Ignore Heading – Content
UNITED STATES COURT OF APPEALS FOR THE SIXTH CIRCUIT
and ST. MARTIN’S PRESS, INCORPORATED,
MICHICAN DOCUMENT SERVICES, INC.,
and JAMES M. SMITH,
ON APPEAL FROM THE UNITED STATES DISTRICT COURT
FOR THE EASTERN DISTRICT OF MICHIGAN
UNIVERSITY PRESS, MACMILLAN, INC. AND
ST. MARTIN’S PRESS, INCORPORATED
COUNSEL FOR PLAINTIFFS-APPELLEES:
|Ronald S. Rauchberg||James E. Stewart|
|Jon A. Baumgarten||J. Michael Huget|
|Herman L. Goldsmith||Butzel Long, P. C.|
|Proskauer Rose Goetz & Mendelsohn||150 West Jefferson|
|1585 Broadway||Detroit, Michigan 48226|
|New York, New York 10036||(313) 225-7069|
November 15th, 1994
Ignore Heading – Content
TABLE OF CONTENTS
TABLE OF AUTHORITIES
STATEMENT OF SUBJECT MATTER AND APPELLATE JURISDICTION
STATEMENT REGARDING ORAL ARGUMENT
DISCLOSURE OF CORPORATE AFFILIATIONS AND FINANCIAL INTEREST
STATEMENT OF ISSUES
STATEMENT OF THE CASE
A. Nature of the Case
A. Plaintiffs Proved They Hold Valid Copyrights In The Six Works
B. Copying And Selling Were Admitted
II. THE FAIR USE DEFENSE DOES NOT PROTECT DEFENDANTS’ COPYING
A. The Fair Use Defense Is Not Available To An Infringer Who Seeks To Profit By Making And Selling Multiple Copies Of The Copyrighted Material Owned By Its Competitors
- The Purpose And Character Of Defendants’ Use Is To Profit, And The Defendants May Not Conceal That Purpose Behind The Nonprofit Educational Purposes Of Their Customers
- The Nature Of The Copyrighted Works Is That They Are Original, Educational Works With A Limited Market
- Defendants Copied And Sold Substantial Amounts From Plaintiffs’ Copyrighted Works
Defendants’ Unauthorized Copying And Selling Adversely Affects Plaintiffs’ Actual And Potential Markets
Ignore Heading – Content
Ignore Heading – Content
Addison-Wesley Publishing Co., Inc. et al v.
New York University, et al., 1983
Copyright L. Dec. ¶ 25, 544 (S. D. N. Y.)
1983) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 42
Amana Refrigeration, Inc. v. Consumers Union
of United States, Inc., 431 F. Supp.
324 (N. D. Iowa 1977)
471 U.S. 539 (1985) . . . . . . . . . . . . . . . . . . . . . . . Page 30
American Geophysical Union v. Texaco, Inc.,
802 F. Supp. 1 (S. D. N. Y.) 1992), aff’d,
No. 92-9341 U. S. App. LEXIS 30437
(2d Cir. October 28, 1994) . . . . . . . . . . . . . . . . . . . . . . . passim
Basic Books, Inc. v. The Gnomon Corp., 1980
Copyright L. Dec. ¶ 25, 145 (D. Conn.
1980) . . . . . . . . . . . . . . . . . . . . . . . Page 42
Basic Books, Inc. v. Kinko’s Graphics Corp.,
758 F. Supp. 1522 (S. D. N. Y. 1991) . . . . . . . . . . . . . . . . . . . . . . . passim
Bridge Publications, Inc. v. Vien,
827 F. Supp. 629 (S. D. Cal. 1993) . . . . . . . . . . . . . . . . . . . . . . . Page 25
Budish v. Gordon, 784 F. Supp. 1320
(N. D. Ohio 1992) . . . . . . . . . . . . . . . . . . . . . . . Page 43
Cable/Home Communication Corp. v. Network
Productions, Inc., 902 F. 2d 829 (11th
Cir. 1990) . . . . . . . . . . . . . . . . . . . . . . . Pages 16, 46
Campbell v. Acuff-Rose Music
114 S. Ct. 1164 (1994) . . . . . . . . . . . . . . . . . . . . . . . passim
Carpenters Dist. Council v. Dillard Dept.
Stores, 778 F. Supp. 318 (E. D. La.
1991), aff’d in pertinent part, 15 F. 3d
1275 (5th Cir. 1994) . . . . . . . . . . . . . . . . . . . . . . . Page 38
Celotex Corp. v. Catrett, 477 U. S. 317 (1986) . . . . . . . . . . . . . . . . . . . . . . . Pages 13, 41
College Entrance Book Co. v. Amsco Book Co.,
119 F. 2d 874 (2d Cir. 1941) . . . . . . . . . . . . . . . . . . . . . . . Page 30
Consumers Union of United States, Inc. v.
General Signal Corp., 724 F. 2d 1044 (2d
Cir. 1983), cert. denied, 469 U. S. 823
(1984) . . . . . . . . . . . . . . . . . . . . . . . Page 15
D C Comics Inc. v. Reel Fantasy, Inc. 696
F. 2d 24 (2d Cir. 1982) . . . . . . . . . . . . . . . . . . . . . . . Page 34
Elsmere Music, Inc. v. NBC, 623 F. 2d 252 (2d
Cir. 1980) . . . . . . . . . . . . . . . . . . . . . . . Page 15
Encyclopedia Britannica Educ. Corp. v.
Crooks, 542 F. Supp. 1156 (W, D. N. Y.
1982) . . . . . . . . . . . . . . . . . . . . . . . Page 18
F. E. L. Publications, Ltd. v. Catholic Bishop
of Chicago, 214 U. S. P. Q. (BNA) 409 (7th
Cir. 1982) . . . . . . . . . . . . . . . . . . . . . . . Page 37
Feist Publications v. Rural Tel. Serv. Co.,
499 U. S. 340 (1991) . . . . . . . . . . . . . . . . . . . . . . . Pages 28, 30
Financial Information, Inc. v. Moody’s
Investor Servs., Inc., 751 F. 2d 501
(1984), and aff’d, 808 F. 2d 204 (2d Cir.
1986), cert. denied, 484 U. S. 820
(1987) . . . . . . . . . . . . . . . . . . . . . . . Pages 34-35
Fisher v. Dees, 794 F. 2d 432 (9th Cir. 1986) . . . . . . . . . . Page 44
Folsom v. Marsh, 9 F. Cas. 342 (C. C. D. Mass.
1841) . . . . . . . . . . . . . . . . . . . . . . . Page 40
Forry, Inc. v. Neundorfer, Inc., 837 F. 2d 259
(6th Cir. 1988) . . . . . . . . . . . . . . . . . . . . . . . Page 41
Gaste v. Kaiserman, 863 F. 2d 1061
(2d Cir. 1988) . . . . . . . . . . . . . . . . . . . . . . . Page 14
Georgia Television Co. v. TV News Clips of
Atlanta, Inc., 19 U. S. P. Q. 2d (BNA) 1372
(N. D. Ga. 1991), aff’d without op.,
983 F. 2d 238 (11th Cir. 1993) . . . . . . . . . . . . . . . . . . . . . . . Pages 43-44, 46, 47, 49
Grayned v. City of Rockford, 408 U. S. 104
(1972) . . . . . . . . . . . . . . . . . . . . . . . Page 40
Harper & Row, Publishers, Inc v. Nation
Enter., 471 U.S. 539 (1985) . . . . . . . . . . . . . . . . . . . . . . . passim
Henry Holt & Co. v. Liggett & Myers Tobacco
Co., 23 F. Supp. 302 (D. Pa. 1938) . . . . . . . . . . . . . . . . . . . . . . . Page 30
Iowa State Univ. Research Found., Inc. v.
ABC, 621 F. 2d 57 (2d Cir. 1980) . . . . . . . . . . . . . . . . . . . . . . . Page 25
K-S Pharmacies, Inc. v. American Home Prods.
Corp., 962 F. 2d 728 (7th Cir. 1992) . . . . . . . . . . . . . . . . . . . . . . . Page 39
Los Angeles News Serv. v. Tullo, 973 F. 2d 791
(9th Cir. 1992) . . . . . . . . . . . . . . . . . . . . . . . Pages 26, 27, 44
Lotus Dev. Corp. v. Borland, Int’l, 831 F.
Supp. 223 (D. Mass. 1993) . . . . . . . . . . . . . . . . . . . . . . . Page 27
MacMillan Co. v. King, 223 F. 862
(D. Mass. 1914) . . . . . . . . . . . . . . . . . . . . . . . Page 18
Marcus v. Rowley, 695 F. 2d 1171
9th Cir. 1983) . . . . . . . . . . . . . . . . . . . . . . . Pages 18, 20, 29
Martin Luther King, Jr. Ctr. for Social
Change, v. American Heritage Prods.,
508 F. Supp. 854 (N. D. Ga. 1981), rev’d
on other grounds, 694 F. 2d 674 (11th
Cir. 1983) . . . . . . . . . . . . . . . . . . . . . . . Page 29
Mazer v. Stein, 347 U.S. 201(1954) . . . . . . . . . . . . . . . . . . . . . .Page 19
Mitchell Bros. Film Group v. Cinema Adult
Theater, 604 F. 2d 852 (5th Cir. 1979),
cert. denied, 419 U. S. 917 (1980) . . . . . . . . . . . . . . . . . . . . . . . Page 43
Monogram Models, Inc. v. Industro Motive
Corp., 492 F. 2d 1281 (6th Cir.), cert,
denied, 419 U. S. 843 (1974) . . . . . . . . . . . . . . . . . . . . . . . Page 48
N. A. S. Import, Corp. v. Chenson Enters. Inc.,
968 F. 2d 250 (2d Cir. 1992) . . . . . . . . . . . . . . . . . . . . . . . Page 45
Nash v. United States, 229 U. S. 373 (1913) . . . . . . . . . . . . . . . . . . . . . . . Page 40
National Rifle Ass’n v. Handgun Control
Fed’n, 15 F. 3d 559 (6th Cir.), cert.
denied, 115 S. Ct. 71 (1994) . . . . . . . . . . . . . . . . . . . . . . . Pages 15, 28, 32
Nelson v. United States, 796 F. 2d 164 (6th
Cir. 1986) . . . . . . . . . . . . . . . . . . . . . . . Page 40
New Line Cinema Corp. v. Bertlesman Music
Group, Inc., 693 F. Supp. 1517
(S. D. N. Y. 1988) . . . . . . . . . . . . . . . . . . . . . . . Page 35
Olan Mills Inc. v. Linn Photo Co., 23 F. 3d
1345 (8th Cir. 1994) . . . . . . . . . . . . . . . . . . . . . . . Page 50
Pacific & Southern Co. v. Duncan, 744 F. 2d
1490 (11th Cir. 1984), cert. denied471
U. S. 1004 (1985) . . . . . . . . . . . . . . . . . . . . . . . Pages 31, 37, 44, 49, 50
Paramount Pictures v. Labus, 16 U. S. P. Q. 2d
(BNA) 1143 (W. D. Wis. 1990) . . . . . . . . . . . . . . . . . . . . . . . Page 46
Peer Int’l Corp. v. Pausa Records, Inc., 909
F. 2d 1332 (9th Cir. 1990) . . . . . . . . . . . . . . . . . . . . . . . Page 46
Princeton Univ. Press v. Michigan Document
Servs., Inc., 22 U. S. P. Q. 2d (BNA) 1863
(E. D. Mich. 1992) . . . . . . . . . . . . . . . . . . . . . . . Page 11
Princeton Univ. Press v. Michigan Document
Servs., Inc., 855 F. Supp. 905
(E. D. Mich. 1994) . . . . . . . . . . . . . . . . . . . . . . . passim
RCA/Ariola Int’l, Inc. v. Thomas & Grayston
Co., 845 F. 2d 773 (8th Cir. 1988) . . . . . . . . . . . . . . . . . . . . . . . Pages 45, 46
Radji v. Khakbaz, 607 F. Supp. 1296
(D. D. C. 1985) . . . . . . . . . . . . . . . . . . . . . . . Page 29
Reliability Research, Inc. v. Computer Assoc.
Int’l, Inc., 793 F. Supp. 68 (E. D. N. Y.
1992) . . . . . . . . . . . . . . . . . . . . . . . Page 43
Reminga v. United States, 695 F. 2d 1000 (6th
Cir. 1982), cert. denied, 460 U. S. 1086
(1983) . . . . . . . . . . . . . . . . . . . . . . . Page 40
Richard Anderson Photography v. Brown, No.
