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RULE 26.1 STATEMENT
Texaco Inc. has no parents and has no affiliates that
have issued shares to the public. The subsidiaries of Texaco
Inc. that are not wholly owned are Four Star Oil & Gas Company,
Caltex Petroleum Corporation, P.T. Caltex Pacific Indonesia,
American Overseas Petroleum Ltd., and Texaco Canada Petroleum
Inc.
TABLE OF CONTENTS
Page
STATEMENT OF JURISDICTION. . . . . . . . . . . . . . . 1
STATEMENT OF ISSUE PRESENTED FOR REVIEW. . . . . . . . 2
STATEMENT OF THE CASE. . . . . . . . . . . . . . . . . 3
A. The Facts . . . . . . . . . . . . . . . . . . . . 3
1. Academic Press and the Journal of Catalysis. 3
a. Publication of the
Journal of Catalysis. . . . . . . . . . 4
b. Sale and Distribution of
the Journal of Catalysis. . . . . . . . 5
2. Texaco's Research Activities . . . . . . . . 6
3. The Reasonable and Customary Practice . . .
of Photocopying. . . . . . . . . . . . . . . 8
4. Dr. Chickering's Photocopying of the Eight
Articles at Issue. . . . . . . . . . . . . . 11
5. The Copyright Clearance Center . . . . . . . 13
B. The Decisions Below . . . . . . . . . . . . . . . 15
ARGUMENT . . . . . . . . . . . . . . . . . . . . . . . 17
I. THE STANDARD OF REVIEW. . . . . . . . . . . . . . 18
Page
II. DR. CHICKERING'S MAKING OF A SINGLE
PHOTOCOPY WAS FAIR USE. . . . . . . . . . . . . . 19
A. "The Purpose and Character of the Use" . . . 19
1. The Use in Question Was for a
Scientific Research Purpose . . . . . . 20
2. That Dr. Chickering Did Not Make a
Transformative Use Does Not Derogate
from the Scientific Purpose of
His Copying . . . . . . . . . . . . . . 26
3. Dr. Chickering's Copying Was a
Reasonable and Customary Use. . . . . . 31
B. "The Nature of the Copyrighted Work" . . . . 33
C. "The Amount and Substantiality of the
Portion Used". . . . . . . . . . . . . . . . 34
D. "The Effect of the Use upon the Potential
Market for or Value of the Copyrighted
Work". . . . . . . . . . . . . . . . . . . . 35
1. Subscriptions and Other Alleged
Substitutes . . . . . . . . . . . . . . 38
2. The Irrelevance of Individual
Blanket Licenses and the CCC. . . . . . 44
E. The Balancing of the Four Statutory Factors
Demonstrates that Dr. Chickering's Use
Was Fair . . . . . . . . . . . . . . . . . . 52
CONCLUSION . . . . . . . . . . . . . . . . . . . . 53
STATUTORY ADDENDUM
Section 107 of the Copyright Act . . . . . . . . A-1
Section 108 of the Copyright Act . . . . . . . . A-1
TABLE OF AUTHORITIES
Page
Cases
Argus, Inc. v. Eastman Kodak Co., 801 F.2d 38 (2d
Cir. 1986), cert. denied, 479 U.S. 1088 (1987) . . . 42
Arica Inst., Inc. v. Palmer, 970 F.2d 1067 (2d
Cir. 1992) . . . . . . . . . . . . . . . . . . . . . 18
Association of Am., Medical Colleges v. Cuomo, 928
F.2d 519 (2d Cir.), cert. denied, 112 S. Ct. 184
(1991) . . . . . . . . . . . . . . . . . . . . . . . 53
Atari Games Corp. v. Nintendo of America Inc., 975
F.2d 832 (Fed. Cir. 1992). . . . . . . . . . . . . . 21,28
Baldwin v. Missouri, 281 U.S. 586 (1930) . . . . . . . 51
Basic Books, Inc. v. Kinko's Graphics Corp., 758 F.
Supp. 1522 (S.D.N.Y. 1991) . . . . . . . . . . . . . 22,23
Berlin v. E.C. Publications, Inc., 329 F.2d 541 (2d
Cir. 1964) . . . . . . . . . . . . . . . . . . . . . 52
Bruzzone v. Miller Brewing Co., 202 U.S.P.Q. 809
(N.D. Cal. 1979) . . . . . . . . . . . . . . . . . . 32
Catalano, Inc. v. Target Sales Inc., 446 U.S. 643
(1980) . . . . . . . . . . . . . . . . . . . . . . . 51
Consumers Union of U.S., Inc. v. General Signal
Corp., 724 F.2d 1044 (2d Cir. 1983), cert. denied,
469 U.S. 823 (1984). . . . . . . . . . . . . . . . . 30,34,35,36,
43,52
Dellar v. Samuel Goldwyn, Inc., 104 F.2d 661 (2d Cir.
1939). . . . . . . . . . . . . . . . . . . . . . . . 17
Dodsley v. Kinnersley, 27 Eng. Rep. 270, 271 (Ch.
1761). . . . . . . . . . . . . . . . . . . . . . . . 32
Feist Publications v. Rural Telephone Service Co.,
111 S. Ct. 1282 (1991) . . . . . . . . . . . . . . . 25
Folsom v. Marsh, 9 F. Cas. 342 (C.C.D. Mass. 1841) . . 17,23,35,36,
38,45
Page
Fortnightly Corp. v. United Artists Television, Inc.,
392 U.S. 390 (1968). . . . . . . . . . . . . . . . . 50
Guccione v. Flynt, 1984 Copr. L. Dec. 25,669
(S.D.N.Y. 1984). . . . . . . . . . . . . . . . . . . 35
Harper & Row Publishers, Inc. v. Nation Enterprise,
471 U.S. 539 (1985). . . . . . . . . . . . . . . . . 18,20,31,34,
35,36,47
Holdredge v. Knight Publishing Corp., 214 F. Supp.
921 (S.D. Cal. 1963) . . . . . . . . . . . . . . . . 32
Lasercomb Am., Inc. v. Reynolds, 911 F.2d 970
(4th Cir. 1990). . . . . . . . . . . . . . . . . . . 49
Lish v. Harper's Magazine Foundation, 807 F. Supp.
1090 (S.D.N.Y. 1992) . . . . . . . . . . . . . . . . 21
Mathieson v. Associated Press, 23 U.S.P.Q.2d 1685
(S.D.N.Y. 1992). . . . . . . . . . . . . . . . . . . 35,43,48
Maxtone-Graham v. Burtchaell, 803 F.2d 1253 (2d Cir.
1986), cert. denied, 481 U.S. 1059 (1987). . . . . . 17,18,20,33,
36,44,47
MCI Commun. v. American Telephone & Telephone Co.,
708 F.2d 1081 (7th Cir.), cert. denied, 464 U.S.
891 (1983) . . . . . . . . . . . . . . . . . . . . . 42
Meeropol v. Nizer, 560 F.2d 1061 (2d Cir. 1977),
cert. denied, 434 U.S. 1013 (1978) . . . . . . . . . 52
New Era Publications Int'l v. Carol
Publishing Group, 904 F.2d 152 (2d Cir.), cert.
denied, 111 S. Ct. 297 (1990). . . . . . . . . . . . 18,19,34
Parsons v. Honeywell, Inc., 929 F.2d 901 (2d Cir.
1991). . . . . . . . . . . . . . . . . . . . . . . . 42
Rogers v. Koons, 960 F.2d 301 (2d Cir.), cert.
denied, 113 S. Ct. 365 (1992). . . . . . . . . . . . 36
Rosemont Enterprise, Inc. v. Random House, Inc., 366
F.2d 303 (2d Cir. 1966), cert. denied, 385 U.S.
1009 (1967). . . . . . . . . . . . . . . . . . . . . 31,52
Salinger v. Random House, Inc., 811 F.2d 90 (2d
Cir.), cert. denied, 484 U.S. 890 (1987) . . . . . . 18
Sega Enterprises Ltd. v. Accolade, Inc., 977 F.2d
1510 (9th Cir. 1992) . . . . . . . . . . . . . . . . 20-21,28
Shapiro, Bernstein & Co. v. P.F. Collier & Son Co.,
26 U.S.P.Q. 40 (S.D.N.Y. 1954) . . . . . . . . . . . 32
Sinai v. Bureau of Automotive Repair, No. 92-0274-VEW,
slip. op. (N.D. Cal. Dec. 21, 1992). . . . . . . . . 49
Sony Corp. v. Universal City Studios, Inc., 464 U.S.
417 (1984) . . . . . . . . . . . . . . . . . . . . . passim
Stevens Linen Assocs., Inc. v. Mastercraft Corp.,
656 F.2d 11 (2d Cir. 1981) . . . . . . . . . . . . . 42
Stewart v. Abend, 495 U.S. 207 (1990). . . . . . . . . 47
Teleprompter Corp. v. CBS, Inc., 415 U.S. 394 (1974) . 50
Triangle Publications, Inc. v. Knight-Ridder
Newspapers, Inc., 626 F.2d 1171 (5th Cir. 1980). . . 31-32,35,36
Twentieth Century Music Corp. v. Aiken, 422 U.S. 151
(1975) . . . . . . . . . . . . . . . . . . . . . . . 50
United States v. Addyston Pipe & Steel Co., 85 F. 271
(6th Cir. 1898), aff'd, 175 U.S. 211 (1899). . . . . 51
United States v. Trenton Potteries Co., 273 U.S. 392
(1927) . . . . . . . . . . . . . . . . . . . . . . . 51
Universal City Studios, Inc. v. Sony Corp., 480 F.
Supp. 429 (C.D. Cal. 1979), rev'd, 659 F.2d 963
(9th Cir. 1981), rev'd, 464 U.S. 417 (1984). . . . . 42
West Pub. Co. v. Mead Data Central, Inc., 799 F.2d
1219 (8th Cir. 1986), cert. denied, 479 U.S.
1070 (1987). . . . . . . . . . . . . . . . . . . . . 40
Williams & Wilkins Co. v. United States, 203 Ct. Cl.
74, 487 F.2d 1345 (Ct. Cl. 1973), aff'd by equally
divided Court, 420 U.S. 376 (1975) . . . . . . . . . passim
Page
Wojnarowicz v. American Family Association, 745 F.
Supp. 130 (S.D.N.Y. 1990). . . . . . . . . . . . . . 35
Wright v. Warner Books, Inc., 953 F.2d 731 (2d Cir.
1991). . . . . . . . . . . . . . . . . . . . . . . . 17,36,47-48
Wright v. Warner Books, Inc., 748 F. Supp. 105
(S.D.N.Y. 1990), aff'd, 953 F.2d 731 (2d Cir.
1991). . . . . . . . . . . . . . . . . . . . . . . . 48
Statutes
The 1976 Copyright Act:
Section 102, 17 U.S.C. 102 . . . . . . . . . . . . 30
Section 106, 17 U.S.C. 106 . . . . . . . . . . . . 52
Section 107, 17 U.S.C. 107 . . . . . . . . . . . . passim, A-1
Section 108, 17 U.S.C. 108 . . . . . . . . . . . . 22, A-1
Section 111, 17 U.S.C. 111 . . . . . . . . . . . . 50
Act of May 31, 1790, 1st Cong. 2d Sess., 1 Stat. 124
(1790) . . . . . . . . . . . . . . . . . . . . . . . 51
The Patent Act:
Section 271, 35 U.S.C. 271 . . . . . . . . . . . . 52
Public Law 102-563 . . . . . . . . . . . . . . . . . . 51
The Judicial Code:
Section 1292, 28 U.S.C. 1292 . . . . . . . . . . . 2,16
Section 1331, 28 U.S.C. 1331 . . . . . . . . . . . 1
Section 1334, 28 U.S.C. 1334 . . . . . . . . . . . 2
Section 1338, 28 U.S.C. 1338 . . . . . . . . . . . 1
Statute of Anne, 8 Anne c. 19 (1710) . . . . . . . . . 51
Legislative History
H.R. Rep. No. 1476, 94th Cong., 2d Sess. (1976),
reprinted in 1976 U.S.C.C.A.N. 5659. . . . . . . . . 22
Page
Treatises and Other Authorities
Ball, The Law of Copyright & Literary Property
(1944) . . . . . . . . . . . . . . . . . . . . . . . 32
R.C. DeWolf, An Outline of Copyright Law (1925). . . . 32
M. Nicholson, A Manual of Copyright Practice for
Writers, Publishers and Agents (2d ed. 1970) . . . . 32
A. Weil, American Copyright Law (1917) . . . . . . . . 32
Weinreb, "Fair's Fair: A Comment on the
Fair Use Doctrine," 103 Harv. L. Rev. 1137 (1990). . 32
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
92-9341
AMERICAN GEOPHYSICAL UNION, et al.,
Plaintiffs-Counter-
Claim-Defendants-Appellees,
v.
