Category Archives: Fair Use

Restricting Innovation: How Publisher Contracts Undermine Scholarly AI Research

Posted December 6, 2024

This post is by Rachael Samberg, Director, Scholarly Communication & Information Policy, UC Berkeley Library and Dave Hansen, Executive Director, Authors Alliance

This post is about the research and the advancement of science and knowledge made impossible when publishers use contracts to limit researchers’ ability to use AI tools with scholarly works.

Within the scholarly publishing community, mixed messages pervade about who gets to say when and how AI tools can be used for research reliant on scholarly works like journal articles or books. Some scholars voiced concern (explained more here) when major scholarly publishers like Wiley or Taylor & Francis entered lucrative contracts with big technology companies to allow for AI training without first seeking permission from authors. We suspect that these publishers have the legal right to do so since most publishers demand that authors hand over extensive rights in exchange for publishing their work. And with the backdrop of dozens of pending AI copyright lawsuits, who can blame the AI companies for paying for licenses, if for no other reason than avoiding the pain of litigation? While it stings to see the same large commercial, academic publishers profit yet again off of the work academic authors submit to them for free, we continue to think there are good ways for authors to retain a say in the matter.

Big tech companies are one thing, but what about scholarly research? What about the large and growing number of scholars who are themselves using scholarly copyrighted content with AI tools to conduct their research? We currently face a situation in which publishers are attempting to dictate how and when researchers can do that work, even when authors’ fair use rights to use and derive new understandings from scholarship clearly allow for such uses.

How vendor contracts disadvantage US researchers

We have written elsewhere (in an explainer and public comment to the Copyright Office) why training AI tools, particularly in the scholarly and research context, constitutes a fair use under U.S. Copyright law. Critical for the advancement of knowledge, training AI is based on a statutory right already held by all scholarly authors engaging in computational research and one that lawmakers should preserve.

The problem U.S. scholarly authors presently face with AI training is that publishers restrict their access to these statutory rights through contracts that override them: In the United States, publishers can use private contracts to take away statutory fair use rights that researchers would otherwise hold under Federal law. In this case, the private contracts at issue are the electronic resource (e-resource) license agreements that academic research libraries sign to secure campus access to electronic journal, e-book, data, and other content that scholars need for their computational research.

Contractual override of fair use is a problem that disparately disadvantages U.S. researchers. As we have described elsewhere, more than forty countries, including the European Union, expressly reserve text mining and AI training rights for scientific research by research institutions. Not only do scholars in these countries not have to worry whether their computational research with AI is permitted, but also: They do not risk having those reserved rights overridden by contract. The European Union’s Copyright Digital Single Market Directive and recent AI Act nullify any attempt to circumscribe the text and data mining and AI training rights reserved for scientific research within research organizations. U.S. scholars are not as fortunate.

In the U.S., most institutional e-resource licenses are negotiated and managed by research libraries, so it is imperative that scholars work closely with their libraries and advocate to preserve their computational research and AI training rights within the e-resource license agreements that universities sign. To that end, we have developed adaptable licensing language to support institutions in doing that nationwide. But while this language is helpful, the onus of advocacy and negotiation for those rights in the contracting process remains. Personally, we have found it helpful to explain to publishers that they must consent to these terms in the European Union, and can do so in the U.S. as well. That, combined with strong faculty and administrative support (such as at the University of California), makes for a strong stance against curtailment of these rights.

But we think there are additional practical ways for libraries to illustrate—both to publishers and scholarly authors—exactly what would happen to the advancement of knowledge if publishers’ licensing efforts to curtail AI training were successful. One way to do that is by “unpacking” or decoding a publisher’s proposed licensing restriction, and then demonstrating the impact that provision would have on research projects that were never objectionable to publishers before, and should not be now. We’ll take that approach below.

Decoding a publisher restriction

A commercial publisher recently proposed the following clause in an e-resource agreement:

Customer [the university] and its Authorized Users [the scholars] may not:

directly or indirectly develop, train, program, improve, and/or enrich any artificial intelligence tool (“AI Tool”) accessible to anyone other than Customer and its Authorized Users, whether developed internally or provided by a third party; or
reproduce or redistribute the Content to any third-party AI Tool, except to the extent limited portions of the Content are used solely for research and academic purposes (including to train an algorithm) and where the third-party AI Tool (a) is used locally in a self-hosted environment or closed hosted environment solely for use by Customer or Authorized Users; (b) is not trained or fine-tuned using the Content or any part thereof; and (c) does not share the Content or any part thereof with a third party.

What does this mean?

The first paragraph forbids the training or improving of any AI tool if it’s accessible or released to third parties. And, it further forbids the use of any computational outputs or analysis that are derived from the licensed content from being used to train any tool available to third parties.
The second paragraph is perhaps even more concerning. It provides that when using third party AI tools of any kind, a scholar can use only limited portions of the licensed content with the tools, and are prohibited from doing any training at all of third party tools even if it’s a non-generative AI tool and the scholar is performing the work in a completely closed and highly secure research environment.

What would the impact of such a restrictive licensing provision be on research?

It would mean that every single one of the trained tools in the following projects could never be disseminated. In addition, for the projects below that used third-party AI tools, the research would have been prohibited full-stop because the third-party tools in those projects required training which the publisher above is attempting to prevent:

Tools that could not be disseminated

In 2017, chemists created and trained a generative AI tool on 12,000 published research papers regarding synthesis conditions for metal oxides, so that the tool could identify anticipated chemical outputs and reactions for any given set of synthesis conditions entered into the tool. The generative tool they created is not capable of reproducing or redistributing any licensed content from the papers; it has merely learned conditions and outcomes and can predict chemical reactions based on those conditions and outcomes. And this beneficial tool would be prohibited from dissemination under the publisher’s terms identified above.
In 2018, researchers trained an AI tool (that they had originally created in 2014) to understand whether a character is “masculine” or “feminine” by looking at the tacit assumptions expressed in words associated with that character. That tool can then look at other texts and identify masculine or feminine characters based on what it knows from having been trained before. The implications are that scholars can therefore use texts from different time periods with the tool to study representations of masculinity and femininity over time. No licensed content, no licensed or copyrighted books from a publisher can ever be released to the world by sharing the trained tool; the trained tool is merely capable of topic modeling—but the publisher’s above language would prohibit its dissemination nevertheless.

Tools that could neither be trained nor disseminated

In 2019, authors used text from millions of books published over 100 years to analyze cultural meaning. They did this by training third-party non-generative AI word-embedding models called Word2Vec and GLoVE on multiple textual archives. The tools cannot reproduce content: when shown new text, they merely represent words as numbers, or vectors, to evaluate or predict how similar words in a given space are semantically or linguistically. The similarity of words can reveal cultural shifts in understanding of socioeconomic factors like class over time. But the publisher’s above licensing terms would prohibit the training of the tools to begin with, much less the sharing of them to support further or different inquiry.
In 2023, scholars trained a third-party-created open-source natural language processing (NLP) tool called Chemical Data Extractor (CDE). Among other things, CDE can be used to extract chemical information and properties identified in scholarly papers. In this case, the scholars wanted to teach CDE to parse a specific type of chemical information: metal-organic frameworks, or MoFs. Generally speaking, the CDE tool works by breaking sentences into “tokens” like parts of speech and referenced chemicals. By correlating tokens, one can determine that a particular chemical compound has certain synthetic properties, topologies, reactions with solvents, etc. The scholars trained CDE specifically to parse MoF names, synthesis methods, inorganic precursors, and more—and then exported the results into an open source database that identifies the MoF properties for each compound. Anyone can now use both the trained CDE tool and the database of MoF properties to ask different chemical property questions or identify additional MoF production pathways—thereby improving materials science for all. Neither the CDE tool nor the MoF database reproduces or contains the underlying scholarly papers that the tool learned from. Yet, neither the training of this third-party CDE tool nor its dissemination would be permitted under the publisher’s restrictive licensing language cited above.

