PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

A.V., a minor, by his next friend 

Robert Vanderhye; K.W., a minor,

by his next friend Kevin Wade,

Sr.; E.N., a minor, by her next

friend Scott Nelson; M.N., a

minor, by her next friend Scott

Nelson,  No. 08-1424

Plaintiffs-Appellants,

v.

IPARADIGMS, LLC,

Defendant-Appellee. 

A.V., a minor, by his next friend 

Robert Vanderhye; K.W., a minor,

by his next friend Kevin Wade,

Sr.; E.N., a minor, by her next

friend Scott Nelson; M.N., a

minor, by her next friend Scott

Nelson,  No. 08-1480

Plaintiffs-Appellees,

v.

IPARADIGMS, LLC,

Defendant-Appellant. 

Appeals from the United States District Court

for the Eastern District of Virginia, at Alexandria.

Claude M. Hilton, Senior District Judge.

(1:07-cv-00293-CMH-BRP)
Argued: December 4, 2008

Decided: April 16, 2009

Before WILKINSON, MOTZ, and TRAXLER,

Circuit Judges.

Affirmed in part, reversed in part, and remanded by published

opinion. Judge Traxler wrote the opinion, in which Judge

Wilkinson and Judge Motz joined.

COUNSEL

ARGUED: Robert Arthur Vanderhye, McLean, Virginia, for

Appellants/Cross-Appellees. James F. Rittinger, SATTERLEE, STEPHENS, BURKE & BURKE, New York, New

York, for Appellee/Cross-Appellant. ON BRIEF: Joshua M.

Rubins, Justin E. Klein, SATTERLEE, STEPHENS, BURKE

& BURKE, New York, New York, for Appellee/CrossAppellant.

OPINION

TRAXLER, Circuit Judge:

Plaintiffs brought this copyright infringement action against

defendant iParadigms, LLC, based on its use of essays and

other papers written by plaintiffs for submission to their high

school teachers through an online plagiarism detection service

operated by iParadigms. See 17 U.S.C. § 501. iParadigms

asserted counterclaims alleging that one of the plaintiffs

gained unauthorized access to iParadigms’ online service in

violation of the Computer Fraud and Abuse Act, see 18

2 A.V. v. IPARADIGMS, LLC
U.S.C. §§ 1030(a)(5)(A)(iii) & (B)(i), and the Virginia Computer Crimes Act, see Va. Code Ann. § 18.2-152.1-18.2-

152.16. The district court granted summary judgment in favor

of iParadigms on plaintiffs’ copyright infringement claim

based on the doctrine of fair use. See 17 U.S.C. § 107. On the

counterclaims, the district court granted summary judgment

against iParadigms based on its conclusion that iParadigms

failed to produce evidence that it suffered any actual or economic damages. 

The parties cross appeal. We affirm the grant of summary

judgment on the plaintiffs’ copyright infringement claim, but

reverse the summary judgment order as to iParadigms’ counterclaims and remand for further consideration.

I.

Defendant iParadigms owns and operates "Turnitin Plagiarism Detection Service," an online technology system

designed to "evaluate[ ] the originality of written works in

order to prevent plagiarism." S.J.A. 1. According to

iParadigms, Turnitin offers high school and college educators

an automated means of verifying that written works submitted

by students are originals and not the products of plagiarism.

When a school subscribes to iParadigms’ service, it typically

requires its students to submit their written assignments "via

a web-based system available at www.turnitin.com or via an

integration between Turnitin and a school’s course management system." S.J.A. 1-2. In order to submit papers online,

students "must be enrolled in an active class" and must "enter

the class ID number and class enrollment password" supplied

by the assigning professor. J.A. 240. 

After a student submits a writing assignment, Turnitin performs a digital comparison of the student’s work with content

available on the Internet, including "student papers previously

submitted to Turnitin, and commercial databases of journal

A.V. v. IPARADIGMS, LLC 3
articles and periodicals." S.J.A. 2.1

 For each work submitted,

Turnitin creates an "Originality Report" suggesting a percentage of the work, if any, that appears not to be original. The

assigning professor may, based on the results of the Originality Report, further explore any potential issues. 

The Turnitin system gives participating schools the option

of "archiving" the student works. When this option is

selected, Turnitin digitally stores the written works submitted

by students "so that the work becomes part of the database

used by Turnitin to evaluate the originality of other student’s

works in the future." S.J.A. 2.2 The archived student works are

stored as digital code, and employees of iParadigms do not

read or review the archived works. 

