Fair Use R&D Paper

RECENT COPYRIGHT LAW DEVELOPMENTS November 12 - 14, 2003
Wesley D. Blakeslee
The Johns Hopkins University Baltimore, Maryland
THE STATE OF FAIR USE IN ACADEMIA TODAY
I.
The Origin of Fair Use.
Fair use as a cohesive set of principles developed in English common law between 1740 and 1839. In the United States, the concept of fair use has its basis in the Constitution, Article I Section 8, from which the concept of patents and copyrights springs, which grants Congress the power "to promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries." The first expression of the doctrine of fair use in the American court system is generally considered to have appeared in the opinion of Justice Story in Folsom v. Marsh, 9 F. Cas. 342 (D. Mass. 1841) However the concept was discussed two years earlier in Gray v. Russell, 10 F. Cas. 1035 (D. Mass. 1839)2. Although in neither case did Justice Story mention the Constitution, he laid down a description of what is now called fair use remarkably not too different from the doctrine as it is described today:
1
The question, in such a case, must be compounded of various considerations; whether it be a bona fide abridgment, or only an invasion by the omission of some unimportant parts; whether it will, in its present form, prejudice or supercede the original work; whether it will be adapted to the same class of readers; and many other considerations of the same sort, which may enter as elements, in ascertaining, whether there has been a piracy, or not. Although the doctrine is often laid down in the books, that an abridgment is not a piracy of the original copyright; yet this proposition must be received
1
WILLIAM F. PATRY, THE FAIR USE PRIVILEGE IN COPYRIGHT LAW, BNA Books (2nd ed. 1995). [Hereinafter PATRY].
2
The first use of the precise phrase "fair use" seems to have occurred in Lawrence v. Dana, et al., 15 F. Cas. 26 (C. C. D. Mass. 1869)
Copyright 2003 Wesley D. Blakeslee, The Johns Hopkins University. All rights reserved. Permission is granted to download this document for non-profit educational or research purposes, provided the copyright notice is retained and references to this document are included in any work where it is used. Further copying and distribution is prohibited without the permission of the copyright holder. 1
with many qualifications. [Citations omitted] In many cases, the question may naturally turn upon the point, not so much of the quantity, as of the value of the selected materials.3 This basic concept was expanded in Folsom v. Marsh4 which describes the four elementsto be taken into consideration to determining if the use is fair use, although that term was not used, and although again in Folsom, Justice Story made no reference to the Constitution: In short, we must often, in deciding questions of this sort, look to the nature and objects of the selections made, the quantity and value of the materials used, and the degree in which the use may prejudice the sale, or diminish the profits, or supersede the objects, of the original work5
Later, Justice Story added: Much must, in such cases, depend upon the nature of the new work, the value and extent of the copies, and the degree in which the original authors may be injured thereby.6 In theory, there should be a concept in patents parallel to fair use, since both have the same basis in the Constitution. This fact was discussed by Justice Story in Folsom: Patents and copyrights approach, nearer than any other class of cases belonging to forensic discussions, to what may be called the metaphysics of the law, where the distinctions are, or at least may be, very subtle and refined, and, sometimes, almost evanescent. In many cases, indeed, what constitutes an infringement of a patented invention, is sufficiently clear and obvious, and stands upon broad and general agreements and differences; but, in other cases, the lines approach very near to each other, and, sometimes, become almost evanescent, or melt into each other. So, in cases of copyright, it is often exceedingly obvious, that the whole substance of one work has been copied from another, with slight omissions and formal differences only, which can
3 4
Gray v. Russell, 10 F. Cas 1035, 1038 (C.C. D. Mass 1841). 9 F. Cas. 342 (C.C. D. Mass. 1841).
5 Id. at 348. 6 Id. at 349.
be treated in no other way than as studied evasions; whereas, in other cases, the identity of the two works in substance, and the question of piracy, often depend upon a nice balance of the comparative use made in one of the materials of the other; the nature, extent, and value of the materials thus used; the objects of each work; and the degree to which each writer may be fairly presumed to have resorted to the same common sources of information, or to have exercised the same common diligence in the selection and arrangement of the materials. Thus, for example, no one can doubt that a reviewer may fairly cite largely from the original work, if his design be really and truly to use the passages for the purposes of fair and reasonable criticism. On the other hand, it is as clear, that if he thus cites the most important parts of the work, with a view, not to criticize, but to supersede the use of the original work, and substitute the review for it, such a use will be deemed in law a piracy. A wide interval might, of course, exist between these two extremes, calling for great caution and involving great difficulty, where the court is approaching the dividing middle line which separates the one from the other. So, it has been decided that a fair and bona fide abridgment of an original work, is not a piracy of the copyright of the author. [Citations omitted.]7 II. Educational Fair Use.
For the purpose of this discussion, educational fair use means direct copying of the work in question with little change, for the purpose of providing materials to students in a nonprofit educational institution. Initially there was no special exception for educational use, as such, and early nonprofit use cases found an infringement of copyright.8 Educational use was directly an issue in MacMillan v. King, 223 F. 862 (D. Mass. 1914), a case in which the defendant, as part of his practice of tutoring individual pupils, prepared outlines of the copyrighted material, and distributed them for the use of defendants pupils. The court found that these outlines were copies, that their use was an infringement, and granted an injunction against the defendant. The claim by the defendant that his use of these summaries did not diminish the value of the original work or lead to reduced sales was of no avail. It is clear from the earliest cases that in the considering fair use, it was the transformative 7 Id. at 344. 8 See, e.g. Scott v. Stanford, L.R. 3 Eq. 718 (1867) and Reed v. Holliday, 19 F. 325 (C.C.W.D. Pa. 1884).
