Intellectual Property
Jun. 17, 2000
Copy or Transformation?
Practitioner: Intellectual Property Law By Mitchell Zimmerman The Internet has given rise to myriad novel copyright issues, to which the courts have as yet provided few answers. In the past six months, however, three federal district courts have addressed the scope of the fair-use doctrine on the Internet.
Intellectual Property Law
By Mitchell Zimmerman
The Internet has given rise to myriad novel copyright issues, to which the courts have as yet provided few answers. In the past six months, however, three federal district courts have addressed the scope of the fair-use doctrine on the Internet. UMG Recordings v. MP3.com Inc., 00 Civ. 472 (S.D.N.Y. May 4, 2000); Los Angeles Times v. Free Republic, 54 U.S.P.Q.2d 1453 (C.D. Cal. 2000); Kelly v. Arriba Soft Corp., 77 F. Supp.2d 1116 (C.D. Cal. 1999).
The Copyright Act provides that certain unauthorized activities that would otherwise constitute infringement are permitted as "fair uses." Section 107 of the Copyright Act sets forth four nonexclusive factors that must be considered in determining whether the fair-use doctrine applies: "(1) the purpose and character of the use ; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work."
"Purpose and character" also includes consideration of whether "the new work merely supersedes the objects of the original creation, or instead adds something new, with a further purpose or different character, altering the first [work] with new expression, meaning, or message; it asks, in other words, whether and to what extent the new work is transformative." Campbell v. Acuff-Rose Music, 510 U.S. 569 (1994).
In the three recent Internet fair-use cases, consideration of "transformativeness" was pivotal. In MP3.com, the defendant had purchased tens of thousands of CDs and copied them onto its servers in MP3 format. Once a subscriber "proved" that he or she owned a copy of a recording by inserting a commercial CD into the drive of the computer, the defendant's service allowed the subscriber to access and play the music from anywhere. MP3.com asserted that such wholesale acts of unauthorized copying and distribution were fair uses, on the theory that they were the "functional equivalent" of storing its subscribers' CDs for them for "space shifting" purposes.
The court summarily denied MP3.com's defense. The court found nothing remotely transformative. The d efendant added no "new aesthetics, new insights or understandings" to the original music but "simply repackage[d] those recordings to facilitate their transmission through another medium." The court concluded, "While such services may be innovative, they are not transformative."
Arriba Soft and Free Republic posed more difficult issues. Arriba operated a visual search engine that permitted Internet users to search the Web for images. Arriba's automated "crawler" collected 2 million such images for display in response to search queries. Results were displayed in the form of "thumbnail"-sized copies of pictures, and a link to the original site was provided. Transformative? The Arriba court held yes.
Free Republic ran an online "bulletin board." Its members posted the entire text of news articles in which they were interested, and they and other visitors added their comments on political and social issues. Transformative? The Free Republic court held no.
In Arriba Soft, it might have been reasonable to wonder whether, once the images had been located and displayed, most users really used the site in order to go to the linked site that was the source of the located photos - that is, whether the site really functioned as a search engine, as opposed to an enormous collection of images on all subjects. But the court had no doubt about the character of Arriba's use: "Plaintiff's photographs are artistic works used for illustrative purposes. Defendant's visual search engine is designed to catalog and improve access to images on the Internet. The character of the thumbnail index is not esthetic, but functional; its purpose is not to be artistic, but to be comprehensive."
In Free Republic, on the other hand, the court summarily ruled that the use was neither transformative nor a fair use - notwithstanding that the articles were reproduced for purposes of "comment," one of the explicit examples of fair use mentioned in the Copyright Act. Critical to that determination was evidence showing that the comments on the site focused on the underlying news, not on the articles themselves, and the fact that the articles were copied in their entirety. The court stated that such complete, verbatim copying was not "necessary" for the purpose of commentary and that the Free Republic postings could simply have provided links to the actual news articles.
Actual Internet users might well, however, find tiresome the need to jump from site to site in order to read first an article and then the commentary, and such a requirement could present a significant impediment to the interactive, public discussion of the news that Free Republic was trying to promote. But the Free Republic court provided little "breathing room" for the broader purpose underlying the bulletin board - namely, facilitating the transformation of passive consumers of news into active participants.
Contrast the Free Republic court's grudging view with the words of encouragement from Arriba Soft: "Where ... a new use and new technology are evolving, the broad transformative purpose of the use weighs more heavily than the inevitable flaws in its early states of development."
Whether a court perceives a use as "new" is likely decisive. The Free Republic court probably concluded that nothing really all that new was going on here. The Arriba Soft court, on the other hand, was clear that it was addressing a case of first impression; and the court did not liken a visual search engine to a catalog, collection of photos or anything else.
The court having determined in Arriba Soft that the visual search engine was a new thing, that determination influenced the rest of the analysis. One would have thought, for example, that the third factor, "the amount and substantiality of the portion [of the copyrighted work] used," would have weighed heavily against Arriba, since the "thumbnail" photos appear to be perfect (if small) reproductions of the originals. Not so, the court concluded, because the thumbnails are inferior in quality and because thumbnails should be seen as a taking of only as much as was needed for the transformative purpose.
A court can choose a wide angle or a telephoto lens when it focuses on the use at issue. In Arriba Soft, the wide-angle approach puts the plaintiff's images in the context of the 2 million other images that the defendant had copied and of its Internet use-facilitating purpose. In Free Republic, the court zooms in on the articles themselves, emphasizing that the original postings were often accompanied by little commentary.
Treatment of the final statutory fair-use factor (the effect of the use on the copied work's market or value) was illuminating. In each case, the defendant argued that its actions actually redound to the plaintiff's benefit. However, the copyright holders' response has been, "Don't do me any favors," and the courts have mostly endorsed that position.
In MP3.com, for example, the defendant asserted that its activities could only enhance the plaintiffs' CD sales. The court concluded that this kind of supposed "help" was not cognizable even if true: "Any allegedly positive impact of defendant's activities on plaintiff's prior market in no way frees defendant to usurp a further market that directly derives from reproduction of the plaintiffs' copyrighted works."
Similarly, Free Republic tried to prove that the plaintiffs were not deprived of advertising-derived revenue based on site traffic because Free Republic referrals generated tens or hundreds of thousands of additional hits per month. The court scrutinized the evidence closely, however, and found it wanting. More important, the point was held irrelevant, because the plaintiffs were themselves attempting to exploit online markets, and the Free Republic site "has the potential to interfere with these markets."
In Arriba Soft, too, the defendant asserted that its search engine helped the plaintiff by directing traffic to the plaintiff's site. The plaintiff responded that he was harmed notwithstanding because the search engine provided Web surfers with "deep links" to the interior pages of his site. This meant, first, that advertising on the plaintiff's home page would be bypassed, and second, that users would be less likely to view the site's overall promotional message. The court dismissed these points, stating: "Plaintiff has shown no evidence of any harm or adverse impact."
The court probably had in mind the plaintiff's failure to quantify the dollar impact of the harm, but this may be difficult to square with the fact that it is the defendant's burden to prove fair use, not the plaintiff's burden to negate it. The court states, also ignoring the equivalence of each side's evidence: "The defendant has met its burden by offering evidence tending to show a lack of market harm, and Plaintiff has not refuted that evidence."
These first cases on copyright fair use on the Internet are not a seamless web, so to speak. They suggest that the assessment of transformativeness will be critical, and this factor will drive and shape the remaining fair-use factors when a court decides what is fair use on the Web.
Mitchell Zimmerman is a partner at Palo Alto's Fenwick & West and chair of its copyright group.
Contributing Writer
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