TEXACO INC.,
Defendant-Counter-Claim-
Plaintiff-Appellant.
_____________
ON APPEAL FROM AN INTERLOCUTORY ORDER OF THE UNITED
STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK
_______________ * ______________
BRIEF OF APPELLANT TEXACO INC.
_____________
STATEMENT OF JURISDICTION
In May, 1985 six scientific and technical publishers,
on behalf of a putative class, sued Texaco claiming copyright
infringement by reason of Texaco's alleged failure to pay
license fees for articles its scientists copied from the
publishers' copyrighted journals. Jurisdiction was asserted
under 28 U.S.C. 1331, 1338. (Joint Appendix ("A.") 13).
Texaco subsequently filed for bankruptcy, and the named
plaintiffs and the putative class members were required by the
Bankruptcy Court to file individual proofs of claim. The six
original plaintiffs and 78 other publishers filed proofs of
claim alleging copyright infringement, adjudication of which was
then transferred to Judge Leval for determination (A. 160-
72; see, e.g., A. 53). As a result, the District Court,
pursuant to 28 U.S.C. 1334, had subject matter jurisdiction to
issue the order that is the subject of this appeal.
This Court has appellate jurisdiction pursuant to 28
U.S.C. 1292(b), the District Court having certified its
interlocutory order for review on October 26, 1992 (A. 143-49),
Texaco having petitioned this Court for permission to appeal on
November 4, 1992, and this Court having granted Texaco's
petition on December 26, 1992.
STATEMENT OF ISSUE PRESENTED FOR REVIEW
The issue for review is whether an in-house Texaco
scientist's making of a single photocopy of eight copyrighted
scientific articles to assist him in his scientific research,
where the copy was neither sold nor distributed, is a fair use
within the meaning of 17 U.S.C. 107. Such copying, in Judge
Leval's words, is "extremely widespread" and has historically
been a "reasonable and customary" use by scientists. (A. 148,
129). Indeed, in the only two decisions to address analogous
issues, the courts have held the use fair -- the Supreme Court
in Sony Corp. v. Universal City Studios, Inc., 464 U.S. 417
(1984), with respect to home videotaping for entertainment pur-
poses, and the Court of Claims in Williams & Wilkins Co. v.
United States, 487 F.2d 1345 (Ct. Cl. 1973), aff'd by equally
divided Court, 420 U.S. 376 (1975), with respect to large-scale
photocopying by the National Institutes of Health and the
National Library of Medicine, where the copies were distributed
to for-profit drug companies and to doctors among others for use
in their research.
STATEMENT OF THE CASE
At the suggestion of Judge Leval and the plaintiffs,
the parties agreed to try, on a written record, a "test" case
limited to whether it was fair use for one Texaco scientist --
Dr. Donald Chickering -- to make a single copy of eight articles
from issues of the Journal of Catalysis. (A. 78, 150-58). The
articles in question were selected by plaintiffs and, as the
parties stipulated, no effort was made "to determine quantita-
tively how much photocopying of copyrighted material, if any,
has taken place" at Texaco. (A. 188, 79). Adjudication of
all other issues with respect to the eight articles, as well as
of the fair use and other issues concerning any other articles,
was postponed until the test case was resolved.
A. The Facts
1. Academic Press and the Journal of Catalysis
Academic Press, a wholly-owned subsidiary of Harcourt
Brace Jovanovich, Inc. ("Harcourt"), is a "major publisher of
scholarly scientific, technical and medical . . . journals,
monographs and books." (A. 1035, 1123, 3862). Academic Press
has grown steadily to where it currently publishes 105
scientific and technical journals. Since 1971, it has
introduced over forty new journals (five in 1990 alone). (A.
1035-36, 1057, 1124-25, 2297).
a. Publication of the Journal of Catalysis
The Journal of Catalysis ("Catalysis") is published
monthly. Each issue contains numerous articles, notes and
letters to the editor (collectively, "articles"). (A. 1046,
1130-31). Every article published in Catalysis is unsolicited;
none is written by an Academic Press employee. (A. 1061, 1131-
33). Academic Press has never paid an author for an article.
Indeed, payment is not even open to negotiation. (A. 1173-74,
1337-38).
Authors submit their articles directly to editors,
who, like the authors, are neither paid nor employed by Academic
Press. (A. 1106a-08, 1134-36, 3779). The editors "have
complete editorial control and sole discretion over the content
of Catalysis." (A. 82, 1140-41). If an editor determines an
article potentially worthy of publication, he will choose
scientists to review it in a process called "peer review." (A.
1058, 1137, 1361-63, 1386-92, 1399). Academic Press is not
aware that an article has been submitted to Catalysis until
after the editor and peer reviewers have approved and revised it
for publication. (A. 1138-40, 1142-44, 3779).
After the editor's acceptance of an article for publi-
cation, Academic Press' role is ministerial, performing essen-
tially proofreading, printing functions and the like. (A. 1109-
15, 1144-53, 1169, 3779-80). Academic Press' only contribution
to the journal's text is the preparation of a table of contents
and subject and author indices. (A. 1072, 1147). The only
copyright Academic Press registers with the Copyright Office is
the copyright in the journal issue as a whole. (A. 1117-18,
1185-86). An issue of Catalysis contain upwards of 225 pages
and may contain more than 20 articles. (See, e.g., A. 805,
1777-80, 1791-94).
b. Sale and Distribution of
the Journal of Catalysis
Academic Press sells subscriptions to Catalysis at two
rates: an "institutional" rate charged to institutions (both
profit and non-profit) and an "individual" rate. (A. 1202-05).
The institutional rate is double that of the individual rate
because Academic Press is "well aware" that the issues sent to
institutional subscribers "are used by many people" and will be
circulated. (A. 1205-06, 1209, 3856). Both prices have
increased substantially since 1972, at a rate more than three
times the increase in the Consumer Price Index, with the
institutional rate going from $112 in 1972 to $888 in 1991. (A.
3689-90, 3792, 3856). Given this price rise and the negligible
risk and cost to Academic Press of publishing Catalysis, it is
hardly surprising that Academic Press' profits have consistently
been extraordinary. (A. 3802, 4230, 4275-76, 4320-21, 4363).
In addition to yearly subscriptions, Academic Press
offers back issues for sale. It generally takes two weeks from
receipt of an order for the issue to be shipped. (A. 1184).
Back issues are available only for the three-year period follow-
ing publication. (A. 1234, 3785). Thereafter, only the entire
volume (containing two or three issues) in which the issue
appeared will be sold. Although Academic Press also offers
reprints of individual articles, orders for reprints are
accepted only with the author's prior approval, for orders of
one hundred or more, and normally take three weeks to fill. (A.
1175-76, 1180-83).
2. Texaco's Research Activities
Texaco is an integrated petroleum company engaged in
the exploration, production and refining of crude oil and the
marketing of petroleum products. It employs hundreds of
scientists and researchers to conduct scientific research at
several locations, including its research center at Beacon, New
York. Texaco devotes significant resources to scientific
research, spending approximately $37 million a year over the
seven years prior to trial, and subscribing to hundreds of
scientific and technical journals at substantial expense. (A.
906-07, 932).
"In order to attract top scientists and engineers as
employees," as Dale Pollart, the General Manager of Texaco's
Beacon facility explained, "it is necessary for Texaco to foster
and encourage an atmosphere of scientific excellence that will
be recognized both inside and outside the corporation." It is
therefore "essential" that "Texaco's scientists and engineers
actively participate in scientific meetings and symposia,
prepare and present scientific and technical papers at such
meetings, and publish the results of their research in leading
scientific publications." (A. 932-33, 968-71, 975-77). Thus,
over the five year period prior to trial, Texaco scientists
published and presented more than 130 papers. (A. 933-34,
2876).
While university scientists generally conduct basic
scientific research and companies concentrate more on applied
science, there is a large area of overlap between the two. (A.
934, 965-67, 1397-98). Thus, it is not unusual for Texaco
scientists to work with members of the academic community and to
exchange results of research in areas of common interest as, in
fact, occurred here with respect to two of the articles at
issue. (A. 460, 469). Moreover, because academics are inte-
rested in and study the same chemistry as do Texaco's scien-
tists, there is a lively interchange between defendant's
scientists and the academic community from which the public
benefits by the advancement of science. (A. 934, 965-67).
Texaco and other corporations also sponsor and finance research
at universities in areas of common scientific interest. (See A.
948).
3. The Reasonable and Customary Practice of Photocopying
It is undisputed that, in the words of plaintiffs'
witness, Dr. Elliott, "it is the practice of research scientists
to make, or have made, single photocopies of scientific and
technical journal articles for use in their work." (A. 727).
As Judge Leval found, this practice is "extremely widespread"
and historically has been a "reasonable and customary" use. (A.
148, 129). When doing research and when reading, writing and
reviewing articles (that, in turn, cite other articles), the
researcher, of necessity, must make constant and repeated refer-
ence to other articles. As a result, researchers maintain
easily referenced personal files of copies of articles instead
of surrounding themselves with numerous, bulky original volumes
or repeatedly returning to a library to refer to the original
volumes. (A. 185, 458-70, 584, 727-30, 739-40, 742, 753-54,
790-91, 887, 905, 952-54, 982-83, 985-87, 1037, 1079, 1333-36,
1364-67, 1392).
It is equally undisputed that the making of single
copies serves functions that the originals do not. Single
copies facilitate research and writing by making the information
and data in the articles more accessible and reliable. (A.
1392). Dr. Chickering and Dr. Elliott agree that, in Dr.
Elliott's words, "[i]t is far more reliable to review scientific
data, especially graphs, charts, diagrams, formulas, equations
and calculations, directly from a photocopy of the article than
from notes because there is an extremely high risk of error in
attempting to transcribe such information." (A. 459-62, 465-67,
584-85, 588-89, 727-28, 740, 1079-80). In addition, as
Professor Schwarz, the author of one of the eight articles and a
Professor of Chemical Engineering at Syracuse University,
testified, whether he made a copy for his work when he was
employed by Bell Telephone, Chevron or Exxon, or in the course
of his duties as a professor, he "used the photocopy in the same
manner -- for [his] convenience." (A. 1335-36). In particular,
he took copies home to read, which "would be next to impossible"
to do if he attempted to "carry home bound volumes of the
journals . . . in view of their bulk and weight." (A. 1335).
Moreover, a scientist can make notes on a copy which he cannot
on the glossy paper of the original. (A. 579-80). Copying also
facilitates dissemination of scientific information because, as
Drs. Schwarz and Elliott testified, it is considerably easier to
write an article by using photocopies of sources than to take
detailed notes or have to refer to original volumes. (A. 730,
742, 754, 789-91, 798-800, 1335-36, 1369, 1370-73, 1390-92).