nature of the use rather than the ultimate purpose (such as education) that was important. For example, in Folsom, Justice Story noted the allowance of a reviewer to cite large portions of a work if the design was to use the passages for the purpose of fair and reasonable criticism: there must be real, substantial condensation of the materials, and intellectual labor and judgment bestowed thereon9 The first clash in the modern era came in Wihtol v. Crow,10 in which the defendant was the head of the vocal departments of a junior college and high school and a church choir director, and had created an arrangement of a very popular hymn. The defendant distributed copies of the arrangement to schools and the church with whom the defendant was affiliated. The defense was that there was no intent to infringe, and no commercial interest. The Wihtol court held that intention was not an issue in a copyright infringement case, and found that the work had been infringed upon, giving no regard to the nature and purpose of the use, nor its transformative nature.11 In fact, nonprofit educational fair use as a concept had been rejected by the courts consistently, until the decision in Williams & Wilkins Company v. United States.12 That case was against the United States and specifically the NIH and its National Library of Medicine, which had a practice of copying articles from scientific journals and distributing copies of the articles to government agencies and its outside patrons, which were primarily commercial drug companies. The commissioner in the lower Court of Claims decision had no difficulty finding that the use was not fair use and was in fact an infringement and that a license should be obtained for the privilege. The court of appeals reversed, in a decision that has been criticized by some writers on fair use.13 To be fair, the court did attempt to analyze the then current copyright statute which was the 1909 Act, and prior decisions. By then the four factors were well established and were described by the Wilkins Court as: These overall factors are now said to be: (a) the purpose and character of the use, (b) the nature of the copyright work, (c) the amount and substantiality of the material used to relation to the copyrighted work as 9 9 F. Cas. at 345.
10 309 F.2d 777 (8th Cir. 1962) 11 Wihtol did not examine the four factors of fair use at all, summarily concluding without discussion, Whatever may be the breadth of the doctrine of 'fair use,' it is not conceivable to us that the copying of all, or substantially all, of a copyrighted song can be held to be a 'fair use.' Id. at 780. 12 487 F.2d 1345 (Ct. Cl. 1973) (Although the case is actually more of a research exception than a non-profit educational use exception.) 13 See PATRY, at 204-210.
a whole, and (d) the effect of the use on a copyright owners potential market for and in value of his work. The court further stated that [T]he development of "fair use" has been influenced by some tension between the direct aim of the copyright privilege to grant the owner a right from which he can reap financial benefit and the more fundamental purpose of the protection To promote the Progress of Science and the useful Arts. U.S. Const., art. 1, 8.14 The court took notice that the House committee which recommended the 1909 Act declared that copyright was not "primarily for the benefit of the author, but primarily for the benefit of the public," and, quoting Mazer v. Stein,15 "The copyright law, like the patent statutes, makes reward to the owner a secondary consideration."16 The court considered the fact that photocopying at that time was widespread, and noted the common practice of photocopying of articles and exchanging such articles on a casual basis. In finding fair use, the court stated: First, plaintiff has not in our view shown, and there is inadequate reason to believe, that it is being or will be harmed substantially by these specific practices of NIH and NLM; second we are convinced that medicine and medical research will be injured by holding these particular practices to be an infringement; and, third, since the problem of accommodating the interest of science with those of the publishers (and authors) calls fundamentally for legislative solution or guidance, which is not yet been given, we should not, during the period before congressional action is forthcoming, place such a risk of harm upon science and medicine.17 Unfortunately, we received no guidance from the Supreme Court, which was equally divided, therefore causing the appellate court decision to be affirmed.18 It is in this context that the 1976 Copyright Act came into being. 14 Id. at 1352.
15 347 U.S. 201, 219 (1954) 16 Williams and Wilkins, 487 F.2d at 1352.
17 Id. at 1354 18 420 U.S. 376 (1975).

III.
The 1976 Act.
The most recent entire revamping of the Copyright Act came in 1976, which is still the current version though it has since been amended. For the first time in that Act Congress included a specific section, Section 107, on fair use: Section 107. Limitations on Exclusive Rights: Fair use Notwithstanding the provisions of Section 106 and 106A the fair use of a copyrighted work, including such use by reproduction of copies or phonorecords or by any other means specified by that section, for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include (1) (2) (3) (4) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; the nature of the copyrighted work; the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and the effect of the use upon the potential market for or value of the copyrighted work.
The fact that a work is unpublished shall not of itself bar finding of fair use if such finding is made upon consideration of all the above factors. The inclusion of language specifically mentioning educational fair use and multiple copies for classroom use was a great victory for proponents of educational fair use. This favorable language resulted at least in part from the combined efforts of various education groups, including the Ad Hoc Committee of Educational Organizations on Copyright Law Revision (hereinafter the Ad Hoc Committee), and including the efforts of John C. Stedman, Wisconsin Law School faculty member, who, representing the American Association University Professors, testified eloquently on educational fair use before the senate subcommittee.19 The statutory language seems quite straight forward. It should be clear that making multiple 19 KENNETH D. CREWS, COPYRIGHT, FAIR USE AND THE CHALLENGE FOR UNIVERSITIES, 47- 48, University of Chicago Press (1993),. PATRY, 277-365.
copies of articles, such as scientific journal articles, for classroom use is in fact fair use so long as the four factors are considered. However, the Williams & Wilkins case, and the passage of the Copyright Act of 1976, was the highwater mark for educational fair use.20
IV.
The Erosion of the Right of Educational Institutions to use Copyrighted Works for Nonprofit Educational Purposes. The Classroom Guidelines.
A.
