The following statement about the Texaco fair use case was filed this week with the Second Circuit Court on behalf of ARL and 14 other library and academic organizations. The statement, prepared by ARL's attorney, Ritchie Thomas of the firm Squire, Sanders & Dempsey, supports Texaco's petition to rehear the case about whether the use of certain scientific and technical journal articles by a Texaco researcher was a fair use. The Court has no deadline for deciding if it will rehear the case; it would be unusual for a rehearing to be granted. We will keep you informed of further developments. STATEMENT OF SUPPORT FOR APPELLANT TEXACO INC.'S PETITION FOR REHEARING AND SUGGESTION FOR REHEARING EN BANC This statement amici curiae in support of Texaco Inc.'s ("Texaco") Petition for Rehearing And Suggestion For Rehearing En Banc is submitted by the following library associations: Association of Research Libraries American Association of Law Libraries Medical Library Association Special Libraries Association Northern California Association of Law Libraries Association of Academic Health Science Library Directors the following universities and university libraries: Duke University Georgetown University Michigan State University Libraries University of California at Santa Barbara University Library University of Delaware Library University of Missouri-Columbia Library University of Texas System and the following alliances of learned and scholarly societies: American Council of Learned Societies National Humanities Alliance These Library and Academic Amici urge the Court to grant Texaco's petition to rehear this appeal and reconsider, en banc, this Court's 2-1 decision of October 28, 1994, in American Geophysical Union v. Texaco, Inc., 37 F.3d 881 (2nd Cir. 1994), which affirmed then District Court Judge Pierre N. Leval's order in American Geophysical Union v. Texaco Inc., 802 F. Supp. 1 (S.D.N.Y. 1992), granting judgment to the plaintiff on the issue of whether the use of certain scientific and technical journal articles and letters by Texaco's researcher Dr. Chickering was a fair use. The Library and Academic Amici support Texaco's request for a rehearing because the decision of the majority of the reviewing panel throws into confusion the status of personal use photocopying of scientific, technical, and medical (and potentially other) journal articles and excerpts by or for students, teachers, and researchers, which is widely practiced and long has been considered fair use. As noted by Judge Jacobs' dissent, "making single photocopies for research and scholarship purposes has been considered both reasonable and customary for as long as photocopying technology has been in existence." American Geophysical, 37 F.3d at 902 (Jacobs, J., dissenting). This use is consistent with the expectations of the authors of these articles, who "work and publish in order to gain distinction, appointment, resources, tenure.....[but].....seek and derive absolutely no direct cash benefit from publication" and "do not seek or expect royalties" from photocopying. Id. at 907, 908. Typically, the authors have themselves used photocopied journal articles and excerpts in the creative process that led to the insights and advances that are subject of their articles. The majority's decision holding that the photocopying of journal articles by Texaco's researchers without a license is infringement upsets a long-standing equilibrium between the interests of the owners of copyright in such publications and the needs of researchers and others users. It threatens to impose a regime that Judge Jacobs accurately observes would subject users "on a day to day basis to burdens that cannot be satisfied without a team of intellectual property lawyers and researchers." Id. at 906. Moreover, the addition "to the cost, time and effort that scientists [and others] spend to scan, keep and use journal articles" (id. at 908) resulting from the liability imposed by the majority is a non-productive economic rent that would significantly impede progress in science and the arts in the United States. This result is of serious concern to the Library and Academic Amici, whose members have an interest and responsibility to assure that information is made available to scholars, teachers, and researchers to the maximum possible extent. It is a result that is not mandated -- or even authorized -- by statute, precedent, or reason. The opinion of Judge Jacobs and the petition submitted by Texaco point out several flaws in the assumptions and reasoning that led the majority to its erroneous conclusion. In this statement, therefore, the Library and Academic Amici simply express their support for Texaco's petition and comment briefly on two respects in which the majority decision misconceives express provisions of the governing statute and its legislative history --- in the development of which several of the Library and Academic Amici participated --- which errors provide further reasons why the majority's decision should be reconsidered. 