Fair Use

Boston, MA

The Bar Against Fair Use set by 

Warner Bros. Entertainment & J.K. Rowling v. RDR Books

IP Thesis Submitted to Michael L. Rustad, Suffolk University Law, Fall 2008

(c) Nicole L. M. Jurkowski 2008

I. Abstract

In a time when digital technology facilitates the possible avenues of copyright infringement, it comes as a poignant moment when the courts hand down a permanent injunction in order to stop the print publication of an online lexicon of a copyright owner’s work. Similar to the fanatic following Rowling generated with her original print publications, as the case Warner Bros. Entertainment & J.K. Rowling v. RDR Books, moved through the courts, there was an intense following of both legal scholars and public citizens, each chiming in with their opinions. On one side of the isle, proponents for the lexicon claimed that use of Rowling’s world was “fair use”, and the transformative nature of the lexicon itself stood to exempt the print version of the Lexicon from claims of copyright infringement. It was even so bold as to postulate that if the court decided that the work was infringing, it would be a blow to both historical import of lexicons and research material everywhere. On the other side of the isle, proponents of Rowling defended her Bundle of Rights granted by the Copyright Act to guide the dissemination of her work into all types of media. In addition, they argued that the manuscript of the print lexicon revealed not only how the quality of the work was not only taking large portions of her unique expressions verbatim, but preempted Ms. Rowling’s market in publishing a print lexicon of her own. Allowing the Lexicon to go to print would be a blow to her creativity, undercutting the work of 17 years of her life by letting a third party profit.

In the recent Option for the case, the court made it clear that such a use by the Lexicon was an infringement of Ms. Rowling’s copyrights in her work. The discussion of this falls clearly into a taking of Ms. Rowling’s particular, unique expressions without the transformative nature that would allow the Lexicon to be exempt like so many publications that had come before it. The heart of the why this case is important, however, is revealed when one understands that the Lexicon was considered for print publication after it already had a following of readers. This highlights that the transformative nature of the project was that it took nearly a million words of print and indexing them online for the benefit of the world-wide public good, public which included Ms. Rowling herself, and those people involved in creating the derivative games and movies.

In a discussion of the benefits of technology for the public good and the fair use that is incorporated in transforming print media and indexing it for online access, the import of Rowling v. RDR Books becomes apparent. Despite its transformative nature when going from print media to online, the court has now held that it is appropriate that traditional defenses of fair use and innovations in technology fail when a transformative work (the Lexicon) attempts to regress in technology. The transformative nature of the fair use is found in by providing online access and indexing capabilities for the public good. There is not, however, transformative use of the same text when it is utilized in a separate medium that will only serve to forward the commercial gain of individuals who, although arguably having a copyright to the lexicon’s organization, do not have a copyright in the content.

In revealing the significance of this decision, I briefly review the history of fair use defense, and then discuss the nuanced understanding of the line between fair use and infringement on the Internet that has been set as precedent by the courts. Such cases include: Kelly v. Arriba Soft Corp., 336 F.3d 811 (9th Cir. 2003) (finding that an Internet search engine creating an electronic database of images that provided commercial benefit to the search engine was not dispositive of fair use), Perfect 10 v. Google, Inc., 416 F.Supp. 2d 828, 851 (C.D.Cal. 2006) (holding that Google’s use of plaintiff’s thumbnail images in Google’s image search engine was not a fair use, as it provided a direct commercial benefit to Google), and Perfect 10, Inc. v. CCBill LLC, 488 F.3d 1102 (2007) (finding that there is transformative use benefiting the public good when online images are index for use in search engine).

In discussing these cases, I emphasize the courts favorable treatment of online, technological resources, and the natural development of a retraction of that favoritism. Despite the advancement of the public good, copyright holders have managed to both alter the “fair use” to incorporate citations to the original copyright holder’s website, and how Rowling v. RDR Books addresses the potential market of third party sources reaping a profit from publication of online databases back into print media. From this discussion, I will also show how decision of the court is congruent with precedent regarding online use of copyrighted works on the Internet, and how it has given copyright owners relief from a potential flood-gate of infringement. This decision is a warning for those who would attempt to subvert the rights of copyright holders, as the courts both encourage the growth of technology and understand that such technology has rapidly expanding potential for both fair use and infringement. With this case, the public has been informed that the right to the online use of copyrighted works is transformative and protected; the right to publish online work to print media, however, is not.

Furthering the discussion, I will then show how Rowling v. RDR is especially relevant to a current, unresolved lawsuit regarding The Google Books Library Project. It is my opinion that the Rowling case provides guidance from the courts for this case in the form of a “line in the sand” regarding offline content being brought online and then indexed. The argument behind this new ruling has begun to show that when faced with technology versus copyright infringement, the court is growing in sophistication as to its analysis of copyrighted material being used by third parties on and subsequently off the internet, and how it is beginning to discard the favoritism of technology for an analysis of the public good versus the rights of the copyright holder.

II. Introduction

The “fair use” doctrine evolved first in the common law and was later codified in Section 107 of the U.S. Copyright Act decades before the rise of the Internet. The doctrine of transformative use, too, was understood and institutionalized decades before the development of the World Wide Web. Throughout the development of these doctrines, the United States legal system grounded any third party use of copyright material that transformed the material into a new work of art in an exception to the Copyright Act called “fair use”. Now, as public consumption of Internet media for news and entertainment threatens to bring down newspaper giants and sales of hardback manuscripts, copyright artists find themselves and their art work taken for a ride under the protection of “fair use”.