Indeed, there are hundreds of AI tools that scholars have trained and disseminated—tools that do not reproduce licensed content—and that scholars have created or fine-tuned to extract chemical information, recognize faces, decode conversations, infer character types, and so much more. Restrictive licensing language like that shown above suppresses research inquiries and societal benefits that these tools make possible. It may also disproportionately affect the advancement of knowledge in or about developing countries, which may lack the resources to secure licenses or be forced to rely on open-source or poorly-coded public data—hindering journalism, language translation, and language preservation.

Protecting access to facts

Why are some publishers doing this? Perhaps to reserve the opportunity to develop and license their own scholarship-trained AI tools, which they could then license at additional cost back to research institutions. We could speculate about motivations, but the upshot is that publishers have been pushing hard to foreclose scholars from training and dissemination AI tools that now “know” something based on the licensed content. That is, such publishers wish to prevent tools from learning facts about the licensed content.

However, this is precisely the purpose of licensing content. When institutions license content for their scholars to read, they are doing so for the scholars to learn information from the content. When scholars write about it or teach about the content, they are not regenerating the actual expression from the content—the part that is protected by copyright; rather the scholars are conveying the lessons learned from the content—facts not protected by copyright. Prohibiting the training of AI tools and the dissemination of those tools is functionally equivalent to prohibiting scholars from learning anything about the content that institutions are licensing for that very purpose, and that scholars have written to begin with! Publishers should not be able to monopolize the dissemination of information learned from scholarly content, and especially when that information is used non-commercially.

For these reasons, when we negotiate to preserve AI usage and training rights, we generally try to achieve the following outcomes which would promote—rather than prohibit—all of the research projects described above:

The sample language we’ve disseminated empowers others to negotiate for these outcomes. We hope that, when coupled with the advocacy tools we’ve provided above, scholars and libraries can protect their AI usage and training rights, while also being equipped to consider how they want their own works to be used.

Hachette v. Internet Archive Update: Second Circuit Court of Appeals Rules Against Internet Archive

Posted September 5, 2024

We got a disappointing decision yesterday from the Second Circuit Court of Appeals in the long-running Hachette v. Internet Archive (IA) copyright lawsuit about IA’s digitization and lending of books. The Court affirmed the district court’s decision that IA cannot circulate digital copies of books they have legitimately acquired in physical copies, even when only the same number of copies as legitimately acquired are circulated to a single user at a time—just as a physical book would be loaned.

The Court, focusing on IA’s lending of digitized books that were available for license as ebooks from the publishers, concluded that IA’s fair use defense fails. We think this decision will result in a meaningful reduction in access to knowledge. This is sad news for many authors who have relied on IA’s Open Library for research and discovery, and for readers who have used Open Library to find authors works. However, we also view it as a decision limited to its facts—that is, IA’s particular implementation of controlled digital lending (CDL), and more specifically, its lending of books that are already available in licensed digital formats.

We plan to do a more in-depth analysis of the Court’s decision later, but for now, we offer some initial thoughts. First, there are a couple of bright spots in the opinion:

1) The Court rejected the district court’s conclusion that IA was engaged in commercial use when looking at the first factor of fair use. The publishers argued IA’s lending of digitized books was commercial in nature because IA received a few thousand dollars from a for-profit used-bookseller and also solicited donations on its website. The Court rightly pointed out that if that was the standard, virtually every nonprofit that solicits donations would by default only be able to engage in commercial use. This was an issue we and others strongly urged the Court to address, and we’re glad it did.

2) For the most part, the Court focused its analysis on the facts of the case, which was really about IA lending digitized copies of books that were already available in ebook form and licensable from the publishers. The legal analysis in several places turned on this fact, which we think leaves room to make fair use arguments regarding programs to digitize and make available other books, such as print books for which there is no licensed ebook available, out-of-print books, or orphan works. CDL will remain an important framework, especially considering the lack of an existing digital first-sale doctrine.

We are also disappointed by several key points in the decision:

One was the Court’s assessment of the first fair use factor, “purpose and character of the use.” The Court’s analysis of this factor was in some ways unsurprising but nevertheless disappointing. The Court did little more than conclude that the use was not transformative and, therefore, not fair use. Though we think there are strong arguments that CDL is transformative, whether CDL is “transformative” is just one of the supporting rationales for the argument that CDL is fair use. The other justifications—that CDL supports teaching, scholarship, and research, along with complementing the first sale doctrine and supporting the public-interest mission of libraries—are at the heart of CDL. The Court didn’t engage with those other arguments at all and also ignored meaningful discussion of cases where non-transformative copying supported a fair use finding because of the public benefits.

A second key issue is about whether IA’s digital lending negatively impacts the market for the original works. This issue probably deserves a whole blog post to itself, but in short the analysis came down to who shoulders the burden of proving or disproving market harm, and what default assumptions the court has about market harm. The following quotes from the decision will give you a sense of how the Court analyzed the issue:

[a]lthough they do not provide empirical data of their own, Publishers assert that they (1) have suffered market harm due to lost eBook licensing fees and (2) will suffer market harm in the future if IA’s practices were to become widespread. IA argues that Publishers cannot rely on the “common-sense inference” of market harm without data to back that up, citing American Society for Testing & Materials v. Public.Resource.Org, Inc. [citations omitted]. . . . We agree with Publishers’ assessment of market harm.

Despite IA’s experts having offered meaningful data and analysis indicating a lack of market harm on sales of publishers’ books, the Court went on to say:

We are likewise convinced that “unrestricted and widespread conduct of the sort engaged in by [IA] would result in a substantially adverse impact on the potential market for [the Works in Suit]. . . . Though Publishers have not provided empirical data to support this observation, we routinely rely on such logical inferences where appropriate in assessing the fourth fair use factor. . . . Thus, we conclude it is “self-evident” that if IA’s use were to become widespread, it would adversely affect Publishers’ markets for the Works in Suit.

We are also disappointed by how the Court portrayed the overall public benefit of IA’s lending and its long-term effect: “while IA claims that prohibiting its practices would harm consumers and researchers, allowing its practices would―and does―harm authors.” We think this is a gross generalization and mischaracterization of how IA’s digital lending affects most authors. Authors are researchers. Authors are readers. IA’s digital library helps authors create new works and supports their interests in having their works read. This ruling may benefit the largest publishers and most prominent authors, but for most, it will end up harming more than it will help.

Fair Use Week 2023: Looking Back at Google Books Eight Years Later

Posted February 24, 2023

This post is authored by Authors Alliance Senior Staff Attorney, Rachel Brooke.