Researchers also take copies of articles into the
laboratory, as did Dr. Chickering, to refer to their data and
graphs while conducting or evaluating experiments and to avoid
errors in transcription and in the misapplication of equations
or data. (A. 458-62, 465-68, 584-85, 740, 753). Originals, by
contrast, cannot be used in this manner because of the risk that
the equipment and chemicals in the laboratory might accidentally
ruin them. (A. 463, 729, 740-41). Thus, even where a scientist
has a personal subscription to a journal, he will make copies of
the articles he wishes to save or to use in the laboratory. (A.
728, 740-41, 1079-80, 1335-36).
Making single photocopies of articles also performs a
time-shifting function. As Dr. Pollart explained, since "what
you really want out of that article is the knowledge, the know-
how, the information that is there, . . . [i]f you couldn't make
a photocopy at the time you read the article," instead of
"studying" and "interpreting" the photocopied article later, you
would have to do so at the time you read the original. (A. 972-
73).
In short, as Professor Schwarz testified, "I believe
that my colleagues and my students and the students of my
colleagues view photocopying as an important and essential
aspect of their education." (A. 1378). Copying, in Dr.
Schwarz's words, "is being done by the public as a natural
[act], much like breathing . . . ." (A. 1379). In fact, the
unlicensed copying of articles is "commonplace" by researchers
and editors in the course of writing, peer reviewing and editing
articles that are published in Catalysis and journals published
by other plaintiffs who are challenging copying in this suit.
(A. 798-800). Indeed, Dr. Schwarz testified that the editors of
Catalysis have sent him photocopies of articles in other
journals referenced in manuscripts they requested him to peer
review. (A. 1386-90). Scientists, of course, are not alone in
photocopying. Lawyers, judges and even publishers copy
comparable materials for convenience. As the executive director
of one of the plaintiffs put it in explaining why he made
photocopies without the permission of the copyright holder,
"[e]verybody photocopies copyrighted material." (A. 1417).
4. Dr. Chickering's Photocopying of the Eight
Articles at Issue
Dr. Chickering, who has a Ph.D. in Chemical Engineer-
ing, is himself the co-author of a journal article written while
employed at Beacon. (A. 449, 454-55). Since joining Texaco in
1981, he has worked on several projects in the field of
catalysis -- the study of catalysts. (A. 450-53). Throughout
his tenure at Texaco, Dr. Chickering has had his name on the
routing lists for Catalysis and other scientific and technical
journals that he believed would be particularly relevant to his
work or that otherwise would be of professional interest to
him. (A. 457). Texaco's Beacon facility purchased one
subscription to Catalysis until 1983, when it increased the
number to two. It went to three subscriptions in 1988. (A.
803). Most subscribers to Catalysis purchase only one copy.
(A. 1187).
The circumstances surrounding the photocopying and use
of the single photocopies at issue -- four articles, two letters
to the editor and two notes, which range in length from 2+ to 16
pages -- were not contested by plaintiffs. Nor did plaintiffs
take issue with the reasons Dr. Chickering testified for the
copying. Six of the articles were copied when Catalysis was
circulated to him. The other two copies were made for him by
the Beacon library since they were contained in issues from
prior years. (A. 458-69).
In brief, Dr. Chickering made single copies of the
articles for his individual use to facilitate his research.
(A. 457-60). Thus, he copied articles to refer to their
figures, equations or graphs in the laboratory in order to test
the accuracy of his results or to calibrate the apparatus he was
working with. (A. 459-62). In addition, he did not want to run
the risk of error in transcribing the information by hand or of
destroying or ruining the original in the laboratory. (A. 459-
63, 465-67). The articles are short, and virtually every page
contains figures, equations and graphs. Although he made some
of the copies for future reference, because of the direction of
his research, he ended up not using or referring to five of the
eight articles. (A. 460-61, 464-65, 469). With respect to one
of the articles, Dr. Chickering travelled to Syracuse University
to meet with the author -- Dr. Schwarz -- to discuss the
apparatus described in the article. (A. 460). Dr. Schwarz
testified that "[s]uch give and take and professional
cooperation is necessary for research and the advancement of
science." (A. 1338-39). He explained that he used photocopies
in writing the article and that he "ha[s] no objection to any
person, whether he or she works for a university, a non-profit
institution or a for-profit corporation, photocopying, without
charge, any of my articles for his or her personal use or
convenience." (A. 1337-38).
Significantly, Dr. Chickering did not cause more than
one copy to be made of any of the articles in question. (A.
457-58). Equally undisputed, neither Dr. Chickering nor Texaco
published, sold or otherwise distributed any of the single
copies of the articles.
5. The Copyright Clearance Center
The Copyright Clearance Center ("CCC") is a clearing
house some publishers established to accept license payments for
photocopying. From 1981 to 1983, the time during which Dr.
Chickering did most of his copying, the CCC offered one license,
the transactional reporting system ("TRS"). The TRS covered
less than a third of the copies made from scientific and
technical journals at major petroleum companies, and, in the
CCC's own words, "was not effectively meeting the needs of
substantial segments of both the user and copyright owner
communities." (A. 2031; see also A. 238-39, 310-12, 337, 360-
65, 2054-55, 2060-61, 3728-74, 3807, 3850). The CCC thus
concluded that the TRS was not suited to large companies like
Texaco. (A. 2054-55, 3848).
The CCC's blanket license, the Annual Authorizations
Service ("AAS"), which was developed later as a result of the
TRS' admitted failure, also did not provide coverage for all
articles. (See, e.g., A. 348-54, 2020-21, 4304-06; see also
A. 4328-29, 4337). More fundamentally, under both the TRS and
the AAS, users are charged for photocopying all copies even
though the publishers admit they do not own the copyrights in
all of the articles and even though some of the articles are in
the public domain. When companies were not quick to accept
the AAS, the publishers sued Texaco in the hope that the "fright
of a suit" and "accompanying class action" would "jar" other
companies into action. (A. 3808). Indeed, it was only after
Texaco was sued with much fanfare "to provide an example for
other industries and to encourage . . . others to join" that
additional companies began signing up for the AAS. (A. 3853-55,
3885; see A. 182-83). Nonetheless, as of 1990, only 19% of
Fortune 500 companies were CCC licensees, and fewer than 20 of
the 84 claimants in this action had taken licenses, even though
publishers, like Texaco (and lawyers and judges), also make
copies. (A. 176-83, 357-58, 877-81, 896-99, 1251-55, 1257-58,
1296-97, 1417-22, 2326, 3686, 4230-31, TEX-190).
As for revenues, while the CCC has received some $9.6
million under the TRS and another $18 million under AAS, it
disbursed only $4.2 million to publishers, with the balance
going to cover costs. (A. 4346-47).
B. The Decisions Below
Without analyzing the circumstances surrounding the
copying of any of the eight articles, and rarely referring to
any part of the "voluminous submitted record" (A. 146), Judge
Leval held that Dr. Chickering's copying was not fair use. On
the first of the four fair use factors -- "the purpose and char-
acter of the use" -- the court found in plaintiffs' favor since
Dr. Chickering did not use the copies to create a new
copyrighted work and, although he used the copies "to assist in
socially valuable scientific research" and Texaco did "not
resell the copies," Dr. Chickering's ultimate purpose was "to
improve Texaco's commercial performance." (A. 99, 105). On the
second factor -- the "nature of the copyrighted work" -- the
court held in Texaco's favor since the articles were factual and
scientific. (A. 106-08). The third factor -- "the amount and
substantiality of the portion used" -- went to plaintiffs on the
ground that Dr. Chickering copied the entire articles
(notwithstanding, for example, that one "article" was no more
than a 2+-page letter to the editor in an issue of 203 pages).
(A. 109-10, 507, 804). The court also awarded to plaintiffs the
fourth factor -- "the effect of the use upon the potential
market for or value of the copyrighted work" even though it
concluded that neither back issues, back volumes nor additional
subscriptions were "practicable" alternatives to photocopies (A.
113). Judge Leval reasoned that, because, in his view, the CCC
would accept, "at a reasonable cost and burden to Texaco,"
payment for the copies, Academic Press was therefore entitled to
such money. (A. 115).
Two days after rendering his opinion, Judge Leval
amended it by adding a two-page footnote, holding that, even if
Dr. Chickering's purpose in making the copies was viewed as
"research" and, as a result, the first fair use factor should be
awarded to Texaco, plaintiffs would still prevail. (A. 140-41).
In other words, the court adopted what amounts to a per se rule:
any copying of a CCC-registered article -- whether or not for a
commercial purpose and regardless of its length (A. 82) -- is
ipso facto not fair use.
In his order granting Texaco's motion for
certification under 1292(b) -- which plaintiffs did not oppose
-- Judge Leval found that, given the "enormous differences of
opinion" on the subject of fair use, the absence of "controlling
precedent," and the fact that the Court of Claims' decision in
Williams & Wilkins, which has the "closest fact pattern," "is
arguably in tension with this court's decision," "I can only
conclude that there is substantial ground for a difference of
opinion" as to whether the decision was correct and that,
"agree[ing]" with both parties, "there is a strong public
interest in having prompt appellate review of the fair use issue
presented in this case." (A. 147-49).
ARGUMENT
Beginning with Justice Story's seminal decision in
Folsom v. Marsh, 9 F. Cas. 342, 344 (C.C.D. Mass. 1841)
(No. 4,901), the courts have consistently acknowledged the
unique complexity and difficulty of fair use analysis. See,
e.g., Dellar v. Samuel Goldwyn, Inc., 104 F.2d 661, 662 (2d Cir.
1939); A. 91-92, 147-48. It is a measure of this complexity and
difficulty that Justice Story's formulation (9 F. Cas. at 348)
does not differ much from the 1976 codification by Congress in
Section 107 of the Copyright Act, 17 U.S.C. 107 (which is
reprinted in the Statutory Appendix to this brief).
Notwithstanding the apparent specificity of Section
107's four factors, application of the fair use doctrine "is not
a mechanical determination," but remains an "equitable rule of
reason," requiring a "case-by-case balancing of complex
factors." Sony Corp. v. Universal City Studios, Inc., 464 U.S.
417, 448 (1984); Wright v. Warner Books, Inc., 953 F.2d 731, 740
(2d Cir. 1991); Maxtone-Graham v. Burtchaell, 803 F.2d 1253,
1255, 1259 (2d Cir. 1986), cert. denied, 481 U.S. 1059 (1987).
Here, just as in Williams & Wilkins and Sony, a correct
balancing of the four statutory factors demonstrates that
Dr. Chickering's making of a single photocopy for "basic
research" (A. 79) was a fair use.
I.
THE STANDARD OF REVIEW
Fair use has variously been described as a "doctrine,"
"privilege," "concept," and "defense," which "requires a complex
and subtle evaluation of numerous mixed issues of fact and law."
Harper & Row Publishers, Inc. v. Nation Enters., 471 U.S. 539,
549 (1985); Sony, 464 U.S. at 447-48 & n.31, 454; Maxtone, 803
F.2d at 1258, 1259. Given its difficulty in application and its
equitable nature, the standard of appellate review is not the
usual "clearly erroneous" rule. New Era Publications Int'l v.
Carol Publishing Group, 904 F.2d 152, 155 (2d Cir.), cert.
denied, 111 S. Ct. 297 (1990). Rather, "the district court's
conclusion . . . is open to full review on appeal." Id. at 155.
That is, this Court "review[s] de novo this mixed question of
fact and law." Arica Inst., Inc. v. Palmer, 970 F.2d 1067, 1077
(2d Cir. 1992). Thus, whether this Court has affirmed or
reversed a trial or preliminary injunction ruling, it has done
so by analyzing the issues anew, as opposed to its normal
deference to verdicts or district court findings. See, e.g.
Maxtone (affirmance); New Era (reversal); Salinger v. Random
House, Inc., 811 F.2d 90 (2d Cir.) (reversal), cert. denied, 484
U.S. 890 (1987).
II.