To submit a paper to Turnitin, a student must create a user

profile on the web site, a process that requires the student to

click on "I Agree" under the "terms of agreement" or "Clickwrap Agreement." The Clickwrap Agreement provided,

among other things, that the services offered by Turnitin are

"conditioned on [the user’s] acceptance without modification

of the terms, conditions, and notices contained herein," and

that "[i]n no event shall iParadigms . . . be liable for any . . .

damages arising out of or in any way connected with the use

of this web site." J.A. 340.

When they initiated the lawsuit, the four plaintiffs were

minor high school students and thus appeared in this litigation

via their next friends. Plaintiffs A.V. and K.W. attended

1The comparison occurs as follows: "[T]he Turnitin system makes a

‘fingerprint’ of the work by applying mathematical algorithms to its content. This fingerprint is merely a digital code. Using the digital fingerprint

made of the student’s work, the Turnitin system compares the student’s

work electronically to content available on the Internet . . . and student

papers previously submitted to Turnitin." S.J.A. 2. 

2At the time plaintiffs filed this action, there were approximately 7,000

institutional Turnitin subscribers that, in turn, resulted in the submission

of about 125,000 papers each day. 

4 A.V. v. IPARADIGMS, LLC
McLean High School in Fairfax County, Virginia, which

began using Turnitin in 2006 and opted to have its student

papers archived in the Turnitin data base. Plaintiffs E.N. and

M.N. attended Desert Vista High School in Tucson, Arizona,

which also subscribed to the Turnitin service and elected the

archiving option. According to the complaint, both schools

required students to submit their written assignments via

Turnitin.com to receive credit; failure to do so would result in

a grade of "zero" for the assignment under the policy of both

schools.

Plaintiffs K.W., E.N. and M.N. allege that their teachers

adhered to school policy and required them to submit their

written assignments to Turnitin. Using the passwords provided by the schools, K.W., E.N. and M.N. submitted their

papers, each of which included a "disclaimer" objecting to the

archiving of their works.3 As requested by the two high

schools, however, each of these submissions was archived.

A.V., the fourth plaintiff, did not submit his paper for credit

in a high school course; instead, he submitted his work to

Turnitin using a password designated for students enrolled in

a college course at the University of California, San Diego

("UCSD"). The password was provided to A.V. by plaintiffs’

counsel who obtained it by conducting an internet search. 

According to iParadigms, "no one at iParadigms read[ ] or

review[ed] the [p]apers submitted" by plaintiffs, and

iParadigms did not send any "[p]aper at issue in this action

. . . to anybody other than the instructor to whom plaintiffs[ ]

submitted their own papers." S.J.A. 2. 

Plaintiffs filed a complaint alleging that iParadigms

infringed their copyright interests in their works by archiving

them in the Turnitin database without their permission.4 The

3Shortly before plaintiffs submitted their assignments to Turnitin, plaintiffs’ counsel applied for and was granted a copyright registration for each

paper at issue. 

4Plaintiffs also alleged that the Turnitin system offends copyright law

because it "may send a full and complete copy of a student’s unpublished

A.V. v. IPARADIGMS, LLC 5
district court granted summary judgment to iParadigms on

two bases. First, the court found that the students and

iParadigms entered into binding agreements when the students clicked on "I Agree," and that the agreements shielded

iParadigms from liability arising out of plaintiffs’ use of the

Turnitin website. Furthermore, the court concluded that the

disclaimers included on plaintiffs’ written submissions did not

"modify the Agreement or render it unenforceable." J.A. 50.5

Second, the court determined that iParadigms’ use of each

of the plaintiffs’ written submissions qualified as a "fair use"

under 17 U.S.C. § 107 and, therefore, did not constitute

infringement. In particular, the court found that the use was

transformative because its purpose was to prevent plagiarism

by comparative use, and that iParadigms’ use of the student

works did not impair the market value for high school term

papers and other such student works. 

manuscript to an iParadigms client anywhere in the world upon request of

the client, and without the student’s permission." J.A. 22. Plaintiffs, however, have not produced any evidence to demonstrate that this occurred

with respect to the plaintiffs’ works at issue here. Accordingly, we confine

our review of the copyright issues to iParadigms’ practice of archiving

documents. 

