Appeals Court Overturns Important Fair Use Win Concerning University 'E-Reserves' -- But Potentially For Good Reasons
from the for-the-encouragement-of-learning dept
More than two years ago, a ruling came out and it was massive. In 350 pages Judge Orinda Evans did a four factors fair use analysis on each and every work named in the lawsuit, eventually declaring the majority of them to be fair use (5 were found to be infringing, others were dumped for not having shown that the publishers held the copyright or for de minimis use). The whole ruling was mostly good, but still fairly messy, and had some weird made up rules in there, such as claiming that it's fair use if the reserve was less than 10% of the book. As we noted, the judge seemed to get "excessively formulaic" in making the fair use call. While that might be expected having to go through so many separate analyses, it's not how fair use is supposed to work.
Now, the 11th Circuit Appeals court has basically overturned the ruling on fair use, in a ruling that comes in at only 129 pages. But the reasoning isn't that bad. It calls out the same problems that worried us when the original ruling came out. The main concern here is that Judge Evans "gave each of the four factors equal weight" when that's not how the factors are supposed to work. They're supposed to be the things that you look at before making a determination on the use as a whole. Furthermore, the appeals court seemed quite reasonably concerned about Judge Evans' formulaic conclusions. The court further rejects the publishers' misplaced argument about "media neutrality" as a reason why the e-reserves should be treated just like coursepacks. That's good.
In the end, the appeals court looks at the four factors, claiming that the use is not "transformative" but that it doesn't really matter, because the use here is for education. There's an awful lot of "on the one hand/on the other hand" reasoning that almost makes it feel like the judges on the panel kept going back and forth until finally deciding when to stop flipping a coin. Where it finally lands, goes back to that whole "multiple copies for classroom use" tidbit in the damn law itself. And thus:
In sum, Congress devoted extensive effort to ensure that fair use would allow for educational copying under the proper circumstances and was sufficiently determined to achieve this goal that it amended the text of the statute at the eleventh hour in order to expressly state it. Furthermore, as described above, allowing latitude for educational fair use promotes the goals of copyright. Thus, we are persuaded that, despite the recent focus on transformativeness under the first factor, use for teaching purposes by a nonprofit, educational institution such as Defendants’ favors a finding of fair use under the first factor, despite the nontransformative nature of the use.The court says the district court got the 2nd factor wrong (nature of the copyrighted work) by not really looking at each instance, but assuming they were all in favor of fair use. But also admits that the 2nd factor really isn't a big deal in this particular case (again getting at the mistake of trying to weigh all four factors evenly). The 3rd factor (amount of the work) calls out Judge Evans for that weird 10% formulaic calculation.
Here, the District Court found that the third factor favored fair use in instances where Defendants copied no more than 10 percent of a work, or one chapter in case of a book with ten or more chapters.... The District Court’s blanket 10 percent-or-one-chapter benchmark was improper. The fair use analysis must be performed on a case-bycase/ work-by-work basis. Campbell, 510 U.S. at 577, 114 S. Ct. at 1170; see supra discussion accompanying note 20. We must avoid “hard evidentiary presumption[s] . . . and ‘eschew a rigid, bright-line approach to fair use.’” Campbell, 510 U.S. at 584–85, 114 S. Ct. at 1174 (quoting Sony, 464 U.S. at 449 n. 31, 104 S. Ct. at 792 n. 31). By holding that the third factor favored fair use whenever the amount of copying fell within a 10 percent-or-one-chapter baseline, the District Court abdicated its duty to analyze the third factor for each instance of alleged infringement individually.While it can be worrisome to see a fair use win sent back, in this case, it seems to be mostly for the right reasons. That formulaic 10% rule was a strange one and a point that certainly concerned us in the original ruling. Here, the appeals court is pointing out that it's just the wrong way to do fair use analysis.
On the fourth factor, concerning the impact on the market, the court appears well aware of the simple trick of just saying "well, there was a license available, and thus the use harmed the market" noting that this is circular reasoning.
As previously explained, licensing poses a particular threat that the fair use analysis will become circular, and Plaintiffs may not head off a defense of fair use by complaining that every potential licensing opportunity represents a potential market for purposes of the fourth fair use factor.This follows a lengthy back and forth discussion on whether or not there were licenses available, what impact that has on the fourth factor and which party has the burden here. In the end, the court found that the District Court was correct in its initial analysis of the state of licenses, but failed to take into account the fact that the use was transformative in judging the fourth factor.
Finally, the court is also troubled that the District Court separately looked at the fact that copyright law is supposed to "promote the dissemination of knowledge" saying that it's fine to recognize that, but it should be considered within the first fair use factor, rather than as a separate issue altogether. I'm not sure I agree with that directly, since I'd argue it not only goes way beyond the first factor but (again) is in the law itself outside of the factor. Still, it's not a horrible point.
There is one other slightly troubling part in the ruling, which is that the court seems to suggest that fair use is "an implied license."
In a sense, the grant to an author of copyright in a work is predicated upon a reciprocal grant to the public by the work’s author of an implied license for fair use of the work.But that's just wrong. The law itself says "the fair use of a copyrighted work... is not an infringement of copyright." That doesn't mean that it's an implied license. It means that no license is needed. The idea that it's an implied license, unfortunately, takes us back to this idea that every use "must be licensed" which is simply wrong. Still, that's not a huge part of the ruling, but a little pet peeve.
Given all that, the case has been sent back to the lower court to reconsider and to correct these errors. As noted, it was good that so much was considered fair use in the original ruling, but a bit troubling on the reasons. Given these new instructions, it seems like the lower court now has a chance to come to the right answer for the right reasons and that's always going to be a better result.
There is a "concurring" opinion by Judge Vinson, which is a bit on the wacky side, insisting that, despite the fact that fair use has been a part of the actual statute since the Copyright Act of 1976, it doesn't matter because it was originally common law and thus "fair use analysis does not require conventional statutory interpretation." Then he suggests the court "step back a little" and look at the use and determine if it's fair use or not -- and he's pretty damn sure it's not. Eh, whatever. Let's see what the lower court has to say, and then the inevitable return on appeal.