. Supp.

in order to obtain a "copy" of a single judicial opinion.

          That researchers would merely forego if copying were

declared unlawful is confirmed by the fact that they never use

many of the articles they copy.  Thus, although researchers copy

articles because they expect a need for them, if their work

fails to proceed as anticipated, or their interest lags or

changes, they may never have occasion to refer to the photocopy. 

In fact, that is precisely what happened with five of the eight

articles here.  In other words, the copies were not in lieu of

subscriptions or anything else.  (A. 461, 464-65, 589-91, 596,

976-77).  

          The only basis Judge Leval cites to support his

"inference" is the assertion that Texaco increased the number of

subscriptions to Catalysis "in order to speed up the circulation

process" and that "scientists will make a photocopy of an

article in order not to slow down the circulation process."  (A.

114).  There is, however, no evidence that Texaco scientists --

let alone Dr. Chickering -- photocopied articles to speed up the

journal's circulation or that photocopying had that effect on

Catalysis.  To the contrary, at the very time Dr. Chickering was

making the copies in question, Texaco increased its subscrip-

tions, the opposite of what Judge Leval's theory would predict. 

The evidence -- none of which related to Catalysis -- at most

reflects the idiosyncratic and unique nature of researchers'

individual decisions to make a copy of a particular article. 

Equally significant, the record is devoid of any evidence that

Texaco ever took the amount of photocopying into account in

determining the number of subscriptions to order.

          As for the evidence of Academic Press, Mrs. Sasmor,

the person designated as most knowledgeable regarding its claim

of injury, could not name even one institution that had more

than three subscriptions and admitted that "[m]ost subscribers

get one copy" of Catalysis.  (A. 1187).  Academic Press has

never even bothered to ask any subscriber to any of its over 100

journals why it had cancelled or reduced the number of its

subscriptions and could supply no evidence that any subscriber

had ever substituted photocopies for subscriptions.  (A. 1318-

18a).  Not surprisingly, Judge Leval did not rely on any of the

speculative testimony of purported injury that plaintiffs

proffered -- testimony that was far more speculative than the

survey evidence of injury in Sony.  See 464 U.S. at 423-24, 452-

55; 480 F. Supp. at 438-40, 451-52, 463-68.

          Turning to the CCC, there is no evidence that annual

licensees purchase any fewer subscriptions than non-licensees,

which is what one would expect if, in fact, copying were a

substitute for subscriptions.  Indeed, the very fact that the

relief the publishers seek in this lawsuit is to require Texaco

to pay licensing fees to the CCC, and not to be enjoined from

copying (A. 14), belies any claim of real world effect on

subscriptions from single copies.  For if photocopying were

depriving publishers in the real world of significant subscrip-

tion revenues, they would seek an injunction to stop it and

would not license copying on the theory that subscriptions,

which are far more lucrative than royalty fees, would increase. 

When all is said and done, there is no evidence that any person,

at any time, under any circumstances, ever purchased an

additional subscription in lieu of photocopying an article.  

          In all events, according to plaintiffs and Judge

Leval, the copyrighted "works" at issue are the eight articles. 

In Consumers Union, however, this Court squarely rejected the

argument that the defendant's use of a copyrighted issue of Con-

sumer Reports magazine in its advertising would injure "the

value of possible future issues of Consumer Reports."  (724 F.2d

at 1051) (emphasis in original).  Judge Timbers explained that

"[t]his clearly does not involve the fourth factor which focuses

upon the effect of the use upon the potential market for or

value of the copyrighted work."  Id. (emphasis in original). 

Accord, Mathieson v. Associated Press, 23 U.S.P.Q.2d 1685, 1691

(S.D.N.Y. 1992) (injury had to be shown to the copyright in the

"particular photo" that was copied and not to related photo-

graphs) (emphasis in original).

          Finally, as for Judge Leval's hypothesis that Texaco

might order photocopies from document delivery services

"promptly and inexpensively" (A. 113, 114), as Mrs. Sasmor

testified, the use of such services "would entail some delay" --

precisely the reason they are not a realistic substitute for

photocopying.  Nor is there any evidence that any photocopy of

any of the eight articles was ever provided to any person by any

document delivery service, or that Academic Press has ever

earned any significant revenues from this source.  (See A. 1300-

05, 1796, 4243-44).  Indeed, in Williams & Wilkins, the Court

found that the publisher was not injured by the massive

photocopying there notwithstanding that it had "granted a

royalty-bearing license" to the very same document delivery

service that Academic Press uses.  203 Ct. Cl. at 171

 36(a)(v).  (A. 1300-05, 1796, 4243-44, 4247).

