FOR THE SIXTH CIRCUIT ____________________
PRINCETON UNIVERSITY PRESS, MACMILLAN,
INC., and ST. MARTIN’S PRESS, INC.,
MICHIGAN DOCUMENT SERVICES, INC.,
and JAMES M. SMITH,
REPLY BRIEF OF DEFENDANTS-APPELLANTS,
MICHIGAN DOCUMENT SERVICES, INC.
AND JAMES M. SMITH
Susan M. Kornfield (P41071) David G. Chardavoyne (P27034) Louise-Annette Marcotty (P44657) Lydia Pallas Loren (P47644) Attorneys for Defendants-Appellants BODMAN, LONGLEY & DAHLING 110 Miller, Suite 300 Ann Arbor, Michigan 48104 (313) 761-3780
December 5, 1994
TABLE OF CONTENTS
American Geophysical Union v. Texaco, Inc.,
37 F.3d 881 (2d Cir. 1994) Petition for
Rehearing and Rehearing En Banc, filed
Nov. 21, 199410
Ardestani v. I.N.S., ___ U.S. ___, 112 S.Ct. 515
Basic Books, Inc. v Kinko’s Graphics Corp.,
758 F.Supp. 1522 (S.D.N.Y. 1991)18, 19, 22
Braxton-Secret v. A.H. Robins Co., 769 F.2d 528
(9th Cir. 1985)23
Campbell v. Acuff-Rose Music, Inc., ___ U.S. ___,
114 S.Ct. 1164 (1994)passim
Charbonnages de France v. Smith, 597 F.2d 406
(4th Cir. 1979)23
Connor v. Chicago Transit Auth., 985 F.2d 1362
(7th Cir. 1993)23
Dayton Hudson Corp. v. Macerich Real Estate Co.,
812 F.2d 1319 (10th Cir. 1987)23
DC Comics, Inc. v. Reel Fantasy, Inc., 696 F.2d 24
(2d Cir. 1982)22
Encyclopedia Britannica Educ. Corp. v. Crooks,
558 F. Supp. 1247 (W.D.N.Y. 1983)16
Feist Publications, Inc. v. Rural Telephone
Service Co., 499 U.S. 340, 111 S.Ct. 1282 (1991)11
Fogerty v. Fantasy, Inc., __ U.S. __,
114 S.Ct. 1023 (1994)11, 21
Gulf Oil Corp. v. Copp Paving Co., 419 U.S. 186,
95 S.Ct. 392 (1974)14
Haberman v. Hustler Magazine, Inc., 626 F. Supp. 201
(D. Mass. 1986)17
Harper & Row v. Nation Enterprises, 471 U.S. 539,
105 S.Ct. 2218 (1985)6
International Bhd. of Elec. Workers v. NLRB,
814 F.2d 697 (D.C. Cir. 1987)13, 14
Los Angeles News Service v. Tullo, 973 F.2d 791
(9th Cir. 1992)5
Lotus v. Borland Int’l. Inc., 831 F. Supp. 223
(D. Mass. 1993)5
Marcus v. Rowley, 695 F.2d 1171 (9th Cir. 1983)16
Maxtone-Graham v. Burtchaell, 803 F.2d 1253
(2d Cir.), cert. denied, 481 U.S. 1059,
107 S.Ct. 2201 (1986)17, 18
MacMillan Co. v. King, 223 F. 862 (D. Mass. 1914)16
N.A.D.A. Services Corp. v. Business Data of
Virginia, Inc., 651 F. Supp. 48 (E.D. Va. 1986)17
Sec. of State of Maryland v. Joseph H. Munson Co.,
467 U.S. 958, 104 S.Ct. 2839 (1984)6
Sony Corp. of America v. Universal Studios, Inc.,
464 U.S. 417, 104 S.Ct 774 (1984)2, 3, 9, 12
United States Dept. of Labor v. Triplett, ___ U.S. ___,
110 S.Ct. 1428 (1990)6
United States v. Steerwell Leisure Corp.,
598 F. Supp. 171 (W.D.N.Y. 1984)21
West Virginia Univ. Hosps. v. Casey,
499 U.S. 83, 111 S.Ct. 1138 (1991)13
Wihtol v. Crow, 309 F.2d 777 (8th Cir. 1962)16
U.S. Const. art. I, §8, cl. 83
Statutes and Rules
U.S. Copyright Act of 1976,
17 U.S.C. §§ 101 et. seq.passim
H.R. Rep. 1476, 94th Cong.,
2d Sess. (1976)12, 14, 15
H.R. Rep. 2237, 89th Cong.,
2d Sess. (1966)15
Scott Martin, Photocopying and the Doctrine
of Fair Use: The Duplication of Error,
39 J. Copyright Soc’y USA 345 (1992)19
The publishers’ brief is a press release for their trade organization, the Association of American Publishers (“AAP”). It is a breezy story, filled with nearly one hundred case citations, heroes, and villains. It is not, however, a correct statement either of copyright law or of the facts in this case.
