*CORRECTED VERSION*
92-9341
_____________________________________________________________________
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
________________________________________
AMERICAN GEOPHYSICAL UNION; ELSEVIER SCIENCE PUBLISHING CO. INC.;
PERGAMON PRESS, LTD; SPRINGER-VERLAG, GmbH & CO., K.G.;
JOHN WILEY & SONS, INC. and WILEY HEYDEN, LTD., on behalf of
themselves and others similarly situated,
Plaintiffs-Counterclaim-
Defendants-Appellees,
--v.--
TEXACO INC.,
Defendant-Counterclaim-
Plaintiff-Appellant.
(Caption continued on inside front cover)
________________________________________
ON APPEAL FROM AN INTERLOCUTORY ORDER OF THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
_______________________________________________________________________
*AMICUS CURIAE* BRIEF OF ASSOCIATION OF RESEARCH LIBRARIES,
AMERICAN ASSOCIATION OF LAW LIBRARIES, SPECIAL LIBRARIES ASSOCIATION,
MEDICAL LIBRARY ASSOCIATION, AMERICAN COUNCIL OF LEARNED SOCIETIES,
NATIONAL HUMANITIES ALLIANCE, AND ASSOCIATION OF ACADEMIC HEALTH
SCIENCES LIBRARY DIRECTORS
_______________________________________________________________________
Ritchie T. Thomas, Esq.
James V. Dick, Esq.
Susan Neuberger Weller, Esq.
SQUIRE, SANDERS & DEMPSEY
1201 Pennsylvania Avenue, N.W.
Washington, D.C. 20004
(202) 626-6600
Attorneys for *Amicus Curiae*
ASSOCIATION OF RESEARCH LIBRARIES,
AMERICAN ASSOCIATION OF LAW
LIBRARIES, SPECIAL LIBRARIES
ASSOCIATION, MEDICAL LIBRARY
ASSOCIATION, AMERICAN COUNCIL OF
LEARNED SOCIETIES, NATIONAL
HUMANITIES ALLIANCE, AND
ASSOCIATION OF ACADEMIC
HEALTH SCIENCES
LIBRARY DIRECTORS
Dated: March 4, 1993
(Corrected Version: March 10, 1993)
________________________________________
IN RE: TEXACO INC.; TEXACO CAPITAL INC., TEXACO CAPITAL N.V.,
Reorganized Debtors.
________________________________________
ACADEMIC PRESS, INC.; ALAN R. LISS, INC.; ALLERTON PRESS INC.; AMBIENT PRESS
LTD.; AMERICAN ASSOCIATION FOR THE ADVANCEMENT OF SCIENCE, AMERICAN
ASSOCIATION OF COST ENGINEERS, INC., AMERICAN CHEMICAL SOCIETY, AMERICAN
CONFERENCE OF GOVERNMENTAL INDUSTRIAL HYGIENISTS, AMERICAN INSTITUTE OF
PHYSICS, AMERICAN MATHEMATICAL SOCIETY, AMERICAN MEDICAL ASSOCIATION
AMERICAN SOCIETY FOR BIOCHEMISTRY AND MOLECULAR, BIOLOGY, INC., AMERICAN
SOCIETY FOR MICROBIOLOGY, ASPEN PUBLISHERS, INC., ASSOCIATION FOR SYMBOLIC
LOGIC, BIRKHAUSER BOSTON, BLACKWELL, SCIENTIFIC PUBLICATIONS, LTD., THE
BUREAU OF NATIONAL AFFAIRS, INC., BUSINESS MONTH CORPORATION, BUSINESS
PUBLISHERS, INC., BUTTERWORTH & CO. (PUBLISHERS) LTD., THE C.V. MOSEBY
COMPANY, CANNING PUBLICATIONS, INC., CENTER FOR COMPUTER/LAW, CORNELL
UNIVERSITY, CRC PRESS, INC., DATA PROCESSING MANAGEMENT ASSOCIATION INC.,
EDITIONS SCIENTIFIQUES ELSEVIER, ELSEVIER SCIENCE PUBLISHERS B.V., ELSEVIER
SCIENCE PUBLISHERS LTD., ELSEVIER SEQUOIA SA, FEDERATION OF SOCIETIES FOR
COATINGS TECHNOLOGY, GROVE & STRATTON, INC., HARCOURT BRACE JOVANOVICH
LIMITED (FORMERLY ACADEMIC PRESS INC. (LONDON) LTD.), HEMISPHERE
PUBLISHING CO., HUMANA PRESS, HUMAN SCIENCES PRESS, INC. PUBLISHING
CORPORATION, THE INFORMATION STORE, INC., INSTITUTION OF ELECTRICAL
ENGINEERS/PETER PEREGRINUS LTD., INTERNATIONAL ACADEMY AT SANTA
BARBARA, INC., J. SCHWEITZER VERLAG, JOHN WILEY & SONS LIMITED, KENNETH
MASON PUBLICATIONS LTD., THE LAUX COMPANY, LAW & TECHNOLOGY PRESS,
LITTLE, BROWN & COMPANY, MARCEL DEKKER, INC., MASSACHUSETTS MEDICAL
SOCIETY, MBR PRESS, INC., MIT PRESS, MUNKSGAARD INTERNATIONAL PUBLISHERS
LTD., MULTI-SCIENCE PUBLISHING CO. LTD., OPEN-APPLE, PHYSOLOGIA PLANTARUM,
PJD PUBLICATIONS LTD., PLENUM PUBLISHING CORPORATION, PRINCETON
UNIVERSITY PRESS, RAVEN PRESS, ROYAL AUSTRALASIAN ORNITHOLOGIST'S UNION,
SCANNING MICROSCOPY INTERNATIONAL, INC., SCRIPTA TECHNICA, INC., SKY
PUBLISHING CORPORATION, THE SOCIETY OF NAVAL ARCHITECTS AND MARINE
ENGINEERS, SPRINGER-VERLAG NEW YORK INC., TECHNOLOGY CONFERENCES A/K/A
T/C PRESS, TECHNOMIC PUBLISHING CO., INC., TISSUE CULTURE ASSOCIATION, INC.,
TRANSACTION PUBLISHERS, VAN NOSTRAND REINHOLD, VCH PUBLISHERS, INC., VNU
BUSINESS PUBLICATIONS INC., W.B. SAUNDERS COMPANY, WALTER DE GRUYTER, INC.,
WARREN GORHAM & LAMONT, INC., WASHINGTON REGULATORY REPORTING ASSOC.,
WILLIAMS & WILKINS, INC., WOLTERS KLUWER ACADEMIC PUBLISHERS B.V.,
AMERICAN GEOPHYSICAL UNION, ELSEVIER SCIENCE PUBLISHING CO., INC.,
Petitioners-Appellees,
--v.--
TEXACO INC.,
Respondent-Appellants.
*CORPORATE DISCLOSURE STATEMENT*
*Amici*, by their attorneys and pursuant to Rule 26.1, Fed.
R. App. Proc., file their corporate disclosure statement as
follows:
1. This *Amicus Curiae* Brief is filed on behalf of the
following associations and organizations:
Association of Research Libraries
American Association of Law Libraries
Special Libraries Association
Medical Library Association
American Council of Learned Societies
National Humanities Alliance
Association of Academic Health Sciences Library Directors
2. None of the *Amici* have any parent companies,
subsidiaries or affiliates which issue or have issued shares to
the public.
TABLE OF CONTENTS
PAGES
PRELIMINARY STATEMENTS . . . . . . . . . . . . . . . . . 1
SUMMARY OF ARGUMENT . . . . . . . . . . . . . . . . . . 2
I. INTRODUCTION . . . . . . . . . . . . . . . . . . . 5
II. THE TRIAL COURT ERRED IN ITS APPLICATION
AND BALANCING OF THE STATUTORY
"FAIR USE" FACTORS . . . . . . . . . . . . . . . . 8
A. Factor One: The Purpose and Character
of the Use . . . . . . . . . . . . . . . . . . 9
1. The Lower Court Erred in Focusing
on the Commercial Nature of the
User Rather Than the Socially
Beneficial Research Purpose and the
Limited, "Private" Character of the
Immediate Use. . . . . . . . . . . . . . 10
a. Texaco's Immediate Research Use
Is the Relevant Focus of the
Factor One Inquiry . . . . . . . . . 10
b. Under Second Circuit Precedent,
A Socially Beneficial Purpose
Generally Outweighs the Possibility
of Commercial Gain Even Where the
Immediate Use Involves the Sale or
Distribution of Multiple Copies of
Allegedly Infringing Material. . . . 14
c. The Trial Court's "Commerciality"
Analysis Is Unsupported As a
Matter of Law and Perilous As a
Matter of Policy . . . . . . . . . . 16
2. The Lower Court Erred in Placing
Undue Weight On The "Productive vs.
Non-Productive" Issue, and in
Finding That Texaco's Copying was
"Non-Productive". . . . . . . . . . . . . 18
a. The "Productive vs. Non-Productive"
Distinction Is Not Determinative
of Fair Use. . . . . . . . . . . . . 18
b. Texaco's Reproductive Use of the
Copied Work Was "Productive" . . . . 19
B. Factor Three: The Amount and Substantiality
of the Portion Used. . . . . . . . . . . . . . 23
C. Factor Four: The Effect of the Use
Upon the Potential Market for or Value
of the Copyrighted Work. . . . . . . . . . . . 27
1. The Lower Court Erred in Basing
Its Finding On Royalties It Assumed
Publishers Would Receive If the
Researchers' Photocopying at Texaco
Was Not Fair Use. . . . . . . . . . . . . 28
2. Other Harm That the Lower Court
Postulated Is Based On Speculation
and Is Not Shown to Be Substantial. . . . 33
D. The Lower Court's Balancing of Equitable
Considerations Gave Insufficient Weight
to the "Reasonable and Customary" Nature
of the Use at Issue and Undue Weight
to the CCC . . . . . . . . . . . . . . . . . . 35
III. THE TRIAL COURT'S CONCLUSIONS REGARDING THE
APPLICATION OF SECTION 108 OF THE COPYRIGHT
ACT TO JOURNAL ARTICLE COPYING AT TEXACO ARE
BOTH INAPPROPRIATE AND WRONG. . . . . . . . . . . . 39
A. The Trial Court Erred In Purporting
To Address The Applicability
of Section 108 . . . . . . . . . . . . . . . . 39
B. The History and Background of Section 108. . . 39
C. The Trial Court Erred in Its Conclusion
That Texaco's Scientists Made Copies for
"Commercial Advantage" as That Term is
Used in Section 108. . . . . . . . . . . . . . 42
D. The Trial Court Erred in Its Interpretation
of the "Single Copy" Restriction of
Section 108. . . . . . . . . . . . . . . . . . 46
IV. CONCLUSION . . . . . . . . . . . . . . . . . . . . 49
TABLE OF AUTHORITIES
*CASES PAGES*
*American Geophysical Union, et al. v. Texaco Inc.*,
802 F. Supp. (S.D.N.Y. 1992) . . . . . . . . . . *passim*
*Arica Institute, Inc. v. Palmer*,
970 F.2d 1067 (2d Cir. 1992) . . . . . . . . . . 14, 31
*Berlin v. E.C. Publications, Inc.*,
329 F.2d 541 (2d Cir. 1964) . . . . . . . . . . . 7
*Consumers Union of U.S. v. General Signal Corp.*,
724 F.2d 1044 (2d Cir. 1983),
*cert. denied*, 469 U.S. 823 (1984) . . . . . . . 15, 31
*Dow Jones & Co. v. Board of Trade*,
546 F. Supp. 113 (S.D.N.Y. 1982) . . . . . . . . 20, 24
*Haberman v. Hustler Magazine, Inc.*,
626 F. Supp. 201 (D. Mass. 1986) . . . . . . . . 24
*Harper & Row, Publishers, Inc. v.
