Understand how your organization should approach copyrighted content
“Fair Use” is probably the most misunderstood aspect of copyright law. When threatened with a cease and desist letter or a copyright lawsuit, people are quick to claim fair use. Myths, misunderstandings and misinformation are rampant on this subject, but here are some of the most common ones:
It’s okay to use a copyrighted work if you only use a little bit (e.g. 10 seconds of a song or one paragraph of a book)
It’s okay to use a copyrighted work for a charitable purpose
It’s okay to use a copyrighted work as long as you aren’t making any money
It’s okay to use a copyrighted work if you use a disclaimer (e.g. “I do not own this work”)
It’s okay to use a copyrighted work for a public event
Nope, nope, and nope.
In this blog post, I’m breaking down the truth about Fair Use and how to do it the right way.
What not to do
A recent court decision illustrates what courts do not consider to be fair use. The case involved Internet Archive (IA), a California nonprofit. You may not recognize the name, but you have probably used their well-known tool, Wayback Machine. In 2022, IA reportedly did around $30 million in revenue.
In 2023, IA was sued by four of the top book publishers in the US over their Free Digital Library, which contains copyrighted books. This lawsuit illustrates the limitations of fair use.
What Happened?
According to the court opinion, IA launched its free digital library back in 2011. IA would acquire books, scan them, and upload them to its website. It then would lend the books to users, similar to the way in which libraries lend ebooks. That is, IA would only allow digital checkouts of a given book that were equal to the actual number of physical copies that IA owned. In 2018, IA expanded its catalog of available books by partnering with other libraries.
All seemed well until the pandemic hit in 2020. During the pandemic, IA lifted its one-to-one checkout restriction and allowed its digitized books to be checked out by up to 10,000 users at a time. Book publishing companies quickly sued. IA tried to argue that its actions were justified under fair use, but ultimately lost in court. They appealed… and lost again.
What is Fair Use?
Under copyright law, a copyright owner is the only one allowed to copy, distribute, perform, display or create derivative works of their work. “Fair use” is an exception to the rule that is meant to preserve free speech rights under the First Amendment. That being said, relying on fair use is very risky. Every fair use claim is evaluated on a case-by-case basis by the courts, which means that almost no situation is a slam dunk.
Courts use four factors when considering a fair use claim. Courts also have discretion to decide which factors matter more than others, depending on the facts of each case:
How was the copyrighted work used?
Was the use transformational?
Was the use for commercial purposes or nonprofit educational purposes?
What is the nature of the copyrighted work? Is it the type of work that is entitled to strong copyright protection?
How substantial and/or significant was the copying?
How did the copying affect the potential market for, or value of, the copyrighted work?
Applying these four factors to the IA case, you can see why the court decided the way it did. IA is a nonprofit and the use was arguably for nonprofit educational purposes, so factor 1b is in their favor. However, there is nothing “transformational” about scanning an exact copy of a book (factor 1a), books are exactly the type of work that copyright law was originally created to protect (factor 2), entire books were copied verbatim (factor 3), and making a book available for free likely affects people’s willingness to buy the book (factor 4).
The court weighed the factors, and ruled that this was not fair use.
What would count as fair use?
90% of the time, there is only one correct way to use a copyrighted work, and that is to get permission from the owner (preferably in writing). Copyright covers a ton of different types of content, from music to photography, graphics, animations, illustrations, podcasts, videos, movies, books, speeches, poems, software, and more. Fair use is always a risky strategy because it is decided case-by-case by the court in each lawsuit.
Before relying on fair use, get a good intellectual property lawyer who can frankly advise you on dos, don’ts and how to keep your organization in the safe zone.
This case is Hachette Book Grp., Inc. v. Internet Archive, No. 23-1260, 2024 WL 4031751 (2d Cir. Sept. 4, 2024)
Thanks for reading the Bevel Law Blog! While this information is hopefully helpful to you, nothing in this blog is intended to be legal advice. Always consult a lawyer before making any legal decisions based on topics in this blog.
Ready to secure your intellectual property? Book a call today at bevellaw.com/call.
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