The first blow to educational fair use, the first narrowing of what appears to be the broad scope of Section 107,21 actually occurred before the 1976 Act was passed. Williams reminded us of the constitutional mandate, and the hard and persistent work of the supporters of educational fair use, resulted in the teaching and non profit educational purposes language in the 1976 Act. However, prior to the passage of the 1976 Act, many educators were desirous of certainty and security in their use of copyrighted materials, and had formed the Ad Hoc Committee, composed of twenty-five educational associations. Proving the axiom those who would trade liberty for security have neither and deserve none22, the Ad Hoc Committee, as part of the compromise with publishers, and in connection with its members desire for certainty and security, apparently agreed to the now commonly called Classroom Guidelines." These Classroom Guidelines, attached at Appendix A, were quoted in the congressional record as part of the legislative history of the 1976 Act. Although the Classroom Guidelines were intended to be a minimum statement of fair use, a "safe harbor" if you will, and were not intended to describe uses that are fair under Section 107, their inclusion in 20 The Williams & Wilkins principles were incorporated into Section 108, the special provisions for library copying. The provisions of Section 108 are separate from and in addition to fair use, so that if the copying comes within Section 108, no fair use analysis is needed. 21 Congress specifically stated that its intention was not to change the law of fair use or to broaden it in any way, however, as discussed, educational fair use, as such, had not been recognized, and most certainly multiple copies for classroom use had never been a class of uses found to be fair. That the 1976 act did in fact change the scope of fair use is also the opinion of William F. Patry, who clearly holds the view that fair use should be a very narrow privilege. See PATRY at 298-99, 414. 22 To make the point, a rewording of the quote of Benjamin Franklin they that can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety. BENJAMIN FRANKLIN, FRANKLINS HISTORICAL REVIEW (1759); reported also in RICHARD FROTHINGHAM, THE RISE OF THE REPUBLIC OF THE UNITED STATES, 413, (Little Brown and Company 1873)
legislative history of the Act has been detrimental to educational fair use, and certainly have had consequences unintended by the Ad Hoc Committee. This, despite the fact that the Register of Copyrights, in the Report on Copyright and Digital Distance Education, described the Classroom Guidelines as follows: Fair use guidelines. Several attempts have been made to provide greater certainty for both educational users and copyright owners under section 107, by crafting guidelines as to how fair use applies to educational uses. Guidelines are detailed standards describing permissible uses that represent a negotiated consensus among groups of interested parties. They do not have the force of law, do not control or alter statutory language, and are not binding on any party. Their purpose is to establish a "safe harbor" of conduct -- a minimum standard that those endorsing them agree would qualify as fair use. They typically include guidance as to specific amounts of works that can safely be used for a particular purpose, the numbers of copies that can be made, and time periods for various uses. Operating within such guidelines substantially reduces the risk of suit. Accordingly, they are helpful to educators in planning their conduct. It is important to stress, however, that they are a floor and not a ceiling; conduct that falls outside the guidelines may qualify as fair use as well. Despite the lack of legal force, courts have considered the contents of guidelines in evaluating fair use claims, and some have ruled in accordance with their principles.23 Sadly, the Classroom Guidelines give no assurance of safety, underscoring the Franklin axiom, quoted, as the content industry has refused to acknowledge the Classroom Guidelines as a "safe harbor, and has not agreed to forego suits when the Classroom Guidelines are followed, and in fact has reserved openly its right to bring an action even for copying that is within the Classroom Guidelines.24 The Classroom Guidelines have been insidious, and have caused a substantial reduction in the freedom of academic institutions to utilize the benefits of fair use as had been established in case law as well as outlined in the statute. These Classroom Guidelines have had more influence on the content of university copyright policies then any case law, analysis, or statute itself.25 A Google 23 Report on Copyright and Digital Distance Education, 91, (U.S. Copyright Office, 1999), available online at http://www.copyright.gov/reports/de_rprt.pdf. 24 Kenneth D. Crews, Fair Use and Higher Education Are the Guidelines the Answer, 83 Academe 38-40. (Nov./Dec. 1997). 25 CREWS, supra note 20.
search on Ad Hoc Committee on Copyright Law Revision provides links to numerous university and library policies which site the Classroom Guidelines. The broad following of the Classroom Guidelines as part of university policies leads to the Classroom Guidelines becoming the de facto interpretation of fair use by academic institutions, and precludes the kind of reliance on practices of photocopying and exchanging articles that were described and relied upon in Williams & Wilkins Company v. The United States. B. The Course Pack Cases. The second big blow to academic fair use came in the course pack cases. It was highly unlikely that taking four or five textbooks whose only market was education, copying fifteen to thirty percent of each to create a course pack to substitute for the textbooks would be found to be fair use. Yet that was the practice at many universities, including New York University. Not long after the implementation of the 1976 Act, and the appearance of the Classroom Guidelines in the congressional record, the American of Association of Publisher began to press the Classroom Guidelines as the standard for educational use photocopying as the upper limit of fair use, rather than a safe harbor. The AAP first attacked private, off campus, commercial photocopy shops creating course packs, each of which were settled when the shops agreed to adopt the Classroom Guidelines as their standard for photocopying. Realizing that attacks on the commercial shops would not be as effective as attacks directly against universities, in 1982, the AAP, Addison-Wesley Publishing Company and eight other major publishers brought an action against New York University and nine of its professors and a commercial copy center, alleging copyright violations in creating course packs. The case was settled when New York University adopted the Classroom Guidelines as the standard. New York University was in an untenable position and had little choice but to settle on the publishers terms. That settlement required NYU to adopt the Classroom Guidelines, but without the language in the original preamble to the Classroom Guidelines that acknowledged that they are minimum standards and that photocopying outside of the Classroom Guidelines may be permitted. Thus, in the New York University settlement, the Classroom Guidelines became the maximum permitted photocopying for classroom use.26 V. The Problem with Guidelines. The problem with guidelines is that they are often confused by the participants and the court. In fact, in two additional attempts since the original Classroom Guidelines, there has been no consensus on educational copying guidelines by the participants. The Clinton Administrations initiative on the National Information Infrastructure gave rise to the Conference on Fair Use (CONFU). The CONFU working group on intellectual property rights called upon interested parties 26 Kenneth D. Crews, supra note 20 at 45-47.