Nation Enters.*, 18, 20, 32
471 U.S. 539 (1985) . . . . . . . . . . . . . . . 35, 36
*Iowa State University Research Found., Inc. v. ABC, Inc.*,
621 F.2d 57 (2d Cir. 1980) . . . . . . . . . . . 35
*Key Maps, Inc. v. Pruitt*,
470 F. Supp. 33 (S.D. Tex. 1978) . . . . . . . . 24
*Mathieson v. Associated Press*,
23 USPQ 2d 1685 (S.D.N.Y. 1992) . . . . . . . . . 36
*Maxtone-Graham v. Burtchaell*,
803 F.2d 1253 (2d Cir. 1986),
*cert. denied*, 481 U.S. 1059 (1987) . . . . . . 14, 31
*New Era Publications Int'l v. Carol Publishing Group*,
904 F.2d 152 (2d Cir. 1990) . . . . . . . . . . . 31
*New Era Publications Int'l v. Henry Holt & Co.*,
873 F.2d 576 (2d Cir. 1989) . . . . . . . . . . . 15
*Northcross v. Memphis Board of Education*,
412 U.S. 427 (1972) . . . . . . . . . . . . . . . 13
*Perales v. Sullivan*,
971 F.2d 1348 (2d Cir. 1991) . . . . . . . . . . 13
*Religious Technology Center v. Wollersheim*,
971 F.2d 364 (9th Cir. 1992) . . . . . . . . . . 36
*Rogers v. Koons*,
960 F.2d 301 (2d Cir. 1992) . . . . . . . . . . . 31
*Rosemont Enters., Inc. v. Random House, Inc.*,
366 F.2d 303 (2d Cir. 1966),
*cert. denied*, 385 U.S. 1009 (1967). . . . . . . 14, 36
*Salinger v. Random House, Inc.*,
811 F.2d 90 (2d Cir.),
*cert. denied*, 484 U.S. 890 (1987) . . . . . . . 31
*Sega Enterprises, Ltd. v. Accolade, Inc.*,
977 F.2d 1510 (9th Cir. 1993) . . . . . . . . . . 10, 11, 12
*Stewart v. Abend*,
495 U.S. 207 (1990) . . . . . . . . . . . . . . . 32
*Sony Corp. v. Universal City Studios, Inc.*,
464 U.S. 417 (1984) . . . . . . . . . . . . . . . *passim*
*Triangle Publications, Inc. v.
Knight-Ridder Newspapers, Inc.*,
626 F.2d 1171 (5th Cir. 1980) . . . . . . . . . . 24, 36
*Update Art, Inc. v. Maariv Israel Newspaper, Inc.*,
635 F. Supp. 228 (S.D.N.Y. 1986),
*aff'd*, 843 F.2d 67 (2d Cir. 1988) . . . . . . . 31
*William & Wilkins Co. v. United States*,
487 F.2d 1345 (Ct. Cl. 1973),
*aff'd by an equally divided Court*,
420 U.S. 376 (1975) . . . . . . . . . . . . . . . *passim*
*Wright v. Warner Books, Inc.*
953 F.2d 731 (2d Cir. 1991) . . . . . . . . . . . 14
*CONSTITUTION, STATUTES AND RULES*
United States Const. art. I, 8 . . . . . . . . . . . 2, 22
The Copyright Act:
17 U.S.C. 107 . . . . . . . . . . . . . . . . . 2, 8, 20
17 U.S.C. 107(1). . . . . . . . . . . . . . . . 9
17 U.S.C. 107(4) . . . . . . . . . . . . . . . 27
17 U.S.C. 108. . . . . . . . . . . . . . . . . .12, 39, 44
17 U.S.C. 108(a) . . . . . . . . . . . . . . . 46
17 U.S.C. 108(a)(1) . . . . . . . . . . . . . . 43
17 U.S.C. 108(d) . . . . . . . . . . . . . . . 41
17 U.S.C. 108(g) . . . . . . . . . . . . . . . 46
17 U.S.C. 108(g)(1) . . . . . . . . . . . . . . 47
17 U.S.C. 108(g)(2) . . . . . . . . . . . . . . 42
Federal Rules of Appellate Procedure
Rule 29 . . . . . . . . . . . . . . . . . . . . 1
*LEGISLATIVE MATERIALS*
*The Constitution of the United States of America:
Analysis and Interpretation*, Sen. Doc. No. 39,
88th Cong., 1st Sess. (1964) . . . . . . . . . . . . . 6
*Copyright Law Revision, 1975: Hearings Before
the House Subcommittee on Courts, Civil Liberties,
and the Administration of Justice*
94th Cong., 1st Sess. (1975) . . . . . . . . . . . . . 43
*Copyright Law Revision: Report of the Register
of Copyrights on the General Revision of the
U.S. Copyright Law*, 87th Cong.,
1st Sess. (Comm. Print 1961) . . . . . . . . . . . . . 40
H.R. Rep. No. 83, 90th Cong., 1st Sess. (1967) . . . . 25
H.R. Rep. No. 1476, 94th Cong., 2d Sess. (1976). . . . *passim*
H.R. Conf. Rep. No. 1733, 94th Cong., 2d Sess. (1976). 45
S. Rep. No. 473, 94th Cong., 1st Sess. (1975) . . . . . 25, 43
Library of Congress, *Final Report of the National
Commission on the Technological Uses of Copyrighted
Works*, App. A ("Summary of the Legislative History
of Computer-Related Issues and the Photocopy Issue") 13,
89-104 (1979) ("CONTU Final Report) . . . . . . . . . 40, 41
*OTHER AUTHORITIES*
Zechariah Chafee, Jr., *Reflections on the Law of
Copyright* : *I*, 45 Colum. L. Rev. 503 (1945) . . . 22
Pierre N. Leval, *Toward a Fair Use Standard*,
103 Harv. L. Rev. 1105 (1990) . . . . . . . . . . . . 19, 30
L. Ray Patterson, *Free Speech, Copyright, and Fair
Use*, 40 Vand. L. Rev. 1 (1987). . . . . . . . . . . . 21
L. Ray Patterson, *Understanding Fair Use*
55 Law & Contemp. Probs. 249 (1992). . . . . . . . . . 30
Lloyd L. Weinreb, *Fair's Fair: A Comment on the
Fair Use Doctrine*, 103 Harv. L. Rev. 1137 (1990). . . 19
1935 "Gentlemen's Agreement," reprinted in
Leon E. Seltzer, *Exemptions and Fair Use in
Copyright*, at App. E (1978) . . . . . . . . . . . . . 37
This *amicus curiae* brief is submitted on behalf of the
Association of Research Libraries, the American Association of
Law Libraries, the Special Libraries Association, the Medical
Library Association, the American Council of Learned Societies,
the National Humanities Alliance, and the Association of Academic
Health Sciences Library Directors ("*Amici*"). Pursuant to
F.R.A.P. 29, this brief is being conditionally filed with the
Motion of these *amici* for leave to file, and supporting
memorandum and affidavits. The identity and interests of these
*amici* are described in that Motion. These *amici* support the
position of Appellant Texaco Inc. ("Texaco"), that this Court
should reverse the Opinion and Order entered by the Hon. Pierre
N. Leval, U.S.D.J., of the United States District Court for the
Southern District of New York, on July 23, 1992, as modified,
*American Geophysical Union, et al. v. Texaco Inc.*, 802 F.Supp.
1 (S.D.N.Y. 1992) ("*Texaco*").
*STATEMENT OF JURISDICTION*
*Amici* adopt and incorporate herein the Statement of
Jurisdiction in the Brief of Appellant Texaco Inc.
*STATEMENT OF ISSUE PRESENTED FOR REVIEW*
*Amici* adopt and incorporate herein the Statement of
Issue Presented for Review in the Brief of Appellant Texaco Inc.
*STATEMENT OF THE CASE*
*Amici* adopt and incorporate herein the Statement of the
Case in the Brief of Appellant Texaco Inc.
*SUMMARY OF ARGUMENT*
The decision of the lower court, if upheld, threatens a
longstanding, reasonable and customary practice in for-profit and
non-profit institutions alike -- the spontaneous photocopying of
single copies of published scientific, technical, and other
research and scholarly journal articles, notes and comments by
researchers, scientists, and scholars for their own research use.
The lower court's rejection of Texaco's "fair use" claim would
impose substantial, additional costs on researchers and their
employers or institutions, hampering scientific, medical and
scholarly research in the United States. It would thus impair,
not promote, the constitutional objective of the Copyright Act,
"the Progress of Science and Useful Arts." U.S. Const., art. I,
8.
The trial court committed multiple errors in its
application and balancing of the statutory "fair use" factors
under Section 107 of the Copyright Act, 17 U.S.C. 107. With
regard to factor one ("the purpose and character of the use"),
the lower court erred, first, by focusing on the commercial
nature of the user rather than the socially beneficial research
purpose and limited, private character of the immediate use.
Contrary to the lower court's conclusion, the copies of
plaintiffs' articles made by Texaco's researchers were not "for
commercial gain," because they were not sold or otherwise
distributed, and any commercial exploitation of the articles by
Texaco was attenuated, remote, and uncertain. Any presumption of
commercial use is also overridden by the facts that the copying
was conducted for a socially beneficial purpose (*i.e.*,
research); was limited in scope (single copies); and was non-
public in character. Second, the lower court erred in placing
undue weight on the distinction between "productive" and "non-
productive" uses, and in finding that Texaco's copying was "non-
productive." Not only is the distinction between "productive"
and "non-productive" uses not determinative of fair use, but also
the use of the articles by Texaco's scientists should properly be
viewed as "productive" under Supreme Court authority ignored by
the lower court.
The lower court also erred in its conclusion that factor
three ("the amount and substantiality of the portion used")
favored plaintiffs. The court applied a "general rule" -- that
the copying of entire works precludes fair use -- that is not an
accurate reflection of historic case law and is contrary to
Supreme Court precedent and to legislative history indicating
Congress considered copying of journal articles to be fair use in
appropriate circumstances.
The lower court's conclusion that factor four ("the effect
of the use upon the potential market for or value of the
copyrighted work") favors plaintiffs is similarly based on a
flawed analysis which poses a major threat to the continued
viability of the fair use exception and expands the monopoly of
copyright proprietors beyond constitutional limits. The trial
court's conclusion is based on the faulty premise that the mere
existence of procedures (however imperfect) for the payment of
royalties to publishers somehow establishes their legal right to
collect them, and it ignores Supreme Court and Second Circuit
precedent restricting the analysis to market impact. Moreover,
any suggestion that the practice of Texaco's scientists had a
significant, adverse effect on a relevant market is based on the
lower court's own speculation, not the record.
The lower court also erred in its balancing of the
equitable considerations at issue. It failed to give due weight
to the "reasonable and customary" practice of personal use
copying by scientists and researchers, and it vastly overstated
the legal and factual significance and effectiveness of existing
licensing mechanisms and procedures.
Finally, both the fact and the substance of the lower
court's analysis of Section 108 of the Copyright Act are in
error. The applicability of Section 108 was not before the trial
court; it therefore should not have purported to apply the
substantive provisions of that section at all. Its substantive
analysis only compounded the error. First, its conclusion that
Texaco's scientists made copies for "commercial advantage," as
that term is used in Section 108, flies in the face of
legislative history expressly stating that the type of copying at
issue here is *not* for "commercial advantage." Second, the
trial court's conclusion that Texaco's scientists violated the
"single copy" restriction of Section 108 disregards the plain
language of that section.
The lower court's opinion, in short, is permeated with
errors which, if not corrected by this Court, pose grave threats
to researchers, scientists, and scholars, and to the libraries
they use.
