Evaluating Fair Use for...

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The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 10. Presenting a live 90-minute webinar with interactive Q&A Evaluating Fair Use for Copyrights Making Tough Calls on Excluding, Obtaining Permission, or Relying on Fair Use Today’s faculty features: 1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific TUESDAY, AUGUST 29, 2017 Jennifer L. Elgin, Shareholder, Bean Kinney & Korman, Arlington, Va. Jon R. Tandler, Member, Sherman & Howard, Denver, Co.

Transcript of Evaluating Fair Use for...

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The audio portion of the conference may be accessed via the telephone or by using your computer's

speakers. Please refer to the instructions emailed to registrants for additional information. If you

have any questions, please contact Customer Service at 1-800-926-7926 ext. 10.

Presenting a live 90-minute webinar with interactive Q&A

Evaluating Fair Use for Copyrights Making Tough Calls on Excluding, Obtaining Permission, or Relying on Fair Use

Today’s faculty features:

1pm Eastern | 12pm Central | 11am Mountain | 10am Pacific

TUESDAY, AUGUST 29, 2017

Jennifer L. Elgin, Shareholder, Bean Kinney & Korman, Arlington, Va.

Jon R. Tandler, Member, Sherman & Howard, Denver, Co.

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Evaluating Fair Use for Copyrights - Making

Tough Calls on Excluding Third Party Content,

Obtaining Permission or Relying on Fair Use

Jon R. Tandler

Sherman & Howard L.L.C.

Stafford Publishing Webinar August 29, 2017

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Exclusive Rights of Copyright

Exclusive Rights of Copyright – Section 106 of Copyright Act

“Subject to sections 107 through 122, the owner of copyright under this title has the exclusive rights to do and to authorize any of the following:

(1) to reproduce the copyrighted work in copies or phonorecords;

(2) to prepare derivative works based upon the copyrighted work;

(3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending;

(4) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and motion pictures and other audiovisual works, to perform the copyrighted work publicly;

(5) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work, to display the copyrighted work publicly; and

(6) in the case of sound recordings, to perform the copyrighted work publicly by means of a digital audio transmission.”

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Freedom of Speech vs. Copyright

• The First Amendment of the U.S. Constitution

– “Congress shall make no law . . . abridging the freedom of speech,

or of the press.” (U.S. Const. Amend. I).

• The Copyright Clause of the U.S. Constitution

– Congress has the power “. . . to promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.” (U.S. Const., Art. 1, §8, c. 8).

Copyright law defines authors’ exclusive rights to control the exploitation of their works. The First Amendment prohibits Congress from passing laws which abridge free speech. The First Amendment does not invalidate all laws which in some measure abridge free speech; copyright law is one example.

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Freedom of Speech vs. Copyright

There must be a constitutional balance between the respective First Amendment and Copyright Clause interests, in order for the two to have co-existed for so many years:

• Free speech interest – necessary for democracy

• Copyright interest – necessary to promote the interests of creators for the common good

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Freedom of Speech vs. Copyright

The balance is based upon the distinction between an idea, and the expression of that idea.

• Idea = free speech (ideas are not protectable

under copyright law)

• Original work of authorship fixed in a tangible medium = Copyrightable expression (protectable under copyright law)

Fair use attempts to balance one’s use of another’s protected copyrighted expression in order to advance one’s ideas.

The balance is difficult—so is fair use!

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Basic Elements of Copyright Infringement

• Fair use is an affirmative defense to copyright infringement. You don’t get to the defense/fair use analysis unless there is infringement in the first place!

• The basic elements of copyright infringement, and thus what must be proven before fair use comes into play, are that the copyright owner must show:

– Ownership of a valid copyright,

– Access by the defendant, and

– Copying in the secondary work of protectable matter from the original work such that there is substantial similarity between the two works. The critical analysis of substantial similarity varies with the type of work at issue.

• Attribution is not a defense to copyright infringement.

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Fair Use – An Affirmative Defense to Copyright Infringement

• Section 107 of the Copyright Act – codification of prior case law:

– The fair use of a copyrighted work, ...for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright.

– Factors to be considered in determining whether a particular use is fair include the following four factors, which are illustrative and not exhaustive:

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Fair Use – The Four Factors

1. The purpose and character of the use, including whether commercial or non-profit.

Primary focus of court’s inquiry is the extent to which the new work is transformative; the more transformative, the less significant the other factors. Campbell v. Acuff-Rose Music, Inc.

2. The nature of the copyrighted work.

― More creative a work = more copyright protection

― More factual, information, or functional a work = less copyright protection under a fair use analysis

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Fair Use – The Four Factors

3. The amount and substantially of the portion used in relation to the copyrighted work as a whole.

― Proper analysis here includes qualitative and quantitative determinations, including whether material taken is the “heart of the work.” Harper & Row Publishers v. Nations Enterprises.