1. The Making Of Single Photocopies Of Journal Articles Is Not ___________________________________________________________ Inherently Suspect Or Disfavored Under The Copyright Act, When Done For ______________________________________________________________________ Personal Use In Teaching, Scholarship, Or Research __________________________________________________ The majority makes a serious error early in the development of its rationale, in its basic assessment of the application of the doctrine of fair use to the photocopying of documents. See id. at 885-886. The Majority's error is to consider photocopying a new development, which threatens the balance struck in the Copyright Act between the rights of copyright proprietors and the rights of users, to which the fair use doctrine is of questionable application, and about which Congress has provided "scant guidance." Id. at 886. In each of these particulars the Majority is mistaken. The Majority's error is significant, because it skews the Majority's application of the fair use factors. There is no evidence to support the Majority's statement that "the invention and widespread availability of photocopying technology threatens to disrupt the delicate balances established by the Copyright Act" (id. at 885). That statement is mistaken in its historical and factual assumptions. When the Copyright Act was considered in the 1970's and enacted in 1976, the photocopy machine was already ubiquitous. Photocopying of articles and excerpts had widely supplanted hand or type-written notes as a way of making personal use copies of materials of interest to scholars and researchers; transmissions of photocopies of journal articles had largely replaced the physical transfer of journal issues as a means of inter-library loan of those materials; and photocopies of articles and excerpts were in general use by teachers in classrooms. This is apparent from Williams and Wilkins Co. v. United States, 487 F.2d 1345 (Ct. Cl. 1973), aff'd by equally divided Court, 420 U.S. 376 (1975), and the legislative history of sections 107 and 108 of the Act (which to a very large extent is devoted to issues raised by the photocopying of copyrighted works). The Act expressly took photocopying and other forms of mechanical reproduction into account, not only in section 108, which addresses reproduction and distribution of copies in and by libraries and archives, but also in the general fair use provisions of section 107. Section 107 states that the exclusive rights of a copyright holder are limited by the right of the public to make fair use of a copyrighted work, "including such use by reproduction in copies . . . for purposes such as . . . teaching (including multiple copies for classroom use), scholarship, or research . . ." 17 U.S.C. sect. 107. The legislative history of this provision adds that "the reference to fair use 'by reproduction in copies or phonorecords or by any other means' is mainly intended to make clear that THE DOCTRINE HAS AS MUCH APPLICATION TO PHOTOCOPYING AND TAPING AS TO OLDER FORMS OF USE . . . " H.R. Rep. No. 1476, 94th Cong., 3d Sess. 66 (1976) (emphasis added). See S. Rep. 473, 94th Cong., 1st Sess. 62 (1975). It is also clear from the provisions of section 107 and its legislative history that the Majority is mistaken in considering that Congress has "provided scant guidance for resolving fair use issues involving photocopying, legislating specifically only as to library copying." American Geophysical, 37 F.3d at 886. Congress, in section 107, legislated specifically that: 1) photocopying is a fair use when done in appropriate degree and circumstances; 2) uses involving photocopying are to be treated the same as more traditional uses in fair use analysis; and 3) in some circumstances, fair use extends to the making of even multiple photocopies of the same work. In addition, the legislative history of section 107 specifically endorses guidelines that approve, among other things, the making by or for a teacher of single copies of periodical articles for his or her RESEARCH, as "a reasonable interpretation of the MINIMUM standards of fair use." H.R. Rep. 1476 at 68, 72 (emphasis added). Therefore, the majority erred in stating that the advent of photocopying technology "threatens to disrupt the delicate balances established by the Copyright Act." The balances between the rights of authors and the rights of users of copyrighted works struck in the Copyright Act were devised well after the invention of photocopying technology; they took account of the availability and widespread use of photocopying technology; and they contemplated that, in appropriate circumstances, uses involving photocopying would be fair uses. This should have been the starting place for the court's analysis. 