*ARGUMENT*
I. *INTRODUCTION*
The decision of the lower court ignores manifested
Congressional intent and misapplies fair use principles to reach
a result that imperils spontaneous, personal copying of
scientific, technical, medical, and other scholarly journal
articles and excerpts by researchers and clinicians at for-profit
organizations, copying that is necessary for the efficient use of
these materials and that has long been considered reasonable and
customary. If upheld, the lower court's decision would impose,
at the least, substantial and unexpected new costs on the use of
these materials, and, for many researchers, substantially
decrease or even deny access to them. The resulting new costs
and obstacles would hamper research in all disciplines, including
education, science, medicine, social sciences, law, and
engineering, and the development of all products based on
information.
There is no reason to believe that, if the lower court's
decision is upheld, there would be a countervailing increase in
research or in publication of scientific articles. To the
contrary, no new incentives would be provided researchers and
authors. The authors of these journal articles are not
compensated for their work by publishers and, as they assign
their copyrights to the publishers, 802 F. Supp. at 6, they will
receive none of the royalties the publishers seek to extract.
Thus, the lower court's ruling would lead to a potentially
massive transfer of funds from users of articles and reports in
scientific, technical, medical, legal, social science and other
journals, to publishers' publications, such as the *Journal of
Catalysis*, and to publishers who, the record shows, already are
highly profitable. *Id*. at 27.
Moreover, despite the lower court's heavy reliance on
Texaco's profit objectives,(1) clearly erroneous elements of
its Section 107 and Section 108 analysis narrow rights under
those provisions in ways that have a potential for threatening
fair use, spontaneous, personal copying even at non-profit
institutions. If the lower court's errors are not corrected,
they ultimately could have a damaging effect on research, study,
and teaching that spreads beyond the for-profit section.
The constitutional clause that authorizes "the creation
and bestowal of monopolistic privileges" on authors and inventors
limits Congress both "as to the purpose and duration of the
rights granted." *See* The Constitution of the United States of
America: Analysis and Interpretation, Sen. Doc. No. 39, 88th
Cong., 1st Sess. 317 (1964). The Supreme Court held in *Sony
Corp. v. Universal City Studios, Inc.*, 464 U.S. 417, 429 (1984)
("*Sony*") that:
The monopoly privileges that Congress may authorize
are neither unlimited nor primarily designed to
provide a special private benefit. Rather, the
limited grant is a means by which an important
public purpose may be achieved.
Congressional authority to enact legislation establishing
copyright protection for works of authorship is limited by the
principle that open communication of knowledge and ideas is an
essential characteristic of a free society. The grant of a
monopoly to the written expression of knowledge and ideas must be
viewed as a special exception, to be given a scope no broader
than the purpose for which the exception is granted. Since
Congress has no power to confer any "exclusive rights" which
would be incompatible with the constitutional objective of
promoting the progress of science and the arts, any copyright law
must be interpreted in the light of the constitutional grant of
authority on which it depends.
The principles that a copyright monopoly may be enforced
only to the extent that to do so will "promote the Progress of
Science and Useful Arts" and that the judiciary should be
reluctant to "expand the protections afforded by copyright
without explicit legislative guidance," *Sony*, 464 U.S. at 431,
are particularly applicable to the present case.(2) As
observed by this Court, in order to serve the constitutional
purpose, "[c]ourts in passing upon particular claims of
infringement must occasionally subordinate the copyright holder's
interest in a maximum financial return to the greater public
interest in the development of art, science and industry."
*Berlin v. E.C. Publications, Inc.*, 329 F.2d 541, 544 (2d Cir.
1964). A decision for plaintiffs in this case will interfere
seriously with the "Progress of Science" and will in no way
promote that progress.
This Court should not endorse such a novel extension of
copyright that would have such a clearly unconstitutional effect.
However, it is not necessary for this Court to reach this
constitutional issue, because, as the following analysis shows,
Congress never intended that the provisions of the Copyright Act
would be used to bar the unrelated making of single photocopies
of published, scientific, journal articles by researchers (or
libraries at their request) for their own research use, when that
copying does not significantly substitute for subscriptions to
the works concerned.
II. THE TRIAL COURT ERRED IN ITS APPLICATION AND BALANCING
*OF THE STATUTORY "FAIR USE" FACTORS *
The introductory sentence of Section 107 of the Copyright
Act, 17 U.S.C. 101 *et seq.*, provides in relevant part
that: "Notwithstanding the provisions of section 106, *the fair
use of a copyrighted work*, including such use by reproduction in
copies . . . , for purposes such as criticism, comment, news
reporting, teaching (including multicopies for classroom use),
scholarship, or research, *is not an infringement of copyright*."
17 U.S.C. 107 (emphasis added). The statute further provides
that four non-exclusive factors shall be considered in
determining whether the use made of a work in any particular case
is or is not a fair use. District Judge Leval concluded that
three of the four factors (factors one, three, and four) favored
the plaintiff. *Amici* contend that his conclusions with respect
to those three factors are based on fundamental errors of law.
A. *Factor One: The Purpose and Character of the Use*
The first statutory factor to be considered in the fair
use analysis is "the purpose and character of the use, including
whether such use is of a commercial nature or is for nonprofit
educational purposes." 17 U.S.C. 107(1). The lower court
found that this factor favored the plaintiff principally because
it viewed Texaco's copying of the article at issue as "not of the
transformative, nonsuperseding type that has historically been
favored under the fair use doctrine." 802 F. Supp. at 13. It
further found that Texaco's copying was "for commercial gain" and
therefore did not "come within the class of copying that has
prevailed under the first factor because of its nonprofit
educational or social value." *Id.*
With respect to the first factor, the lower court's
opinion is in error for at least two major reasons: (1) in
concluding that Texaco's copying was for commercial gain, the
lower court improperly emphasized the commercial objectives of
the user organization and failed to focus on the purpose and
character of the immediate use, *i.e.*, the making of single
photocopies for individual, personal use in direct support of
research (one of the presumptively fair uses specified in the
introductory sentence of Section 107) rather than the sale or
public distribution of multiple copies; and (2) the lower court
gave undue weight to the supposed "non-productive" nature of
Texaco's copying, and erred in finding Texaco's use to be "non-
productive."
1. The Lower Court Erred in Focusing on the Commercial
Nature of the User Rather Than the Socially
Beneficial Research Purpose and the Limited,
*"Private" Character of the Immediate Use *
The lower court expressly found that Texaco's "copiers are
scientists, they are using their copies to assist in socially
valuable scientific research, and they do not resell the copies."
802 F. Supp. at 16. That finding should have swung the first
factor in Texaco's favor notwithstanding the undeniable fact that
Texaco is a commercial entity which employs scientists and others
in order to maintain and improve its competitiveness and
profitability. Where, as here, the copying itself is undertaken
for a recognized, socially beneficial purpose such as scientific
research, and is both limited in scope (*i.e.*, single copies)
and "private" in nature (*i.e.*, for individual or "in-house"
use), it is insignificant that the copying may ultimately prove
to be one small step on the path toward any possible commercial
application.
a. Texaco's Immediate Research Use Is the Relevant
* Focus of the Factor One Inquiry *
The critical "commerciality" inquiry, of which the lower
court lost sight, focuses on the purpose and character of the
immediate use of the copied work, not the commercial nature of
the user. This principle is well illustrated by a recent Ninth
Circuit case, *Sega Enterprises, Ltd. v. Accolade, Inc.*, 977
F.2d 1510 (9th Cir. 1993) ("*Sega*"), decided after the lower
court issued its opinion herein. In *Sega*, defendant Accolade,
a manufacturer of video game cartridges, disassembled the
copyrighted computer program of the plaintiff, a video game
console manufacturer. Using the "object code" it obtained,
Accolade manufactured video game cartridges compatible with
Sega's "Genesis" video game console. *Id.* at 1514-15. The
Ninth Circuit found the first factor to favor Accolade. *Id.* at
1522. In words directly applicable here, it stated that the use
at issue "was an *intermediate* one only and thus any commercial
'exploitation' was *indirect* or *derivative*." *Id.* (emphasis
added). More specifically, it found:
[A]lthough Accolade's ultimate purpose was the
release of Genesis-compatible games for sale, its
direct purpose in copying Sega's code, and thus
*its direct use of copyrighted material, was simply
to study* the functional requirements for Genesis
compatibility so that it could modify existing
games and make them usable with the Genesis
console.
*Id.* (emphasis added). It concluded "that Accolade copied
Sega's code for a legitimate, essentially non-exploitative
purpose, and the commercial aspect of its use can best be
described as of minimal significance." *Id.* at 1533.
Similarly, the commercial aspect of Dr. Chickering's
photocopying can best be described as of minimal significance.
As the lower court found, Dr. Chickering photocopied particular
articles because they were pertinent to research that he was
conducting or expected to conduct in the future. 802 F. Supp. at
6. As with Accolade, Dr. Chickering's direct purpose was solely
"in-house" research and study. His use of the copyrighted
material was, therefore, legitimate and non-exploitative. The
commercial aspects of Dr. Chickering's ultimate purpose,
"creat[ing] new products and process for Texaco," *id.* at 16,
like those of Accolade, were too attenuated and indirect to merit
a finding of overriding commercial use.(3)
This analysis of the "commerciality" element of factor one
is buttressed by analogy to a related section of the Copyright
Act, 17 U.S.C. 108.(4) Section 108(a) permits qualifying
libraries to make single photocopies of articles for researchers,
if *inter alia*, the copies are made "without any purpose of
direct or indirect commercial advantage." The legislative
history of Section 108(a) states that the photocopying of journal
articles by libraries of profit-making institutions, absent a
"systematic effort to substitute photocopying for subscriptions,
would be covered by Section 108, even though copies are furnished
to the employees of the organization for use in their work."
H.R. Rep. No. 1476, 94th Cong., 2d Sess. 74 (1976). Such
photocopying is covered by Section 108 because it:
would ordinarily not be considered 'for direct or
indirect commercial advantage,' since the
'advantage' referred to in this clause must attach
to the *immediate commercial motivation behind the
reproduction or distribution itself, rather than to
the ultimate profit-making motivation behind the
enterprise* in which the library is located.
*Id.* (emphasis added).
Thus, in connection with a related provision of the same
Act, in which a commercial character or profit motive for the use
would be potentially disqualifying,(5) Congress clearly
intended the "commerciality" inquiry to focus on the immediate
use rather than an attenuated connection to any possible future
commercial application by a profit-making entity. As a matter of
statutory construction, the clear Congressional intent with
respect to this aspect of Section 108 is directly relevant to the
proper interpretation of the parallel aspect of Section 107(1).
*See Perales v. Sullivan*, 948 F.2d 1348, 1355 (2d Cir. 1991)
("[S]imilar language in two different sections of the same law
should be given similar interpretation."); *see also*
*Northcross v. Memphis Board of Education*, 412 U.S. 427, 428
(1972). Yet the trial judge failed even to acknowledge the plain
Congressional intent behind Section 108(a), and the relevance of
that intent to Section 107(1).
b. Under Second Circuit Precedent, A Socially
Beneficial Purpose Generally Outweighs the
Possibility of Commercial Gain Even Where the
Immediate Use Involves the Sale or Distribution
of Multiple Copies of Allegedly Infringing
*Material *
The Second Circuit has held that factor one generally
favors defendants where a socially beneficial purpose underlies
the use at issue, notwithstanding the possibility of ultimate
commercial gain. Thus, in *Arica Institute, Inc. v. Palmer*, 970
F.2d 1067, 1077 (2d Cir. 1992), this Court wrote: "Where
defendant's use is for purposes of 'criticism, comment . . .
scholarship [or] research,' (citation omitted) there will be a
'strong presumption that factor one favors the defendant,'"
*citing Wright v. Warner Books, Inc.*, 953 F.2d 731, 736 (2d
Cir. 1991) (strong presumption that factor one favors the
defendant if defendant's use of the work fits within the
description of uses set forth in the introductory sentence of
Section 107, *e.g.*, criticism, scholarship, or research). Uses
such as criticism, scholarship, and research are presumed to
confer a public benefit which outweighs any ultimate commercial
aspect of the use. In *Rosemont Enterprises, Inc. v. Random
House, Inc.*, 366 F.2d 303, (2d Cir. 1966), *cert*. *denied*, 385
U.S. 1009 (1967), for example, this Court wrote: "Whether an
author or publisher reaps economic benefits from the sale of a
biographical work, or whether its publication is motivated in
part by a desire for commercial gain . . . has no bearing on
whether a public benefit may be derived from such a work." In
*Maxtone-Graham v. Burtchaell*, 803 F.2d 1253, 1262 (2d Cir.