85-0373-R, 1990 U. S. Dist. LEXIS 19846
(W. D. Va. Apr. 16, 1990) . . . . . . . . . . . . . . . . . . . . . . . Page 135
Robert R. Jones Assoc. Inc. v. Nino Homes,
858 F. 2d 274 (6th Cir. 1988) . . . . . . . . . . . . . . . . . . . . . . . Page 13
Rogers v. Koos, 960 F. 2d 301 (2d Cir.),
cert. denied, 113 S. Ct. 365 (1992) . . . . . . . . . . . . . . . . . . . . . . . Page 16
Sony Corp. v. Universal City Studios. Inc.,
464 U.S. 417 (1984) . . . . . . . . . . . . . . . . . . . . . . . . Pages 15, 39
Stewart v. Abend, 495 U. S. 207 (1990) . . . . . . . . . . . . . . . . . . . . . . . Pages 16, 34, 37
Supermarket of Homes, Inc. v. San Fernando
Valley Board of Realtors, 786 F. 2d 1400
(9th Cir. 1986) . . . . . . . . . . . . . . . . . . . . . . . Page 16
Swallow Turn Music v. Wilson, 831 F. Supp.
575 (E. D. Tex. 1993) . . . . . . . . . . . . . . . . . . . . . . . Pages 46, 49
Telerate Sys., Inc. v. Caro, 689 F. Supp. 221
(S. D. N. Y. 1988 . . . . . . . . . . . . . . . . . . . . . . . Page 35
Triangle Publications Inc. v. Knight-Ridder
Newspapers, Inc., 626 F. 2d 1171 (5th
Cir. 1980) . . . . . . . . . . . . . . . . . . . . . . . Page 44
Twin Peaks Prods. v. Publications Int’l, 996
F. 2d 1366 (2d Cir. 1993) . . . . . . . . . . . . . . . . . . . . . . . Pages 32, 34, 44
United States v. Heilman, 614 F. 2d 1133
(7th Cir.), cert. denied, 447 U. S. 922
(1980) . . . . . . . . . . . . . . . . . . . . . . . Page 40
United States v. National Dairy Products
Corp., 372 U. S. 29 (1963) . . . . . . . . . . . . . . . . . . . . . . . Page 40
United States v. Skinner, 25 F. 3d 1314
(6th Cir. 1994) . . . . . . . . . . . . . . . . . . . . . . . Page 40
United States v. Steerwell Leisure Corp., 598
F. Supp. 171 (W. D. N. Y. 1984) . . . . . . . . . . . . . . . . . . . . . . . Pages 45, 47
United States v. Taxe, 540 Fj. 2d 961 (9th
Cir.), cert. denied, 429 U. S. 1040
(1977) . . . . . . . . . . . . . . . . . . . . . . . Page 38
United States v. Wise, 550 F. 2d 1180 (9th
Cir.), cert. denied, 434 U. S. 929
(1977) . . . . . . . . . . . . . . . . . . . . . . . Page 38
United Tel. Co. v. Johnson Pub. Co., 855 F. 2d
604 (8th Cirr. 1988) . . . . . . . . . . . . . . . . . . . . . . . Page 34
Van Halen Music v. Foos, 728 F. Supp. 1495
(D. Mont. 1989 . . . . . . . . . . . . . . . . . . . . . . . Page 46
Wainwright Sec., Inc. v. Wall St. Transcript
Corp., 558 F. 2d 91 (2d Cir. 1977),
cert denied, 434 U. S. 1014 (1978) . . . . . . . . . . . . . . . . . . . . . . . Pages 44-45
Walt Disney Prods. v. Air Pirates, 581 F. 2d
751 (9th Cir. 1978), cert. denied, 439
U. S. 1132 (1979) . . . . . . . . . . . . . . . . . . . . . . . Page 44
Weissmann v. Freema, 868 F. 2d 1313 (2d
Cir.), cert. denied, 493 U. S. 883
(1989) . . . . . . . . . . . . . . . . . . . . . . . Page 25
Wickham v. Knoxville Int’l Energy Exposition,BR Inc., 739 F. 2d 1094 (6th Cir. 1984) . . . . . . . . . . . . . . . . . . . . . . . Page 13
Wihtol v. Crow, 309 F. 2d 777 (8th Cir. 1962) . . . . . . . . . . . . Page 18
Williams & Wilkins Coo. v. United States, 487
F. 2d 1345 (Ct. Cl. 2973), aff’d by an
equally divided Court, 420 U. S. 376
(1975) . . . . . . . . . . . . . . . . . . . . . . . Page 35
Statutes and Rules
Fed. R. Civ. P. 56 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 13
17 U. S. C. § 103 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 30
17 U. S. C. § 106 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Pages 34, 38
17 U. S. C. § 107 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . passim
17 U. S. C. § 201(d) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 19
17 U. S. C. § 410(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 14
17 U. S. C. § 502(a) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 48
17 U. S. C. § 504 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Page 44
H. R. Rep. No. 1476, 94th Cong., 2d Sess.
(1976) . . . . . . . . . . . . . . . . . . . . . . . Pages 20, 21, 26, 39
H. R. Conf. Rep. No. 1733, 94th Cong.,
2d Sess. (1976) . . . . . . . . . . . . . . . . . . . . . . . Page 20
H. R. Rep. No. 83, 90th Cong.,
1st Sess. (1967) . . . . . . . . . . . . . . . . . . . . . . . Pages 21, 32
H. R. Rep. No. 2237, 89th Cong.,
2d Sess. (1966) . . . . . . . . . . . . . . . . . . . . . . . Page 21
S. Rep. No. 473, 94th Cong.,
1st Sess. (1975) . . . . . . . . . . . . . . . . . . . . . . . Pages 21, 28
2 Nimmer on Copyright, § 9.06 [B]  . . . . . . . . . . . . . . . . . . . . . . . Page 15
2 Nimmer on Copyright, § 13.05 [A]  . . . . . . . . . . . . . . . . . . . . . . . Pages 28, 33
Ignore Heading – Content
STATEMENT OF SUBJECT MATTER AND APPELLATE JURISDICTION
This is a copyright infringement action arising under 17 U.S.C. § 101 et seq. The United States District Court For The Eastern District Of Michigan had subject matter jurisdiction pursuant to 28 U.S.C. § 1338. Following the District Court’s entry of summary judgment for the Plaintiffs-appellees, this Court has appellate jurisdiction pursuant to 28 U.S.C. § 1291.
STATEMENT REGARDING ORAL ARGUMENT
Defendants-appellants have requested oral argument. Plaintiffs-appellees also request oral argument.
UNITED STATES COURT OF APPEALS
FOR THE SIXTH CIRCUIT
MICHICAN DOCUMENT SERVICES,
INC., and JAMES M. SMITH
AND FINANCIAL INTEREST
1. Is said party a subsidiary or affiliate of a publicly-owned corporation? As to plaintiffs-appellees Princeton University Press and St. Martin’s Press, Incorporated: No.
As to Plaintiff-appellee Macmillan, Inc.: Yes; Macmillan, Inc. is a wholly-owned indirect subsidiary of Viacom Inc.
2. Is there a publicly-owned corporation, not a party to this appeal, that has a financial interest in the outcome? As to all Plaintiffs-appellees: No.
|____________________________________||November 15th, 1994|
|Herman L. Goldsmith|
|Proskauer Rose Goetz|
|New York, New York 10036|
STATEMENT OF ISSUES
1. Whether the District Court properly awarded summary judgment to the plaintiffs on their claims of copyright infringement after plaintiffs’ submission of uncontroverted proof of their ownership of six copyrights and defendants’ admission that they copied and sold substantial excerpts of the copyrighted works without permission?
2. Whether defendants failed to raise a triable issue in connection with their claim that their copying and sale, for profit, of substantial excerpts of plaintiffs’ copyrighted works was a “fair use” of the works?
3. Whether the Copyright Act is constitutional as applied to this case, despite defendants’ claim of vagueness, when the Act, its legislative history, and the cases are clear that the commercial copying and sale of substantial excerpts from a competitor’s copyrighted work is copyright infringement?
4. Whether defendants failed to raise a triable issue with respect to their other alleged affirmative defenses?
5. Whether, after the evidence established that defendants should have known that their actions violated plaintiffs’ copyrights, the District Court correctly declared the defendants’ infringements to be willful?
6. Whether the District Court properly awarded injunctive relief protecting plaintiffs’ other works from infringement by the defendants when defendants threatened to keep infringing unless “forced” into stopping by the Court?
STATEMENT OF THE CASE
A. Nature of the Case.
This is a copyright infringement action. On June 9, 1994 the United States District Court for the Eastern District of Michigan (Hackett, J.) found that the facts are not in dispute, granted summary judgment to the Plaintiffs-appellees, declared the defendants-appellants to be willful copyright infringers, and awarded the plaintiffs injunctive relief, $30,000 in statutory damages, and reasonable attorneys’ fees (the amount of which has not yet been determined by the District Court). The Opinion and Order below is reported at Princeton Univ. Press v. Michigan Document Servs., Inc., 855 F. Supp. 905 (E.D. Mich. 1994).
As we show below, there are no fact issues presented in this case. It is undisputed that defendants are in the business of selling the copyrighted works of others. The parties are in complete agreement about what the defendants did, and the context in which it was done.
1. The Parties.
Plaintiffs-appellees, Princeton University Press, Macmillan, Inc., and St Martin’s Press, Incorporated, are three well known and well respected publishers in the business of publishing and selling nonfiction works. Princeton University Press is a not-for- profit entity with a mission of promoting learning through the publication of educational and scholarly books (R. 42 Van Rheinberg Declaration, ¶1); the other two plaintiffs are for-profit corporations.
Defendant-appellant Michigan Document Services, Inc. (“MDS”) is a Michigan for-profit corporation that operates several photocopy shops. Defendant-appellant James M. Smith (“Smith”) is the president and sole stockholder of MDS and Smith runs the business of MDS on a day-to-day basis. (R. 41 Exhibit 2 [Answer, ¶ 6]; R. 41 Exhibit 2 [Defendants’ Interrogatory Response No. 1]; R. 46-47 Smith Deposition, 161:2 to 161:24; 291:5 to 291:18; 291:22 to 292:8.)
2. The Educational Works Sold By The Parties.
There is a vast market for books that serve higher education. Each plaintiff, in addition to publishing books of general or widespread interest, also publishes educational, scholarly and other works aimed specifically at that market. Thus, the plain- tiffs publish textbooks, anthologies, collections of readings, and other works specifically designed to be useful in the college classroom. Such books, the plaintiffs hope, are assigned by college professors, and then purchased by students. (R. 42 Van Rheinberg Declaration, ‘ 11; R. 42 Fisher Declaration, ‘ 12; R. 42 Mullen Declaration, ‘ 10.)
As defendants note, professors often wish to supplement published collections of readings and textbooks with newly assembled, previously unpublished collections of readings, for example, when existing collections or textbooks published by the plaintiffs or others are not exactly what the professors want. (See, ~, Brief of Defendants-Appellants [Defendants’ Brief 3, 5- 6.)
When a professor seeks to assign a customized collection of readings, he or she designates the readings and MDS (like many other copyshops) turns the collection into books called “course- packs. ” Coursepack books are compilations, or anthologies, of excerpts from various sources that the copyshops combine, identify in a table of contents, photocopy, bind, and sell to students. (R. 41 Exhibit 2 [Answer, ‘1 5, 8, 10]; R. 41 Exhibit 12 [Defen- dants’ Admission Response No. 7]; R. 46 Smith Deposition, 61:9 to 62:1~ 157:2 to 157:3.)
Like the plaintiffs, the defendants hope that professors will assign, and students will buy, their books. In fact, defendants advertise that coursepacks can be used to “replace a conventional textbook.” (R. 41 Exhibit 22 [Defendants’ Promotional Materials]; see 4mQ R. 46-47 Smith Deposition, 192:18-21; 313:1 to 313:9.))
3. The “Permissions” Market.
In addition to selling books, each plaintiff also serves educational markets by selling licenses, usually called “permissions,” to other publishers, copyshops, and college bookstores, granting the right to copy excerpts from its copyrighted works for inclusion in other books, anthologies, and coursepacks used in the classroom. Each plaintiff has a department that regularly processes and passes upon such requests. (R. 42 Van Rheinberg Declaration, ¶ 2; R. 42 Fisher Declaration, ¶ 2; R. 42 Mullen Declaration, ¶ 2.) The plaintiffs’ success in publishing educationally useful works is confirmed whenever their books are excerpted by others for use in the classroom.