DR. CHICKERING'S MAKING OF A
SINGLE PHOTOCOPY WAS FAIR USE
A. "The Purpose and Character of the Use"
The Copyright Act expressly provides that the fair use
of a copyrighted work, "including . . . use by reproduction in
copies," for a research purpose does not constitute copyright
infringement. 17 U.S.C. 107 (emphasis added). Thus, making a
copy for research is favored. Indeed, "'[i]f a [work] falls
into one of these categories [i.e., criticism, scholarship or
research], assessment of the first fair use factor should be at
an end.'" New Era, 904 F.2d at 156 (quoting New Era
Publications Int'l v. Henry Holt & Co., 884 F.2d 659, 661 (2d
Cir. 1989) (Miner, J. concurring in the denial of rehearing in
banc), cert. denied, 493 U.S. 1094 (1990)).
Nonetheless, the district court awarded this factor to
plaintiffs on two grounds: (1) because Texaco is a for-profit
entity; and (2) because Dr. Chickering's copying was "non-
transformative." (A. 93-106). Neither has merit. The statute
requires the court to focus on the nature and character of the
use (which indisputably was scientific research), not on
Texaco's character as a for-profit user. As for Judge Leval's
stress on the non-transformative nature of the copying, he
erroneously ignored the importance of such copying to the
advancement of science and knowledge as well as the plain
language of 107, which expressly permits non-transformative
"reproduction in copies" for research purposes. Moreover, while
acknowledging that photocopying of the type at issue here has
become "extremely widespread" and "reasonable and customary" (A.
148, 129), the district court gave no weight to this critical
fact in evaluating the nature and character of the use.
1. The Use in Question Was for a Scientific Research
Purpose
The district court committed fundamental error by
deeming the scientific research purpose of Dr. Chickering's
copying legally irrelevant because the "research is being
conducted for commercial gain." (A. 105). While copying for a
commercial purpose weighs against a finding of fair use, Harper
& Row, 471 U.S. at 562, the law does not automatically render
copying by a profit-making institution per se unfair. The
presumption of unfairness that arises from a commercial purpose
can be rebutted by the characteristics of the particular use in
question and "was 'not intended to be interpreted as any sort of
not-for-profit limitation on educational uses of copyrighted
works.'" Maxtone, 803 F.2d at 1262. As this Court put it in
Maxtone, "the commercial nature of a use is a matter of degree,
not an absolute, and we find that the educational elements of
[the defendant's book] far outweigh [its] commercial aspects."
Id.
Judge Leval erred in focusing on Texaco's ultimate
profit-making goal and not on the immediate scientific research
purpose of a scientist's copying of eight scholarly articles --
which is light years away from the development, production and
exploitation of any commercial product by Dr. Chickering's
employer. The Ninth Circuit's recent decision in Sega
Enterprises Ltd. v. Accolade, Inc., 977 F.2d 1510 (9th Cir.
1992), is illustrative. There, copying a competitor's computer
program in order to understand it and make a competing product
was held a fair use. In finding that the research nature of the
copying outweighed the defendant's ultimate commercial purpose,
the Court of Appeals reasoned:
Sega argues that because Accolade copied its
object code in order to produce a competing
product, the Harper & Row presumption
applies and precludes a finding of fair use.
That analysis is far too simple . . . . As
we have noted, the use at issue was an
intermediate one only and thus any
commercial "exploitation" was indirect or
derivative.
* * *
[A]lthough Accolade's ultimate purpose was
the release of [competitive] games for sale,
its direct purpose in copying Sega's code,
and thus its direct use of the copyrighted
material was simply to study the functional
requirements for Genesis compatibility so
that it could modify existing games and make
them usable with the Genesis console. (Id.
at 1522).
Accord, Atari Games Corp. v. Nintendo of Am. Inc., 975 F.2d 832,
842-44 (Fed. Cir. 1992).
As Judge Lasker recently explained, "[t]he question
under factor one is the purpose and character of the use, not of
the alleged infringer." Lish v. Harper's Magazine Found., 807
F. Supp. 1090, 1101 (S.D.N.Y. 1992). Thus, he ruled the
defendant publisher could not avoid the commercial nature of the
sale of the copy as part of its magazine on the grounds that it
is owned by a non-profit organization and operates at a loss.
Id. at 1100-01. The converse is equally so: The research
nature of Dr. Chickering's use may not be avoided because he
works for a profit-making corporation. See also Basic Books,
Inc. v. Kinko's Graphics Corp., 758 F. Supp. 1522, 1531-32
(S.D.N.Y. 1991) (commercial sale of excerpts of photocopied
books not a non-profit educational use merely because purchasers
ultimately used materials in classrooms).
In this connection, it is significant that the
Congress that enacted 107 simultaneously passed
Section 108(a), which permits libraries to make single
photocopies of articles for researchers if, inter alia, the
copies are made "without any purpose of direct or indirect
commercial advantage." The legislative history reveals that
photocopying by libraries of profit-making institutions, absent
any "systematic effort to substitute photocopying for
subscriptions or purchases, would be covered by section 108,
even though the copies are furnished to the employees of the
organization for use in their work." H.R. Rep. No. 1476, 94th
Cong., 2d Sess. 75 (1976), reprinted in 1976 U.S.C.C.A.N. 5659,
5689. That is because such copying "would ordinarily not be
considered 'for direct or indirect commercial advantage,' since
the 'advantage' referred to in this clause must attach to the
immediate commercial motivation behind the reproduction or
distribution itself, rather than to the ultimate profit-making
motivation behind the enterprise in which the library is
located." Id. (emphasis added). While the application of
108(a) to the copies at issue was not the subject of the fair
use trial (A. 150), Congress' interpretation of the phrase
"direct or indirect commercial advantage" in a related section
of the same statute is compelling evidence that the pertinent
inquiry under 107(1) is whether the direct use in question had
an immediate commercial motivation, i.e., sale or distribution,
and not whether the user is a for-profit entity.
Courts consider the defendant's profit motive
important "because the alleged infringing work competes in the
same market as the copyrighted work, thus making the 'commerci-
ality' more harmful to the copyright holder." Basic Books, Inc.
v. Kinko's Graphic Corp., supra, 758 F. Supp. at 1532. Indeed,
the fair use test codified in 107 arose as a method of deter-
mining whether a second author's work embodied so much of the
original as to compete unfairly with it and deprive the original
author of a sale. Folsom v. Marsh, supra, 9 F. Cas. 342. Here,
neither Dr. Chickering nor Texaco sold or distributed any of the
eight copies in question. The direct use of the copies was no
more commercial than that at issue in Williams & Wilkins, 487
F.2d 1345 (Ct. Cl. 1983), aff'd by equally divided Court, 420
U.S. 376 (1975). There, the Court of Claims held that it was
fair use for the National Institutes of Health ("NIH") library
and the National Library of Medicine ("NLM") to provide, on a
wide scale basis, copies of scientific and technical articles to
for-profit drug companies and "physicians or other medical
personnel . . . in connection with medical research. . . ." Id.
at 1349; 203 Ct. Cl. at 153-54. There, as here, the "copied
articles [we]re scientific studies useful to the requesters in
their work" and the "scientific researchers and practitioners"
"ha[d] no purpose to reduplicate them for sale or other general
distribution." Id. at 1354. Similarly, here, as in William &
Wilkins:
[S]cientific progress, untainted by any
commercial gain from the reproduction, is
the hallmark of the whole enterprise of
duplication. There has been no attempt to
misappropriate the work of earlier
scientific writers for forbidden ends, but
rather an effort to gain easier access to
the material for study and research. (Id. at
1354) (emphasis added).
Texaco and Dr. Chickering no more sought to gain com-
mercially from the reproduction of copies than did the
scientists at for-profit drug companies and the practicing
doctors who received copies in Williams & Wilkins. Indeed, if
the test were whether the user was a for-profit entity, or stood
ultimately to gain financially from the research -- not whether
the direct use in question was a commercial exploitation of the
work -- the Williams & Wilkins court could not have ruled as it
did since both drug companies and doctors seek profits.
Judge Leval's emphasis on Texaco's ultimate for-profit
business also ignores the overwhelming record evidence of the
important role copies like Dr. Chickering's play in scientific
research. (See pp. ____, supra). As the Supreme Court stated
recently in Feist Publications v. Rural Telephone Service Co.,
111 S. Ct. 1282, 1290 (1991):
The primary objective of copyright is not to
reward the labor of authors, but "[t]o pro-
mote the Progress of Science and useful
Acts." [U.S. Const.] Art. I, 8 cl.8. To
this end, copyright assures authors the
right to their original expression, but
encourages others to build freely upon the
ideas and information conveyed by a work.
(Id.) (emphasis added).
For more than three decades scientists have used single
photocopies to assist them in studying and understanding the
complex equations, graphs and scientific ideas and information
contained in scholarly scientific articles and to build upon
them. This copying plainly assists in the dissemination of
knowledge and in advancing the goals of copyright.
The direct use here was no more commercial than the
off-air videotaping of television shows that the Supreme Court
held was a fair use in Sony. As Justice Stevens put it,
"[t]ime-shifting for private home use must be characterized as
noncommercial, nonprofit activity." 446 U.S. at 449. Judge
Leval's analysis leads to the bizarre result that fair use
favors copying for personal entertainment, but not for
scientific research -- a use specifically mentioned in 107.
2. That Dr. Chickering Did Not Make a Transformative Use
Does Not Derogate from the Scientific Purpose of His
Copying
The district judge reasoned that Texaco should be
deprived of credit for the scientific purpose of
Dr. Chickering's copying because he merely studied and used the
copies in his research and laboratory and did not make transfor-
mative use of them. (A. 99-104). In Sony, the Supreme Court
authoritatively rejected as "erroneous" the Ninth Circuit's view
that fair use applies only to transformative or "productive"
uses, "i.e., when copyrighted material is reproduced for [other
than its] intrinsic use.'" 464 U.S. at 427 n.9 (quoting 659
F.2d at 971-72); id. at 455 n.40. Justice Stevens explained
that 107 "does not identify any dichotomy between productive
and nonproductive" uses. Id. at 455 n.40. Rather, "Congress
has plainly instructed us that fair use analysis calls for a
sensitive balancing of interests" (id.):
The distinction between "productive" and
"unproductive" uses may be helpful in cali-
brating the balance, but it cannot be wholly
determinative. Although copying to promote
a scholarly endeavor certainly has a
stronger claim to fair use than copying to
avoid interrupting a poker game, the
question is not simply two-dimensional.
(Id.) (emphasis added).
Even Justice Blackmun in dissent acknowledged that the
productive/nonproductive dichotomy was not dispositive. His
point of disagreement with the majority was the "crucial differ-
ence" between the "researcher or scholar whose own work depends
on the ability to refer to and quote the works of prior
scholars" and the "ordinary user," such as a consumer who
videotapes a television program for his "sole benefit":
When the scholar user forgoes the use of a
prior work, not only does his own work
suffer, but the public is deprived of his
contribution to knowledge. The scholar's
work, in other words, produces external
benefits from which everyone profits. (Id.
at 477-78).
Justice Blackmun went on to acknowledge that each of the uses
listed in 107 -- which include "research" -- "is a productive
use, resulting in some added benefit to the public beyond that
produced by the first author's work." 464 U.S. at 478 (emphasis
in original).
The plain language of 107 itself specifically
contemplates that some non-transformative uses are fair since it
lists "use by reproduction in copies" for "purposes such as
. . . research" as an example of a fair use. It is difficult to
conceive how a copy can be used in research, as expressly
contemplated by 107, without being a non-transformative use.
For if it were used transformatively, it would become "criti-
cism," "comment," or "scholarship," all of which involve
creation of new works.
Nevertheless, the non-transformative use test is
helpful in determining whether a work sold in competition with
the copyrighted work is unfairly competing with it and depriving
it of a sale. The lack of transformative use is often
conclusive evidence that the second author is unfairly
superseding the demand for the original. But where the copy is
not sold or distributed in competition with the original, but
(as here) merely used by the copier for study, non-
transformative use by a for-profit user does not definitively
indicate that the original use has been superseded.