The cause of this crisis in print media comes from a number of legal decisions that acknowledge the transformative use of moving print media into an online format, especially when that transformation includes indexing media for the purpose of search engines. (See, Perfect 10 v. Google, Inc., 416 F.Supp. 2d 828 (C.D.Cal. 2006), Kelly v. Arriba Soft Corp., 336 F.3d 811 (9th Cir. 2003)) The rational for this trend lies in the court’s deference to the extra-ordinary technological advancements this brings to the general public, and the willingness to forgo rights that copyright holders may claim limit or prohibit such online searching from being able to do legally, without paying a fee. This is the reason that Google and other major search engines are able to provide image search capabilities as part of their service; they find and copy millions of copyrighted images in order to reference them and display them for search queries without any cost to them.

Fortunately, this technological “benefit” can also be seen as infringement of the copyholder’s rights, and the courts agree. This infringement is typically founded on a lack of actual transformation or the fact that original sources are not referenced at all in the transformed work, both of which effectively destroy the market for the print media and the original sources. (See, Castle Rock Entm’t, Inc. v. Carol Publ’g Group, Inc., 150 F.3d 132, 137 (2d Cir. 1998); Perfect 10 v. Amazon.com, Inc., 487 F.3d 701). When this has happened, Internet giants like Google Inc. and Yahoo! have been forced to adjust the way in which they make fair use of the material – though none of these directions from the courts have required paying the copyright holder a licensing fee at the end of the day.

In analyzing the rational of the courts, it would seem as though the fate of print media artists has been sealed. Because the technology involved in the Internet necessarily requires innovation and transformation from the software that has come before it, the works that are utilized to create these online resources will arguably always fall under fair use. Though there is not yet a presumption of fair use with regard to its use on the internet, and arguably such a presumption would never find its way into the Copyright Act, there is a real danger to copyright holders in the court’s logic.

Given this trend in Internet-related copyright law, it comes as a poignant moment when the Southern District Court of New York hands down a permanent injunction to stop the printing of a much-lauded online resource for the millions of words of text that make up the Harry Potter universe. In the case of Warner Bros. Entertainment Inc. and J.K. Rowling v. RDR Books, 575 F. Supp. 2d 513, the federal district court was faced with analyzing if it is a violation of a copyright holder’s rights to allow an online encyclopedia to go to print. More specifically, it had to answer the question of whether it is a transformative use to take the material from a fair use, online index of J. K. Rowling’s material and put it back into print in this indexed form. While this may be a specific and targeted question in regards to the facts surrounding the case, it is important to note that this type of transformative use could be implemented across the entire Internet. Essentially, the question comes down to: is it transformative to take print media sources from all around the world, compile and index them for free on the Internet, and then once the compilation has proven a viable and sought-after resource – sell that same compilation via print media to gain a profit. Has this dual transformation – print media to indexed, online content and then online content back to print media – created a new work for which there is protection because of its transformative quality, or does the transformation back to print infringe the original copyright holder’s rights?

From the decision of the court, the answer is infringement; the online nature of the content that made it transformative originally does not make subsequent works created from that content protectable in its own right. If the material is the same, if it lacks a transformative quality for the medium it seeks to return to, then the original copyright holder has a right to deny a third party the ability to use the work at all. The impact of this decision means, hypothetically, that Google cannot create and print a book about the top ten searches of all time, with copyrighted material from those searches included in the book, without seeking licenses to utilize that material from the original authors. That much is clear.

A. Internet challenges doctrine of fair use

What remains to be seen, then, is how this decision will impact the analysis of further issues related to other large-scale fair use of print media being utilized by third parties. Unsurprisingly, Google Inc. already has a similar use in mind that will encounter this issue that has been called “The Google Books Project”. In this project, Google intends to digitize entire a number of library catalogues in order to index the text and provide a searchable interface for users. Originally, this project was going to be free to the public, supported by the sale of lucrative advertisement space. However, given the massive scope of the project and the fact that they would be copying the text of many copyrighted works verbatim to use in their project, Google was sued by the Authors Guild and the Association of American Publishers (AAP) to enjoin the project. At the beginning of working on this thesis, Google and the collective copyright artists stood head to head, one claiming fair use and the other infringement. Now at the close of this paper, the two have come to a $125 Million dollar settlement, leaving the legal relevant questions unanswered:

(1) Is it fair use to utilize the verbatim text of copyrighted works if that use is such a technological advancement that it will be considered transformative? Arguably, the answer to this question is yes. Given the trend of the courts, the greater the advancement, the more likely it is that the courts will acknowledge the use as transformative, and exempt it under fair use.

(2) Is it transformative to utilize the copyrighted works to derive a profit from the sale of a service that provides access to this copyrighted material, without approval from the original authors? Arguably, the answer to this question is no. The service provided by Google to the public could arguably be the same “service” RDR Books sought to sell as print media to Harry Potter fans. Without getting the approval of the copyright holders, the use is infringement of those holders bundle of rights which are granted by the Copyright Law.

In a courtroom culture where online technological advancement has more often than not favored technology over copyright holders, it is my opinion that the ruling in Rowling v. RDR Books gives a signal that the courts are not charging headlong with technology, and do recognize the danger such a broad stroke of fair use poses to copyright holders. Should it have gone to court, I believe that although The Google Books Project would have had a strong argument for fair use, the advancement in technology would not be so innovative that the court would have allowed it to prosper to the alleged detriment of an enormous number of copyright holders.

