Amicus curiae brief filed by ARL et al

*CORRECTED VERSION*

                                                          92-9341

  _____________________________________________________________________

                 UNITED STATES COURT OF APPEALS

                     FOR THE SECOND CIRCUIT

            ________________________________________

AMERICAN GEOPHYSICAL UNION; ELSEVIER SCIENCE PUBLISHING CO. INC.;

               PERGAMON PRESS, LTD; SPRINGER-VERLAG, GmbH & CO., K.G.;

               JOHN WILEY & SONS, INC. and WILEY HEYDEN, LTD., on behalf of

               themselves and others similarly situated,

                                         Plaintiffs-Counterclaim-

                                            Defendants-Appellees,

                             --v.--

                          TEXACO INC.,

                                          Defendant-Counterclaim-

                                             Plaintiff-Appellant.

            (Caption continued on inside front cover)

            ________________________________________

   ON APPEAL FROM AN INTERLOCUTORY ORDER OF THE UNITED STATES

      DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK

   _______________________________________________________________________

   *AMICUS CURIAE* BRIEF OF ASSOCIATION OF RESEARCH LIBRARIES,

AMERICAN ASSOCIATION OF LAW LIBRARIES, SPECIAL LIBRARIES ASSOCIATION,

MEDICAL LIBRARY ASSOCIATION, AMERICAN COUNCIL OF LEARNED SOCIETIES,

NATIONAL HUMANITIES ALLIANCE, AND ASSOCIATION OF ACADEMIC HEALTH

                   SCIENCES LIBRARY DIRECTORS

   _______________________________________________________________________

                                  Ritchie T. Thomas, Esq.

                                  James V. Dick, Esq.

                                  Susan Neuberger Weller, Esq.

                                  SQUIRE, SANDERS & DEMPSEY

                                  1201 Pennsylvania Avenue, N.W.

                                  Washington, D.C.  20004

                                  (202) 626-6600

                                  Attorneys for *Amicus Curiae*

                                  ASSOCIATION OF RESEARCH LIBRARIES,

                                  AMERICAN ASSOCIATION OF LAW

                                  LIBRARIES, SPECIAL LIBRARIES

                                  ASSOCIATION, MEDICAL LIBRARY

                                  ASSOCIATION, AMERICAN COUNCIL OF

                                  LEARNED SOCIETIES, NATIONAL

                                  HUMANITIES ALLIANCE, AND

                                  ASSOCIATION OF ACADEMIC

                                  HEALTH SCIENCES

                                  LIBRARY DIRECTORS

Dated:  March 4, 1993

(Corrected Version:  March 10, 1993)

            ________________________________________

 IN RE:  TEXACO INC.; TEXACO CAPITAL INC., TEXACO CAPITAL N.V.,

                                             Reorganized Debtors.

            ________________________________________

ACADEMIC PRESS, INC.; ALAN R. LISS, INC.; ALLERTON PRESS INC.; AMBIENT PRESS

LTD.; AMERICAN ASSOCIATION FOR THE ADVANCEMENT OF SCIENCE, AMERICAN

ASSOCIATION OF COST ENGINEERS, INC., AMERICAN CHEMICAL SOCIETY, AMERICAN

CONFERENCE OF GOVERNMENTAL INDUSTRIAL HYGIENISTS, AMERICAN INSTITUTE OF

PHYSICS, AMERICAN MATHEMATICAL SOCIETY, AMERICAN MEDICAL ASSOCIATION

AMERICAN SOCIETY FOR BIOCHEMISTRY AND MOLECULAR, BIOLOGY, INC., AMERICAN

SOCIETY FOR MICROBIOLOGY, ASPEN PUBLISHERS, INC., ASSOCIATION FOR SYMBOLIC

LOGIC, BIRKHAUSER BOSTON, BLACKWELL, SCIENTIFIC PUBLICATIONS, LTD., THE

BUREAU OF NATIONAL AFFAIRS, INC., BUSINESS MONTH CORPORATION, BUSINESS

PUBLISHERS, INC., BUTTERWORTH & CO. (PUBLISHERS) LTD., THE C.V. MOSEBY

COMPANY, CANNING PUBLICATIONS, INC., CENTER FOR COMPUTER/LAW, CORNELL

UNIVERSITY, CRC PRESS, INC., DATA PROCESSING MANAGEMENT ASSOCIATION INC.,

EDITIONS SCIENTIFIQUES ELSEVIER, ELSEVIER SCIENCE PUBLISHERS B.V., ELSEVIER

SCIENCE PUBLISHERS LTD., ELSEVIER SEQUOIA SA, FEDERATION OF SOCIETIES FOR

COATINGS TECHNOLOGY, GROVE & STRATTON, INC., HARCOURT BRACE JOVANOVICH

LIMITED (FORMERLY ACADEMIC PRESS INC. (LONDON) LTD.), HEMISPHERE

PUBLISHING CO., HUMANA PRESS, HUMAN SCIENCES PRESS, INC. PUBLISHING

CORPORATION, THE INFORMATION STORE, INC., INSTITUTION OF ELECTRICAL

ENGINEERS/PETER PEREGRINUS LTD., INTERNATIONAL ACADEMY AT SANTA

BARBARA, INC., J. SCHWEITZER VERLAG, JOHN WILEY & SONS LIMITED, KENNETH

MASON PUBLICATIONS LTD., THE LAUX COMPANY, LAW & TECHNOLOGY PRESS,

LITTLE, BROWN & COMPANY, MARCEL DEKKER, INC., MASSACHUSETTS  MEDICAL

SOCIETY, MBR PRESS, INC., MIT PRESS, MUNKSGAARD INTERNATIONAL PUBLISHERS

LTD., MULTI-SCIENCE PUBLISHING CO. LTD., OPEN-APPLE, PHYSOLOGIA PLANTARUM,

PJD PUBLICATIONS LTD., PLENUM PUBLISHING CORPORATION, PRINCETON

UNIVERSITY PRESS, RAVEN PRESS, ROYAL AUSTRALASIAN ORNITHOLOGIST'S UNION,

SCANNING MICROSCOPY INTERNATIONAL, INC., SCRIPTA TECHNICA, INC., SKY

PUBLISHING CORPORATION, THE SOCIETY OF NAVAL ARCHITECTS AND MARINE

ENGINEERS, SPRINGER-VERLAG NEW YORK INC., TECHNOLOGY CONFERENCES A/K/A

T/C PRESS, TECHNOMIC PUBLISHING CO., INC., TISSUE CULTURE ASSOCIATION, INC.,

TRANSACTION PUBLISHERS, VAN NOSTRAND REINHOLD, VCH PUBLISHERS, INC., VNU

BUSINESS PUBLICATIONS INC., W.B. SAUNDERS COMPANY, WALTER DE GRUYTER, INC.,

WARREN GORHAM & LAMONT, INC., WASHINGTON REGULATORY REPORTING ASSOC.,

WILLIAMS & WILKINS, INC., WOLTERS KLUWER ACADEMIC PUBLISHERS B.V.,

AMERICAN GEOPHYSICAL UNION, ELSEVIER SCIENCE PUBLISHING CO., INC.,

                                           Petitioners-Appellees,

                             --v.--

                          TEXACO INC.,

                                           Respondent-Appellants.

                *CORPORATE DISCLOSURE STATEMENT*

   *Amici*, by their attorneys and pursuant to Rule 26.1, Fed.

R. App. Proc., file their corporate disclosure statement as

follows:

   1.  This *Amicus Curiae* Brief is filed on behalf of the

following associations and organizations:

       Association of Research Libraries

       American Association of Law Libraries

       Special Libraries Association

       Medical Library Association

       American Council of Learned Societies

       National Humanities Alliance

       Association of Academic Health Sciences Library Directors

   2.  None of the *Amici* have any parent companies,

subsidiaries or affiliates which issue or have issued shares to

the public.

                        TABLE OF CONTENTS

                                                            PAGES

PRELIMINARY STATEMENTS . . . . . . . . . . . . . . . . .        1

SUMMARY OF ARGUMENT  . . . . . . . . . . . . . . . . . .        2

I.   INTRODUCTION  . . . . . . . . . . . . . . . . . . .        5

II.  THE TRIAL COURT ERRED IN ITS APPLICATION

     AND BALANCING OF THE STATUTORY

     "FAIR USE" FACTORS  . . . . . . . . . . . . . . . .        8

     A.   Factor One:  The Purpose and Character

          of the Use . . . . . . . . . . . . . . . . . .        9

          1.   The Lower Court Erred in Focusing

                on the Commercial Nature of the

                User Rather Than the Socially

                Beneficial Research Purpose and the

                Limited, "Private" Character of the

                Immediate Use. . . . . . . . . . . . . .       10

               a.   Texaco's Immediate Research Use

                    Is the Relevant Focus of the

                    Factor One Inquiry . . . . . . . . .       10

               b.   Under Second Circuit Precedent,

                    A Socially Beneficial Purpose

                    Generally Outweighs the Possibility

                    of Commercial Gain Even Where the

                    Immediate Use Involves the Sale or

                    Distribution of Multiple Copies of

                    Allegedly Infringing Material. . . .       14

               c.   The Trial Court's "Commerciality"

                    Analysis Is Unsupported As a

                    Matter of Law and Perilous As a

                    Matter of Policy . . . . . . . . . .       16

          2.   The Lower Court Erred in Placing

               Undue Weight On The "Productive vs.

               Non-Productive" Issue, and in

               Finding That Texaco's Copying was

               "Non-Productive". . . . . . . . . . . . .       18

               a.   The "Productive vs. Non-Productive"

                    Distinction Is Not Determinative

                    of Fair Use. . . . . . . . . . . . .       18

               b.   Texaco's Reproductive Use of the

                    Copied Work Was "Productive" . . . .       19

     B.   Factor Three:  The Amount and Substantiality

          of the Portion Used. . . . . . . . . . . . . .       23

     C.   Factor Four:  The Effect of the Use

          Upon the Potential Market for or Value

          of the Copyrighted Work. . . . . . . . . . . .       27

          1.   The Lower Court Erred in Basing

               Its Finding On Royalties It Assumed

               Publishers Would Receive If the

               Researchers' Photocopying at Texaco

               Was Not Fair Use. . . . . . . . . . . . .       28

          2.   Other Harm That the Lower Court

               Postulated Is Based On Speculation

               and Is Not Shown to Be Substantial. . . .       33

     D.   The Lower Court's Balancing of Equitable

          Considerations Gave Insufficient Weight

          to the "Reasonable and Customary" Nature

          of the Use at Issue and Undue Weight

          to the CCC . . . . . . . . . . . . . . . . . .       35

III. THE TRIAL COURT'S CONCLUSIONS REGARDING THE

     APPLICATION OF SECTION 108 OF THE COPYRIGHT

     ACT TO JOURNAL ARTICLE COPYING AT TEXACO ARE

     BOTH INAPPROPRIATE AND WRONG. . . . . . . . . . . .       39

     A.   The Trial Court Erred In Purporting

          To Address The Applicability

          of Section 108 . . . . . . . . . . . . . . . .       39

     B.   The History and Background of Section 108. . .       39

     C.   The Trial Court Erred in Its Conclusion

          That Texaco's Scientists Made Copies for

          "Commercial Advantage" as That Term is

          Used in Section 108. . . . . . . . . . . . . .       42

     D.   The Trial Court Erred in Its Interpretation

          of the "Single Copy" Restriction of

          Section 108. . . . . . . . . . . . . . . . . .       46

IV.  CONCLUSION . .  . . . . . . . . . . . . . . . . . .       49

                      TABLE OF AUTHORITIES

*CASES                                                     PAGES*

*American Geophysical Union, et al. v. Texaco Inc.*,

     802 F. Supp. (S.D.N.Y. 1992)  . . . . . . . . . .   *passim*

*Arica Institute, Inc. v. Palmer*,

     970 F.2d 1067 (2d Cir. 1992)  . . . . . . . . . .     14, 31

*Berlin v. E.C. Publications, Inc.*,

     329 F.2d 541 (2d Cir. 1964) . . . . . . . . . . .          7

*Consumers Union of U.S. v. General Signal Corp.*,

     724 F.2d 1044 (2d Cir. 1983),

     *cert. denied*, 469 U.S. 823 (1984) . . . . . . .     15, 31

*Dow Jones & Co. v. Board of Trade*,

     546 F. Supp. 113 (S.D.N.Y. 1982)  . . . . . . . .     20, 24

*Haberman v. Hustler Magazine, Inc.*,

     626 F. Supp. 201 (D. Mass. 1986)  . . . . . . . .         24

*Harper & Row, Publishers, Inc. v.