Here, the copies were not sold or distributed in
competition with the original and fulfilled a different
function. As Judge Leval acknowledged (A. 101-02, 112-13),
Dr. Chickering wanted a copy, not the original, because it
enabled him to take materials into the laboratory and avoid
mistakes in taking notes regarding difficult and complex
calculations and equations. He wanted a photocopy, and not the
original, because he wanted to mark it up with notes or
thoughts. While finding "some merit" to the argument that Dr.
Chickering's use was not superseding, Judge Leval nevertheless
rejected it, contending that it would only be convincing if the
copying had been done to transfer text on to a different
material, such as microfilm to preserve space. (A. 101-02).
The district judge does not explain why preserving space is more
worthy of fair use protection than advancing scientific
research. The only apparent answer is the trial court's
ambiguous statement that "the three subscriptions to Catalysis
are serving the needs of hundreds of scientists" and thus "the
principal feature of the photocopying is its capacity to give
numerous scientists their own copy based on Texaco's purchase of
an original." (A. 102) (emphasis added). Texaco's
"transformative use" is, according to Judge Leval, "overshadowed
by the primary aspect for the copying, which is to multiply
copies." (A. 102) (emphasis added).
To the extent that Judge Leval meant that several
scientists independently may have decided to copy the same or
different articles from editions of Catalysis on different
occasions, thereby "multiplying" copies, that does not mean that
the demand for the original had been superseded or reduced. On
the contrary, Texaco increased its subscriptions to Catalysis.
(See pp. ___, supra). If, however, the district court had in
mind that "hundreds" of scientists used Catalysis and made
copies from it, there is no record support, for plaintiffs
specifically eschewed any attempt to quantify the amount of
copying at Texaco and made no effort to do so with respect to
Catalysis. Nor is there any evidence that Texaco ever copied
the same article twice. Finally, as to Dr. Chickering's intent,
his primary and only purpose was to further his scientific
research.
Dr. Chickering also copied the articles, as in Sony,
to time-shift their use to a later date by filing them away for
future reference. Although once again acknowledging that
Texaco's "argument has some force," Judge Leval distinguished
Sony on the ground that Texaco's alleged use of three subscrip-
tions to Catalysis for "hundreds" of scientists is "a far cry"
from the single copy involved in Sony. (A. 122-23). The
"distinction" does not withstand analysis. On the one hand,
there is no evidence that anyone other than Dr. Chickering
copied the eight articles at issue. On the other, even if other
Texaco scientists had made an undetermined number of copies of
the eight articles, that pales in comparison to the undetermined
number of viewers who videotaped the specific copyrighted
broadcasts at issue in Sony.
In addition, the copying at issue should be favored
under the first factor because Dr. Chickering copied the
articles in question for access to the ideas and information
contained therein, not the articles' expression of those ideas.
It is axiomatic that copyright protects the expression of ideas,
not the ideas themselves. 17 U.S.C. 102(a)-(b). Dr. Chicker-
ing wished to duplicate precisely the complex mathematical equa-
tions and formulas in the articles, because that was the only
way accurately to compare the data from his experiments with the
published data. This concern for accuracy is a recognized basis
for fair use. Consumers Union of U.S., Inc. v. General Signal
Corp., 724 F.2d 1044, 1049 (2d Cir. 1983), cert. denied, 469
U.S. 823 (1984). (See also A. 102-03). While once again recog-
nizing that the argument has "some merit," Judge Leval rejected
it because "Dr. Chickering and his colleagues do not only copy
the formulas, graphs and tables," but the entire article. (A.
104). That, of course, ignores the fact that virtually every
page of the articles in question contains equations, charts or
formulas of interest to a research scientist which are difficult
to copy accurately by hand. (See A. 474-535).
Moreover, where the article is not being sold or
distributed in competition with the original and does not
substitute for it, that the entire article has been copied lacks
significance. Copying an entire article to use in the
laboratory no more displaces the original than does copying a
page or two from it.
3. Dr. Chickering's Copying Was a Reasonable
and Customary Use
As Judge Leval acknowledged, photocopying of the type
engaged in by Dr. Chickering is "extremely widespread" and
historically has been "reasonable and customary . . ." (A. 129,
148). Not only scientists, but lawyers and judges, too, make
unlicensed single copies of copyrighted articles and cases for
their work as do many of the publishers who sued Texaco. (A.
877-81, 896-99, 1251-55, 1257-58, 1417-22). Justice O'Connor
explained in Harper & Row that the fair use doctrine is
predicated on "the author's implied consent to 'reasonable and
customary use' when he released his work for public
consumption. . . ." 471 U.S. at 550. In Williams & Wilkins,
the Court of Claims, in determining that the making of single
copies of articles was fair use, was influenced by the fact that
the practice was a long-standing and customary one. 487 F.2d at
1353, 1355-56. Indeed, as far back as 1761, an English court
found that the printing of one-tenth of a book by Samuel Johnson
in a magazine was fair use based upon "custom and usage."
Dodsley v. Kinnersley, 27 Eng. Rep. 270, 271 (Ch. 1761). And
numerous commentators have described fair use as a use that is
"reasonable and customary."
While Judge Leval stated that "Texaco's strongest
arguments may be that photocopying has become 'reasonable and
customary,'" he inexplicably did not discuss this factor under
the nature and character of the use; elsewhere in his opinion he
concluded that the existence of the CCC undermined the perti-
nence of the reasonable and customary use argument. (A. 129-30,
132). The court below nowhere explains why custom and practice
can be changed by the vehicle of self-help and a class action
lawsuit. It has long been the practice for biographers to quote
excerpts from their subject's works in their biographies and for
reviewers to quote excerpts of an article or book in their
reviews. Should a reviewer be required to pay a CCC-licensing
fee if he is quoting from a CCC-registered publication because
the publisher is willing to accept such a fee and has
purportedly made it easy to report and pay? Does the
publishers' willingness to accept a fee for such a reasonable
and customary use transform it into an unfair use? Why does a
long-standing and accepted practice cease to be a fair use
merely because some publishers (but not all) wish to license it
and have brought a test case designed to change the status quo?
There is no evidence in this record that the custom
and practice of making single copies has changed appreciably.
As of 1983, the CCC by its own estimate licensed fewer than 5%
of the copies made, and it was only after the publishers sued
Texaco with much fanfare and publicity that some large
corporations began accepting an annual license from the CCC.
(A. 336, 2031, 3807-08, 3853-55, 3885-86). Nevertheless, only
19% of Fortune 500 companies have signed up with the CCC and
fewer than 20 of the 84 publisher plaintiffs in this case have
taken licenses to copy even though they indisputably make copies
too. (See pp. __, supra). That the publishers wish to change
the custom and practice, and are seeking to use this lawsuit to
do so, does not mean that what has occurred for decades is no
longer reasonable or customary, and hence unfair.
B. "The Nature of the Copyrighted Work"
Given the undisputed facts that the articles are
published and that they are, as Judge Leval put it,
"'essentially factual in nature,'" he correctly held that the
"second factor favors Texaco." (A. 108, quoting Maxtone, 803
F.2d at 1263). See, e.g., Harper & Row, 471 U.S. at 563; New
Era, 904 F.2d at 157; Consumers Union, 724 F.2d at 1049;
Williams & Wilkins, 487 F.2d at 1354.
C. "The Amount and Substantiality of the Portion Used"
This factor is useful in determining whether a second
user's sale unfairly supersedes the demand for the original.
The greater the use the more likely the subsequent sale is
unfair. But where, as explained in connection with the first
and fourth fair use factors (see pp. __, supra, pp. __, infra),
the copy is not sold or distributed and has not been used to
substitute for subscriptions, this factor is largely irrelevant.
In all events, while Dr. Chickering copied all of the
eight articles, only two of which exceeded ten pages in length
(see p. __ n.4, supra), it is also undisputed that the "work"
that Academic Press offers for sale is a yearly journal
subscription, that it neither sells individual articles nor
makes reprints reasonably available, and that it did not regis-
ter copyrights in any of the eight articles, but only in the
issues as a whole. Viewed in this light, the "amount and sub-
stantiality of the portion used in relation to the copyrighted
work as a whole" is minuscule -- on average, 0.26% of the pages
published in Catalysis during the subscription year in which the
articles were published (or 1.62% of the pages in the volume and
3.46% of the pages in the issue). (A. 804-05).
Alternatively, as Judge Leval concluded (but see pp.
__, infra), each article could be viewed as a separate work.
But even that would not compel a holding for plaintiffs. For,
as this Court, citing Williams & Wilkins with approval, explain-
ed in Maxtone, "[i]n some instances, copying a work wholesale
has been held to be fair use." 803 F.2d at 1263. And, of
course, the courts in Sony and Williams & Wilkins held that the
copying of the "entire" copyrighted works at issue was fair use.
464 U.S. at 449-50; 487 F.2d at 1353.
D. "The Effect of the Use upon the Potential
Market for or Value of the Copyrighted Work"
For the copyright holder to succeed on this factor,
the defendant's use must "'materially impair the marketability
of the work which is copied.'" Harper & Row, 471 U.S. at 567.
That is, there must be evidence of a "demonstrable" or "signifi-
cant" effect. Rogers v. Koons, 960 F.2d 301, 312 (2d Cir.),
cert. denied, 113 S. Ct. 365 (1992); Wright, 953 F.2d at 739;
Maxtone, 803 F.2d at 1264. See Folsom, 9 F. Cas. at 348 ("the
value of the original is sensibly diminished") (emphasis added).
As the Supreme Court explained in Sony, "a use that has no
demonstrable effect upon the potential market for, or the value
of, the copyrighted work need not be prohibited in order to
protect the author's incentive to create." 464 U.S. at 450. In
addition, the courts have required that the "copyright holder
establish[] with reasonable probability the existence of a
causal connection" -- "a cogent explanation of the logical link"
between the defendant's use and "the alleged harm to the
copyright." Harper & Row, 471 U.S. at 567; Triangle
Publications, Inc. v. Knight-Ridder Newspapers, Inc., supra, 626
F.2d at 1177.
The fourth statutory factor bears a close relationship
to the first factor's purpose and character inquiry. The less
commercial the direct use of the copy in question, the less
likely it is to compete with the original and unfairly deprive
the copyright owner of a sale. As this Court explained in
Consumers Union:
The theory behind the copyright laws is that
creation will be discouraged if demand can
be undercut by copiers. Where the copy does
not compete in any way with the original,
this concern is absent. (724 F.2d at 1051).
Thus, the same facts indicating that the purpose and
character of the use should tip in Texaco's favor, also show
that Dr. Chickering's use did not have a "demonstrable" or
"significant" effect on the value of the copyrights in question.
Because Dr. Chickering's copying served a different function
than the original subscription, was not sold in competition with
it, and was not used to avoid or reduce the number of
subscriptions Texaco needed, Academic Press was not unfairly
deprived of a sale.
Judge Leval acknowledged that Texaco is "substantially
correct" that, if it had to stop making photocopies, it "would
not replace those photocopies by purchasing additional subscrip-
tions or by purchasing back issues and back volumes" because
"[s]uch purchases would not serve the necessary ends." (A.
113). He further accepted Texaco's contention "that Academic
Press does not offer reprints on terms convenient to the needs
of Texaco's individual scientists as reprints may be purchased
only with a minimum order of 100 copies." (A. 113).
Nevertheless, he found this did not significantly undermine
plaintiffs' position because, "although I accept Texaco's
contentions that it would not replace its scientists' individual
copies by vastly increasing the number of subscriptions, the
evidence supports the inference that, if Texaco stopped
photocopying," it would increase the number of subscriptions
"somewhat," and (1) could obtain copies of articles from
document delivery services, (2) negotiate blanket licenses with
individual publishers, and (3) use a CCC license from which the
publishers would gain revenue. (A. 113-14) (emphasis added).
