Fair Use of Copyrighted Material

By Richard Warner

Tutorial

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 What Is Fair Use?

When a work is copyrighted, one may not ordinarily do any of

the following without the permission of the copyright owner:
copy the work; distribute it; publicly display or perform it;
create a derivate work.

The Federal copyright statute, 17 U. S. C., creates exceptions

to this rule in sections 107 118. Fair use (Section 107) is
one of the most important exceptions.

To illustrate the exception, assume that you use a copyrighted

work by doing one of the following: copying it; distributing it;
publicly displaying or performing it; creating a derivate work.
If your use is fair, you do not violate the copyright even if
you use the work without the permission of the copyright
owner.

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 The Four Fair Use Factors
Section 107 identifies four factors to be considered in
determining whether or not a use is fair:

1. The purpose and character of the use, including whether

such use is of 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.
4. The effect of the use upon the potential market for, or
value of, the copyrighted work.

This tutorial examines each factor in turn.

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 The Purpose and Character of the Use
The first factor is: The purpose and character of the use,
including whether such use is of commercial nature or is for
nonprofit educational purposes.

The following questions illustrate this factor.

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 The Professors Sudden Idea
A professor is sitting in his office working on the computer
before class. She notices that a new article in a law review
publication (copyright held by the publisher) and thinks, This
would be great to discuss in class. She copies the relevant
parts of the article and gives each student a copy.

The professors use is educational.

(a) True

(b) False
 Correct!

(a): True

The use for class discussion is certainly an educational use.

Other educational uses include research, scholarship, criticism,
and commentary.

The educational nature of the use counts in favor of a finding of

fair use.

Note: it is not a decisive consideration. It is just one

consideration that weighs in favor of finding fair use. It may be
outweighed by other factors.

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 Why Does An Educational Use Matter?

Why does and educational use count in favor of finding a fair use?

To answer, recall, the purpose of copyright law, according to the

Constitution, is 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. I, 8.

Allowing educators to use copyrighted material for educational

purposes without the permission of the copyright owner,

(a) does not promote the Progress of Science and useful Arts.
(b) promotes the Progress of Science and useful Arts.
 Correct!

(b): Allowing educators to use copyrighted material

for educational purposes without the permission of
the copyright owner certainly promotes the
Progress of Science and useful Arts.

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 Transformative Use
Transformative uses are another type of use that counts in favor
finding fair use. Consider Thomas Forsythes series of 78
photographs entitled Food Chain Barbie. The photos depict
Barbie in various, often sexually suggestive, positions involving
food.

Forsythe explained that he photographed Barbie in because

Barbie is the most enduring of those products that feed on the
insecurities of our beauty and perfection-obsessed consumer
culture.

Forsythe took the image of Barbie and transformed it into a

parody of our our beauty and perfection-obsessed consumer
culture.

(a) True
(b) False
 Correct!

(a): True

He transformed the image into a parody.

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 Transformation and Progress
In transforming the image of Barbie into a parody, he created
something new and therebyso the courts assumepromoted
progress in the arts.

So, like an educational use, a transformative use

(a) is irrelevant to the question of fair use.

(b) should count in favor of finding fair use.

(c) should not count in favor of finding a fair use.

 Correct!

(b): And it does count in favor of finding a fair use.

The court addressed this issue when Mattel, the company that
owns the copyright to Barbie, sued Forsythe and his company
Walking Mountain Productions. In Mattel v. Walking Mountain
Productions, 353 F.3d 792 (C. A. 9th Circuit 2003) the court noted
that [t]he purpose and character of use factor in the fair use
inquiry asks to what extent the new work is transformative and
does not simply supplant the original work. The court noted that
the work must add something new, with a further purpose or
different character, altering the first with new expression,
meaning, or message. The court found that the photographs of
Barbie as a parody fulfilled this condition.

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 Commercial Uses
Educational and transformative uses count in favor of finding fair
use. What type of use counts against finding fair use?
It counts against finding a fair use if the use is commercial. The
activities involved in selling goods or services for profit are the
central examples of a commercial activity.
Princeton University Press v. Michigan Document Services, 99
F.3d 1381 (6th Cir. 1996), is a good example. Michigan Document
Services copied documents for its customers in exchange for a
fee. Some professors from the University of Michigan provided
Michigan Document Services with copies of articles from various
publications. Michigan Document Services reproduced the
articles, bound them, and sold them to students. The articles
were copyrighted but Michigan Document Services did not obtain
permission to copy and distribute the articles from the copyright
holders.
The court held the use by Michigan Document Services was a
commercial use.