More recent members and readers may not be aware that Authors Alliance was founded in the wake of Authors Guild v. Google, a class action fair use case in the Second Circuit that was litigated for nearly a decade, and finally resolved in favor of Google in 2015. The case concerned the Google Books project—an initiative launched by Google whereby the company partnered with university libraries to scan books in their collections. These scans would ultimately be made available as a full-text searchable database for the public to search through for particular terms, with short “snippets” displayed accompanying the search results. Users could not, however, view or read the scanned books in their entirety. The Authors Guild, along with several authors, filed a lawsuit against Google alleging that scanning the books and displaying these snippets constituted copyright infringement.

In addition to Authors Guild representing its members in the litigation, its associated plaintiffs brought the case as a class action, claiming to bring the case on behalf of a broad group of authors: “[a]ll persons residing in the United States who hold a United States copyright interest in one or more Books reproduced by Google as part of its Library Project” who were either authors or the authors’ heirs.

But many of these authors did not agree with the Authors Guild’s stance in the case, and felt that the Google Books project served their interests in sharing knowledge, seeing their creations be preserved, and reaching readers interested in their work. A group of authors and scholars came together to share their views with the district court, many of whom would soon become founding members of Authors Alliance. Many of those same authors signed on to amicus briefs before both the district court and Second Circuit explaining why they opposed the litigation and supported Google’s fair use defense. Then, in 2014, Authors Alliance submitted its first amicus brief to the Second Circuit, supporting Google’s ultimately successful fair use defense. The plaintiffs later appealed the Second Circuit’s ruling, asking the Supreme Court to weigh in, but the Court ultimately declined to hear the case, leaving the Second Circuit’s ruling intact.

Nearly a decade later, the effects of Google Books can still be seen in fair use decisions and copyright policy developments involving the challenges of adapting copyright to the digital world. In today’s post, I’ll reflect on how Google Books can be contextualized within today’s fair use landscape and share my thoughts on what the case can tell us about copyright in the digital world.

Google Books and Transformativeness

A major question in Authors Guild v. Google was whether Google’s use of the copyrighted works was “transformative,” a key component of the fair use inquiry. When a use is found to be transformative, this in practice weighs heavily in favor of a finding of fair use. In the case, the court found that Google’s scanning, as well as the search and snippet display functions, were transformative because the service “augments public knowledge by making available information about [the] books without providing the public with a substantial substitute for . . . the original works.” This was because Google Books provided information about the books—such as the author and publisher information—without creating substitutes of the original works. In other words, readers could learn about the books they searched through, but could not read the books in full—to do this, those readers would have to purchase or borrow copies through the normal channels.

Since the doctrine of transformativeness was established in the 1994 landmark Supreme Court case, Campbell v. Acuff-Rose Music, there have been myriad questions about the precise contours of what it means for a use to be transformative. Campbell established that a use is transformative when it endows the secondary work with a “new meaning or message,” but it can be difficult to apply this test in practice, particularly in the context of new or nascent technologies. Google Books tells us that scanning works in order to create a full-text searchable database with limited snippet displays is a transformative use based on its new and different purpose from the purpose of the works themselves. Furthermore, it reinforces the notion that a use is particularly likely to be considered transformative when it serves the underlying purpose of copyright law: incentivizing new creation for the benefit of the public and “enriching public knowledge.” By highlighting that Google contributed to public knowledge about books through its scanning activities and the Google Books search function, the court helped bring fair use for scholarship and research—two key prototypical uses established in the 1976 Copyright Act—into the digital age, setting an important precedent for later cases.

Google Books and Derivative Works

One of the plaintiffs’ arguments in Google Books was that Google’s full-text searchable database constituted a derivative work. One of a copyright holder’s exclusive rights is the right to prepare derivative works—such as adaptations, abridgements, or translations of the original work—and the plaintiffs alleged that this right had been infringed. The court disagreed, finding that Google’s use had a transformative purpose, whereas derivative works tend to involve a transformation in form, such as the adaptation of a novel into a movie or an audiobook. Furthermore, the court explained that derivative works are “those that re-present the protected aspects of the original work, i.e., its expressive content, converted into an altered form[.]” In contrast, the Google Books project provided information about the books and offered a limited “snippet” view, but did not re-present the expressive content: the full text of the books themselves.

The distinction the court drew between transformative fair uses and derivative works in Google Books is an important one, as it can often be a close question whether a work involves a transformative purpose or merely represents the same work in a new form, without enough added to tip the scales towards fair use. And it is a question that continues to arise in fair use cases today: just last year, the Supreme Court agreed to hear Warhol Foundation v. Goldsmith, a case about whether Andy Warhol’s creation of a series of screenprints of the late musical artist Prince which drew from a photograph taken by photographer Lynn Goldsmith qualified as a fair use. We’ve covered this case extensively on our blog over the past few years, and submitted an amicus brief in the case. Our brief argues (among other things) that Warhol’s screen prints involve much more than a transformation in form: they are stylistically and visually distinct from Goldsmith’s photograph, and endow the photograph with a new meaning or message, making the use highly transformative.

As in Google Books, the parties and amici in Goldsmith grapple with the line between transformative uses and the creation of derivative works, an often complicated and fact-sensitive determination. In this context, Google Books serves as a reminder that fair use is not a one-size-fits-all determination. Yet it also provides support for arguments advanced by Authors Alliance and others that simply because a transformation in form exists—in the Google Books case, the transformation from a print book to a scanned copy, and in Goldsmith, the transformation of a black and white photo to a series of colorful screenprints—does not mean that a secondary use cannot be a fair one. Warhol’s use did not merely “re-present the protected aspects of the original work[‘s] . . . expressive content,” but was transformative in the different “purpose, character, expression, meaning, and message” it conveyed.

Google Books and Controlled Digital Lending

The practice of controlled digital lending (“CDL”)—and the arguments in favor of it constituting a fair use—can be traced back in part to the fair use principles established and reinforced in Google Books. As I argue in our amicus brief in Hachette Books v. Internet Archive, a case about—among other things—whether CDL constitutes a fair use, Google Books shows that copying the entirety of a work in the process of making a transformative use of it can be fully consistent with fair use.

Another important suggestion in the Google Books case, made at the district court level, was that the Google Books search function could actually drive book sales: the search results were accompanied by links to purchase the book, and research suggested that this could enhance sales of those books. This is analogous to the effects of library lending: library readers often purchase books by authors they first discovered at the library, an effect which can apply with equal force when the library patron borrows a CDL scan. Indeed, several other amici in Hachette Books argue that the finding that the Google Books search was a fair use lent substantial support for the argument that CDL is a fair use, based on both the factual similarities between the two initiatives and their shared objective of “enriching public knowledge.”

As in Google Books, CDL also helps authors reach readers who could not otherwise access their books, and achieves this through scanning books on library shelves. And also like Google Books, CDL helps solve the problem of 20th century works “disappearing”: the commercial life of a book tends to be much shorter than the term of copyright, so when books under copyright go out of print, they can disappear into obscurity. Scanning these books to preserve them ensures that the knowledge they advance will not be lost.

Google Books and Text Data Mining

Text data mining—the process of using automated techniques aimed at quantitatively analyzing text and other data—is also widely considered to be a fair use, and this determination is similarly built in part on the building blocks established in Google Books. As was the case in Google Books, the results of text data mining research provide information about the works being studied, and cannot in any way serve as substitutes for the content of the works. In fact, one important aspect of the new exemption to DMCA liability for text data mining, which Authors Alliance successfully petitioned for in 2021, is that researchers are not able to use the works in the text data mining corpus for consumptive purposes. And also like Google Books, researchers are able to view the content in a limited manner to verify their findings, analogous to Google Books’s snippet view. The new TDM exemption was a huge win for Authors Alliance members, and something to celebrate for all scholars engaged in this important research. Importantly, the precedent established by Google Books strongly supported its adoption and the Register of Copyright’s suggestion that text data mining was likely to be a fair use.