The publishers’ brief (“Pl. Br.”) is a tribute to the correctness of defendants’ legal position. To make their case against fair use, the publishers had to rely upon a definition of fair use that has been rejected by the United States Supreme Court, misstate the facts of this case, misstate the law, make up “facts,” and assert legal positions that are unsupportable.
To the publishers, the seminal issue in copyright is money. For them, an understanding of the role of money in the printing and publishing worlds is a substitute for an understanding of fair use. They actually assert that the fair use doctrine is unavailable where a copy shop provides photoreproduction services to professors and students. (Pl. Br. p.17). They also assert the remarkable proposition that in no case has a claim of fair use been upheld where the alleged infringer intended to make a profit. (Pl. Br. p.17).
However, their most outlandish claim is this: even though they cannot prove the loss of even one sale of any book at issue in this litigation, they claim that any money made by defendant Michigan Document Services (“MDS”) was essentially stolen from them. In effect, they argue that they are entitled to receive revenues from the fair use by students and professors of excerpts of works in which the publishers claim to hold copyright.[ FN 1 ] (Pl. Br. p.33). The remainder of the publishers’ brief is an aggressive personal attack on Mr. Smith, the avoidance of the plain language of the U.S. Copyright Act, 17 U.S.C. §101 et seq. (the “Act”), and reliance on irrelevant case law.
Defendants’ Reply Brief will demonstrate that §107 of the Copyright Act, and not legislative history, controls the analysis applicable to the facts of this case; this case is about three professors and six excerpts, only, and is not about coursepacks in general; there has never been a more clear example of fair use than the activities of these three professors, their students, and the defendants; the entirety of the publishers’ arguments rest on mischaracterizations of fact and misstatements of law; and that this Court must reverse the Order of the District Court granting summary judgment to the publishers.
When a use is fair, the demands of the copyright owner are irrelevant. Campbell v. Acuff-Rose Music, Inc., ___ U.S. ___, 114 S.Ct. 1164, 1174-1175 n.18 (1994) (“Acuff-Rose“) (“If the use is otherwise fair, then no permission need be sought or granted.”); Sony Corp. of America v. Universal Studios, Inc., 464 U.S. 417, 432, 104 S.Ct 774, 784 (1984). The objections by these publishers to the fair use of six works, without the publishers’ permission and without payment of fees, are irrelevant.
In its most recent pronouncement on fair use, Acuff-Rose, the Supreme Court thoughtfully reflected on the complexities of a fair use analysis. It noted that third-party uses of a copyrighted work for purposes such as teaching, including multiple copies for classroom use, are the types of copying that courts and Congress most commonly find to be fair uses. Acuff-Rose, 114 S.Ct. at 1170. It noted that the fair use doctrine is a vehicle whose application prevents the copyright statute from stifling the very creativity that the law was designed to foster. Id. It rejected any bright-line approach to resolving fair use cases and required that the four statutory factors be weighed together in light of the purposes of copyright, the promotion of learning. Id.; U.S. Const. art. I, §8, cl. 8. The Court confirmed that the fair use doctrine guarantees breathing space within the confines of copyright. Acuff-Rose, 114 S.Ct. at 1170-1171.
The publishers contend that fair use is applied only “in limited circumstances,” that it encompasses “quotation or copying of small parts of copyrighted works,” and that fair use applies when there is “no adverse commercial consequences to the copyright holder.” (Pl. Br. p.15). They cite no cases that support their personal view of copyright, because there are none.[ FN 2 ]
The publishers then claim that fair use is “unavailable” in this copyright infringement case, i.e., that defendants cannot, under any set of facts, avail themselves of the protection of §107. (Pl. Br. p.17). They do not cite any cases in support of this obviously false assertion, and no court has even suggested that the fair use doctrine is “unavailable” in circumstances where third parties have made multiple copies of excerpts of works at the request of professors for use by students.
Thus, the parties dispute not only the facts and the application of law to those facts, but they dispute a most fundamental issue — whether the correct fair use framework is that set forth in §107 and the U.S. Supreme Court, or whether it is the straightjacket offered by the publishers.
- A.Defendants’ actions are inextricably intertwined with the fair use rights of the professors and students.
The publishers recommend that this Court pay no attention to the fact that the works at issue were excerpted by professors for use by students enrolled in their classes. (Pl. Br. p.25). Yet it is the professors who make all decisions relevant to the materials to be assigned to the students — including what work should be excerpted, the length of the excerpt, the other materials to be provided to the student along with that excerpt, the order in which an excerpt appears in the photocopied readings, and any other decision as to the content of the course materials. Further, it is the students for whom the copies are made and to whom the copies are sold, not as a replacement for the underlying work but as a substitute for the students’ own copying of that excerpt from the library. No sales are made by defendants to the public. How could any rational fair use analysis disregard those who excerpted and those who use the excerpts?
The answer is clear: the publishers have no case at all if the trier considers those facts as part of the fair use analysis. No reported case supports the publishers’ position that a fair use analysis must disregard the identity of the parties who excerpt the work, and disregard the identity of the parties who request that it be copied for personal use. No case suggests that fair use turns on whether a photocopy machine is located in the reserve reading room at the university library or across the street at an academic copy shop.