B. History of Fair Use

To understand the intent behind the fair use exemption that has developed in Copyright Law, it is essential to understand the origins, foundations, and growth of the law itself. The idea of protecting the thoughts and musings of artists that were put to paper began with the advent of the printing press in 1476. This viable method of mass-producing written works quickly lead to a coupe by the English monarchy to control that ability through patents for printing. A hundred years later, when the control of copyright had developed into a censorship scheme, a group of artists petitioned the English Parliament for aid and the Statute of Anne, 8. Ann., c.19 (1709) was enacted. Provided with the Act was a 14 year term for each work, registration with a central copyright office, and a deposit of the work into the national archive.

In 1783 American Continental Congress adopted the English copyright system, passing a resolution which urged “the several states… to secure to the authors or publishers of any new books… the copy right of such books…” This urging was answered in the unanimous support for the of the enumerated power of the Congress with what is known as the “Copyright Clause” of United States Constitution: Congress shall have the power “…to promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”

In 1790, the Congress enacted Title 17 of the United States Code in order to specifically protect the artist’s “sole right and liberty of printing, reprinting, publishing and vending” the copies of their “maps, charts, and books” for a term of 14 years, with the right to renew for one additional 14 year term should the copyright holder still be alive. That law was updated multiple times (1831, 1909, 1976, and 1998) in order to extend either the term or requirements of protection, or adjust the scope of protection became more enumerated to include new technologies. Eventually, the term and protection became so broad that protection vested in the work upon creation by the author and the scope of protection grew to “original works of authorship fixed in any tangible medium of expression, now known or later developed, from which they can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device.” 17 USC §102(a), emphasis added.

Considering the scope of protection granted by the Copyright Act, it would seem that the “public domain” from which third party authors might draw their work without a license from the original author is limited at best. Fortunately, the 1976 Copyright Act addressed this issue by codifying an exemption to the exclusive right of copyright holders, known as Seciotn 107, which acknowledged what had previously been judge made law. This exemption was intended to allow “courts to avoid rigid application of the copyright statute when, on occasion, it would stifle the very creativity which that law is designed to foster”. It is important to note that the section “does not, and does not purport to, provide a rule that may automatically be applied in deciding whether any particular use is ‘’fair’. ”  Rather, it provides factors that are to be considered in a determination of the “whether the use made of a work in any particular case is a fair use.”

The four factors to be considered are: (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 four factors, balanced against one another, allow the court discretion in determining the value of the new work in each instant case. This analysis is then balanced against the rights of original work, and an assessment is made to determine if use of original work has so transformed the quality that it has become a new, independent work in itself. Under this analysis, the balance should be struck between the rights of original work and the Copyright clause’s goal of supporting the proliferation of art for the benefit of the public. “An integral part of copyright law, then, is accommodating the simultaneous needs to protect copyrighted material and to allow others to build upon it”. The precedent of the courts has made it clear that “this goal would be better served by allowing the use than by preventing it.” (See, Castle Rock Enter. v. Carol Pub. Group, Inc., 150 F.3d 132, 144 (2d Cir. 1998) (quoting Arica Inst., 970 F.2d at 1077).)

This argument, while founded in the Constitution, is the key reason that print media copyright holders must be wary of fair use claims by individuals who seek to use other’s work on the Internet. If the Internet is a progress of Science that allows an unprecedented number of others to build upon their works, then the floor falls out from underneath the system. Much in tune with Ms. Rowling’s personal argument, if a writer can reap no reward from their art, or must suffer it despoiled by others without the ability to stop such blatant infringement, then the originating art will cease to be produced at all. While this may not be true for original works of art, it is more understandable that an artist, with many other original works to create in their lifetime, would forgo the creation of resource materials to their own works because of a spoiled market or other economic circumstances.

Therefore, in a challenge between infringement and fair use, the analysis must focus on whether the new work has transformed the prior art some a substantial way that enables the new work to take on its own creative quality, so that it is separate and distinct from the original work it references. If not, then it is an infringement of the prior work, and may be enjoined from publication for the harm it would cause.  Courts have found a transformative purpose both where the defendant combines copyrighted expression with original expression to produce a new creative work, and where the defendant uses a copyrighted work in a different context to serve a different function than the original.(See, Bill Graham Archives v. Dorling Kindersley Ltd., 448 F.3d 605 (2d Cir. 2006) (holding that use of images as historical artifacts of a musical group’s performance was transformatively different from the original expressive purpose of the images.)

When dealing with this sort of argument, the rule of thumb is that the more verbatim text that is taken, the easier the argument is that there has been misappropriation of the work. For example, in Salinger v. Random House, Inc., 811 F.2d 90, 99 (2d Cir. 1987), the court found quantitative significance in the fact that the defendant’s biography took “59 instances of verbatim quoting or close paraphrasing (constituting just 40% of defendant’s 192-page book)”. Such a massive taking, however, is not necessarily required. In Craft v. Kobler, 667 F. Supp. 120, 128-29 (S.D.N.Y. 1987), the court concluded that the defendant’s use “which constituted approximately 3% of the infringing biography and “the liveliest and most entertaining part” of it” were “far too numerous and with too little instructional justification to support the conclusion of fair use”.