As demonstrated below, the record simply does not
support an inference that, if Texaco could not copy, it would
significantly increase its number of journal subscriptions. Nor
are document delivery services a realistic alternative to
photocopies. As for blanket licenses from individual publishers
and licenses from the CCC, Judge Leval's conclusions in this
regard turn fair use on its head by reversing the inquiry from
whether the "value of the original is sensibly diminished" by
the use in question (Folsom, 9 F. Cas. at 348 (emphasis added)),
into whether the value could be increased if the user were
required to pay for the use. Under that theory, all uses are
ipso facto unfair because the value of a copyrighted work can
always be increased by the copyright holder's willingness to
accept a fee for its use. Congress obviously did not intend the
fourth statutory factor to produce this absurd result and to
effectively eliminate "fair use."
1. Subscriptions and Other Alleged Substitutes
Judge Leval found that "Texaco's contentions are
substantially correct (although perhaps slightly overstated)"
that "complete issues (or, a fortiori, complete volumes) are far
too bulky to be kept in scientist's files or even used
conveniently," and that Texaco would not replace photocopies "by
purchasing numerous additional subscriptions." (A. 112-13). He
nevertheless concluded that, if Texaco stopped photocopying, it
would increase the number of subscriptions "somewhat." (A.
114). He speculated that "it seems likely that Texaco would add
at least a modest number of subscriptions to Catalysis" if
photocopying were barred. (A. 114). These speculations plainly
do not rise to the level of the "demonstrable" harm required by
the fourth factor. In any event, they are belied by the record.
To begin with, Judge Leval agreed that "what a
scientist needs is a photocopy, and that need would not be
served by additional subscriptions," thus "mak[ing] complete
issues of the journal impracticable." (A. 112-13) (emphasis in
original). Indeed, as Dr. Chickering testified, regardless of
the number of subscriptions Texaco had to Catalysis, he would
have copied the eight articles. That is because, as all of the
witnesses agreed, copies serve a different function than the
originals. (A. 457-58, 579-80, 593-94, 754, 788-92, 794, 798-
800, 953-56, 1403-04, 1407-09). The simple fact is that no
company or university would purchase separate subscriptions for
each researcher or professor. Nor would multiple subscriptions
serve the need for easy, quick reference to photocopies. As the
court stated in Williams & Wilkins:
It is . . . wholly unrealistic to expect
scientific personnel to subscribe regularly
to large numbers of journals which would
only occasionally contain articles of
interest to them. Nor will libraries
purchase extensive numbers of whole
subscriptions to all medical journals on the
chance that an indeterminate number of
articles in an indeterminate number of
issues will be requested at indeterminate
times. The result of a flat proscription on
library photocopying would be, we feel sure,
that medical and scientific personnel would
simply do without, and have to do without,
many of the articles they now desire, need,
and use in their work. (487 F.2d at 1357).
In short, if photocopying were prohibited, researchers would do
what Drs. Pollart and Elliott testified they did before the
advent of the modern photocopier -- they would either do without
or take detailed notes. (A. 740-41, 775-77, 783-84, 886, 957-
58). The contention that Texaco would substitute subscriptions
for photocopies makes as much sense as arguing that a law firm
or judge would purchase an additional copy of F.2d or F. Supp.
in order to obtain a "copy" of a single judicial opinion.
That researchers would merely forego if copying were
declared unlawful is confirmed by the fact that they never use
many of the articles they copy. Thus, although researchers copy
articles because they expect a need for them, if their work
fails to proceed as anticipated, or their interest lags or
changes, they may never have occasion to refer to the photocopy.
In fact, that is precisely what happened with five of the eight
articles here. In other words, the copies were not in lieu of
subscriptions or anything else. (A. 461, 464-65, 589-91, 596,
976-77).
The only basis Judge Leval cites to support his
"inference" is the assertion that Texaco increased the number of
subscriptions to Catalysis "in order to speed up the circulation
process" and that "scientists will make a photocopy of an
article in order not to slow down the circulation process." (A.
114). There is, however, no evidence that Texaco scientists --
let alone Dr. Chickering -- photocopied articles to speed up the
journal's circulation or that photocopying had that effect on
Catalysis. To the contrary, at the very time Dr. Chickering was
making the copies in question, Texaco increased its subscrip-
tions, the opposite of what Judge Leval's theory would predict.
The evidence -- none of which related to Catalysis -- at most
reflects the idiosyncratic and unique nature of researchers'
individual decisions to make a copy of a particular article.
Equally significant, the record is devoid of any evidence that
Texaco ever took the amount of photocopying into account in
determining the number of subscriptions to order.
As for the evidence of Academic Press, Mrs. Sasmor,
the person designated as most knowledgeable regarding its claim
of injury, could not name even one institution that had more
than three subscriptions and admitted that "[m]ost subscribers
get one copy" of Catalysis. (A. 1187). Academic Press has
never even bothered to ask any subscriber to any of its over 100
journals why it had cancelled or reduced the number of its
subscriptions and could supply no evidence that any subscriber
had ever substituted photocopies for subscriptions. (A. 1318-
18a). Not surprisingly, Judge Leval did not rely on any of the
speculative testimony of purported injury that plaintiffs
proffered -- testimony that was far more speculative than the
survey evidence of injury in Sony. See 464 U.S. at 423-24, 452-
55; 480 F. Supp. at 438-40, 451-52, 463-68.
Turning to the CCC, there is no evidence that annual
licensees purchase any fewer subscriptions than non-licensees,
which is what one would expect if, in fact, copying were a
substitute for subscriptions. Indeed, the very fact that the
relief the publishers seek in this lawsuit is to require Texaco
to pay licensing fees to the CCC, and not to be enjoined from
copying (A. 14), belies any claim of real world effect on
subscriptions from single copies. For if photocopying were
depriving publishers in the real world of significant subscrip-
tion revenues, they would seek an injunction to stop it and
would not license copying on the theory that subscriptions,
which are far more lucrative than royalty fees, would increase.
When all is said and done, there is no evidence that any person,
at any time, under any circumstances, ever purchased an
additional subscription in lieu of photocopying an article.
In all events, according to plaintiffs and Judge
Leval, the copyrighted "works" at issue are the eight articles.
In Consumers Union, however, this Court squarely rejected the
argument that the defendant's use of a copyrighted issue of Con-
sumer Reports magazine in its advertising would injure "the
value of possible future issues of Consumer Reports." (724 F.2d
at 1051) (emphasis in original). Judge Timbers explained that
"[t]his clearly does not involve the fourth factor which focuses
upon the effect of the use upon the potential market for or
value of the copyrighted work." Id. (emphasis in original).
Accord, Mathieson v. Associated Press, 23 U.S.P.Q.2d 1685, 1691
(S.D.N.Y. 1992) (injury had to be shown to the copyright in the
"particular photo" that was copied and not to related photo-
graphs) (emphasis in original).
Finally, as for Judge Leval's hypothesis that Texaco
might order photocopies from document delivery services
"promptly and inexpensively" (A. 113, 114), as Mrs. Sasmor
testified, the use of such services "would entail some delay" --
precisely the reason they are not a realistic substitute for
photocopying. Nor is there any evidence that any photocopy of
any of the eight articles was ever provided to any person by any
document delivery service, or that Academic Press has ever
earned any significant revenues from this source. (See A. 1300-
05, 1796, 4243-44). Indeed, in Williams & Wilkins, the Court
found that the publisher was not injured by the massive
photocopying there notwithstanding that it had "granted a
royalty-bearing license" to the very same document delivery
service that Academic Press uses. 203 Ct. Cl. at 171
36(a)(v). (A. 1300-05, 1796, 4243-44, 4247).
The ultimate irony is that the only hard evidence in
this record is that photocopying benefits publishers. See
Maxtone, 803 F.2d at 1264. As Professor Schwarz explained, he
uses photocopies of articles when writing and peer reviewing
articles for Catalysis and other journals. The copies make him
more productive and efficient and thus permit him to peer review
and write more articles than he otherwise could. That is,
photocopying increases the number of articles available to be
published, which, in turn, permits publishers to increase the
number of articles and journals they publish, which, to complete
the cycle, increases their profits. And that is exactly what
has happened with respect to Catalysis, with its profits and
number of published pages increasing steadily over the last
three decades as photocopying continued to occur. (A. 1390-91,
1399-1400, 1544).
2. The Irrelevance of Individual Blanket
Licenses and the CCC
Given the absence of demonstrable injury to the sale
of subscriptions, this case boils down to Judge Leval's
acceptance of plaintiffs' argument that their willingness to
accept money for otherwise "fair use" establishes harm under the
fourth factor. This conclusion is contrary to case law dating
back to Justice Story's holding in Folsom that the court must
examine "the degree in which the use may prejudice the sale, or
diminish the profits, or supersede the objects, of the original
work." 9 F. Cas. at 348. That is, the court must examine
whether the "value of the original is sensibly diminished." Id.
(emphasis added). See Sony, 464 U.S. at 441 n.21, 450, 456;
Williams v. Wilkins, 487 F.2d at 1357 n.19. In other words, the
fourth factor must focus on the question of whether, if the
practice in question were not enjoined, the value of the
original would be diminished, not on whether the value could be
increased by licensing the use in question.
Judge Leval ignored this principle and reversed the
inquiry from an examination of what the author actually lost
into an examination of what the author might conceivably gain if
he had the power of a federal court behind him. As he put it,
the issue was whether "the copyright owner would be receiving
significantly higher revenue but for the defendant's
uncompensated copying." (A. 116). At the heart of the decision
below is the district court's holding that since, in its view,
it is no longer "absurdly inefficient" to obtain licenses to
make single copies because some publishers have created the CCC,
it is no longer a fair use to make single copies of those
publishers' works. (See A. 127, 131).
Judge Leval's radical theory of using the willingness
to license as a bar to fair use has been rejected by the only
two courts that have squarely addressed it. In Williams &
Wilkins, the Court turned aside the argument as circular:
It is wrong to measure the detriment to
plaintiff by loss of presumed royalty income
-- a standard which necessarily assumes that
plaintiff had a right to issue licenses.
That would be true, of course, only if it
were first decided that the defendant's
practices did not constitute "fair use." In
determining whether the company has been
sufficiently hurt to cause these practices
to become "unfair," one cannot assume at the
start the merit of the plaintiff's position,
i.e., that plaintiff had the right to
license. That conclusion results only if it
is first determined that the photocopying is
"unfair." (487 F.2d at 1357 n.19).
Similarly, although ignored by Judge Leval, the
Supreme Court in Sony refused to accept the dissent's contention
that video tape recorders "created a potential market for . . .
copyrighted programs," that "[t]hat market consists of those
persons who find it impossible or inconvenient to watch the
programs at the time they are broadcast," that "[t]hese persons
are willing to pay for the privilege of watching copyrighted
works at their convenience," and that, as a result, time-
shifting has a "substantial adverse effect upon the 'potential
market for' the . . . copyrighted works." Compare 464 U.S. at
441 n.21 with id. at 485-86 (Blackmun, J., dissenting) (emphasis
added). That is because, as Justice Stevens explained, the
plaintiffs' argument "merely indicates that [they] . . . would
be willing to license their claimed monopoly interest . . . to
Sony in return for a royalty." Id. at 441 n.21.
