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When Fair Means Free

By THEA KERMAN
Reprinted from the November/December 2008 issue of The Financial Manager magazine

The rap group 2 Live Crew has never been one to shirk controversy, with albums like As Nasty as They Want to Be instigating an obscenity suit, and another suit filed by the likes of George Lucas over band member Luther Campbell’s label name, Luke Skyywalker Records.

But 2 Live Crew scored a legal victory particularly relevant to members of the news and documentary industry when the United States Supreme Court ruled that 2 Live Crew could legally copy the first line and famous bass riff of Roy Orbison’s classic rock ballad “Oh, Pretty Woman.”

The Court’s decision relied upon “fair use,” an often-overlooked exception to the general rule of U.S. copyright law that a work protected by copyright cannot be copied without the written consent of the copyright owner.

In times of tight and even shrinking budgets, fair use, correctly employed, can be a valuable tool in the production of documentary and news programs, because payment for the right to use the copied work is not required.

First, a definition is in order. Essentially, fair use is a limitation on the exclusive rights normally accorded to a copyright owner. Section 107 of the U.S. Copyright Act permits a work that is otherwise protected by copyright to be copied without permission from, or payment to, the copyright owner for purposes such as criticism, comment, news reporting, teaching, scholarship or research.

However, this right has its limits. There is no bright line clearly denoting when such copying is legally permissible. And that provides a challenge for those who wish to employ it.

Each case is decided on its own merits in which the competing interests of protecting the rights of the author of the work being copied must be balanced against society’s interest in furthering knowledge, art and science. However, consultation with a lawyer knowledgeable in fair use issues can help you glide through and make meaningful use of this copyright tool.

The copyright statute specifies four factors to be considered in determining whether the use made of a work in any particular case is a fair use.

Purpose and Character

The first factor is the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes. There are two key elements. The first, and more important, element examines whether the new use is transformative, i.e., does the new work add something new to the copied work so as to alter the copied work with new expression, meaning or message?

The second element is whether the new work is produced for commercial or non-profit educational purposes. However, the mere fact that the new work is produced for commercial profit-making purposes does not automatically disqualify it from fair use treatment, because the courts have long recognized that nearly all news reporting, comment, criticism, teaching, scholarship and research are generally conducted for profit.

In the “Pretty Woman” case, Justice David Souter acknowledged Samuel Johnson’s observation that “no man but a blockhead ever wrote, except for money.” Moreover, the mere fact that a use is educational and not-for-profit does not insulate it from a finding of infringement.

The crux of the profit/nonprofit distinction is not whether the sole motive of the use is monetary gain but whether the user stands to profit from exploitation of the copyrighted material without paying the customary price. The courts balance the degree to which the new use transforms the copied work against the commercial aspects of the new work. In general, the more the new work transforms the copied work, the less significant is the fact that the new work is produced for commercial purposes.

Nature of Copied Work

The second factor considers whether the copied work is factual or fictional. No one can claim copyright to facts or ideas since copyright protects only the expression of ideas. Fair use is more likely to be found if the copied work is factual rather than a work of fiction or fantasy. However, this factor is rarely decisive in fair use determinations.

Amount Used

The third factor is the amount and substantiality of the portion of the copied work used in relation to that work as a whole. This factor examines both the quantity of the copied materials used as well as their quality and importance to the original work. It evaluates whether the quantity and value of the materials used are reasonable in relation to the purpose of the copying. A work composed primarily of the copied material, particularly its heart, with little added or changed, is less likely to be deemed transformative and, thus, more likely to be found to have infringed the copyright of the copied work.

Market for Copied Work

The fourth factor is the effect of the use upon the potential market for, or value of, the copied work. Justice Sandra Day O’Connor cited with approval this description of fair use: “Take not from others to such an extent and in such a manner that you would be resentful if they so took from you.”

It requires courts to consider not only the extent of market harm caused by the particular actions of the alleged infringer, but also whether unrestricted and widespread conduct of the sort engaged in by the copier would result in a substantially adverse impact on the potential market for the original work.

The analysis takes into account both harm to the original work and harm to the market for works derived from the original work. Once again, the greater the sec- ond use transforms the copied work, the less likely the courts are to infer harm to the market for the copied work.

These four factors are not the only ones that can be considered in evaluating whether any particular copying constitutes a fair use of the copied work. Courts frequently consider whether or not the copied work has been published previously. Greater protection is often accorded to a work not previously available to the public because an important right belonging to the copyright owner is determining when and how the work will first be made available to the public.

Are You Safe?

While the fair use section of the copyright act lists news reporting as an example of a type of use that would qualify for fair use treatment, you should not assume that if a copied work appears in a news or documentary program it automatically qualifies for fair use treatment. There have been many cases when courts have ruled that the use of a copied work, especially news footage, did not qualify for fair use treatment.

It is important to examine how you are using the copied work. If you are using it to illustrate a point, or you are commenting upon the copied work, the use is more likely to be found to be transformative and, therefore, qualify for fair use treatment.

On the other hand, if you are merely using the copied work to substitute for something you could have done but could not afford to do – or it was inconvenient to do – such a use is less likely to be found to qualify as fair use.

For example, there were several lawsuits filed against news organizations, including Reuters and KCAL-TV in Los Angeles, which used copyrighted footage that showed the beating of Reginald Denny at the start of the 1992 Los Angeles riots.

The owners of the footage, a husband-and-wife team who taped the incident from a helicopter, won many of the court cases – even though the news organizations only used small segments. The courts ruled that even though the news organizations used only a small portion of the couple’s footage in their news programming, it was the “heart” of the couple’s work – the most important part – and that such copying was not transformative.

Another important consideration in fair use decisions is the quantitative and qualitative amount of the copied work used. You should always use the smallest amount of the copied work as necessary to make your point. Care must also be taken not to take the “heart” of the copied work even if the portion taken is quantitatively a small portion of the copied work.

Because the determinations are made on a case-by-case basis, it is a good idea to consult a lawyer who is knowledgeable in the fair use provisions of the United States copyright law when evaluating whether a particular use qualifies for fair use treatment. A knowledgeable fair use lawyer can save a production thousands of dollars in rights payments by counseling the producers on the proper exploitation of fair use of material included in their production. And they can help procure coverage for such use from the productions’ errors and omissions insurance carrier.

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