Looking Forward: Google Books and Artificial Intelligence

In recent years, scholars and researchers have grappled with the implications of copyright protection on AI-generated content and AI models more generally. The holding in Google Books provides some support for companies’ and researchers’ ability to engage in these activities: one important factor in the case was that Google Books did not harm the market for the books at issue in the case, since the books in the database could not serve as substitutes for the books themselves. Similarly, when copyrighted works are used to train AI, the output cannot serve as a substitute for the copyrighted works, and the market for those works is not harmed, even if—like the plaintiffs in Google Books—the copyright holders might prefer that their works not be used in this way. Google Books establishes that simply because copyrighted works are used as “input” in a given model, this does not mean that the outputs constitute infringement. It is also worth noting that the court found Google’s use to be fair despite the fact that it was a use by a commercial, profit-seeking entity. While a commercial use can sometimes tip the scales in favor of finding a use to not be fair, this can be overcome by a socially beneficial, transformative purpose. This could arguably apply with equal force to AI models trained on copyrighted works which contribute to our understanding of the world, despite the fact that commercial entities are often the ones deploying these technologies.

Eight years after it was decided, the legacy of Google Books endures in policy debates and copyright lawsuits that capture the public’s attention. Policymakers and judges would be wise to heed the lessons it teaches about the value of advancing public knowledge through digitization and the use of copyrighted works for new and socially beneficial purposes. As we await policy developments regarding text data mining and wait for decisions in Goldsmith and Hachette Books, it is my hope that this legacy will live on, reminding us all of the vast capabilities of information technology to enrich our understanding of the world and advance the progress of knowledge, which, after all, is what copyright law is all about.

Fair Use Week 2023: How to Evade Fair Use in Two Easy Steps

Posted February 23, 2023

This post is by Dave Hansen and also posted to the Fair Use Week blog here.

Fair use is an essential part of the Copyright Act’s careful balance—on the one hand protecting rightsholders’ interests, while on the other “[permitting and requiring] courts to avoid rigid application of the copyright statute when, on occasion, it would stifle the very creativity which that law is designed to foster.” The Supreme Court has explained that fair use is a core part of what makes the Copyright Act compatible with the First Amendment guarantee of free expression. “First Amendment protections are ‘embodied . . . ’ in the ‘latitude for scholarship and comment’ safeguarded by the fair use defense.”

Fair use is what has allowed biographers to quote critically from originals when writing their own works, even when the copyrights are owned by the rich and powerful, as in cases involving L. Ron Hubbard and Howard Hughes. It’s what allows researchers to write and quote from unpublished manuscripts for literary criticism, as in this case about scholarly use of an unpublished work by Marjorie Kinnan Rawlings Baskin. It’s also what has allowed libraries to provide copies of books to blind readers, conduct research across texts, and make preservation copies. It allows reuse of images in support of news and political commentary, supports researchers who use tools like Google Image Search, and allows artists to use source materials to create transformative new works, such as parody.

Two easy steps to evade fair use

Given its importance, it may surprise you to learn that fair use is remarkably easy to evade. Savvy copyright owners do it all the time. It takes just two easy steps.

First, you need to write a contract, specifically a “license” for the use of your work. In it, you dictate the terms on which you provide access to your work. You can impose almost any restrictions you like. Sometimes, contracts will restrict certain classes of uses: “you cannot reproduce this content for commercial use” or “you may download one copy of this work for personal consultation; you cannot reproduce or share any part of this work in whole or in part in any form, or share in any form with the public.”

Other contractual terms guard against specific threats. For example, Disney once won a lawsuit over use of its movie trailers, which Disney would license to websites only if they agreed that the website “may not be derogatory to or critical of the entertainment industry or of [Disney] (and its officers, directors, agents, employees, affiliates, divisions and subsidiaries) or of any motion picture produced or distributed by [Disney].”

The key here is that you can essentially rewrite the rules, and forbid those aspects of fair use that you disapprove of. Want to make sure critics can’t use your words against you? Just say they can’t. Want to make sure libraries don’t make preservation copies without paying you first? Want to make sure that instructors of college classes can only use excerpts of your book—even very small excerpts—if they pay every single time? It’s your prerogative.

Second, you need to make sure that everyone who gains access to your work is bound by your license. This sounds hard, but with online distribution, it’s actually pretty easy.

In the world of print copies, this was difficult because copies had a way of traveling beyond the control of the original purchaser. The “first sale” doctrine meant that buyers of copies could freely transfer those copies to third-party buyers (e.g., someone who buys a book at a used book store, or who borrows a book from a library) or give them away. So, even if you got the original buyer to agree to your terms, those downstream users didn’t have to. But there is no widespread acceptance of a buyer’s “digital first sale.” So, buyers can’t just transfer the copies they purchase to downstream users. Everyone who wants access to the digital copy must agree to the license. All you have to do is make sure that your materials are distributed exclusively on digital platforms that are subject to your terms, and you’re all set.

That’s it. Two easy steps and you’ve practically eliminated fair use. For any use you haven’t already authorized, you can just say no, require them to pay whatever you want, or just refuse to grant access. And if they don’t comply, at a minimum you’ve got at a slam-dunk breach of contract claim.

Is it Seriously That Easy?

Unfortunately, this two-step approach–sometimes known as “contractual override”–reflects the prevailing wisdom and practice of many copyright owners. It is widely used online, by parties ranging from massive corporations such as Amazon or Netflix to small publishers and news outlets. And though the precedent for it isn’t airtight, when it has come up in court, the licensors have mostly prevailed. Because U.S. law so venerates “freedom of contract,” it has been difficult for policymakers or the courts to address the problem of rightsholders forbidding lawful fair uses under the terms of their licenses.

How did we get to this point? This is not a new or unexpected problem. You can look back to 1993, when law professor Jane Ginsburg foresaw this state of affairs just as the possibilities of the internet were coming into view:

“In the digital environment posited here, contract protection may not be the fragile creature presumed in prior intellectual property preemption decisions. If access to works could be obtained only through the information provider (directly or through an authorized online distributor), and if copying could be electronically tracked or prevented, no ‘third parties’ to the contract would exist. When ‘we’re all connected,’ no functional difference may exist between a contract and a property right. At that point, it becomes necessary to consider whether limitations incorporated in the copyright law should be imported to its contractual substitute.”

Numerous others in the legal community soon made similar observations, such as Julie Cohen, Niva Elkin-Koren, and Andrew Shapiro, among others, who also wrote about aspects of this then-new challenge.

How to Protect Fair Use from Contractual Override

A handful of efforts to address this problem have been mounted in Congress. In 2003 and 2005, representative Zoe Lofgren introduced a bill appropriately called the BALANCE Act (“Benefit Authors without Limiting Advancement or Net Consumer Expectations”), which addressed both the unavailability of “first sale” in the digital environment and contractual override of fair use. The proposed legislation provided that “[w]hen a digital work is distributed to the public subject to nonnegotiable license terms, such terms shall not be enforceable under the common laws or statutes of any State to the extent that they restrict or limit any of the limitations on exclusive rights under this title.” The BALANCE Act never passed however, and hasn’t been revisited in Congress since 2005.