     Nation Enters.*,                                  18, 20, 32

     471 U.S. 539 (1985) . . . . . . . . . . . . . . .     35, 36

*Iowa State University Research Found., Inc. v. ABC, Inc.*,

     621 F.2d 57 (2d Cir. 1980)  . . . . . . . . . . .         35

*Key Maps, Inc. v. Pruitt*,

     470 F. Supp. 33 (S.D. Tex. 1978)  . . . . . . . .         24

*Mathieson v. Associated Press*,

     23 USPQ 2d 1685 (S.D.N.Y. 1992) . . . . . . . . .         36

*Maxtone-Graham v. Burtchaell*,

     803 F.2d 1253 (2d Cir. 1986),

     *cert. denied*, 481 U.S. 1059 (1987)  . . . . . .     14, 31

*New Era Publications Int'l v. Carol Publishing Group*,

     904 F.2d 152 (2d Cir. 1990) . . . . . . . . . . .         31

*New Era Publications Int'l v. Henry Holt & Co.*,

     873 F.2d 576 (2d Cir. 1989) . . . . . . . . . . .         15

*Northcross v. Memphis Board of Education*,

     412 U.S. 427 (1972) . . . . . . . . . . . . . . .         13

*Perales v. Sullivan*,

     971 F.2d 1348 (2d Cir. 1991)  . . . . . . . . . .         13

*Religious Technology Center v. Wollersheim*,

     971 F.2d 364 (9th Cir. 1992)  . . . . . . . . . .         36

*Rogers v. Koons*,

     960 F.2d 301 (2d Cir. 1992) . . . . . . . . . . .         31

*Rosemont  Enters., Inc. v. Random House, Inc.*,

     366 F.2d 303 (2d Cir. 1966),

     *cert. denied*, 385 U.S. 1009 (1967). . . . . . .     14, 36

*Salinger v. Random House, Inc.*,

     811 F.2d 90 (2d Cir.),

     *cert. denied*, 484 U.S. 890 (1987) . . . . . . .         31

*Sega Enterprises, Ltd. v. Accolade, Inc.*,

     977 F.2d 1510 (9th Cir. 1993) . . . . . . . . . . 10, 11, 12

*Stewart v. Abend*,

     495 U.S. 207 (1990) . . . . . . . . . . . . . . .         32

*Sony Corp. v. Universal City Studios, Inc.*,

     464 U.S. 417 (1984) . . . . . . . . . . . . . . .   *passim*

*Triangle Publications, Inc. v.

     Knight-Ridder Newspapers, Inc.*,

     626 F.2d 1171 (5th Cir. 1980) . . . . . . . . . .     24, 36

*Update Art, Inc. v. Maariv Israel Newspaper, Inc.*,

     635 F. Supp. 228 (S.D.N.Y. 1986),

     *aff'd*, 843 F.2d 67 (2d Cir. 1988) . . . . . . .         31

*William & Wilkins Co. v. United States*,

     487 F.2d 1345 (Ct. Cl. 1973),

     *aff'd by an equally divided Court*,

     420 U.S. 376 (1975) . . . . . . . . . . . . . . .   *passim*

*Wright v. Warner Books, Inc.*

     953 F.2d 731 (2d Cir. 1991) . . . . . . . . . . .         14

*CONSTITUTION, STATUTES AND RULES*

United States Const. art. I,  8 . . . . . . . . . . .      2, 22

The Copyright Act:

     17 U.S.C.  107 . . . . . . . . . . . . . . . . .   2, 8, 20

     17 U.S.C.  107(1). . . . . . . . . . . . . . . .          9

     17 U.S.C.  107(4)  . . . . . . . . . . . . . . .         27

     17 U.S.C.  108. . . . . . . . . . . . . . . . . .12, 39, 44

     17 U.S.C.  108(a)  . . . . . . . . . . . . . . .         46

     17 U.S.C.  108(a)(1) . . . . . . . . . . . . . .         43

     17 U.S.C.  108(d)  . . . . . . . . . . . . . . .         41

     17 U.S.C.  108(g)  . . . . . . . . . . . . . . .         46

     17 U.S.C.  108(g)(1) . . . . . . . . . . . . . .         47

     17 U.S.C.  108(g)(2) . . . . . . . . . . . . . .         42

Federal Rules of Appellate Procedure

     Rule 29  . . .  . . . . . . . . . . . . . . . . .          1

*LEGISLATIVE MATERIALS*

*The Constitution of the United States of America:

Analysis and Interpretation*, Sen. Doc. No. 39,

88th Cong., 1st Sess. (1964) . . . . . . . . . . . . .          6

*Copyright Law Revision, 1975:  Hearings Before

the House Subcommittee on Courts, Civil Liberties,

and the Administration of Justice*

94th Cong., 1st Sess. (1975) . . . . . . . . . . . . .         43

*Copyright Law Revision:  Report of the Register

of Copyrights on the General Revision of the

U.S. Copyright Law*, 87th Cong.,

1st Sess. (Comm. Print 1961) . . . . . . . . . . . . .         40

H.R. Rep. No. 83, 90th Cong., 1st Sess. (1967) . . . .         25

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

H.R. Conf. Rep. No. 1733, 94th Cong., 2d Sess. (1976).         45

S. Rep. No. 473, 94th Cong., 1st Sess. (1975) . . . . .    25, 43

Library of Congress, *Final Report of the National

Commission on the Technological Uses of Copyrighted

Works*, App. A ("Summary of the Legislative History

of Computer-Related Issues and the Photocopy Issue")          13,

89-104 (1979) ("CONTU Final Report)  . . . . . . . . .     40, 41

*OTHER AUTHORITIES*

Zechariah Chafee, Jr., *Reflections on the Law of

Copyright* :  *I*, 45 Colum. L. Rev. 503 (1945)  . . .         22

Pierre N. Leval, *Toward a Fair Use Standard*,

103 Harv. L. Rev. 1105 (1990)  . . . . . . . . . . . .     19, 30

L. Ray Patterson, *Free Speech, Copyright, and Fair

Use*, 40 Vand. L. Rev. 1 (1987). . . . . . . . . . . .         21

L. Ray Patterson, *Understanding Fair Use*

55 Law & Contemp. Probs. 249 (1992). . . . . . . . . .         30

Lloyd L. Weinreb, *Fair's Fair:  A Comment on the

Fair Use Doctrine*, 103 Harv. L. Rev. 1137 (1990). . .         19

1935 "Gentlemen's Agreement," reprinted in

Leon E. Seltzer, *Exemptions and Fair Use in

Copyright*, at App. E (1978) . . . . . . . . . . . . .         37

       This *amicus curiae* brief is submitted on behalf of the

Association of Research Libraries, the American Association of

Law Libraries, the Special Libraries Association, the Medical

Library Association, the American Council of Learned Societies,

the National Humanities Alliance, and the Association of Academic

Health Sciences Library Directors ("*Amici*").  Pursuant to

F.R.A.P. 29, this brief is being conditionally filed with the

Motion of these *amici* for leave to file, and supporting

memorandum and affidavits.  The identity and interests of these

*amici* are described in that Motion.  These *amici* support the

position of Appellant Texaco Inc. ("Texaco"), that this Court

should reverse the Opinion and Order entered by the Hon. Pierre

N. Leval, U.S.D.J., of the United States District Court for the

Southern District of New York, on July 23, 1992, as modified,

*American Geophysical Union, et al. v. Texaco Inc.*, 802 F.Supp.

1 (S.D.N.Y. 1992) ("*Texaco*").

                   *STATEMENT OF JURISDICTION*

       *Amici* adopt and incorporate herein the Statement of

Jurisdiction in the Brief of Appellant Texaco Inc.

            *STATEMENT OF ISSUE PRESENTED FOR REVIEW*

       *Amici* adopt and incorporate herein the Statement of

Issue Presented for Review in the Brief of Appellant Texaco Inc.

                     *STATEMENT OF THE CASE*

       *Amici* adopt and incorporate herein the Statement of the

Case in the Brief of Appellant Texaco Inc.

                      *SUMMARY OF ARGUMENT*

       The decision of the lower court, if upheld, threatens a

longstanding, reasonable and customary practice in for-profit and

non-profit institutions alike -- the spontaneous photocopying of

single copies of published scientific, technical, and other

research and scholarly journal articles, notes and comments by

researchers, scientists, and scholars for their own research use.

The lower court's rejection of Texaco's "fair use" claim would

impose substantial, additional costs on researchers and their

employers or institutions, hampering scientific, medical and

scholarly research in the United States.  It would thus impair,

not promote, the constitutional objective of the Copyright Act,

"the Progress of Science and Useful Arts."  U.S. Const., art. I,

 8.

       The trial court committed multiple errors in its

application and balancing of the statutory "fair use" factors

under Section 107 of the Copyright Act, 17 U.S.C.  107.  With

regard to factor one ("the purpose and character of the use"),

the lower court erred, first, by focusing on the commercial

nature of the user rather than the socially beneficial research

purpose and limited, private character of the immediate use.

Contrary to the lower court's conclusion, the copies of

plaintiffs' articles made by Texaco's researchers were not "for

commercial gain," because they were not sold or otherwise

distributed, and any commercial exploitation of the articles by

Texaco was attenuated, remote, and uncertain.  Any presumption of

commercial use is also overridden by the facts that the copying

was conducted for a socially beneficial purpose (*i.e.*,

research); was limited in scope (single copies); and was non-

public in character.  Second, the lower court erred in placing

undue weight on the distinction between "productive" and "non-

productive" uses, and in finding that Texaco's copying was "non-

productive."  Not only is the distinction between "productive"

and "non-productive" uses not determinative of fair use, but also

the use of the articles by Texaco's scientists should properly be

viewed as "productive" under Supreme Court authority ignored by

the lower court.

       The lower court also erred in its conclusion that factor

three ("the amount and substantiality of the portion used")

favored plaintiffs.  The court applied a "general rule" -- that

the copying of entire works precludes fair use -- that is not an

accurate reflection of historic case law and is contrary to

Supreme Court precedent and to legislative history indicating

Congress considered copying of journal articles to be fair use in

appropriate circumstances.

       The lower court's conclusion that factor four ("the effect

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

copyrighted work") favors plaintiffs is similarly based on a

flawed analysis which poses a major threat to the continued

viability of the fair use exception and expands the monopoly of

copyright proprietors beyond constitutional limits.  The trial

court's conclusion is based on the faulty premise that the mere

existence of procedures (however imperfect) for the payment of

royalties to publishers somehow establishes their legal right to

collect them, and it ignores Supreme Court and Second Circuit

precedent restricting the analysis to market impact.  Moreover,

any suggestion that the practice of Texaco's scientists had a

significant, adverse effect on a relevant market is based on the

lower court's own speculation, not the record.

       The lower court also erred in its balancing of the

equitable considerations at issue.  It failed to give due weight

to the "reasonable and customary" practice of personal use

copying by scientists and researchers, and it vastly overstated

the legal and factual significance and effectiveness of existing

licensing mechanisms and procedures.