The cases cited by the plaintiffs in support of their position that the students and professors are irrelevant to this case are inapposite because, in those cases, the copier conceived of a product for sale to the public and decided what to copy. In Los Angeles News Service v. Tullo, 973 F.2d 791 (9th Cir. 1992), defendant Tullo systematically recorded news programs in the hope that he would sell them later to “interested individuals and businesses.” Similarly, in Lotus v. Borland Int’l. Inc., 831 F. Supp. 223 (D. Mass. 1993), the defendant incorporated into its commercial software copyrighted elements of a program owned by the plaintiff. Defendant then sold its program to the public on the open market. As in Tullo, the defendant in Lotus analyzed a potential market, decided what its product should contain, decided what to copy, how much to copy, and marketed that product to the public in the hope that there were buyers for it. The facts of the present case are completely different.
When Dorothy’s dog Toto pulled back the curtain, disclosing the Wizard of Oz as a fraud, he responded by manipulating the looming image of the Wizard and saying — “Pay no attention to the man behind the curtain.” Likewise, the publishers urge that this Court pay no attention to the professors who excerpted the works and to the students who requested and used them.[ FN 3 ] The Court, however, is required to consider the users of the copies in a fair use analysis.[ FN 4 ]
- B.MDS’s money is a fee for services to students.
MDS charges students a service fee for its reproduction of the excerpts. The publishers hope that this Court, like the District Court, will be blinded by the fact that the service is not provided for free, and that it will conclude that any business whose activities include the reproduction of excerpts of copyrighted works for a fee must be infringing. The errors in the publishers’ scenario are obvious.
First, even if this Court somehow concluded that the use of the works by the professors and students was not relevant to a fair use analysis, the commercial aspects of MDS’s services could never be a bar to a finding of fair use because the Supreme Court has unanimously concluded that a commercial use of copyrighted work can be a fair use. Acuff-Rose, 114 S.Ct. at 1174.
Second, MDS does not charge fees based upon the nature of the work, or whether it is copyrighted. Instead, the price of an excerpt is based upon the number of pages copied. A coursepack containing 100 pages of public domain material costs the same amount of money as a coursepack containing 100 pages of excerpts of copyrighted works. Therefore, there is no factual basis on which to conclude that defendants make money as a result of the copyrighted nature of the excerpts.
Third, the publishers’ arguments about “commercial use” are further confused by the erroneous assertion that MDS is a competitor of the publishers. (Pl. Br. p.17). This is, of course, wrong. As explained previously, MDS is not a publisher (no selection of author, content, order of materials, length of work, channels of distribution, or whether a work is in print). (Df. Br. pp.24-25). The publishers do not sell excerpts of materials and do not reproduce coursepacks; students cannot purchase coursepacks from them. (Hearing before Magistrate Judge Carlson at TR 7, “Hearing”). Therefore, there is no factual basis on which to conclude that the plaintiffs and the defendants are competitors. The publishers nevertheless advance this mischaracterization because they hope that if they are seen as competitors of MDS, the Court will conclude that the money MDS charges for its services is somehow stolen from the publishers.[ FN 5 ]
Fourth, the publishers assert “This case is about defendants’ coursepacks.” (Pl. Br. p.6). Yet this case cannot be about coursepacks when the publishers do not own any copyrights in MDS’s coursepacks or in the other excerpts in the coursepacks.
Apparently under the impression that professors have some legal duty to assign textbooks, the publishers argue that there is fair use significance in the possibility that a coursepack might be used to replace a conventional textbook. (Pl. Br. p.4). Surely, there is no doubt that a professor can “replace a conventional textbook” with a coursepack when the professor holds the copyright to all of the materials included in the coursepack, or when the materials are all in the public domain, or when all of the readings are “fairly used” within the meaning of §107. Thus, the issue of whether a collection of readings is used by a professor to replace a textbook is irrelevant. What is relevant is whether the use of an excerpt from any particular copyrighted work replaces the purchase of that copyrighted work. Acuff-Rose, 114 S.Ct. at 1171.
- C.The publishers cannot “lose” what they never had.
The publishers’ most persistent money argument is what they call “lost permission fees.” They are reduced to complaining about permission fees because they have been unable to prove the loss of the sale of even one work at issue, and have thus failed to meet their burden of demonstrating economic injury. Sony, 464 U.S. at 454.
Both the language of the Copyright Act and the Supreme Court cases state that the inquiry on this factor looks to the market for the copyrighted work; it does not look to whether a copyright owner can seek to create markets for pieces of the work. 17 U.S.C. §107 (“the effect of the use upon the potential market for or the value of the copyrighted work”); Acuff-Rose, 114 S.Ct. at 1170 (whether the new work merely ‘supersedes the objects’ of the original creation).
The publishers’ argument, if adopted by the Court, would eliminate the requirement that a copyright holder demonstrate that the use in question by a third party harms the market for the copyrighted work. If all a copyright holder has to do to satisfy that burden is inform a court that the copyright holder is willing to charge for incidental uses of its work, then it would have established that anyone else who exercises that use is harming the copyright holder’s potential market.[ FN 6 ] All fair uses can eventually be eliminated because copyright owners will have a legal tool to dictate that fair use is only that use in which the copyright owner has no desire to participate.
