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The Surprisingly Confused History of Fair Use: Is It a Limit or a Defense or Both?

The Supreme Court’s upcoming oral argument in Andy Warhol Foundation v. Goldsmith will focus on one of the most practically significant of the thorny questions of copyright law: what uses are fair? Fair use is both crucially important and profoundly murky. Indeed, its murkiness is part of its design. The doctrine of fair use has served since its inception as a sort of an amorphous safe haven for unwritten but important limits on a statutory right, decided on a case-by-case basis. It’s the Mutara Nebula of copyright law.

That makes fair use a bit of an anachronism in a modern age where statutes are read literally and every degree of judicial freedom has been crushed down into a multi-part test.  Indeed, fair use’s role in copyright law has arguably grown as judges, shut out of other ways of using discretion to decide copyright claims, have turned to fair use to accomplish what substantial similarity or limitations on scope once did.

That growing importance has set up the current conflict. In the last several decades, there have been attempts to define fair use more rigorously, to make it more predictable and ensure consistent application. The AWF case involves one of those — defining fair use as revolving around a single, critical concept: “transformativeness.” I’ll take a look at those efforts in a future post.

But there’s another aspect of the AWF case that makes it difficult. Fair use has historically served not one but two murky and undefined roles. One is to allow for discrete carve-outs from infringement liability to serve some countervailing interest: criticism, news reporting, personal convenience, third-party contributions. All of the Supreme Court’s prior fair use cases fall into the “discrete carve-outs” bucket. Two cases dealt with individual uses of new copying technologies (Williams & Wilkins v. US and Sony v. Universal); two cases dealt with reuse of software commands known by programmers (Lotus v. Borland and Google v. Oracle); two cases dealt with a particular form of criticism, parodies (CBS v. Loew’s and Campbell v. Acuff-Rose). Finally, Harper & Row v. Nation Enterprises dealt with the limits of quotation for news reporting.

AWF involves a claim of fair use that does not fall within any of the traditional carve-outs, and does not involve a novel technological development. It’s a claim that Andy Warhol’s adapted portraits of Prince fall outside the proper limits of Goldsmith’s copyright, that the purposes of copyright law are no longer served at that point. That is, it’s more of a rebuttal to the infringement claim than an affirmative defense asserting some sort of privilege.

That sort of claim, that fair use limits copyright infringement instead of just carving out holes from it, will strike most copyright lawyers as odd or mistaken. Fair use, it’s been declared repeatedly, is an affirmative defense. You only reach the issue of fair use if it’s already been determined that the plaintiff has established infringement. It’s too late to rebut the infringement claim at that point.

But while the modern cases all say fair use is just a defense, it’s clear it’s more than that. Fair use is a critical part of how copyright lawyers and judges determine what is infringing in the first place, which is why copyright analyses often jump to it before infringement has been clearly established. (The district court’s decision in AWF is an example of this.) Copyright owners sending takedown notices under Section 512 can be sued if they don’t take fair use into account, which would be inexplicable if it was just a defense.

And furthermore there’s a long history in copyright law of treating fair use as not simply a series of carve-outs, but as the inverse of infringement. Take what is generally recognized as the earliest American fair use opinion, Folsom v. Marsh, decided by Supreme Court Justice Joseph Story, riding circuit. Folsom v. Marsh is the source of what eventually gets codified as the four fair use factors in 17 U.S.C. § 107. But the opinion begins with musings on what constitutes infringement, before discussing specific exceptions that seem more like fair uses: reviews, and “fair abridgements.” That conflation of exception and limits continued when Justice Story reached the crucial issue in the case — in his words, whether the defendant had engaged in “a justifiable use of the original materials.” In determining whether such a justifiable — fair — use had occurred, Justice Story again discussed the requirements for finding infringement: “It is certainly not necessary, to constitute an invasion of copyright, that the whole of a work should be copied, or even a large portion of it, in form or in substance.” Quantity alone was not determinative, Story declared; the value and importance of the portion taken are relevant.

So far, this sounds like the doctrine of what later became known as “substantial similarity”; a work can be infringed by taking even a small part of it, as long as that small part is significant enough (under various tests) to establish a “substantial similarity” between the two works. Substantial similarity is part of the modern test for infringement, not fair use.

After quoting Lord Cottenham’s opinion in Bramhall v. Halcombe that “[i]t is not only quantity, but value, that is always looked to,” Story concludes with a sentence that would later become the test, not for infringement, but fair use: “In short, we must often, in deciding questions of this sort, look to the nature and objects of the selections made, the quantity and value of the materials used, and the degree in which the use may prejudice the sale, or diminish the profits, or supersede the objects, of the original work.” The “sort” of questions Story referred to were questions of how to tell if enough material had been taken to constitute infringement.

Eaton Drone’s treatise on copyright law nearly forty years later similarly included discussion of “fair use” within the chapter on infringement. But Drone distinguished between fair use and other forms of noninfringement. He described “fair use” as a privilege for certain forms of copying, such as quotation in reviews, or copying facts from informational works. In those cases the test for fair use was whether the user took so much as to supersede the original and harm its sales, which sounds like two of the Folsom factors.

But so did Drone’s test for infringement. When it came to establishing infringement through copying of a “material part” of the plaintiff’s work, Drone listed a number of relevant considerations, reminiscent of Justice Story’s opinion in Folsom:

the absolute amount and value of the part [taken]; its ratio to the whole from which it is taken, and to the whole in which it is afterward incorporated; its relative value to each of the works in controversy; the purpose which it serves in each; how far the later work may tend to supersede the original, or interfere with its sale; to what extent the original author may be injured, actually or potentially, by the unlicensed use made of his production; and many other special considerations, which need not here be mentioned.

This blurry line between noninfringement and fair uses continued into the twentieth century. The influential treatise by Arthur Weil in 1917 declared that, as the term was used in the cases, “‘fair use’ simply means a use which is legally permissive, either because of the scope of a copyright, the nature of a work, or by reason of the application of known commercial, social or professional usages, having the effect of custom, insofar as these do not expressly run contrary to the plain language of copyright legislation.”

This concept of “fair use” as encompassing “all permitted uses” — whether due to the limits of copyright or some sort of exception — is clearly evident in the opinions of Judge Learned Hand in the 1930s. Hand appears to have used the phrase “fair use” three times, and in all three cases he meant either a lack of substantial similarity — a failure of the plaintiff to prove its case — or copying of uncopyrightable ideas. In one of his most famous opinions, Nichols v. Universal Pictures, it’s clearly the former: “[T]he question is whether the part so taken is ‘substantial,’ and therefore not a ‘fair use’ of the copyrighted work; it is the same question as arises in the case of any other copyrighted work.”

Part of the explanation for the confusion over fair use is that the precise doctrinal basis for rejecting an infringement claim just did not matter much in the 1930s. Most copyright cases were heard in equity, without a jury. Courts would hear the plaintiff’s and defendant’s evidence and then make a determination of whether, in fairness, the plaintiff should get an injunction. Whether the injunction was denied due to the plaintiff failing to make out a claim of infringement, or due to some privilege protecting the defendant from liability, was a technical distinction that the extremely short opinions at the time did not dwell on.

But two decades later, legal culture was changing. As Congress began considering the wholesale revision that would become the 1976 Copyright Act, it mattered whether fair use was a limit on infringement or an affirmative defense for an exception, and unguided court discretion to excuse infringements was becoming passé. Fair use started down its current path.

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