by Yonatan Shefa1
While copyright law provides protection for the intellectual property rights of copyright holders, those protections are not absolute.2 Courts have long recognized the affirmative defense of fair use in infringement cases, and in 1976, Congress codified that defense.3 In making fair use determinations, courts balance four factors: the purpose and character of the use; the nature of the copyrighted work; the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and the effect of the use upon the potential market for or value of the copyrighted work.4 The Supreme Court in Harper & Row, Publrs. v. Nation Enters referred to the fourth and last factor – the effect on the potential market – as the single most important of the four factors.5
Under the fourth factor, courts are to consider market harms to the original creator.6 In one sense, the inquiry is broad, in that it extends beyond actual harm. The statute and courts make clear that the analysis looks at the adverse impact to both the actual and potential market to the original work.7 However, the inquiry is limited to harms felt in the market. In other words, the court is concerned with the original artist’s ability to make a profit from the works that artist created.8 Yet, certain academics have argued that copyright law, fair use included, should consider other harms as well, because creators are incentivized by more than just profits.9 This is significant, considering that copyright law as a whole has its roots in the Progressive Clause10 of the Constitution, which seeks to ensure that the law creates incentives for creation. These academics reference research indicating that monetary incentives for creation are often secondary at best.11 Rather, creation is driven by a host of incentives, including desire and cultural engagement.12 Additionally, copyright holders often sue infringers for non-economic reasons, such as a feeling that the infringing use is unfair or immoral.13 Therefore, if copyright law is concerned with incentivizing creation, these scholars conclude that it should address non-pecuniary harm to copyright holders by factoring in notions of fairness and justice, not just economic harm.14 This article refers to these non-market harms as “moral harms.” Even if the research is correct, however, this Contribution will argue that, within the context of fair use, courts and policymakers should continue to focus on monetary market harms in order to preserve the long history of the fair use doctrine, to uphold fair use’s goals of protecting the First Amendment and providing more works for the public, and, practically speaking, to allow for a more fact intensive inquiry. At the very least, courts cannot change course unless so instructed by Congress.
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The fair use doctrine’s exclusive focus on market harms is deeply rooted in this country’s jurisprudence.15 Justice Story, in his eminent 1841 opinion in Folsom v. Marsh, instructed courts to consider whether the secondary work “may prejudice the sale, or diminish the profits” of the original work.16 This remained the focus of the fair use doctrine, which existed as a court created doctrine until 1976 when Congress codified fair use in the Copyright Act.17 In fact, Justice Story’s holding in Folsom is in large part restated in §107, and Congress in House and Senate reports specified its intent to maintain the fair use doctrine as created by the common law.18
In any event, Congress made clear in the text of §107 that the fair use inquiry is focused on market harms, and courts have continued to focus on the same. In fact, in the overall copyright scheme, Congress has steered clear of any focus on moral rights or harms. The one narrow exception is found in the Visual Artists Rights Act, which allows the author of a visual work of art that exists in a very small quantity to prevent intentional distortion or modification of that work which would prejudice the author’s reputation.19 However, this statute is very limited in scope, has rarely been invoked, and still only provides market-based remedies.20 More importantly, in limiting its attention to moral harms in this one limited circumstance, Congress evidently intended to exclude it elsewhere.21 The Visual Artists Rights Act aside, moral rights and harms remain absent from copyright law.22 Indeed, in the context of fair use, the Supreme Court in Campbell23 stated explicitly that when a parody, a common subject of fair use, kills demand for the original – which most certainly would be a moral harm – “it does not produce a harm cognizable under the Copyright Act.”24
One borderline exception is that some courts might be receptive to claims of reputational harm. For example, in one such case, the California Central District Court found harm where a Honda commercial made use of the James Bond franchise.25 Plaintiffs argued, and the court agreed, that an important aspect of the James Bond persona is his association with high class.26 Therefore, the use of James Bond in a low-end car commercial might have harmed the rights holder’s ability to license out the character to high-end licensees.27 However, the Supreme Court has made it clear that reputational damage is of no consequence.28 Additionally, even when courts do consider harm to reputation, as in the James Bond example, those harms are still directly tied to harms felt in the market, as distinguished from non-pecuniary reputational harm. Therefore, while reputational harms might sit on ground slightly closer to moral harm, they are still only recognized to the extent they constitute market harms as well.
Some, however, have suggested that courts may in fact consider moral harms in certain cases.29 For example, in Monge v. Maya, the Ninth Circuit denied a finding of fair use where a magazine published pictures from the wedding of celebrities who wished to keep their wedding secret.30 The Ninth Circuit reached this conclusion even though there was a tenuous potential for market harm, perhaps overextending the potential market harm standard. The court ultimately reasoned that there was market harm because the celebrity couple could have changed their mind and profited from selling their wedding pictures.31 Therefore, the court’s decision was still grounded in potential profit losses. While moral harms may or may not operate in the background of such a case, the express concern is still strict market harm, even if that harm appears tenuous.