1986), *cert*. *denied*, 481 U.S. 1059 (1987), this Court
similarly held that the "educational elements" of an allegedly
infringing work "far outweigh[ed] the commercial aspects of the
book," noting that the "commercial nature of the use is a matter
of degree, not an absolute."(6)
In the Second Circuit cases cited above, the defendants'
immediate use involved the sale of books or use of advertisements
containing allegedly infringing material. Multiple copies of
such material were publicly distributed. This Court nevertheless
found a public benefit that overrode the significance of profit
motivation and tipped factor one in favor of the defendants. In
this case, too, the immediate use is imbued with a public benefit
-- scientific research -- but involves neither multiple copies
nor public sale or distribution, and is only remotely connected
to the possibility of future corporate profits. Thus, there is
even greater reason to discount any commercial aspect of Texaco's
use. While the Second Circuit has not been confronted with such
a fact pattern until now, the holdings of its prior cases,
reinforced by the logic of *Sega* and the legislative history of
Section 108(a), compel the conclusion that factor one properly
favors Texaco.
c. The Trial Court's "Commerciality" Analysis Is
Unsupported As a Matter of Law and Perilous As
*a Matter of Policy *
The trial judge correctly recognized that a profit motive
does not by itself disqualify the use of copyrighted material
from fair use protection. 802 F. Supp. at 12. But he then went
on to hold, in effect, that the existence of a profit-making
motive is disqualifying where the secondary use is superseding
(or non-productive), rather than transformative (or productive).
*Id.* at 13-15. This distinction may be useful when the
immediate use involves the sale or public distribution of
multiple copies of allegedly infringing material. There is no
authority or rationale for applying it to the situation presented
here, however, where the secondary use is in direct support of
scientific research, is non-public, is limited in scope, and
where any commercial exploitation stemming from the use is at
best remote and uncertain. *See* discussion at Section II.A.2
*infra*.
The lower court's test regarding the "commerciality"
element of Section 107(1) is not only unsupported as a matter of
law, but also fraught with peril as a matter of policy. From the
perspective of the libraries which are members of the *amici*
associations and from the perspective of scholars and researchers
who use those libraries, the lower court's analysis of this
element could, if upheld, have a serious adverse impact on
scholarship and research in the United States. Under the lower
court's analysis, making single photocopies for an individual's
own use in connection with scholarship or research is a
superseding (non-productive) use. Thus, the lower court would
find that such use favors the user under factor one only if the
individual is engaged in a wholly non-profit endeavor. If the
individual is employed by a profit-making enterprise or there is
a possibility of commercial exploitation, however remote, the
lower court would find the use to be presumptively unfair under
factor one. This analysis leads to anomalous results,(7)
demonstrating the need, particularly in the area of scholarship
and research, to focus on the immediate use of the copyrighted
work rather than the profit-making status of the user or the
user's employer. Under a proper analysis of factor one, a
presumption against fair use exists where the immediate use of
the copied material is clearly commercial, *e.g.*, the copier
attempts to sell competing copies for his own financial
enrichment. But a presumption in favor of fair use exists where
single copies are made for immediate and "private" use by the
individual scholar or researchers engaged in his or her research
pursuits, regardless of the nature of the individual's employer
or the source of research funding.
2. The Lower Court Erred in Placing Undue Weight
on the "Productive vs. Non-Productive" Issue,
and in Finding That Texaco's Copying was "Non-
*Productive" *
a. The "Productive vs. Non-Productive"
Distinction Is Not Determinative of Fair
*Use *
In its factor one analysis, the lower court placed undue
weight on whether the copying at Texaco was "productive" or "non-
productive." It held that if the use of the copied material is
deemed "commercial," a defendant can succeed under factor one
only by showing that the use nevertheless was "productive" (which
it defines as a "nonsuperseding use of the original"). 802 F.
Supp. at 12-13. In so holding, the lower court disregarded the
Supreme Court's ruling in *Sony*, that "[t]he distinction between
'productive' and 'unproductive' uses . . . [is not] wholly
determinative" of fair use, 464 U.S. at 455 n.40, and ignored the
Court's instruction that "productivity" is only to be considered
as one of a multitude of factors in a "sensitive balancing of
interests" under the first part of the four-pronged fair use
test. *Id.* *See also* *Harper & Row, Publishers, Inc. v.
Nation Enterprises*, 471 U.S. 539, 561 (1985) ("[P]roductive use
is simply one factor in a fair use analysis.") Rather than
follow established Supreme Court precedent, the lower court
applied its own "productivity" test, which it used to analyze the
conduct of Texaco's scientists in this case.(8)
*Amici* do not suggest that the "productive" nature of use
cannot be considered as part of a fair use analysis. However, it
is not the primary or determinative factor to be evaluated to the
exclusion of all others. Thus, the lower court's first factor
"test" misapplies the law, and its holding thereunder should be
reversed.
b. Texaco's Reproductive Use of the Copied
*Work Was "Productive" *
In its analysis of this issue, the lower court also erred
in holding that Texaco's use of the copied works was not
productive. The court summarily dismissed Texaco's argument that
its use of the copied material for "socially valuable scientific
research", 802 F. Supp. at 16, was "productive," by stating:
"[that] is not the kind of productivity that was intended by the
discussions and holdings." *Id*. at 14. It held that the use
involved no more than "simply mak[ing] mechanical photocopies of
the entirety of relevant articles," *id*. at 13, and
"contribute[d] nothing new or different to the copyrighted work."
*Id*. Again, the court's narrow analysis of what constitutes a
"productive use" thwarts the purpose and intent behind the fair
use doctrine.
In the preamble to Section 107, Congress provided a
guiding illustration of fair uses, including criticism, comment,
news reporting, teaching, scholarship, and research. 17 U.S.C.
107. Whether or not these types of uses are presumptively
determinative of the first fair use factor, they undoubtedly are
the types of uses courts have identified as "productive" uses.
*See* *Harper & Row*, 471 U.S. at 561 ("The fact that an article
is originally 'news' and therefore productive use is simply one
factor in a fair use analysis."); *Sony*, 464 U.S. at 455 n.40
("A teacher who copies to prepare lecture notes is clearly
productive. But so is a teacher who copies for the sake of
broadening his personal understanding of his specialty. Or a
legislator who copies for the sake of broadening her
understanding of what her constituents are watching; or a
constituent who copies a news program to help make a decision on
how to vote").(9) The reproduction for research purposes of
the articles at issue in this case is not any less "productive"
than these other recognized and enumerated productive uses.
The lower court's rigid test appears to reject Texaco's
research purpose as a productive use solely because the articles
copied were not immediately (at the point of reproduction at the
photocopying machine) incorporated into a new, tangible and non-
identical work. In the court's eyes, Texaco's "copy of the
original [was not] employed as part of a larger whole, for some
new purpose," and this was "the type of superseding copying that
has been disfavored since the earliest discussion of the doctrine
and [which] was thought by many to preclude a finding of fair use
*prior to the Supreme Court's decision in Sony*." 802 F. Supp.
at 13 (emphasis added).
This rationale ignores not only Supreme Court precedent,
but also history and reality, to reach a result that implies that
even notetaking by a scholar researching a critical work or a
scientist preparing an experiment is "non-productive." The
court's rationale ignores history because it takes no account of
the fact that at the time the fair use doctrine was developed and
for much of its history, the copyright law accorded copyright
owners of books only the exclusive rights to print, reprint,
publish or vend their works, and did not limit copying of such
works. *See* *Williams & Wilkins Co. v. United States*, 487 F.2d
1345, 1350 (Ct. Cl. 1973), *aff'd by an equally divided Court*,
420 U.S. 376 (1975); L. Ray Patterson, *Free Speech, Copyright,
and Fair Use*, 40 Vand. L. Rev. 1, 37 (1987). Distinctions among
holdings characterized by Judge Leval as distinctions between
"productive" and "non-productive" uses therefore related to
instances of publications of the copyright owners' works, that
is, public, competitive uses. In that context, according
preferred status to publications that in some way modify or
comment on the original work may be logical. In the context of
private research or study, where an exact record of the original
expression is needed, but the copy does not compete with the
original, such a distinction has nothing to recommend it.
The lower court's opinion also ignores reality by failing
to recognize the fact that research is not a simple, one-step
process, particularly the sophisticated type of research in which
Dr. Chickering was engaged. The creation of a new and
"nonsuperseding" work, which incorporates and thus uses the
earlier copied work, is necessarily a laborious process for any
researcher. Study and research may ultimately beget tangible
results, which may in turn be used and copied by future
researchers for use in their research efforts. This is how a
civilized society progresses, and precisely how the fair use
exception must function to fulfil the constitutional objective to
"promote the Progress of Science and Useful Arts." U.S. Const.
art. 1, 8; *see* Zechariah Chafee, Jr., *Reflections on the
Law
of Copyright: I*, 45 Colum. L. Rev. 503, 511 (1945).
Even where tangible results are not achieved, the
researcher would have, at the least, "broaden[ed] his personal
understanding of his specialty." *Sony*, 464 U.S. at 455 n.40.
It is difficult to imagine a court holding that the efforts of an
individual scientist or other scholar to keep current on
developments in his or her field of specialty is not only "non-
productive" but constitutes copyright infringement. Yet that is
precisely what the lower court did.
Under the lower court's analysis, moreover, the
republication of a quotation from another author's work in a work
of criticism would be a "productive" use, but the copying of that
quotation in conducting research for the critical work would be a
"non-productive," "superseding" use. A rationale that yields
this preposterous result is manifestly flawed.
In view of these multiple errors of analysis, the lower
court's analysis under the first fair use factor should be
soundly rejected. The reproduction of the copied materials by
Texaco's researchers was a productive use for a socially
beneficial purpose, limited in scope and non-public in character.
Properly assessed, the balance under factor one is in Texaco's
favor.
B. Factor Three: The Amount and Substantiality of the
*Portion Used *
The lower court gave only cursory consideration to the
third factor, holding that because Dr. Chickering copied the
entirety of selected *Catalysis* articles relevant to his
research "[t]his factor clearly favors plaintiffs." 802 F. Supp.
at 17. In reaching this conclusion, the lower court ignored the
legislative history of Section 107 and an important teaching of
the Supreme Court in *Sony* (the only judicial authority the
court cited) and alluded to a general rule -- that the copying of
entire works precludes fair use -- which is not an accurate
reflection of historic case law and is contrary to the Supreme
Court's holding in *Sony*.