to participate in discussions on fair use. The participants identified five areas of fair use for consideration, and ultimately propounded three sets of guidelines: digital image, synchronous distance learning, and educational multimedia. However, the participants did not even reach consensus on those guidelines.27 Similarly, the National Commission on New Technological Uses of Copyrighted Works (CONTU) also promulgated guidelines for photocopying under interlibrary loan arrangements, considered in drafting Section 108.28 So although there have been other sets of guidelines promulgated and promoted, including model policies such as those promoted by the American Library Association, none of those has been given the notoriety in the court system as have the Classroom Guidelines by reason of their appearance in the legislative history of Section 107, as an agreed compromise between educators and publishers. The agreement to the Classroom Guidelines (which are much more restrictive than the working CONFU guidelines, which received no consensus whatsoever) is an enigma, for which no rationale (except perhaps the overwrought desire for safety), has been found by this author.29 The preamble notwithstanding, the introduction of the concept of spontaneity30, which has and had no foundation in the law, is inexplicable. Even PATRY, while noting numerous references to 27 See, Georgia Harper, CONFU, The Conference on Fair Use, available at http://www.utsystem.edu/ogc/intellectualproperty/confu.htm. For a detailed discussion of guidelines see Kenneth D. Crews, et al., Perspectives on Copyright and Fair Use Guidelines for Education and Libraries, 50 J. AM. SOCY. INF. SCI. 1304 (1999). 28 Final Report of the National Commission on New Technology Uses of Copyrighted Works, http://digital-law-online.info/CONTU/contu32.html. 29 Subsequent to completing this paper the author had a opportunity to discuss spontaneity with Sheldon Steinbach now Vice President and General Counsel of the American Council on Education, but who was counsel to the educational institutions that formed the AD HOC Committee and signed the classroom guidelines on behalf of the Committee. Mr. Steinbach revealed that the guidelines were focused primarily on grades K-12. With specific regard to the issue of spontaneity, Mr. Steinbach recalled that the primary interest of the educators was the preservation of the teachable moment, when a copyrighted work would be particularly useful in a timely way in the classroom when there would be no opportunity to obtain permission. Viewed in that light, spontaneity would be a wonderful addition to fair use. In fact, fair use would be enhanced if it would include the right to use works where there was an exigent need, and no opportunity to obtain permission, in circumstances where such use would otherwise not be fair use and where permission would otherwise be required. Unfortunately, as we have seen, spontaneity has not been interpreted in this manner. 30 Spontaneity refers to the requirement that the use be made only upon the immediate inspiration of the instructor for a use so close in time that it would be unreasonable to expect a response for permission
spontaneity, does not specifically identify its initial origin. Prior to the Classroom Guidelines, not one case ever discussed the concept of spontaneity, let alone turned on it. The final Classroom Guidelines seem so far removed from the strenuous arguments of the Ad Hoc Committee concerning the content Section 107, that the acceptance of the language of the Guidelines is simply unexplainable. Perhaps the desire for certainty combined with faith that the preamble would make clear the intent, led to acceptance of what are in fact very restrictive provisions that unequivocally do not meet the needs of higher education.31 In essence, spontaneity, if accepted as a requirement of fair use, ends traditional fair use, as fair use then applies only if the need to use the work is so exigent that it would be impossible to obtain permission to use the work before its use was required. The doctrine of fair use then becomes an excuse for not having obtained permission rather than the broad doctrine which fair use was intended to be. With the advent of the Copyright Clearance Center and regular licensing programs, for most modern journals and periodicals there is never an issue of getting permission, only the timing and amount of payment.32 Does that then end educational fair use? Many Universities have adopted the Classroom Guidelines and even those who have wavered and broadened their policies, have been impacted by spontaneity. Thus, the typical university policy allows items to be placed on electronic reserve, or allows a faculty member to obtain copies of a journal article for classroom use, but only in one semester. In subsequent semesters permission must be obtained, and a license fee paid. Fair use thus becomes relegated to a test of whether there is an opportunity to obtain permission and a mechanism to do so. The doctrine of fair use does not consider whether or not a license might be available from the owner of copyright. In fact, the essence of fair use is that the user does not need a license, does not need permission. The statute states fair use is not an infringement of copyright, and if it is not an infringement of copyright no permission nor license is required. If no permission or license is required when first used, how does that change the second time a use is to be made? The insidious effect of the Classroom Guidelines can be seen most directly in Princeton University Press, et al., v. Michigan Documents Services, Inc., et al.33 It is often said that bad cases make bad law, and Michigan Document Services is one of those. Michigan Documents Services was a for-profit copy shop making substantial money preparing course packs for the University of 31 To be fair, before Wilkins, the concept of copying for educational use had been uniformly rejected as fair use. 32 Though there was much discussion around creating such rights licensing system, the Ad Hoc Committee resisted that idea, for precisely the fear of such a situation. PATRY, supra note 1 at 328-340. 33 99 F.3d 1381 (6th Cir. 1996).