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Thus, the history of both copyright law and fair use establish that courts should be primarily, if not exclusively, concerned with pecuniary harm to authors. Further, regardless of the motivations of authors, both courts and Congress should continue to focus on market harms within the fair use framework for four primary policy reasons.
First, the doctrine of stare decisis militates against the consideration of moral harms. Not only has fair use long excluded moral harms, it has been absent from the analysis since the creation of the doctrine.32 As the Supreme Court has noted, the application of stare decisis is the “preferred course because it promotes the evenhanded, predictable, and consistent development of legal principles, fosters reliance on judicial decisions, and contributes to the actual and perceived integrity of the judicial process.”33 It carries particular weight when prior decisions have interpreted statutes, because those decisions “become part of the statutory scheme, subject (just like the rest) to congressional change.”34 Therefore, at the very least, courts must await a change of course by Congress before taking moral harms into consideration. Congress, in turn, would be wise to continue the status quo for the sake of consistency and reliance, as well as for the reasons discussed below.
Second, fair use as a doctrine plays an important role as a First Amendment safety valve within the copyright scheme.35 Copyright holders are granted a bundle of rights to prevent others from misappropriating their works. However, fair use recognizes that secondary creators have the right to freedom of expression, which allows those secondary creators to provide important criticism and comment on the creations of others by including or referencing the original in their works.36 By taking moral harm into account, this First Amendment protection would be greatly frustrated.37 To be certain, plaintiffs are often motivated by moral harms when they choose to bring a suit.38 If courts begin to recognize these harms, they would effectively be adding a weight on the scale in favor of plaintiffs. In many circumstances, this weight would be diametrically counter to the value of free expression. For example, imagine a singer writes a song with racist overtones. Because of fair use, another singer could make use of the first singer’s composition to create a parody to critique the original. This is certainly a valuable use of freedom of expression. However, the larger the critique and attack on the original, the larger the moral harm felt by the original artist is likely to be. Therefore, effective and socially valuable critique would be worse off in the analysis than a modest critique.
Additionally, the progress of the arts would be impaired if courts were to start contemplating moral harms. Scholars point to the Progress Clause as a check on the overextension of copyrights because it creates an imperative for Congress, in its enactment of intellectual property laws, to prioritize the public’s interest in access to more creative output.39 This imperative is particularly prevalent in fair use doctrine, which is especially concerned with enabling a secondary market of creators, despite the general rights of original creators. Because of the prevalence of moral issues in infringement suits leading to fair use defenses, and the ease with which a moral harm could be asserted, the public would unquestionably end up with diminished access to a secondary market, and thus less creative works overall, contrary to the goal of the Progress Clause. This is especially true given the limited nature of truly original works. As Justice Story stated in his oft quoted observation, “[t]here are, and can be, few, if any, things, which in an abstract sense, are strictly new and original throughout. Every book in literature, science and art, borrows, and must necessarily borrow, and use much which was well known and used before.”40 Because so much creation is secondary in some sense, the Supreme Court has counseled courts to avoid applying copyright law in a manner that would “stifle the very creativity which that law is designed to foster.”41 Giving preference to the incentives of original authors over those of secondary authors runs contrary to this important progressive aim of the fair use doctrine.42
Finally, moral harms are difficult to measure. A focus on pecuniary harms has the benefit of being a fact-based inquiry. For example, in Campbell, the issue to be addressed on remand was whether or not the owner to the rights of the song “Oh, Pretty Woman” could establish that 2 Live Crew’s “Pretty Woman” served as a market substitute for a rap derivative of the original.43 Such a determination could be reached by fact finders after they consider the evidence introduced by the parties. Moral harms, on the other hand, are easy to allege but difficult to quantify and prove. If fact-finders were to consider moral harms, their verdicts would be swayed by their personal feelings of justice as it relates to the potentially infringing activity, rather than being rooted in the evidence proffered. Therefore, fair use should remain focused on market harms, which could be proven in economic terms, and lends itself to a more objective ruling.
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There is value in continuity within the legal system. That courts have for so long focused the fair use investigation on market harms is not merely the product of inertia, but of a carefully crafted doctrine. Courts have been true to the primary goals of fair use, and as a matter of policy, the consideration of market harms is more in line with the constitutional aims of the fair use doctrine. Additionally, market harm is arguably the most significant fair use consideration. Such a dramatic departure from over a century and a half of jurisprudence might throw off the balance of the analysis and lead to an unpredictable doctrine in such a manner that courts and lawmakers should avoid.
1. Yonatan Shefa is a 3L at New York University School of Law. This piece is a commentary on the 2018 problem at the BMI Entertainment and Media Law Moot Court Competition, presented by the Benjamin N. Cardozo School of Law in New York, NY. The issue in the problem dealt with whether a parody qualified as fair use. The views expressed in this piece do not necessarily reflect those of the author on this point of law. Rather, this exposition is meant to be a distillation of a single side of the argument reflected within the competition.
2. E.g. 17 U.S.C §§ 107–22 (2018).
3. 4 Melville B. Nimmer and David Nimmer, Nimmer on Copyright § 13.05 (2018).