2. The Majority Erred In Holding That Congress Has Suggested That ______________________________________________________________ Royalty Fees For Photocopying Should Be Recognized As Part Of The _________________________________________________________________ "Potential Market For Or Value Of" Journal Articles ___________________________________________________ The Majority is guilty of a second significant misreading of the Copyright Act and its legislative history. This arises in the Majority's effort to defend the circular reasoning by which it concludes that the publishers' development of a (seriously flawed) mechanism for collecting royalties for journal article photocopying has radically expanded the publishers' monopoly and correspondingly eroded the public's fair use rights. The Majority asserts that: [i]n two ways, Congress has impliedly suggested that the law should recognize licensing fees for photocopying as part of the "potential market for or value of" journal articles. American Geophysical, 37 F.3d at 899. This assertion is not supported by the statutory and legislative history provisions cited by the Majority. The Majority claims the first source in which it finds the implied suggestion is section 108, which, the Majority asserts, "narrowly circumscribes the conditions under which libraries are permitted to make copies of copyrighted works." Id. The Majority states that: the very fact that Congress restricted the rights of libraries to make copies implicitly suggests that Congress views journal publishers as possessing the right to restrict photocopying, or at least the right to demand a licensing royalty from non-public institutions that engage in photocopying. Id. at 899. This is a misreading of section 108, in two respects. First, section 108 does not restrict the rights of libraries to make copies. It provides express rights as a "safe harbor" for libraries. While the rights accorded under section 108 are specific and finite, the statute makes clear that they do not limit libraries' rights of fair use under section 107, which may be more extensive. See 17 U.S.C. SECT. 108(f)(4). Second, the finite character of the rights to reproduce and distribute copyrighted works expressly granted by section 108 does not in any way suggest that Congress sought to protect potential royalty revenues of journal publishers. Section 108 makes very clear that Congress' focus was on publishers' subscription revenues. Section 108(g)(2) provides that libraries may engage in systematic reproduction of single or even multiple copies of journal articles, provided that a library does not receive copies of articles in such aggregate quantities as to "substitute for a subscription to or purchase of such work." Congress considered that, while a library (or a researcher) would not purchase a volume or subscription simply to obtain a single journal article or excerpt, or even several articles or extracts sporadically over time from the same journal, if the need for articles from a particular journal was substantial and frequent enough, then a subscription or purchase would be considered, and at that point continued recourse to photocopies might cause copyright proprietors economic harm. This is a very different concern from that inferred by the Majority. As its second point, the Majority states that "Congress apparently prompted the development of CCC by suggesting that an efficient mechanism be established to license photocopying." American Geophysical, 37 F.3d at 899. The doubt about this assertion expressed by the Majority's use of the word "apparently" is warranted. The legislative history cited by the Majority contains no Congressional directive to establish a royalty collection mechanism. Two of the legislative history references cited by the Majority were in reports regarding early versions of the Copyright Act, which were not adopted by Congress. The reference in the House Judiciary Committee report cited was deleted from the Committee's report regarding the provisions ultimately enacted. The suggestion made by the Senate Judiciary Committee in its 1974 and 1975 reports, that "workable clearance and licensing procedures be developed," was made in the context of provisions that accorded libraries significantly more limited rights to make inter-library loans of photocopies of journal articles than were contained in section 108 as enacted. Thus, the cited comments do not reflect the balance ultimately struck in the Copyright Act and do not support the Majority's inference that Congress contemplated and instigated, as a complement to that balance, the establishment of a mechanism for collecting copyright royalties on photocopies. The history and provisions of the Copyright Act simply cannot be read as the Majority's decision seeks to interpret them. There is no evidence whatsoever from which it reasonably can be concluded that Congress considered that the expectation of photocopy licensing fees should be a part of the fair use calculus, much less that an expectation of royalties should play the