Michigan. MDS not only did not request permissions from the copyright holders (as others had begun to do since Basic Books v. Kinkos34), but also, the owner of MDS had become a crusader against the system and thus attracted the attention of the publishing industry. Thus MDS did not make a sympathetic defendant to throw into the caldron of fair use analysis and its course packs went way beyond fair use. Traditional notions of fair use were sufficient to doom MDS. However the majority opinion was clearly motivated and influenced by the Classroom Guidelines. What they said about the Classroom Guidelines was more frightening: Although the Classroom Guidelines purport to >state the minimum and not the maximum standards of educational fair use, they do evoke a general idea, at least of the type of educational copying Congress had in mind. The guidelines allow multiple copies for classroom use provided that (1) the copying meets the test of brevity (1000 words, in the present context); (2) the copying meets the test of spontaneity, under which the inspiration and decision to use the work and the moment of its use for maximum teaching effectiveness [must be] so close in time that it would be unreasonable to expect timely reply to request for permission.35 Note the language that the Classroom Guidelines purport to state the minimum. Such a phrase is generally used when claiming that what is purported is wrong or misleading, and that is exactly what the majority was stating. The Classroom Guidelines are not a minimum, they are in fact what Congress had in mind. The argument against that reasoning seems quite plain and clear. The word spontaneity does not appear anywhere in the code. If Congress had intended to insert the concept of spontaneity in fair use, one would think Congress would have inserted that term in the code, but it did not.36 It relied on the case law up to that point and time, and not one case ever turned on the ability of the user to obtain copyright permission because of spontaneity.37 34 Basic Books, Inc. et al. v. Kinkos Graphics Corporation, 758 F.Supp. 1522 (S.D. N.Y. 1991) 35 99 F.3d at 1390. 36 Though, the argument goes, Congress inserted the Classroom Guidelines in the record which is how Congress endorsed spontaneity as a part of fair use. 37 Under the doctrine of spontaneity, how would the case of Time v. Geis, 293 F. Supp. 130 (S.D. N.Y. 1968) have been decided? Mr. Geis attempted to get permission from Time Inc., which refused to grant permission. Should there then be no fair use? Campbell v. Acuff-Rose, 510 U.S. 569, 114 S.Ct. 1164, 127, L.Ed.2d 500 (1994) rejected the permissions argument where there is fair use.
VI.
Permission Fees-The Fallacy of Circular Reasoning.
Most copyright scholars recognize that the concept of spontaneity, as such, plays no part whatsoever in determining whether a use is fair use. The explanation for its inclusion in the Classroom Guidelines and in most university policies is usually based in an argument related to the fourth fair use factor - economic loss - as related to permission fees (also referred to as rights fees or reprint fees). That is, the argument supporting a concept of spontaneity, and the provision in most university policies that, for example, a journal article can be used for one class but may not be used in subsequent semesters without obtaining permission, is thought to be based upon the effect upon revenue, of a loss of permission fees.38 It appears, however, that spontaneity begat the permission fee dichotomy, not the other way around. The issue of circular reasoning concerning permission fees is an excellent example of how the seeming acceptance of the concept of spontaneity with no basis anywhere in law can then spill over into other areas so that an otherwise flawed procedure for examining whether the use was fair can be made to seem reasonable. There have been great debates as to whether or not fair use is a right of the public or whether it is simply a defense to copyright. Even though its relationship in the law seems fairly clear in the language of the statute which clearly provides that Notwithstanding the provisions of Section 106 and 106A, the fair use of a copyrighted work, . . . is not an infringement of copyright. The statute does not say it shall be a defense to a claim of copyright infringement, the statute does not say no damages will lie for copyright infringement if fair use, but rather the statute says that fair use is not an infringement of copyright. Clear principles of statutory construction lead to the conclusion that fair use is not an infringement in the first instance, and it is more than just a defense, since we must presume that Congress knew how to use language and said what it meant to say. Congress could have said in Section 107 that it shall be a defense to an action of infringement that the use was fair use if the four tests are met. This is also bolstered by the statutory framework in which statutory damages are reduced in Section 504, where it is specifically stated "in the case where the infringer sustains the burden of proving, [emphasis added] and the court finds, that such infringer was not aware and had no reason to believe that his or her act constituted an infringement of copyright, the court is [in sic] its discretion may reduce the award of statutory damage to the sum of not less than $200. It seems clear that fair use is an affirmative statement of the public=s right to use copyrighted works which do not constitute an infringement, rather than a mere defense to a claim of 38 See, e.g., the explanation of Georgia Harper contained at http://www.utsystem.edu/ogc/intellectual property/copypol2.htm.
