By Scott Hervey
Recently the 11th Circuit addressed on appeal the question of whether fair use insulates from copyright liability a University which offers to its students a digital repository of reading material culled from third party publications without the benefit of a license. Three academic publishers filed suit against Georgia State University claiming that the University infringed their copyrights by maintaining a policy which allows GSU professors to make digital copies of excerpts of their books available to students without paying them a royalty. Prior copyright cases known as the “course pack cases” – cases in which commercial copy shops were found to have infringed copyrights by printing course packs containing excerpts from third party publications without permission from the publishers – seemed to dictate a finding of infringement. However, of the 74 instances of infringement alleged, the lower court found that the Plaintiffs failed to establish a prima facie case of infringement for 26 works and that fair use applied to all but 5 instances.
The fair use of a copyrighted work is not an infringement of copyright. The four factors a court must consider in determining whether fair use applies are: (1) the purpose of the allegedly infringing use, (2) the nature of the original work, (3) the size and significance of the portion of the original work that was copied, and (4) the effect of the allegedly infringing use on the potential market for or value of the original.
In weighing the fair use factors, the lower court applied a very mechanical analysis and held that fair use applied whenever at least three of the four factors favored GSU. The lower court held that the first and second fair use factors strongly favored GSU since the copies are of excerpts of copyrighted works that are informational in nature and used for teaching students and for scholarship. As for the third factor, the lower court determined that where a professor posted an excerpt that was less than 10 percent of the total work, this would support a finding of fair use. As for the fourth factor, the lower court found that the use of small excerpts did not affect the publishers’ actual or potential sales of books because they do not substitute for the books, and where permissions to use book excerpts are not readily available through a third party licensing service, this also supports a finding of fair use.
Although technically a victory for the publishers, they challenged the lower court’s analysis on multiple grounds. The publishers argued that each of the four factors should not have been given equal weight. The publishers also argued that the course pack cases should have been controlling.
The Appeals Court vacated the decision of the lower court and then engaged in a lengthy analysis of the lower court’s fair use analysis.
The first fair use factor has several facets including whether such use is “transformative” and also whether the use is for a nonprofit educational purpose, as opposed to a commercial purpose. Under the course pack series of cases, the court found that that the copy shops infringed copyrights by printing course packs containing excerpts from third party publications without permission from the publishers. Applying the first fair use factor, the photocopying was not fair use primarily because (i) the use was not transformative because the copy shop merely “re packaged” the excerpts into bound volumes; and (ii) despite the educational use of the course packets, the copy shop’s own use was commercial in nature.
In reviewing the first fair use factor, the Appeals Court, similar to the course pack courts, found that the verbatim copies of portions of the original books posted online is not a transformative use. It is in the Appeals Court’s analysis of the second facet of the first factor – whether the use is for a nonprofit educational purpose, as opposed to a commercial purpose – that a different result is reached.
The commercial or non-transformative uses of a work are separate factors that are accorded their own weight for or against the finding of fair use. Even where such use is non-transformative, nonprofit educational use may weigh in favor of a finding of fair use under the first factor. Because the very purpose of Copyright is to promote creation and learning, the Court noted that some leeway must be given to educational use.
The Court found that holdings of the course pack cases do not dictate the findings of this case. In the course pack cases, the court noted that the first factor weighed against a finding of fair use when the non-transformative, educational use in question was performed by a for-profit copy shop, and was therefore commercial. Here, the Court notes that the use is by a non-profit, educational institution for educational purposes. The Court found this to be a significant distinguishing factor from the course pack cases and that this “places sufficient weight on the first factor scales to justify a finding that this factor favors fair use despite the non‑transformativeness of Defendants’ use.”
While the Appeals Court’s review of the first fair use factor is certainly a blow to the publishers, the Court’s opinion was not a complete loss for the publishers. The Court found that the lower court erred in applying a mathematical approach to determining whether fair use is applicable – if three factors favor fair use, fair use is to be found. The Court also took issue with the lower court’s holding that copying less than a chapter or 10 percent of a book is a safe harbor from copyright infringement. As most copyright attorneys tell their clients when asked how much of a work may be safely copied, there is no set rule; each instance of copying must be analyzed and the quantity and quality of the material taken must be considered as well as whether the taking was excessive in light of the purpose and the threat of market substitution.
Apparently the publishers are not happy with the decision by the 11th Circuit; they are asking the 11th Circuit to rehear their case against GSU.