That a copyright owner's willingness to accept license
fees does not transform an otherwise fair use into infringement
is borne out by the effect that such a rule would have on the
fourth factor. Plainly, the "injury" to Academic Press from
Dr. Chickering's failure to pay the CCC fee for copying an
article is identical to the "injury" that Academic Press would
suffer no matter what the reason for making the copy. Thus, it
would "lose" the same fee if a researcher at a non-profit
foundation or university made the copy or, for that matter, if a
member of this Court made a copy in preparation for hearing this
appeal. Indeed, under Judge Leval's analysis, even copying one
page of a multi-page article would tip the scales on the fourth
factor since the CCC demands payment for copying of single pages
and, in Judge Leval's view, "injury" should be measured by
totalling all fees lost instead of just the fee lost on the
copyrighted work sued upon. (See A. 115, 3703, 3707-08). The
fourth factor requires examination of the potential market "for
the work," not the potential market for licenses for fair
use. As this Court recently explained in Wright, the
plaintiff's claim that the defendant's "failure to get
plaintiff's permission to use" the copyrighted work made the use
unfair was "meritless." 953 F.2d at 737. For as Judge Walker
held below in Wright, the claim "only begs the question: if
[the defendant's] paraphrased use of the letters is fair, then
permission was not necessary." 748 F. Supp. at 109. Accord,
Mathieson v. Associated Press, supra, 23 U.S.P.Q.2d at 1688.
Nor does Judge Leval's assertion that the CCC
allegedly provides a "convenient, reasonable licensing system"
for the payment of a fee (A. 129) -- which it demonstrably does
not (see pp. ___, infra, pp. __, supra) -- make plaintiffs'
offer to accept money relevant to a fair use analysis. The
fact that it is convenient to pay a plaintiff does not mean the
plaintiff is entitled to be paid. Indeed, the same argument was
made and rejected in Sony and could be made with respect to
every other fair use. For example, one could argue that it
would be convenient for a biographer to pay his subject for
permission to quote from his letters, for a book reviewer to pay
the author for permission to quote from his work, or for a
parodist to pay for permission to parody, and therefore it would
not be fair use if payment were not made. That is not the law,
any more than counsel could assert that he is entitled to
receive $1.00 for everyone's attending the argument on the
appeal of this case because, by holding his hat at the door, he
makes it easy and convenient to pay him the fee. In short, fair
use is determined by application of the four-factor test set
forth in 107, not by whether the plaintiff is willing to offer
a "convenient" license and take Texaco's money.
Moreover, even if the gain to plaintiffs from CCC-
generated revenues were relevant to the fourth factor, the CCC
is, in fact, unfair to users. Under the AAS, publishers indis-
putably charge users for articles in which they do not have
rights and for which they are thus not entitled to fees. (See
p. ___, supra). By permitting publishers to leverage their
ownership of copyright in some articles into a basis for
collecting photocopy fees for articles in which they have no
rights, the AAS plainly constitutes copyright misuse. See,
e.g., Lasercomb Am., Inc. v. Reynolds, 911 F.2d 970, 976-77 (4th
Cir. 1990). In all events, there is no evidence in this record
that such loss with respect to the eight articles (see pp. ____,
supra) was anything more than de minimis. See, e.g., Sinai v.
Bureau of Automotive Repair, No. 92-0274-VEW, slip op. at 8
(N.D. Cal. Dec. 21, 1992) (distribution of copies of copyrighted
chart to "limited group" at several locations "has only a slight
effect on the market" for the work).
Aside from the circularity of plaintiffs' argument,
their contention must be rejected because it would require this
Court to make a quintessentially legislative judgment. As
Justice Stevens explained in Sony, citing Williams & Wilkins
with approval, "[t]he judiciary's reluctance to expand the
protections afforded by the copyright without explicit
legislative guidance is a recurring theme" in the history of
American copyright. 464 U.S. at 431. Thus, the Court has left
it to Congress to make the necessary policy choices, which
Congress has done, for example, by expanding the law to apply to
cable retransmission (17 U.S.C. 111) and by not prohibiting
home videotaping. Compare Fortnightly Corp. v. United Artists
Television, Inc., 392 U.S. 390, 402 (1968); Teleprompter Corp.
v. CBS, Inc., 415 U.S. 394, 405 (1974).
The problems that would be presented if Dr. Chicker-
ing's copying were declared unlawful confirm the legislative
nature of the radical change plaintiffs seek here. To begin
with, there is the question of "practical unenforceability" -- a
concern that the Supreme Court has voiced in the past in
deciding not to expand the scope of copyright. Twentieth
Century Music Corp. v. Aiken, 422 U.S. 151, 162 (1975). Should
there be copyright police to search corporate offices (or homes)
in attempts to find unlawful copying, or should publishers be
given the right to do so? How should prices be set? Should
they be left to the sole discretion of publishers to set prices
in their economic self-interest without any government
supervision? Alternatively, should courts oversee pricing to
insure that, in Judge Leval's word, the prices are "reasonable"?
(A. 112). How should a court determine what is a "reasonable"
price, particularly given the Supreme Court's repeated warnings
that the setting of a "reasonable" price is precisely the type
of decision that only a legislature may make? Surely, the
courts should no more "set sail on a sea of doubt" in setting
"reasonable" photocopy prices under the copyright laws than they
should under the antitrust laws. United States v. Addyston Pipe
& Steel Co., 85 F. 271, 284 (6th Cir. 1898), aff'd, 175 U.S. 211
(1899).
The bottom line is that whether to require payment for
copying and, if so, whether to base the price on payments per
page, per article, or per subscription, or to tax photocopiers
or photocopy paper, or whether to charge corporations,
universities, libraries and consumers the same prices, are the
stuff of politics and elections, not ad hoc judicial rulings
that have "no guide but the Court's own discretion." Baldwin v.
Missouri, 281 U.S. 586, 595 (1930) (Holmes, J., dissenting).
(Compare Public Law 102-563 (royalty payments required for sale
of digital audio recorders)). As the courts held in Sony and
Williams & Wilkins, it is up to Congress -- not the courts or
private parties -- to make the "difficult balance between the
interests of authors . . . in the control and exploitation of
their writings and . . . society's competing interest in the
free flow of ideas, information, and commerce on the other
hand." Sony, 464 U.S. at 429.
E. The Balancing of the Four Statutory Factors
Demonstrates that Dr. Chickering's Use Was Fair
As generally noted, although Congress specified four
factors to be balanced in determining if a defendant's use is
protected by the fair use doctrine, it failed to provide any
explicit guidance as to how the factors should be balanced. We
do know, however, that "[t]he doctrine offers a means of balanc-
ing the exclusive right of a copyright holder with the public's
interest in dissemination of information." Meeropol v. Nizer,
560 F.2d 1061, 1068 (2d Cir. 1977), cert. denied, 434 U.S. 1013
(1978); see Consumers Union, 724 F.2d at 1048. We also know
that a copyright, unlike a patent, does not give the owner an
absolute right to exclude others from use of the work. Compare
17 U.S.C. 106 with 35 U.S.C. 271. Rather, a copyright gives
the owner the right to prohibit only certain specified uses; and
one of the rights explicitly not given to the owner is the right
to restrict fair use. As this Court put it in Rosemont:
The fundamental justification for the [fair
use] privilege lies in the constitutional
purpose in granting copyright protection in
the first instance, to wit, "To Promote the
Progress of Science and the Useful Arts."
. . . To serve that purpose, "courts in
passing upon particular claims of infringe-
ment must occasionally subordinate the
copyright holder's interest in a maximum
financial return to the greater public
interest in the development of art, science
and industry." (366 F.2d at 303) (quoting
Berlin v. E.C. Publications, Inc., 329 F.2d
541, 544 (2d Cir. 1964)).
See Association of Am. Medical Colleges v. Cuomo, 928 F.2d 519,
525-26 (2d Cir.), cert. denied, 112 S. Ct. 184 (1991).
In short, the trial evidence demonstrates convincingly
that the status quo provides ample incentives for the creation
of scientific articles, and that use of single photocopies, far
from eliminating those incentives, facilitates progress in
scientific research and writing to the ultimate benefit of the
public.
CONCLUSION
For all of the foregoing reasons, the Order below
should be reversed and remanded with directions that the
District Court determine plaintiffs' proofs of claim in Texaco's
favor.
Dated: March 4, 1993
New York, New York
Respectfully submitted,
KAYE, SCHOLER, FIERMAN,
HAYS & HANDLER
425 Park Avenue
Of Counsel: New York, New York 10022
(212) 836-8000
Milton J. Schubin
Thomas A. Smart JOSEPH P. FOLEY
Michael Malina Texaco Inc.
Richard A. De Sevo 2000 Westchester Avenue
White Plains, New York 10650
(914) 253-4000
Attorneys for Appellant
Texaco Inc.
STATUTORY ADDENDUM
Section 107 of the Copyright Act (17 U.S.C. 107)
The full text of Section 107 of the Copyright Act,
107, with the December 1, 1990 and October 24, 1992 (Public Law
102-492) amendments printed in italics, is as follows:
Notwithstanding the provisions of
sections 106 and 106A, the fair use of a
copyrighted work, including such use by
reproduction in copies or phonorecords or by
any other means specified by that section,
for purposes such as criticism, comment,
news reporting, teaching (including multiple
copies for classroom use), scholarship, or
research, is not an infringement of
copyright. In determining whether the use
made of a work in any particular case is a
fair use the factors to be considered shall
include --
(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 fact that a work is unpublished shall
not itself bar a finding of fair use if such
finding is made upon consideration of all
the above factors.
Section 108 of the Copyright Act (17 U.S.C. 108)
The full text of Section 108 of the Copyright Act,
with the material repealed by the June 26, 1992 amendment
(Public Law 102-307), printed in italics, is as follows:
(a) Notwithstanding the provisions of
section 106, it is not an infringement of
copyright for a library or archives, or any
of its employees acting within the scope of
their employment, to reproduce no more than
one copy or phonorecord of a work, or to
distribute such copy or phonorecord, under
the conditions specified by this section, if
--
(1) the reproduction or
distribution is made without any
purpose of direct or indirect
commercial advantage;
(2) the collections of the library
or archives are (i) open to the public,
or (ii) available not only to
researchers affiliated with the library
or archives or with the institution of
which it is a part, but also to other
persons doing research in a specialized
field; and
(3) the reproduction or
distribution of the work includes a
notice of copyright.
(b) The rights of reproduction and
distribution under this section apply to a
copy or phonorecord of an unpublished work
duplicated in facsimile form solely for
purposes of preservation and security or for
deposit for research use in another library
or archives of the type described by clause
(2) of subsection (a), if the copy or phono-
record reproduced is currently in the
collections of the library or archives.
(c) The right of reproduction under this
section applies to a copy or phonorecord of
a published work duplicated in facsimile
form solely for the purpose of replacement
of a copy or phonorecord that is damaged,
deteriorating, lost, or stolen, if the
library or archives has, after a reasonable
effort, determined that an unused
replacement cannot be obtained at a fair
price.
(d) The rights of reproduction and
distribution under this section apply to a
copy, made from the collection of a library
or archives where the user makes his or her
request or from that of another library or
archives, of no more than one article or
other contribution to a copyrighted collec-
tion or periodical issue, or to a copy or
phonorecord of a small part of any other
copyrighted work, if --
(1) the copy or phonorecord becomes
the property of the user, and the
library or archives has had no notice
that the copy or phonorecord would be
used for any purpose other than private
study, scholarship, or research; and
(2) the library or archives
displays prominently, at the place
where orders are accepted, and includes
on its order form, a warning of
copyright in accordance with
requirements that the Register of
Copyrights shall prescribe by
regulation.
(e) The rights of reproduction and
distribution under this section apply to the
entire work, or to a substantial part of it,
made from the collection of a library or
archives where the user makes his or her
request or from that of another library or
archives, if the library or archives has
first determined, on the basis of a
reasonable investigation, that a copy or
phonorecord of the copyrighted work cannot
be obtained at a fair price, if --
(1) the copy or phonorecord becomes
the property of the user, and the
library or archives has had no notice
that the copy or phonorecord would be
used for any purpose other than private
study, scholarship, or research; and
(2) the library or archives
displays prominently, at the place
where orders are accepted, and includes
on its order form, a warning of
copyright in accordance with
requirements that the Register of
Copyrights shall prescribe by
regulation.