The publishers lost this circular permission fees argument in Williams & Wilkins Co. v. United States, 487 F.2d 1345, 1357 n.19, aff’d by an equally divided court, 420 U.S. 376, 95 S.Ct. 1344 (1975):
- “In determining whether the company has been sufficiently hurt to cause these practices to become ‘unfair,’ one cannot assume at the start the merit of the plaintiff’s position, i.e., that plaintiff had the right to license. That conclusion results only if it is first determined that the photocopying is ‘unfair.'”
The dissent in American Geophysical Union v. Texaco, Inc., 37 F.3d 881 (2d Cir. 1994) Petition for Rehearing and Rehearing En Banc, filed Nov. 21, 1994 (“Texaco“) also rejected the “lost permission fees” argument:
- “There is a circularity to the problem: the market will not crystalize unless the courts reject the fair use argument that Texaco presents; but, under the statutory test, we cannot declare a use to be an infringement unless (assuming other factors also weigh in favor of the secondary user) there is a market to be harmed.” Id. at 881 (J. Jacobs, dissenting).
The majority in Texaco failed to appreciate the consequences of its opposite conclusion: if publishers can create a system to collect permission fees for all fair uses, then all fair uses can be and will be “permissioned” out of existence.[ FN 7 ]
The publishers’ argument concerning lost permission fees is further flawed because it treats copyrights as personal property, like “pens and papers.” (Pl. Br. p.18). The Supreme Court has rejected this property-rights view of copyright, and confirmed that (unlike pens and paper) there is a RIGHT to use works in which one does not hold copyright:
- “[the use of the fruit of another’s labor] is not some unforeseen byproduct of a statutory scheme. It is, rather, the essence of copyright, and a constitutional requirement. The primary objective of copyright is not to reward the labor of authors, but ‘[t]o promote the Progress of Science and useful Arts.’ Art.I, §8, cl.8.” Feist Publications, Inc. v. Rural Telephone Service Co., 499 U.S. 340, 111 S.Ct. 1282, 1290 (1991) (internal citations omitted).
Further, the Supreme Court has held that the private economic interests of copyright holders (such as the publishers) are not the point of reference for adjudicating a fair use case:
“We have often recognized the monopoly privileges that Congress has authorized . . . are limited in nature and must ultimately serve the public good . . . .
‘The primary objective of copyright is not to reward the labor of authors, but ‘[t]o promote the Progress of Science and useful Arts.’ . . .
[C]opyright law ultimately serves the purpose of enriching the general public through access to creative works . . . .” Fogerty v. Fantasy, Inc., __ U.S. __, 114 S.Ct. 1023, 1029 (1994).
This Court will decide whether the publishers had absolute control over the duplication of the six excerpts at issue; that is, whether reproduction required the permission of the copyright owner. The “lost permission fees” argument cannot aid that decision because no fees are required unless the publishers do have that right. Although the publishers complain that defendants’ activities “plainly deprive plaintiffs of income” (Pl. Br. p. 33), their entitlement to that “income” in the first place is what this case will determine.
- A.The Classroom Guidelines are not the law.
In their appeal brief (pp.13-20), defendants articulate the rules of statutory construction and apply those rules to §107 of the Act. The publishers neither contest that the right of fair use is codified in §107 nor claim that there is any other statutory source of fair use rights relevant to this litigation. Instead, they contend that the fair use rights involved in this litigation are governed by the legislative history of the Copyright Act instead of the plain language of the Act. (Pl. Br. p.20). The publishers ask this Court to give the legislative history of the Copyright Act more force than the Act itself, and to read into the Copyright Act requirements Congress itself refused to incorporate. The Supreme Court has previously rejected the copyright owners’ attempts to expand the protections afforded by copyright. Sony, 464 U.S. at 431, 104 S.Ct. at 783.
Even if they were authoritative, the Classroom Guidelines are Congress’s view of the minimum amount and circumstances in which an educator may copy excerpts of and/or entire works and be within the bounds of fair use. This is expressed in both the text of H.R. Rep. 1476 at 68, 94th Cong., 2d Sess. (1976), and in the guidelines themselves. Because the guidelines, by their own terms, are the floor and not the ceiling of “educational fair use,” any argument that the guidelines suggest defendants’ copying is not fair use is backwards; the guidelines indicate only that if defendants had followed the guidelines, they could not have been sued by the publishers. In this case, however, only an evaluation of the statutory criteria can determine whether defendants’ conduct was fair use.[ FN 8 ]
It is improper for a court to rely on the legislative history to interpret a statute if the language of the statute is plain.[ FN 9 ] See, e.g., Ardestani v. I.N.S., ___ U.S. ___, 112 S.Ct. 515, 519 520 (1991). Where the statutory text adopted by both Houses of Congress contains a phrase that is unambiguous, the court may not expand or contract its meaning by relying on the statements of individual committees during the course of the enactment process. West Virginia Hosps, Inc. v. Casey, ___ U.S. ___, 111 S.Ct. 1138, 1147 (1991).