       Finally, both the fact and the substance of the lower

court's analysis of Section 108 of the Copyright Act are in

error.  The applicability of Section 108 was not before the trial

court; it therefore should not have purported to apply the

substantive provisions of that section at all.  Its substantive

analysis only compounded the error.  First, its conclusion that

Texaco's scientists made copies for "commercial advantage," as

that term is used in Section 108, flies in the face of

legislative history expressly stating that the type of copying at

issue here is *not* for "commercial advantage."  Second, the

trial court's conclusion that Texaco's scientists violated the

"single copy" restriction of Section 108 disregards the plain

language of that section.

       The lower court's opinion, in short, is permeated with

errors which, if not corrected by this Court, pose grave threats

to researchers, scientists, and scholars, and to the libraries

they use.

                           *ARGUMENT*

I.     *INTRODUCTION*

       The decision of the lower court ignores manifested

Congressional intent and misapplies fair use principles to reach

a result that imperils spontaneous, personal copying of

scientific, technical, medical, and other scholarly journal

articles and excerpts by researchers and clinicians at for-profit

organizations, copying that is necessary for the efficient use of

these materials and that has long been considered reasonable and

customary.  If upheld, the lower court's decision would impose,

at the least, substantial and unexpected new costs on the use of

these materials, and, for many researchers, substantially

decrease or even deny access to them.  The resulting new costs

and obstacles would hamper research in all disciplines, including

education, science, medicine, social sciences, law, and

engineering, and the development of all products based on

information.

       There is no reason to believe that, if the lower court's

decision is upheld, there would be a countervailing increase in

research or in publication of scientific articles.  To the

contrary, no new incentives would be provided researchers and

authors.  The authors of these journal articles are not

compensated for their work by publishers and, as they assign

their copyrights to the publishers, 802 F. Supp. at 6, they will

receive none of the royalties the publishers seek to extract.

Thus, the lower court's ruling would lead to a potentially

massive transfer of funds from users of articles and reports in

scientific, technical, medical, legal, social science and other

journals, to publishers' publications, such as the *Journal of

Catalysis*, and to publishers who, the record shows, already are

highly profitable.  *Id*. at 27.

       Moreover, despite the lower court's heavy reliance on

Texaco's profit objectives,(1) clearly erroneous elements of

its Section 107 and Section 108 analysis narrow rights under

those provisions in ways that have a potential for threatening

fair use, spontaneous, personal copying even at non-profit

institutions.  If the lower court's errors are not corrected,

they ultimately could have a damaging effect on research, study,

and teaching that spreads beyond the for-profit section.

       The constitutional clause that authorizes "the creation

and bestowal of monopolistic privileges" on authors and inventors

limits Congress both "as to the purpose and duration of the

rights granted."  *See* The Constitution of the United States of

America:  Analysis and Interpretation, Sen. Doc. No. 39, 88th

Cong., 1st Sess. 317 (1964).  The Supreme Court held in *Sony

Corp. v. Universal City Studios, Inc.*, 464 U.S. 417, 429 (1984)

("*Sony*") that:

       The monopoly privileges that Congress may authorize

       are neither unlimited nor primarily designed to

       provide a special private benefit.  Rather, the

       limited grant is a means by which an important

       public purpose may be achieved.

       Congressional authority to enact legislation establishing

copyright protection for works of authorship is limited by the

principle that open communication of knowledge and ideas is an

essential characteristic of a free society.  The grant of a

monopoly to the written expression of knowledge and ideas must be

viewed as a special exception, to be given a scope no broader

than the purpose for which the exception is granted.  Since

Congress has no power to confer any "exclusive rights" which

would be incompatible with the constitutional objective of

promoting the progress of science and the arts, any copyright law

must be interpreted in the light of the constitutional grant of

authority on which it depends.

       The principles that a copyright monopoly may be enforced

only to the extent that to do so will "promote the Progress of

Science and Useful Arts" and that the judiciary should be

reluctant to "expand the protections afforded by copyright

without explicit legislative guidance," *Sony*, 464 U.S. at 431,

are particularly applicable to the present case.(2)  As

observed by this Court, in order to serve the constitutional

purpose, "[c]ourts in passing upon particular claims of

infringement must occasionally subordinate the copyright holder's

interest in a maximum financial return to the greater public

interest in the development of art, science and industry."

*Berlin v. E.C. Publications, Inc.*, 329 F.2d 541, 544 (2d Cir.

1964).  A decision for plaintiffs in this case will interfere

seriously with the "Progress of Science" and will in no way

promote that progress.

       This Court should not endorse such a novel extension of

copyright that would have such a clearly unconstitutional effect.

However, it is not necessary for this Court to reach this

constitutional issue, because, as the following analysis shows,

Congress never intended that the provisions of the Copyright Act

would be used to bar the unrelated making of single photocopies

of published, scientific, journal articles by researchers (or

libraries at their request) for their own research use, when that

copying does not significantly substitute for subscriptions to

the works concerned.

II.    THE TRIAL COURT ERRED IN ITS APPLICATION AND BALANCING

       *OF THE STATUTORY "FAIR USE" FACTORS                   *

       The introductory sentence of Section 107 of the Copyright

Act, 17 U.S.C.  101 *et seq.*, provides in relevant part

that:  "Notwithstanding the provisions of section 106, *the fair

use of a copyrighted work*, including such use by reproduction in

copies . . . , for purposes such as criticism, comment, news

reporting, teaching (including multicopies for classroom use),

scholarship, or research, *is not an infringement of copyright*."

17 U.S.C.  107 (emphasis added).  The statute further provides

that four non-exclusive factors shall be considered in

determining whether the use made of a work in any particular case

is or is not a fair use.  District Judge Leval concluded that

three of the four factors (factors one, three, and four) favored

the plaintiff.  *Amici* contend that his conclusions with respect

to those three factors are based on fundamental errors of law.

       A.    *Factor One:  The Purpose and Character of the Use*

       The first statutory factor to be considered in the fair

use analysis is "the purpose and character of the use, including

whether such use is of a commercial nature or is for nonprofit

educational purposes."  17 U.S.C.  107(1).  The lower court

found that this factor favored the plaintiff principally because

it viewed Texaco's copying of the article at issue as "not of the

transformative, nonsuperseding type that has historically been

favored under the fair use doctrine."  802 F. Supp. at 13.  It

further found that Texaco's copying was "for commercial gain" and

therefore did not "come within the class of copying that has

prevailed under the first factor because of its nonprofit

educational or social value."  *Id.*

       With respect to the first factor, the lower court's

opinion is in error for at least two major reasons:  (1) in

concluding that Texaco's copying was for commercial gain, the

lower court improperly emphasized the commercial objectives of

the user organization and failed to focus on the purpose and

character of the immediate use, *i.e.*, the making of single

photocopies for individual, personal use in direct support of

research (one of the presumptively fair uses specified in the

introductory sentence of Section 107) rather than the sale or

public distribution of multiple copies; and (2) the lower court

gave undue weight to the supposed "non-productive" nature of

Texaco's copying, and erred in finding Texaco's use to be "non-

productive."

       1.    The Lower Court Erred in Focusing on the Commercial

             Nature of the User Rather Than the Socially

             Beneficial Research Purpose and the Limited,

             *"Private" Character of the Immediate Use       *

       The lower court expressly found that Texaco's "copiers are

scientists, they are using their copies to assist in socially

valuable scientific research, and they do not resell the copies."

802 F. Supp. at 16.  That finding should have swung the first

factor in Texaco's favor notwithstanding the undeniable fact that

Texaco is a commercial entity which employs scientists and others

in order to maintain and improve its competitiveness and

profitability.  Where, as here, the copying itself is undertaken

for a recognized, socially beneficial purpose such as scientific

research, and is both limited in scope (*i.e.*, single copies)

and "private" in nature (*i.e.*, for individual or "in-house"

use), it is insignificant that the copying may ultimately prove

to be one small step on the path toward any possible commercial

application.

             a.   Texaco's Immediate Research Use Is the Relevant

                  * Focus of the Factor One Inquiry              *

       The critical "commerciality" inquiry, of which the lower

court lost sight, focuses on the purpose and character of the

immediate use of the copied work, not the commercial nature of

the user.  This principle is well illustrated by a recent Ninth

Circuit case, *Sega Enterprises, Ltd. v. Accolade, Inc.*, 977

F.2d 1510 (9th Cir. 1993) ("*Sega*"), decided after the lower

court issued its opinion herein.  In *Sega*, defendant Accolade,

a manufacturer of video game cartridges, disassembled the

copyrighted computer program of the plaintiff, a video game

console manufacturer.  Using the "object code" it obtained,

Accolade manufactured video game cartridges compatible with

Sega's "Genesis" video game console.  *Id.* at 1514-15.  The

Ninth Circuit found the first factor to favor Accolade.  *Id.* at

1522.  In words directly applicable here, it stated that the use

at issue "was an *intermediate* one only and thus any commercial

'exploitation' was *indirect* or *derivative*."  *Id.* (emphasis

added).  More specifically, it found:

       [A]lthough Accolade's ultimate purpose was the

       release of Genesis-compatible games for sale, its

       direct purpose in copying Sega's code, and thus

       *its direct use of 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.* (emphasis added).  It concluded "that Accolade copied

Sega's code for a legitimate, essentially non-exploitative

purpose, and the commercial aspect of its use can best be

described as of minimal significance."  *Id.* at 1533.

       Similarly, the commercial aspect of Dr. Chickering's

photocopying can best be described as of minimal significance.

As the lower court found, Dr. Chickering photocopied particular

articles because they were pertinent to research that he was

conducting or expected to conduct in the future.  802 F. Supp. at

6.  As with Accolade, Dr. Chickering's direct purpose was solely

"in-house" research and study.  His use of the copyrighted

material was, therefore, legitimate and non-exploitative.  The

commercial aspects of Dr. Chickering's ultimate purpose,

"creat[ing] new products and process for Texaco," *id.* at 16,

like those of Accolade, were too attenuated and indirect to merit

a finding of overriding commercial use.(3)

       This analysis of the "commerciality" element of factor one

is buttressed by analogy to a related section of the Copyright

Act, 17 U.S.C.  108.(4)  Section 108(a) permits qualifying

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 of Section 108(a) states that the photocopying of journal

articles by libraries of profit-making institutions, absent a

"systematic effort to substitute photocopying for subscriptions,

would be covered by Section 108, even though copies are furnished

to the employees of the organization for use in their work."

H.R. Rep. No. 1476, 94th Cong., 2d Sess. 74 (1976).  Such

photocopying is covered by Section 108 because it:

       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).

       Thus, in connection with a related provision of the same

Act, in which a commercial character or profit motive for the use

would be potentially disqualifying,(5) Congress clearly

intended the "commerciality" inquiry to focus on the immediate

use rather than an attenuated connection to any possible future

commercial application by a profit-making entity.  As a matter of

statutory construction, the clear Congressional intent with

respect to this aspect of Section 108 is directly relevant to the

proper interpretation of the parallel aspect of Section 107(1).

*See Perales v. Sullivan*, 948 F.2d 1348, 1355 (2d Cir. 1991)

("[S]imilar language in two different sections of the same law

should be given similar interpretation."); *see also*

*Northcross v. Memphis Board of Education*, 412 U.S. 427, 428

(1972).  Yet the trial judge failed even to acknowledge the plain

Congressional intent behind Section 108(a), and the relevance of

that intent to Section 107(1).

             b.   Under Second Circuit Precedent, A Socially

                  Beneficial Purpose Generally Outweighs the

                  Possibility of Commercial Gain Even Where the

                  Immediate Use Involves the Sale or Distribution

                  of Multiple Copies of Allegedly Infringing

                  *Material                                     *

       The Second Circuit has held that factor one generally

favors defendants where a socially beneficial purpose underlies

the use at issue, notwithstanding the possibility of ultimate

commercial gain.  Thus, in *Arica Institute, Inc. v. Palmer*, 970

F.2d 1067, 1077 (2d Cir. 1992), this Court wrote:  "Where

defendant's use is for purposes of 'criticism, comment . . .

scholarship [or] research,' (citation omitted) there will be a

'strong presumption that factor one favors the defendant,'"

*citing Wright v. Warner Books, Inc.*, 953 F.2d 731, 736 (2d

Cir. 1991) (strong presumption that factor one favors the

defendant if defendant's use of the work fits within the

description of uses set forth in the introductory sentence of

Section 107, *e.g.*, criticism, scholarship, or research).  Uses

such as criticism, scholarship, and research are presumed to

confer a public benefit which outweighs any ultimate commercial

aspect of the use.  In *Rosemont Enterprises, Inc. v. Random

House, Inc.*, 366 F.2d 303, (2d Cir. 1966), *cert*. *denied*, 385

U.S. 1009 (1967), for example, this Court wrote:  "Whether an

author or publisher reaps economic benefits from the sale of a

biographical work, or whether its publication is motivated in

part by a desire for commercial gain . . . has no bearing on

whether a public benefit may be derived from such a work."  In

*Maxtone-Graham v. Burtchaell*, 803 F.2d 1253, 1262 (2d Cir.