This notion of taking the best part of the work and utilizing it is especially true where an artist is famous, and many people want would be willing to buy any and all information relating to the person’s works or writings. Getting the scoop on the author for a release of one of their own subjects, as the newspaper did in Harper & Row, 471 U.S. at 564-66, will help to trigger a lower requirement of copying. In this case, though the court finding verbatim copying from only “an insubstantial portion of the copyrighted work and only 13% of the infringing magazine article”, it was still able to find that the “substantial appropriation in view of the expressive value of the excerpts and their key role in the infringing work.” Id. The key role here was releasing excerpts of what would drive the public to want to buy the work in the first place, and ruining that market by taking verbatim from the work will inevitably be found as infringement in that author’s rights.

What the court attempts to focus on in balancing between the progress of the Arts and the rights of the artists is the “unfairness that arises when a secondary user makes unauthorized use of copyrighted material to capture significant revenues as a direct consequence of copying the original work.”  In this instance, courts will not find fair use when the secondary use “when a commercial use amounts to mere duplication of the entirety of an original” as duplication would “clearly ‘supersede the objects’ of the original and serve as a market replacement for it.”  Further, when this exploitation hurts not only the original market for the work, arguably sale of original novels – as the encyclopedia could serve as a spoiler for the plot of the novels, the courts also consider the harm “to the potential market for derivative works.”

While not enough on its own to exempt the work as fair use, the transformative purpose of the work is a key consideration in the realm of fair use. This transformative purpose moves a new work, like the reference guide in Rowling v. RDR Books,  out of the realm of misappropriation materials to create an unlicensed derivative work. To clarify, a work is derivative when it contains a substantial amount of unaltered material from the original, and does not transform that material into a new mode of presentation. A work becomes transformative, then, when it does change that presentation. In the case of Rowling v. RDR Books, this can be seen in the “condensing, synthesizing, and reorganizing the preexisting material in an A-to-Z reference guide” that gave the material a new purpose, and therefore no longer “represents [the] original work[s] of authorship.”Id. For that reason, it is not a derivative requiring a license from Rowling. It is this repurposing a work, be it from creative expression to academic analysis that allows the use to be considered fair.

Outside of the realm of derivative uses of a work, the fair use argument rests on the concept of creating an entirely new work from copyrighted material. This can be accomplished by either utilizing only as much as is necessary to reference the new work and give it context, or by repurposing all or nearly all of a copyrighted work. The seminal case in this area is Campbell v. Acuff-Rose, 510 U.S. 569 (1994), as it created the foundation for transformative purpose in relation to use of an original party’s work for a new purpose. Specifically, that “the more transformative the new work, the less important the other factors … become”. Id. at 579. The facts of the case surround a transformation of the song “Pretty Woman” by Roy Orbison, and the claim of unauthorized copying and alleged market harm that resulted when the new song was released. Defended on the grounds that the work was a parody whose purpose was to critique, rather than entertain like the original (or at least, entertain a different market), the court found the use to be a fair one. Id. at 599. That issue in this case was the subject matter of a societal view of an ideal woman – and Acuff-Rose’s production of the parody spoke directly to that, arguing a different view of women in society with its own lyrics. Though there was direct taking of the heart of the work, that taking was necessary to make the connection to the original work, as it was the connection that gave the parody meaning. Id. at 598.

Following Campbell, other cases have argued that they, too, manage to affect a similar transformative purpose on other works. To help clarify the nature of substantial or entire takings that alleged fair users were attempting to qualify, the court in Faith Ringgold v. Black Entertainment Television, 126 F.3d 70, directly addressed the issue. At issue in the case was the unauthorized use of an entire poster during a television segment that belonged wholly to Ringgold. Id. at 71.  To begin, the court found that the use of the work in the television series was exactly the same use intended by the artist – decoration. Id. at 79. As the court analyzed: “Nothing that the  defendants have done with the poster “supplants” the original or “add something new.” Id. In this case, the court denied the defendant’s argument that such a use of the entire poster was allowable because the use was de minimus. Id. at 80. Rather, the court noted that the third fair use favor “obliges a court to consider the amount and substantiality of the portion used” so that if the use of the work “does not serve any of the purpose for which the fair use defense is normally invoked”, the market for licensing the work will not be impaired by the defending being able to “escape liability by claiming only a small infringement”. Id. In this way, the “substantial similarity” factor for copyright infringement is utilized as “the threshold for determining that the degree of similarity suffices to demonstrate actionable infringement.” Id. at 75.

This acknowledgement of infringement allows for fair users to have a bar against which to understand how their use, in relation to their alleged transformative purpose, will be analyzed by the courts. Because of this, some cases have not managed to overcome being classified as “substantially similar” and therefore transformative. This is more clearly explained by the case of Paramount Pictures Corporation v. Carol Publishing, 11 F. Supp. 2d 329. Here, the court was presented with a book, The Joy of Star Trek, based off the famous Star Trek series, owned by Paramount Pictures. This book attempted, much like RDR Books, to utilizing verbatim script material, interspersed with new commentary, to create a comprehensive guide to the Star Trek universe. Id. at 333. In order to accomplish this feat, the authors took a number of quotes and fictitious facts compromising “the heart” of the Star Trek world and presented them in a “different order then that in which it appeared in the Star Trek Properties”. Id. Under a Ringgold analysis, this use was held to be “fragmented literal similarity”, and therefore infringement, because of the “verbatim recitations of quotes… along with the retelling of its essential elements” Id. at 344. At the time of Paramount, appropriation of this type had previously been considered infringing as well, though under a separate analysis. As precedent, the case of Twin Peaks International v. Publications International, 996 F.2d 1366, held that the book which “is essentially a detailed recounting of [*1373] the first eight episodes of the series” is infringes on [that series’] copyright”. Id. at 1373. This type of literal, if fragmented taking, does not have the qualities of a transformative purpose because it lacks the addition of new material that would repurpose the work. Arguably, “such use would occur, for example, if a plot was briefly described for purposes of adding significant criticism or comment about the author’s plotting technique” Id. at 1320.