“[A] committee report cannot serve as an independent statutory source having the force of law. As this court recently explained in Abourezk v. Reagan:
‘[I]t [is] plainly wrong as a general matter … to regard committee reports as drafted more meticulously and as reflecting the congressional will more accurately than the statutory text itself. Committee reports, we remind, do not embody the law. Congress, as Judge [now Justice] Scalia recently noted, votes on the statutory words, not on different expressions packaged in committee reports.'”
International Bhd. of Elec. Workers v. NLRB, 814 F.2d 697, 712 (D.C. Cir. 1987) (emphasis original) (footnotes and citations omitted).
If Congress had wanted to enact a particular comment or proposal contained in the legislative history, it would have done so. The fact that Congress did not enact a portion of the legislative history “‘strongly militates against a judgment that Congress intended a result that it expressly declined to enact.'” Id. at 711 (quoting Gulf Oil Corp. v. Copp Paving Co., 419 U.S. 186, 200, 95 S.Ct. 392, 401 (1974)).
- B.Section 108 of the Act is not §107 of the Act.
Lacking any support in the legislative history of §107 for the publishers’ proposition that professors and students may not have their personal copies made by an outside copy shop, the publishers quote from the legislative history of §108 (the exemption from infringement liability for libraries and archives) as if it were somehow relevant to the copying in this case. (Pl. Br. pp.25-26). Copying by libraries and archives is not at issue in this litigation. §108 expressly states that the scope of copying allowable under §107 is not affected by the scope of copying allowable under §108. 17 U.S.C. 108(f)(4). Finally, §108 (and not §107) specifies complex protocols that must be followed by the staff of libraries and archives in order to claim the benefit of §108; those protocols cannot be monitored by the staff if they are followed by an unrelated third party.[ FN 10 ] Thus, the publishers’ quotation from the legislative history to §108 is legally irrelevant and misleading. If H.R. Rep. 1476 implies anything about copying by outside service providers it is that Congress knew such providers existed but that Congress consciously did not suggest a limitation on the use of an outside copy service under §107.
In the end, the publishers rely on legislative history relating to a portion of the Act which specifies procedures for obtaining single copies as authority for limiting the rights under the section of the Act that expressly permits multiple copies for classroom use.
- C.General references to legislative history are of no value.
In addition to their misplaced reliance on the examples of legislative history identified above, the publishers also rely on other various statements taken from legislative history, but only after removing any context which might have made the statements meaningful or accurate. For example, although the publishers say that “Congress never varied” from its purported view that unauthorized “anthologies”[ FN 11 ] threaten harm to the incentives of authors, the legislative history does not indicate any such thing. See, H.R. Rep. 1476 (no legislative view on harm threatened by anthologies at all); H.R. Rep. 2237 at 61-64, 89th Cong., 2d Sess. (1966) (fair use can include reproduction of copies for classroom teaching). The publishers presumptively equate their own concerns regarding the allegedly disastrous effect of unauthorized “anthologies” (summarized at H.R. Rep. 2237 at 59-60 and cited by plaintiffs at p.21 n.2) with the intent of Congress.
In sum, while the defendants rest their case on the laws that were actually enacted by Congress, the publishers resort to summaries of their own views, comments about sections of the Act not at issue, and isolated statements by participants in the legislative process whose comments were never enacted into law and which directly conflict with the express provisions of the law.
- D.The publishers misstate the cases on which they rely.
The publishers misstate the law of copyright and educational fair use. For example, after suggesting that verbatim copying for educational use has routinely been found to be infringing (Pl. Br. p.18), they cite a number of cases that they contend support that proposition. Those cases do nothing of the sort. Instead, they are all cases in which either the copying by the alleged infringer displaced the sale of the entire original work, Marcus v. Rowley, 695 F.2d 1171 (9th Cir. 1983), Encyclopedia Britannica Educ. Corp. v. Crooks, 558 F. Supp. 1247 (W.D.N.Y. 1983), Wihtol v. Crow, 309 F.2d 777 (8th Cir. 1962); and/or are cases that were analyzed under the 1909 Copyright Act and involved the creation of a derivative work, Id., MacMillan Co. v. King, 223 F. 862 (D. Mass. 1914). Those cases are completely irrelevant in the present action where the evidence in the record proves that the professors who excerpted the work at issue were never going to assign the entire works and, thus, the excerpts did not replace the work; the use of the excerpts increased the value of and the market for the underlying works; and no derivative works were created.
The publishers also misstate the legal significance of a commercial use. (Pl. Br. p.17, 26, 27). The Supreme Court has expressly rejected any presumption that a commercial use is unfair, and has held that a use which does not substitute for the original does not allow the inference of market harm as to the fourth factor. Acuff-Rose, 114 S.Ct. at 1173-1174, 1177. Acuff Rose is the quintessential example of a commercial use not precluding a finding of fair use; the Supreme Court held that the plainly commercial use of significant musical elements of a “creative” sound recording (a type of work that is “closer to the core of intended copyright protection”), Id. at 1175, could still be a fair use.