Recent actions in other jurisdictions may provide renewed legislative interest and guidance on possible models to adopt. For example, in 2014, the UK passed legislation that limits contractual override of user rights—providing that “to the extent that a term of a contract purports to prevent or restrict the doing of any act which, by virtue of this section, would not infringe copyright, that term is unenforceable.” This language has been applied in the UK to exceptions that allow for making copies for persons with print and other disabilities, research and teaching, and text and data-mining. Similarly, the EU’s recent Copyright in the Digital Single Market Directive contains similar protections for copyright exceptions, as does Singapore’s recent copyright bill. So far, though, there has been no indication of real interest from Congress in the United States.

It’s also possible that states could craft legislation. There has recently been a surge of interest in bills in a number of states aimed at protecting libraries’ ability to license books on reasonable terms (bills that Authors Alliance generally supports). These bills also go beyond what fair use protects—seeking to, for example, ensure that libraries have broad access to ebooks on “reasonable terms,” and addressing problems of major publishers simply refusing to license books to libraries. Maryland was the first state to actually pass such a law, but it was struck down as preempted by federal copyright law in AAP v. Frosh. The court concluded that because federal copyright law dictates the scope of rights governing public distribution of works, it was impermissible for the state of Maryland to interject its own rules about the scope of the publishers’ distribution rights.

It’s possible that state legislation that is more narrowly tailored—e.g., a state law that focused solely on protecting fair use—would not suffer the same fate as the Maryland law. In fact, the reasoning of the Maryland e-lending case would seem to support such a state law, since a state law protecting fair use would be maintaining, rather than altering, the balance of rights as defined by federal law.

Legal Strategies in Court

It’s also possible that the courts could intervene, though so far they have mostly declined to do so. It seems to me there are two or three viable ways for judicial intervention to be effective:

First, Courts could conclude that contracts (created under and governed by state law) are preempted by federal copyright law, which is what defines the scope of copyright’s exclusive rights. The Constitution provides that federal law supersedes conflicting state law, and Congress has provided specific instructions on how such preemption should apply, stating that “all legal or equitable rights that are equivalent to any of the exclusive rights within the general scope of copyright as specified by section 106 . . . are governed exclusively” by federal copyright law. Those exclusive rights of copyright owners are explicitly defined as being “subject to” the limitations including fair use, so it would make some sense for courts to view state law expansions of those rights as being in conflict with and therefore preempted by federal copyright law.

However, there are several negative precedents indicating that this approach may not work. Take Bowers v. Baystate, for example, a Federal Circuit case involving two competing computer aided design (CAD) software companies. Bowers contended that Baystate violated the terms of use on its software by reverse-engineering its product in violation of a clause explicitly prohibiting such use. Baystate contended that such reverse engineering was protected by fair use and that contract terms to the contrary should be preempted as inconsistent with federal law. The Federal Circuit, observing that as a general matter “most courts to examine this issue have found that the Copyright Act does not preempt contractual constraints on copyrighted articles,” concluded that “private parties are free to contractually forego the limited ability to reverse engineer a software product under the exemptions of the Copyright Act. . . . [A] state can permit parties to contract away a fair use defense or to agree not to engage in uses of copyrighted material that are permitted by the copyright law, if the contract is freely negotiated.”

Other courts addressing state contract law and other state law limitations on fair use (e.g,. this California right of publicity case) have largely followed the same approach. One notable exception to is Vault Corp. v. Quaid Software, Ltd., in which the Fifth Circuit invalidated a Louisiana law that permitted contracts to prohibit reverse engineering, even though federal law provides a specific exception (Section 117) that allows for such reverse engineering. Although not directly addressing fair use, the court’s holding could apply equally to state law contractual restrictions on fair use. The issue has not directly reached the Supreme Court, though there is a case, Genius v. Google, currently pending on a Petition for Certiorari that asks the Court to weigh in on the broader question of when federal law preempts contracts under state law.

Second, courts could conclude that the state common law (the body of law made up of legal principles established by courts over the years) on contracts does not permit contractual restrictions on fair use. This could come in a few different forms. One option might be for courts to consider more seriously the question of whether a valid contract is actually created in the first place, particularly in situations where users have no meaningful opportunity to negotiate terms and little ability to even understand what restrictions they are agreeing to. For years, following the lead of the Seventh Circuit Court of Appeals in ProCD v. Zeidenberg, courts have been willing to accept that a valid agreement is formed even in situations with “shrinkwrap” or “browsewrap” licenses. But, despite ongoing criticism of this approach by many, the approach has prevailed. Courts might also take more seriously the public policy implications of fair use evasion more directly, by invoking traditional rules for contract interpretation that hold terms unenforceable when they violate public policy—e.g., agreements to commit a crime, or a tort, or restraint of trade. To date, however, I’m unaware of any such cases directly applying these principles to contracts that restrict fair use, though there is a large body of case law and this may merit more research.

Third, the courts could apply existing or new equitable doctrines, such as “copyright misuse” or a yet-to-be-defined right of “fair breach” to protect users from overenforcement of contracts that limit fair use. Professor Jane Ginsburg outlines the potential need for courts to develop their own remedy of “fair breach.” She observes that, as with the current licensing environment online, at some point “it becomes necessary to consider whether limitations incorporated in the copyright law should be imported to its contractual substitute. With respect to libraries and their users, one should inquire whether some kind of fair use exception is appropriate. This might take the form of a judge-made right of ‘fair breach,’ or legislatively imposed mandatory library-user rights.”

This idea of “fair breach” has drawn little attention since Ginsburg first identified its need and coined the term, but it merits further attention. “Fair breach” may have some similarity to the existing doctrine of copyright misuse, which could have some application to contracts that restrict fair use. A judge-made doctrine borrowed from the patent law doctrine of patent misuse, copyright misuse has been mostly applied to situations where copyright owners have attempted to exercise their rights to unfairly stifle competition. The primary question with copyright misuse is “whether the copyright is being used in a manner violative of the public policy embodied in the grant of a copyright.” If copyright misuse is found, the copyright isn’t invalidated, but courts have held that the owners’ copyright cannot be enforced to exclude the harmed party’s use. The Supreme Court has yet to acknowledge the existence of this doctrine, but numerous appellate courts have recognized it over the last thirty years.

A handful of cases suggest that extension of copyright misuse to fair-use limiting contracts could be effective. For example, in Assessment Technologies of Wi, LLC v. Wiredata, the Seventh Circuit Court of Appeals held that Assessment Technologies’ attempt to restrict access to data that was not copyrighted fell within the copyright misuse doctrine’s core focus: “preventing copyright holders from leveraging their limited monopoly to allow them control of areas outside the monopoly.”

Video Pipeline, Inc. v Buena Vista Home Entertainment, Inc., also gives some encouragement. In that case, Video Pipeline brought a declaratory judgment action seeking a judgment that its use of video trailers from Disney and others was not copyright infringement. Among the defenses it cited was copyright misuse on the part of Disney. To support its copyright misuse argument, Video Pipeline pointed to the license term I mentioned at the beginning of this blog post, which conditioned the license on an agreement to not disparage Disney or the entertainment industry. The court ultimately declined to find that those terms constituted copyright misuse, because the contract had a narrow focus and limited application: “we nonetheless cannot conclude on this record that the agreements are likely to interfere with creative expression to such a degree that they affect in any significant way the policy interest in increasing the public store of creative activity. The licensing agreements do not, for instance, interfere with the licensee’s opportunity to express such criticism on other web sites or elsewhere.” However, the court suggested that the outcome could have been different if the restrictions were more far reaching.