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 A Commercial Use
Copying articles to sell them for profit in coursepacks is clearly
a commercial use. As the court notes,

[T]he use to which the materials are put by the students

who purchase the coursepacks is noncommercial in nature.
But the use of the materials by the students is not the use
that the publishers are challenging. What the publishers
are challenging is the duplication of copyrighted materials
for sale by a for-profit corporation that has decided to
maximize its profits.

The question that matters for this tutorial is not whether the
use is commercial but why it matters to a finding of fair use
whether it is or not.

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 Royalties
The articles copied were copyrighted and available in published
anthologies, journals, magazines, and newspapers. Michigan
Document Services did not contact the authors. They copied and
distributed the articles without permission. If Michigan Document
Services had contacted the copyright owners, those owners
would have charged a royalty for the use of the articles.

So, when Michigan Document services failed to contact the

copyright holders, it reduced the cost of their creating
coursepacks by denying the copyright owners of the chance to
demand a royalty.

(a) Yes
(b) No
 Correct!

(a): As the court notes, Michigan Document Services decided to

maximize its profitsand give itself a competitive edge over other
copyshopsby declining to pay the royalties requested by the holders
of the copyrights.

Now why does this matter to whether Michigan Document Services

use of the copied material is a fair use?

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 The Goal of Copyright and Two Assumptions

To see why it matters, recall a central goal of copyright law: To

promote the Progress of Science and useful Arts. U. S. Const.
art. I, 8. Assume two thingsas the courts do.
First: in a market economy, authors will not create enough work,
and hence will not adequately advance the sciences and useful
arts, unless they can be sure of getting paid (or otherwise
rewarded) when others use what they create.
Second: authors can be sure of getting paid (or otherwise
rewarded) when others use what they create only if they hold the
copyright to what they create (hold it initially; they may transfer
it to others).
Thus, it would further the goal of copyright law if Michigan
Document Services shared some of the profit it made with the
copyright owners.
(a) Yes

(b) No
 Correct!
(a): Compensating the copyright owner for the use of the
copyrighted work helps ensure that authors have an adequate
incentive to create works.

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 Why Commercial Use Matters
This is why a commercial use matters: sharing the profits with
the copyright owner helps ensure that authors will create enough
works to adequately promote progress in the sciences and arts.
But there is still a question left over. To see what it is, consider
that the coursepacks ensured that all the relevant articles could
be inexpensively provided to students in one volume.
So,
(a) The coursepacks did not promote progress in the sciences
and arts.
(b) The coursepacks did promote progress in the sciences and
arts.
 Correct!
(b): The coursepacks ensured that the relevant articles were
inexpensively and easily available. They thereby promoted
education and hence progress in the sciences and arts.

So: allowing Michigan Document Services to copy the articles

without the permission of the copyright holders has two
consequences: (1) it does promote progress in the sciences and
arts (by promoting education); and, (2) it works against progress
(by working against the incentive authors have to produce
works).

How should the courts resolve this conflict? To the extent the
courts consider this question, they do so primarily in the fourth
fair use factor (impact on the potential market). The first factor
is merely concerned with whether the use is commercial or not.

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 Summary of the First Factor
The first factor is: The purpose and character of the use,
including whether such use is of commercial nature or is for
nonprofit educational purposes.

A commercial use counts against a finding of fair use. A

nonprofit education use counts in favor of a finding of fair use.

In addition, courts consider the extent to which the use is

transformative. A transformative use counts in favor of
finding fair use. A non-transformative use counts against a
finding of fair use.

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 The Second Factor: The Nature of the Copyrighted Work
The nature of the copyrighted work is the second fair use factor.
What is meant by the nature of the copyrighted work? An
example is helpful.
Suppose Sarah owns the copyright to an unpublished poem she
has written. Without Sarahs permission, Sam quotes the entire
poem on his blog. What matters to the court in assessing the
nature of the copyrighted work in this case? The court will
consider two things: (1) the fact that it was unpublished, and (2)
the fact that it is a creative work.
To why it matters whether the poem was published, consider the
following.
When Sam publishes Sarahs poem before she has, he deprives
her of the opportunity to be the first to publish it where, when,
and on what terms she wants.

(a) True

(b) False
 Correct!
(a): The next screen begins the explanation of why it matters
that Sarah have the opportunity to publish first.

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 Why Unpublished Matters
Suppose there are publishers who would like to copy and
distribute Sarahs poem. Sarah is willing to grant them
permission to do so in exchange for money or some other
benefit.

The publishers are most likely to give Sarah the money (or
other benefit) she wants if

(a) someone else has already made Sarahs poem available to

the general public.