Each plaintiff generally favors granting permission, and each plaintiff generally charges a fee, usually shared equally with the author, for the right to copy portions of its works. Plaintiffs sometimes grant permission at no charge, and sometimes they deny permission, for example, when a request is to copy an excerpt so large that the plaintiff believes that the book should be purchased instead. (R. 42 Fisher Declaration, ¶¶ 2, 3, 4, 5; R. 42 Mullen Declaration, ¶¶ 2, 3, 4, 5, 10; R. 42 Van Rheinberg Declaration, ¶¶ 2, 3, 4, 11.)
Permission fees are modest in the individual case but are in the aggregate a substantial source of income for the plaintiffs: Princeton University Press received $42,700 from such fees from August 1991 through July 1992 and $17,300 more through December 1992; St. Martin’s Press received more than $125,000 in fiscal 1992; and Macmillan received $237,415 from April 1991 through March, 1992 and $241,000 more through December 1992. (See 855 F. Supp. at 911; R. 42 Fisher Declaration, ¶ 5; R. 42 Mullen Declaration, ¶ 5; R. 42 Van Rheinberg Declaration, ¶ 4′)
Indeed, as defendants knew before they made the copies at issue, publishers generally seek permission fees for the kind of copying and selling involved here. (R. 46 Smith Deposition, 177:9 to 202:21.) Defendants, however, as a matter of their routine practice do not seek permission from copyright holders, nor do they pay required licensing fees, when they create and sell their coursepack books to students. (See below, pp. 8-11.)
According to William Ternes, who was designated by defendants as an expert witness in their industry, defendants are thereby mavericks within the industry: Mr. Ternes, who owns and operates a copyshop that seeks permission to copy the copyrighted materials it includes in its coursepacks, testified that there are ten coursepack sellers in Ann Arbor, where the copying in suit occurred. Mr. Ternes believed that seven of the copyshops (including his) regularly obtain permission and pay the required fees. Mr. Ternes had no information as to two shops and the last one, defendant MDS, was the only one known to Mr. Ternes not to obtain permission or pay required fees when selling coursepacks containing copyrighted material. (R. 72 Exhibit A; Ternes Deposition, 81:25 to 82:4; 168:21 to 171:3.)
As the District Court noted, this provides the defendants with a tremendous competitive advantage over other copyshops:
“Defendants also are candid in admitting that the practice of not seeking permission from publishers has given them a market advantage . . . . The record is clear that the competitor copy service companies follow the procedures, get the required approval, and provide coursepack material to students. . . .
855 F. Supp. at 908. It is important to emphasize at the outset that this case is not about authorized coursepacks, nor about coursepacks in general, to which plaintiffs have no objection whatever. This case is about defendants’ coursepacks, made without the permission of copyright holders, and without the payment of licensing fees.
4. Defendants’ Infringements.
The declarations submitted with plaintiffs’ summary judgment motion establish that plaintiffs own the copyrights in the six works in suit. (R. 42 Goldstein Declaration, ¶¶ 3, 4, 5, 6, 7, 8; R. 42 Mullen Declaration, ¶ 7; R. 42 Van Rheinberg Declaration, ¶ 6.) Excerpts from these six books appear in three coursepack books sold by the defendants. The plaintiffs’ books are R. 27-32. The defendants’ coursepacks books are R. 33-35. For convenience, the excerpts from plaintiffs’ books, as they were reproduced in defendants’ books, are R. 41 Exhibits 3-8.
Defendants admit that at the start of the Winter 1992 semester at the University of Michigan, at defendants’ Ann Arbor store, they prepared and sold multiple copies of the three unauthorized coursepack books containing excerpts photocopied from plaintiffs’ books. The shortest excerpt copied was 17 pages The longest was 95 pages. The other four excerpts ranged from 45 to 78 pages. Defendants sold nearly five hundred copies of the three infringing coursepack books to college students at the University of Michigan during the Winter, 1992 semester. Defendants’ purpose was to profit. Defendants did not seek permission to copy any of the six excerpts in suit, nor did they pay any permission fees before selling multiple copies of the three coursepacks. (855 F. Supp at 907; R. 41 Exhibit 2 [Answer, ¶¶ 15, 19, 23, 27, 31, 35]; R. 41 Exhibit 12 [Defendants’ Admissions Responses, Nos. 1, 3, 5, 6, 7, 9, 10, 11]; R. 46 Smith Deposition, 64:21 to 65:9, 222:16 to 223:6; R. 41 Exhibit 21 [MDS Corporate Documents]; R. 41 Exhibit 13 (Defendants’ Letter Of September 17, 1992, p. 4]; R. 41 Exhibits 14 and 26 [Defendants’ Records Of Sales].)
The plaintiffs submitted uncontroverted evidence that, consistent with their usual practices, they would have granted permission to copy five of the six excerpts in suit for modest fees. (Permission to copy the sixth work, Macmillan’s Public Opinion by Walter Lippman, would have been denied because the excerpt requested was so large that Macmillan would prefer to ask students to buy the book itself, available in an inexpensive paperback edition.) (R. 42 Fisher Declaration, ¶¶ 5, 8, 9, 10, 11; R. 42 Mullen Declaration, ¶¶ 5, 8; R. 42 Van Pheinberg Declaration, ¶¶ 4, 7, 8.)
One of the excerpts that defendants copied is a 17-page excerpt from St Martin’s Press’s Where The Domino Fell: America and Vietnam 1945-1990, appearing in the coursepack assigned in Professor Lieberman’s History 218 course at the University of Michigan in the Winter, 1992 semester. On December 26, 1991, Kinko’s, a competitor of MDS, requested permission to make 550 copies of that excerpt for inclusion in the coursepack. On January 9, 1992, St. Martin’s granted permission and requested a fee of $440 (eighty cents per copy times 550 copies). (R. 42 Mullen Declaration, ¶ 9.)
The coursepack was never produced by Kinko’s and the fee was never collected by St. Martin’s Press. Instead, defendants MDS and Smith produced the coursepack and sold hundreds of copies, including the excerpt from Where The Domino Fell, without seeking St. Martin’s Press’s permission or paying a license fee. (R. 42 Mullen Declaration, ¶ 11.)
The six representative infringements in suit are, as the District Court found, but the “tip of the iceberg” of the thousands of infringements committed by the defendants each semester. 855 F. Supp. at 911. Defendants admit that in 1991 they sold multiple copies of approximately 700 different coursepack books (and could have sold as many as 25,000 books in total), and that in 1992 they sold multiple copies of approximately 1,000 different coursepack books. Defendants’ computer lists show that defendants made multiple copies of at least 2,900 copyrighted excerpts during the Winter, 1992 term alone at the University of Michigan (Ann Arbor), where the copying in suit occurred. That is only one of the fourteen schools at which defendants admit they sell or have sold coursepacks, and Smith has publicly stated his “best guess” that MDS makes multiple copies of 10,000 to 15,000 copyrighted excerpts each semester. (R. 47 Smith Deposition, 248:23 to 249:3, 293:17 to 293:23, 295:22 to 296:2, 296:19 to 297:20; R. 41 Exhibit 11 [Defendants’ Interrogatory Response 11]; R. 41 Exhibit 26 [Defendants’ Computerized Records Of Copied Excerpts].) This is infringement on a massive scale.
5. Defendants’ Willfulness.
The evidence of Smith’s and MDS’s willfulness begins with the decision in Basic Books Inc. v. Kinko’s Graphics Corp., 758 F. Supp. 1522 (S.D.N.Y. 1991), holding that unauthorized coursepacks like defendants’ infringe copyrights. Smith read Kinko’s, and then read widely in the area of copyright law looking for authority suggesting that Kinko’s was wrongly decided. (Defendants’ Brief, 47). He found no such authority, because there is none. See 855 F. Supp. at 912.
Together with his expert witness, William Ternes, Smith also consulted a lawyer, Lawrence Jordan. Although defendants in their brief ingenuously claim to rely upon that consultation as showing that they proceeded in “good faith” (e. g., Defendants’ Brief, 8-9), in fact, Mr. Jordan gave Smith no comfort and never said that defendants’ approach was in conformity with the law.
To the contrary, as Smith admitted, Mr. Jordan advised that defendants’ business of selling unauthorized coursepacks for profit was a “very risky proposition” (a conclusion that Smith admitted he had reached on his own), because Smith and MDS could be “held liable for copyright infringement.” (R. 47 Smith Deposition, 490:21 to 491:3; 491:19 to 491:21; R. 53 Exhibit A; Ternes Deposition, 77:15 to 77:25.)
Mr. Jordan also wrote a paper that Smith read (R. 58 Exhibit B; R 47 Smith Deposition, 484:23 to 486:2), advising copyshops to “heed Kinko’s warning”, and “always seek and obtain written permission before copying anything.” Mr. Jordan added:
“I am aware that the suggestions contained in this paragraph are not all economically desirable. It is sometimes a lawyer’s role to tell a business client that the law limits the business client’s profits. Please remember, in considering this paragraph, that the cost of copyright infringement can be substantially higher than lost profits.”
Thus, by the time Smith and MDS made and sold the copies involved here, they knew such copying had been held to be infringement, they had looked for but failed to find any authority to the contrary, and they had been advised by counsel not to make the copies without first obtaining written permission. They nonetheless went ahead.
Not only did defendants thus knowingly infringe, but they decided publicly to proclaim their willingness to infringe. Defendants sent out thousands of letters to professors “to try and solicit new business” by promising not to comply with the Kinko’s case and thereby to save the time and expense of seeking and paying for the permission from the copyright holders. Defendants boasted that their unauthorized coursepacks, as distinct from their competitors’, meant “No Delays Waiting for Permission” and “No Excessive Royalty Demands.” (R. 41 Exhibit 15 [Defendants’ Promotional Materials]; R. 47 Smith Deposition, 347:17 to 348:22; 384:25 to 385:6, 386:4 to 386:12; R. 41 Exhibit 16 (Defendants’ Letter To Professors].)
At the commencement of this action, plaintiffs moved for a preliminary injunction requiring defendants to seek permission and to pay license fees before photocopying and selling excerpts of plaintiffs’ copyrighted works in coursepacks. The District Court granted the requested relief from the bench on April 1, 1992, categorizing defendants’ conduct as a “clear misappropriation” of copyright (R. 41 Exhibit 9 [Hearing Transcript, 49, 51].) The District Court’s preliminary injunction order is reported at Princeton Univ. Press v. Michigan Document Servs., Inc., 22 U.S.P.Q. 2d (BNA) 1863 (E.D. Mich. 1992).
Even after Mr. Smith sat in the Courtroom and heard the Court’s remarks, defendants continued to engage in precisely the same practice as to all publishers other than the three plaintiffs, announcing:
“Under duress [the order of the court as embodied in the preliminary injunction], Michigan Document will seek permission for any articles belonging to Princeton University Press, McMillan, Inc. [sic] or St. Martin’s Press. . . . [However,] we will not seek permission from other publishers unless also forced to do so by order of the court.” (Emphasis supplied) (material in brackets added) .
(R. 41 Exhibit 19; R. 47 Smith Deposition, 517:19 to 518:20.)
B. Course of Proceedings and Disposition in Court Below.
On February 28, 1992, the Plaintiffs filed their complaint setting forth six causes of action for copyright infringement. (R. 41 Exhibit 1.) The plaintiffs also moved for and received the Preliminary injunctive relief discussed above.
On January 19, 1993, the plaintiffs moved for summary judgment. (R. 40-43, 46-47, 72.) District Judge Hackett referred the motion to Magistrate Judge Thomas A. Carlson, who issued a Report and Recommendation on December 17, 1993, recommending that the Court grant summary judgment to the plaintiffs and award plaintiffs permanent injunctive relief, statutory damages, and reasonable attorneys’ fees. (R. 87.) The plaintiffs objected to the Magistrate Judge’s conclusion that defendants’ infringements were not willful, and the defendants objected to the balance of the Report. (R. 89, 90.)
