March 23, 2015

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Wyche Inside IP
By Troy A. Tessier

Under the Copyright Act, “fair use” is a defense to a copyright infringement claim. According to the statute, the determination of fair use depends on four main factors:

  1. The purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
  2. The nature of the copyrighted work;
  3. The amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
  4. The effect of the use upon the potential market for or value of the copyrighted work.

The fair use determination has always been “an open-ended and context sensitive inquiry.” Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569 (1994), and the “ultimate test of fair use … is whether the copyright law’s goal of ‘promoting the Progress of Science and the useful Arts’ … would be better served by allowing the use than by preventing it.”  Castle Rock Entm’t, Inc. v. Carol Publ’g Grp., Inc., 150 F.3d 132, 141 (2d Cir. 1998).

While the statute sets forth four non-exclusive factors for consideration, the Second Circuit has developed an analysis of fair use that looks at these factors through the lens of what it calls “transformative use.” Basically, if someone takes a copyrighted work and uses it as raw material to transform the work into something new and different from the original author’s work, the Court considers this “transformative use” as it reviews the four factors set forth above. The way the Court described it, “the more transformative the new work, the less will be the significance of other factors, like commercialism, that may weigh against a finding of fair use.”  Cariou v. Prince, 714 F.2d 694, 708 (2d Cir. 2013). Cariou involved the use of photographs by an “appropriation artist” who purposely tries to take original artwork and create his own, unique art from that original work. Using the “transformative use” analysis, the Second Circuit found that the appropriation artist’s work was, for the most part, fair use.

Obviously, the Second Circuit’s analysis has a tendency to expand the fair use defense and dilute the protections afforded to protected works. In a recent decision, Kienitz v. Sconnie Nation, LLC, 766 F.3d 756 (7th Cir. 2014), the Seventh Circuit criticized this type of analysis. It noted that “transformative use” is not one of the statutory factors, and expressed skepticism of the Second Circuit’s approach, because focusing on whether a use is “transformative” not only replaces the four statutory factors, but also endangers the protection afforded to derivative works under the Copyright Act. In Kienitz, the Seventh Circuit applied the statutory list, but still found that the work in question, a photograph of the Mayor of Madison, Wisconsin modified for use on a protest T-shirt, was fair use.

Given this recent criticism between Circuits, perhaps the Supreme Court will have an opportunity to clarify the proper application of the “fair use” defense. Stay tuned.

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