infringement.39 The significance of that argument seems to be largely ignored, probably because, as a practical matter, fair use always arises in the context in which the defendant, the alleged infringer, raises fair use as a defense in the litigation. For the most part the courts refer to the defense of fair use, not in contrast to whether it is some affirmative right, but whether some uses are per se fair use, or whether the defendant has some burden of proof concerning an allegedly infringing use.40 However, in Sony v. Universal Studios41 the court did provide better analysis of the issue, even though it would still have been raised as a defense. Concerning rights of copyright holders the court stated: This grant [of copyright] expressly is made subject to 107-118, which create a number of exemptions and limitations on the copyright owner's rights. The most important of these sections, for present purposes, is 107; that section states that the fair use of a copyrighted work . . . is not an infringement of copyright."42 The court also made a distinction of the burden of proof: Thus, although every commercial use of copyrighted material is presumptively an unfair exploitation of the monopoly privilege that belongs to the owner of the copyright, noncommercial uses are a different matter. A challenge to a noncommercial use of a copyrighted work requires proof either that the particular use is harmful, or that if it should become widespread, it would adversely affect the potential market for the copyrighted work.43
This distinction should be an important one when considering permission fees, although the adoption of the rule of spontaneity by virtually every college and university, has probably doomed that argument to failure. However, it is reasonable to believe that the only consideration with regard 39 Patry, who apparently holds the view that fair use should be narrow or non-existent, states repeatedly that fair use is an affirmative defense rather than a right or privilege. See PATRY, supra note 1 at 286, 418, citing Harper & Row, Publishers, Inc. v. Nation Enterprises, 471 U.S. 539, 561 (1985). 40 Campbell v. Acuff-Rose, 510 U.S. 569, 589; 114 S. Ct. 1164; 127 L. Ed. 2d 500 (1994) (Citing Harper &Row without discussion); Harper & Row, Publishers, Inc. v. Nation Enterprises, 471 U.S. 539, 561; 105 S. Ct. 2218, 2231; 85 L. Ed. 2d 588 (1985). (The drafters resisted pressures from special interest groups to create presumptive categories of fair use, but structured the provision as an affirmative defense requiring a case-by-case analysis.) 41 Sony Corporation of America v. Universal City Studios, Inc., 464 U.S. 417; 104 S. Ct. 774; 78 L. Ed. 2d 574 (1984). 42 Id. 464 U.S. at 461. 43 Id., 464 U.S. at 497-98
to whether or not there is an economic loss suffered by the copyright holder, is whether the action claimed to be fair use impacts the sale of the particular thing from which the copy is taken, i.e., sale of a journal subscription rather than permission fees to copy an article. The use of one or two articles from many years worth of journals to be handed to the students in class, clearly will not change the number of subscriptions sold for the journal. In fact, introduction to students of interesting articles from scientific journals which they probably know little of upon entering the class, has the ability to increase sales rather than decrease them. It is the journal or the book in question which should be considered and considered only. Williams & Wilkins recognized that to look toward permission fees was circular reasoning. In footnote 19, in answering the claim that the persons obtaining the copies were a potential source of royalty income for licensed copying, the court stated: 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 defendants 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 right to license. That conclusion results only if it is first determined that the photocopying is unfair.44 This reasoning makes excellent sense, but Williams & Wilkins was decided prior to the Classroom Guidelines and the curse of spontaneity appearing in the congressional record, and the shortsightedness of the entities involved in the course pack cases. Despite the fact that Section 107 does not mention permission fees, spontaneity or any other such concept, the concept has worked its way into case law in a very devastating way, beginning with the course pack cases. The problem with the course pack cases such as Kinkos, New York University and Michigan Document Services are that the course packs replace textbooks that would have been sold to students. It should have been absolutely clear to the defendants in each of those cases that creating materials which became the materials sold to the students instead of the textbooks from which the course packs were made and which otherwise would have been used, would not be, and should not have been fair use. Permission fees and the Classroom Guidelines came to the fore in those cases, and unfortunately, now we have a direct consideration of loss of permission fees in considering the fourth factor of Section 107.
44 Williams & Wilkins, at 1357

Permission fees became an issue in American Geophysical Union v. Texaco, Inc., et al.45 This unfortunate case was one in which Texaco scientists routinely made copies of journal articles from journals which were circulated throughout departments. Circulation of the journals and the copying by the individual scientists likely reduced the number of subscriptions purchased by Texaco, but the plaintiffs had difficulty proving how many additional subscriptions would have been purchased had the copying not taken place. The number, and resulting damages, was likely small. However, at least one of plaintiffs journals had a bulk licensing policy in place, so Texaco could have purchased in advance the right to make copies. A permission fee structure also existed for copies from the other journals. Thus, the plaintiff focused on the much larger loss of permission fee claim. The Texaco court noted the analysis of Williams & Wilkins regarding permission fees, and not being bound by the analysis of the sister circuit chose to ignore it, stating that: Whatever the situation may have been previously, before the development of a market for institutional users to obtain licenses to photocopy articles, [citing Williams & Wilkins], it is now appropriate to consider the loss of licensing revenues in evaluating >the effect of the use upon the potential market for or value of journal articles.46 The court did acknowledge that only licensing revenue for developed markets should be considered, but that provides little protection in this day of the Copyright Clearance Center and regular rights fees pricing. The court also found that in measuring the amount copied you must look at the individual article, not the journal itself, obviously driven by the permission fee availability for individual articles. That is, copying of an individual article is now viewed as copying 100% of the item, so weighs against fair use on the third factor, the amount used. Throughout its decision the court was influenced significantly by the Classroom Guidelines, mentioning them on several occasions. The court also adopted the concept of spontaneity: For example, if [the Texaco employee making the copy] had asked the library to buy him a copy of the pertinent issue of Catalysis and had placed it on his shelf, and one day while reading it had noticed a chart, formula, or other material that he wanted to take right into the lab, it might be a fair use for him to make a photocopy, and use that copy in the lab (especially if he did not retain it and build up a mini-library of 45 60 F.3d 913 (2d Cir. 1994). 46 Id. at 931.
photocopied articles). This is the sort of "spontaneous" copying that is part of the test for permissible nonprofit classroom copying. [Citations omitted] But that is not what happened here as to the six items copied from the circulated issues. Thus, all of a sudden now what was a minimum has become part of the test for permissible nonprofit classroom copying. We have no review of American Geophysical by the Supreme Court as certiorari was denied. VII. Summary: Where We Are Today.