Conclusion

Contractual override of fair use poses a real threat to free expression, especially given the increasing limits on distribution of copyrighted works online. Almost all online platforms that distribute copyrighted works impose restrictions that inhibit fair use to some degree. It takes just two easy steps. Thankfully, there are some plausible routes forward for improving the law to protect authors and others who rely on fair use to create new works and share knowledge with the world. There is also some reason for optimism due to renewed interest in the issue among scholars and organizations such as the Association of Research Libraries, which issued a report on contractual override for libraries, and is co-hosting a symposium with Washington College of Law at American University on the subject with perspectives from around the world.

Fair Use Week 2023: Resource Roundup

Posted February 21, 2023

Authors who want to incorporate source materials into their writings with confidence may find themselves faced with more questions than answers. What exactly does fair use mean? What factors do courts consider when evaluating claims of fair use? How does fair use support authors’ research, writing, and publishing goals? Fortunately, help is at hand! This Fair Use/Fair Dealing Week, we’re featuring a selection of resources, briefs, and blog posts to help authors understand and apply fair use.

Fair Use 101

Cover of the Fair Use Guide for Nonfiction Authors

Authors Alliance Guide to Fair Use for Nonfiction Authors: Our guidebook, Fair Use for Nonfiction Authors, covers the basics of fair use, addresses common situations faced by nonfiction authors where fair use may apply, and debunks some common misconceptions about fair use. Download a PDF today.

Authors Alliance Fair Use FAQs: Our Fair Use FAQs cover questions such as:

Can I still claim fair use if I am using copyrighted material that is highly creative?
What if I want to use copyrighted material for commercial purposes?
Does fair use apply to copyrighted material that is unpublished?

Codes of Best Practices in Fair Use: The Center for Media and Social Impact at American University has compiled this collection of Codes of Best Practices in Fair Use for various creative communities, from journalists to librarians to filmmakers.

Fair Use Evaluator Tool: This tool, created by the American Library Association, helps users support and document their assertions of fair use.

Dig Deeper

U.S. Copyright Office Fair Use Index: The U.S. Copyright Office maintains this searchable database of legal opinions and fair use test cases.

Fair Use Amicus Briefs: Authors Alliance submitted several friend of the court briefs on issues related to fair use over the past year. Check out our brief in Hachette Books v. Internet Archive, where we expand on our longtime defense of Controlled Digital Lending as a fair use; our brief in Goldsmith v. Warhol Foundation, where we advocate for a broad yet sensible conception of “transformativeness”; and our brief in Sicre de Fontbrune v. Wofsy, where we explain why fair use is a crucial aspect of U.S. policy and why it should shield authors from the enforcement of foreign copyright judgments where fair use would have protected the use had it occurred in the U.S.

Fair Use and Text Data Mining: Learn about Authors Alliance’s new project, “Text and Data Mining: Defending Fair Use,” intended to support researchers engaging in text and data mining under the recent DMCA exemption for Text Data Mining, generously supported by the Mellon Foundation.

Fair Use and Public Policy: Learn about why we voiced opposition to the SMART Copyright Act of 2022 and the Journalism Competition and Preservation Act—proposed legislation that, if passed, could erode our fair use rights.

Announcing the “Text and Data Mining: Demonstrating Fair Use” Project

Posted December 22, 2022

We’re very pleased to announce a new project for 2023, “Text and Data Mining: Demonstrating Fair Use,” which is generously supported by the Mellon Foundation. The project will focus on lowering and overcoming legal barriers for researchers who seek to exercise their fair use rights, specifically within the context of text data mining (“TDM”) research under current regulatory exemptions.

Fair use is one of the primary legal doctrines that allow researchers to copy, transform, and analyze modern creative works—almost all of which are protected by copyright—for research, educational, and scholarly purposes. Unfortunately, in practice, not everyone is able to use this powerful right. Researchers today face the challenge that fair use is often overridden by a complex web of copyright-adjacent laws. One major culprit is Section 1201 of the Digital Millennium Copyright Act (“DMCA”), which imposes significant liability for users of copyrighted works who circumvent technical protection measures (e.g., content scramble for DVDs), unless those users comply with a series of specific exemptions to Section 1201. These exemptions are lengthy and complex, as is the process to petition for their adoption or renewal, which recurs every three years.

Text data mining is a prime example of work that demonstrates the power of fair use, as it allows researchers to discover and share new insights about how modern language and culture reflect on important issues ranging from our understanding of science to how we think about gender, race, and national identity. Authors Alliance has worked extensively on supporting TDM work in the past, including by successfully petitioning the Copyright Office for a DMCA exemption to allow researchers to break digital locks on films and literary works distributed electronically for TDM research purposes, and this project builds on those previous efforts.

The Text Data Mining: Demonstrating Fair Use project has two goals in 2023:

1) To help a broader and more diverse group of researchers understand their fair use rights and their rights under the existing TDM exemption through one-on-one consultations, creating educational materials, and hosting workshops and other trainings; and

2) To collect and document examples of how researchers are using the current TDM exemption, with the aim of illustrating how the TDM exemption can be applied and highlighting its limitations so that policymakers can improve it in the future.

We’ll be working closely with TDM researchers across the United States, as well organizations such as the Association for Computers and the Humanities, and will be actively exploring opportunities to work with others. If you have an interest in this project, we would love to hear from you!

About The Andrew W. Mellon Foundation

The Andrew W. Mellon Foundation is the nation’s largest supporter of the arts and humanities. Since 1969, the Foundation has been guided by its core belief that the humanities and arts are essential to human understanding. The Foundation believes that the arts and humanities are where we express our complex humanity, and that everyone deserves the beauty, transcendence, and freedom that can be found there. Through our grants, we seek to build just communities enriched by meaning and empowered by critical thinking, where ideas and imagination can thrive. Learn more at mellon.org.

Fair Use and Literary Parodies

Posted June 3, 2022

“Parody Is Not Infringement” by Joe Gratz is licensed under CC BY-NC 2.0.

Fair use is one of the more dynamic topics in copyright law lately—the Supreme Court has issued decisions or agreed to hear cases in two separate fair use cases that could affect how authors can rely on fair use just within the past year and a half. Fair use is also a topic Authors Alliance discusses a lot on this blog and elsewhere—we care about fair use so much that we wrote a book on it! While our guide focuses on fair use for nonfiction writers, fiction authors can and do rely on fair use to create new creative works of authorship. One of the clearest examples of fair use in the realm of fiction is parody (a topic we previously discussed in our 2020 series on fair use for fiction authors). At the most basic level, a parody is defined as “a literary or musical work in which the style of an author or work is closely imitated for comic effect or in ridicule.” In today’s post, we will contextualize parodies within copyright and offer some thoughts on how law and practice surrounding parody might affect authors of parodies and authors more generally.

