Transformation’ of Fair Use Back to Its Section 107 RootsJanuary 20, 2015 – New York Law Journal
The U.S. Court of Appeals for the Seventh Circuit recently put the brakes on more than two decades of widespread judicial application of the "transformative use" test in assessing a fair use defense to infringement under §107 of the Copyright Act.1
In Kienitz v. Sconnie Nation,2 the court expressly rejected the concept of transformative use and, in particular, the Second Circuit Court of Appeal's heavy reliance on that doctrine in Cariou v. Prince.3 This clash was perhaps inevitable, seeing that "transformative use" theory has been described as "a often highly contentious topic."4 But some history is needed to understand the tension between the Seventh and Second Circuits, as well as various other circuit courts that have embraced transformative use doctrine.
The concept of "transformative use" dates back to a seminal 1990 Harvard Law Review commentary entitled "Toward a Fair Use Standard"5 by current Second Circuit Judge Pierre N. Leval, who laid out a proposed analytical approach to assessing fair use. Frustrated by the absence of specific guidance from Congress when it enacted §107, and a lack of consistency and agreement among judges in their respective approaches to fair use, Leval postured that while no simple definition of fair use can be fashioned … recognition of the function of fair use as integral to copyright's objectives leads to a coherent and useful set of principles. Briefly stated, the use must be of a character that serves the copyright objective of stimulating productive thought and public instruction without excessively diminishing the incentives for creativity. One must assess each of the issues that arise in considering a fair use defense in the light of the governing purpose of copyright law.
Leval emphasized that the focus of the first §107 factor—"the purpose and character of the use"—must be on "the question of justification," that is, whether the use fulfills copyright law's objective "to stimulate creativity for public illumination."6 A court must, however, also examine "how powerful, or persuasive, is the justification" and weigh the strength of the justification "against factors favoring the copyright owner."7 Leval proposed that the type of "justification" supporting fair use "turns primarily on whether, and to what extent, the challenged use is transformative. The use must be productive and must employ the quoted matter in a different manner or for a different purpose from the original."8 Merely superseding the object of the original protected work, such as repackaging or republishing it, however, "is unlikely to pass the test."9 But where a "secondary use adds value to the original—if the quoted matter is used as raw material, transformed in the creation of new information, new aesthetics, new insights and understandings," Leval viewed this as "the very type of activity that the fair use doctrine intends to protect for the enrichment of society … ."; nevertheless, he cautioned that transformative uses under the first §107 factor are "weakened to the extent that [the] takings exceed the asserted justification."10 In giving examples of lawful "transformative" uses, Leval cited criticism, "exposing the character of the original author, proving a fact, or summarizing an idea argued in the original in order to defend or rebut it," as well as "parody, symbolism, aesthetic declarations, and innumerable other uses."11
The potential to exceed an "asserted justification" manifests itself in the creation of derivative works, which is one of the exclusive rights reserved to a copyright owner under §106 of the Copyright Act. Leval emphasized that merely having a transformative objective does not guaranty success in claiming fair use because the transformative justification "must overcome factors favoring the copyright owner"—i.e., the other three statutory fair use factors. Thus, one who creates a derivative work "may claim absolute entitlement because of the transformation," but "excessive takings may impinge on creative incentives," and a secondary user's claim under the first fair use factor is weakened "to the extent that her takings exceed the asserted justification."12
Notably, the only place in the Copyright Act in which the word "transform" appears is in its definition of a derivative work as "a work based upon one or more preexisting works, such as … art reproduction, abridgment, condensation, or any other form in which a work may be recast, transformed, or adapted. A work consisting of editorial revisions, annotations, elaborations, or other modifications, which, as a whole, represent an original work of authorship, is a 'derivative work'."13 While the exclusive right to create derivative works is reserved to the copyright owner and such works may "transform" the original, some unauthorized derivative works may also be protected by the fair use defense. Thus, while the right to authorize the creation of derivative works is exclusively reserved to the copyright owner, some derivative works that are created without such authority but are both transformative and justified under all four of the fair use factors are lawful.
