Business people may hear the phrase “fair use” quite often in the future because of the electronic media explosion. If a business engages in diverse occupations, such as but not exclusively, writing, media reporting, publishing, computer programming or visual arts, the business owners should be aware of the convoluted contours of this slippery term. For example, in the United States the legal requirements of fair use for trademarks are completely different from fair use of works containing copyright. For trademarks and service marks, the primary question is generally whether a registered logo is being used to (i) merely describe an item, or (ii) ‘glom onto’ and financially benefit from the good will of the true mark owner. On the other hand, the United States copyright fair use doctrine provides criteria by which a person or entity who can legitimately copy a portion of a work under certain exceptions to infringement.
To qualify for the fair use defense to copyright infringement in the United States, one must look to judicial decisions for (i) how each kind of copyrightable work can be copied in part without liability and (ii) how the criteria vary in the federal appellate courts. Nevertheless, most courts look at: (i) transformation of the portion of the copied work; (ii) quality and quantity of the work copied and (iii) the financial benefit to the copier and financial detriment to the author and owner of the work. In this context, ‘transformation’ means that the portion of the work was so substantially changed by the subsequent user that the original work was no longer apparent.
In the media business a recent case from a federal New York court is The Associated Press v Meltwater U.S. Holdings, Inc. [“AP” and “Meltwater” respectively]. In this decision the facts were that AP (i) is owned by well over thousand newspaper in the United States and (ii) produces between 1,000 and 2,000 news articles daily. Each of AP’s thirty-three articles at issue in the lawsuit was written by AP reporters. Furthermore, AP’s license agreements with clients for its news content comprise more than $ 75 million of AP annual gross revenue. Meltwater markets its services to communications and public relations professionals (i) to assist in locating “identification of their business in media, press releases and research” and (ii) for information on general news developments. In this particular instance Meltwater’s excerpts of each of AP’s thirty-three articles were sent to Meltwater’s customers. These excerpts were gleaned from Meltwater’s searches of AP’s licensee’s sites and there were at least 22,297 excerpts from AP’s registered articles.
Meltwater contended that it had transformed the AP material in its written excerpts, but the court concluded to the contrary on this point. In fact the court found that Meltwater had copied many excerpts and lead lines from AP’s articles verbatim. The court also concluded that permitting Meltwater to avoid paying AP’s licensing fee provided (i) an unfair financial advantage over competitors that paid licensing fees and (ii) AP was financially disadvantaged by losing licensing fees. The court further noted that although Meltwater contended that its customers proceeded to access the bona fide full text of AP’s articles, there was actually no evidence for this position. Based in part upon this lack of evidence, the court concluded that Meltwater was merely a substitute for news sites licensed or operated by AP. The court also rejected Meltwater’s position that the entire reproduction of a copyrighted work is fair use if a search engine (such as Meltwater, according to Meltwater’s position) provides a reprinted version.
The court finally concluded that the amount and portions of AP’s work copied by Meltwater, did not qualify qualitatively and quantitatively for the fair use defense. The court then held that Meltwater had no legitimate fair use defense whatsoever. Because this case was high stakes financially for the parties, it would be interesting if (i) it is appealed and (ii) on what basis.
© 2013 Adrienne B. Naumann
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