Even before the Supreme Court’s ruling in Acuff-Rose, lower courts recognized that a use could be fair notwithstanding the commercial nature of the defendants’ activities. For example, in Maxtone-Graham v. Burtchaell, 803 F.2d 1253, 1162 (2d Cir.), cert. denied, 481 U.S. 1059, 107 S.Ct. 2201 (1986), the Second Circuit affirmed the grant of summary judgment for defendants noting that the “educational elements” of defendant’s use (copying verbatim 7,000 words from plaintiff’s book into defendants’ book) “far outweigh the commercial aspects of the” defendant’s use. The Court also noted that with sales of “6,000 copies, [the defendants’ work] was hardly a commercial blockbuster.” See also, N.A.D.A. Services Corp. v. Business Data of Virginia, Inc., 651 F. Supp. 48 (E.D. Va. 1986) (defendant’s commercial use of the information provided in plaintiff’s books was a fair use, even though the court found against the defendant on three of the four statutory factors); Haberman v. Hustler Magazine, Inc., 626 F. Supp. 201 (D. Mass. 1986) (reproduction of two works of visual art in their entirety in defendant’s for-profit publication was a fair use).
Any assertion that a commercial use cannot be a fair use, or that courts have never found such uses to be fair, is wrong. While defendants do not “use” the work within the meaning of fair use, if a jury were to find that they did and were to find that the use was commercial,[ FN 12 ] such a use can still be found to be fair.
In addition to asserting erroneously that a plainly commercial use has never been upheld as a fair use, the publishers allege that the “Kinko’s case” (Basic Books, Inc. v. Kinko’s Graphics Corp., 758 F. Supp. 1522 (S.D.N.Y. 1991)) is “identical” to this case. (Pl. Br. p.16). However, the publishers have overlooked numerous critical distinctions. First, Kinko’s was decided after a trial while the present case was inappropriately decided on a motion for summary judgment. Additionally, defendants in the present case established significant facts which were not submitted in Kinko’s, while factors which the Kinko’s court found persuasive are absent in the present case.
For example, the Kinko’s court was persuaded that there had been no transformative use of the work (Id. at 1530-31) and that the absence of such a use weighed against a finding of fair use. However, subsequent to the Kinko’s decision, the Supreme Court made clear that “the obvious exception” to the transformative use requirement is the “straight reproduction of multiple copies for classroom distribution.” Acuff-Rose, 114 S. Ct. at 1171 n.11.
Additionally, in Kinko’s the excerpts carried no copyright line crediting the original text (Kinko’s, 758 F.2d at 1548), professors profited from doing business with Kinko’s (Id. at 1532), and the court found that “critical parts of the books” had been copied (Id. at 1533). In the present action, the evidence shows that MDS reproduced all copyright notices provided with the excerpts, that the professors do not personally profit from using MDS’s services, and that the portions of the works excerpted were not the “heart of the work.” (R.61 Ex.A, Decl. Dawson ¶4-5, Kinder ¶3-4, Lieberman ¶5-6). Significantly, the Kinko’s court found that the purchase of the packets “obviates purchase of the full texts.” Id. at 1534. Here, the uncontroverted evidence is completely to the contrary.
Finally, the court found that Kinko’s had failed to prove its central contention that enjoining the use of coursepacks would halt the educational process. While the defendants in the present case do not rely on that proposition as a central contention, the evidence in the record and all reasonable inferences to be drawn in favor of defendants indicate the grave harm to education that is occurring where coursepack copiers are required to obtain permission and pay permission fees for the students’ use of each excerpt. Scholars have also criticized the faulty reasoning of the Kinko’s court. See, e.g., Scott Martin, Photocopying and the Doctrine of Fair Use: The Duplication of Error, 39 J. Copyright Soc’y USA 345 (1992).
- A.The plaintiffs’ personal attacks upon Mr. Smith evidence only the bad faith of the publishers.
The publishers’ brief breathes life into the old joke about litigation — if the facts are against you, argue the law; if the law is against you, argue the facts; if they are both against you, attack your opponent personally. The publishers, clearly, have everything against them.
They call Mr. Smith a “maverick” because he has the temerity to read §107 and conclude that it means what is says, i.e., that the right to reproduce multiple copies of works for purposes such as teaching in fact allows the reproduction of multiple copies of excerpts of works at the request of professors for use by their students. They attack him also because he has publicly stated that the publishers are misrepresenting the facts and the law in an attempt to impose on the public the publishing industry’s own “private law” of copyright, which does not include fair use for educators when they utilize a for-profit photoduplication service to make their copies.
Far from being a “maverick,” Mr. Smith is in very impressive company in his belief that the publishers’ misstate copyright law and fair use. Mr. Smith’s position in this litigation is supported by eleven of this country’s copyright scholars and 119 libraries, including the Library of Congress (see Amici Curiae Brief of Concerned Professors of Copyright Law, filed October 11, 1994, and Notice of Additional Signatory, filed November 17, 1994), and by 560 authors, educators, and students.