          The ultimate irony is that the only hard evidence in

this record is that photocopying benefits publishers.  See

Maxtone, 803 F.2d at 1264.  As Professor Schwarz explained, he

uses photocopies of articles when writing and peer reviewing

articles for Catalysis and other journals.  The copies make him

more productive and efficient and thus permit him to peer review

and write more articles than he otherwise could.  That is,

photocopying increases the number of articles available to be

published, which, in turn, permits publishers to increase the

number of articles and journals they publish, which, to complete

the cycle, increases their profits.  And that is exactly what

has happened with respect to Catalysis, with its profits and

number of published pages increasing steadily over the last

three decades as photocopying continued to occur.  (A. 1390-91,

1399-1400, 1544).

     2.   The Irrelevance of Individual Blanket

          Licenses and the CCC

          Given the absence of demonstrable injury to the sale

of subscriptions, this case boils down to Judge Leval's

acceptance of plaintiffs' argument that their willingness to

accept money for otherwise "fair use" establishes harm under the

fourth factor.  This conclusion is contrary to case law dating

back to Justice Story's holding in Folsom that the court must

examine "the degree in which the use may prejudice the sale, or

diminish the profits, or supersede the objects, of the original

work."  9 F. Cas. at 348.  That is, the court must examine

whether the "value of the original is sensibly diminished."  Id.

(emphasis added).  See Sony, 464 U.S. at 441 n.21, 450, 456;

Williams v. Wilkins, 487 F.2d at 1357 n.19.  In other words, the

fourth factor must focus on the question of whether, if the

practice in question were not enjoined, the value of the

original would be diminished, not on whether the value could be

increased by licensing the use in question.

          Judge Leval ignored this principle and reversed the

inquiry from an examination of what the author actually lost

into an examination of what the author might conceivably gain if

he had the power of a federal court behind him.  As he put it,

the issue was whether "the copyright owner would be receiving

significantly higher revenue but for the defendant's

uncompensated copying."  (A. 116).  At the heart of the decision

below is the district court's holding that since, in its view,

it is no longer "absurdly inefficient" to obtain licenses to

make single copies because some publishers have created the CCC,

it is no longer a fair use to make single copies of those

publishers' works.  (See A. 127, 131).

          Judge Leval's radical theory of using the willingness

to license as a bar to fair use has been rejected by the only

two courts that have squarely addressed it.  In Williams &

Wilkins, the Court turned aside the argument as circular:

          It is wrong to measure the detriment to

          plaintiff by loss of presumed royalty income

          -- a standard which necessarily assumes that

          plaintiff had a right to issue licenses. 

          That would be true, of course, only if it

          were first decided that the defendant's

          practices did not constitute "fair use."  In

          determining whether the company has been

          sufficiently hurt to cause these practices

          to become "unfair," one cannot assume at the

          start the merit of the plaintiff's position,

          i.e., that plaintiff had the right to

          license.  That conclusion results only if it

          is first determined that the photocopying is

          "unfair."  (487 F.2d at 1357 n.19).

          Similarly, although ignored by Judge Leval, the

Supreme Court in Sony refused to accept the dissent's contention

that video tape recorders "created a potential market for . . .

copyrighted programs," that "[t]hat market consists of those

persons who find it impossible or inconvenient to watch the

programs at the time they are broadcast," that "[t]hese persons

are willing to pay for the privilege of watching copyrighted

works at their convenience," and that, as a result, time-

shifting has a "substantial adverse effect upon the 'potential

market for' the . . . copyrighted works."  Compare 464 U.S. at

441 n.21 with id. at 485-86 (Blackmun, J., dissenting) (emphasis

added).  That is because, as Justice Stevens explained, the

plaintiffs' argument "merely indicates that [they] . . . would

be willing to license their claimed monopoly interest . . . to

Sony in return for a royalty."  Id. at 441 n.21.