1986), *cert*. *denied*, 481 U.S. 1059 (1987), this Court

similarly held that the "educational elements" of an allegedly

infringing work "far outweigh[ed] the commercial aspects of the

book," noting that the "commercial nature of the use is a matter

of degree, not an absolute."(6)

       In the Second Circuit cases cited above, the defendants'

immediate use involved the sale of books or use of advertisements

containing allegedly infringing material.  Multiple copies of

such material were publicly distributed.  This Court nevertheless

found a public benefit that overrode the significance of profit

motivation and tipped factor one in favor of the defendants.  In

this case, too, the immediate use is imbued with a public benefit

-- scientific research -- but involves neither multiple copies

nor public sale or distribution, and is only remotely connected

to the possibility of future corporate profits.  Thus, there is

even greater reason to discount any commercial aspect of Texaco's

use.  While the Second Circuit has not been confronted with such

a fact pattern until now, the holdings of its prior cases,

reinforced by the logic of *Sega* and the legislative history of

Section 108(a), compel the conclusion that factor one properly

favors Texaco.

             c.   The Trial Court's "Commerciality" Analysis Is

                  Unsupported As a Matter of Law and Perilous As

                  *a Matter of Policy                          *

       The trial judge correctly recognized that a profit motive

does not by itself disqualify the use of copyrighted material

from fair use protection.  802 F. Supp. at 12.  But he then went

on to hold, in effect, that the existence of a profit-making

motive is disqualifying where the secondary use is superseding

(or non-productive), rather than transformative (or productive).

*Id.* at 13-15.  This distinction may be useful when the

immediate use involves the sale or public distribution of

multiple copies of allegedly infringing material.  There is no

authority or rationale for applying it to the situation presented

here, however, where the secondary use is in direct support of

scientific research, is non-public, is limited in scope, and

where any commercial exploitation stemming from the use is at

best remote and uncertain.  *See* discussion at Section II.A.2

*infra*.

       The lower court's test regarding the "commerciality"

element of Section 107(1) is not only unsupported as a matter of

law, but also fraught with peril as a matter of policy.  From the

perspective of the libraries which are members of the *amici*

associations and from the perspective of scholars and researchers

who use those libraries, the lower court's analysis of this

element could, if upheld, have a serious adverse impact on

scholarship and research in the United States.  Under the lower

court's analysis, making single photocopies for an individual's

own use in connection with scholarship or research is a

superseding (non-productive) use.  Thus, the lower court would

find that such use favors the user under factor one only if the

individual is engaged in a wholly non-profit endeavor.  If the

individual is employed by a profit-making enterprise or there is

a possibility of commercial exploitation, however remote, the

lower court would find the use to be presumptively unfair under

factor one.  This analysis leads to anomalous results,(7)

demonstrating the need, particularly in the area of scholarship

and research, to focus on the immediate use of the copyrighted

work rather than the profit-making status of the user or the

user's employer.  Under a proper analysis of factor one, a

presumption against fair use exists where the immediate use of

the copied material is clearly commercial, *e.g.*, the copier

attempts to sell competing copies for his own financial

enrichment.  But a presumption in favor of fair use exists where

single copies are made for immediate and "private" use by the

individual scholar or researchers engaged in his or her research

pursuits, regardless of the nature of the individual's employer

or the source of research funding.

             2.   The Lower Court Erred in Placing Undue Weight

                  on the "Productive vs. Non-Productive" Issue,

                  and in Finding That Texaco's Copying was "Non-

                  *Productive"                                 *

                  a.   The "Productive vs. Non-Productive"

                       Distinction Is Not Determinative of Fair

                       *Use                                    *

       In its factor one analysis, the lower court placed undue

weight on whether the copying at Texaco was "productive" or "non-

productive."  It held that if the use of the copied material is

deemed "commercial," a defendant can succeed under factor one

only by showing that the use nevertheless was "productive" (which

it defines as a "nonsuperseding use of the original").  802 F.

Supp. at 12-13.  In so holding, the lower court disregarded the

Supreme Court's ruling in *Sony*, that "[t]he distinction between

'productive' and 'unproductive' uses . . . [is not] wholly

determinative" of fair use, 464 U.S. at 455 n.40, and ignored the

Court's instruction that "productivity" is only to be considered

as one of a multitude of factors in a "sensitive balancing of

interests" under the first part of the four-pronged fair use

test.  *Id.* *See also* *Harper & Row, Publishers, Inc. v.

Nation Enterprises*, 471 U.S. 539, 561 (1985) ("[P]roductive use

is simply one factor in a fair use analysis.")  Rather than

follow established Supreme Court precedent, the lower court

applied its own "productivity" test, which it used to analyze the

conduct of Texaco's scientists in this case.(8)

       *Amici* do not suggest that the "productive" nature of use

cannot be considered as part of a fair use analysis.  However, it

is not the primary or determinative factor to be evaluated to the

exclusion of all others.  Thus, the lower court's first factor

"test" misapplies the law, and its holding thereunder should be

reversed.

                  b.   Texaco's Reproductive Use of the Copied

                       *Work Was "Productive"                  *

       In its analysis of this issue, the lower court also erred

in holding that Texaco's use of the copied works was not

productive.  The court summarily dismissed Texaco's argument that

its use of the copied material for "socially valuable scientific

research", 802 F. Supp. at 16, was "productive," by stating:

"[that] is not the kind of productivity that was intended by the

discussions and holdings."  *Id*. at 14.  It held that the use

involved no more than "simply mak[ing] mechanical photocopies of

the entirety of relevant articles," *id*. at 13, and

"contribute[d] nothing new or different to the copyrighted work."

*Id*.  Again, the court's narrow analysis of what constitutes a

"productive use" thwarts the purpose and intent behind the fair

use doctrine.

       In the preamble to Section 107, Congress provided a

guiding illustration of fair uses, including criticism, comment,

news reporting, teaching, scholarship, and research.  17 U.S.C.

 107.  Whether or not these types of uses are presumptively

determinative of the first fair use factor, they undoubtedly are

the types of uses courts have identified as "productive" uses.

*See* *Harper & Row*, 471 U.S. at 561 ("The fact that an article

is originally 'news' and therefore productive use is simply one

factor in a fair use analysis."); *Sony*, 464 U.S. at 455 n.40

("A teacher who copies to prepare lecture notes is clearly

productive.  But so is a teacher who copies for the sake of

broadening his personal understanding of his specialty.  Or a

legislator who copies for the sake of broadening her

understanding of what her constituents are watching; or a

constituent who copies a news program to help make a decision on

how to vote").(9)  The reproduction for research purposes of

the articles at issue in this case is not any less "productive"

than these other recognized and enumerated productive uses.

       The lower court's rigid test appears to reject Texaco's

research purpose as a productive use solely because the articles

copied were not immediately (at the point of reproduction at the

photocopying machine) incorporated into a new, tangible and non-

identical work.  In the court's eyes, Texaco's "copy of the

original [was not] employed as part of a larger whole, for some

new purpose," and this was "the type of superseding copying that

has been disfavored since the earliest discussion of the doctrine

and [which] was thought by many to preclude a finding of fair use

*prior to the Supreme Court's decision in Sony*."  802 F. Supp.

at 13 (emphasis added).

       This rationale ignores not only Supreme Court precedent,

but also history and reality, to reach a result that implies that

even notetaking by a scholar researching a critical work or a

scientist preparing an experiment is "non-productive."  The

court's rationale ignores history because it takes no account of

the fact that at the time the fair use doctrine was developed and

for much of its history, the copyright law accorded copyright

owners of books only the exclusive rights to print, reprint,

publish or vend their works, and did not limit copying of such

works.  *See* *Williams & Wilkins Co. v. United States*, 487 F.2d

1345, 1350 (Ct. Cl. 1973), *aff'd by an equally divided Court*,

420 U.S. 376 (1975); L. Ray Patterson, *Free Speech, Copyright,

and Fair Use*, 40 Vand. L. Rev. 1, 37 (1987).  Distinctions among

holdings characterized by Judge Leval as distinctions between

"productive" and "non-productive" uses therefore related to

instances of publications of the copyright owners' works, that

is, public, competitive uses.  In that context, according

preferred status to publications that in some way modify or

comment on the original work may be logical.  In the context of

private research or study, where an exact record of the original

expression is needed, but the copy does not compete with the

original, such a distinction has nothing to recommend it.

       The lower court's opinion also ignores reality by failing

to recognize the fact that research is not a simple, one-step

process, particularly the sophisticated type of research in which

Dr. Chickering was engaged.  The creation of a new and

"nonsuperseding" work, which incorporates and thus uses the

earlier copied work, is necessarily a laborious process for any

researcher.  Study and research may ultimately beget tangible

results, which may in turn be used and copied by future

researchers for use in their research efforts.  This is how a

civilized society progresses, and precisely how the fair use

exception must function to fulfil the constitutional objective to

"promote the Progress of Science and Useful Arts."  U.S. Const.

art. 1,  8; *see* Zechariah Chafee, Jr., *Reflections on the

Law

of Copyright: I*, 45 Colum. L. Rev. 503, 511 (1945).

       Even where tangible results are not achieved, the

researcher would have, at the least, "broaden[ed] his personal

understanding of his specialty."  *Sony*, 464 U.S. at 455 n.40.

It is difficult to imagine a court holding that the efforts of an

individual scientist or other scholar to keep current on

developments in his or her field of specialty is not only "non-

productive" but constitutes copyright infringement.  Yet that is

precisely what the lower court did.

       Under the lower court's analysis, moreover, the

republication of a quotation from another author's work in a work

of criticism would be a "productive" use, but the copying of that

quotation in conducting research for the critical work would be a

"non-productive," "superseding" use.  A rationale that yields

this preposterous result is manifestly flawed.

       In view of these multiple errors of analysis, the lower

court's analysis under the first fair use factor should be

soundly rejected.  The reproduction of the copied materials by

Texaco's researchers was a productive use for a socially

beneficial purpose, limited in scope and non-public in character.

Properly assessed, the balance under factor one is in Texaco's

favor.

       B.    Factor Three:  The Amount and Substantiality of the

             *Portion Used                                     *

       The lower court gave only cursory consideration to the

third factor, holding that because Dr. Chickering copied the

entirety of selected *Catalysis* articles relevant to his

research "[t]his factor clearly favors plaintiffs."  802 F. Supp.

at 17.  In reaching this conclusion, the lower court ignored the

legislative history of Section 107 and an important teaching of

the Supreme Court in *Sony* (the only judicial authority the

court cited) and alluded to a general rule -- that the copying of

entire works precludes fair use -- which is not an accurate

reflection of historic case law and is contrary to the Supreme

Court's holding in *Sony*.

             1.   The Copy of an Entire Copyrighted Work Can Be a

                  *Fair Use                                     *

       The "suggest[ion] that the copying of an entire

copyrighted work, any such work, cannot ever be 'fair use,' . . .

is an overbroad generalization, unsupported by the decisions and

rejected by years of accepted practice."  *Williams & Wilkins*,

487 F.2d at 1353.(10)  The Supreme Court clearly agrees,

because in *Sony* it held that the recording of entire television

programs for private, noncommercial time-shifting use in the home

was a fair use of copyrighted television programs.  *See* 464

U.S. at 447-56.