(b) Sarahs poem is unpublished and thus not yet available to

the general public.
 Correct!
(b): If Sarahs poem has already been published, part of the
market demand for the poem has been satisfied, and there
will be fewer people willing to purchase the second
publication. Thus, it is most likely less profitable for a second
publisher to make it available.

This is why it counts against a finding of fair use if the worked

used has not been published.

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 Creative Versus Factual: Creative
The court will also consider the fact that Sarahs poem is a
creative work.

It counts against finding fair use if the copyrighted work used

without permission is a creative work. The assumption is that
allowing others to use ones creative work without permission
reduces the incentive authors have to create and hence
reduces progress in the arts and sciences.

But wouldnt allowing others to use ones creative works also

promote progress by allowing others to easily build on
previous work? It certainly would, but the courts come down
on the side of the creative author here.

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 Creative Versus Factual: Factual
It counts in favor of finding fair use if the work used reports
facts (historical research or a news story, example).

The same points hold as before: (1) allowing others to use

ones factual work without permission reduces the incentive
one has to produce factual works and hence reduces progress
in the arts and sciences. (2) But allowing others to use ones
factual works also promotes progress since it allows them to
easily build on previous work. This time the courts come
down on the side of favoring the use of the work by others.

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 Summary of the Second Factor
The second factor is: The nature of the copyrighted work.

The courts consider whether the work has been previously

published and whether it is a creative or factual work.

Unpublished and creative count against a finding of fair use;

previously published and factual count in favor.

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 The Third Factor
The third factor is the amount and substantiality of the portion
used in relation to the copyrighted work as a whole.

The more of the work one uses, the more that counts against
a finding of fair use.

The courts do not just look at the quantity used, but the
importance of what one uses. Using the parts of the work
that particularly contribute to its value counts against a
finding of fair use.

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 The Fourth Factor
The fourth factor is the effect of the use upon the potential
market for, or value of, the copyrighted work.

This is the most important of the four factors. It plays a major

role in determining whether a particular use counts as a fair use.

Princeton University Press v. Michigan Document Services,

discussed earlier, illustrates the fourth factor.
The fourth factor is the effect of the use upon the potential
market for, or value of, the copyrighted work.

This is the most important of the four factors. It plays a major

role in determining whether a particular use counts as a fair use.

Princeton University Press v. Michigan Document Services,

discussed earlier, illustrates the fourth factor.

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 The Effect of Selling the Course Packs
Michigan Document Services created coursepacks for students
by copying articles supplied by professors. The articles copied
were copyrighted and available in published volumes.
Michigan Document Services provided the articles in much
more cheaply in coursepacks. It only charged the cost of
copying for the course packs.

Does this affect the potential market for, or value of, the
copyrighted work?

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 A Supreme Court Test for Market Harm
According to the Supreme Court, to negate fair use one need
only show that if the challenged use should become
widespread, it would adversely affect the potential market for
the copyrighted work. Harper & Row Publishers v. Nation
Enters., 471 U.S. 539, 568.

If the practice of making coursepacks became widespread,

fewer students would buy the volumes containing the
published articles.

(a) True

(b) False
 Correct!
(a): Students would buy the cheaper coursepacks assigned
by the professors instead of the volumes.

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 Adverse Effect
By leading to fewer student purchases the widespread use of
coursepacks would adversely affect that potential market for
the copyrighted works.

(a) True

(b) False
 Correct!
(a): True

As the court notes,

most of the copyshops that compete with MDS in the sale of

coursepacks pay permission fees for the privilege of duplicating
and selling excerpts from copyrighted works. The three plaintiffs
together have been collecting permission fees at a rate
approaching $500,000 a year. If copyshops across the nation
were to start doing what the defendants have been doing here,
this revenue stream would shrivel and the potential value of the
copyrighted works of scholarship published by the plaintiffs
would be diminished accordingly.

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 Compare the Barbie Parody
Recall Mattel v. Walking Mountain Productions, the case
concerning the photographs of Barbie.

People who buy the photographs buy them as a substitute for

buying Barbie.

(a) True
(b) False
 Incorrect.

(b): is incorrect - the correct answer is (a)

As the court notes,

most of the copyshops that compete with MDS in the sale of

coursepacks pay permission fees for the privilege of duplicating
and selling excerpts from copyrighted works. The three plaintiffs
together have been collecting permission fees at a rate
approaching $500,000 a year. If copyshops across the nation were
to start doing what the defendants have been doing here, this
revenue stream would shrivel and the potential value of the
copyrighted works of scholarship published by the plaintiffs would
be diminished accordingly.

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 Summary of the Fourth Factor
The fourth factor is the effect of the use upon the potential
market for, or value of, the copyrighted work.