1. The Copy of an Entire Copyrighted Work Can Be a
*Fair Use *
The "suggest[ion] that the copying of an entire
copyrighted work, any such work, cannot ever be 'fair use,' . . .
is an overbroad generalization, unsupported by the decisions and
rejected by years of accepted practice." *Williams & Wilkins*,
487 F.2d at 1353.(10) The Supreme Court clearly agrees,
because in *Sony* it held that the recording of entire television
programs for private, noncommercial time-shifting use in the home
was a fair use of copyrighted television programs. *See* 464
U.S. at 447-56.
The legislative history of Section 107 shows that Congress
specifically considered the photocopying of entire journal
articles to be a fair use in appropriate circumstances. The
House Judiciary Committee Report notes that "[a]lthough the works
and uses to which the doctrine of fair use is applicable are as
broad as the copyright law itself, most of the discussion of
Section 107 [during development of the 1976 Copyright Act] has
centered around questions of classroom reproduction, particularly
photocopying." H.R. Rep. No. 1476 at 66. Although enactment of
a specific provision was considered, the Judiciary Committee
decided Section 107's fair use provisions were adequate to shield
reproduction for classroom use. *Id*. at 66-67. With respect to
the application of the Section 107 criteria to photocopying for
classroom use, the Committee referred to a pertinent discussion
in its 1967 report (H.R. Rep. No. 83, 90th Cong., 1st Sess. 32-35
(1967)) which, with some changes, is also set forth in the Senate
Report on S.22 (S. Rep. No. 473, 94th Cong., 1st Sess. 63-65
(1975)). H.R. Rep. No. 1476 at 67. As contained in the Senate
Report, that discussion listed the copying of an article in a
collective work (such as a periodical issue) as an example of
fair use:
The educators have sought a limited right for a
teacher to make a single copy of an "entire" work
for classroom purposes, but it seems apparent that
this is not generally intended to extend beyond a
"separately cognizable" or "self-contained" portion
(for example, a single poem, story, or *article* in
a collective work), and that no privilege is sought
to reproduce an entire collective work (for
example, an encyclopedia volume, a periodical issue
or a sizable integrated work published as an
entity) (a novel, treatises, monograph, and so
forth). With this limitation, and subject to the
other relevant criteria, the requested privilege of
making a single copy appears appropriately to be
within the scope of fair use.
S. Rep. No. 473 at 64 (emphasis added). The House Judiciary
Committee, and subsequently the Conference Committee, also
endorsed as "a reasonable interpretation of the minimum standard
of fair use," H.R. Rep. No. 1476 at 72, guidelines for classroom
use photocopying negotiated by representatives of publishers and
certain educational organizations.(11) Although they are
considered by many to be otherwise too limited, the guidelines
specifically approve the copying of periodical articles and other
entire works.(12)
In view of these provisions, it is clear that Congress did
not consider the photocopying of entire periodical articles,
short stories, or short essays as necessarily inimical to fair
use. Thus, Judge Leval's cursory treatment of the third factor,
in which he concludes that the mere fact that entire articles
were copied conclusively places factor three on the publishers'
side of the scales, is grossly in error. Application of his
analysis to the copying of scholarly or technical journal
articles by or for professors for classroom use would imperil
copying that the House and Senate Committees expressly stated was
fair use.
In *Sony*, the Supreme Court held that the copying of
*entire* programs by VCR users did not militate against a finding
of fair use "when one considers the nature of a televised
copyrighted audiovisual work . . . and that time-shifting merely
enables a viewer to see such a work which he had been invited to
witness in its entirety free of charge." 464 U.S. at 449. The
lower court erred in not taking such factors into account in its
third factor analysis. *See* 802 F. Supp. at 17. It should have
considered that Dr. Chickering's copying of articles in
scientific journals, to which Texaco was a paid subscriber,
merely allowed him (a) to use the material in a laboratory
conveniently and without endangering the originals, and (b) to
postpone the reading of an article from the time the journal
issue is circulated to him to some later, more convenient
time.(13) In these circumstances, the third factor does not
militate against a finding of fair use, and Judge Leval's
contrary ruling was error.
C. Factor Four: The Effect of the Use Upon the
*Potential Market for or Value of the Copyright Work*
The final statutory factor to be considered in the fair
use analysis is "the effect of the use upon the potential market
for or value of the copyrighted work." 17 U.S.C. 107(4). The
lower court found that the plaintiffs "powerfully demonstrated
entitlement to prevail as to the fourth factor." 802 F. Supp. at
18. The lower court reached this conclusion by means of a
gravely flawed analysis, which poses a major threat to the
continued viability of the fair use exception and expands the
monopoly of copyright proprietors beyond constitutional limits.
1. The Lower Court Erred in Basing Its Finding On
Royalties It Assumed Publishers Would receive
If the Researchers' Photocopying at Texaco Was
*Not Fair Use *
Texaco contended below that its scientists needed
photocopies for their research purposes, not multiple originals.
*Id*. As the lower court observed, Texaco argued that if it
"stopped making photocopies for Chickering and his colleagues,
Texaco would not replace those photocopies by purchasing numerous
additional subscriptions or by purchasing back issues and back
volumes." *Id*. at 19. The lower court "accept[ed] . . . that
Texaco would not fill [its] need [now being supplied by
photocopies] by enormously enlarging the number of its
subscriptions."(14) *Id*. It nevertheless concluded that
factor four weighed strongly in plaintiffs' favor because:
The plaintiffs have shown that there are a
variety of other avenues Texaco could and would
follow to provide its scientists promptly and
relatively inexpensively with working copies of
articles for their files (which would produce
revenues for the publishers). These include the
ordering of photocopies from document delivery
services that would pay royalties to the
publishers, the negotiation of blanket licenses
with individual publishers, and the use of a CCC
[Copyright Clearance Center] license under either
the TRS [Transactional Reporting Service] or the
AAS [Annual Authorization Service].
*Id*. The court, in other words, was persuaded that factor four
tipped in plaintiffs' favor not because the challenged practice
significantly restricted the number of original copyrighted works
Texaco would purchase from plaintiffs, but because mechanisms
(such as the CCC) existed whereby plaintiffs could extract
royalties from Texaco (directly or indirectly) for making the
working photocopies Texaco's scientists desired.
The lower court's conclusion in this regard is erroneous
as a matter of law. First, it conflicts with the statute because
the court's rationale focuses on the value of the *copyright* and
not, as directed by Section 107(4), on the market for or value of
the "copyrighted *work*." Second, it necessarily assumes its
conclusion -- that Texaco's photocopying is not a fair use and
that plaintiffs therefore have a right to collect royalties for
the reproduction of articles in their journals. The mere
existence of mechanisms or procedures for the payment of
royalties cannot establish the legal right of plaintiffs to
collect them. If it did, fair use defendants would virtually
never succeed with respect to the fourth factor, and it would
become meaningless. A fair use by definition involves
uncompensated use of copyrighted materials. That a plaintiff
will obtain more revenue when it is paid for the use of its work
than when it is not, is no more than a tautology that fails to
advance the fair use analysis at all.
Judge Leval appeared at points in his opinion to
appreciate the circular nature of plaintiffs' argument. His
opinion, for example, quoted his own law review article as
follows:
By definition every fair use involves some loss of
royalty revenue because the secondary user has not
paid royalties. Therefore, if an insubstantial
loss of revenue turned the fourth factor in favor
of the copyright holder, this factor would never
weigh in favor of the secondary user. And if we
then gave serious deference to the proposition that
it is 'undoubtedly the single most important
element of fair use,' fair use would become
defunct.
802 F. Supp. at 21 n.18, *quoting*, Leval, *Toward A Fair Use
Standard*, at 1124-25. But he then falls into the very trap he
foresaw, writing "[i]f the copyright owner would be receiving
significantly higher revenue but for the defendant's
uncompensated copying, the standard is satisfied." 802 F. Supp.
at 20. By focusing exclusively on the *ability* of plaintiffs to
extract additional royalties, Judge Leval ignores whether they
have a *right* to do so and renders the fourth factor virtually
impossible for defendants to fulfill.
The role of alleged lost royalty income was correctly
analyzed in *Williams & Wilkins*. In that case, as in the
instant case below, the trial judge inferred that the defendants'
photocopying resulted in a loss of royalty income. 487 F.2d at
1357. But the Court of Claims rejected this measure of harm:
It is wrong to measure the detriment to
plaintiff by loss of presumed royalty income -- a
standard which necessarily assumes that plaintiff
had a right to issue licenses. That would be true,
of course, only if it were first decided that the
defendant's practices did not constitute "fair
use." In determining whether the company has been
sufficiently hurt to cause these practices to
become "unfair," one cannot assume at the start the
merit of the plaintiff's position, *i.e.*, that
plaintiff had the right to license. That
conclusion results only if it is first determined
that the photocopying is "unfair."
*Id*. at 1357 n.19; *see also* L. Ray Paterson, *Understanding
Fair Use*, 55 Law & Contemp. Probs., 249, 263 (1992).
A proper analysis of factor four focuses not on the
plaintiff's ability to collect additional revenue, for that will
frequently be present, but on whether the defendant's practice
has a significant, adverse effect on actual or potential demand
for the original work or for a derivative of the original work.
Such an effect will generally be found only when a defendant's
secondary use competes with (and therefore reduces demand for) a
plaintiff's copyrighted work or a derivative work. As this Court
wrote in *Consumers Union of U.S. v. General Signal Corp.*, 724
F.2d 1044, 1044, 1050 (2d Cir. 1983), *cert*. *denied*, 469 U.S.
823 (1984), "[t]he fourth factor is aimed at the copier who
attempts to usurp the demand for the original work." It
continued:
The theory behind the copyright laws is that
creation will be discouraged if demand can be
undercut by copiers. Where the copy does not
compete in any way with the original, this concern
is absent.
*Id*. at 1051. These words were quoted approvingly in the more
recent Second Circuit opinion in *New Era Publications
International v. Carol Publishing Group*, 904 F.2d 152, 160 (2d
Cir. 1990).(15)
Supreme Court cases in this area also consistently
emphasize the impact of the defendant's conduct on the
marketability of the copyrighted work (or a derivative work)
rather than the loss of any royalty income which resulted from
the alleged infringement. In *Sony*, for example, the fourth
factor favored Sony in large part because "respondents failed to
demonstrate that time-shifting [of television programs using
Sony's Betamax] would cause any likelihood of non-minimal harm to
the potential market for, or value of, their copyrighted works."
464 U.S. at 456. In that case, the potential royalty revenue to
plaintiffs if Betamax users were required to pay royalties
whenever they taped a program for private viewing would have been
immense, yet that calculation played no role whatever in the
Supreme Court's analysis of the effect of such use on the market
for plaintiffs' copyrighted works.(16)
The lower court's emphasis on the loss of potential
royalties for the right to make the fair use copies skewed its
analysis of the fourth factor in a way that biases the factor in
all but *de minimis* cases even against private, academic and
research uses of copyrighted works. This narrows fair use and
expands copyright proprietors' monopoly unreasonably, with
adverse effects on scholarship and scientific research.