With the rise of the Internet, this understanding of fair use has created a uniquely new type of repurposing: the indexing of copyrighted materials across the world wide web in order to provide searchable indexes for Internet users. The transformative nature of this new use has been challenge in three unique issues: online content being utilized by third parties in indexes and search engines, previously offline content being brought online and utilized by third parties in indexes and search engines, unique situation posed by third parties making an indirect profit from providing access to copyrighted material. What this means for future works addressing the complex legal tangles of transforming others’ copyrighted material into online material which can be indexed and serve multiple purposes, some legal (research and scholarly analysis) and some not (unlicensed reproduction and distribution) has yet to be decided by the courts. However, it’s importance is directly informative as to the direction of the courts in relation to other online fair use ventures, especially that of the Google Books Literary Project – a venture designed, much like RDR Books on a macrocosmic scale, to take a wealth of literary print media, transform it into online media, index it, and provide access to the public.

Once the Internet became a viable means for accessing information, the courts were forced to address the issue of whether or not it was a transformative use of copyrightable material, already available online by the copyright owner, to copy that material verbatim and index it for search queries made by the public. The case that addressed this issue was Kelly v. Arriba Soft Corp., 336 F.3d 811 (9th Cir. 2003), where Arriba Soft had created an electronic database of copyrighted images from the Internet, scaled down considerably to “thumbnails”. In a scheme that coupled the public good of an image search with the commercial gain of selling advertisement space on the web site that provided access to the query system for the database, the Ninth Circuit reasoned that the use of thumbnails was indeed fair: “Arriba was neither using Kelly’s images to directly promote its website nor trying to profit by selling Kelly’s images.” Id. at 818. In addition, the court found that the very nature of the images Kelly provided, thumbnails at a much lower-resolution than the originals, will make enlargement and use for their original artistic purpose inappropriate. Id. Despite the works remaining exactly the same, the court nonetheless found a transformative purpose and nature to Arriba’s appropriation because the resulting use of the copyrighted work is different than the original work. Id. In addition, the commercial nature of Aribba’s use was afforded weight against its use because “it was more incidental and less exploitative in nature than more traditional types of commercial use”. Id. At the end of the opinion, Arriba Soft came out on top, its transformative nature and technological public good far outweighing the rights of the copyright holder.

As the profitable nature of trading free public access to a searchable database for commercial advertising space became a standard in the newly developed online industry, it was inevitable that a copyright holder would challenge the third party’s right to make a direct profit off of their work. In the case of Perfect 10 v. Google, Inc., 416 F.Supp. 2d 828 (C.D.Cal. 2006), the court was faced with a situation where Google had utilized plaintiff’s thumbnail images in an image search engine that generated advertising revenue for the company. Despite the overwhelming public benefit of the use of the images, Google’s use was not considered fair. It was plainly making money from its database of images collected from the Internet. The court distinguished its holding here from Kelly, though, by addressing the fact that the search results that Google’s provided do harm an actual market for Perfect 10, licensing reduced sized images for sale and distribution for download and use on cell phones. Id. at 850. In this way, Google was directly infringing against Perfect 10’s market, making the use to Google’s benefit (a consumption of the copyright, rather than a fair use) and thus a strike against it in a fair use analysis. In the end, the court admitted that “it reaches this conclusion despite the enormous public benefit that search engines such as Google provide”. Id. at 851. Although reluctant to rule against a new advancement in technology, the court relayed that existing judicial precedents do not allow such considerations to trump a reasoned analysis of the four fair use factors

II. Fair Use in Cyberspace

In consideration of the struggle which continues regarding fair use on the Internet and new types of appropriations by fair users as they exploit computer technologies, it comes as an enlightening moment to when the court gives indication that a potential new utilization of that technology will be regarded as infringement. This issue is the issue at the heart of Rowling v. RDR Books, and the online lexicon of <http://www.hp-lexicon.com> which sought to go to print because of a proven market demand.

While the Harry Potter Series began as a unique expression from the mind of J.K. Rowling in 1997, one of her fans, Mr. Vander Ark began to create notes on her world in 1999 as he read the second book in the series.  Rowling at 8. In an effort to share these notes with other fans, he began work on a website “The Harry Potter Lexicon”, which included Vander Ark’s “descriptive lists of the spells, characters, and fictional objects in Harry Potter” as well as “brief descriptions or definitions of terms”. Id. at 9. As the court describes, his purpose was to “create an encyclopedia that collected and organized information from the Harry Potter books into one central source for fans to use for reference.”  Id. At the launch of the website, these entries were notably cross-referenced by hyperlinks to other entries containing the similar or relevant material. Id. Eventually, these entries were “developed [into] an A-to-Z index to… allow users to search for entries alphabetically.” Id. It is notable that the content from which Vander Ark drew his material is “primarily from the Harry Potter series and companion books”, while some additional content was “drawn from outside reference sources” in order to “enrich the experience of readers by illuminating the rich world and hidden meanings” of the series. Id. at 10-11.