According to the Supreme Court, to negate fair use one need

only show that if the challenged use should become
widespread, it would adversely affect the potential market for
the copyrighted work. Harper & Row Publishers v. Nation
Enters., 471 U.S. 539, 568.

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 Correct!

(b): The photographs are not a substitute for Barbie dolls in

the way the purchasing coursepacks is a substitute for
purchasing the copyrighted works in their published form.

In this way, the Barbie photographs have no effect on the

market for Barbie dolls. The photographs might have an
effect if they make people dislike Barbie dolls, but that is not
the kind of effect that concerns the court.

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You have completed this tutorial.
 Incorrect.

(b): False - the correct answer is (a)

The use for class discussion is certainly an educational use.

Other educational uses include research, scholarship, criticism,
and commentary.

The educational nature of the use counts in favor of a finding of

fair use.

Note: it is not a decisive consideration. It is just one

consideration that weighs in favor of finding fair use. It may be
outweighed by other factors.

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 Incorrect.

(b): is incorrect - the correct answer is (a)

Allowing educators to use copyrighted material for educational

purposes without the permission of the copyright owner
certainly promotes the Progress of Science and useful Arts.

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 Incorrect.

(b): False - the correct answer is (a)

He transformed the image into a parody.

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 Incorrect.

(a): is incorrect - the correct answer is (b)

The court addressed this issue when Mattel, the company that
owns the copyright to Barbie, sued Forsythe and his company
Walking Mountain Productions. In Mattel v. Walking Mountain
Productions, 353 F.3d 792 (C. A. 9th Circuit 2003) the court
noted that [t]he purpose and character of use factor in the
fair use inquiry asks to what extent the new work is
transformative and does not simply supplant the original work.
The court noted that the work must add something new, with
a further purpose or different character, altering the first with
new expression, meaning, or message. The court found that
the photographs of Barbie as a parody fulfilled this condition.

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 Incorrect.

(c): is incorrect - the correct answer is (b)

The court addressed this issue when Mattel, the company that
owns the copyright to Barbie, sued Forsythe and his company
Walking Mountain Productions. In Mattel v. Walking Mountain
Productions, 353 F.3d 792 (C. A. 9th Circuit 2003) the court
noted that [t]he purpose and character of use factor in the
fair use inquiry asks to what extent the new work is
transformative and does not simply supplant the original work.
The court noted that the work must add something new, with
a further purpose or different character, altering the first with
new expression, meaning, or message. The court found that
the photographs of Barbie as a parody fulfilled this condition.

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 Incorrect.

(b): is incorrect - the correct answer is (a)

As the court notes, Michigan Document Services decided to

maximize its profitsand give itself a competitive edge over
other copyshopsby declining to pay the royalties requested
by the holders of the copyrights.

Now why does this matter to whether Michigan Document

Services use of the copied material is a fair use?

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 Incorrect.

(b): is incorrect - the correct answer is (a)

Compensating the copyright owner for the use of the

copyrighted work helps ensure that authors have an adequate
incentive to create works.

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 Incorrect.

(a): is incorrect - the correct answer is (b)

The coursepacks ensured that the relevant articles were

inexpensively and easily available. They thereby promoted
education and hence progress in the sciences and arts.

So: allowing Michigan Document Services to copy the articles

without the permission of the copyright holders has two
consequences: (1) it does promote progress in the sciences and
arts (by promoting education); and, (2) it works against progress
(by working against the incentive authors have to produce works).

How should the courts resolve this conflict? To the extent the
courts consider this question, they do so primarily in the fourth fair
use factor (impact on the potential market). The first factor is
merely concerned with whether the use is commercial or not.

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 Incorrect.

(b): is incorrect - the correct answer is (a)

The next screen begins the explanation of why it matters that

Sarah have the opportunity to publish first.

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 Incorrect.

(a): is incorrect - the correct answer is (b)

If Sarahs poem has already been published, part of the market

demand for the poem has been satisfied, and there will be
fewer people willing to purchase the second publication. Thus,
it is most likely less profitable for a second publisher to make it
available.

This is why it counts against a finding of fair use if the worked

used has not been published.

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 Incorrect.

(b): is incorrect - the correct answer is (a)

Students would buy the cheaper coursepacks assigned by the

professors instead of the volumes.

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 Incorrect.

(a): is incorrect - the correct answer is (b)

The photographs are not a substitute for Barbie dolls in the way the
purchasing coursepacks is a substitute for purchasing the copyrighted
works in their published form. In this way, the Barbie photographs
have no effect on the market for Barbie dolls. The photographs might
have an effect if they make people dislike Barbie dolls, but that is not
the kind of effect that concerns the court.

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