2. Other Harm That the Lower Court Postulated Is
Based On Speculation and Is Not Shown to Be
*Substantial *
When the loss of potential royalty income from the making
of the fair use copies is properly removed from the factor four
analysis, it is clear that the plaintiffs have suffered no
significant or "non-minimal" harm to the market for their
copyrighted works. Such harm would be present only if the
copying by Texaco's scientists usurped demand for the original or
derivative works. It does not, because (unlike the cases noted
above in which the fourth factor was found to favor plaintiffs)
Texaco's copies do not compete in the marketplace with
plaintiffs' originals or with any derivative of plaintiffs'
originals. Indeed, Texaco's copies are neither sold nor
otherwise distributed at all. They therefore have no potential
for reducing demand for plaintiffs' works beyond Texaco itself,
and that possibility was substantially excluded by the trial
court's conclusion that Texaco would not significantly increase
its journal subscriptions if it stopped making photocopies. 802
F. Supp. at 19.
The lower court, did, however, opine that if photocopying
were stopped, circulation of subscription copies would slow, and
"[t]o speed up the circulation, it seems likely that Texaco would
add at least a modest number of subscriptions to *Catalysis*
which would increase Academic Press' revenues." *Id*. At best,
this conclusion is highly speculative. It assumes that Texaco
(and other similarly situated institutions) would continue to pay
the premium "institutional" subscription rates charged by many
publishers, even if precluded from making necessary copies of
articles at the request of scholars or researchers. It also
assumes that Texaco -- and, by extension, others to whom
publishers would attempt to apply a favorable decision -- has a
substantially expandable budget for serial subscriptions. We are
aware of no evidence in the record to support these
counterintuitive assumptions. It is at least as likely that
circulation of subscription copies would be allowed to suffer
whatever slowing, if any, was experienced; and if subscriptions
to one or more journals were increased, subscriptions to others
would be commensurately reduced or eliminated and greater
reliance placed on other sources such as public or university
libraries when access to less used publications was required.
*See* *Williams & Wilkins*, 487 F.2d at 1358.(17)
D. The Lower Court's Balancing of Equitable
Considerations Gave Insufficient Weight to the
"Reasonable and Customary" Nature of the Use at
*Issue and Undue Weight to the CCC *
Having analyzed each of the four statutory factors in
Section 107, the lower court properly addressed additional
equitable considerations. *Sony*, 464 U.S. at 448 & n.31; *Iowa
State University Research Foundation, Inc. v. ABC, Inc.*, 621
F.2d 57, 60 (2d Cir. 1980); *see* 802 F. Supp. at 21-22. The
lower court's balancing of the equities in this case, however,
weighed custom and practice far too lightly and the CCC far too
heavily.
The lower court expressly acknowledged that "[i]t is
commonplace for scientists . . . in industry generally . . . to
make for themselves (or to request from the company library)
photocopies of particular articles that are expected to be useful
in their work." 802 F. Supp. at 4. It also stated that
"Texaco's strongest argument may be that photocopying has become
'reasonable and customary,' [*Harper & Row*], 471 U.S. at 550,
105 S. Ct. at 2225, and that failure to permit it would
substantially harm scientific research, as *Williams & Wilkins*
found." 802 F. Supp. at 25.
But the court ultimately rejected these equitable
arguments on the ground that they "depend . . . on the absence of
a convenient, reasonable licensing system." *Id.* Texaco's
scientists need to stop making individual copies of copyrighted
material, the lower court reasoned, because such a "convenient,
reasonable licensing system" is now in place which permits the
practice to continue on a compensated basis. It wrote:
The monumental change since the decision of
*Williams & Wilkins* in 1973 has been the
cooperation of users and publishers to create
workable solutions to the problem. Most notable
has been the creation of the CCC, and its
establishment of efficient licensing systems -- the
TRS, established in 1978, followed by the AAS,
established in 1983.
*Id.* at 24. "Reasonably priced, administratively tolerable
licensing procedures are available [through] the CCC]," the court
stated "that can protect the copyright owners' interests without
harming research or imposing excessive burdens on users." *Id.*
at 25.
The lower court's rejection of Texaco's "commonplace" use
as a fair use improperly discounts the significance of
longstanding custom and practice. As the Supreme Court has
stated, "the fair use doctrine was predicated on the author's
implied consent to 'reasonable and customary' use when he
released his work for public consumption." *Harper & Row*, 471
U.S. at 550 (1985).(18) The making of single photocopies for
research and scholarly purposes has been recognized as customary
for decades. *See* *Williams & Wilkins*, 487 F.2d at 1350, 1355-
56. Library photocopying, for example, has been a generally
accepted, customary practice conducted with the blessing of
publishers since at least the beginning of this century. *Id.*
Under the 1935 "Gentleman's Agreement," representatives of
publishers agreed that a library could make single photocopies of
articles from copyrighted works for use by scholars. *Id.*(19)
The lower court's ringing endorsement of the CCC as having
altered longstanding custom is wholly unjustified. First, as
discussed at length above, the mere fact that a mechanism exists
for the payment of royalties cannot by itself create a legal
right to collect such royalties. *See supra* Section II.C.1.
Put differently, the decision of publishers to promote the CCC
should not be permitted to restrict or eliminate the existing
rights of users. The CCC is no more than a means for complying
with the law if it has been determined that a particular use is
not a fair use; it cannot by itself diminish the scope of users'
rights.
Second, the fact that many of the fees collected by the
CCC may be "reasonable" now is no guarantee that they will remain
so in the future, particularly if the lower court's opinion is
upheld. Licensing fees are unregulated and, as the *Williams &
Wilkins* court found, they cannot be effectively regulated by the
courts. *See* 487 F.2d at 1360. The publishers who participate
in the CCC are free to raise their fees to levels which
effectively would prevent many users from making the copies they
need in connection with research or other socially beneficial
purposes, thus impairing the constitutional objectives of the
copyright laws. And, the right to grant a license for a royalty,
reasonable or otherwise, implies the right to withhold a license.
Third, the record does not show that the CCC represents
all or even a preponderance of publishers of scientific,
technical and medical journals. It does not show that the CCC
has even minimal participation by publishers of law, social
science, humanities, or other journals. Separate licenses still
would need to be negotiated by libraries and other users, at
considerable time and expense, with publishers not represented in
the CCC.
In short, the CCC cannot be said to have changed
longstanding custom, and it provides no comfort to *amici* and
others who are gravely concerned that if the customary practice
in which Texaco's scientists engaged is not deemed a fair use,
research and scholarship in this country will be seriously
harmed. The equitable considerations in this case strongly
reinforce the conclusions that each of the four statutory factors
properly favors Texaco.
III. THE TRIAL COURT'S CONCLUSIONS REGARDING THE APPLICATION OF
SECTION 108 OF THE COPYRIGHT ACT TO JOURNAL ARTICLE
*COPYING AT TEXACO ARE BOTH INAPPROPRIATE AND WRONG *
The lower court devoted a portion of its opinion to the
application of Section 108 of the Copyright Act to the challenged
practices of Texaco's researchers. *See* 802 F. Supp. at 27-28.
Section 108 declares that, in certain circumstances, the
reproduction and distribution of single copies or phonorecords of
copyrighted works by libraries or archives is not an infringement
of copyright. 17 U.S.C. 108.
A. The Trial Court Erred In Purporting To Address The
*Applicability of Section 108 *
Although some of the copies of scientific journal articles
or letters used by Dr. Chickering were made at his request by the
Beacon library, the lower court's Section 108 analysis is
inappropriate, because the issue before it was limited by
stipulation to whether the copying at Texaco was fair use within
*Section 107* of the Copyright Act. *See* 802 F. Supp. at 28.
This Court therefore should hold that the lower court erred in
purporting to address the applicability of Section 108 at all.
Moreover, the lower court's Section 108 analysis is wrong on
every point, and should be expressly disavowed by this Court.
B. *The History and Background of Section 108*
Section 108 was the product of extensive Congressional
consideration of conflicting views of libraries and copyright
proprietors regarding the extent to which libraries should be
permitted, without incurring copyright liability, to reproduce
and distribute journal articles and small parts of copyrighted
works at the request of library users, and entire books and other
copyrighted works for security or replacement purposes.(20)
As early as July, 1961, the Copyright Office recommended
enactment of a provision that would permit qualifying libraries
to supply "a single photocopy of one article in any issue of a
periodical, or a reasonable part of any other publication, . . .
when the applicant states in writing that he needs and will use
such materials solely for his own research."(21) In the years
that followed, several efforts were made to develop such a
provision but (with the exception of a provision authorizing
limited reproduction of unpublished works for purposes such as
preservation) none was included in the initial efforts to compose
a general revision of the copyright law. Publishers claimed that
proposed provisions would permit too much, while libraries were
concerned the proposals might preclude the exercise of rights
long considered reasonable and customary. *See* CONTU Final
Report, *supra* note 5, at 92. In 1969, the Senate Judiciary
Subcommittee on Patents, Trademarks and Copyrights referred to
the full Committee a copyright revision bill that included, in
Section 108, provisions recognizing that the libraries could,
without incurring copyright liability, make single copies of
copyrighted works in specified circumstances, including, subject
to certain conditions, "at the request of a user of the
collection of the library or archives, including a user who makes
his request though another library or archives." *Id.* at 97.
Over the next several years, numerous hearings were held in the
House and Senate, and successive iterations of these provisions
were developed. *Id.* at 97-101. But it was not until August 3,
1976, when the House Judiciary Committee completed its revisions
and reported H.R. 2223 (the House version of the omnibus
copyright revision bill), that Section 108 attained its final
form.
Section 108 expressly recognizes, in subsection (d) that,
at the request of a user, libraries may, without copyright
liability, make single copies from their collection (or from the
collection of another library) of one article or other
contribution to a copyrighted collection or periodical issue, or
of a small part of any other copyrighted work. 17 U.S.C.
108(d).(22) This right is subject to the conditions that:
the copy becomes the property of the user; the library has no
notice that the copy would be used for a purpose other than
private study, scholarship, or research; and the library has a
warning of copyright on its order form and at the place where
copy orders are accepted. *Id.* This right extends to single
copies of the same material on separate occasions, but not in the
circumstances where a library has substantial reason to believe
it is engaged in the "related or concerted" reproduction of
multiple copies of the same material, or where a library engages
in "systematic" reproduction or distribution of copies.(23)
It is this authority that the court below misinterpreted.
C. The Trial Court Erred in Its Conclusion That
Texaco's Scientists Made Copies for "Commercial
*Advantage" as That Term is Used in Section 108 *
The lower court erroneously stated that Section 108 is
inapplicable to copying at Texaco because the provision applies
only if "the reproduction or distribution is made without any
purpose of direct or indirect commercial advantage," 802 F. Supp.
at 27 (*quoting* 17 U.S.C. 108(a)(1)), and "Texaco makes the
copies solely for commercial advantage." *Id.* at 27. The
latter assertion is based not on any sale, lease, or other
disposition of the copies by Texaco, but solely on the fact that
the articles were photocopied to help Texaco's scientists in
their research, which the court considered was conducted
ultimately with a view to increasing Texaco's profits. *Id.* at
27-28. The court's rationale misconstrues the statute.
Section 108's legislative history makes clear that the
section's provisions apply to libraries at for-profit entities as
well as libraries at non-profit institutions. The House
Judiciary Committee's Report on H.R. 2223 -- in which Section 108
took its final form -- states that:
The reference to "indirect commercial
advantage" has raised questions as to the status of
photocopying done by or for libraries or archival
collections within industrial, profit-making, or
proprietary institutions (such as the research and
development departments of chemical,
pharmaceutical, automobile, and oil corporations,
the library of a proprietary hospital, the
collections owned by a law or medical partnership,
etc.)(24) . . . .
*Isolated, spontaneous making of single
photocopies by a library in a for-profit
organization, without any systematic effort to
substitute photocopying for subscriptions or
purchases, would be covered by section 108, even
though the copies are furnished to the employees of
the organization for use in their work.*
Similarly, for-profit libraries could participate
in interlibrary arrangements for exchange of
photocopies, as long as the reproduction or
distribution was not "systematic." *These
activities, by themselves, would ordinarily not be
considered "for direct or indirect commercial
advantage," since the "advantage" referred to in
this case must attach to the immediate commercial
motivation behind the reproduction or distribution
itself, rather than to the ultimate profit-making
motivation behind the enterprise in which the
library is located*. On the other hand, Section
108 would not excuse reproduction or distribution
if there were a commercial motive behind the actual
making or distribution of the copies, if multiple
copies were made or distributed, or if the
photocopying activities were "systematic" in the
sense that their aim was to substitute for
subscriptions or purchases.