On June 9, 1994, the District Court adopted in part and reversed in part the Magistrate Judge’s Report, as reported at 855 F. Supp. 905. The Court upheld the award of summary judgment to plaintiffs, the award of an injunction and the award of attorneys’ fees. The District Court reversed the Report, however, on the issue of willfulness and damages: It declared the defendants to be willful copyright infringers and increased the award of statutory damages from $3,000 to $30,OO0 ($5,000 per work). The Court engaged in a careful review of the undisputed facts and controlling law, and concluded:
“This court is compelled to see this practice for what it is. The defendant is taking the property of another without right or permission, using that property for personal gain. There simply is no excuse for this conduct.”
855 F. Supp. at 908.
Under Fed. R. Civ. P. 56, summary judgment is appropriate when no “genuine issue” of “material fact” exists to be tried:
“Rule 56(c) mandates the entry of summary judgment, after adequate time for discovery and upon motion, against a party who fails to make a showing sufficient to establish the existence of an element essential to that party’s case, and on which that party will bear the burden of proof at trial.”
Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). As both Judge Hackett and Magistrate Judge Carl son found, the historical facts are not in dispute (855 F. Supp. at 907), and in their brief on this appeal, defendants do not identify any issue of fact about which there was controverted evidence.
I. DEFENDANTS INFRINGED PLAINTIFFS’ COPYRIGHTS BY COPYING AND SELLING LENGTHY EXCERPTS FROM PLAINTIFFS’ COPYRIGHTED WORKS.
A. Plaintiffs Proved They Hold Valid Copyrights In The Six Works.
To establish a prima facie case of copyright infringement, plaintiffs must show (1) ownership of valid copyrights and (2) copying by the defendants. Robert R. Jones Assoc. Inc. v. Nino Homes, 858 F.2d 274, 276 (6th Cir. 1988); Wickham v. Knoxville Int’l Enerqy Exposition. Inc., 739 F.2d 1094 (6th Cir. 1984).
For four of the six works in suit, plaintiffs submitted copyright registration certificates filed within five years of first publication of the work, naming the respective plaintiffs as copyright claimants. (See R. 42, exhibits to Goldstein, Mullen and Van Pheinberg Declarations.) Such certificates are prima facie proof that plaintiffs are the copyright holders of those works. 17 U.S.C. § 410(c); Gaste v. Kaiserman, 863 F.2d 1061 (2d Cir. 1988). Defendants submitted no evidence in an effort to rebut the prima facie case.[FN 1]
For the remaining two works in suit, Public Opinion and Political Ideology: Why The American Common Man Believes What He Does, plaintiff Macmillan submitted author contracts and copies of renewal certificates for the works on file at the Copyright Office. (R. 42 Goldstein Declaration, ¶¶ 3, 4, 5, 6.) Defendants argue (Defendants’ Brief, n.22) that the renewal certificates raise a fact issue because they are in the name of the authors, but defendants misunderstand the law: renewals were then required by law to be filed in the author’s — and not the publisher’s — name, even when the publisher had an assignment of the rights. The author contracts conveyed all relevant rights to Macmillan, including copyright renewals. See 2 Nimmer on Copyright, 9.06 (B) .
B. Copying And Selling Were Admitted
Defendants admit that they made and sold multiple copies of the three unauthorized coursepack books containing excerpts from plaintiffs’ six works See above at p. 7
Thus, a prima facie case of copyright infringement was established as a matter of law.
II. THE FAIR USE DEFENSE DOES NOT PROTECT DEFENDANTS’ COPYING.
The fair use doctrine, in limited circumstances, permits quotation or copying of small parts of copyrighted works without permission of the copyright holder, generally when the quotation or copying has no adverse commercial consequences to the copyright holder. Examples of fair use may be found in Sony Corp. v. Universal City Studios. Inc., 464 U4S4 417 (1984) (copying of televised programs onto videotapes for personal viewing later); National Rifle Ass’n v. Handgun Control Fed’n, 15 F.3d 559 (6th Cir.) (noncommercial copying of list of legislators’ addresses by political organization debating gun control issue), cert. denied, 115 S.Ct. 71 (1994); Consumers Union of United States. Inc. v. General Signal Corp., 724 F.2d 1044, 1050 (2d Cir. 1983) (quotation of a few sentences from product review in commercial for product), cert. denied, 469 U.S. 823 (1984); Elsmere Music. Inc. v. NBC, 623 F.2d 252 (2d Cir. 1980) (use in parody of some content of work parodied).
Fair use is an affirmative defense, and its proponents bear the burden of proving it. Camnbell v. Acuff-Rose Music, 114 S.Ct 1164, 1177 (1994); American Geophysical Union v. Texaco, Inc., No. 92-9341, 1994 U.S. App. LEXIS 30437, at *15 (2d Cir October 28, 1994), (“the party claiming that its secondary use of the original copyrighted work constitutes a fair use typically carries the burden of proof as,to all issues in the dispute”).
The fact that a fair use defense was claimed here does not mean that a trial is required; the defense is commonly dismissed on summary judgment. See e.g. , Stewart v. Abend, 495 U.S. 207, 238 (1990); Rogers v. Koons, 960 F.2d 301, 308-09 (2d Cir.), cert. denied, 113 S.Ct. 365 (1992); Cable/Home Communication Corp. v. Network Productions. Inc. 902 F.2d 829, 843-45 (11th Cir. 1990); Supermarket of Homes, Inc. v. San Fernando Valley Board of Realtors, 786 F.2d 1400, 1408-09 (9th Cir. 1986) (all granting summary judgment to the copyright holder and rejecting fair use defenses).
A. The Fair Use Defense Is Not Available To An Infringer Who Seeks To Profit By Making And Selling Multiple Copies Of The Copyrighted Material Owned By Its Competitors.
The fair use defense was unsuccessfully pursued by a commercial copyshop in a case identical to this one, Basic Books Inc. v. Kinko’s Graphics Corp., 758 F. Supp. 1522 (S.D.N.Y. 1991). The District Court here conducted an independent fair use analysis, while correctly noting that the Kinko’s decision was “persuasive” and concluding that the decision was “not sufficiently distinguishable to be inapplicable to this case, as defendants would argue.” 855 F. Supp. at 911.
Defendants claim, like the defendant in Kinko’s, that the “fair use” defense applies here because coursepacks are used in the classroom and have educational value. (Defendants’ Brief, 5). Of course, any such educational value comes precisely from the fact that defendants’ coursepacks are the means by which students acquire excerpts of plaintiffs’ educational materials.
Plaintiffs and defendants are all in the business of selling valuable educational materials. Plaintiffs sell educational works that they hope will be bought and used by students; they are not thereby excused from paying royalties to the authors who write the books or to the holders of copyrights in materials they excerpt. Plaintiffs, who published the educational materials in suit in the first place, do not and may not freely pirate from each other; why should the defendants’ profit-seeking business alone be excused from the obligation of paying royalties to the copyright holders?
The fair use defense is unavailable where, as here, the defendants simply take plaintiffs’ products, copy them, and resell them in the market where plaintiffs are selling. Plaintiffs work hard to sell copyrighted materials to students; defendants cannot simply copy the copyrighted materials and sell them to the students without permission and claim “fair use.” Such a plainly commercial use, motivated solely by the desire to profit at the expense of a competitor, has never been upheld as “fair use.” As the Second Circuit recently confirmed:
“[C]ourts will not sustain a claimed defense of fair use when the secondary use can fairly be characterized as a form of ‘commercial exploitation,’ i.e., when the copier directly and exclusively acquires conspicuous financial rewards from its use of the copyrighted material.”
Texaco, 1994 U.S. App. LEXIS 30437 at *30.
Moreover, the courts have, at least on four prior occasions, held verbatim copying of course materials for distribution to students to be copyright infringement and not fair use, even in the absence of a profit motive. See Marcus v. Rowley, 695 F.2d 1171 (9th Cir. 1983) (summary judgment granted against defendant teacher who copied eleven pages from another teacher’s home economics instructional book); Wihtol v. Crow, 309 F.2d 777 (8th Cir. 1962) (no fair use where defendant teacher arranged plaintiff’s original musical composition for school choirs and provided students with copies); Encyclopedia Britannica Educ. Corp. v. Crooks, 542 F. Supp. 1156 (W.D.N.Y. 1982) (denying fair use defense asserted by non-profit educational consortium that copied portions of plaintiff’s educational films for use in schools); Macmillan Co. v. King, 223 F. 862 (D. Mass. 1914) (professor who tutored students infringed plaintiff’s work by providing students with memoranda quoting and paraphrasing sections of plaintiff’s work).
The message of these cases is that just as those who supply pens and paper to schools must buy them from the manufacturers rather than misappropriate them, so too those who would supply educational materials to students must “buy” and not simply take them from the copyright holders.
Defendants have it precisely backwards when they argue that the constitutional purpose behind copyright — to “promote the Progress of Science and useful Arts” — favors their unrestricted copying and selling of excerpts from copyrighted works (see, e.g., Defendants’ Brief, 12). The cases are clear that widespread for-profit competitive copying like that in suit would destroy the very “progress” that the Constitution seeks to foster. As the Supreme Court has said:
“[I]t should not be forgotten that the Framers intended copyright itself to be the engine of free expression. By establishing a marketable right to the use of one’s expression, copyright supplies the economic incentive to create and disseminate ideas . . . [A]s one commentator has noted: ‘If every volume that was in the public interest could be pirated away by a competing publisher . . . the public [soon] would have nothing worth reading.’”
Harper & Row PubIishers, Inc. v. Nation Enter., 471 U.S. 539, 558- 59 (1985); see also Mazer v. Stein, 347 U.S. 201, 209 (1954):
“The economic philosophy behind the clause empowering Congress to grant patents and copyrights is the conviction that encouragement of individual effort by personal gain is the best way to advance public welfare through the talents of authors and inventors in ‘Science and useful Arts.’”
Defendants also miss the point when they complain that the District Court treated copyrights as “property.” (Defendants’ Brief, 12-13 n.6.) Copyrights, commonly referred to as “intellectual property,” can be bought, sold, used as security for a loan, and bequeathed by will (see. e.g., 17 U.S.C. 201(d)); they plainly are property. As Harper and Row and Mazer v. Stein recognized, the public interest is served when the creation of works is encouraged by the congressional grant of the exclusive rights we call “copyright.” Nor does it matter that some authors want their writings distributed in coursepacks (Defendants’ Brief, 7-8, 20, 35). The views of authors who have assigned their copyrights to publishers do not control, precisely because the rights have been assigned. See, e.g., American Geonhysical Union v. Texaco. Inc., 802 F. Supp. 1, 27 (S.D.N.Y. 1992), aff’d, No. 92-9341, 1994 U.S. App. LEXIS 30437 (2d Cir. October 28, 1994). If authors insisted on controlling the distribution and economic exploitation of their works rather than leaving it to publishers, their works might not be published in the first instance.
B. The Legislative History Of The Copyright Act Of 1976 Clearly Shows Congress’s Intent To Deny The Fair Use Defense To Copying Like That At Issue Here.
During the deliberations that led to the 1976 Copyright Act, the Congress adopted guidelines (“the Classroom Guidelines”) setting forth the extent to which copying small amounts for non-profit educational purposes could be “fair use.” The Classroom Guidelines are part of the legislative history of the Copyright Act and, according to both the House and Conference Reports, they express Congress’s view on educational fair use. H.R. Rep. No. 1476, 94th Cong., 2d Sess. (1976), H.R. Conf. Rep. No. 1733, 94th Cong., 2d Sess. (1976). The Classroom Guidelines, while not law, are persuasive in educational copying cases. Kinko’s, 758 F. Supp. at 1535-37; Marcus v. Rowley, 695 F.2d at 1178; Texaco, 1994 U.S. App. LEXIS 30437, at *19 (Classroom Guidelines are “persuasive authority marking out certain minimum standards for educational fair uses”).
The Classroom Guidelines present a “safe harbor” for non-profit copying for educational purposes of “not more than 1,000 words” when “the inspiration and decision to use the work and the moment of its use for maximum teaching effectiveness are so close in time that it would be unreasonable to expect a timely reply to a request for permission.” H.R. Rep. No. 1476 at 68-71.
The Classroom Guidelines only allow copying of individual excerpts, not the assembly of book-length compilations like defendants’ coursepacks, and they expressly “prohibi[t] . . . [c]opying used to create . . . anthologies, compilations, or collective works.” H.R. Rep. No. 1476 at 69; see Kinko’s, 758 F. Supp. at 1537 (“the fact that these excerpts were placed in anthologies weighs significantly against defendant”)[FN 2]
Defendants here are entirely outside the Classroom Guidelines for each of the following reasons: (1) they copy for profit, (2) they are making anthologies, (3) each one of the excerpts at issue is far longer than the 1,000 words provided in the Guidelines (the shortest excerpt here exceeds 8,000 words) and (4) because the professors decide to assign the readings in defendants’ books in advance, before the start of the semester, there is ample time to seek permission to copy the readings.
