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).