After years of positive feedback, “including from Rowling and her publishes, about the value of the Lexicon website as a reference source”, Vander Ark was approached by Roger Rapoport, president of RDR books, about a publishing opportunity on August 6, 2007. Id. at 14. After a discussion as to the ability to legally bring such a work into print media, Mr. Vander Ark agreed to the proposition and RDR agreed to indemnify Mr. Vander Ark if the issue was to go to court. Id. at 15. Once the deal was set, preparations began to take the encyclopedia sections of the website “that presented descriptions of the persons, places, spells, and creatures from the Harry Potter works” and create a manuscript for the print version of the Lexicon. Unsurprisingly, when Warner Brothers and J.K. Rowling heard of this project, they brought suit for copyright infringement, and this suit began.

Relevant to the issue of Mr. Vander Ark’s alleged fair use of Rowling’s material, the court recognizes that the print version Lexicon “does not purport to be a work of literary criticism or to constitute a fair use on that basis.” Id. at 78. Most notably, this “lack of critical analysis, linguistic understanding, or clever humor is not determinative of whether or not its purpose is transformative”. Id. Instead, RDR Books sought to argue that the Lexicon had “a “further purpose or different character” that alters the original aesthetic of the Harry Potter series from an intricate narrative to an alphabetized catalogue of elements from the Harry Potter world”. Id. at 78, quoting Campbell at 579.

Given this argument, the print version of the Lexicon seeks to turn the repurposed, online arrangement of J. K. Rowling’s text into print text once again. In doing so, the court must asses if the text that work is transformative in this context as well. Despite the evidence that a print version of the online Lexicon would serve as a valuable reference source to readers and fans of Harry Potter, the court recognizes that the transformative nature of the Lexicon is diminished, “because the [print] Lexicon’s use of the original Harry Potter works is not consistently transformative.” Id. at 81. Because of this, the court focuses its argument on the substantial similarity between the two works in print form, and explains that, in this instance, “a finding of verbatim copying in excess of what is reasonably necessary diminishes a finding of a transformative use.

Despite the argument that Rowling makes that the “works cannot be considered transformative because the Lexicon does not add significant analysis”, the court brings to light that “what the Lexicon fails to add by way of analysis misses the point that the Lexicon’s chief contribution is the function it serves”. Id. at 78. For the facts surrounding this case, there are two relevant transformations taking place. First was the transformation of the original text into notes and descriptions, most with large verbatim copying of Rowling’s original text, onto an online environment. This, like many other technical advancements that benefit the public good, is a transformative use of the copyrighted material. (See, e.g., and Perfect 10 v. CCBill (holding that there is transformative use benefiting the public good when online content is indexed for use in search engine). This transformation is separate and distinct from the infringing use of the same text that RDR Books would be engaging in were the book to go to print, as the relevant transformation would be on the use of the material in context of an encyclopedia, not the transformation of text to online, indexed content.

Proponents for the lexicon claimed that use of Rowling’s world was fair use, and the transformative nature of the lexicon itself stood to exempt the print version of the Lexicon from claims of copyright infringement. Their cause was championed by The Fair Use Society of Stanford Center for Internet and Society, which served as counsel for the defense – but members of the literary press at large. Their argument is based in the notion that websites and publishing ventures like Mr. Vander Ark’s are the product of the Copyright clause’s purpose in the constitution, to advance “the progress of … the useful arts” by stimulating the growth of new art for the public use.

Alternatively, proponents of Rowling defended her absolute right to control those unique expressions that are her creations. Contrary to the claim that the Lexicon compiled facts into an encyclopedic format that was exempt from fair use, Rowling argues that those so called “facts” are actually her particular creative expressions – which are the heart of material protected by the Copyright Act. The claimed that the lexicon did nothing more than “rearranging the furniture” of her text, summarized her many volumes of works and lacked the independent analysis or content regularly valued as fair use works of commentary.

Rowling’s argument about the quality and quantity of text taken from her Harry Potter series is certainly supported by case law, distinguishing this new concept from those seen before. In, Castle Rock Entm’t, Inc. v. Carol Publ’g Group, Inc., 150 F.3d 132, 137 (2d Cir. 1998), the Second Circuit upheld the lower court’s order enjoining the publishers of a book on the popular series, Seinfeld, from publishing their work because it was a wholesale appropriation of the copyrighted television series.  In that case, the defendant compiled a Seinfeld trivia book that copied more than six hundred fragments from eighty-four copyrighted episodes of Seinfeld for its trivia book.  Here, the court concluded that this “plainly crossed the quantitative copying threshold”, taking more than was necessary to effect a transformative work. Id. at 138.

Similarly, in Twin Peaks Prods., Inc. v. Publ’ns Int’l, Ltd., 996 F.2d 1366, 1372 (2d Cir. 1993), the court concluded that the identical nature of eight-nine lines of dialogue between Twin Peaks’ teleplays and the defendant’s Publication’s guide to the television series constituted substantial similarity. Despite the dialogue being used for an arguably different purpose, the text taken was not transformed enough to warrant exemption under fair use.