C. Defendants Erroneously Argue That The Statutory Definition Of Fair Use Supports Their Copying.
Fair use is codified in 107 of the Copyright Act, which provides in pertinent part:
“[T]he fair use of a copyrighted work, including such use by reproduction in copies . . . for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include –
- ” the purpose and character of the use, including whether such use is a commercial nature or is for non-profit educational purposes;
- ” the nature of the copyrighted work;
- ” the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
- “the effect of the use upon the potential market for or value of a copyrighted work.”
Defendants argue that, as a matter of “statutory construction,” the “illustrative” uses set forth in the preamble to § 107 are fair use per se: “The Copyright Act states that the reproduction of copyrighted works for classroom use is a fair use.” (Defendants’ Brief, 13). This is flatly wrong; § 107 does not say any such thing. It says that a “fair use” for one of the illustra- tive purposes is not an infringement, and refers to the four factors to be considered in making the determination whether any given use is, in fact, a fair use.
Moreover, no case — not one — has ever found a use “fair” simply because the copying was for one of § 107’s “illustrative” purposes, be it “multiple copies for classroom use,” “news reporting,” or “criticism or comment” in the form of parody.
In Campbell v. Acuff-Rose Music, 114 S.Ct. 1164 (1994), for example, the Supreme Court reiterated that “the mere fact that a use is educational and not for profit does not insulate it from a finding of infringement. . . .” 114 S.Ct. at 1174. As set forth above (p. 18) the courts have specifically and consistently held that copying of substantial excerpts from educational copyrighted works in the “multiple copies for classroom use” context, even when not-for-prof it, is not a “fair use.”
In Acuff-Rose Music the Supreme Court expressly rejected a “per se” claim by a parodist: “Petitioner’s suggestion that any parodic use is presumptively fair has no more justification in law or fact than the equally hopeful claim that any use for news reporting should be presumed fair.” Id. at 1172; see also 1170 n. 9. Indeed, in Harper & Row. Publishers Inc. v. Nation Enter., 471 U.S. 539 (1985), the Court rejected a fair use defense concededly involving “news reporting.” 471 U.S. at 561 (noting that the drafters of the Copyright Act had “resisted pressures from special interest groups to create presumptive categories of fair use”).
Thus, the “illustrative” uses in § 107, like all other claimed “fair uses,” require an analysis of four factors specified in the statute. Acuff-Rose Music 114 S.Ct. at 1170 n.9 (citing legislative history); Harper & Row, 471 U.S. at 561 (same). Consideration of these four factors confirms that the fair use defense is not available here.
1. The Purpose And Character Of Defendants’ Use Is To Profit, And The Defendants May Not Conceal That Purpose Behind The Nonprofit Educational Purposes Of Their Customers.
As the District Court found, this case involves “pure copying for profit.” 855 F. Supp. at 909. The Supreme Court has repeatedly instructed that “the ‘fact that a publication [is] commercial as opposed to nonprofit . . . tends to weigh against a finding of fair use.”‘ Acuff-Rose Music, 114 S.Ct. at 1774 (citing Harper & Row and Sony Corp. v. Universal City Studios, Inc., 464 U.S. 417 (1984)). Defendants’ profits here came directly from the sale of plaintiffs’ copyrighted material.
We noted above (at pp. 17-18) that the Texaco opinion states that the fair use defense is not available in connection with the unauthorized copying and selling of copyrighted materials. Interestingly, even the Texaco dissent observed that “the articles are not re-sold or retailed in any way” and concluded that “[i]f the copies were sold by [Texaco’s scientists], that would be a telling — possibly determinative fact.” Texaco, 1994 U.S. App. LEXIS 30437, at *79 .
Plaintiffs and defendants all market and sell materials that they hope will be purchased and used in the classroom. When, as here, a commercial use competes in the same market as the copyrighted work, the “commerciality” is even “more harmful to the copyright holder” and the first factor cuts even more strongly against defendant. Acuff-Rose Music, 114 S.Ct. at 1171 (the “central purpose” of the first factor inquiry “is to see . . . whether the new work merely ‘supersedes the objects’ of the original [work]”); Harper & Row, 471 U.S. 539, 562; Iowa State Univ Research Found., Inc. v. ABC, 621 F2d 57, 67 (2d Cir. 1980); Weissmann v. Freeman, 868 F.2d 1313, 1324 (2d Cir.), cert. denied, 493 U.S. 883 (1989); Kinko’s, 758 F. Supp., 1522, 1532; Bridge Publications. Inc. v. Vien, 827 F. Supp. 629, 635 (S.D. Cal. 1993) (no fair use when defendant seller of educational materials used plaintiffs’ work “for the same intrinsic purpose as plaintiffs”).
Defendants assert, without any reference to authority, that under the “plain language” of § 107, students and professors could have undertaken the copying in suit without seeking permission or paying fees and that the decision below somehow curtails the rights of professors and students. (Defendants’ Brief, 16-17). But the court below said nothing about the rights of professors and students, and this case, like Kinko’s, does not require a decision about “copying performed by students, libraries, nor on-campus copyshops.” Kinko’s, 758 F. Supp. at 1537, n.13. As the Kinko’s court held,
“The use of the Kinko’s packets, in the hands of the students, was no doubt educational. However, the use in the hands of Kinko’s employees is commercial.”
758 F. Supp. at 1531. The professors and students here are the customers, not the copiers. The defendants’ copying in this case is “for” students in exactly the same sense that plaintiffs’ printing of textbooks is “for” students.
The legislative history of the Copyright Act underscores the difference between copying by defendants and copying by professors and students. See H.R. Rep. No. 1476, 94th Cong., 2d Sess. 74: “It would not be possible for a non-profit institution, by means of contractual arrangements with a commercial copying enterprise, to authorize the enterprise to carry out copying and distribution functions that would be exempt if conducted by the non-profit institution itself.”
Under the cases the difference between MDS and its customers is plain: The “crux of the profit/nonprofit distinction is not whether the sole motive of the use is monetary gain but whether the user stands to profit from exploitation of the copyrighted material without paying the customary price.” Harper & Row, 471 U.S. at 562. In Texaco, the Second Circuit said:
“The commercial/nonprofit dichotomy concerns the unfairness that arises when a secondary user makes unauthorized use of copyrighted material to capture significant revenues as a direct consequence of copying the original work.”
1994 U.S. App. LEXIS 30437, at *29. That is exactly what happened here, where defendants seek to profit directly from the exploitation of plaintiffs’ copyrighted material without paying the “customary price.”
The Harper & Row “customary price” requirement was recently applied in Los Ange1es News Serv. v. Tullo, 973 F.2d 791 (9th Cir. 1992). In Tullo, the plaintiff owned the copyrights in unedited videotaped news footage. It licensed the footage to television stations and networks, which then edited the footage and used it in broadcast news shows. Defendant AVRS recorded news shows and sold tapes including excerpts of the shows — containing plaintiff’s footage — to interested persons. As in this case, AVRS simply copied portions of plaintiffs’ works and sold them for profit. AVRS unsuccessfully argued that its sale of video news clips was a fair use because of the non-profit uses of the clips by its customers. specifically, AVRS argued that the use was “news reporting,” that “its clients used the tapes for ‘research, scholarship and private study,’ and therefore [that its] use must be considered fair in light of Sony Corp. . . . .” 973 F.2d at 797 (citations omitted) . The Court rejected the argument that a commercial seller of copyrighted works could hide behind the non-profit use of its customers (id.):
“[A video tape recorder] owner who tapes a copyrighted movie broadcast over a public television station to watch at home at a later time is protected by the fair use doctrine, but a VTR owner who tapes the movie to sell copies to others without the copyright owner’s consent is subject to a range of civil and criminal sanctions. . . . AVRS is no more a ‘news reporter’ than the VTR owner who tapes a publicly broadcast movie is a filmmaker.”
Defendants here are no more “educators” than AVRS was a “news reporter.”
Similarly, in Lotus Dev. Corp. v. Borland Int’l, 831 F. Supp. 223 (D. Mass. 1993), the defendant argued that its sale of plaintiffs’ copyrighted programs was not the “use” that counted, but rather, the Court should focus on the “use” by defendants’ customers and declare the defendants’ acts to be a fair use. The Court rejected the argument:
“The consumer’s use of the part of Quattro Pro that Borland copied from Lotus, however, does not change the character of Borland’s use of the copied materials — to please consumers and increase sales. . . . The fair use issues in this case properly focus on Borland’s use (and not the consumer’s use) of the infringing products. Otherwise, a book store could copy and sell ‘Gone With The Wind’ without permission. The books store would rely on the consumer’s private use of the copied material to claim that its copying is a fair use.”
331 F. Supp. at 241-42 (emphasis original).
Defendants’ commercial copying and sale of plaintiffs’ works means that the first factor cuts sharply in favor of a finding of infringement.
2. The Nature Of The Copyrighted Works Is That They Are Original, Educational Works With A Limited Market.
Works with relatively limited markets, such as newsletters and textbooks, are generally subject to very limited fair use copying, particularly by those seeking to participate in the same market. The legislative history of the Copyright Act states that “[t]extbooks and other material prepared primarily for school markets would be less susceptible to reproduction for classroom use than material prepared for general public distribution.” S. Rep No. 473, 94th Cong., 1st Sess. 64 (1975); 3 Nimmer on Copyright, 13.05 [A) . This case presents exactly the situation envisaged by Congress.
Defendants argue (Defendants’ Brief, 26) that plaintiff’s non-fiction works should receive little, or no, copyright protection, citing Feist Publications v. Rural Tel. Serv. Co., 499 U.S. 340 (1991). As this court noted in National Rifle Ass’n v. Handgun Control Fed’n, 15 F.3d 559, 562 n.2. (6th Cir.), cert. denied, 115 S.Ct. 71 (1994), Feist simply held that a “white pages” phone directory was not original enough to be copyrighted. Here, as the District Court found, as is evident from the works themselves, and as defendants have never disputed, plaintiffs’ works are original, creative works of authorship entitled to copyright protection.
Defendants also argue that the fact that two of Macmillan’s works were out of print favors defendants’ copying, because the works were therefore “unavailable.” (Defendants’ Brief, 28). The record is clear, however, that Macmillan always grants permission to copy from such works, and would have done so here. Indeed, the fees earned through permissions are virtually the only way an owner of the copyright in an out-of-print work can earn revenues from the work. (R. 42 Fisher Declaration, ¶¶ 4, 9, 10.)
We note that in the Kinko’s case, the Court held that the second factor weighed in Kinko’s favor, and nonetheless rejected the fair use defense, and declared Kinko’s a willful infringer because it should have known that its activities were not fair use. Kinko’s, 758 F. Supp. at 1533.
3. Defendants Copied And Sold Substantial Amounts From Plaintiffs’ Copyrighted Works.
a. Quantitative Substantiality.
In Kinko’s, an excerpt as short as 14 pages (5.2% of the infringed work) was held too long to be fair use. All of the excerpts in suit here exceed 14 pages and are 5% or more of the work. Courts have routinely found copying of similar (and smaller) excerpts not to be fair use. See, e.g., Marcus v. Rowley, 695 F.2d 1171 (9th Cir. 1983) (11 pages of instructional home economics book for educational purposes); Radji v. Khakbaz, 607 F. Supp. 1296 (D.D.C. 1985) (10% of book); Martin Luther King Jr. Ctr. for Social Change. v. American Heritage Prods., 508 F. Supp. 854 (N.D. Ga. 1981) (eight sentences of copyrighted speech), rev’d on other grounds, 694 F.2d 674 (11th Cir. 1983); Harper & Row, 471 U.S. at 565 (300 words quoted and a few sentences paraphrased from President Ford’s 200,000-word memoirs for news purposes); College Entrance Book Co. v. Amsco Book Co., 119 F.2d 874 (2d Cir. 1941) (list comprising 15% of book); Amana Refrigeration Inc. v. Consumers Union of United States, Inc., 431 F. supp. 324 (N.D. Iowa 1977) (paragraph of magazine article); Henry Holt & Co. v. Liggett & Myers Tobacco Co., 23 F. Supp. 302 (D. Pa. 1938) (three sentences of medical treatise).