4. 17 U.S.C. § 107 (2018).
6. 17 U.S.C. § 107(4) (2018).
7. E.g., Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 590 (1994) (“It [the fourth factor] requires courts to consider not only the extent of market harm caused by the particular actions of the alleged infringer, but also ‘whether unrestricted and widespread conduct of the sort engaged in by the defendant . . . would result in a substantially adverse impact on the potential market’ for the original.”) (emphasis added) (quoting 4 Melville B. Nimmer and David Nimmer, Nimmer on Copyright § 13.05[A] (Matthew Bender, Rev. Ed.)).
8. See, e.g., Nimmer and Nimmer, supra note 3, § 13.05 (“The fourth factor looks to adverse impact only by reason of usurpation of the demand for plaintiff’s work.”).
9. E.g. Christopher Buccafusco and David Fagundes, The Moral Psychology of Copyright Infringement, 100 Minn. L. Rev. 2433, 2441–46 (2016).
10. U.S. Const., art. I, § 8, cl. 8.
11. Buccafusco and Fagundes, supra note 9, at 2449.
13. Id. at 2451–52.
14. For example, in the BMI Moot Court competition, the copyright holder objected to a parody of his song for religious reasons and because it tarnished his reputation in his community.
15. In fact, this focus precedes the development of fair use by the courts. The British precursor to the copyright clause on which early copyright law was based, the Statute of Anne of 1709, is likewise primarily concerned with the financial entitlements of authorship. Similarly, the Progress Clause of the U.S. Constitution only grants an exclusive right to authors and inventors for a limited time. This limited right suggests that it was not intended to be a moral right. See Pierre N. Leval, Toward A Fair Use Standard, 103 Harv. L. Rev. 1105, 1108 (1990).
16. Folsom v. Marsh, 9 F. Cas. 342, 348 (C.C.D. Mass. 1841) (No. 4,901) (emphasis added).
17. See Leval, supra note 15, at 1105.
18. Campbell, 510 U.S. at 577.
19. 17 U.S.C. § 106A (2018).
20. Buccafusco and Fagundes, supra note 9, at 2447.
22. Gilliam v. ABC, 538 F.2d 14, 24 (2d Cir. 1976) (“American copyright law, as presently written, does not recognize moral rights or provide a cause of action for their violation, since the law seeks to vindicate the economic, rather than the personal, rights of authors.”).
23. Campbell is the Supreme Court’s most recent and significant fair use case expounding on the fair use factors. It involved the rights owner of a famous song suing a rap group for using aspects of the original in their parody. In addition, the case is particularly relevant to the issue of moral harms, in that it addresses parody’s claim to fair use, and parody cases are particularly ripe for the existence of moral harms because a parody not only copies the original, but generally attacks it as well.
24. Campbell, 510 U.S. at 591–92.
25. Metro-Goldwyn-Mayer, Inc. v. Am. Honda Motor Co., 900 F. Supp. 1287, 1300 (C.D. Cal. 1995).
28. See, e.g., Campbell at 592 (distinguishing between “remediable displacement and unremediable disparagement.”).
29. See, e.g., Buccafusco and Fagundes, supra note 9, at 2454.
30. Monge v. Maya Magazines, 688 F.3d 1164, 1179 (9th Cir. 2012).
31. Id. at 1182.
32. See Folsom v. Marsh, 9 F. Cas. 342, 348 (C.C.D. Mass. 1841) (No. 4,901).
33. Kimble v. Marvel Entm’t, 135 S. Ct. 2401, 2409 (2015) (quoting Payne v. Tennessee, 501 U.S. 808, 827–28 (1991)).
35. See Harper & Row, Publrs., 471 U.S. at 560.
36. SunTrust Bank v. Houghton Mifflin Co., 268 F.3d 1257, 1264 (11th Cir. 2001).
37. Notably, the Supreme Court has on more than one occasion shrugged off First Amendment challenges to copyright law. See, e.g., Eldred v. Ashcroft, 537 U.S. 186, 219 (2003). That is because copyright provides an internal system to protecting the First Amendment, which consists of a robust fair use defense. See id. at 789. However, weakening that defense by way of considering moral harm to plaintiffs would call into question whether copyright law continues to properly safeguard the First Amendment, and would open the Court up to legitimate challenges to its prior jurisprudence.
38. See e.g. Buccafusco and Fagundes, supra note 9, at 2498.
39. Id. at 2498–99.
40. Campbell, 510 U.S. at 575 (quoting Emerson v. Davies, 8 F. Cas. 615, 619 (C.C.D. Mass. 1845) (No. 4,436)).
41. Id. at 577 (quoting Stewart v. Abend, 495 U.S. 207, 236 (1990)).
42. Importantly, primary and secondary users are not necessarily two distinct groups. The same author who writes something original might later borrow from elsewhere and vice versa. Therefore, even though creators might respond to the incentive of a legal landscape that they see as moral, that same incentive could later backfire.
43. Campbell, 510 U.S. at 593.