H.R. Rep. No. 1476 at 74-75. (emphasis added).(25) The House-
Senate Conference adopted the House version of Section 108,
including a key revision of the limitation on "systematic"
photocopying in Section 108(g)(2). It also declined to adopt the
Senate Committee's view that the prohibition on indirect
commercial advantage precluded libraries in for-profit
organizations from enjoying Section 108 protection for the
provision of photocopies of copyrighted materials to employees
engaged in furtherance of the organization's commercial
enterprise.(26) Therefore, Judge Leval's interpretation of
the "direct or indirect commercial advantage" limitation in
Section 108 was rejected by Congress in favor of a more liberal
view, which recognizes that for-profit institutions have Section
108 rights, subject to the limitations on related or concerted
making of multiple copies and systematic reproduction and
distribution, provided that there is no "immediate commercial
motivation behind the reproduction or distribution itself."
*See* H.R. Rep. No. 1476 at 75.
D. The Trial Court Erred in Its Interpretation of the
*"Single Copy" Restriction of Section 108 *
In addition, the lower court misunderstood the limitation
of Section 108 reproduction to "no more than one copy . . . of a
work." *See* 17 U.S.C. 108(a). The court opined that:
A library that qualifies under 108 could deliver
a maximum of one copy of a particular item to
Texaco . . . . Texaco's Beacon library . . . does
not comply with this restriction. If Chickering
obtains a copy of an article, there is no procedure
barring his Texaco colleagues from copying the same
article. In all likelihood, numerous Texaco
scientists make copies of the same article when
they pertain to matters that are important to
Texaco research. Nor is there any procedure in
place limiting a single Texaco scientist to a
single copy.
802 F. Supp. at 28. The lower court was in error in two
respects.(27)
First, subsection 108(g) expressly states that "the rights
of reproduction and distribution under this section extend to the
isolated and unrelated reproduction or distribution of a single
copy of phonorecord of the same material *on separate
occasions*." 17 U.S.C. 108(g) (emphasis added). Therefore,
the lower court is wrong in asserting that Section 108 did not
authorize Dr. Chickering or another Texaco scientist to have more
than a single copy of any one journal article made by the Beacon
library. The law permits more than one copy to be made, provided
the reproductions and distributions of the individual copies are
isolated and unrelated.(28)
Second, this same provision permits the library to make
individual copies of the same article for several different
Texaco scientists, provided the library is not aware and has no
substantial reason to believe it is engaged "in the related or
concerted reproduction or distribution of multiple copies or
phonorecords of the same material." *See* 17 U.S.C.
108(g)(1).
There is no evidence in the record that the Beacon library was
aware or had any reason to believe that any copying it performed
involved related or concerted reproduction or distribution of
multiple copies. Thus, the copying and distribution involved in
this case is not outside Section 108's provisions, even if
"numerous Texaco scientists make copies of the same articles [or,
more properly in this context, have such copies made for them by
the library] when they pertain to matters that are important for
Texaco's research," as speculated by the lower court, 802 F.
Supp. at 28, and even if for that reason alone such copying could
be regarded as "related or concerted reproduction" within the
meaning of Section 108(g)(1) -- which we strongly dispute.(29)
Therefore, if this Court considers the applicability of
Section 108 to the copying of journal articles by Texaco
researchers, it must reject the lower court's analysis. Under a
proper analysis, it will find that -- insofar as the record
addresses the Section 108 criteria -- there is no basis in the
record for holding Section 108 inapplicable to the copies made by
the Beacon library for Dr. Chickering.
IV. *CONCLUSION*
For the reasons stated herein, *amici* urge this Court to
reverse the lower court's decision and to rule that the
photocopying at issue herein is a fair use. *Amici* further ask
this Court expressly to reject the lower court's gratuitous and
erroneous conclusions regarding Section 108.
Respectfully submitted,
______________________________
Ritchie T. Thomas, Esq.
James V. Dick, Esq.
Susan Neuberger Weller, Esq.
SQUIRE, SANDERS & DEMPSEY
1201 Pennsylvania Avenue, N.W.
Washington, D.C. 20004
(202) 626-6600
Attorneys for *Amicus Curiae*
ASSOCIATION OF RESEARCH
LIBRARIES, AMERICAN
ASSOCIATION OF LAW LIBRARIES
SPECIAL LIBRARIES ASSOCIATION,
MEDICAL LIBRARY ASSOCIATION,
AMERICAN COUNCIL OF LEARNED
SOCIETIES, NATIONAL HUMANITIES
ALLIANCE, AND ASSOCIATION OF
ACADEMIC HEALTH SCIENCES
LIBRARY DIRECTORS
Dated: March 4, 1993
(Corrected Version: March 10, 1993)
*Certificate of Service*
I hereby certify that a Corrected Version of the foregoing
*Amicus Curiae* Brief of Association of Research Libraries,
American Association of Law Libraries, Special Libraries
Association, Medical Library Association, American Council of
Learned Societies, National Humanities Alliance, and Association
of Academic Health Sciences Library Directors was mailed this
10th day of March, 1993, by first class mail, postage, to the
following:*
Thomas Smart, Esq.
Richard A. De Sevo, Esq.
Kaye, Scholer, Fierman, Hays & Handler
425 Park Avenue
New York, New York 10022
Joseph P. Foley
Texaco Inc.
2000 Westchester Avenue
White Plains, New York 10650
S.R. Kay, Esq.
Proskauer Rose Goetz & Mendelsohn
1585 Broadway
New York, New York 10036
______________________________
Ritchie Thomas
*The original *Amicus Curiae* Brief was served on the noted
individuals on March 4, 1993.
FOOTNOTES
1. The lower court's opinion places great emphasis on Texaco's
for-profit status, the size of its income and revenues, and
the court's view that the copying was carried on in a
commercial context for the purpose "of producing profits."
*See* 802 F. Supp. at 16, 27 & n. 25. Should this Court
affirm the lower court's determination -- as these *amici*
strongly believe it should not -- it should draw a sharp and
explicit line between the facts of this case and copying by
and for researchers, scholars, and teachers at non-profit
institutions.
2. *See* L. Ray Patterson, *Understanding Fair Use*, 55 Law &
Contemp. Probs. 249, 263 (1992).
3. The *Sega* court also found an overriding "public benefit"
under factor one because "the challenged use serves a public
interest," 977 F.2d at 1523, *i.e.*, "Accolade's
identification of the functional requirements for Genesis
compatibility has led to an increase in the number of
independently designed video game programs offered for use
with the Genesis console. *Id.* If the proliferation of
compatible video game programs is, as in *Sega*, a public
benefit justifying the copying of a work for study purposes
under the first fair use factor, then surely the
acknowledged socially beneficial objectives of research
science justify the copying of the works at issue here.
4. As discussed in Section III of this brief, the applicability
of Section 108 to the copying at issue was not before the
lower court under the stipulation that governed the trial
below. Nevertheless, the language and legislative history
of Section 108 are relevant to an understanding of the
"commerciality" element of Section 107(1).
5. The photocopying of copyrighted works, particularly in
educational and research contexts, was a major consideration
of Congress in the development of both Section 107 and
Section 108 of the 1976 Copyright Act. *See* Library of
Congress, *Final Report of the National Commission on the
Technological Uses of Copyrighted Works*, App. A ("Summary
of the Legislative History of Computer-Related Issues and
the Photocopy Issue"), 89-104 (1979) ("CONTU Final Report").
6. *See also* *New Era Publications Int'l v. Henry Holt & Co.*,
873 F.2d 576, 583 (2d Cir. 1989) ("As long as a book can be
classified as a work of criticism, scholarship, or research,
as can the book here, the [first] factor cuts in favor of
the book's publisher. . . ."); *Consumers Union of U.S. v.
General Signal Corp.*, 724 F.2d 1044, 1049 (2d Cir. 1983),
*cert. denied*, 469 U.S. 823 (1984) (public benefit of
consumer education justified, under factor one, the accurate
use of allegedly infringing material in commercial
advertisements).
7. -- If a scholar's or researcher's efforts are funded by
grants from the government or non-profit foundations, then
the reproduction of single copies by or for that individual
would be a fair use. But if a portion of his or her funding
was in the form of grants from for-profit corporate sources,
then the same reproduction may not be regarded as a fair use
even though the subject and objective of the research were
identical.
-- If a doctor or medical researcher is employed by a non-
profit hospital, the making of a single copy of an article
in connection with that individual's research efforts is
presumptively a fair use. But the same reproduction of the
same article in connection with the same research effort
would be presumed to be unfair if undertaken by a doctor or
medical researcher employed by a for-profit hospital or in
private practice.
-- In the legal context, reproduction of a single copy of an
article, treatise, case note, or other copyrighted work
would presumptively be a fair use under factor one if
undertaken by or on behalf of a lawyer employed by the
government or a non-profit public interest organization, but
the logic of the lower court's analysis would dictate that
the same reproduction of the same work would presumptively
be unfair under factor one if undertaken by an associate or
partner of a private law firm (unless, perhaps, the law firm
attorney was working on behalf of a *pro bono* client).
8. Judge Leval has written that he "believes the answer to the
question of justification [for copying] turns primarily on
whether, and to what extent, the challenged use is
*transformative* [or productive]." Pierre N. Leval, *Toward
A Fair Use Standard*, 103 Harv. L. Rev. 1105, 1111 (1990)
(emphasis in original). He evidently adopted and applied
this standard despite his express recognition that this
approach was rejected by the Supreme Court in *Sony*. *Id*.
at 1111 n.29. His position on the importance of the
"productive" nature of a reproductive use also has been
criticized elsewhere as being far too limiting and as
overstating the usefulness of this factor in a fair use
analysis. *See* Lloyd L. Weinreb, *Fair's Fair: A Comment
on the Fair Use Doctrine*, 103 Harv. L. Rev. 1137, 1143
(1990).
9. *See also* *Dow Jones & Co. v. Board of Trade*, 546 F.
Supp. 113, 119 (S.D.N.Y. 1982) ("[A]n illustrative, but not
exclusive list of productive uses is found in the first
sentence of 17 U.S.C. 107."); *Williams & Wilkins Co. v.
United States*, 487 F.2d 1345, 1350, 1353 (Ct. Cl. 1973),
*aff'd by an equally divided Court*, 420 U.S. 376 (1975) ("a
scholar can make a handwritten copy of an entire copyrighted
article for his own use . . . and he could have his
secretary make a typed copy for his personal use and files;"
"[A] library could supply single photocopies of entire
copyrighted works to attorneys or courts for use in
litigation.").
10. *See also* *Triangle Publications, Inc. v. Knight-Ridder
Newspapers, Inc.*, 626 F.2d 1171, 1177 & n.15 (5th Cir.
1980) (quoting *Williams & Wilkins*); *Dow Jones & Co. v.
Board of Trade*, 546 F. Supp. 113, 120-21 (S.D.N.Y. 1982)
("[I]t would make no sense . . . to adopt the notion that
copying an entire work can never be fair use."); *Haberman
v. Hustler Magazine, Inc.*, 626 F. Supp. 201, 212 (D. Mass.
1986) (copying of photograph (the entire work) held to be
fair use); *Key Maps, Inc. v. Pruitt*, 470 F. Supp. 33, 38
(S.D. Tex. 1978) (300 copies of copyrighted maps held fair
use).
11. The Judiciary Committee Report makes clear that the
guidelines do not necessarily define the limits of fair use
photocopying of copyrighted materials for classroom use.
H.R. Rep. No. 1476 at 68.
12. The guidelines state: "A single copy may be made of any of
the following by or for a teacher at his or her individual
request for his or her scholarly research or use in teaching
or preparation to teach a class: . . . [a]n article from a
periodical or newspaper, . . . [a] short story, short essay
or short poem, whether or not from a collective work . . .