- B.The publishers have conceded the issue of willfulness.
The publishers have conceded that Smith did not know or believe that he was infringing:
- “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.” (Pl. Br. p.45) (emphasis added).
Therefore, defendants are entitled to summary judgment on the issue of willful infringement. To avoid this result, the publishers advocate a new standard for willfulness, i.e. coming “perilously close” to the boundary of infringement. (Pl. Br. p.45). This is not a legally-recognized willfulness standard.[ FN 13 ] Further, the publishers’ equation of willfulness with conduct that is “unsafe” has been rejected unanimously by the Supreme Court:
- “Because copyright law ultimately serves the purpose of enriching the general public through access to creative works, it is peculiarly important that the boundaries of copyright law be demarcated as clearly as possible. To that end, defendants who seek to advance a variety of meritorious copyright defenses should be encouraged to litigate them to the same extent that plaintiffs are encourage to litigate meritorious claims of infringement.” Fogerty v. Fantasy, Inc., ___ U.S. ___, 114 S.Ct. 1023, 1030 (1994).
Finally, as to the objectively reasonable nature of Smith’s subjective good faith in the legality of defendants’ activities, the filing of the Brief of Amici Curiae should dispel any doubt as to the reasonableness of those views.[ FN 14 ]
“The four factors listed in Section 107 raise essentially factual issues and . . . are normally questions for the jury.” DC Comics, Inc. v. Reel Fantasy, Inc., 696 F.2d 24, 28 (2d Cir. 1982). While the plaintiffs cite a plethora of cases to support their peculiar view of each of the fair use factors, in the end, those cases must be examined in (and limited to) the context and the unique facts of each case. Fair use determinations require a case-by-case analysis, and are rarely appropriate for summary judgment. Acuff-Rose, 114 S.Ct. at 1170. Here, the plaintiffs dispute not only the evidence which supports defendants on each of the fair use factors, but also the inferences to be drawn from those facts and the relative weight to be given each of the fair use factors. Defendants have submitted over 500 declarations of professors and students establishing that the use of the works was fair in this case. If this Court does not rule in defendants’ favor as a matter of law, defendants are entitled to have a jury hear the evidence, weigh the factors, and determine whether the use of the excerpts is a reasonable, fair use under the law, and to determine the issue of willfulness.
Even if no evidentiary facts were in dispute, summary judgment is not appropriate if more than one material inference or conclusion can be drawn from those undisputed facts. E.g., Connor v. Chicago Transit Auth., 985 F.2d 1362, 1366 (7th Cir. 1993):
- “If the evidence is subject to conflicting interpretations, or if reasonable persons might differ as to its significance, summary judgment is not appropriate.”
Accord, Dayton Hudson Corp. v. Macerich Real Estate Co., 812 F.2d 1319, 1322-23 (10th Cir. 1987) (no summary judgment where “different, ultimate inferences may be drawn from the evidence”); Braxton-Secret v. A.H. Robins Co., 769 F.2d 528, 531 (9th Cir. 1985) (no summary judgment where contradictory inferences may be drawn from undisputed facts); Charbonnages de France v. Smith, 597 F.2d 406, 414 (4th Cir. 1979) (no summary judgment where there is no dispute as to evidentiary facts but there is as to conclusions to be drawn from those facts). Defendants are entitled to a trial on the issue of fair use, and the Order of the District Court must be reversed.
As for the remainder of plaintiffs’ arguments, the arguments and facts in defendants’ appeal brief effectively dispel the inaccuracies and misimpressions promulgated by the publishers. Defendants restate and rely on that brief.[ FN 15 ]
The precise facts in the present case relate to the six excerpts at issue and to the manner in which multiple copies of those excerpts were used for purposes such as teaching.
A professor excerpted the copyrighted work and selected all course materials, without input from defendants. Each professor took the materials to defendants and informed defendants of the order in which the materials were to be bound, any special printing requirements the professor wanted, and the expected number of students in the class. Defendants printed copies as specified by the professor and in a number sufficient to service the expected number of students. The professors advised their students that the materials could be obtained from defendants. Defendants charged those students who wanted a coursepack a service fee based solely on the number of pages copied. That fee was the same for pages of copyrighted works as for pages of uncopyrighted works as for blank pages. The professors used the coursepacks to improve their ability to teach the subject of the course; the students used the coursepacks as an active part of their education, typically underlining, highlighting, and annotating the excerpts. Professors received no compensation from defendants. The use of excerpts did not harm the market for or the value of the copyrighted work.
The facts in the record, the language of the U.S. Copyright Act, and the directions of the Supreme Court dictate that the grant of summary judgment in favor of plaintiffs be reversed, and that summary judgment on willfulness be entered in favor of defendants.
BODMAN, LONGLEY & DAHLING
Susan M. Kornfield (P41071)
David G. Chardavoyne (P27034)
Louise-Annette Marcotty (P44657)
Lydia Pallas Loren (P47644)
Attorneys for Defendants-Appellants
December 5, 1994
Footnote 2 Plaintiffs, through their trade group, the AAP, made the same arguments unsuccessfully as an amicus curiae in Sony. (AAP amicus brief, pp.2-7). The Supreme Court rejected those arguments and held that copying an entire copyrighted work can be a fair use even when the copyright holder is willing to charge for such copying. Sony, 464 U.S. at 417.