          That a copyright owner's willingness to accept license

fees does not transform an otherwise fair use into infringement

is borne out by the effect that such a rule would have on the

fourth factor.  Plainly, the "injury" to Academic Press from

Dr. Chickering's failure to pay the CCC fee for copying an

article is identical to the "injury" that Academic Press would

suffer no matter what the reason for making the copy.  Thus, it

would "lose" the same fee if a researcher at a non-profit

foundation or university made the copy or, for that matter, if a

member of this Court made a copy in preparation for hearing this

appeal.  Indeed, under Judge Leval's analysis, even copying one

page of a multi-page article would tip the scales on the fourth

factor since the CCC demands payment for copying of single pages

and, in Judge Leval's view, "injury" should be measured by

totalling all fees lost instead of just the fee lost on the

copyrighted work sued upon.  (See A. 115, 3703, 3707-08).  The

fourth factor requires examination of the potential market "for

the work," not the potential market for licenses for fair

use.  As this Court recently explained in Wright, the

plaintiff's claim that the defendant's "failure to get

plaintiff's permission to use" the copyrighted work made the use

unfair was "meritless."  953 F.2d at 737.  For as Judge Walker

held below in Wright, the claim "only begs the question:  if

[the defendant's] paraphrased use of the letters is fair, then

permission was not necessary."  748 F. Supp. at 109.  Accord,

Mathieson v. Associated Press, supra, 23 U.S.P.Q.2d at 1688.

          Nor does Judge Leval's assertion that the CCC

allegedly provides a "convenient, reasonable licensing system"

for the payment of a fee (A. 129) -- which it demonstrably does

not (see pp. ___, infra, pp. __, supra) -- make plaintiffs'

offer to accept money relevant to a fair use analysis.  The

fact that it is convenient to pay a plaintiff does not mean the

plaintiff is entitled to be paid.  Indeed, the same argument was

made and rejected in Sony and could be made with respect to

every other fair use.  For example, one could argue that it

would be convenient for a biographer to pay his subject for

permission to quote from his letters, for a book reviewer to pay

the author for permission to quote from his work, or for a

parodist to pay for permission to parody, and therefore it would

not be fair use if payment were not made.  That is not the law,

any more than counsel could assert that he is entitled to

receive $1.00 for everyone's attending the argument on the

appeal of this case because, by holding his hat at the door, he

makes it easy and convenient to pay him the fee.  In short, fair

use is determined by application of the four-factor test set

forth in  107, not by whether the plaintiff is willing to offer

a "convenient" license and take Texaco's money.

          Moreover, even if the gain to plaintiffs from CCC-

generated revenues were relevant to the fourth factor, the CCC

is, in fact, unfair to users.  Under the AAS, publishers indis-

putably charge users for articles in which they do not have

rights and for which they are thus not entitled to fees.  (See

p. ___, supra).  By permitting publishers to leverage their

ownership of copyright in some articles into a basis for

collecting photocopy fees for articles in which they have no

rights, the AAS plainly constitutes copyright misuse.  See,

e.g., Lasercomb Am., Inc. v. Reynolds, 911 F.2d 970, 976-77 (4th

Cir. 1990).  In all events, there is no evidence in this record

that such loss with respect to the eight articles (see pp. ____,

supra) was anything more than de minimis.  See, e.g., Sinai v.

Bureau of Automotive Repair, No. 92-0274-VEW, slip op. at 8

(N.D. Cal. Dec. 21, 1992) (distribution of copies of copyrighted

chart to "limited group" at several locations "has only a slight

effect on the market" for the work).

          Aside from the circularity of plaintiffs' argument,

their contention must be rejected because it would require this

Court to make a quintessentially legislative judgment.  As

Justice Stevens explained in Sony, citing Williams & Wilkins

with approval, "[t]he judiciary's reluctance to expand the

protections afforded by the copyright without explicit

legislative guidance is a recurring theme" in the history of

American copyright.  464 U.S. at 431.  Thus, the Court has left

it to Congress to make the necessary policy choices, which

Congress has done, for example, by expanding the law to apply to

cable retransmission (17 U.S.C.  111) and by not prohibiting

home videotaping.  Compare Fortnightly Corp. v. United Artists

Television, Inc., 392 U.S. 390, 402 (1968); Teleprompter Corp.

v. CBS, Inc., 415 U.S. 394, 405 (1974). 