5Plaintiffs offered two other theories upon which the district court could

find the Clickwrap Agreement unenforceable, which the court also

rejected. First, the district court disagreed that the agreement was an unenforceable adhesion contract, finding no evidence that plaintiffs were

coerced by iParadigms (as opposed to the schools). Second, the district

court refused to void the contract based on the doctrine of infancy, see Zelnick v. Adams, 561 S.E.2d 711, 715 (Va. 2002) ("[A] contract with an

infant is not void, only voidable by the infant upon attaining the age of

majority."), concluding that plaintiffs cannot use this doctrine as a "sword"

to void a contract while retaining the benefits of the contract — high

school credit and standing to bring this action, cf. 5 Richard A. Lord, Williston on Contracts § 9.14 (4th ed.) ("When the infant has received consideration which he still possesses, . . . he cannot, upon reaching majority,

keep it and refuse to pay.") 

6 A.V. v. IPARADIGMS, LLC
iParadigms asserted four counterclaims, but only two are

now at issue: (1) that plaintiff A.V. gained unauthorized

access to Turnitin by using passwords designated for use by

college students enrolled at UCSD, in violation of the Computer Fraud and Abuse Act ("CFAA"), see 18 U.S.C. § 1030;

and (2) that plaintiff A.V., based on the aforementioned unauthorized access, violated the Virginia Computer Crimes Act

("VCCA"), see Va. Code Ann. § 18.2-152.3. 

The district court rejected both counterclaims, granting

summary judgment to plaintiff A.V. on the grounds that there

was no evidence of actual or economic damages suffered by

iParadigms as a result of the alleged violations under the

CFAA and the VCCA. 

II. Plaintiffs’ Appeal

We first consider the summary judgment order as to plaintiffs’ copyright infringement claim. The owner of a copyright

enjoys "a bundle of exclusive rights" under section 106 of the

Copyright Act, Harper & Row, Publishers, Inc. v. Nation

Enters., 471 U.S. 539, 546 (1985), including the right to copy,

the right to publish and the right to distribute an author’s

work, see id. at 547; see also 17 U.S.C. § 106 (also including

among fundamental rights in copyrighted works rights to display, to perform, and to prepare derivative works). These

rights "vest in the author of an original work from the time of

its creation." Harper & Row, 471 U.S. at 547. "‘Anyone who

violates any of the exclusive rights of the copyright owner,’

that is, anyone who trespasses into his exclusive domain by

using or authorizing the use of the copyrighted work . . . ‘is

an infringer of the copyright.’" Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417, 433 (1984) (quoting

17 U.S.C. § 501(a)).

The ownership rights created by the Copyright Act, however, are not absolute; these rights, while exclusive, are "limited in that a copyright does not secure an exclusive right to

A.V. v. IPARADIGMS, LLC 7
the use of facts, ideas, or other knowledge." Bond v. Blum,

317 F.3d 385, 394 (4th Cir. 2003). Rather, copyright protection extends only to the author’s manner of expression. See 17

U.S.C. § 102(b) ("In no case does copyright protection for an

original work . . . extend to any idea, procedure, process, system, method of operation, concept, principle, or discovery,

regardless of the form in which it is described . . ."); Feist

Publ’ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 344-45

(1991) ("The most fundamental axiom of copyright law is that

no author may copyright his ideas or the facts he narrates."

(internal quotation marks and alteration omitted)). 

Moreover, the copyright owner’s rights are subject to several exceptions enumerated by the Copyright Act. "[T]he definition of exclusive rights in § 106 of the [Copyright] Act is

prefaced by the words ‘subject to sections 107 through [122].’

Those sections describe a variety of uses of copyrighted material that ‘are not infringements of copyright’ ‘notwithstanding

the provisions of § 106.’" Sony, 464 U.S. at 447 (quoting 17

U.S.C. § 106).

One of these statutory exceptions codifies the common-law

"fair use" doctrine, which "allows the public to use not only

facts and ideas contained in a copyrighted work, but also

expression itself in certain circumstances." Eldred v. Ashcroft,

537 U.S. 186, 219 (2003); see Campbell v. Acuff-Rose Music,

Inc., 510 U.S. 569, 577 (1994) ("Congress meant § 107 to

restate the present judicial doctrine of fair use . . . and

intended that courts continue the common-law tradition of fair

use adjudication." (internal quotation marks omitted)). "From

the infancy of copyright protection, some opportunity for fair

use of copyrighted materials has been thought necessary to

fulfill copyright’s very purpose, ‘[t]o promote the Progress of

Science and useful Arts . . . .’" Campbell, 510 U.S. at 575

(quoting U.S. Const., Art. I, § 8, cl. 8). Courts have traditionally regarded "fair use" of a copyrighted work as "a privilege

in others than the owner of the copyright to use the copyrighted material in a reasonable manner without his consent."