Additionally, the smallest excerpt in suit is approximately 8,000 words, eight times longer than the 1,000 word “safe harbor” set forth in the Classroom Guidelines.
Plaintiffs’ works, like many nonfiction works, contain quotations that are in the public domain or from works copyrighted by third parties. But unlike the “white pages” in Feist (above at p. 28), it is clear that the plaintiffs hold copyrights both in their new, original material and in the combination of pre-existing materials with the new material. Defendants here did not copy only the preexisting material that plaintiffs did not own; defendants copied lengthy sections of entire pages from plaintiffs’ works, including the original material. See 17 U.S.C. §103 (affording copyright protection to derivative works and compilations).
Defendants claim that one third of the excerpt they copied from Princeton University Press’s Farewell To The Party Of Lincoln is “not original to the author.” (Defendants’ Brief, 29-30.) The excerpt that defendants copied from that work is 95 pages long. Thus, taking defendants’ claim as true, there is no dispute that defendants copied and sold for profit about 60 pages of original material from that work, a plainly substantial amount.
b. Qualitative Substantiality.
By definition, anthologizing involves qualitatively significant excerpts:
“[T]he portions copied were critical parts of the books copied, since that is the likely reason the college professors used them in their classes. . . . While it may be impossible to determine, as the Court did in Harper & Row, that the quoted material was ‘essentially the heart of’ the copyrighted material, Id. at 565, it may be inferred [from the sole fact that they were copied] that they were important parts.”
Kinko’s, 758 F. Supp. at 1533 (material in brackets added). Similarly, the District Court here properly found that the excerpts could not be characterized as “insubstantial or incidental references,” 855 F. Supp. at 910, and defendants made no effort to prove otherwise.
It stands to reason that professors are not assigning to their students trivial or irrelevant portions of books. Indeed, defendants admit, and advertise, that their anthologies allow professors to assemble together in one place the most important sections of many different works. (R. 41 Exhibit 22 [Defendants’ Promotional Materials].). See Pacific & Southern Co. v. Duncan, 744 F.2d 1490, 1497 n.11 (11th Cir. 1984) (“The single story involving a particular subject is by far the most significant portion of the newscast for that potential customer“) (emphasis added), cert. denied 471 U.S. 1004 (1985).
Analysis of the third factor shows that it too favors the conclusion that defendants are infringers.
Defendants do not dispute (Defendants’ Brief, 30) that the effect of their use upon “the potential market for or value of the copyrighted work” is “the single most important element of [the] fair use [analysis].” Harper & Row, 471 U.S. at 566; National Rifle Ass’n v. Handgun Control Fed’n, 15 F.3d 559, 561 (6th Cir.), cert. denied, 115 S.Ct. 71 (1994); Twin Peaks Prods. v. Publications Int’l, 996 F.2d 1366, 1377 (2d Cir. 1993). The effect need not be large for this factor to cut against the use; as Congress recognized:
“Where the unauthorized copying displaces what might realistically have been a sale, no matter how minor the amount of money involved, the interests of the copyright owner need protection. Isolated instances of minor infringements, when multiplied many times, become in the aggregate a major inroad on copyright that must be prevented “
H.R. Rep. No. 83, 90th Cong., 1st Sess. at 35 (1967). Thus, “to negate fair use one need only show that if the challenged use ‘should become widespread, it would adversely affect the potential market for the copyrighted work.’” Harper & Row, 471 U.S. at 568 (emphasis in original); Campbell v. Acuff-Rose Music, 114 S.Ct. 1164, 1177 (1994) (courts must consider not only “particular actions of alleged infringer” but also impact of potential “unrestricted and widespread conduct of the sort engaged in by the defendant”).
Defendants do not dispute that Princeton University Press received $42,700 from “permissions” fees from August 1991 through July 1992 and $17,300 more through December 1992; St. Martin’s Press received more than $125,000 in fiscal 1992; and Macmillan received $237,415 from April 1991 through March, 1992 and $241,000 from April 1992 through December 1992. (See 855 F. Supp. at 911; R. 42 Fisher Declaration, ¶ 5; R. 42 Mullen Declaration, ¶ 5; R. 42 Van Rheinberg Declaration, ¶ 4.) If defendants’ use is upheld as “fair,” MDS’s competitors in the coursepack industry, who currently seek permission and pay royalties, would abandon the permissions market. The loss to copyright holders would be huge. See e.g., 3 Nimmer On Copyright, 13.05 [E)] [l] at 13-225 to 13-226 (1994) (“unrestricted photocopying practices could largely undercut the entire law of copyright”).
Defendants argue that plaintiffs “have not been able to document the loss of a single sale of any work at issue” and therefore lose on the fourth factor analysis. (Defendants’ Brief, 30.) Defendants’ sales of copies of excerpts from plaintiffs’ works plainly deprive plaintiffs of income. The copyrights at issue benefit the publishers and authors economically both by assuring them the exclusive rights to sell books, and by assuring them the exclusive rights to sell permissions allowing others to reproduce and sell excerpts of the books.
The loss of licensing fees is one type of harm contemplated by the fourth fair use factor: “[T]he licensing of derivatives is an important economic incentive to the creation of originals. . . The enquiry ‘must take account not only of harm to the original but also of harm to the market for derivative works.’” Acuff-Rose Music, 114 S.Ct. at 1177-78; quoting from Harper & Row.[FN 3]
Thus, in Stewart v. Abend, 495 U.S. 207, 238 (1990), the Supreme Court denied a fair use defense to film producers who re-released a film after their license to use the underlying story had lapsed. The re-release of the film could not possibly have harmed sales of the story itself, but the Court found that “common sense” indicated that it might harm future sales of rights to the story to other filmmakers. See also American Geophysical Union v. Texaco Inc., No. 92-9341, 1994 U.S. App LEXIS 30437 at *61-64 (2d Cir. October 28, 1994) (economic harm from lost photocopying license fees); Kinko’s, 758 F. Supp. at 1534 (unauthorized coursepacks harm copyright holders by depriving them of photocopying license fees); Harper & Row, 471 U.S. at 567 (copying resulted in plaintiffs’ loss of income from licensing right to publish brief excerpts); Twin Peaks Prods. v. Publications Int’l Ltd., 996 F.2d 1366, 1377 (2d Cir. 1993); United Tel. Co. v. Johnson Pub. Co., 855 F.2d 604 (8th Cir. 1988); DC Comics Inc. v. Reel Fantasy. Inc., 696 F.2d 24, 28 (2d Cir. 1982); Financial Information Inc. v. Moody’s Investor Servs. Inc., 751 F.2d 501, 509-10 (1984), aff’d, 808 F.2d 204 (2d Cir. 1986), cert. denied, 484 U.S. 820 (1987); Richard Anderson Photography v. Brown, No. 85-0373-R, 1990 U.S. Dist. LEXIS 19846 at *4 (W.D. Va. Apr. 16, 1990); New Line Cinema Corp. v. Bertlesman Music Group, Inc., 693 F. Supp. 1517, 1528-29 (S.D.N.Y. 1988); Telerate Sys. Inc. v. Caro, 689 F. Supp. 221, 230 (S.D.N.Y. 1988).
Defendants rely on Williams & Wilkins Co. v. United States, 487 F.2d 1345, 1357 n.19 (Ct. Cl. 1973), aff’d by an equally divided Court, 420 U.S. 376 (1975), to argue that plaintiffs’ demonstration of lost licensing income is irrelevant because the plaintiffs were never entitled to that income in the first place. In Williams & Wilkins, however, which involved copying by a nonprofit government research library, there was no functioning market for photocopy licenses. 487 F.2d at 1345.
Here, in contrast, there is a large, well-established market in which plaintiffs and other copyright holders profit by selling permission to copy excerpts of their works (see above at pp. 4-6). There exist, as the District Court found, “clear and relatively simple procedures in place” for copyshops to seek permission in that licensing market. 855 F. Supp. at 908. When defendants make and sell a coursepack with an excerpt from one of the plaintiffs’ works, that plaintiff loses the licensing income it would receive if the coursepack were made by one of defendants’ competitors. Thus, this case is similar to Texaco, where the Court said:
“Since the Copyright Act explicitly provides that copyright holders have the ‘exclusive rights’ to ‘reproduce’ and ‘distribute copies’ of their works, see 17 U.S.C. § 106 (1)&(3), and since there currently exists a viable market for licensing these rights for individual journal articles, it is appropriate that potential licensing revenues for photocopying be considered in a fair use analysis.”
1994 U.S. App. LEXIS 30437, at *61.
Defendants argue that, in general, “the use of coursepacks increases the value of, and the market for, the copyrighted work. (Defendants’ Brief, 31.) Defendants, however, offered no evidence to prove this about any of the works in suit. Even if they had, such “favorable evidence, without more, Is no guarantee of fairness.” Acuff-Rose Music, 114 S.Ct. at 1177 n.21 (example of song that enjoys increased sales from unauthorized inclusion in successful film). Thus, a new movie version of Gone With The Wind might well stimulate sales of the book, but nonetheless a license is necessary. The copyright holder is entitled both to the license fee from the film producer and to the additional sales of the book.
Defendants also argue that they should be allowed to copy plaintiffs’ copyrighted works as a fair use because, they assert, plaintiffs’ existing systems for granting permissions are a “disaster.” (Defendants’ Brief, 33 n. 19.) None of the declarations submitted by the defendants, however, in fact include any criticism of the permissions systems of the plaintiffs, and none assert that the plaintiffs have ever processed requests in anything other than the “clear and relatively simple” manner found by the District Court. 855 F. Supp. at 905.
On the other hand, the plaintiffs have demonstrated that they favor granting permission, and that requests to photocopy materials for the classroom are prioritized so that plaintiffs’ educational materials can be made available to the students promptly. (R. 42 Van Rheinberg Declaration, ¶ 5; R. 42 Mullen Declaration, ¶ 6; R. 42 Fisher Declaration, ¶ 6.) An example was set forth above (at p. 8); St. Martin’s Press responded positively, and promptly, to Kinko’s request to copy the excerpt that defendants then copied without permission.
The record demonstrates that defendants’ competitors seek permission and pay required fees under the existing permissions systems. The record here does not include evidence of a single coursepack seller (other than defendants) who produce and sell their coursepacks without first obtaining permission. As the District Court found, defendants should play by the same rules as their competitors, and lose their “market advantage” over them that comes from infringement. 855 F. Supp. at 905.
In any event, even if defendants had any evidence that plaintiffs’ permissions systems did not work well, the argument would be irrelevant as a matter of law. The plaintiffs have the right to say “no” to requests for permission. They are not required to say “yes,” or to say “yes” quickly and efficiently, or otherwise to respond under a system that satisfies the defendants. See e.g. Stewart v. Abend, 495 U.S. 207, 228-29 (1990) (“a copyright owner has the capacity arbitrarily to refuse to license one who seeks to exploit the work”); Pacific & Southern Co. v. Duncan, 744 F.2d 1490, 1496 (11th Cir. 1984), cert. denied, 471 U.S. 1004 (1985); F.E.L. Publications. Ltd. v. Catholic Bishop of Chicago, 214 U.S.P.Q. (ENA) 409, 412 (7th Cir. 1982).
The plaintiffs’ clear loss of licensing income when defendants copy without permission means that the highly important fourth factor strongly supports the conclusion of infringement. More broadly, the consideration of all four factors as discussed above shows that the fair use defense is unavailable as a matter of law to these defendants whose business is simply to copy and sell the copyrighted works of others.
Ignore Heading – Content
III. THE COPYRIGHT ACT IS NOT UNCONSTITUTIONALLY VAGUE
Defendants argue that if their conduct is unlawful, then § 106 (exclusive rights) and §107 (fair use) of the Copyright Act are “unconstitutionally vague” because the Act, its legislative history and the cases, gave defendants no notice that their conduct was unlawful. (Defendants’ Brief, 41).
Section 106 of the Copyright Act is set out in plain English; it gives copyright holders the exclusive right to distribute and sell copies of their works. No court has ever struck such provisions from the copyright law. See, e.g., United States v. Wise, 550 F.2d 1180, 1186 (9th Cir.) (“[I]t is clear that any act which is inconsistent with the exclusive rights of the copyright holder, as enumerated [in the Act], constitutes infringement”), cert. denied, 434 U.S. 929 (1977); see also United States v. Taxe, 540 F.2d 961, 965 (9th Cir. 1976), cert. denied, 429 U.S. 1040 (1977).
