Session 4

Applications of the “Fair Use” Doctrine

An excellent guide to application of the fair use doctrine to educational examples is in the “Regents Guide” as a Course Handout.

The basic concepts for “fair use” are contained in 17 U.S.C. 107 as exceptions for exclusive use of copyrighted materials for criticism, scholarship, news reporting, teaching, and other forms of expression that may be considered useful for society as a whole. The statute sets forth factors the courts are to use to determine if the use falls within “fair use” – purpose and character of the use, if the use is commercial or nonprofit educational, nature of the copyrighted work, amount and substance of the portion used and its relation to the copyrighted work as a whole, and the effect of the use on the potential market for or value of the copyrighted work.

Court cases have expanded the factors to apply as a result of the challenge from new technologies. In the 1984 Sony case, the court determined that the primary purpose of a VCR was to allow “time-shift” viewing, where a user could tape a program for later viewing at a more convenient time, and, if a product was capable of “substantial noninfringing uses” the manufacturer was not liable. In a ruling that may have more impact with digital technologies able to seamlessly graft in several media sources in a new work, the Campbell case held that the more the defendant has “transformed the work with new expression, meaning, or message,” the more likely it will fall into “fair use.” The NY Court in UMG Recordings Inc. v. MP3.Com Inc however rejected a “fair use” defense primarily because there was no real transformation by the defendant in posting thousands of CDs as MP3 format, and it was not “time-shifting” simply because it allowed subscribers access to music “without having to lug around the actual disk.” A recent order in the decision determined the damages to be $25,000 per CD, or a total of $100 million. The case is on appeal. A similar failure of the “fair use” doctrine occurred in the A&M Records Inc v. Napster Inc., where the court not only threw out the defense, but also determined that Napster was not entitled to the safe harbors of DCMA, nor the Sony defense of providing a non-infringement service that only “space shifted” the music to a more accessible format, like home recordings. The court noted that the explosive growth of Napster content was not due to its alleged convenience to the user, but the fact that the user could get huge libraries of music for free, and arrange for peer-to-peer swapping. When Napster pointed out that the plaintiffs also operated web sites for sampling recordings, the court said those sites were highly restricted and did not allow copying of entire songs or collections. [See the opinion in the Course Handout section] Finally, the City Studios Inc. v. Reimerdes case denied the “fair use”, Sony, and DCMA protections to defendants who posted a decryption program to allow copying of DVD movies.