Applying the Doctrine
The U.S. Supreme Court picked up on Leval's postulate in Campbell v. Acuff-Rose Music, which involved a parodic rendition of the Roy Orbison song "Oh, Pretty Woman" by the rap group 2 Live Crew.14 In upholding a fair use defense, Justice David Souter cited Leval's transformative use test under the first §107 factor. The court emphasized that while transformative use "is not absolutely necessary for a finding of fair use … the goal of copyright, to promote science and the arts, is generally furthered by the creation of transformative works … and the more transformative the new work, the less will be the significance of other factors, like commercialism, that may weigh against a finding of fair use."15
The court specifically held that a parody "has an obvious claim to transformative value … . Like less ostensibly humorous forms of criticism, it can provide social benefit, by shedding light on an earlier work, and, in the process, creating a new one. We thus line up with the courts that have held that parody, like other comment or criticism, may claim fair use under §107."16 Yet "parody," which by definition is "a literary or musical work in which the style of an author or work is closely imitated for comic effect or in ridicule,"17 seems to readily fall into the category of works created for the statutory purpose of "criticism [and] comment" without the need to resort to "transformative use" analysis.18 Indeed, the court in Campbell noted that both the district and appeals courts in the case had found or presumed that the challenged song was "commenting on and criticizing the original work, whatever it may have to say about society at large."19 So in a sense, Campbell was not a difficult case as it made clear that in assessing the first "purpose and character of the use" factor, a "parody" coincided with the statutory examples of "criticism" and "comment," subject of course to further assessment of the other three fair use factors. Indeed, Leval had cautioned that "[t]he existence of any identifiable transformative objective does not, however, guarantee success in claiming fair use."20 But having let Leval's transformative use test out of the bag, the court opened a floodgate.
Following Campbell, Leval wrote another lesser-known article that praised the Supreme Court's approach as advancing copyright law's goal of bringing "intellectual enrichment to the public by giving authors a limited control over their writings to provide them with financial incentive to create."21 Leval further emphasized that the first and fourth §107 factors were of "cardinal importance" because the more a transformative use is made of a work, "the less likely it is that appropriative use will be a substitute for the original, and therefore the less impact it is likely to have on the protected market opportunities of the original."22 At the same time, however, he cautioned against granting fair use protection to permit "minor changes" to circumvent copyright law and "leaving authors and artists defenseless" and unable to earn a living.23
Since Campbell, every fair use case that has come up before the Second Circuit—Leval's "home" court—has referenced transformative use as the primary focus of the first §107 fair use factor.24 And the Second Circuit is not alone in having adopted transformative use analysis.25 Despite this extensive application of the transformative use doctrine, courts still struggle in applying the doctrine. In some cases, once transformative use is found under the first §107 factor, it largely overrides the other three factors.
One of the more controversial fair use cases that relied heavily on transformative use is the Second Circuit's decision in Cariou v. Prince.26 In assessing whether 30 works by appropriation artist Richard Prince were entitled to a fair use defense respecting copyrights in original photographs contained in Patrick Cariou's published book "Yes Rasta," the court held that to be entitled to the defense under the first §107 factor, an allegedly infringing work need not comment on, relate to the historical context of, or critically refer back to the copyrighted work. Finding that the law imposes no such requirement, and that a defendant's commercial use also is not dispositive, the court held that a secondary work may constitute a fair use even if it serves some purpose other than those cited as examples in the Copyright Act's fair use clause, namely criticism, comment, news reporting, teaching, scholarship and research. The court also emphasized that to qualify as a fair use, the copied work generally must alter the original with "new expression, meaning, or message."27 In its review, the Second Circuit rejected Cariou's request to treat Prince's lack of testimony regarding any new meaning of his works as dispositive; rather, the court stated there is no rule requiring a defendant to explain and defend his or her use as transformative. What is important, the court stated, is how the work in question appears to the reasonable observer. Ultimately, the court held that 25 of Prince's 30 works were entitled to the fair use defense as a matter of law because they were transformative.
The Second Circuit cautioned, however, that its conclusion in Cariou did not suggest that merely adding cosmetic changes or presenting a work in a new format alone would constitute fair use. Instead, a work has to add something new and present the work with a fundamentally different aesthetic to be protected as fair use. In this context, with respect to five Prince works remanded to the district court, the Second Circuit noted that "[e]ach of those artworks differs from, but is still similar in key aesthetic ways, to Cariou's photographs [and] it is unclear whether these alterations amount to a sufficient transformation of the original work of art such that the new work is transformative."28
Rejecting Transformative Use
Upending two decades of case law that has adopted "transformative use" as the sine qua non of fair use, in affirming a district court's finding of fair use in Kienitz v. Sconnie Nation, the Seventh Circuit expressly rejected transformative use and, in particular, the Second Circuit's heavy reliance on that doctrine in Cariou. Kienitz was a well-publicized case in which a posterized, low-resolution photograph of Paul Soglin, the mayor of Madison, Wis., appeared on a T-shirt as political commentary about Soglin having participated in the Mifflin Street Block Party.