          The problems that would be presented if Dr. Chicker-

ing's copying were declared unlawful confirm the legislative

nature of the radical change plaintiffs seek here.  To begin

with, there is the question of "practical unenforceability" -- a

concern that the Supreme Court has voiced in the past in

deciding not to expand the scope of copyright.  Twentieth

Century Music Corp. v. Aiken, 422 U.S. 151, 162 (1975).  Should

there be copyright police to search corporate offices (or homes)

in attempts to find unlawful copying, or should publishers be

given the right to do so?  How should prices be set?  Should

they be left to the sole discretion of publishers to set prices

in their economic self-interest without any government

supervision?  Alternatively, should courts oversee pricing to

insure that, in Judge Leval's word, the prices are "reasonable"? 

(A. 112).  How should a court determine what is a "reasonable"

price, particularly given the Supreme Court's repeated warnings

that the setting of a "reasonable" price is precisely the type

of decision that only a legislature may make?  Surely, the

courts should no more "set sail on a sea of doubt" in setting

"reasonable" photocopy prices under the copyright laws than they

should under the antitrust laws.  United States v. Addyston Pipe

& Steel Co., 85 F. 271, 284 (6th Cir. 1898), aff'd, 175 U.S. 211

(1899).

          The bottom line is that whether to require payment for

copying and, if so, whether to base the price on payments per

page, per article, or per subscription, or to tax photocopiers

or photocopy paper, or whether to charge corporations,

universities, libraries and consumers the same prices, are the

stuff of politics and elections, not ad hoc judicial rulings

that have "no guide but the Court's own discretion."  Baldwin v.

Missouri, 281 U.S. 586, 595 (1930) (Holmes, J., dissenting). 

(Compare Public Law 102-563 (royalty payments required for sale

of digital audio recorders)).  As the courts held in Sony and

Williams & Wilkins, it is up to Congress -- not the courts or

private parties -- to make the "difficult balance between the

interests of authors . . . in the control and exploitation of

their writings and . . . society's competing interest in the

free flow of ideas, information, and commerce on the other

hand."  Sony, 464 U.S. at 429.

E.   The Balancing of the Four Statutory Factors 

     Demonstrates that Dr. Chickering's Use Was Fair

          As generally noted, although Congress specified four

factors to be balanced in determining if a defendant's use is

protected by the fair use doctrine, it failed to provide any

explicit guidance as to how the factors should be balanced.  We

do know, however, that "[t]he doctrine offers a means of balanc-

ing the exclusive right of a copyright holder with the public's

interest in dissemination of information."  Meeropol v. Nizer,

560 F.2d 1061, 1068 (2d Cir. 1977), cert. denied, 434 U.S. 1013

(1978); see Consumers Union, 724 F.2d at 1048.   We also know

that a copyright, unlike a patent, does not give the owner an

absolute right to exclude others from use of the work.  Compare

17 U.S.C.  106 with 35 U.S.C.  271.  Rather, a copyright gives

the owner the right to prohibit only certain specified uses; and

one of the rights explicitly not given to the owner is the right

to restrict fair use.  As this Court put it in Rosemont:

          The fundamental justification for the [fair

          use] privilege lies in the constitutional

          purpose in granting copyright protection in

          the first instance, to wit, "To Promote the

          Progress of Science and the Useful Arts."

          . . .  To serve that purpose, "courts in

          passing upon particular claims of infringe-

          ment 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."  (366 F.2d at 303) (quoting

          Berlin v. E.C. Publications, Inc., 329 F.2d

          541, 544 (2d Cir. 1964)).

See Association of Am. Medical Colleges v. Cuomo, 928 F.2d 519,

525-26 (2d Cir.), cert. denied, 112 S. Ct. 184 (1991).

          In short, the trial evidence demonstrates convincingly

that the status quo provides ample incentives for the creation

of scientific articles, and that use of single photocopies, far

from eliminating those incentives, facilitates progress in

scientific research and writing to the ultimate benefit of the

public.

                           CONCLUSION

          For all of the foregoing reasons, the Order below

should be reversed and remanded with directions that the

District Court determine plaintiffs' proofs of claim in Texaco's

favor.

Dated:  March 4, 1993

        New York, New York

                              Respectfully submitted,

                                   KAYE, SCHOLER, FIERMAN,

                                     HAYS & HANDLER

                                   425 Park Avenue

Of Counsel:                        New York, New York  10022

                                   (212) 836-8000

     Milton J. Schubin                  

     Thomas A. Smart               JOSEPH P. FOLEY     

     Michael Malina                Texaco Inc.    