       The legislative history of Section 107 shows that Congress

specifically considered the photocopying of entire journal

articles to be a fair use in appropriate circumstances.  The

House Judiciary Committee Report notes that "[a]lthough the works

and uses to which the doctrine of fair use is applicable are as

broad as the copyright law itself, most of the discussion of

Section 107 [during development of the 1976 Copyright Act] has

centered around questions of classroom reproduction, particularly

photocopying."  H.R. Rep. No. 1476 at 66.  Although enactment of

a specific provision was considered, the Judiciary Committee

decided Section 107's fair use provisions were adequate to shield

reproduction for classroom use.  *Id*. at 66-67.  With respect to

the application of the Section 107 criteria to photocopying for

classroom use, the Committee referred to a pertinent discussion

in its 1967 report (H.R. Rep. No. 83, 90th Cong., 1st Sess. 32-35

(1967)) which, with some changes, is also set forth in the Senate

Report on S.22 (S. Rep. No. 473, 94th Cong., 1st Sess. 63-65

(1975)).  H.R. Rep. No. 1476 at 67.  As contained in the Senate

Report, that discussion listed the copying of an article in a

collective work (such as a periodical issue) as an example of

fair use:

       The educators have sought a limited right for a

       teacher to make a single copy of an "entire" work

       for classroom purposes, but it seems apparent that

       this is not generally intended to extend beyond a

       "separately cognizable" or "self-contained" portion

       (for example, a single poem, story, or *article* in

       a collective work), and that no privilege is sought

       to reproduce an entire collective work (for

       example, an encyclopedia volume, a periodical issue

       or a sizable integrated work published as an

       entity) (a novel, treatises, monograph, and so

       forth).  With this limitation, and subject to the

       other relevant criteria, the requested privilege of

       making a single copy appears appropriately to be

       within the scope of fair use.

S. Rep. No. 473 at 64 (emphasis added).  The House Judiciary

Committee, and subsequently the Conference Committee, also

endorsed as "a reasonable interpretation of the minimum standard

of fair use,"  H.R. Rep. No. 1476 at 72, guidelines for classroom

use photocopying negotiated by representatives of publishers and

certain educational organizations.(11)   Although they are

considered by many to be otherwise too limited, the guidelines

specifically approve the copying of periodical articles and other

entire works.(12)

       In view of these provisions, it is clear that Congress did

not consider the photocopying of entire periodical articles,

short stories, or short essays as necessarily inimical to fair

use.  Thus, Judge Leval's cursory treatment of the third factor,

in which he concludes that the mere fact that entire articles

were copied conclusively places factor three on the publishers'

side of the scales, is grossly in error.  Application of his

analysis to the copying of scholarly or technical journal

articles by or for professors for classroom use would imperil

copying that the House and Senate Committees expressly stated was

fair use.

       In *Sony*, the Supreme Court held that the copying of

*entire* programs by VCR users did not militate against a finding

of fair use "when one considers the nature of a televised

copyrighted audiovisual work . . . and that time-shifting merely

enables a viewer to see such a work which he had been invited to

witness in its entirety free of charge."  464 U.S. at 449.  The

lower court erred in not taking such factors into account in its

third factor analysis.  *See* 802 F. Supp. at 17.  It should have

considered that Dr. Chickering's copying of articles in

scientific journals, to which Texaco was a paid subscriber,

merely allowed him (a) to use the material in a laboratory

conveniently and without endangering the originals, and (b) to

postpone the reading of an article from the time the journal

issue is circulated to him to some later, more convenient

time.(13)  In these circumstances, the third factor does not

militate against a finding of fair use, and Judge Leval's

contrary ruling was error.

       C.    Factor Four:  The Effect of the Use Upon the

             *Potential Market for or Value of the Copyright Work*

       The final statutory factor to be considered in the fair

use analysis is "the effect of the use upon the potential market

for or value of the copyrighted work."  17 U.S.C.  107(4).  The

lower court found that the plaintiffs "powerfully demonstrated

entitlement to prevail as to the fourth factor."  802 F. Supp. at

18.  The lower court reached this conclusion by means of a

gravely flawed analysis, which poses a major threat to the

continued viability of the fair use exception and expands the

monopoly of copyright proprietors beyond constitutional limits.

             1.   The Lower Court Erred in Basing Its Finding On

                  Royalties It Assumed Publishers Would receive

                  If the Researchers' Photocopying at Texaco Was

                  *Not Fair Use                                *

       Texaco contended below that its scientists needed

photocopies for their research purposes, not multiple originals.

*Id*.  As the lower court observed, Texaco argued that if it

"stopped making photocopies for Chickering and his colleagues,

Texaco would not replace those photocopies by purchasing numerous

additional subscriptions or by purchasing back issues and back

volumes." *Id*. at 19.  The lower court "accept[ed] . . . that

Texaco would not fill [its] need [now being supplied by

photocopies] by enormously enlarging the number of its

subscriptions."(14)  *Id*.  It nevertheless concluded that

factor four weighed strongly in plaintiffs' favor because:

             The plaintiffs have shown that there are a

       variety of other avenues Texaco could and would

       follow to provide its scientists promptly and

       relatively inexpensively with working copies of

       articles for their files (which would produce

       revenues for the publishers).  These include the

       ordering of photocopies from document delivery

       services that would pay royalties to the

       publishers, the negotiation of blanket licenses

       with individual publishers, and the use of a CCC

       [Copyright Clearance Center] license under either

       the TRS [Transactional Reporting Service] or the

       AAS [Annual Authorization Service].

*Id*.  The court, in other words, was persuaded that factor four

tipped in plaintiffs' favor not because the challenged practice

significantly restricted the number of original copyrighted works

Texaco would purchase from plaintiffs, but because mechanisms

(such as the CCC) existed whereby plaintiffs could extract

royalties from Texaco (directly or indirectly) for making the

working photocopies Texaco's scientists desired.

       The lower court's conclusion in this regard is erroneous

as a matter of law.  First, it conflicts with the statute because

the court's rationale focuses on the value of the *copyright* and

not, as directed by Section 107(4), on the market for or value of

the "copyrighted *work*."  Second, it necessarily assumes its

conclusion -- that Texaco's photocopying is not a fair use and

that plaintiffs therefore have a right to collect royalties for

the reproduction of articles in their journals.  The mere

existence of mechanisms or procedures for the payment of

royalties cannot establish the legal right of plaintiffs to

collect them.  If it did, fair use defendants would virtually

never succeed with respect to the fourth factor, and it would

become meaningless.  A fair use by definition involves

uncompensated use of copyrighted materials.  That a plaintiff

will obtain more revenue when it is paid for the use of its work

than when it is not, is no more than a tautology that fails to

advance the fair use analysis at all.

       Judge Leval appeared at points in his opinion to

appreciate the circular nature of plaintiffs' argument.  His

opinion, for example, quoted his own law review article as

follows:

       By definition every fair use involves some loss of

       royalty revenue because the secondary user has not

       paid royalties.  Therefore, if an insubstantial

       loss of revenue turned the fourth factor in favor

       of the copyright holder, this factor would never

       weigh in favor of the secondary user.  And if we

       then gave serious deference to the proposition that

       it is 'undoubtedly the single most important

       element of fair use,' fair use would become

       defunct.

802 F. Supp. at 21 n.18, *quoting*, Leval, *Toward A Fair Use

Standard*, at 1124-25.  But he then falls into the very trap he

foresaw, writing "[i]f the copyright owner would be receiving

significantly higher revenue but for the defendant's

uncompensated copying, the standard is satisfied."  802 F. Supp.

at 20.  By focusing exclusively on the *ability* of plaintiffs to

extract additional royalties, Judge Leval ignores whether they

have a *right* to do so and renders the fourth factor virtually

impossible for defendants to fulfill.

       The role of alleged lost royalty income was correctly

analyzed in *Williams & Wilkins*.  In that case, as in the

instant case below, the trial judge inferred that the defendants'

photocopying resulted in a loss of royalty income.  487 F.2d at

1357.  But the Court of Claims rejected this measure of harm:

             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."

*Id*. at 1357 n.19; *see also* L. Ray Paterson, *Understanding

Fair Use*, 55 Law & Contemp. Probs., 249, 263 (1992).

       A proper analysis of factor four focuses not on the

plaintiff's ability to collect additional revenue, for that will

frequently be present, but on whether the defendant's practice

has a significant, adverse effect on actual or potential demand

for the original work or for a derivative of the original work.

Such an effect will generally be found only when a defendant's

secondary use competes with (and therefore reduces demand for) a

plaintiff's copyrighted work or a derivative work.  As this Court

wrote in *Consumers Union of U.S. v. General Signal Corp.*, 724

F.2d 1044, 1044, 1050 (2d Cir. 1983), *cert*. *denied*, 469 U.S.

823 (1984), "[t]he fourth factor is aimed at the copier who

attempts to usurp the demand for the original work."  It

continued:

       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.

*Id*. at 1051.  These words were quoted approvingly in the more

recent Second Circuit opinion in *New Era Publications

International v. Carol Publishing Group*, 904 F.2d 152, 160 (2d

Cir. 1990).(15)

       Supreme Court cases in this area also consistently

emphasize the impact of the defendant's conduct on the

marketability of the copyrighted work (or a derivative work)

rather than the loss of any royalty income which resulted from

the alleged infringement.  In *Sony*, for example, the fourth

factor favored Sony in large part because "respondents failed to

demonstrate that time-shifting [of television programs using

Sony's Betamax] would cause any likelihood of non-minimal harm to

the potential market for, or value of, their copyrighted works."

464 U.S. at 456.  In that case, the potential royalty revenue to

plaintiffs if Betamax users were required to pay royalties

whenever they taped a program for private viewing would have been

immense, yet that calculation played no role whatever in the

Supreme Court's analysis of the effect of such use on the market

for plaintiffs' copyrighted works.(16)

       The lower court's emphasis on the loss of potential

royalties for the right to make the fair use copies skewed its

analysis of the fourth factor in a way that biases the factor in

all but *de minimis* cases even against private, academic and

research uses of copyrighted works.  This narrows fair use and

expands copyright proprietors' monopoly unreasonably, with

adverse effects on scholarship and scientific research.

             2.   Other Harm That the Lower Court Postulated Is

                  Based On Speculation and Is Not Shown to Be

                  *Substantial                                  *

       When the loss of potential royalty income from the making

of the fair use copies is properly removed from the factor four

analysis, it is clear that the plaintiffs have suffered no

significant or "non-minimal" harm to the market for their

copyrighted works.  Such harm would be present only if the

copying by Texaco's scientists usurped demand for the original or

derivative works.  It does not, because (unlike the cases noted

above in which the fourth factor was found to favor plaintiffs)

Texaco's copies do not compete in the marketplace with

plaintiffs' originals or with any derivative of plaintiffs'

originals.  Indeed, Texaco's copies are neither sold nor

otherwise distributed at all.  They therefore have no potential

for reducing demand for plaintiffs' works beyond Texaco itself,

and that possibility was substantially excluded by the trial

court's conclusion that Texaco would not significantly increase

its journal subscriptions if it stopped making photocopies.  802

F. Supp. at 19.

       The lower court, did, however, opine that if photocopying

were stopped, circulation of subscription copies would slow, and

"[t]o speed up the circulation, it seems likely that Texaco would

add at least a modest number of subscriptions to *Catalysis*

which would increase Academic Press' revenues."  *Id*.  At best,

this conclusion is highly speculative.  It assumes that Texaco

(and other similarly situated institutions) would continue to pay

the premium "institutional" subscription rates charged by many

publishers, even if precluded from making necessary copies of

articles at the request of scholars or researchers.  It also

assumes that Texaco -- and, by extension, others to whom

publishers would attempt to apply a favorable decision -- has a

substantially expandable budget for serial subscriptions.  We are

aware of no evidence in the record to support these

counterintuitive assumptions.  It is at least as likely that

circulation of subscription copies would be allowed to suffer

whatever slowing, if any, was experienced; and if subscriptions

to one or more journals were increased, subscriptions to others

would be commensurately reduced or eliminated and greater

reliance placed on other sources such as public or university

libraries when access to less used publications was required.