pivotal role attributed to it by the Majority. CONCLUSION For the foregoing reasons and those cited by Texaco and other amici, the Library and Academic Amici respectfully urge the Second Circuit to rehear this appeal and reconsider, en banc, this court's 2-1 decision of October 28, 1994, affirming the district court's finding that Dr. Chickering's copying was not fair use. Respectfully submitted, SQUIRE, SANDERS & DEMPSEY By: Ritchie T. Thomas James V. Dick 1201 Pennsylvania Ave., N.W. P.O. Box 407 Washington, D.C. 20004 (202) 626-6600 Dated: December 14, 1994 ENDNOTES  "The specific wording of section 107 as it now stands is the result of a process of accretion, resulting from the long controversy over the related problems of fair use and the reproduction (mostly by photocopying) of copyrighted material for educational and scholarly purposes. . . Although 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 has centered around questions of classroom reproduction, particularly photocopying." H.R. Rep. No. 1476, 94th Cong., 2d Sess. 66 (1976). See S. Rep. 473, 94th Cong., 1st Sess. 61-63 (1975); H.R. Rep. 1733, 94th Cong., 2d Sess. (1976) (Conference report).  While both the House and Senate reports state that Congress did not intend by section 107's express reference to "reproduction in copies" to give that use a special or preferred status as compared with other kinds of uses, Congress also intended that a use involving reproductions in copies was not to be given an inferior status. As stated in the House Judiciary report quoted above, in applying the fair use doctrine, a use by reproduction in copies (such as photocopying) was to be treated the same as older forms of use.  The majority's error in assessing the fair use status of photocopying under the Copyright Act has significant implications for other elements of the Majority's analysis. In view of the statute's express recognition of fair use photocopying, it is inappropriate when photocopying is involved to emphasize the "transformative" or "non-transformative" character of the use in analysis of the first fair use factor. This is particularly true if the photocopying is associated with a research or scholarly use, where accurate reproduction of the original is essential. The Majority's emphasis on what it claimed was the non- transformative nature of the use in this case effectively nullified the statute's declaration that photocopying is to be treated like older forms of uses in fair use analysis. The concept of a "transformative use" may be central to analysis under the first factor in many situations, but the Supreme Court in Campbell v. Acuff-Rose Music, Inc., 114 S. Ct. 1164 (1994) recognized that "the obvious exception to this focus on transformative use is the straight reproduction of multiple copies for classroom distribution." 114 S. Ct. 117 n. 11. The straight reproduction of single copies for research use is another obvious exception, for similar reasons. The Majority, however, failed to consider in its decision this important element of the Supreme Court's decision in Campbell.  The Committee stated in its 1976 report that its discussion in the earlier report of the consideration lying behind the fair criteria listed in the amended section 107 remained valuable as an analysis of aspects of the problem. H.R. Rep. 1476 at 67. However, that comment does not apply to matters in the earlier report that are not a part of the Committee's analysis of the four factors.  The suggestion also clearly relates to circumstances where multiple copies are being made, which the Committee expressly distinguishes from "isolated single spontaneous" copies, such as those made by Dr. Chickering. See S. Rep. 473 at 20.  The Majority falls into a similar error with respect to the Supreme Court's holding in Sony Corporation of America v. Universal City Studios, Inc., 464 U.S. 417, 456 (1984), that the plaintiffs in that case had not shown that home-use video taping of copyrighted television programs and movies "would cause any likelihood of non-minimal harm to the potential market for, or value of, [the movie and TV program producers'] copyrighted works." The Majority asserted that this finding implied a conclusion by the Court that the potential market in videotaping licensing royalties that Justice Blackmun's dissent claimed to exist was insubstantial. The Supreme Court could more reasonably and more likely have concluded that the alleged royalties were not relevant, because it would be inappropriate to engage in the circular reasoning by which conduct loses its fair use status if it is assumed that royalties can be extracted from that conduct in the event it is declared not to be fair use. In fact, it appears that copyright owners did not consider the potential royalty market involved in Sony to be insubstantial, because they fought an ultimately unsuccessful battle to persuade Congress to levy a copyright royalty on sales of blank VCR tapes.