With respect to 107, defendants are in the unusual position of attacking the very provision upon which they rely for their defense. See, e.g., Carpenters Dist. Council v. Dillard Dept. Stores, 778 F. Supp. 318, 319 (E.D. La. 1991) (“an enactment is void for vagueness if its prohibitions are not clearly defined”) (emphasis original, citing City of Mesquites v. Aladdin’s Castle, Inc., 455 U.S. 283 (1982)), aff’d in pertinent part, 15 F.3d 1275 (5th Cir. 1994).
Prior to the enactment of § 107, the fair use concept was a feature of case law applied as an “equitable rule of reason.” Kinko’s, 758 F. Supp. at 1529. Mindful of that case law, Congress purposefully worded § 107 (like many other statutes) for maximum judicial flexibility. The section was
“intended to restate the present judicial doctrine of fair use, not to change, narrow, or enlarge it in any way. . . . Beyond a very broad statutory explanation of what fair use is and some of the criteria applicable to it, the courts must be free to adapt the doctrine to particular situations on a case-by-case basis.”
H.R. Rep. No. 1476, 94th Cong., 2d Sess. at 66 (1976), Sony Corp. v. Universal City Studios, Inc., 464 U.S. 417, 447-48 n.29 (1984).
Thus, as in K-S Pharmacies. Inc. v. American Home Prods. Corp., 962 F.2d 728 (7th Cir. 1992):
“Is Wisconsin’s law vague? Of course it Is. No statute so compact . . . resolves a fraction of the problems that attend any attempt to regulate price differences. Weighty treatises on the Robinson-Patman Act attest to the many subtle issues that arise . . . . Is Wisconsin’s law unconstitutionally vague? Of course it is not. It is no worse than the Robinson-Patman Act itself, which resolves few of the many questions . . . so vital to implementation. If [Wisconsin’s law] is unconstitutionally vague, then the entire common law is unconstitutional because courts revise this non-text as they go along, and all laws calling for ‘reasonable’ behavior in one or another fashion are forbidden. Yet for centuries courts have thought it sufficient that specificity may be created through the process of construction. Clarity via interpretation is enough even when the law affects political speech. [Wisconsin’s law] sets an intelligible benchmark (no price discrimination) and leaves the details to be worked out. . . . The Sherman Act was not unconstitutional in 1890, becomIng enforceable only in 1913. It has been constitutional all along because it provides a starting place, and courts resolve disputes as they arise.”
962 F.2d at 732 (materials in bracket added), (citations omitted); see also Grayned v. City of Rockford, 408 U.S. 104, 110 (1972) (broad “antinoise ordinance” upheld; “Condemned to the use of words, we can never expect mathematical certainty from our language. The words . . . of the ordinance are marked by ‘flexibility and reasonable breadth, rather than meticulous Specificity’”); United States v. National Dairy Products Corp., 372 U.S. 29, 32-34 (1963); (upholding prohibition against “unreasonably low prices”); Nash v. United States, 229 U.S. 373, 374 (1913) (upholding Sherman Act’s prohibition on conspiracies “in restraint of trade” and “to monopolize trade”); United States v. Skinner, 25 F.3d 1314, 1318-19 (6th Cir. 1994); Nelson v. United States, 796 F.2d 164, 167 (6th Cir. 1986); Reminga v. United States, 695 F.2d 1000, 1004 (6th Cir. 1982), cert. denied, 460 U.S. 1086 (1983).
The pre-statutory common law “fair use” doctrine emerged in 1841, when Justice Story issued the seminal opinion in Folsom v. Marsh, 9 F. Cas. 342, 344 (C.C.D. Mass. 1841). In the century and a half since Folsom v. Marsh, we are unaware of any authority that has struck down any copyright legislation, ever, nor do defendants cite any authority. Rather, each time the Copyright Act has faced a constitutional challenge, It has been upheld. See cases cited above at p. 38; see also. e.g., United States v. Heilman, 614 F.2d 1133, 1136-37 (7th Cir.), cert. denied, 447 U.S. 922 (1980) (upholding criminal sections).
Moreover, in construing the fair use provision of the Copyright Act (and in elaborating the pre-statutory judicial doctrine of fair use), the courts have always held that lengthy verbatim copying of classroom materials is copyright infringement and not fair use, even when conducted by non-profit educators. See above at 18. These cases, together with the explicit on-all-fours holding of the Kinko’s case, plainly sufficed to give defendants adequate notice.
IV. THE REMAINING DEFENSES HAVE NO MERIT.
With respect to their defenses other than fair use, defendants were required to set out “specific facts showing that there is a genuine issue for trial” Celotex Corp. v. Catrett, 477 U.S. 317, 324 (1986). None of the hundreds of declarations submitted by the defendants even tried to do that; in response to plaintiffs’ summary judgment motion, defendants did little more than repeat the list of ten defenses set out in their Answer. (E.g., R. 60, p. 20.) Nonetheless, defendants press some of those defenses here.
(Defendants’ Brief, 44.) A copyright defendant may only avail itself of a laches defense when there is an unreasonable delay between the time when a plaintiff is first apprised of the infringing acts and the time of the filing of an infringement action, and when prejudice to the infringer from the delay results. Forry, Inc. v. Neundorfer, Inc., 837 F.2d 259, 267 (6th Cir. 1988).
Defendants have not shown any delay with respect to plaintiffs’ actions to enforce their copyrights. As set forth above (p. 7); the copying in suit occurred in December, 1991 and January, 1992 and this lawsuit began in February, 1992 (p. 12).
Defendants claim that coursepacks have existed for twenty years, and that Mr. Smith “set up his business . . . relying on the publishing industry’s inaction in allowing the coursepack industry to develop.” (Defendants’ Brief, 37-38, 44.) Defendants also claim that Mr. Ternes’s Declaration (R. 54) shows the “absence of any objection” to coursepacks by publishers. (Defendants’ Brief, 39). It is correct that the plaintiffs do not object to coursepacks — they happily give permission to their production every day. But the Ternes Declaration says nothing about unauthorized coursepacks, to which publishers generally, and these plaintiffs in particular, have always objected. See unauthorized coursepack cases Basic Books, Inc. v. The Gnomon Corp., 1930 Copyright L. Dec. ¶ 25,145 (D. Conn. 1980) (Princeton University Press, plaintiff); Addison-Wesley Publishing Co. Inc. et al v. New York University, et al., 1983 Copyright L. Dec. ¶ 25,544 (S.D.N.Y. 1983) (Macmillan Inc.’s predecessor, plaintiff); see also Harper & Row, Publishers, Inc. v. The Tyco Copy Service, Inc., 1981 Copyright L. Dec. ¶ 25,230 (D. Conn. 1981).
Finally, and itself dispositive of their claim, defendants did not attempt to prove that any plaintiff had any awareness of defendants’ infringing activities prior to defendants’ public announcement, following the Kinko’s decision in 1991, of their intention to infringe copyrights. (R. 41 Exhibit 15 [Defendants’ Promotional Material]; Exhibit 16 [Defendants’ Letters To Professors]; Exhibit 17 [Defendants’ Paper Regarding Kinko’s].)
B. Unclean Hands.
(Defendants’ Brief7 44-45.) The “unclean hands” defense requires a defendant to show direct injury resulting from a plaintiff’s wrongful conduct directed at that defendant. Defendants have offered no such evidence here. In fact, as demonstrated above, there has been no showing that the plaintiffs were even aware of what defendants were doing. Thus, the defense has no role here:
“The maxim of unclean hands is not applied where plaintiffs’ misconduct is not directly related to the merits of the controversy between the parties, but only where the wrongful acts ‘in some measure affect the equitable relations between the parties in respect of something brought before the court for adjudication.’ The alleged wrongdoing of the plaintiff does not bar relief unless the defendant can show that he has personally been injured by the plaintiffs’ conduct.”
Mitchell Bros. Film Group v. Cinema Adult Theater, 604 F.2d 352, 863 (5th Cir. 1979), cert. denied, 445 U.S. 917 (1980); see also National Cable Television Ass’n v. Broadcast Music Inc., 772 F. Supp. 614, 652 (D.D.C. 1991). Defendants do claim to have been “personally injured” by anything the plaintiffs have done.
C. Copyright Misuse.
(Defendants’ Brief, 45.) The defense of “copyright misuse” has been rejected by many courts and has never been adopted by this Court. Budish v. Gordon, 734 F. Supp. 1320, 1335-36 (N.D. Ohio 1992). When the defense has been recognized, it requires a substantial showing:
“[T)he burden of the party asserting misuse is ‘great,’ and . . . if no antitrust violation is proven the party must show the copyright holder ‘somehow illegally extended its monopoly or otherwise violated the public policy underlying copyright law.’”
Budish, 784 F. Supp. at 1336 (citation omitted); see also Reliability Research. Inc. v. Computer Assoc. Int’l. Inc., 793 F. Supp. 68, 69 (E.D.N.Y. 1992); National Cable Television Ass’n Inc. v. Broadcast Music. Inc., 772 F. Supp. 614, 652 (D.D.C. 1991); Georgia Television Co. v. TV News Clips of Atlanta. Inc., 19 U.S.P.Q.2d 1372 (BNA) (N.D. Ga. 1991) aff’d without op., 983 F.2d 238 (11th Cir. 1993).
Here, although defendants flail about with accusations of “classism” and “racism” and other epithets (Defendants’ Brief, 36), they have proved no copyright-related conduct by plaintiffs other than ordinary economic exploitation and enforcement. There is therefore no evidence of any misuse.
D. The First Amendment.
(Defendants’ Brief, 46.) There is no separate First Amendment defense in a copyright case. The defendants state that “The Supreme Court has recognized the First Amendment values inherent in the Copyright Act.” What defendants do not state is that the Supreme Court, and all other courts that have ever considered the issue, have concluded that the copyright law’s distinction between protected expression and unprotected facts and ideas, allowing unrestricted access to facts and ideas and other established copyright concepts, are sufficient to encompass any and all constitutional concerns. See e.g., Harper & Row, 471 U.S. at 560; Twin Peaks Prods. v. Publications Int’l, 996 F.2d 1366, 1378 (2d Cir. 1993); Pacific & Southern Co. v. Duncan, 744 F.2d 1490, 1498 (11th Cir. 1984), cert. denied, 471 U.S. 1004 (1985); Los Angeles News Serv. v. Tullo, 973 F.2d 791, 795 (9th Cir. 1992); Fisher v. Dees, 794 F.2d 432, 434 n.2 (9th Cir. 1986); Walt Disney Prods. v. Air Pirates, 581 F.2d 751, 759 (9th Cir. 1978), cert. denied, 439 U.S. 1132 (1979); Triangle Publications Inc. v. Knight-Ridder Newspapers. Inc., 626 F.2d 1171, 1179-80 (5th Cir. 1980); Wainwright Sec., Inc. v. Wall St. Transcript Corp., 558 F.2d 91, 95 (2d Cir. 1977), cert. denied, 434 U.S. 1014 (1978).
V. DEFENDANTS’ INFRINGEMENTS WERE WILLFUL.
Copyright infringement is “willful” (thus entitling a plaintiff to enhanced statutory damages under 17 U.S.C. § 504) if a defendant reasonably should have known that its conduct constituted infringement, or if the defendant acted in reckless disregard of the copyrights of others. See e.g., N.A.S. Import, Corp. v. Chenson Enters. Inc., 968 F.2d 250, 252 (2d Cir. 1992); RCA/Ariola Int’l, Inc. v. Thomas & Grayston Co., 845 F.2d 773, 779 (8th Cir. 1988).
In United States v. Steerwell Leisure Corp., 598 F. Supp. 171 (W.D.N.Y. 1984), the Court found the defendants to be willful infringers, holding:
“A defendant is on sufficient notice [that he may be a willful copyright infringer] as long as the law is clear enough so that he is informed that the course of conduct he contemplates may fall perilously close to the line which separates what is legal from that which is not.“
598 F. Supp. at 173 (emphasis supplied) (material in brackets added). There is no fact issue here about Smith’s state of mind; for present purposes, we take as true his claim that he studied copyright law closely and did not have a subjective belief that he was violating it. The evidence, however, is uncontradicted that Smith could not reasonably have held such a belief, and that, in the words of Steerwell, he deliberately and knowingly put himself “perilously close to the line.” As the District Court held:
“An extensive effort to find law to support their conduct, when they were unable to do so, does not excuse defendants’ violation of the established copyright law. They proceeded recklessly at their own peril and should not be surprised that they are now called upon to answer for this unjust enrichment.”