     Richard A. De Sevo            2000 Westchester Avenue

                                   White Plains, New York  10650

                                   (914) 253-4000

                                   Attorneys for Appellant

                                     Texaco Inc.

                       STATUTORY ADDENDUM 

Section 107 of the Copyright Act (17 U.S.C.  107) 

          The full text of Section 107 of the Copyright Act,

107, with the December 1, 1990 and October 24, 1992 (Public Law

102-492) amendments printed in italics, is as follows:

               Notwithstanding the provisions of

          sections 106 and 106A, the fair use of a

          copyrighted work, including such use by

          reproduction in copies or phonorecords or by

          any other means specified by that section,

          for purposes such as criticism, comment,

          news reporting, teaching (including multiple

          copies for classroom use), scholarship, or

          research, is not an infringement of

          copyright.  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 nonprofit

          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 upon the

          potential market for or value of the

          copyrighted work.  

          The fact that a work is unpublished shall

          not itself bar a finding of fair use if such

          finding is made upon consideration of all

          the above factors.

Section 108 of the Copyright Act (17 U.S.C.  108) 

          The full text of Section 108 of the Copyright Act,

with the material repealed by the June 26, 1992 amendment

(Public Law 102-307), printed in italics, is as follows:    

             (a)  Notwithstanding the provisions of

          section 106, it is not an infringement of

          copyright for a library or archives, or any

          of its employees acting within the scope of

          their employment, to reproduce no more than

          one copy or phonorecord of a work, or to

          distribute such copy or phonorecord, under

          the conditions specified by this section, if

          --

                  (1)  the reproduction or

               distribution is made without any

               purpose of direct or indirect

               commercial advantage;

                  (2)  the collections of the library

               or archives are (i) open to the public,

               or (ii) available not only to

               researchers affiliated with the library

               or archives or with the institution of

               which it is a part, but also to other

               persons doing research in a specialized

               field; and

                  (3)  the reproduction or

               distribution of the work includes a

               notice of copyright.

             (b)  The rights of reproduction and

          distribution under this section apply to a

          copy or phonorecord of an unpublished work

          duplicated in facsimile form solely for

          purposes of preservation and security or for

          deposit for research use in another library

          or archives of the type described by clause

          (2) of subsection (a), if the copy or phono-

          record reproduced is currently in the

          collections of the library or archives.

             (c)  The right of reproduction under this

          section applies to a copy or phonorecord of

          a published work duplicated in facsimile

          form solely for the purpose of replacement

          of a copy or phonorecord that is damaged,

          deteriorating, lost, or stolen, if the

          library or archives has, after a reasonable

          effort, determined that an unused

          replacement cannot be obtained at a fair

          price.

             (d)  The rights of reproduction and

          distribution under this section apply to a

          copy, made from the collection of a library

          or archives where the user makes his or her

          request or from that of another library or

          archives, of no more than one article or

          other contribution to a copyrighted collec-

          tion or periodical issue, or to a copy or

          phonorecord of a small part of any other

          copyrighted work, if --

                  (1)  the copy or phonorecord becomes

               the property of the user, and the

               library or archives has had no notice

               that the copy or phonorecord would be

               used for any purpose other than private

               study, scholarship, or research; and

                  (2)  the library or archives

               displays prominently, at the place

               where orders are accepted, and includes

               on its order form, a warning of

               copyright in accordance with

               requirements that the Register of

               Copyrights shall prescribe by

               regulation.

             (e)  The rights of reproduction and

          distribution under this section apply to the

          entire work, or to a substantial part of it,

          made from the collection of a library or

          archives where the user makes his or her

          request or from that of another library or

          archives, if the library or archives has

          first determined, on the basis of a

          reasonable investigation, that a copy or

          phonorecord of the copyrighted work cannot

          be obtained at a fair price, if --

                  (1)  the copy or phonorecord becomes

               the property of the user, and the

               library or archives has had no notice

               that the copy or phonorecord would be

               used for any purpose other than private

               study, scholarship, or research; and

                  (2)  the library or archives

               displays prominently, at the place

               where orders are accepted, and includes

               on its order form, a warning of

               copyright in accordance with

               requirements that the Register of

               Copyrights shall prescribe by

               regulation.