*See* *Williams & Wilkins*, 487 F.2d at 1358.(17)

       D.    The Lower Court's Balancing of Equitable

             Considerations Gave Insufficient Weight to the

             "Reasonable and Customary" Nature of the Use at

             *Issue and Undue Weight to the CCC              *

       Having analyzed each of the four statutory factors in

Section 107, the lower court properly addressed additional

equitable considerations.  *Sony*, 464 U.S. at 448 & n.31; *Iowa

State University Research Foundation, Inc. v. ABC, Inc.*, 621

F.2d 57, 60 (2d Cir. 1980); *see* 802 F. Supp. at 21-22.  The

lower court's balancing of the equities in this case, however,

weighed custom and practice far too lightly and the CCC far too

heavily.

       The lower court expressly acknowledged that "[i]t is

commonplace for scientists . . . in industry generally . . . to

make for themselves (or to request from the company library)

photocopies of particular articles that are expected to be useful

in their work."  802 F. Supp. at 4.  It also stated that

"Texaco's strongest argument may be that photocopying has become

'reasonable and customary,' [*Harper & Row*], 471 U.S. at 550,

105 S. Ct. at 2225, and that failure to permit it would

substantially harm scientific research, as *Williams & Wilkins*

found."  802 F. Supp. at 25.

       But the court ultimately rejected these equitable

arguments on the ground that they "depend . . . on the absence of

a convenient, reasonable licensing system."  *Id.*  Texaco's

scientists need to stop making individual copies of copyrighted

material, the lower court reasoned, because such a "convenient,

reasonable licensing system" is now in place which permits the

practice to continue on a compensated basis.  It wrote:

       The monumental change since the decision of

       *Williams & Wilkins* in 1973 has been the

       cooperation of users and publishers to create

       workable solutions to the problem.  Most notable

       has been the creation of the CCC, and its

       establishment of efficient licensing systems -- the

       TRS, established in 1978, followed by the AAS,

       established in 1983.

*Id.* at 24.  "Reasonably priced, administratively tolerable

licensing procedures are available [through] the CCC]," the court

stated "that can protect the copyright owners' interests without

harming research or imposing excessive burdens on users."  *Id.*

at 25.

       The lower court's rejection of Texaco's "commonplace" use

as a fair use improperly discounts the significance of

longstanding custom and practice.  As the Supreme Court has

stated, "the fair use doctrine was predicated on the author's

implied consent to 'reasonable and customary' use when he

released his work for public consumption."  *Harper & Row*, 471

U.S. at 550 (1985).(18)  The making of single photocopies for

research and scholarly purposes has been recognized as customary

for decades.  *See* *Williams & Wilkins*, 487 F.2d at 1350, 1355-

56.  Library photocopying, for example, has been a generally

accepted, customary practice conducted with the blessing of

publishers since at least the beginning of this century.  *Id.*

Under the 1935 "Gentleman's Agreement," representatives of

publishers agreed that a library could make single photocopies of

articles from copyrighted works for use by scholars.  *Id.*(19)

       The lower court's ringing endorsement of the CCC as having

altered longstanding custom is wholly unjustified.  First, as

discussed at length above, the mere fact that a mechanism exists

for the payment of royalties cannot by itself create a legal

right to collect such royalties.  *See supra* Section II.C.1.

Put differently, the decision of publishers to promote the CCC

should not be permitted to restrict or eliminate the existing

rights of users.  The CCC is no more than a means for complying

with the law if it has been determined that a particular use is

not a fair use; it cannot by itself diminish the scope of users'

rights.

       Second, the fact that many of the fees collected by the

CCC may be "reasonable" now is no guarantee that they will remain

so in the future, particularly if the lower court's opinion is

upheld.  Licensing fees are unregulated and, as the *Williams &

Wilkins* court found, they cannot be effectively regulated by the

courts.  *See* 487 F.2d at 1360.  The publishers who participate

in the CCC are free to raise their fees to levels which

effectively would prevent many users from making the copies they

need in connection with research or other socially beneficial

purposes, thus impairing the constitutional objectives of the

copyright laws.  And, the right to grant a license for a royalty,

reasonable or otherwise, implies the right to withhold a license.

       Third, the record does not show that the CCC represents

all or even a preponderance of publishers of scientific,

technical and medical journals.  It does not show that the CCC

has even minimal participation by publishers of law, social

science, humanities, or other journals.  Separate licenses still

would need to be negotiated by libraries and other users, at

considerable time and expense, with publishers not represented in

the CCC.

       In short, the CCC cannot be said to have changed

longstanding custom, and it provides no comfort to *amici* and

others who are gravely concerned that if the customary practice

in which Texaco's scientists engaged is not deemed a fair use,

research and scholarship in this country will be seriously

harmed.  The equitable considerations in this case strongly

reinforce the conclusions that each of the four statutory factors

properly favors Texaco.

III.   THE TRIAL COURT'S CONCLUSIONS REGARDING THE APPLICATION OF

       SECTION 108 OF THE COPYRIGHT ACT TO JOURNAL ARTICLE

       *COPYING AT TEXACO ARE BOTH INAPPROPRIATE AND WRONG      *

       The lower court devoted a portion of its opinion to the

application of Section 108 of the Copyright Act to the challenged

practices of Texaco's researchers.  *See* 802 F. Supp. at 27-28.

Section 108 declares that, in certain circumstances, the

reproduction and distribution of single copies or phonorecords of

copyrighted works by libraries or archives is not an infringement

of copyright.  17 U.S.C.  108.

       A.    The Trial Court Erred In Purporting To Address The

             *Applicability of Section 108                      *

       Although some of the copies of scientific journal articles

or letters used by Dr. Chickering were made at his request by the

Beacon library, the lower court's Section 108 analysis is

inappropriate, because the issue before it was limited by

stipulation to whether the copying at Texaco was fair use within

*Section 107* of the Copyright Act.  *See* 802 F. Supp. at 28.

This Court therefore should hold that the lower court erred in

purporting to address the applicability of Section 108 at all.

Moreover, the lower court's Section 108 analysis is wrong on

every point, and should be expressly disavowed by this Court.

       B.    *The History and Background of Section 108*

       Section 108 was the product of extensive Congressional

consideration of conflicting views of libraries and copyright

proprietors regarding the extent to which libraries should be

permitted, without incurring copyright liability, to reproduce

and distribute journal articles and small parts of copyrighted

works at the request of library users, and entire books and other

copyrighted works for security or replacement purposes.(20)

As early as July, 1961, the Copyright Office recommended

enactment of a provision that would permit qualifying libraries

to supply "a single photocopy of one article in any issue of a

periodical, or a reasonable part of any other publication, . . .

when the applicant states in writing that he needs and will use

such materials solely for his own research."(21)  In the years

that followed, several efforts were made to develop such a

provision but (with the exception of a provision authorizing

limited reproduction of unpublished works for purposes such as

preservation) none was included in the initial efforts to compose

a general revision of the copyright law.  Publishers claimed that

proposed provisions would permit too much, while libraries were

concerned the proposals might preclude the exercise of rights

long considered reasonable and customary.  *See* CONTU Final

Report, *supra* note 5, at 92.  In 1969, the Senate Judiciary

Subcommittee on Patents, Trademarks and Copyrights referred to

the full Committee a copyright revision bill that included, in

Section 108, provisions recognizing that the libraries could,

without incurring copyright liability, make single copies of

copyrighted works in specified circumstances, including, subject

to certain conditions, "at the request of a user of the

collection of the library or archives, including a user who makes

his request though another library or archives."  *Id.* at 97.

Over the next several years, numerous hearings were held in the

House and Senate, and successive iterations of these provisions

were developed.  *Id.* at 97-101.  But it was not until August 3,

1976, when the House Judiciary Committee completed its revisions

and reported H.R. 2223 (the House version of the omnibus

copyright revision bill), that Section 108 attained its final

form.

       Section 108 expressly recognizes, in subsection (d) that,

at the request of a user, libraries may, without copyright

liability, make single copies from their collection (or from the

collection of another library) of one article or other

contribution to a copyrighted collection or periodical issue, or

of a small part of any other copyrighted work.  17 U.S.C. 

108(d).(22)  This right is subject to the conditions that:

the copy becomes the property of the user; the library has no

notice that the copy would be used for a purpose other than

private study, scholarship, or research; and the library has a

warning of copyright on its order form and at the place where

copy orders are accepted.  *Id.*  This right extends to single

copies of the same material on separate occasions, but not in the

circumstances where a library has substantial reason to believe

it is engaged in the "related or concerted" reproduction of

multiple copies of the same material, or where a library engages

in "systematic" reproduction or distribution of copies.(23)

It is this authority that the court below misinterpreted.

       C.    The Trial Court Erred in Its Conclusion That

             Texaco's Scientists Made Copies for "Commercial

             *Advantage" as That Term is Used in Section 108 *

       The lower court erroneously stated that Section 108 is

inapplicable to copying at Texaco because the provision applies

only if "the reproduction or distribution is made without any

purpose of direct or indirect commercial advantage," 802 F. Supp.

at 27 (*quoting* 17 U.S.C.  108(a)(1)), and "Texaco makes the

copies solely for commercial advantage."  *Id.* at 27.  The

latter assertion is based not on any sale, lease, or other

disposition of the copies by Texaco, but solely on the fact that

the articles were photocopied to help Texaco's scientists in

their research, which the court considered was conducted

ultimately with a view to increasing Texaco's profits.  *Id.* at

27-28.  The court's rationale misconstrues the statute.

       Section 108's legislative history makes clear that the

section's provisions apply to libraries at for-profit entities as

well as libraries at non-profit institutions.  The House

Judiciary Committee's Report on H.R. 2223 -- in which Section 108

took its final form -- states that:

             The reference to "indirect commercial

       advantage" has raised questions as to the status of

       photocopying done by or for libraries or archival

       collections within  industrial, profit-making, or

       proprietary institutions (such as the research and

       development departments of chemical,

       pharmaceutical, automobile, and oil corporations,

       the library of a proprietary hospital, the

       collections owned by a law or medical partnership,

       etc.)(24) . . . .

             *Isolated, spontaneous making of single

       photocopies by a library in a for-profit

       organization, without 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.*

       Similarly, for-profit libraries could participate

       in interlibrary arrangements for exchange of

       photocopies, as long as the reproduction or

       distribution was not "systematic."  *These

       activities, by themselves, would ordinarily not be

       considered "for direct or indirect commercial

       advantage," since the "advantage" referred to in

       this case 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*.  On the other hand, Section

       108 would not excuse reproduction or distribution

       if there were a commercial motive behind the actual

       making or distribution of the copies, if multiple

       copies were made or distributed, or if the

       photocopying activities were "systematic" in the

       sense that their aim was to substitute for

       subscriptions or purchases.

H.R. Rep. No. 1476 at 74-75. (emphasis added).(25)  The House-

Senate Conference adopted the House version of Section 108,

including a key revision of the limitation on "systematic"

photocopying in Section 108(g)(2).  It also declined to adopt the

Senate Committee's view that the prohibition on indirect

commercial advantage precluded libraries in for-profit

organizations from enjoying Section 108 protection for the

provision of photocopies of copyrighted materials to employees

engaged in furtherance of the organization's commercial

enterprise.(26)  Therefore, Judge Leval's interpretation of

the "direct or indirect commercial advantage" limitation in

Section 108 was rejected by Congress in favor of a more liberal

view, which recognizes that for-profit institutions have Section

108 rights, subject to the limitations on related or concerted

making of multiple copies and systematic reproduction and

distribution, provided that there is no "immediate commercial

motivation behind the reproduction or distribution itself."