855 F. Supp. at 912.
When, as here, the undisputed, objective facts are clear, willfulness is routinely determined as a matter of law. See e.g., Peer Int’l Corp. v. Pausa Records. Inc., 909 F.2d 1332, 1335-56 (9th Cir. 1990) (defendant could not reasonably have believed copying was lawful); Cable/Home Comm. Corp. v. Network Prods., Inc., 902 F.2d 829, 851 (11th Cir. 1990) (same); Georgia Television Co. v. TV News Clips of Atlanta Inc., 19 U.S.P.Q.2d (BNA) 1372, 1376-77 (N.D. Ga. 1991), aff’d without op., 983 F.2d 238 (11th Cir. 1993); Swallow Turn Music v. Wilson, 831 F.Supp. 575, 579-80 (E.D. Tex. 1993); Paramount Pictures v. Labus, 16 U.S.P.Q.2d (BNA) 1143, 1147 (W.D. Wis. 1990); Van Halen Music v. Foos, 728 F.Supp 1495, 1498 (D. Mont. 1989).
The defendants also argue that they are not willful because Smith consulted a lawyer before undertaking the copying in suit. But in the “advice of counsel” cases that defendants rely upon, unlike this case, outside counsel had advised that the copying at issue was safe and lawful. See e.g., RCA/Ariola Int’l. Inc. v. Thomas & Grayston Co., 845 F.2d 773, 779 (8th Cir. 19$8) (counsel stated that “there would be no liability” with respect to the copying).
Defendants did not testify to any such advice here; to the contrary, they said that their lawyer specifically warned them about the “risky proposition” they were engaged in. See above at pp. 9-10. Defendants made the coursepacks here at issue after defendant Smith read his lawyer’s written advice not to copy without permission. Steerwell and the other authorities set forth above make clear that when defendants willingly accept such risks in the pursuit of profit, the only conclusion that can be drawn is that the defendants are willfully infringing copyrights.
As demonstrated above, not even the District Court’s preliminary injunction deterred the defendants from proclaiming their defiance with respect to all other copyright holders that were not protected by the injunction, and whose works defendants thereafter continued to infringe. The Court below specifically informed Smith in open court that his conduct was infringing; his response was to announce that he would continue unless subjected to judicial “duress.” (R. 41 Exhibit 19.) Such conduct alone was sufficient to show willfulness in Georgia Television Co. v. TV News Clips of Atlanta, 19 U.S.P.Q.2d (BNA) 1372 (N.D. Ga. 1991), aff’d without op., 983 F.2d 238 (11th Cir. 1993). There, defendant was preliminarily enjoined from infringing plaintiffs’ copyrights, but “continued to tape and sell copies of other stations’ news broadcasts” and stated that she would continue to do so until ordered to stop “by a court of law.” 19 U.S.P.Q.2d at 1376-77. The Court said:
“[Defendants’] responses indicate that defendants will continue to violate the law, requiring numerous copyright owners to bring successive actions in this and other courts, creating unnecessary litigation, and hoping that by sheer obstinance defendants will be able to outlast prospective plaintiffs. This court correspondingly finds that defendants have acted willfully in infringing upon plaintiffs’ copyrights .
The undisputed facts here establish the willfulness of defendants’ infringements.
VI. PLAINTIFFS ARE ENTITLED TO THE INJUNCTIVE RELIEF AWARDED BY THE DISTRICT COURT.
After determining that the defendants had infringed plaintiffs’ copyrights, and after considering “defendants’ refusal to abide by existing law and their unfounded challenges to copyright law,” the District Court enjoined defendants from “copying any of plaintiffs’ existing or future copyrighted works without first obtaining the necessary permission.” 855 F. Supp. at 913.
Such a permanent injunction generally issues as a matter of course under 17 U.S.C. § 502(a) upon proving past infringements and a likelihood of future infringements:
“When liability has been determined, and a history of continuing infringement and a significant threat of future infringement exists, a court must enjoin infringement of future copyrighted works.”
Kinko’s, 758 F. Supp. at 1542; see also. e.g., Monogram Models. Inc. v. Industro Motive Corp., 492 F.2d 1281 (6th Cir.), cert. denied, 419 U.S. 843 (1974).
The fact that “fair use” cases generally require a “case by case” analysis is not at issue here: Defendants claim no meaningful difference among the six instances of copying in suit; nor do they suggest any differences among their thousands of other instances of copying copyrighted works each semester. Thus, even defendants do not proffer a “case by case analysis;” they instead treat all the infringements in suit and their similar infringements of numerous other publishers’ works in the aggregate as though all these instances are governed by the same principle. In this defendants are correct: Each instance involves substantial verbatim copying of lengthy excerpts made for profit and in disregard of the copyright holders’ right to a license fee.
The need here for an injunction, moreover, is plain where defendants have already stated that only judicial “duress” prevents their infringements. Defendants have already proclaimed that “we will not seek permission . . . unless . . forced to do so by order of the court.” (R. 41 Exhibit 19; see also R. 47 Smith Deposition, 517:19 to 518:20.)
Unless the 10,000 to 15,000 excerpts that defendants admit to copying each semester is to lead to an incredible multiplicity of litigation, defendants must be subjected to a broad injunction. This case is similar to Pacific & Southern Co. v. Duncan, 744 F.2d l490 (11th Cir. 1984), cert. denied, 471 U.S. 1004 (1985):
“Unless it can obtain an injunction [protecting all of its works, present and future, without limitation] WXIA can only enforce its copyrights against [defendant] by finding out which stories have been copied and sold, registering those stories, and bringing many different infringement actions against [defendant.] Each infringement action would yield a rather small damage recovery. This is a classic case, then, of a past infringement and a substantial likelihood of future infringements which would normally entitle the copyright holder to a permanent injunction against the infringer pursuant to 17 U.S.C.A. § 502(a).”
744 F.2d at 1499 (material in brackets added); see also. e.g., Swallow Turn Music et al. v. Wilson, 831 F. Supp. 575, 581 (E.D. Tex. 1993) (“[p]iecemeal prohibitions against continued, knowing violations of the law squander scarce judicial resources”); Georgia Television Co., 19 U.S.P.Q.2d at 1376, aff’d without op., 983 F.2d 238 (11th Cir 1993).
Defendants argue that the District Court erred in issuing an injunction that prohibits the copying of uncopyrightable material. (Defendants’ Brief, 48-49.) That challenge is baseless: The injunction enjoins defendants “from copying any of plaintiffs’ existing or future copyrighted works without first obtaining the necessary permission.” 855 F Supp. at 913. Nothing in that injunction can be read to prohibit the copying of uncopyrightable material.
Defendants also object because the injunction does not require the plaintiffs to register works as a prerequisite to protection thereunder. (Defendants’ Brief, 48-49.) As a matter of law, however, registration is expressly not a prerequisite: “The power to grant injunctive relief is not limited to registered copyrights. . . .” Olan Mills Inc. v. Linn Photo Co., 23 F.3d 1345, 1349 (8th Cir. 1994); see also, e.g., Pacific & Southern Co, above at p. 49. A contrary rule would vitiate the well-established power of the Courts to enjoin future infringement when appropriate.
For all of the foregoing reasons, the decision of the District Court should be affirmed.
Dated: New York, New York
November 15th, 1994
|James E. Stewart||Ronald S. Rauchberg|
|J. Michael Huget||Jon A. Baumgarten|
|Butzel Long, P. C.||Herman L. Goldsmith|
|Proskauer Rose Goetz|
As to one of those four works, St Martin’s Press’s Where The Domino Fell, defendants claim (Defendants’ Brief, 39-40 n.22) that another registration certificate lists the authors of the work, rather than St. Martin’s Press, as copyright holders. The certificate naming the authors is not in the record below. As defendants well know, moreover, the authors assigned their rights to St. Martin’s and St. Martin’s produced the assignment to defendants. (Bates Nos. A003891-3899.) Because, in their arguments to the Magistrate Judge, defendants did not contest St. Martin’s claim of copyright ownership, there was no occasion for St. Martin’s to include the assignments in the record below. Because no evidence was submitted to rebut any plaintiffs’ claim of ownership, summary judgment on this issue was correct.
From the outset of its consideration of copyright reform in the mid-1960’s to final enactment of the Copyright Act of 1976, Congress never varied from this view that unauthorized educational anthologies containing excerpts from copyrighted works threatened substantial harm to the incentives of copyright law. See H.R. Rep. No. 2237, 89th Cong., 2d Sess. at 64 (1966); H.R. Rep. No. 83, 90th Cong., 1st Sess. at 33-34 (1967); S. Rep. No. 473, 94th Cong., 1st Sess. at 63 (1975); H.R. Rep. No. 1476, 94th Cong., 2d Sess. at 67 (1976).
Defendants claim that coursepacks are not “derivative works.” (Defendants’ Brief, 30 n. 17.) Whether or not any given coursepack could be copyrighted under 103 as a “derivatIve work” is irrelevant. There is no reason to consider the right to receive licensing income dependent on whether or not the secondary work is sufficiently original to be a “derivative work.” Defendants have appropriated plaintiffs’ rights to distribute and sell copies of their works (see 11 U.S.C. 106) regardless of whether they have created “derivative works.” No case of which we are aware, and no case cited by defendants, has ever excused such a violation or the requirement to pay license fees on the grounds that the secondary work was not sufficiently original to be copyrightable as a “derivative work.”
CERTIFICATE OF SERVICE
I, HERMAN L. GOLDSMITH, certify that on November 15th, 1994 I served two true copies of the attached “BRIEF OF PLAINTIFFS-APPELLEES PRINCETON UNIVERSITY PRESS, MACMILLAN, INC. AND ST. MARTIN’S PRESS, INCORPORATED” upon defendants-appellants MICHIGAN DOCUMENT SERVICES, INC. and JAMES M. SMITH at the address designated by them for that purpose, Bodman, Longley & Dahling, 110 Miller, Suite 300, Ann Arbor, Michigan 48104, by depositing the papers enclosed in a prepaid sealed wrapper, properly addressed, in an official depository under the care and custody of The United States Postal Service within New York State.
|Herman L. Goldsmith|
Ignore Heading – Content
Ignore Heading – Sub Content
Notice Of Hearing, Plaintiffs’ Motion For Summary Judgment (17 pages), and Plaintiffs’ Memorandum Of Law In Support Of Motion For Summary Judgment, each dated January 19, 1993.
Binder submitted in support of plaintiffs1 summary judgment motion below containing Declaration of Herman L. Goldsmith, Esq. dated January 18, 1993, with first 26 of 35 exhIbits (for exhibits 27-35, see R. 43, below).
Binder submitted in support of plaintiffs summary judgment motion containing declarations, with respective exhibits, of Brigitta van Rheinberg (dated January 18, 1993); Beth Mullen (dated January 19, 1993); Jeffrey S. Goldstein, Esq. (dated January 19, 1993); and Agnes Fisher (dated January 19, 1993).
Folders containing the six books owned by the plaintiffs-appellees and the three coursepack books sold by the defendants appellants, submitted to the District Court below as Exhibits 27-35 to the Goldsmith Declaration (see R. 41, above).
Deposition of defendant-appellant James M. Smith dated December 1, 1992 (volume one of two, comprising pages 1- 278).
Deposition of defendant-appellant James M. Smith dated December 4, 1992 (volume two of two, comprising pages 279-601). R. 54 Declaration of defendants’ expert William Ternes dated February 12, 1993.
Plaintiffs’ Memorandum In Opposition To Defendants’ Motion For Partial Summary Judgment On Willfulness dated March 9, 1993, with exhibits, including transcript of deposition of defendants’ expert William Ternes, made available for deposition following submission of plaintiffs’ summary judgment motion, and letter from defendants’ copyright lawyer Lawrence Jordan, produced by defendants after plaintiffs submitted their motion.
Defendants’ Brief In Opposition To Plaintiffs’ Motion For Summary Judgment dated March 8, 1993.
Plaintiffs’ Reply Memorandum In Support Of Motion For Summary Judgment dated March 26, 1993, with exhibits, including transcript of deposition of William Ternes.
Report and Recommendation of Magistrate Judge Thomas A. Carlson dated December 17, 1993.
Defendants’ Objections To Report and Recommendation dated January 5, 1994.
Plaintiffs’ Objections To Report and Recommendation dated January 5, 1994.