4. The effect of use upon the potential market for the copyrighted work

― Effect on market (including potential market) for copyrighted work is “undoubtedly the single most important element of fair use.” Castle Rock Entertainment v. Carol Publishing Group.

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Fair Use - Parody

• A parody is a literary or artistic work that imitates the characteristic style of an author or a work for comic effect or ridicule. A parody is a ‘subset’ of the first fair use factor – the comic effect, ridicule or criticism is the transformative factor.

• The “heart of parodist’s claim is the use of some elements of a prior author’s composition to create a new one that, at least in part, comments on the original.” Campbell v. Acuff-Rose Music, Inc.

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Evaluating Fair Use for Copyrights:

Making Tough Calls on Excluding, Obtaining Permission,

or Relying on Fair Use

Jennifer L. Elgin

[email protected] (703) 284-7275

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Why Do We Care? REMEDIES

Injunction

Damages:

(1) The copyright owner’s actual damages and attributable profits; or

(2) Statutory Damages (if work registered within a certain time frame)

a. $750 - $30,000 per work

b. Up to $150,000 per work, if willful infringement

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The Need to Evaluate Before a Claim Lenz v. Universal Music Corp.

(9th Cir. Sept. 14, 2015)

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Question presented: Have copyright holders been abusing the extrajudicial takedown procedures provided for in the DMCA by declining to first evaluate whether the content qualifies as fair use? "We have a good faith belief that the above-described activity is not authorized by the copyright owner, its agent, or the law."

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Lenz v. Universal Music Corp. (9th Cir. Sept. 14, 2015)

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Answer: YES! “We hold that the statute requires copyright holders to consider fair use before sending a takedown notification, and that failure to do so raises a triable issue as to whether the copyright holder formed a subjective good faith belief that the use was not authorized by law.” Fair Use is a defense, but not a traditional “affirmative” defense in that it is a right established by the Copyright Act, therefore “authorized by the law” – not different from a compulsory license.

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Fair Use In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include—

The purpose and character of the use, including whether such use is of

commercial nature or is for nonprofit educational purposes; The nature of the copyrighted work;

Amount and substantiality of the portion used in relation to the

copyrighted work as a whole; and

The effect of the use upon the potential market for or value of the copyrighted work.

These factors are non-exclusive and illustrative.

Defense to BOTH Direct and Secondary Liability

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North Jersey Media Group Inc. v. Pirro 74 F. Supp. 3d 605 (S.D.N.Y. 2015)

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Original Photoshopped

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North Jersey Media Group Inc. v. Pirro 74 F. Supp. 3d 605 (S.D.N.Y. 2015)

Court held that work was not fair use; factual questions persisted.

Factor 1 (Purpose): There was only a minimal alteration to the original photograph, and inclusion of “#neverforget” beside the image in the facebook post was insufficient to add any additional meaning.

Factor 2 (Nature): The photograph was taken and published for news-gathering purposes, therefore weighing in favor of fair use.

Factor 3 (Amount): Fox News used as much of the photo as they needed to in order to comment on 9/11.

Factor 4 (Effect): Fox News’ use of the photograph poses a risk that others may just seek to use the combined 9/11 & Iwo Jima images instead of paying to license the photograph.

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Fair Use: Sampling How Much is Too Much?

Generally held not a fair use BUT

VMG Salsoul, LLC v. Ciccone, 824 F.3d 871 (9th Cir. 2016)

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Anything less than _______ words is fair use

Anything less than _______ seconds/minutes of a sound clip or audiovisual work is fair use.

The 25% (or 15%, 20%) Rule

No more than 5 images from a single photographer

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Debunking the myths

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Cambridge Univ. Press v. Patton, 769 F.3d 1232 (11th Cir. 2014)

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White v. W. Pub. Corp., 2014 WL 3057885 (S.D.N.Y. July 3, 2014)

Q. Can Lexis and Westlaw aggregate publicly-filed legal briefs for their subscription-only searchable databases without permission from the lawyers who authored the briefs?

A. Yes.

(1) Transformed both the purpose and character of the briefs by using them to create “an interactive legal research tool.”

(2) Made the briefs publicly available by filing them with courts.

(3) Even though Westlaw and Lexis copied entire briefs, the copying was necessary in light of the transformative purpose - neutral.

Plaintiffs hadn’t lost any clients and no market existed for the plaintiffs to license their briefs.