*See* H.R. Rep. No. 1476 at 75.

       D.    The Trial Court Erred in Its Interpretation of the

             *"Single Copy" Restriction of Section 108          *

       In addition, the lower court misunderstood the limitation

of Section 108 reproduction to "no more than one copy . . . of a

work."  *See* 17 U.S.C.  108(a).  The court opined that:

       A library that qualifies under  108 could deliver

       a maximum of one copy of a particular item to

       Texaco . . . .  Texaco's Beacon library . . . does

       not comply with this restriction.  If Chickering

       obtains a copy of an article, there is no procedure

       barring his Texaco colleagues from copying the same

       article.  In all likelihood, numerous Texaco

       scientists make copies of the same article when

       they pertain to matters that are important to

       Texaco research.  Nor is there any procedure in

       place limiting a single Texaco scientist to a

       single copy.

802 F. Supp. at 28.  The lower court was in error in two

respects.(27)

       First, subsection 108(g) expressly states that "the rights

of reproduction and distribution under this section extend to the

isolated and unrelated reproduction or distribution of a single

copy of phonorecord of the same material *on separate

occasions*."  17 U.S.C.  108(g) (emphasis added).  Therefore,

the lower court is wrong in asserting that Section 108 did not

authorize Dr. Chickering or another Texaco scientist to have more

than a single copy of any one journal article made by the Beacon

library.  The law permits more than one copy to be made, provided

the reproductions and distributions of the individual copies are

isolated and unrelated.(28)

       Second, this same provision permits the library to make

individual copies of the same article for several different

Texaco scientists, provided the library is not aware and has no

substantial reason to believe it is engaged "in the related or

concerted reproduction or distribution of multiple copies or

phonorecords of the same material."  *See* 17 U.S.C. 

108(g)(1).

There is no evidence in the record that the Beacon library was

aware or had any reason to believe that any copying it performed

involved related or concerted reproduction or distribution of

multiple copies.  Thus, the copying and distribution involved in

this case is not outside Section 108's provisions, even if

"numerous Texaco scientists make copies of the same articles [or,

more properly in this context, have such copies made for them by

the library] when they pertain to matters that are important for

Texaco's research," as speculated by the lower court, 802 F.

Supp. at 28, and even if for that reason alone such copying could

be regarded as "related or concerted reproduction" within the

meaning of Section 108(g)(1) -- which we strongly dispute.(29)

       Therefore, if this Court considers the applicability of

Section 108 to the copying of journal articles by Texaco

researchers, it must reject the lower court's analysis.  Under a

proper analysis, it will find that -- insofar as the record

addresses the Section 108 criteria -- there is no basis in the

record for holding Section 108 inapplicable to the copies made by

the Beacon library for Dr. Chickering.

IV.    *CONCLUSION*

       For the reasons stated herein, *amici* urge this Court to

reverse the lower court's decision and to rule that the

photocopying at issue herein is a fair use.  *Amici* further ask

this Court expressly to reject the lower court's gratuitous and

erroneous conclusions regarding Section 108.

                                   Respectfully submitted,

                                   ______________________________

                                   Ritchie T. Thomas, Esq.

                                   James V. Dick, Esq.

                                   Susan Neuberger Weller, Esq.

                                   SQUIRE, SANDERS & DEMPSEY

                                   1201 Pennsylvania Avenue, N.W.

                                   Washington, D.C.  20004

                                   (202) 626-6600

                                   Attorneys for *Amicus Curiae*

                                   ASSOCIATION OF RESEARCH

                                   LIBRARIES, AMERICAN

                                   ASSOCIATION OF LAW LIBRARIES

                                   SPECIAL LIBRARIES ASSOCIATION,

                                   MEDICAL LIBRARY ASSOCIATION,

                                   AMERICAN COUNCIL OF LEARNED

                                   SOCIETIES, NATIONAL HUMANITIES

                                   ALLIANCE, AND ASSOCIATION OF

                                   ACADEMIC HEALTH SCIENCES

                                   LIBRARY DIRECTORS

Dated:  March 4, 1993

(Corrected Version:  March 10, 1993)

                    *Certificate of Service*

       I hereby certify that a Corrected Version of the foregoing

*Amicus Curiae* Brief of Association of Research Libraries,

American Association of Law Libraries, Special Libraries

Association, Medical Library Association, American Council of

Learned Societies, National Humanities Alliance, and Association

of Academic Health Sciences Library Directors was mailed this

10th day of March, 1993, by first class mail, postage, to the

following:*

                         Thomas Smart, Esq.

                         Richard A. De Sevo, Esq.

                         Kaye, Scholer, Fierman, Hays & Handler

                         425 Park Avenue

                         New York, New York  10022

                         Joseph P. Foley

                         Texaco Inc.

                         2000 Westchester Avenue

                         White Plains, New York  10650

                         S.R. Kay, Esq.

                         Proskauer Rose Goetz & Mendelsohn

                         1585 Broadway

                         New York, New York  10036

                                   ______________________________

                                   Ritchie Thomas

*The original *Amicus Curiae* Brief was served on the noted

individuals on March 4, 1993.

                            FOOTNOTES

1.   The lower court's opinion places great emphasis on Texaco's

     for-profit status, the size of its income and revenues, and

     the court's view that the copying was carried on in a

     commercial context for the purpose "of producing profits."

     *See* 802 F. Supp. at 16, 27 & n. 25.  Should this Court

     affirm the lower court's determination -- as these *amici*

     strongly believe it should not -- it should draw a sharp and

     explicit line between the facts of this case and copying by

     and for researchers, scholars, and teachers at non-profit

     institutions.

2.   *See* L. Ray Patterson, *Understanding Fair Use*, 55 Law &

     Contemp. Probs. 249, 263 (1992).

3.   The *Sega* court also found an overriding "public benefit"

     under factor one because "the challenged use serves a public

     interest," 977 F.2d at 1523, *i.e.*, "Accolade's

     identification of the functional requirements for Genesis

     compatibility has led to an increase in the number of

     independently designed video game programs offered for use

     with the Genesis console.  *Id.*  If the proliferation of

     compatible video game programs is, as in *Sega*, a public

     benefit justifying the copying of a work for study purposes

     under the first fair use factor, then surely the

     acknowledged socially beneficial objectives of research

     science justify the copying of the works at issue here.

4.   As discussed in Section III of this brief, the applicability

     of Section 108 to the copying at issue was not before the

     lower court under the stipulation that governed the trial

     below.  Nevertheless, the language and legislative history

     of Section 108 are relevant to an understanding of the

     "commerciality" element of Section 107(1).

5.   The photocopying of copyrighted works, particularly in

     educational and research contexts, was a major consideration

     of Congress in the development of both Section 107 and

     Section 108 of the 1976 Copyright Act.  *See* Library of

     Congress, *Final Report of the National Commission on the

     Technological Uses of Copyrighted Works*, App. A ("Summary

     of the Legislative History of Computer-Related Issues and

     the Photocopy Issue"), 89-104 (1979) ("CONTU Final Report").

6.   *See also* *New Era Publications Int'l v. Henry Holt & Co.*,

     873 F.2d 576, 583 (2d Cir. 1989) ("As long as a book can be

     classified as a work of criticism, scholarship, or research,

     as can the book here, the [first] factor cuts in favor of

     the book's publisher. . . ."); *Consumers Union of U.S. v.

     General Signal Corp.*, 724 F.2d 1044, 1049 (2d Cir. 1983),

     *cert. denied*, 469 U.S. 823 (1984) (public benefit of

     consumer education justified, under factor one, the accurate

     use of allegedly infringing material in commercial

     advertisements).

7.   -- If a scholar's or researcher's efforts are funded by

     grants from the government or non-profit foundations, then

     the reproduction of single copies by or for that individual

     would be a fair use.  But if a portion of his or her funding

     was in the form of grants from for-profit corporate sources,

     then the same reproduction may not be regarded as a fair use

     even though the subject and objective of the research were

     identical.

     -- If a doctor or medical researcher is employed by a non-

     profit hospital, the making of a single copy of an article

     in connection with that individual's research efforts is

     presumptively a fair use.  But the same reproduction of the

     same article in connection with the same research effort

     would be presumed to be unfair if undertaken by a doctor or

     medical researcher employed by a for-profit hospital or in

     private practice.

     -- In the legal context, reproduction of a single copy of an

     article, treatise, case note, or other copyrighted work

     would presumptively be a fair use under factor one if

     undertaken by or on behalf of a lawyer employed by the

     government or a non-profit public interest organization, but

     the logic of the lower court's analysis would dictate that

     the same reproduction of the same work would presumptively

     be unfair under factor one if undertaken by an associate or

     partner of a private law firm (unless, perhaps, the law firm

     attorney was working on behalf of a *pro bono* client).

8.   Judge Leval has written that he "believes the answer to the

     question of justification [for copying] turns primarily on

     whether, and to what extent, the challenged use is

     *transformative* [or productive]." Pierre N. Leval, *Toward

     A Fair Use Standard*, 103 Harv. L. Rev. 1105, 1111 (1990)

     (emphasis in original).  He evidently adopted and applied

     this standard despite his express recognition that this

     approach was rejected by the Supreme Court in *Sony*.  *Id*.

     at 1111 n.29.  His position on the importance of the

     "productive" nature of a reproductive use also has been

     criticized elsewhere as being far too limiting and as

     overstating the usefulness of this factor in a fair use

     analysis.  *See* Lloyd L. Weinreb, *Fair's Fair:  A Comment

     on the Fair Use Doctrine*, 103 Harv. L. Rev. 1137, 1143

     (1990).

9.   *See also* *Dow Jones & Co. v. Board of Trade*, 546 F.

     Supp. 113, 119 (S.D.N.Y. 1982) ("[A]n illustrative, but not

     exclusive list of productive uses is found in the first

     sentence of 17 U.S.C.  107."); *Williams & Wilkins Co. v.

     United States*, 487 F.2d 1345, 1350, 1353 (Ct. Cl. 1973),

     *aff'd by an equally divided Court*, 420 U.S. 376 (1975) ("a

     scholar can make a handwritten copy of an entire copyrighted

     article for his own use . . . and he could have his

     secretary make a typed copy for his personal use and files;"

     "[A] library could supply single photocopies of entire

     copyrighted works to attorneys or courts for use in

     litigation.").

10.  *See also* *Triangle Publications, Inc. v. Knight-Ridder

     Newspapers, Inc.*, 626 F.2d 1171, 1177 & n.15 (5th Cir.

     1980) (quoting *Williams & Wilkins*); *Dow Jones & Co. v.

     Board of Trade*, 546 F. Supp. 113, 120-21 (S.D.N.Y. 1982)

     ("[I]t would make no sense . . . to adopt the notion that

     copying an entire work can never be fair use."); *Haberman

     v. Hustler Magazine, Inc.*, 626 F. Supp. 201, 212 (D. Mass.

     1986) (copying of photograph (the entire work) held to be

     fair use); *Key Maps, Inc. v. Pruitt*, 470 F. Supp. 33, 38

     (S.D. Tex. 1978) (300 copies of copyrighted maps held fair

     use).

11.  The Judiciary Committee Report makes clear that the

     guidelines do not necessarily define the limits of fair use

     photocopying of copyrighted materials for classroom use.

     H.R. Rep. No. 1476 at 68.

12.  The guidelines state:  "A single copy may be made of any of

     the following by or for a teacher at his or her individual

     request for his or her scholarly research or use in teaching

     or preparation to teach a class: . . . [a]n article from a

     periodical or newspaper, . . . [a] short story, short essay

     or short poem, whether or not from a collective work . . .

     ." *Id*.