             (f)  Nothing in this section --

                  (1)  shall be construed to impose

               liability for copyright infringement

               upon a library or archives or its

               employees for the unsupervised use of

               reproducing equipment located on its

               premises: Provided, That such equipment

               displays a notice that the making of a

               copy may be subject to the copyright

               law;

                  (2)  excuses a person who uses such

               reproducing equipment or who requests a

               copy or phonorecord under subsection

               (d) from liability for copyright

               infringement for any such act, or for

               any later use of such copy or

               phonorecord, if it exceeds fair use as

               provided by section 107;

                  (3)  shall be construed to limit the

               reproduction and distribution by

               lending of a limited number of copies

               and excerpts by a library or archives

               of an audiovisual news program, subject

               to clauses (1), (2), and (3) of

               subsection (a); or

                  (4)  in any way affects the right of

               fair use as provided by section 107, or

               any contractual obligations assumed at

               any time by the library or archives

               when it obtained a copy or phonorecord

               of a work in its collections.

             (g)  The rights of reproduction and

          distribution under this section extend to

          the isolated and unrelated reproduction or

          distribution of a single copy or phonorecord

          of the same material on separate occasions,

          but do not extend to cases where the library

          or archives, or its employee --

                  (1)  is aware or has substantial

               reason to believe that it is engaging

               in the related or concerted

               reproduction or distribution of

               multiple copies or phonorecords of the

               same material, whether made on one

               occasion or over a period of time, and

               whether intended for aggregate use by

               one or more individuals or for separate

               use by the individual members of a

               group; or

                  (2)  engages in the systematic

               reproduction or distribution of single

               or multiple copies or phonorecords of

               material described in subsection (d):

               Provided, That nothing in this clause

               prevents a library or archives from

               participating in interlibrary

               arrangements that do not have, as their

               purpose or effect, that the library or

               archives receiving such copies or

               phonorecords for distribution does so

               in such aggregate quantities as to

               substitute for a subscription to or

               purchase of such work.

             (h)  The rights of reproduction and

          distribution under this section do not apply

          to a musical work, a pictorial, graphic or

          sculptural work, or a motion picture or

          other audiovisual work other than an

          audiovisual work dealing with news, except

          that no such limitation shall apply with

          respect to rights granted by subsections (b)

          and (c), or with respect to pictorial or

          graphic works published as illustrations,

          diagrams, or similar adjuncts to works of

          which copies are reproduced or distributed

          in accordance with subsections (d) and (e).

            (i)  Five years from the effective date of

          this Act, and at five-year intervals there-

          after, the Register of Copyrights, after

          consulting with representatives of authors,

          book and periodical publishers, and other

          owners of copyrighted materials, and with

          representatives of library users and librar-

          ians, shall submit to the Congress a report

          setting forth the extent to which this

          section has achieved the intended statutory

          balancing of the rights of creators, and the

          needs of users.  The report should also

          describe any problems that may have arisen,

          and present legislative or other recommenda-

          tions, if warranted.

                            FOOTNOTES

1.   There is no evidence that Texaco ever copied the same

     article more than once; to the contrary, the clerk in

     Texaco's Beacon library responsible for responding to

     photocopying requests testified that she was never asked to

     make more than one copy of any article.  (A. 447).

2.   There is no evidentiary basis for Judge Leval's statement

     that publication of scientific journals "requires a large

     investment and a long period of losses."  (A. 135).  In

     fact, the record contains no investment data with respect

     to Catalysis (or any other journal); and, in one annual

     report, Harcourt reported that "all" of Academic Press'

     scientific and medical journals were profitable.  Moreover,

     not only is the direct cost of producing Catalysis

     minuscule compared to the revenues it generates, but in its

     50-year history, Academic Press has never stopped

     publishing a journal

     for economic reasons.  (A. 1077-78, 1124-29, 3857-60, 4245-

     46, 4265-66 (emphasis added)).

3.   The circulation of scientific and technical journals and

     other copyrighted periodicals is common not only in the

     scientific community, but in other industries as well,

     including those of the plaintiffs and other publishing

     companies. (A. 739, 751, 775-76, 877-81, 890-95, 1267,

     1410-12, 1416, 3863-64).