This is the first circuit court to expressly reject transformative use, and it did so rather emphatically. The court found it unnecessary to address transformative use, finding that it was "not one of the statutory factors" under §107, despite the Supreme Court having previously mentioned it in Campbell v. Acuff-Rose Music.29 The Seventh Circuit was skeptical about the Second Circuit's application of transformative use in Cariou, emphasizing that "asking exclusively whether something is 'transformative' not only replaces the list in §107 but also could override 17 U.S.C. §106(2), which protects derivative works. To say that a new use transforms the work is precisely to say that it is derivative and thus, one might suppose, protected under §106(2). Cariou and its predecessors in the Second Circuit do not explain how every 'transformative use' can be 'fair use' without extinguishing the author's rights under §106(2)."30 In referring to the right to create derivative works under §106(2), however, the Seventh Circuit seems to have ignored the preamble to §107, which begins with: "Notwithstanding the provisions of section 106 … ."31 Congress thus intended for §107, where fair use was justified, to override an author's exclusive right to create derivative works.
The court in Kienitz ultimately affirmed the finding of fair use based on a direct application of the four §107 factors, placing particular emphasis on the fourth factor concerning the effect on the potential market for the copyrighted photograph.32 The fact that the defendant intended the shirt to make a political statement also influenced the court's decision under the first factor. Nevertheless, the court took the additional, unusual step of noting its displeasure with "lazy appropriators," who were not intended to be protected by §107, and emphasized that the defendant did not need to use the plaintiff's photograph to create its lampoon and that the T-shirt was not used to mock (parody) the photograph itself, but instead targeted Mayor Soglin. The court further noted that Kienitz, as a photographer, could have his livelihood negatively affected if future clients believed portraits taken for dignified purposes could end up on T-shirts and be used in a derogatory manner. Nevertheless, because Kienitz failed to raise these additional arguments, the court was compelled to find fair use.
What Lies Ahead
Whether this signifies the start of a slow shift away from transformative use theory remains to be seen, but if so, it would be a sea change. A need for "transformative use" doctrine itself becomes questionable if all it does is replace one vague and undefined fair use test with another—the very thing Leval cautioned against. The danger of applying transformative use in a rote manner without a clear understanding of the purpose of fair use only leads to the same problem cited in Leval's 1990 commentary—inconsistent application of the defense, and a lack of consistency and agreement among judges in their respective approaches to fair use. Courts should not avoid the preamble in §107, which refers to a "fair" use and provides guidance through non-exclusive examples "such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research." Those examples illuminate Congress' thinking and were not plucked from thin air. Transformative use can remain a useful tool if courts do not lose sight of Leval's admonition that to be "fair," the use must serve the copyright objective of stimulating productive thought and public instruction without excessively diminishing the incentives for creativity.
1. 17 U.S.C. §107. Section 107 states:
Notwithstanding the provisions of section 106, 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.
2. Kienitz v. Sconnie Nation, 766 F.3d 756 (7th Cir. Sept. 15, 2014).
3. 714 F.3d 694 (2d Cir. 2013).
4. Dereck Seltzer v. Green Day, 725 F.3d 1170, 1176 (9th Cir. 2013).
5. 103 Harv. L. Rev. 1105 (1990)
6. Id. at 1111.
8. Id. (emphasis added).
10. Id. (emphasis added).
13. 17 U.S.C. §106.
14. 510 U.S. 569 (1994).
15. 510 U.S. at 579. A recent example of a work not being deemed "transformative" but nevertheless qualifying under the first Section 107 factor is Cambridge University Press v. Patton, 769 F.3d 1232 (11th Cir. Oct. 17, 2014). There the court found that free teaching course books that included reproductions of graduate-level scholarly and academic materials, while not transformative in and of themselves because they were verbatim copies of the originals converted to digital format and served the same intrinsic purposes as the originals, the use was clearly for nonprofit educational purposes and not commercial exploitation, and thus the first Section 107 factor favored a finding of fair use.