13.  The lower court's effort (in another context) to distinguish

     this time-shifting use in *Sony* is a failure.  The Court

     states that:

          The Supreme Court's finding in *Sony* that the making

          of time-shifting copies caused no economic loss to the

          copyright owners has no application here.  Here the

          free photocopying practiced by large numbers of

          research scientists employed by a large research-

          oriented company deprives the publishers of substantial

          revenues.

     802 F. Supp. at 22.  The lower court's assertion that the

     fair use photocopying by scientists deprives publishers of

     substantial revenues is based on its assumption that

     royalties should be paid for the copies made.  If the same

     assumption were made with respect to the videotaped copies

     of television programs involved in *Sony*, the potential

     royalty revenues involved would have been enormous.

14.  The court did find that "it seems likely that Texaco would

     add at least a modest number of subscriptions to

     *Catalysis* which would increase Academic Press'

     revenues."  802 F. Supp. at 19.  This finding, which is

     highly speculative, is discussed below.

15.  *See also* *Arica Inst., Inc. v. Palmer*, 970 F.2d 1067,

     1078 (2d Cir. 1992) (fourth factor favored defendant; "We

     find that these infringing aspects of [defendant's book]

     will have a negligible effect on the market for [plaintiff's

     biography]."); *Rogers v. Koons*, 960 F.2d 301, 312 (2d Cir.

     1992) (fourth factor favored plaintiff; defendant's

     sculpture, incorporating plaintiff's photograph, could

     reduce demand for other derivative works); *Salinger v.

     Random House, Inc.*, 811 F.2d 90, 99 (2d Cir. 1987), *cert*.

     *denied*., 484 U.S. 890 (1987) (fourth factor favored

     plaintiff; impairment of the potential market for

     plaintiff's copyrighted work was "likely"); *Maxtone-Graham

     v. Burtchaell*, 803 F.2d 1253, 1264 (2d Cir. 1986), *cert*.

     *denied*, 481 U.S. 1089 (1987) (fourth factor favored

     defendant; allegedly infringing book "poses no more than an

     insignificant threat of economic damage"* to the actual or

     potential market for plaintiff's work); *Update Art, Inc. v.

     Maariv Israel Newspapers, Inc.*, 635 F. Supp. 228, 232

     (S.D.N.Y. 1986), *aff'd*, 843 F.2d 67 (2d Cir. 1988) (fourth

     factor favored plaintiff; defendant's smaller copy of poster

     "is likely to reduce the demand for [plaintiff's] original

     poster").

16.  In *Harper & Row*, the Supreme Court held that the

     defendant's publication of an article containing numerous

     verbatim quotations from the unpublished memoirs of

     President Ford, to which plaintiff had been granted the

     exclusive first serial rights, was not a fair use. The Court

     found that the fourth factor favored the plaintiff, not

     because the defendant failed to pay royalties for its use of

     the quotations, but because the defendant's publication of

     the quotations impaired the marketability of the original.

     471 U.S. at 566-69.  Similarly, in the Supreme Court's most

     recent elaboration of the fair use doctrine, *Stewart v.

     Abend*, 495 U.S. 207 (1990), the Court found that the fourth

     factor favored the plaintiff in a case involving the

     distribution and exhibition of a derivative work (a motion

     picture) which infringed the rights of the copyright owner

     of the preexisting work (a magazine story).  The Court's

     rationale was that distribution of "the film impinged on the

     ability to market new versions of the story," *id*. at 238,

     not that the copyright owner lost royalty income in

     connection with the distribution and exhibition of the film.

17.  The lower court further erred in considering "Academic

     Press' growing subscription revenues and glowing

     profitability," 802 F. Supp. at 19, to be irrelevant to its

     inquiry as to whether or not the market for or value of its

     copyrighted works had been harmed by the photocopying by

     Texaco's researchers.  If there were any validity to the

     publishers' claim that the shift to use of photocopying

     machines for making single copies of reference material for

     personal use is depriving them of substantial subscription

     revenue, there should be some evidence of this effect.

     Effects cannot simply be assumed.  *See* *Williams &

     Wilkins*, 487 F.2d at 1359.  The record of this case

     contains no concrete evidence of such harm; it shows quite

     the contrary.

18.  This Court has held that custom is relevant in

     determining whether a use is fair.  In *Rosemont

     Enterprises, Inc. v. Random House, Inc.*, 366 F.2d 303,

     307 (2d Cir. 1966), *cert. denied*, 385 U.S. 1009

     (1967), for example, this Court reversed a district

     court's determination that a biographer's quotation of

     a previous work was not fair use, writing: "It is both

     *reasonable* and *customary* for biographers to refer

     to and utilize earlier works dealing with the subject

     of the work and occasionally to quote directly from

     such works." (emphasis added).  *See* *Religious

     Technology Ctr. v. Wollersheim*, 971 F.2d 364, 367 (9th

     Cir. 1992); *Triangle Publications, Inc v. Knight-

     Ridder Newspapers*, 626 F.2d 1171, 1176 (5th Cir.

     1980); *Mathieson v. Associated Press*, 23 USPQ 2d 1685

     (S.D.N.Y. 1992); Weinreb, *supra* note 8, at 1140.

19.  The Agreement provided in part, that:

          A library, archives office, museum, or similar

     institution owning books or periodical volumes in which

     copyright still subsists may make and deliver a single

     photographic reproduction or reduction of a part

     thereof to a scholar representing in writing that he

     desires such reproduction in lieu of loan of such

     publication or in place of manual transcription and

     solely for the purposes of research; provided:

               (1)  That the person receiving it is

          given due notice in writing that he is not

          exempt from liability to the copyright

          proprietor for any infringement of copyright

          by misuse of the reproduction constituting an

          infringement under the copyright law;

               (2)  That such reproduction is made and

          furnished without profit to itself by the

          institution making it . . . .

          The statutes make no specific provision for a

     right of a research worker to make copies by hand or by

     typescript for his research notes, but a student has

     always been free to "copy" by hand; and mechanical

     reproductions from copyright material are presumably

     intended to take the place of hand transcriptions, and

     to be governed by the same principles governing hand

     transcription . . . .

     1935 "Gentlemen's Agreement," *reprinted in* Leon E.

     Seltzer, *Exemptions and Fair Use in Copyright*, at App. E

     (1978).

20.  Libraries considered that the making and distribution

     of single copies for archival and replacement purposes

     and in response to requests by users and other

     libraries were customary activities that merely

     continued longstanding custodial, lending and

     interlibrary loan practices, and did not significantly

     deprive authors or publishers of purchases or

     subscriptions.  *See generally* CONTU Final Report,

     *supra* note 5, at 90.  Publishers, on the other hand,

     who saw the increasingly ubiquitous copying machine as

     a potential source of windfall revenue, expressed

     concern that interlibrary networking of photocopies

     could have a damaging effect on publishers, and,

     ultimately, on the survival of publications such as

     journals.  *Id.*  These competing viewpoints proved

     difficult to resolve, a difficulty that contributed to

     the long gestation of the 1976 Copyright Act.

21.  *Copyright Law Revision:  Report of the Register of

     Copyrights on the General Revision of the U.S.

     Copyright Law*, 87th Cong., 1st Sess. 25 (Comm. Print

     1961); *see also* CONTU Final Report, *supra* note 5,

     at 89-104.

22.  Other provisions of Section 108 state that, in

     specified circumstances, qualifying libraries and

     archives have express rights to make and distribute

     copies:  (a) of unpublished works for purposes of

     preservation or security or for deposit for research

     use in another library; (b) of published works to

     replace copies lost, stolen, deteriorating, or damaged,

     if an unused replacement cannot be found at a fair

     price; and (c) of entire published or unpublished

     works, or substantial parts of such works, if a copy

     cannot be obtained at a fair price, the copy becomes

     the property of the user, and the library has no reason

     to believe the copy will be used for any purpose other

     than private study, scholarship, or research.  17

     U.S.C.  108.

23.  The statute states that the limitation in the case of

     "systematic" photocopying is not to be interpreted to

     prevent a library from participating in interlibrary

     arrangements that do not have, as their purpose or

     effect, that participants receive photocopies in such

     aggregate quantities as to substitute for a

     subscription to or purchase of a work.  17 U.S.C. 

     108(g)(2).

24.  The "questions" to which the report refers were raised

     late in the 1976 Act's development because of

     suggestions that Section 108 rights might be generally

     unavailable to libraries or archives in profit-making

     organizations.  This position was typified by language

     in the Senate Judiciary Committee Report on parallel

     legislation earlier adopted by the Senate.  *See* S.

     Rep. No. 473 at 67.  One of those who suggested

     clarification would be appropriate was the Registrar of

     Copyrights, Barbara Ringer, who stated in her testimony

     to the House Subcommittee that the interpretation of

     the phrase "without any purpose of direct or indirect

     commercial advantage" was a problem with respect to

     special libraries.  *Copyright Law Revision:  Hearings

     before the Subcommittee on Courts, Civil Liberties, and

     the Administration of Justice of the House Judiciary

     Committee on H.R. 2223*, 94th Cong., 1st Sess. 18091-04

     (1975).  The House Committee's resolution was to reject

     the Senate Committee's interpretation in favor of the

     one that made Section 108 available to libraries in

     for-profit institutions.

25.  The House Judiciary Committee essentially equated

     "direct commercial advantage" with the sale of copies,

     and "indirect commercial advantage" with copying that

     substitutes for subscriptions or purchases  *See* H.R.

     Rep. No. 1476 at 74-75.

26.  The Conference Committee Report states that:

               Another point of interpretation involves the

          meaning of "indirect commercial advantage," as used in

          Section 108(a)(1), in the case of libraries or archival

          collections within industrial profit-making, or

          proprietary institutions.  As long as the library or

          archives meets the criteria in Section 108(a) and the

          other requirements of this section, including the

          prohibitions against multiple and systematic copying in

          subsection (g), the conferees consider that the

          isolated, spontaneous making of single photocopies

          without any commercial motivation, or participation by

          such a library or archives in interlibrary

          arrangements, would come within the scope of section

          108.

     H.R. Conf. Rep. No. 1733, 94th Cong. 2nd Sess. 73-74

     (1976).  This statement is not a model of clarity.

     Nevertheless, it manifestly does not adopt the Senate

     Report's restrictive view.  The "without any commercial

     motivation" clause in the second sentence must refer to

     the act of "making . . . single photocopies," which

     immediately precedes it, rather than to the ultimate

     objective of the research concerned or of the

     enterprise in which the copies are made.  It thus

     relates to the limitations imposed by subsection

     108(g)(1) and (2), consistent with the House Report.

27.  In addition, this part of the trial court's opinion

     relies heavily on speculation.

28.  If, for example, Dr. Chickering were, while using it in

     the laboratory, to damage the copy of an article from

     *Catalysis* made for him, Section 108 would permit the

     library (if it meets the other requirements of Section

     108) to provide him a replacement copy at his request.

29.  The "related or concerted reproduction" to which Section

     108(g)(1) refers must be reproductions that are related by

     more than the mere common interest of the researchers or

     students involved in a particular line of research or study.

     Were such common interest alone to suffice to make the

     separate copying of an article for two or more researchers

     "related," Section 108 would be reduced to an authorization

     merely to make one copy of an article for all time.

     Moreover, contrary to plaintiffs' representations there is

     no evidence the library was engaged in systematic

     reproduction or distribution within the meaning of Section

     108(g)(2).  Plaintiffs' characterization of Texaco's copying

     as "systematic," which was not adopted by the court below,

     is wrong and misleading.  It is based on the mere volume of

     the copying by researchers at Texaco.  As stated by the

     House Report:  "[A] library in a profit-making institution

     would not be authorized to: . . . use a single subscription

     or copy to supply its employees, on request, with single

     copies of material relevant to their work, where the

     arrangement is 'systematic' *in the sense of deliberately

     substituting photocopying for subscription or purchase*."

     H.R. Rep. No. 1476, 94th Cong., 2d Sess. 74-75. (emphasis

     added).  However, "[i]solated, spontaneous making of single

     photocopies by a library in a for-profit organization,

     without 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."  *Id.* at 75.