4.   A. 474 (16 pages); A. 490 (4 pages); A. 499 (7 pages);

     A. 507 (2+ pages); A. 494 (5 pages); A. 510 (8 pages);

     A. 518 (11 pages); A. 530 (6 pages).

5.   It is only by examining the articles that one can

     appreciate their technical character and the benefit a

     photocopy provides.  We therefore urge the Court to examine

     the copies of the articles in the Joint Appendix.  (A. 474-

     535).

6.   See, e.g., A. 246-48b, 304, 311-17, 322-30, 333-35, 342-43,

     346-47, 355-56, 435-38, 629-37, 866, 872-76, 881a-84, 888-

     89, 960-61, 1158-60, 1162-68, 1170-72, 1307-09, 1413-15,

     1426-27, 1430-32, 2021, 3696, 3867, 3887-4227, Texaco Trial

     Exhibit ("TEX") 126, TEX-300, TEX-302 to TEX-326.

7.   While the district court side-stepped the issue (A. 138

     n.26), since the plaintiff has the burden of proving

     infringement, and since  107 provides that a fair use is

     not an infringement, it necessarily follows that the

     plaintiff has the burden of proving that the defendant's

     use was not fair.  See Sony, 464 U.S. at 447; New Era, 904

     F.2d at 155.

8.   The district court ignored this legislative history in con-

     cluding that Dr. Chickering's copying was for a direct or

     indirect commercial advantage.  (A. 136).  Judge Leval also

     assumed incorrectly that others at Texaco made copies of

     the same articles.  (A. 137).  In fact, after thorough

     discovery and the depositions of numerous scientists, the

     record evidence reveals no instance of the same article

     having been copied twice.

9.   In 1968, the NLM provided 120,000 articles to "private or

     commercial organizations, particularly drug companies." 

     487 F.2d at 1349.  In 1970, the NIH library filled 85,744

     requests for journal articles, consisting of about 930,000

     pages.  Id. at 1348.

10.  Both the Ninth and Federal Circuits recently upheld as fair

     uses non-transformative intermediate copying of computer

     programs by for-profit companies where the relationship of

     the copy to the ultimate profit-making activity was

     derivative or indirect and the copy itself was not sold or

     redistributed in competition with the original.  Sega

     Enters. Ltd., 977 F.2d 1510; Atari Games Corp., 975 F.2d

     832.  That is because the non-transformative use simply did

     not deprive plaintiffs of a sale.

11.  Accord, Rosemont Enters., Inc. v. Random House, Inc., 366

     F.2d 303, 307 (2d Cir. 1966), cert. denied, 385 U.S. 1009

     (1967); Triangle Publications, Inc. v. Knight-Ridder

     Newspapers, Inc., 626 F.2d 1171, 1176 (5th Cir. 1980);

     Bruzzone v. Miller Brewing Co., 202 U.S.P.Q. 809, 811 (N.D.

     Cal. 1979); Holdredge v. Knight Publishing Corp., 214 F.

     Supp. 921, 924 (S.D. Cal. 1963); Shapiro, Bernstein & Co.

     v. P.F. Collier & Son Co., 26 U.S.P.Q. 40, 42 (S.D.N.Y.

     1954).

12.  A. Weil, American Copyright Law 429-30 (1917); R.C. DeWolf,

     An Outline of Copyright Law 143 (1925); Ball, The Law of

     Copyright & Literary Property 260 (1944); M. Nicholson, A

     Manual of Copyright Practice for Writers, Publishers and

     Agents 91 (2d ed. 1970); Weinreb, "Fair's Fair:  A Comment

     on the Fair Use Doctrine," 103 Harv. L. Rev. 1137, 1140

     (1990).

13.  By contrast, in Williams & Wilkins, all but two of the

     articles were 10 pages or longer, with the longest four

     articles comprising 29, 33, 38 and 57 pages, respectively. 

     203 Ct. Cl. 150.

14.  See Folsom, 9 F. Cas. at 345, 348-49 (fairness of copying

     100% of 319 of President Washington's letters analyzed by

     treating all eleven volumes of Washington's letters as one

     work, rather than viewing each letter separately).  See

     also, e.g., Triangle-Publications, Inc. v. Knight-Ridder

     Newspapers, Inc., 626 F.2d 1171, 1177 & n.15 (5th Cir.

     1980); Wojnarowicz v. American Family Ass'n, 745 F. Supp.