Parody at the Supreme Court

The landmark Supreme Court decision that proposed a framework for a use’s “transformativeness” which is still relied upon today, Campbell v. Acuff-Rose Music, was itself a case about parody. In the case, the rap group 2 Live Crew recorded and released a song entitled “Pretty Woman.” The song drew from “Oh, Pretty Woman,” a rock ballad by Roy Orbinson and William Dees which was featured in the film Pretty Woman. After reusing a familiar line from the song, the 2 Live Crew song “degenerates into a play on words, substituting predictable lyrics with shocking ones.” The song “juxtaposes the romantic musings of a man whose fantasy comes true, with degrading taunts, a bawdy demand for sex, and a sigh of relief from paternal responsibility.” The Court interpreted this change “as a comment on the naiveté of the original of an earlier day, as a rejection of its sentiment that ignores the ugliness of street life and the debasement that it signifies.” While many remember Campbell for the concept of transformativeness that it established as part of the test for fair use, it also shows the strong legal protection for parodies.

Parodies and Artistic Judgments

One issue that sometimes arises when an author defends their use of another’s work as a fair use parody is the question of whether it is a parody at all. Courts require more than claims from the author that their work is a parody in order to consider it as such. The question of whether the apparent parody uses the first work for a different purpose, or in a way that is transformative, or merely reuses existing material to unfairly benefit from that creative output, involves some artistic judgment by a court. While courts have, in different ways, resisted being slotted into the role of art critic, some judgment as to a work’s “parodic character” is inevitable.

The recent fair use case, TCA v. McCollum, is an illustrative example of this problem. The case concerned the use of a portion of the comedic routine “Who’s on First,” written by Bud Abbott and Lou Costello, in an original play entitled Hand to God, described as an “irreverent puppet comedy” about “a possessed Christian-ministry [sock] puppet.” While the play was not described as a parody, it did arguably use the comedic routine for comedic effect or ridicule, making it at the very least “parody-like.” In Hand to God, “Who’s on First” takes place as a conversation between the protagonist and Tyrone, a sock puppet worn on the character’s hand. The actor performs both roles, using different voices for the character and the sock puppet. In 2015, a district court found the use of the routine in the play to be “highly transformative,” because “[w]hereas the original Routine involved two actors whose performance falls in the vaudeville genre, Hand to God has only one actor performing the Routine in order to illustrate a larger point.” It explained that “[t]he contrast between [the character’s] seemingly soft-spoken personality and the actual outrageousness of his inner nature, which he expresses through the sock puppet, is, among other things, a darkly comedic critique of the social norms governing a small town in the Bible Belt.”

But the next year, the Second Circuit reversed the district court’s decision, finding that the use of “Who’s on First?” in Hand to God was not transformative or a fair use. The court argued that neither the playwright or the district court had explained how the use of “Who’s on First?” specifically served the “darkly comedic” aim of the play. The court added that its conclusion was bolstered by the fact that the playwright presented a portion of the routine “almost verbatim,” apparently ignoring the fact that verbatim copying can be fair use in some instances. In the view of the Second Circuit, the use of the routine did not “add something new” to “Who’s on First?” with “new expression, meaning, or message.” It is difficult to square this with the astute observations of the district court regarding the creative use of “Who’s on First” in Hand to God, and begs the question of how much artistic judgments are involved when judges decide whether a work is transformative or parodic in character.

Parody in Practice

While the fair use doctrine provides strong legal protection for parodies, in practice, authors might still be cautious about whether and how they create parodies of literary works. The possibility of facing a lawsuit related to a new book is daunting, even when those lawsuits are entirely unsuccessful. The cost of defending a copyright infringement suit can be very high, and authors are already strapped for time and resources they need to create new works of authorship. This threat of copyright liability can lead some authors and other creators to be cautious about creating parodies. For example, there has recently been news of an upcoming horror film parody of Winnie-the-Pooh involving live action actors, entitled Winnie the Pooh: Blood and Honey. This work arguably fits squarely within the definition of parody, turning Pooh and Piglet from lovable, naive animated characters into gruesome killers portrayed by actors. Yet the filmmaker waited until Winnie-the-Pooh by A.A. Milne entered the public domain before creating the film. Moreover, the filmmaker took additional precautions to avoid antagonizing the Milne estate or Disney, who owns copyrights in the character as presented in Disney’s Winnie-the-Pooh films and movies. The filmmaker made sure to pattern the character designs off the drawings in Milne’s book rather than the Disney TV show or films, and even omitted characters like Tigger who did not appear until Milne’s later The House at Pooh Corner, which has not yet entered the public domain.

Parodies and the law around them are an important topic for authors who care about fair use. Fiction authors may be inspired to create new parodies, and nonfiction authors too can take lessons from the laws around parody as to transformativeness and practical caution, even when the law is on one’s side.

Fair Use Week 2022: Resource Roundup

Posted February 28, 2022

Authors who want to incorporate source materials into their writings with confidence may find themselves faced with more questions than answers. What exactly does fair use mean? What factors do courts consider when evaluating claims of fair use? How does fair use support authors’ research, writing, and publishing goals? Fortunately, help is at hand! This Fair Use/Fair Dealing Week, we’re featuring a selection of resources and articles to help authors understand and apply fair use. We also encourage our readers to check out the Fair Use week compilation of resources for more information about fair use in general.

Fair Use 101

Authors Alliance Fair Use FAQs: Our Fair Use FAQs cover questions such as:

Can I still claim fair use if I am using copyrighted material that is highly creative?
What if I want to use copyrighted material for commercial purposes?
Does fair use apply to copyrighted material that is unpublished?

Don’t miss the latest best practices document, the Code of Best Practices in Fair Use for Open Educational Resources. This document is intended to support authors, teachers, professors, librarians, and all open educators in evaluating when and how they can incorporate third party copyright materials into Open Educational Resources to meet their pedagogical goals.

Fair Use Evaluator Tool: This tool, created by the American Library Association, helps users support and document their assertions of fair use.

Dig Deeper

U.S. Copyright Office Fair Use Index: The U.S. Copyright Office maintains this searchable database of legal opinions and fair use test cases.

Fair Use Litigation: Learn about two major fair use decisions from 2021 and how they might affect the fair use doctrine in the future.

Fair Use and Text Data Mining: Learn about Authors Alliance’s new DMCA exemption for Text Data Mining, and explore the intersection of fair use and non-consumptive text mining in this chapter on legal issues in text data mining.

Fair Use and Third-Party Permissions: Check out Authors Alliance’s new guide to clearing third-party permissions for a discussion of when using excerpts from others’ work in your own might constitute fair use (and much more!).

Fair Use and Controlled Digital Lending: Read about why we believe Controlled Digital Lending (“CDL”) is supported by a good faith interpretation of fair use, and take a moment to share how CDL has helped you meet your goals for your work.

Update: Fair Use in the Courts in 2021

Posted August 31, 2021

“Prince Mural” by red.wolf is licensed under CC BY-NC-SA 2.0

In April, we published a post on two major fair use decisions from this year: Google v. Oracle and The Andy Warhol Foundation v. Goldsmith. In the post, we expressed our uncertainty about how the decision in Google, which concerned a specific question related to software, would impact fair use analysis for literary and artistic works. Earlier this month, the Second Circuit answered this question, at least with regards to fair use jurisprudence in that circuit.

The Andy Warhol Foundation v. Goldsmith concerned the question of whether Warhol’s screen prints of Prince, based in part on a photograph taken by Goldsmith, constituted fair use. The court found that the works were not fair use, in large part because it believed that Warhol’s screen prints were not transformative, but instead, the same works as Goldsmith’s photograph, but with a new aesthetic. The court signaled that the screen prints were closer to derivative works based on the original photograph than fair uses of the photograph. In contrast, the Supreme Court in Google v. Oracle did find that Google’s use of Oracle’s APIs in its Android platform was a fair one, in part because the Court found the use to be highly transformative.