(f) Nothing in this section --
(1) shall be construed to impose
liability for copyright infringement
upon a library or archives or its
employees for the unsupervised use of
reproducing equipment located on its
premises: Provided, That such equipment
displays a notice that the making of a
copy may be subject to the copyright
law;
(2) excuses a person who uses such
reproducing equipment or who requests a
copy or phonorecord under subsection
(d) from liability for copyright
infringement for any such act, or for
any later use of such copy or
phonorecord, if it exceeds fair use as
provided by section 107;
(3) shall be construed to limit the
reproduction and distribution by
lending of a limited number of copies
and excerpts by a library or archives
of an audiovisual news program, subject
to clauses (1), (2), and (3) of
subsection (a); or
(4) in any way affects the right of
fair use as provided by section 107, or
any contractual obligations assumed at
any time by the library or archives
when it obtained a copy or phonorecord
of a work in its collections.
(g) The rights of reproduction and
distribution under this section extend to
the isolated and unrelated reproduction or
distribution of a single copy or phonorecord
of the same material on separate occasions,
but do not extend to cases where the library
or archives, or its employee --
(1) is aware or has substantial
reason to believe that it is engaging
in the related or concerted
reproduction or distribution of
multiple copies or phonorecords of the
same material, whether made on one
occasion or over a period of time, and
whether intended for aggregate use by
one or more individuals or for separate
use by the individual members of a
group; or
(2) engages in the systematic
reproduction or distribution of single
or multiple copies or phonorecords of
material described in subsection (d):
Provided, That nothing in this clause
prevents a library or archives from
participating in interlibrary
arrangements that do not have, as their
purpose or effect, that the library or
archives receiving such copies or
phonorecords for distribution does so
in such aggregate quantities as to
substitute for a subscription to or
purchase of such work.
(h) The rights of reproduction and
distribution under this section do not apply
to a musical work, a pictorial, graphic or
sculptural work, or a motion picture or
other audiovisual work other than an
audiovisual work dealing with news, except
that no such limitation shall apply with
respect to rights granted by subsections (b)
and (c), or with respect to pictorial or
graphic works published as illustrations,
diagrams, or similar adjuncts to works of
which copies are reproduced or distributed
in accordance with subsections (d) and (e).
(i) Five years from the effective date of
this Act, and at five-year intervals there-
after, the Register of Copyrights, after
consulting with representatives of authors,
book and periodical publishers, and other
owners of copyrighted materials, and with
representatives of library users and librar-
ians, shall submit to the Congress a report
setting forth the extent to which this
section has achieved the intended statutory
balancing of the rights of creators, and the
needs of users. The report should also
describe any problems that may have arisen,
and present legislative or other recommenda-
tions, if warranted.
FOOTNOTES
1. There is no evidence that Texaco ever copied the same
article more than once; to the contrary, the clerk in
Texaco's Beacon library responsible for responding to
photocopying requests testified that she was never asked to
make more than one copy of any article. (A. 447).
2. There is no evidentiary basis for Judge Leval's statement
that publication of scientific journals "requires a large
investment and a long period of losses." (A. 135). In
fact, the record contains no investment data with respect
to Catalysis (or any other journal); and, in one annual
report, Harcourt reported that "all" of Academic Press'
scientific and medical journals were profitable. Moreover,
not only is the direct cost of producing Catalysis
minuscule compared to the revenues it generates, but in its
50-year history, Academic Press has never stopped
publishing a journal
for economic reasons. (A. 1077-78, 1124-29, 3857-60, 4245-
46, 4265-66 (emphasis added)).
3. The circulation of scientific and technical journals and
other copyrighted periodicals is common not only in the
scientific community, but in other industries as well,
including those of the plaintiffs and other publishing
companies. (A. 739, 751, 775-76, 877-81, 890-95, 1267,
1410-12, 1416, 3863-64).
4. A. 474 (16 pages); A. 490 (4 pages); A. 499 (7 pages);
A. 507 (2+ pages); A. 494 (5 pages); A. 510 (8 pages);
A. 518 (11 pages); A. 530 (6 pages).
5. It is only by examining the articles that one can
appreciate their technical character and the benefit a
photocopy provides. We therefore urge the Court to examine
the copies of the articles in the Joint Appendix. (A. 474-
535).
6. See, e.g., A. 246-48b, 304, 311-17, 322-30, 333-35, 342-43,
346-47, 355-56, 435-38, 629-37, 866, 872-76, 881a-84, 888-
89, 960-61, 1158-60, 1162-68, 1170-72, 1307-09, 1413-15,
1426-27, 1430-32, 2021, 3696, 3867, 3887-4227, Texaco Trial
Exhibit ("TEX") 126, TEX-300, TEX-302 to TEX-326.
7. While the district court side-stepped the issue (A. 138
n.26), since the plaintiff has the burden of proving
infringement, and since 107 provides that a fair use is
not an infringement, it necessarily follows that the
plaintiff has the burden of proving that the defendant's
use was not fair. See Sony, 464 U.S. at 447; New Era, 904
F.2d at 155.
8. The district court ignored this legislative history in con-
cluding that Dr. Chickering's copying was for a direct or
indirect commercial advantage. (A. 136). Judge Leval also
assumed incorrectly that others at Texaco made copies of
the same articles. (A. 137). In fact, after thorough
discovery and the depositions of numerous scientists, the
record evidence reveals no instance of the same article
having been copied twice.
9. In 1968, the NLM provided 120,000 articles to "private or
commercial organizations, particularly drug companies."
487 F.2d at 1349. In 1970, the NIH library filled 85,744
requests for journal articles, consisting of about 930,000
pages. Id. at 1348.
10. Both the Ninth and Federal Circuits recently upheld as fair
uses non-transformative intermediate copying of computer
programs by for-profit companies where the relationship of
the copy to the ultimate profit-making activity was
derivative or indirect and the copy itself was not sold or
redistributed in competition with the original. Sega
Enters. Ltd., 977 F.2d 1510; Atari Games Corp., 975 F.2d
832. That is because the non-transformative use simply did
not deprive plaintiffs of a sale.
11. Accord, Rosemont Enters., Inc. v. Random House, Inc., 366
F.2d 303, 307 (2d Cir. 1966), cert. denied, 385 U.S. 1009
(1967); Triangle Publications, Inc. v. Knight-Ridder
Newspapers, Inc., 626 F.2d 1171, 1176 (5th Cir. 1980);
Bruzzone v. Miller Brewing Co., 202 U.S.P.Q. 809, 811 (N.D.
Cal. 1979); Holdredge v. Knight Publishing Corp., 214 F.
Supp. 921, 924 (S.D. Cal. 1963); Shapiro, Bernstein & Co.
v. P.F. Collier & Son Co., 26 U.S.P.Q. 40, 42 (S.D.N.Y.
1954).
12. A. Weil, American Copyright Law 429-30 (1917); R.C. DeWolf,
An Outline of Copyright Law 143 (1925); Ball, The Law of
Copyright & Literary Property 260 (1944); M. Nicholson, A
Manual of Copyright Practice for Writers, Publishers and
Agents 91 (2d ed. 1970); Weinreb, "Fair's Fair: A Comment
on the Fair Use Doctrine," 103 Harv. L. Rev. 1137, 1140
(1990).
13. By contrast, in Williams & Wilkins, all but two of the
articles were 10 pages or longer, with the longest four
articles comprising 29, 33, 38 and 57 pages, respectively.
203 Ct. Cl. 150.
14. See Folsom, 9 F. Cas. at 345, 348-49 (fairness of copying
100% of 319 of President Washington's letters analyzed by
treating all eleven volumes of Washington's letters as one
work, rather than viewing each letter separately). See
also, e.g., Triangle-Publications, Inc. v. Knight-Ridder
Newspapers, Inc., 626 F.2d 1171, 1177 & n.15 (5th Cir.
1980); Wojnarowicz v. American Family Ass'n, 745 F. Supp.
130, 144-45 & n.11, 134 (S.D.N.Y. 1990); Guccione v. Flynt,
1984 Copr. L. Dec. 25,669, pp. 19,000-01 (S.D.N.Y. 1984);
Mathieson v. Associated Press, 23 U.S.P.Q.2d 1685, 1690
(S.D.N.Y. 1992). As for Consumers Union, in holding that
the defendant's use of a portion of an article from
Consumer Reports magazine was fair, the Court did not dis-
cuss the appropriate definition of the "work" when
analyzing the extent of the defendant's use when it
compared the amount taken to the length of the article
instead of to the magazine as a whole. 724 F.2d at 1050.
15. In fact, court decisions reported by West Publishing
Company are copyrighted. See West Pub. Co. v. Mead Data
Central, Inc., 799 F.2d 1219 (8th Cir. 1986), cert. denied,
479 U.S. 1070 (1987).
16. The closest testimony was that of two of the ten
researchers who were deposed, who stated that they "may" or
"might" copy an article in order to move an issue along.
(A. 367, 667-68).
17. That the testimony of plaintiffs' witnesses was based on
nothing but speculation, vague hearsay and "feel[ings]," is
nowhere better summed up than by plaintiffs' improper
reliance on the residual hearsay exception to support its
admission into evidence. (Compare A. 4247, 4272, 4291-94,
768-74, 777-87, 793a-97, 1187-89, 1192-1201, 1211-17,
1229-30, 1237-38, 1316-18, 1320-25, 1327-28 with Parsons v.
Honeywell, Inc., 929 F.2d 901, 907 (2d Cir. 1991)). But
even if the testimony were admissible, these "self-serving
statements" cannot support any theory of injury, let alone
establish the requisite proximate causation. See, e.g.,
Argus, Inc. v. Eastman Kodak Co., 801 F.2d 38, 42, 45-46
(2d Cir. 1986), cert. denied, 479 U.S. 1088 (1987); Stevens
Linen Assocs., Inc. v. Mastercraft Corp., 656 F.2d 11, 14
(2d Cir. 1981); MCI Commun. v. AT&T Co., 708 F.2d 1081,
1161-63 (7th Cir.), cert. denied, 464 U.S. 891 (1983).
18. For the same reason, Judge Leval's reference (A. 115) to
the practices of publishers other than Academic Press is
irrelevant to the fourth factor, although we note that
publishers have prospered during the age of photocopying,
the opposite of what one would expect under plaintiffs'
theory. (A. 3688, 3692-95, 3777-78).
19. Thus, contrary to Judge Leval's attempt to distinguish
Williams & Wilkins, the Court of Claims did not base its
holding "on the absence of a convenient, reasonable
licensing system." (A. 129).
20. Plaintiffs cannot get around this requirement by relying on
the law that injury can be shown by "harm to the market for
derivative works" (Harper & Row, 471 U.S. at 568; Maxtone,
803 F.2d at 1264), since no derivative work is at issue.
Dr. Chickering made a copy of eight articles; he did not
create and market another work based upon the articles,
such as a translation, dramatization or any of the other
examples set forth in Section 101's definition of
derivative work. Compare Stewart v. Abend, 495 U.S. 207,
238 (1990).
21. Judge Leval also opined that, if copying were prohibited,
Texaco would negotiate "blanket licenses with individual
publishers." (A. 113). But there is no evidence Academic
Press ever entered into any blanket advance permission
agreement with anyone or was ever willing to do so. (See
A. 1298-99).
22. E.g., Catalano, Inc. v. Target Sales Inc., 446 U.S. 643,
647 (1980); United States v. Trenton Potteries Co., 273
U.S. 392, 397-98 (1927).
23. In this regard, it is not without significance that in the
original Copyright Act Congress did not adopt the Statute
of Anne's provision that a purchaser of a copyrighted work
could petition the Lord Archbishop of Canterbury or other
government official to "Limit and Settle the Price . . . as
to them shall seem Just and Reasonable." Compare 8 Anne c.
19 (1710), reprinted in H. Ransom, The First Copyright
Statute 113-14 (1956), with Act of May 31, 1790, 1st Cong.
2d Sess., 1 Stat. 124 (1790).
.
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