." *Id*.
13. The lower court's effort (in another context) to distinguish
this time-shifting use in *Sony* is a failure. The Court
states that:
The Supreme Court's finding in *Sony* that the making
of time-shifting copies caused no economic loss to the
copyright owners has no application here. Here the
free photocopying practiced by large numbers of
research scientists employed by a large research-
oriented company deprives the publishers of substantial
revenues.
802 F. Supp. at 22. The lower court's assertion that the
fair use photocopying by scientists deprives publishers of
substantial revenues is based on its assumption that
royalties should be paid for the copies made. If the same
assumption were made with respect to the videotaped copies
of television programs involved in *Sony*, the potential
royalty revenues involved would have been enormous.
14. The court did find that "it seems likely that Texaco would
add at least a modest number of subscriptions to
*Catalysis* which would increase Academic Press'
revenues." 802 F. Supp. at 19. This finding, which is
highly speculative, is discussed below.
15. *See also* *Arica Inst., Inc. v. Palmer*, 970 F.2d 1067,
1078 (2d Cir. 1992) (fourth factor favored defendant; "We
find that these infringing aspects of [defendant's book]
will have a negligible effect on the market for [plaintiff's
biography]."); *Rogers v. Koons*, 960 F.2d 301, 312 (2d Cir.
1992) (fourth factor favored plaintiff; defendant's
sculpture, incorporating plaintiff's photograph, could
reduce demand for other derivative works); *Salinger v.
Random House, Inc.*, 811 F.2d 90, 99 (2d Cir. 1987), *cert*.
*denied*., 484 U.S. 890 (1987) (fourth factor favored
plaintiff; impairment of the potential market for
plaintiff's copyrighted work was "likely"); *Maxtone-Graham
v. Burtchaell*, 803 F.2d 1253, 1264 (2d Cir. 1986), *cert*.
*denied*, 481 U.S. 1089 (1987) (fourth factor favored
defendant; allegedly infringing book "poses no more than an
insignificant threat of economic damage"* to the actual or
potential market for plaintiff's work); *Update Art, Inc. v.
Maariv Israel Newspapers, Inc.*, 635 F. Supp. 228, 232
(S.D.N.Y. 1986), *aff'd*, 843 F.2d 67 (2d Cir. 1988) (fourth
factor favored plaintiff; defendant's smaller copy of poster
"is likely to reduce the demand for [plaintiff's] original
poster").
16. In *Harper & Row*, the Supreme Court held that the
defendant's publication of an article containing numerous
verbatim quotations from the unpublished memoirs of
President Ford, to which plaintiff had been granted the
exclusive first serial rights, was not a fair use. The Court
found that the fourth factor favored the plaintiff, not
because the defendant failed to pay royalties for its use of
the quotations, but because the defendant's publication of
the quotations impaired the marketability of the original.
471 U.S. at 566-69. Similarly, in the Supreme Court's most
recent elaboration of the fair use doctrine, *Stewart v.
Abend*, 495 U.S. 207 (1990), the Court found that the fourth
factor favored the plaintiff in a case involving the
distribution and exhibition of a derivative work (a motion
picture) which infringed the rights of the copyright owner
of the preexisting work (a magazine story). The Court's
rationale was that distribution of "the film impinged on the
ability to market new versions of the story," *id*. at 238,
not that the copyright owner lost royalty income in
connection with the distribution and exhibition of the film.
17. The lower court further erred in considering "Academic
Press' growing subscription revenues and glowing
profitability," 802 F. Supp. at 19, to be irrelevant to its
inquiry as to whether or not the market for or value of its
copyrighted works had been harmed by the photocopying by
Texaco's researchers. If there were any validity to the
publishers' claim that the shift to use of photocopying
machines for making single copies of reference material for
personal use is depriving them of substantial subscription
revenue, there should be some evidence of this effect.
Effects cannot simply be assumed. *See* *Williams &
Wilkins*, 487 F.2d at 1359. The record of this case
contains no concrete evidence of such harm; it shows quite
the contrary.
18. This Court has held that custom is relevant in
determining whether a use is fair. In *Rosemont
Enterprises, Inc. v. Random House, Inc.*, 366 F.2d 303,
307 (2d Cir. 1966), *cert. denied*, 385 U.S. 1009
(1967), for example, this Court reversed a district
court's determination that a biographer's quotation of
a previous work was not fair use, writing: "It is both
*reasonable* and *customary* for biographers to refer
to and utilize earlier works dealing with the subject
of the work and occasionally to quote directly from
such works." (emphasis added). *See* *Religious
Technology Ctr. v. Wollersheim*, 971 F.2d 364, 367 (9th
Cir. 1992); *Triangle Publications, Inc v. Knight-
Ridder Newspapers*, 626 F.2d 1171, 1176 (5th Cir.
1980); *Mathieson v. Associated Press*, 23 USPQ 2d 1685
(S.D.N.Y. 1992); Weinreb, *supra* note 8, at 1140.
19. The Agreement provided in part, that:
A library, archives office, museum, or similar
institution owning books or periodical volumes in which
copyright still subsists may make and deliver a single
photographic reproduction or reduction of a part
thereof to a scholar representing in writing that he
desires such reproduction in lieu of loan of such
publication or in place of manual transcription and
solely for the purposes of research; provided:
(1) That the person receiving it is
given due notice in writing that he is not
exempt from liability to the copyright
proprietor for any infringement of copyright
by misuse of the reproduction constituting an
infringement under the copyright law;
(2) That such reproduction is made and
furnished without profit to itself by the
institution making it . . . .
The statutes make no specific provision for a
right of a research worker to make copies by hand or by
typescript for his research notes, but a student has
always been free to "copy" by hand; and mechanical
reproductions from copyright material are presumably
intended to take the place of hand transcriptions, and
to be governed by the same principles governing hand
transcription . . . .
1935 "Gentlemen's Agreement," *reprinted in* Leon E.
Seltzer, *Exemptions and Fair Use in Copyright*, at App. E
(1978).
20. Libraries considered that the making and distribution
of single copies for archival and replacement purposes
and in response to requests by users and other
libraries were customary activities that merely
continued longstanding custodial, lending and
interlibrary loan practices, and did not significantly
deprive authors or publishers of purchases or
subscriptions. *See generally* CONTU Final Report,
*supra* note 5, at 90. Publishers, on the other hand,
who saw the increasingly ubiquitous copying machine as
a potential source of windfall revenue, expressed
concern that interlibrary networking of photocopies
could have a damaging effect on publishers, and,
ultimately, on the survival of publications such as
journals. *Id.* These competing viewpoints proved
difficult to resolve, a difficulty that contributed to
the long gestation of the 1976 Copyright Act.
21. *Copyright Law Revision: Report of the Register of
Copyrights on the General Revision of the U.S.
Copyright Law*, 87th Cong., 1st Sess. 25 (Comm. Print
1961); *see also* CONTU Final Report, *supra* note 5,
at 89-104.
22. Other provisions of Section 108 state that, in
specified circumstances, qualifying libraries and
archives have express rights to make and distribute
copies: (a) of unpublished works for purposes of
preservation or security or for deposit for research
use in another library; (b) of published works to
replace copies lost, stolen, deteriorating, or damaged,
if an unused replacement cannot be found at a fair
price; and (c) of entire published or unpublished
works, or substantial parts of such works, if a copy
cannot be obtained at a fair price, the copy becomes
the property of the user, and the library has no reason
to believe the copy will be used for any purpose other
than private study, scholarship, or research. 17
U.S.C. 108.
23. The statute states that the limitation in the case of
"systematic" photocopying is not to be interpreted to
prevent a library from participating in interlibrary
arrangements that do not have, as their purpose or
effect, that participants receive photocopies in such
aggregate quantities as to substitute for a
subscription to or purchase of a work. 17 U.S.C.
108(g)(2).
24. The "questions" to which the report refers were raised
late in the 1976 Act's development because of
suggestions that Section 108 rights might be generally
unavailable to libraries or archives in profit-making
organizations. This position was typified by language
in the Senate Judiciary Committee Report on parallel
legislation earlier adopted by the Senate. *See* S.
Rep. No. 473 at 67. One of those who suggested
clarification would be appropriate was the Registrar of
Copyrights, Barbara Ringer, who stated in her testimony
to the House Subcommittee that the interpretation of
the phrase "without any purpose of direct or indirect
commercial advantage" was a problem with respect to
special libraries. *Copyright Law Revision: Hearings
before the Subcommittee on Courts, Civil Liberties, and
the Administration of Justice of the House Judiciary
Committee on H.R. 2223*, 94th Cong., 1st Sess. 18091-04
(1975). The House Committee's resolution was to reject
the Senate Committee's interpretation in favor of the
one that made Section 108 available to libraries in
for-profit institutions.
25. The House Judiciary Committee essentially equated
"direct commercial advantage" with the sale of copies,
and "indirect commercial advantage" with copying that
substitutes for subscriptions or purchases *See* H.R.
Rep. No. 1476 at 74-75.
26. The Conference Committee Report states that:
Another point of interpretation involves the
meaning of "indirect commercial advantage," as used in
Section 108(a)(1), in the case of libraries or archival
collections within industrial profit-making, or
proprietary institutions. As long as the library or
archives meets the criteria in Section 108(a) and the
other requirements of this section, including the
prohibitions against multiple and systematic copying in
subsection (g), the conferees consider that the
isolated, spontaneous making of single photocopies
without any commercial motivation, or participation by
such a library or archives in interlibrary
arrangements, would come within the scope of section
108.
H.R. Conf. Rep. No. 1733, 94th Cong. 2nd Sess. 73-74
(1976). This statement is not a model of clarity.
Nevertheless, it manifestly does not adopt the Senate
Report's restrictive view. The "without any commercial
motivation" clause in the second sentence must refer to
the act of "making . . . single photocopies," which
immediately precedes it, rather than to the ultimate
objective of the research concerned or of the
enterprise in which the copies are made. It thus
relates to the limitations imposed by subsection
108(g)(1) and (2), consistent with the House Report.
27. In addition, this part of the trial court's opinion
relies heavily on speculation.
28. If, for example, Dr. Chickering were, while using it in
the laboratory, to damage the copy of an article from
*Catalysis* made for him, Section 108 would permit the
library (if it meets the other requirements of Section
108) to provide him a replacement copy at his request.
29. The "related or concerted reproduction" to which Section
108(g)(1) refers must be reproductions that are related by
more than the mere common interest of the researchers or
students involved in a particular line of research or study.
Were such common interest alone to suffice to make the
separate copying of an article for two or more researchers
"related," Section 108 would be reduced to an authorization
merely to make one copy of an article for all time.
Moreover, contrary to plaintiffs' representations there is
no evidence the library was engaged in systematic
reproduction or distribution within the meaning of Section
108(g)(2). Plaintiffs' characterization of Texaco's copying
as "systematic," which was not adopted by the court below,
is wrong and misleading. It is based on the mere volume of
the copying by researchers at Texaco. As stated by the
House Report: "[A] library in a profit-making institution
would not be authorized to: . . . use a single subscription
or copy to supply its employees, on request, with single
copies of material relevant to their work, where the
arrangement is 'systematic' *in the sense of deliberately
substituting photocopying for subscription or purchase*."
H.R. Rep. No. 1476, 94th Cong., 2d Sess. 74-75. (emphasis
added). However, "[i]solated, spontaneous making of single
photocopies by a library in a for-profit organization,
without any systematic effort to substitute photocopying for
subscriptions or purchases, would be covered by Section 108,
even though the copies are furnished to the employees of the
organization for use in their work." *Id.* at 75.