After the Google decision was handed down, the Warhol Foundation requested a re-hearing in its case, asking the Second Circuit to consider whether the Google decision would change its fair use determination. The court then issued an amended decision, and for the most part affirmed its earlier ruling, reiterating that the screen prints did not constitute fair use. The court held that the ruling in Google v. Oracle did not have much bearing on determinations about fair use when it comes to literary and artistic works. The court also underscored the Supreme Court’s statement that copyright protection is weaker for functional works—like software—and stronger for literary or artistic works—like Warhol’s screen prints, further making the Google decision inapplicable to its case.

Another small revision in the Warhol court’s amended decision was notable for its bearing on fair use: the original decision stated that derivative works were “specifically excluded” from being considered fair use as a categorical matter, but in the amended decision, the court stated that derivative works may fail to qualify as fair use, walking back its earlier statement. By leaving open the possibility that a derivative work might still be a fair use, the court reinforced the idea that fair use is a context and fact-specific determination, a principle that also animated the decision in the Google case.

For an in-depth discussion of Google v. Oracle and the original decision in The Warhol Foundation v. Goldsmith, see our earlier post.

Fair Use in the Courts in 2021

Posted April 20, 2021

UPDATE: In March 2022, the U.S. Supreme Court granted certiorari in Warhol Foundation v. Goldsmith, announcing it will hear the fair use case during next year’s term. Authors Alliance will continue to monitor this case and update our readers as it moves forward.

This year is shaping up to be a big one for copyright: a new batch of works entered the public domain, the 2020 year-end stimulus bill made several changes to copyright law, the Copyright Office is currently undergoing its triennial rulemaking process to grant exemptions to section 1201’s prohibition on breaking digital locks, and courts are considering ever more difficult issues related to fair use. Two recent cases that have been making waves in the copyright community are Google LLC v. Oracle America, Inc. and The Andy Warhol Foundation v. Goldsmith. Both cases discuss “transformativeness,” a key component of the fair use test, but reach different results: In the former, the Supreme Court ruled in favor of fair use, and in the latter, the Second Circuit Court ruled against fair use.

At Authors Alliance, we care about fair use because it helps authors meet their goals of seeing their works shared broadly, facilitating the use of copyrighted works in some circumstances for certain specific purposes such as research, commentary, and teaching. Fair use also allows authors to use existing materials to strengthen their own research, commentary, and scholarship. We offer short summaries and takeaways from these cases here to keep you apprised of the goings on in copyright and offer some guidance on how these decisions might impact fair use cases more directly related to authors of literary works in the future.

Google v. Oracle

Earlier this month, the Supreme Court issued its long-awaited decision in Google v. Oracle, a case that has been percolating in the lower courts for years, which concerned the question of whether Google’s unauthorized use of computer code to which Oracle held the copyright constituted fair use. In the case, Google was appealing a ruling by the U.S. Court of Appeals for the Federal Circuit, which had held that Google’s use of APIs (also referred to as “declaring code”) was not fair use, despite a jury reaching the opposite conclusion. Google appealed to the Supreme Court on the question of whether APIs were protected by copyright at all and, if so, whether Google’s use of the code was fair.

In a decision by Justice Breyer, the Court skirted the question of whether APIs were copyrightable, but overturned the Federal Circuit’s finding of infringement, holding that Google’s use of the APIs was fair use. To come to this determination, the Court considered the four factors involved in fair use determinations. It found that declaring code was functional in nature: unlike the more creative “implementing code” involved in designing Android (and written by Google), the Court viewed the declaring code as equivalent to “building blocks.”

The Court also found that Google’s use was transformative in purpose and character because it used Oracle’s declaring code, as well as its own computer code, to create a new platform offering “a new collection of tasks operating in a distinct and different computing environment.” The Court stated that this was sufficiently transformative to overcome the commercial nature of Google’s endeavor—the creation of the massively popular Android operating system. The Court further found that Google used a small quantity of Oracle’s code relative to the total code it used to create Android, overcoming arguments that the 11,500 lines of Oracle’s code that Google used was quite a substantial amount. Finally, the Court considered whether Google’s Android usurped a market Oracle could have otherwise profited from, and decided that Oracle was not well-positioned to develop a mobile platform at the time and that Google had not usurped its market.

For authors who care about the widespread dissemination of their works and contributing to the commons of knowledge, Google’s fair use victory may seem a hopeful sign. But there is reason to believe that the holding will be of limited applicability in the future: It is not clear that it even applies to all software copyright issues. The decision—and importance of details such as the number of lines of code that were actually copied—shows how fact-sensitive fair use is. And the Court’s vision of transformativeness in the context of computer code is not an easy fit for other contexts, creating uncertainty as to whether and how the case will affect authors and creators in the future.

The Andy Warhol Foundation v. Goldsmith

In late March, the Second Circuit Court of Appeals issued its opinion in The Andy Warhol Foundation v. Goldsmith, a case concerning a series of screenprinted images created by artist Andy Warhol depicting the late musical artist (formerly known as) Prince, reproduced in court documents and referred to as the Prince series. The first image of Prince that Warhol created was commissioned by Vanity Fair, and was based on a photograph taken by plaintiff Lynn Goldsmith, a renowned celebrity photographer. All of this was authorized pursuant to agreements between Goldsmith and Vanity Fair and between Warhol and Vanity Fair. The Warhol image that appeared in Vanity Fair included credit lines for both Warhol— the artist—and Goldsmith—the photographer of the work upon which Warhol’s was based. But Warhol did not stop there— he created fourteen additional works in the same style, comprising the Prince series that was the subject of the litigation.

In the case, Goldsmith sued the Warhol Foundation for infringement in the New York district court, alleging that the Prince series infringed on her copyright in the photograph of Prince. The district court found for the Warhol Foundation on fair use grounds, focusing on the transformative nature of Warhol’s silkscreen prints, which it believed “transformed Prince from a vulnerable, uncomfortable person,” as he was presented in Goldsmith’s photograph, “to an iconic, larger-than-life figure[.]” Warhol’s works also changed the image of Prince from a black and white, three-dimensional representation to two dimensional, colorful representations. Goldsmith appealed the ruling to the Second Circuit, which overturned the district court’s finding of fair use.

The Second Circuit disagreed with the district court that Warhol’s images were transformative. In its view, the district court improperly took on “the role of art critic,” making an artistic determination that Warhol’s works were transformative, rather than comparing the elements of the images and their purposes and characters. Under this approach, the Second Circuit concluded that the work retained “essential elements” of Goldsmith’s photograph, and was functionally the same work with a new aesthetic.

Unlike the Google case, the narrow reading of transformativeness in Warhol v. Goldsmith can more readily be applied in other contexts where other creative works could be broken down into their elements and compared. The Warhol court was not the only one in recent months to constrain the so-called “transformative use test,” and courts are increasingly moving away from considering transformativeness subjectively, and towards examining elements of the two works more objectively. Yet the Google decision took a broader approach to fair use, and one which, as a Supreme Court case, will be more influential to courts across the country. The variations in treatment of fair use in general, and transformativeness specifically, show how fair use is a context-specific determination. Creators who would like to learn more about how fair use applies to the common situations they face can turn to our fair use guide for nonfiction authors and the best practices guides specific to other communities of creators.