Apr 23 2010

Has the worm turned on transformative use?


A while ago, I commented about the misreading that courts were doing with respect to fair use, especially with respect to so-called “transformative use.” Maybe they heard, but at least they have begun to figure it out. The worm may have begun to turn.


“Fair use” is a defense to a claim of copyright infringement. Its origins lay in the notion that there should be some flexibility in enforcement of the rights of a copyright owner to enable limited use of copyright expression (e.g., I quote a paragraph of your article in my book). The doctrine does go past that occasionally, but the concept should treat the copyright owner’s rights as dominant, providing merely an equitable basis to permit some copying of the owner’s expression that are not harmful to the copyright owner. This loosens up the world of expression to enable productive use of ideas and words of prior creative people, but makes sure that we will still have creative people who make and distribute new works.

So, the Supreme Court in the Acuff-Rose said that fair use applies when the use of part of a work involves a “transformative” use. The court said: “The central purpose … is to see … whether the new work merely “supersede[s] the … original creation, or instead adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message; it asks, in other words, whether and to what extent the new work is “transformative.”” In other words, add something change the original into part of your new work, but do not supersede uses that might be exploited by the copyright owner itself.

Somehow, that simple idea got “transformed”. Some cases began to protect what are best described as “new purpose” uses.  They stretch the boundaries of fair use doctrine beyond a breaking point because they suggest that verbatim use of a work is fair if the infringer uses the work for a purpose that the rights owner does not currently engage even if the “new purpose” affects a market that has been or might reasonably be explored by the copyright owner. 

Hopefully, that theme will be discarded in the future. A better analysis was in U.S. v. ASCAP, 599 F.Supp.2d 415 (SD NY 2009), where the issue what whether ASCAP licensing extends to commercial use of ringtone “previews”. These are brief, illustrative examples of cell phone ringtones available for a phone user to determine what ringtone he or she desires. The previews are up to 30 seconds long excerpts. ASCAP licensing does not apply if the previews are fair use. The court held that the “previews” were not transformative fair use. The court distinguished the “new purpose” cases and concluded that the use of previews to advertise products (the ringtones) was an infringing, commercial use that did not entail a purpose different from the entertainment purpose for which the works (the musical works) were originally intended. Additionally, ASCAP was already licensing various types of short segments of works for third party use.

The court concluded that adverse market impact should be measured in reference to reasonable or likely to be developed markets. Here, there existed a realistic market for use in short segment licensing and, thus, this type of usage indicated that the previews had a significant, adverse market impact.

Similarly, the Federal Circuit in Gaylord v. U.S., 2010 WL ---- (Fed. Cir. 2010) held that the use of images of sculptural work in a postage stamp was not a transformative fair use. The stamp did not transform the character of the artist's work.   In analyzing the four statutory fair use factors, the Federal Circuit disagreed with the lower court on the "purpose and character of use" factor, concluding that the use did not reflect any "further purpose" than the sculptural work. Moreover, the stamp clearly had a commercial purpose. Thus, the factor of "purpose and character" weighed strongly against fair use, according to the appeals court. The factors relating to the "nature of the copyrighted work" and the "amount and substantiality of portion used" weighed against fair use.  Because the stamp did not use the sculptural work in a transformative manner, there was no reason to discount the expressive and creative nature of the sculptural work.  Even though the stamp did not harm the market, allowing the government to commercially exploit a creative expressive work would not advance the purposes of copyright.

    So, perhaps courts are heading back to a proper construct – a use is not transformative or fair simply because the copyright owner has not licensed or used the work in that particular market. Fair use does not give infringers a license to take over markets that they get to first without paying the copyright owner an appropriate fee.

Written By:Bill Broussard On April 24, 2010 11:24 AM

Dean Nimmer - I always appreciate your insights. In this case, I could not agree more regarding your evaluation of what should and should not constitute "fair use," and hopefully courts will head your comments. A common misconception I hear often from clients and during "cocktail talk" is that if a person changes a few things in a copyrighted work, a new work has been created, which is obviously a flawed concept. I think those folks are really trying to apply a "transformative fair use" concept, but without taking into consideration the fundamentals of fair use and the appropriate limitations on that doctrine that should be applied to protect the legitimate and valuable rights of copyright holders. Flatly, if a work supersedes a use of an existing work, even if that work adds something new or uses the existing work to a limited extent, then the fair use defense should not apply. The situation is vastly different if a person merely quotes from a literary work (for example, in connection with a review or a citation) or includes a brief passage from a musical piece (for example, as an homage), which in my view are the kinds of cases where the fair use doctrine is appropriately applied. Thanks for all you do, and I look forward to seeing you sometime soon.
Your friend,

Written By:George Graff On May 5, 2010 12:49 PM

Although there is much to what you say, your quote from Acuff-Rose was truncated in a way that distorts its meaning to support your conclusion. The actual quote, without the ellipses, reads "supersede[s] the objects of the original creation . . . ."

In other words, one must focus not just on the work itself, but on its "objects," the uses that were reasonably within the range of uses contemplated by the author at the time it was created. If the new work is neither used in a manner intended by the author of the original work, and could not be substitute for the original work in those uses, then it can be a fair use.

If the original author can prevent uses that he or she never contemplated, and which don't limit his or her ability to benefit from the uses he or she did contemplate, there would be at very least, a circularity problem in applying the transformation test and many types of uses in the public interest such as satire and the use of thumbnails or excerpts as pointers, (as in the 9th Circuit's Kelly decision) would be eliminated.

Written By:Justin Levine On December 28, 2010 6:07 AM

Must agree with George Graff here and suggest that you and Bill Broussard are trying to mask pure advocacy as legal analysis. Have you considered the notion that the courts you criticize didn't "misread" the law, but merely have an interpretation of it which differs from your own? One that honestly argues that the broader purpose of copyright law should sometimes trump financial licensing considerations?

If "adverse market impact" can genuinely be measured "in reference to reasonable or likely to be developed markets", then the argument becomes a tautology. Anybody can claim that any form of market was "reasonable" or "likely" after a third was creative enough to develop it. As George indicated above, it is a circular (and I must say, rather disingenuous) argument which will end up stifling many new and creative works if put into full effect.

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