     130, 144-45 & n.11, 134 (S.D.N.Y. 1990); Guccione v. Flynt,

     1984 Copr. L. Dec.  25,669, pp. 19,000-01 (S.D.N.Y. 1984);

     Mathieson v. Associated Press, 23 U.S.P.Q.2d 1685, 1690

     (S.D.N.Y. 1992).  As for Consumers Union, in holding that

     the defendant's use of a portion of an article from

     Consumer Reports magazine was fair, the Court did not dis-

     cuss the appropriate definition of the "work" when

     analyzing the extent of the defendant's use when it

     compared the amount taken to the length of the article

     instead of to the magazine as a whole.  724 F.2d at 1050.

15.  In fact, court decisions reported by West Publishing

     Company are copyrighted.  See West Pub. Co. v. Mead Data

     Central, Inc., 799 F.2d 1219 (8th Cir. 1986), cert. denied,

     479 U.S. 1070 (1987).

16.  The closest testimony was that of two of the ten

     researchers who were deposed, who stated that they "may" or

     "might" copy an article in order to move an issue along. 

     (A. 367, 667-68).

17.  That the testimony of plaintiffs' witnesses was based on

     nothing but speculation, vague hearsay and "feel[ings]," is

     nowhere better summed up than by plaintiffs' improper

     reliance on the residual hearsay exception to support its

     admission into evidence.  (Compare A. 4247, 4272, 4291-94,

     768-74, 777-87, 793a-97, 1187-89, 1192-1201, 1211-17,

     1229-30, 1237-38, 1316-18, 1320-25, 1327-28 with Parsons v.

     Honeywell, Inc., 929 F.2d 901, 907 (2d Cir. 1991)).  But

     even if the testimony were admissible, these "self-serving

     statements" cannot support any theory of injury, let alone

     establish the requisite proximate causation.  See, e.g.,

     Argus, Inc. v. Eastman Kodak Co., 801 F.2d 38, 42, 45-46

     (2d Cir. 1986), cert. denied, 479 U.S. 1088 (1987); Stevens

     Linen Assocs., Inc. v. Mastercraft Corp., 656 F.2d 11, 14

     (2d Cir. 1981); MCI Commun. v. AT&T Co., 708 F.2d 1081,

     1161-63 (7th Cir.), cert. denied, 464 U.S. 891 (1983).

18.  For the same reason, Judge Leval's reference (A. 115) to

     the practices of publishers other than Academic Press is

     irrelevant to the fourth factor, although we note that

     publishers have prospered during the age of photocopying,

     the opposite of what one would expect under plaintiffs'

     theory.  (A. 3688, 3692-95, 3777-78).

19.  Thus, contrary to Judge Leval's attempt to distinguish

     Williams & Wilkins, the Court of Claims did not base its

     holding "on the absence of a convenient, reasonable

     licensing system."  (A. 129).

20.  Plaintiffs cannot get around this requirement by relying on

     the law that injury can be shown by "harm to the market for

     derivative works" (Harper & Row, 471 U.S. at 568; Maxtone,

     803 F.2d at 1264), since no derivative work is at issue. 

     Dr. Chickering made a copy of eight articles; he did not

     create and market another work based upon the articles,

     such as a translation, dramatization or any of the other

     examples set forth in Section 101's definition of

     derivative work.  Compare Stewart v. Abend, 495 U.S. 207,

     238 (1990).

21.  Judge Leval also opined that, if copying were prohibited,

     Texaco would negotiate "blanket licenses with individual

     publishers."  (A. 113).  But there is no evidence Academic

     Press ever entered into any blanket advance permission

     agreement with anyone or was ever willing to do so.  (See

     A. 1298-99).

22.  E.g., Catalano, Inc. v. Target Sales Inc., 446 U.S. 643,

     647 (1980); United States v. Trenton Potteries Co., 273

     U.S. 392, 397-98 (1927).

23.  In this regard, it is not without significance that in the

     original Copyright Act Congress did not adopt the Statute

     of Anne's provision that a purchaser of a copyrighted work

     could petition the Lord Archbishop of Canterbury or other

     government official to "Limit and Settle the Price . . . as

     to them shall seem Just and Reasonable."  Compare 8 Anne c.

     19 (1710), reprinted in H. Ransom, The First Copyright

     Statute 113-14 (1956), with Act of May 31, 1790, 1st Cong.

     2d Sess., 1 Stat. 124 (1790).