17. Merriam-Webster Dictionary at http://www.merriam-webster.com/dictionary/parody.
18. Decisions upholding Internet indexing as fair use, for example, also can be justified as falling within a modern scope of online "research" as one of the lawful Section 107 examples, without resorting to transformative use analysis. See, e.g., Authors Guild v. HathiTrust, 755 F.3d 87 (2d Cir. 2014).
19. 510 U.S. at 582.
20. 103 Harv. L. Rev. at 1111.
21. "Campbell v. Acuff-Rose: Justice Souter's Rescue of Fair Use," 13 Cardozo Arts & Entertainment Journal 19 (1994)
22. Id. at 22-23.
23. Id. Of particular interest is Leval's discussion of the "hotly debated" issue of appropriation art and associated infringement remedies, where he suggested that between acts of blatant infringement and those that pass the fair use test there lies a third, less frequent kind of use, which, while failing the fair use test despite some transformative characteristics, still offer "originality and independent value" and present only a small threat of economic harm to the copyright owner. In such cases, he said, the remedy should only be damages and not injunctive relief. Id. at 24-25.
24. See Authors Guild v. HathiTrust, 2014 U.S. App. LEXIS 10803 (2d Cir. N.Y. June 10, 2014); Swatch Group Mgmt. Servs. v. Bloomberg L.P., 742 F.3d 17 (2d Cir. 2014); Cariou v. Prince, 714 F.3d 694 (2d Cir. 2013); Blanch v. Koons, 467 F.3d 244 (2d Cir. 2006); Bill Graham Archives v. Dorling Kindersley, 448 F.3d 605 (2d Cir. 2006); NXIVM v. Ross Inst., 364 F.3d 471 (2d Cir. 2004); Davis v. Gap, 246 F.3d 152 (2d Cir. 2001); Nihon Keizai Shimbun v. Comline Bus. Data, 166 F.3d 65 (2d Cir. 1999); Castle Rock Entertainment v. Carol Publ'g Group, 150 F.3d 132 (2d Cir. 1998); Infinity Broad. v. Kirkwood, 150 F.3d 104 (2d Cir. 1998); Leibovitz v. Paramount Pictures, 137 F.3d 109 (2d Cir. 1998); Ringgold v. Black Entertainment TV, 126 F.3d 70 (2d Cir. 1997); American Geophysical Union v. Texaco, 60 F.3d 913 (2d Cir. 1994); Twin Peaks Prods. v. Publ'ns Int'l, Ltd., 996 F.2d 1366 (2d Cir. 1993).
25. See, e.g., Gaylord v. United States, 595 F.3d 1364, 1372 (Fed. Cir. 2010); A.V., a minor by Vanderhye v. iParadigms, 562 F.3d 630, 638 (4th Cir. 2009); Peter Letterese & Assocs. v. World Inst. of Scientology Enters. Int'l, 533 F.3d 1287, 1309 (11th Cir. 2008); Kelly v. Arriba Soft, 336 F.3d 811, 818 (9th Cir. 2003).
26. 714 F.3d 694 (2d Cir. 2013). Prince, a well-known appropriation artist, altered and incorporated several of Cariou's photographs in a series of paintings and collages entitled "Canal Zone." In 2007 and 2008, Prince exhibited these works through art dealer Larry Gagosian's eponymous gallery, which produced and sold an exhibition catalog containing reproductions of Prince's works featuring the photographs.
27. 714 F.3d at 706.
28. Id. at 711.
29. In Ty v. Publications Int'l, 292 F.3d 512, 522 (7th Cir. 2002), the Seventh Circuit did mention "transformative use" in discussing the purpose of the fair use doctrine, but then distinguished that from the fair use "statutory definition, which though extensive is not illuminating. (More can be less, even in law.)"
30. Kienitz v. Sconnie Nation, 766 F.3d 756, 758 (7th Cir. 2014)
31. 17 U.S.C. §107.
32. 766 F.3d at 759. The court noted that "[a] t-shirt or tank top is no substitute for the original photograph. Nor does Kienitz say that defendants disrupted a plan to license this work for apparel. Kienitz does not argue that defendants' products have reduced the demand for the original work or any use of it that he is contemplating." The court further emphasized that Kienitz had licensed the photograph to Soglin for "no royalty" and that it was "posted on a public website for viewing and downloading without cost."
Barry Werbin is chair of the intellectual property practice at Herrick, Feinstein and former chair of the City Bar's Copyright & Literary Property Committee.
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