Michigan Document Services and Kinkos teach that course packs are not permitted. American Geophysical held that an individual article from a journal can be considered as copying 100% of the copyrighted work. The fact is, however, that no case of a teacher handing out multiple copies of articles for classroom use has ever been decided by the Supreme Court since the passage of the 1976 Act. One of the things that the 1976 Act did make clear is that multiple copies for classroom use if otherwise appropriate, can (and we should argue should) be fair use. Such uses are not fair use per se however. Justice Blackmun notes in his dissent in Sony Corporation that the 1964 draft of section 107 provided that the fair use of copyrighted material for purposes such as criticism, comment, news reporting, teaching, scholarship, or research was not an infringement of copyright, and listed four factors to be considered in determining whether any other [emphasis added] particular use was fair, but that later revisions make it clear that Congress did not intend to create any uses that were fair use per se.47 That notion was directly addressed in Michigan Document Services. The dissent raised the proposition that classroom use was fair use ispo facto, and that specific argument was rejected by the majority.48 Alas, we do not have a Supreme Court opinion in Michigan Document Services. Though it is true that where there is an easy procedure for obtaining permission, the appellate courts will look more carefully at fair use, and will consider loss of a well developed market in analyzing the fourth factor, thus far, the idea of spontaneity and the circular reasoning of permission fees has not yet been directly considered by the Supreme Court. The most recent Supreme Court case concerning fair use, Campbell v. Acuff-Rose, reiterates the proposition that permission is not required if the use is fair use. In considering the argument that the denial of permission by the copyright holder should be held against the alleged infringer, the court said 47 Sony v. Universal, 464 U.S. at 490. 48 99 F.3d at 1385.
We reject the argument that 2 Live Crew=s request for permission to use the original should be weighed against the finding of fair use. Even if good faith were central to fair use, 2 Live Crew=s actions did not necessarily suggest that they believed that their use was not fair use; the offer may have simply been made in a good-faith effort to avoid this litigation. If the use is otherwise fair, then no permission need be sought or granted. Thus being denied permission to use the work does not weigh against the finding of fair use. It seems reasonable to ask the question: if no permission need be sought if the use is fair, then why should lost permission fees be considered to first determine whether the use is fair. While American Geophysical Union may have found the existence of the permission scheme persuasive, the Supreme Court seems to state the opposite in its conclusion in Campbell. Unfortunately this is in a different context but it makes sense in the overall scheme of fair use. Williams and Wilkins pointed out the circular reasoning of looking to permission fees to measure the economic impact. The Supreme Court in the Sony Corporation v. Universal Studios gave little weight to the argument that the plaintiffs might be damaged by a loss of licensing revenues although the direct issue of permission fees was not joined. The only actual statement by the Supreme Court comes in Campbell, where the Court makes it clear that if the use is fair use no permission is required. Thus if the use is fair use no permission fee should be considered, and thus the lack of permission fees should not be considered in the first instance in determining whether the use is fair. If as stated if the use is otherwise fair, then no permission need be sought, how can the idea of spontaneity survive? For example, if in June, with plenty of time to pay a use fee, the teacher decides for the first time to use a single journal article in a class to be taught in September, is that fair use? If spontaneity, then not, because there is plenty of time to get permission and pay the copy fee. But if no permission is needed, since this should clearly be an instance of fair use, then why must a rights fee be paid to use the work again the following September (when the same article is now a year older, and likely less in demand)? That reasoning seems to be based in that terrible throw away language in Sony: A challenge to a noncommercial use of a copyrighted work requires proof either that the particular use is harmful, or that if it should become widespread, it would adversely affect the potential market for the copyrighted work. [Emphasis added.]49 49 464 U.S. at 597 -98.
That language, cited without reference to any prior precedent, must be read in the context of the Sony factors, a case considering the impact of sale of Betamax video tape recorders to facilitate widespread videotaping by the public. In the context of classroom copying it has no meaning. In that context, you would have to ask What practice? The fair use copying for classroom use? If thats the answer, then you have essentially stated that if there will be an economic impact if fair use should become widespread, then there can be no fair use. Clearly the Sony language is inappropriate to determine if a particular incident of classroom copying is fair use. However, that particular phrase has been seized upon and recited as the mantra of determining if the use is fair, which has the potential to eliminate fair use entirely. Though one can argue that if Congress intended fair use to apply only when there was no procedure for easily obtaining permission then the statute would have so stated. It would have been quite simple for Congress, in Section 107, to have added a fifth factor: whether or not a license is generally available and easily obtainable. It makes logical sense, therefore, that for multiple copies of classroom use, where the copies are simply a few articles from a few journals, there should be no prohibition to using the same articles repeatedly, from semester to semester. VIII. The Madey Time Bomb.
There is a time bomb slowly ticking in the matter of Madey v. Duke University50. Madey concerns alleged patent infringement by Duke University, and is not a copyright case. However, as noted both copyrights and patents spring from the same constitutional provision. There really should be a parallel fair use provision in patents, and in fact the equivalent provision has been the scientific use exception. That exception has never been as well developed as copyright, and clearly the rights of patent holders to prevent others from practicing the patent had developed much more strongly than the absolute right of copyright, which has been limited by not only the doctrine of fair use, but by the fact that copyright protects only the expression, and not facts or ideas that are expressed. Also, the disclosure rules, which require the patent to include sufficient information necessary to practice the patent, are considered to satisfy the promotion of the progress of science and useful arts, since others can look at the patent and gain ideas from the information contained therein. This disclosure of ideas and knowledge is viewed as a quid pro quo. The concern from Madey, results from the characterization of the work of Duke by the court. Though the nature of Dukes business was really not an issue, and therefore the comments concerning it can be viewed as dicta, those comments and description certainly do not benefit academic users. 50 307 F.3d 1351 (Fed. Cir. 2002)
The court first stated that the experimental use defense does not immunize a use that is in any way commercial in nature. Then the court indicated that the district court attached too great a weight to Dukes nonprofit educational status, stating that research projects at major universities unmistakably further the institutions legitimate business objectives, and that Duke pursued aggressive patent licensing and derived a not insubstantial revenue stream from patent licensing. The problem is, that the same arguments can be made against fair use. Despite the fact universities are non profit, they do often pursue vigorously licensing of copyrighted materials. Universities can now be likened to Texaco and be subject to a finding that copies of journal articles made for research purposes were no less commercial in nature than the copies made by Texaco. Moreover, it can be argued that since patents spring from the same Constitutional provision as copyrights, it is reasonable to treat fair use similarly to the experimental use defense. The Madey Court clearly had no appreciation for the fact that Duke is in fact non profit, and to the extent that income is received from the licensing of patents or copyrightable materials, that income benefits education and research both directly by the increased and better facilities and instructors, and indirectly by lowering tuition. The impact of Madey has not yet been felt, but it is out there ready to be used by aggressive copyright holder who would seek to further limit educational of fair use.