More on point for Rowling, Harper & Row, Publishers, Inc. v. National Enterprises, 471 U.S. at 539, analyzed a situation where President Ford had engaged in a license with Time Magazine that would give them exclusive right to publish excerpts from his yet unpublished personal memoirs regarding his pardon of President Nixon and the Watergate crisis. Id. at 541. Before the Time Magazine material went to print, an undisclosed source gave a competing political magazine, The Nation, a copy of the manuscript. Knowing the market power of such a piece, a writer for The Nation constructed a piece and publish before both Time Magazine and President Form himself. Id. at 543. During the lawsuit, The Nation defended its action as fair use because the information contained in the memoirs was both a compilation of known facts and therefore newsworthy and undeserving of copyright. Id. The court, on the other hand, held that the material of the manuscript was eligible for copyright by virtue of the fact that Mr. Ford’s “reflections” were expressions. Id. Accordingly, The Nation was held to have infringed by lifting “verbatim quotes of the author’s original language totaling between 300 and 400 words and constituting some 13% of [the defendant’s] article”.

For Rowling v. RDR Books, this case highlights that Lexicon sought to publish a clear taking of Ms. Rowling’s particular, unique expressions without the transformative nature that would allow the Lexicon to be exempt. Much like The Nation’s mistaken claim that the information was “newsworthy” and not subject to copyright, RDR’s claim that the text was repurposed as an encyclopedic guide and therefore exempt under fair use. The court clarified this issue by stating that, quantitatively, “although hundreds pages or thousands of fictional facts may amount to only a fraction of the seven-book series, this quantum of copying is sufficient to support a finding of substantial similarity where the copied expression is entirely the product of the original author’s imagination and creation.”

Considering Rowling’s argument that most, if not all of the text in the book would require quotation marks around it to acknowledge it as her own writing – her position that too much was taken for the purpose of a commentary is understandable. However, many who considered the Lexicon’s use of her work fair argued that in seeking a permanent injunction, she and Warner Bros. were unjustifiably attempting to extend the power of a person’s copyright into “a monopoly on the right to publish literary reference guides and other non-academic research relating to her own fiction”. Much like the court’s approval of new technology advancing the public good by indexing copyrighted material online, proponents of the Lexicon argue that this encyclopedia of Rowling’s work will serve as a benefit for those of in public (including Ms. Rowling and the Warner Brothers movie staff) that already find the online encyclopedia a useful resource.

In cases that have come before the court, the pattern of online use by third parties has relied on two situations: verbatim copying of a substantial portion of the entire work from the original and verbatim copying of those key facts which constitute “the heart of the work”, or to be plain, the sections of a work which would fuel the reader to buy the entire work in the first place. The first situation speaks to the third prong of the fair use test (the amount and substantiality of the work) and the second situation speaks to the fourth prong (the market effect of the new work) and if the new work will cause so much that the harm caused is that the original will be passed over.

Considering the argument between Rowling and RDR books: Rowling contends that the Lexicon is merely a compilation of her text, rearranged by subject matter, with a de minimus amount of new material added. RDR Books disagrees, defending that its work takes only as much as is necessary to build an encyclopedic resource, which by its very nature is a substantial portion of the work, and that it added analytical information and commentary blends the verbatim text into a new work in its own right. Deciding who has the stronger argument will rely on the analysis of the amount taken, if that amount constitutes the heart of the work, and if the amount necessary for the work to be viable.

Fortunately for RDR, the court held that although an encyclopedia would cause some market harm, they ruled that the evidence before the court “does not bear on the determination of the fourth factor, however, because a reference guide to the Harry Potter works is not a derivative work”. Rowling at 99. The transformative purpose behind the work, however inconsistent it was in its transformation of the actual text, cannot serve as a substitute for reading the original novels, as they exist for different purposes.  Thus, the court held that the Lexicon was unlikely to serve as a market substitute for the Harry Potter series and cause market harm. Id. With this in mind, it becomes clear that the courts “are more willing to find a secondary use fair when it produces a value that benefits the broader public interest”. Blanch at 253. In this particular instance, that broader public interest is the resource reference already established as beneficial by the online Lexicon’s proven success.

Essentially this leaves one thing clear – for print media, when a secondary user’s purpose is transformative, there can only be so much actual copying tolerated before the taking makes a fair use into infringement. When a secondary user’s medium is on the internet, much more actual copying will be tolerated because of the transformative nature of the original text itself. This transformation lies in the access and indexing capabilities that the Internet allows, not necessarily the academic or scholarly commentary of the work that print media must contain. The fair use is found in by providing access and value for the public good; it is not found when such transformation is utilized in a separate medium that will only serve to forward the commercial gain of individuals who, although arguably having a copyright to the lexicon’s organization, do not have a copyright in the content.

This decision, while an apparent affront to defenders of fair use, stands as a beacon of hope for artists in the digital age. Here, the court has acknowledged their rights in relation to online use of their work in a fashion that most fans of a creative work employ – creating fan sites reproduce parts of the copyrighted material for transformative purposes. This decision also stands as a warning for those who would attempt to subvert the rights of copyright holders, as the courts have set prescient for an area that has rapidly expanding potential. Potential fair users have been told, clearly, that the right to the online use of copyrighted works is transformative; the right to publish online work to print media, however, is not.