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Authors Guild, Inc. v. HathiTrust, 755 F.3d 87 (2d Cir. 2014)

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(1) Create a database for full-text searching by the general public – FAIR

(2) Permit library patrons with certified print disabilities to have access to full texts of works – FAIR

(3) Allow libraries to replace their original copies that were lost, destroyed, or stolen where a replacement was unobtainable at a fair price elsewhere – REMANDED

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Fox News Network, LLC v. TVEyes, Inc., No. 13 Civ. 5315 (S.D.N.Y. Aug. 25, 2015)

Records content from more than 1,400 television and radio stations and aggregates it into a searchable database for its subscribers. Subscribers obtain text transcripts and video clips containing the search terms.

2014 decision: Denied the request for an injunction on fair use grounds for copying of content for search, tracking and indexing purposes & distribution of clips and snippets in search results: Followed Hathitrust – transformative use

2015 decision: Mixed:

Archiving feature qualifies as fair use;

Downloading and date and time search features do not qualify as fair use; and

E-mailing and sharing feature may qualify as fair use, “but only if TVEyes develops and implements adequate protective measures.”

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The Authors Guild Inc., et al. v. Google,

Inc. (2d Cir. Oct. 16, 2015)

• Google’s unauthorized digitizing of copyright-protected works, creation of a

search functionality, and display of snippets from those works are non-

infringing fair uses.

• The purpose of the copying is highly transformative, the public display of text

is limited, and the revelations do not provide a significant market substitute for

the protected aspects of the originals.

• Google’s commercial nature and profit motivation do not justify denial of fair

use.

• Google’s provision of digitized copies to the libraries that supplied the books,

on the understanding that the libraries will use the copies in a manner

consistent with the copyright law, also does not constitute infringement.

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Search: The purpose of Google’s copying of the original copyrighted books is to make available significant information about those books, permitting a searcher to identify those that contain a word or term of interest, as well as those that do not include reference to it. In addition, through the ngrams tool, Google allows readers to learn the frequency of usage of selected words in the aggregate corpus of published books in different historical periods. Snippet: Designed to show the searcher just enough context surrounding the searched term to help her evaluate whether the book falls within the scope of her interest (without revealing so much as to threaten the author’s copyright interests). Snippet view thus adds importantly to the highly transformative purpose of identifying books of interest to the searcher.

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Swatch Grp. Mgmt. Servs. Ltd. v. Bloomberg

L.P., 756 F.3d 73 (2d Cir. 2014)

Court affirmed the district court’s grant of summary judgment.

(1) the Bloomberg recording didn’t harm “the original author’s

legitimate copyright interests” and was arguably transformative in

“function or purpose” because Bloomberg sought to publish factual

information to an audience that Swatch wanted to hide the

information from;

(2) the public sharing of the information during the conference call

made the publication status of the recording favor fair use;

(3) the third factor was neutral in light of the transformative despite the

entire amount being “copied”; and

(4) Swatch didn’t have any legitimate market for conference call

recordings that Bloomberg had harmed.

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Galvin v. Ill. Republican Party, No. 1:14-cv-00490 (N.D. Ill. Sept. 9, 2015)

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Purpose and character of the use - not dispositive. Nature of the work – factual so favored defendants

Amount and substantiality of the work used - favored plaintiffs. Market – Favored defendants

Finding – FAIR USE

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City of Inglewood v. Teixeira, No. 2:15-cv-01815 (C.D. Cal. August 20, 2015)

“The Court can scarcely conceive of works that are more appropriately protected by the fair use doctrine and § 107 than the Teixeira Videos. He is engaged in core First Amendment speech commenting on political affairs and matters of public concern. To do so, he has taken carefully selected and short portions of significantly longer works, and embellished them with commentary and political criticism through music, his voice, and written subtitles. Even if California law allowed the City to assert a copyright claim, Teixeira’s activities plainly fall within the protections of fair use.”

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Equals Three, LLC v. Jukin Media, Inc., No. 14-09041 (C.D. Cal. Oct. 13, 2015)

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Purpose and character of the use – Criticize and comment on Jukin’s clips

Nature of the work – Previously published, but creative Amount and substantiality of the work used – No more than necessary

Market – Neutral

Finding – FAIR USE

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The Faces of Richard Prince Cariou v. Prince, 714 F. 3d 694 (2d Cir. 2013)

Graham v. Prince, No. 15-CV-10160 (S.D.N.Y. July 18, 2017)

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Kid, You’ll Move Mountains!

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Jennifer L. Elgin

703-284-7275

[email protected]

www.linkedin.com/in/jenniferelgin

@jenelgin

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Practical Evaluation of Use of Third Party Content

• Risk Assessment; what is your client’s/your tolerance for risk. Why should risk be incurred unnecessarily?