APPENDIX A
Agreement on Guidelines for Classroom Copying in Not-For-Profit Educational Institutions with Respect to Books and Periodicals Published in House Report 94-1476 The purpose of the following guidelines is to state the minimum and not the maximum standards of educational fair use under 107 of H.R. 2233. The parties agree that the conditions determining the extent of permissible copying for educational purposes may change in the future; that certain types of copying permitted under these guidelines may not be permissible in the future; and conversely that in the future other types of copying not permitted under these guidelines may be permissible under revised guidelines. Moreover, the following statement of guidelines is not intended to limit the types of copying permitted under the standards of fair use under judicial decision and which are stated in 107 of the Copyright Revision Bill. There may be instances in which copying which does not fall within the guidelines stated below may nonetheless be permitted under the criteria of fair use. * Guidelines * I. SINGLE COPYING FOR TEACHERS: 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. A chapter from a book; B. An article from a periodical or newspaper; C. A short story, short essay or short poem, whether or not from a collective work; D. A chart, graph, diagram, drawing, cartoon or picture from a book, periodical, or newspaper. II. MULTIPLE COPIES FOR CLASSROOM USE: Multiple copies (not to exceed in any event more than one copy per pupil in a course) may be made by or for the teacher giving the course for classroom use or discussion; provided that: A. The copying meets the tests of brevity and spontaneity as defined below: B. Meets the cumulative effect test as defined below; and, C. Each copy includes a notice of copyright. DEFINITIONS
Brevity: i. Poetry: (a) A complete poem if less than 250 words and if printed on not more than two pages or (b) from a longer poem, an excerpt of not more than 250 words. ii. Prose: (a) Either a complete article, story or essay of less than 2,500 words, or (b) an excerpt from any prose work f not more than 1,000 words or 10% of the work, whichever is less, but in any event a minimum of 500 words. [Each of the numerical limits stated in i" and "ii" above may be expanded to permit the completion of an unfinished line of a poem or of an unfinished prose paragraph.] iii. Illustration: One chart, graph, diagram, drawing, cartoon or picture per book or per periodical issue. iv. "Special" works: Certain works in poetry, prose or in "poetic prose" which often combine language with illustrations and which are intended sometimes for children and at other times for a more general audience fall short of 2,500 words in their entirety. Paragraph "ii" above notwithstanding such "special works" may not be reproduced in their entirety; however, an excerpt comprising not more than two of the published pages of such special work and containing not more than 10% of the words found in the text thereof, may be reproduced. Spontaneity: i. The copying is at the instance and inspiration of the individual teacher, and ii. The inspiration and decision to use the work and the moment of its use for maximum teaching effectiveness are so close in time that it would be unreasonable to expect a timely reply to a request for permission. Cumulative Effect: i. The copying of the material is for only one course in the school in which the copies are made. ii. Not more than one short poem, article, story, essay or two excerpts may be copied from the same author, not more than three from the same collective work or periodical volume during one class term. iii. There shall not be more than nine instances of such multiple copying for one course during one class term. [The limitations stated in "ii" and "iii" above shall not apply to current news periodicals and newspapers and current news sections of other periodicals.] III. PROHIBITIONS AS TO I AND II ABOVE: Notwithstanding any of the above, the following shall be prohibited: A. Copying shall not be used to create or to replace or substitute for anthologies, compilations or collective works. Such replacement or substitution may occur whether copies of various works or excerpts therefrom are accumulated or are reproduced and used separately. B. There shall be no copying of or from works intended to be "consumable" in the course of study or of teaching.
These include workbooks, exercises, standardized tests and test booklets and answer sheets and like consumable material. C. Copying shall not: a. substitute for the purchase of books, publishers reprints or periodicals; b. be directed by high authority; c. be repeated with respect to the same item by the same teacher from term to term. D. No charge shall be made to the student beyond the actual cost of the photocopying. AGREED March 19, 1976 AD HOC COMMITTEE ON COPYRIGHT LAW REVISION By Sheldon Elliott Steinbach AUTHOR-PUBLISHER GROUP AUTHORS LEAGUE OF AMERICA By Irwin Karp, Counsel ASSOCIATION OF AMERICAN PUBLISHERS, INC. By Alexander C. Hoffman, Chairman Copyright Committee

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RECENT COPYRIGHT LAW DEVELOPMENTS November 12 - 14, 2003

THE STATE OF FAIR USE IN ACADEMIA TODAY

The Origin of Fair Use.

5 Id. at 348. 6 Id. at 349.

17 Id. at 1354 18 420 U.S. 376 (1975).

The 1976 Act.

Permission Fees-The Fallacy of Circular Reasoning.

44 Williams & Wilkins, at 1357

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