Footnote 3 The publishers also assert that the views of authors are irrelevant once they assign their copyright. (Pl. Br. pp.19-20). To the contrary, the views of authors are relevant to fair use determinations because authors, and not publishers, are the creators of original works, Harper & Row v. Nation Enterprises, 471 U.S. 539, 549-550, 105 S.Ct. 2218, 2225 (1985), and the views of authors are relevant as to what constitutes an incentive to create new works. (E.g., R.61 Ex.A, Decl. Lieberman 8).
Footnote 4 That the professors and the students are the users of the works in this case is not only crucial to defendants’ fair use defense, but it also entitles defendants to raise the rights of professors and students under the doctrine of jus tertii. See United States Dept. of Labor v. Triplett, ___ U.S. ___, 110 S.Ct. 1428, 1432 (1990); Sec. of State of Maryland v. Joseph H. Munson Co., 467 U.S. 958, 954-955, 104 S.Ct. 2839, 2845-2846 (1984). Specifically, a ruling that requires defendants to utilize the publishers’ system hampers professors and students from entering into a contractual relationship with defendants in order to exercise their “fair use” rights and their rights to access information – both of which embody first amendment rights. Harper & Row, 471 U.S. at 559-560.
Footnote 5 The publishers assert that defendants gain an “advantage” over other copy shops by refusing to comply with the publishers’ demands. (Pl. Br. p.6). It is not an “advantage” to be forced to litigate against an aggressive publishing industry to protect constitutional and statutory rights. In fact, there is no evidence that defendants have any competitive advantage over other copy shops because MDS does not pay a licensing fee. The publishers’ attempt to suggest such an advantage from Professor Lieberman’s transfer of a coursepack from Kinko’s to MDS (Pl. Br. p.8) is clearly incorrect. Professor Lieberman transferred that coursepack on December 21, 1991, because Kinko’s had failed to prepare it for printing (R.61, Lieberman Decl. 7), five days before Kinko’s applied to St. Martin’s for permission and 19 days before St. Martin’s demanded a fee. (Pl. Br. p.8).
Footnote 7 The publishers’ reliance on the recent Texaco opinion is misplaced. Texaco by its own terms, was a case decided on the narrowest of facts after trial, involving the archiving of articles which were reproduced in whole from scientific journals for use by employees of a for-profit corporation in furtherance of the for-profit goals of the corporation. The Court of Appeals specifically disclaimed any application of its ruling beyond those facts. Texaco was not a case involving excerpts, nor did it involve the use by professors and students at a public university. Texaco was not a case in which the majority found the use of the works to fall within the enumerated uses in 107.
Footnote 8 (R.54 Steinhilber Decl. pp. 8-10). August W. Steinhilber, one of the members of the committee that negotiated the Classroom Guidelines, testified that the publishers are attempting to use the guidelines in a manner contrary to the sole purpose for which they were negotiated — a safe harbor for educators. (Id. at 3, 9).
Footnote 10 The procedures set forth in the statute include the requirement that only one copy of an article be made and that the library or archive employee have no reason to believe that there are multiple copies of an article made for persons who are members of a group.
Footnote 11 The publishers’ peculiar dread of “anthologies” confirms that their real motive is to eliminate coursepacks. One excerpt’s physical proximity to another is clearly irrelevant to whether the use of the excerpt is fair. The publishers’ purpose in attempting to recast this case as the case about coursepacks is to try and prevent professors from exercising their fair use right so vigorously that they do not have to rely exclusively upon the publishers as their source of educational materials.
Footnote 12 A jury could also find that a use is both commercial and nonprofit educational, as in Maxtone-Graham, 803 F.2d at 1262 (“the commercial nature of a use is a matter of degree, not an absolute”).
Footnote 13 The only case cited by plaintiffs for such a standard, United States v. Steerwell Leisure Corp., 598 F. Supp. 171 (W.D.N.Y. 1984), involved the question of whether defendants had received sufficient notice to be charged with infringement. That court did not address the issue of willfulness and, contrary to the allegation in plaintiffs’ brief, did not find defendants to be willful infringers.
“[A]re you suggesting then that Kinko[‘s] has laid to rest the arguments throughout the country for all time to come– … an unappealed decision by one judge … in one little district in Southern New York?”
(TR pp. 88-89). The publishers admitted that Kinko’s did not have that effect. (Id.)
Footnote 15 Subsequent to the filing of defendants-appellants’ brief on appeal, the District Court entered an “Order Granting Defendants’ [sic] Application for Attorneys Fees,” awarding plaintiffs attorneys’ fees and costs in the amount of $326,318.52 (filed November 28, 1994). Defendants have filed a separate appeal from that order which will address both the amount of fees as well as the propriety of any award at all. Until the District Court fixed the amount of fees, defendants could not know whether to appeal the award of fees.