Taking this analysis to a macrocosm, the Google Books Literary Project seeks to take print media from a multitude of authors and transform the creative works into a searchable database of quotations taken verbatim from the text, along with material surrounding the works at hand. Though the scale may differ, the line the courts have drawn regarding print use of a large portion of text speaks to an acceptance of the same substantial use of the material in an online context. Where RDR Books clearly had a case for fair use for a substantial portion of JK Rowling’s works and failed because its use was deemed to regress in technology, I believe the case law guiding the courts will support Google’s use of a substantial portion of many authors works in order to progress an unprecedented access to print material.

Inherent to this issue are the relevant legal issues that the courts have seen before: the transformative purpose Google intends with the project and the transformative nature of their use of the copyrighted materials. Both of these issues would stretch the breath of the fair use exemption, once again pitting the rights of the authors against the benefit to the public and advancement of technology. Under much the same fact pattern encountered with the original online lexicon that RDR sought to bring to the print market, the transformative purpose which Google seeks is to bring online a proportionally massive amount of information and index it for search-ability.

This kind of use has been supported before, and encountered the same fears from artists. Though the purpose is to provide search ability, Google’s attempt to provide relevant content surrounding the text at issue will inevitably lead to supplying users with a full copy of the manuscript – destroying the market for the works. This is why the transformative nature of Google’s use is key. In order to limit the possibility of destroying the market for these books, Google’s proposal to provide only the relevant surrounding text creates a situation where, although they are utilizing the full text for the service, they are only providing access to that which is necessary for context.  There is an especially interesting analogy here to Perfect 10 v. Google, supra, and the use of full-scale images for search engines, which is infringement, and the use of thumbnails, which is fair.

Despite this substantial argument for fair use, however, under the pressure of a lawsuit and the public attention (and potential public relations fall out if Google was seen to be stealing from artists), on October 29th of 2008, Google settled with the artists for $125 million. Now, instead of being a free service, Google has agreed to make the project a fee based service, reserving a portion of the revenues to aid copyright holders involved. This fee will allow universities and other institutions a subscription option for the full text of the included books (with the option to buy digital copies), and libraries will be granted access for one terminal with a subscription. In addition, Google has also agreed to create a copyright registry to help pay royalties on the works utilized by the project.

Considering the heated issues at hand, and the battle that Google would have face in the courts with rationalizing why this new advance in technology for books would have been worth of a fair use exemption, it is telling to hear Richard Sarnoff, Chairman of the Association of American Publishers, to laud the an advancement as “an innovative framework for the use of copyrighted material in a rapidly digitizing world.Id. This comment speak to the qualities which the court would have focused on to analyze the fair use, the innovative quality, while at the same time exerting the opinion that the innovation comes within a “framework” that puts the copyright holder before the public good.

Considering the holding from Rowling v. RDR Books, Mr. Samhoff’s comment seems to come into line with the path of future conflicts between copyright holders and fair users. In Rowling, the rights of the copyright holder were placed before those of fair users because of the extensive verbatim copying involved with the lexicon project. As such, is stands as a warning for those who would attempt to subvert the rights of copyright holders, as the courts have now shown to understand and delineate between encouragement of technology and the potential which the grown has for both fair use and infringement. From the holding of this case, fair users has been informed that moving copyrighted content online and indexing it to provide a substantial public benefit is transformative; the right to re-publish the transformative nature of the online organization to print media, however, is not.

III. Conclusion

Despite the settlement, it is clear that the Google Books Project stood before the courts as another such technological advancement that will challenge the nature of transformative use in relation to the Internet. Already acknowledged as a transformative giant with respect to the Internet, if anyone one group of people and lawyers had the ability have been able to power this fair use defense through the courts with the glimmer of new technology for the public benefit, it would have been Google. Giving access to many hard to find and out of print books, along with every other book they could get their hands on, through an online medium takes the scenario of the online Lexicon combining millions of words of print text into an accessible resource and doubles it one hundred fold. Taking all books, indexing their text, and allowing for limited scope searching (rather than full novel reading, as many opponents feared) – is simply too fantastic an idea to imagine, at least for a researcher. To the copyright holders, though, it is a means by which to regain revenue from many books that have lost their power to sell.

Perhaps that is why Google decided to settle, instead of taking their claim through to court. Continuing to hold good faith relations with the supplier of your material is necessary if you intend to expand a project, as is maintaining a good faith relationship with the public who will use your service. For as much as large corporations are distrusted, and as much as Google is friendly towards the public – it would be against Google’s nature to be known for ripping off an uncountable number of artists for the sake of its own profit. Though many understand Google runs at a profit, their services still remain in public favor for the innovation and new technology they release without direct charge to them.

It is my firm belief that the courts are developing the defined nature of “fair use” for the Internet in a way that responsibly assess the usefulness of an online tool against the underlying copyright holder’s rights. Additionally, there is guidance to be gained from the use of such technology as a business model, rather than as fair use. While there may be a much larger battle being waged over this free flow of information, and who will grant free or restricted access to print material in an online setting, at least one thing is clear. If that material is taken from print and made profitable online, the copyright holder has a legitimate defense against an entrepreneurs would-be claim to fair use. While transformation can still found in the utilizing verbatim copyrighted material for indexing and searching capabilities, the bar for infringement is continuously being raised as such transformation becomes the norm. Until then, if one seeks to make a profit off of the mere fact that the online transformation is profitable, and would be even more profitable if sold through “traditional” channels of print-media, such profit belongs to the original copyright holder as per Rowling v. RDR Books.


2 responses to “Fair Use

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