• Potential orphan works challenge. • Each proposed use must mostly be evaluated on its

own, independent of others, in a publication. • Go through the analysis/each factor. • Consider the homilies: “Do unto others as you

would have them do unto you.” • “It is easier to stay out of trouble than to get out of

trouble.” • Consider practicality of obtaining a permission. • Consider synergy of obtaining a permission.

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• A permission or clearance is the instrument or agreement by which the owner of a copyrighted work, or other intellectual property such as a trademark, expressly grants permission to a third party to exercise one or more of the owner’s exclusive rights; in the case of copyright those rights under Section 106 of the Copyright Act.

Permissions and Clearances - Functions and Project Planning

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Permissions and clearances

• Provide protection against intellectual property infringement

claims;

• Facilitate learning about the origin of content and proper and

accurate attribution;

• Enable the grantee (the party obtaining the clearance) to use

third party content aligned with the grantee’s intended scope

of usage;

• Provide a legal record; and

• Satisfy media perils insurance underwriters’ requirements.

Permissions and Clearances - Functions and Project Planning

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If a required clearance is not obtained, the infringer can be sued in a state or jurisdiction where the infringer does not reside or do regular business. Adverse consequences include:

• Violation of the law

• Publication ceased

• Distraction of management time

• Defense fees and costs

• Financial liability for actual damages, statutory damages and attorneys' fees

• Embarrassment and frustration

• Increased cost of or difficulty in obtaining insurance

Permissions and Clearances – Functions and Project Planning

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Potential Rights Holders

It will likely require diligence to ascertain from whom a permission or clearance must be obtained. Potential rights holders:

• an author, lyricist or composer;

• a publisher or exclusive licensee;

• an artist;

• a musician or lyricist;

• a photographer or stock photo agency;

• a website proprietor;

Permissions and Clearances – Rights Holders

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Potential Rights Holders

• a newspaper or magazine;

• a software publisher or developer;

• a music studio or record company;

• a music publisher;

• an estate, heir, or descendant of a copyright owner who was a person;

• an assignee or licensee of any of the foregoing; or

• a collective rights organization.

Permissions and Clearances – Rights Holders

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Parties prepare permissions with various degrees of complexity and thoroughness. They should be customized to fit the facts of a particular situation, satisfy parties’ legal and business requirements, and reflect industry custom and practice. They should be tailor made.

Permissions and Clearances – Functions and Project Planning

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Examples of items to specify in a grant of rights include whether the grant:

• is worldwide or has territorial restrictions, including in the case of text English and foreign language rights;

• is exclusive or not;

• is perpetual or has limitations on term;

• what media it is for - print, electronic (all forms of media, whether now known or hereafter devised);

• is for audiovisual, dramatic or entertainment;

• includes the right to slice and dice content, and/or to use it in a

database or other compilation;

• includes the right to use content for promotional purposes; and

• includes the right to assign or sublicense rights granted.

Permissions and Clearances – Grant of Rights

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Permissions and Clearances – Other Items

• Authorization of grantor/licensor;

• Specify what is being cleared from an IP law standpoint – are you clearing something from a copyright, trademark or privacy perspective;

• Specify publication and whether there are any limitations on volume or other restrictions;

• Specify whether clearance or permission is for any particular term/duration; include derivative and subsequent works of the same primary project;

• Financial terms; royalty greatly complexifies – don’t do it for a simple clearance or permission; and

• Governing law and jurisdiction.

A permission does not have to be overly legalistic or complicated.

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Properly obtaining necessary permissions can become a pacing item, which, if not timely completed, can delay project completion and publication or release. Evaluate early on:

• components of a project and what third-party content will be utilized;

• what content will need to be cleared or licensed;

• how difficult or not it will be to obtain the permission at issue – what you want to use may be too expensive or subject to unworkable restrictions.

Get started early!

Permissions and Clearances – Final Note

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Comments on Media Perils (Publishers Liability) Insurance

• Insurance Policies are contracts. Excellent method of managing risk. Engage an expert broker.

• Material Terms to Pay Attention To (not exhaustive): Specific Publication Coverage; derivative works General Coverage – Advertising, Trademark

Infringement, Copyright Infringement, Defamation/Publishing Torts

Face Amount of Coverage Underwriting Requirements/Legal Diligence on

Publications Occurrence or Claims Made Policy Deductible Legal Fees within or Outside Policy Limits Selection of Counsel Pricing

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Thank You

Jon Tandler is a Member of Sherman & Howard L.L.C., Denver, Colorado, and practices intellectual property, publishing and information technology law.

Portions of this presentation have been included in or are based on Jon’s other teaching presentations on intellectual property and fair use law. Copyright 2017 Jon R. Tandler.