8 A.V. v. IPARADIGMS, LLC
Harper & Row, 471 U.S. at 549 (internal quotation marks

omitted).

Thus, the copyright owner’s "monopoly . . . is limited and

subject to a list of statutory exceptions, including the exception for fair use provided in 17 U.S.C. § 107." Bond, 317 F.3d

at 393 (internal quotation marks and citation omitted). A person who makes fair use of a copyrighted work is not an

infringer even if such use is otherwise inconsistent with the

exclusive rights of the copyright owner. See 17 U.S.C. § 107

(providing that "the fair use of a copyrighted work . . . is not

an infringement of copyright"); cf. Bond, 317 F.3d at 394 ("A

fair-use analysis bears relevance only when a challenged use

violates a right protected by the Copyright Act."). 

Section 107 provides that "the fair use of a copyrighted

work . . . for purposes such as criticism, comment, news

reporting, teaching (including multiple copies for classroom

use), scholarship, or research, is not an infringement of copyright." 17 U.S.C. § 107. Congress provided four nonexclusive

factors for courts to consider in making a "fair use" determination:

(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.

17 U.S.C. § 107. Section 107 contemplates that the question

of whether a given use of copyrighted material is "fair"

requires a case-by-case analysis in which the statutory factors

A.V. v. IPARADIGMS, LLC 9
are not "treated in isolation" but are "weighed together, in

light of the purposes of copyright." Campbell, 510 U.S. at

578. 

With these general principles in mind, we consider each of

the statutory factors. 

First Factor

The first fair use factor requires us to consider "the purpose

and character of the use, including whether such use is of a

commercial nature or is for nonprofit educational purposes."

17 U.S.C. § 107(1). A use of the copyrighted material that has

a commercial purpose "tends to weigh against a finding of fair

use." Harper & Row, 471 U.S. at 562. "The crux of the profit/nonprofit distinction is not whether the sole motive of the

use is monetary gain but whether the user stands to profit

from exploitation of the copyrighted material without paying

the customary price." Id.

In assessing the "character" of the use, we should consider

the specific examples set forth in section 107’s preamble,

"looking to whether the use is for criticism, or comment, or

news reporting, and the like," with the goal of determining

whether the use at issue "merely supersedes the objects of the

original creation, or instead adds something new, with a further purpose or different character." Campbell, 510 U.S. at

578-79 (internal quotation marks, alteration and citation omitted). Courts, therefore, must examine "whether and to what

extent the new work is transformative . . . . [T]he 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." Id. at 579 (internal quotation marks omitted). A "transformative" use is one that "employ[s] the quoted

matter in a different manner or for a different purpose from

the original," thus transforming it. Pierre N. Leval, Commentary, Toward a Fair Use Standard, 103 Harv. L. Rev. 1105,

1111 (1990). 

10 A.V. v. IPARADIGMS, LLC
In considering the character and purpose of iParadigms’ use

of the student works, the district court focused on the question

of whether the use was transformative in nature. The court

concluded that "iParadigms, through Turnitin, uses the papers

for an entirely different purpose, namely, to prevent plagiarism and protect the students’ written works from plagiarism

. . . by archiving the students’ works as digital code." J.A. 54.

Although the district court recognized that iParadigms intends

to profit from its use of the student works, the court found that

iParadigms’ use of plaintiffs’ works was "highly transformative," J.A. 54, and "provides a substantial public benefit

through the network of educational institutions using Turnitin." J.A. 55. Accordingly, the court concluded that the first

factor weighed in favor of a finding of fair use.

Plaintiffs argue the district court’s analysis contained several flaws. First, they suggest that the district court ignored

the commercial nature of iParadigms’ use of their materials,

highlighting the fact that iParadigms is a for-profit company

that enjoys millions of revenue dollars based on its everincreasing database of student works. Seizing upon the

Supreme Court’s suggestion in Sony that "every commercial

use of copyrighted material is presumptively an unfair exploitation of the monopoly privilege that belong to the owner of

the copyright," 464 U.S. at 451, plaintiffs contend that the

archiving of their papers cannot constitute a fair use under

section 107. 

The district court, however, did not ignore the fact that

iParadigms’ use of the plaintiffs’ works occurred in the commercial context; indeed, the court expressly noted that

"iParadigms makes a profit in providing this service to educational institutions." J.A. 55. But the fact that the disputed use

of copyrighted material is commercial is not determinative in

and of itself. See Sony, 464 U.S. at 448. As the Second Circuit

observed, "[s]ince many, if not most, secondary users seek at

least some measure of commercial gain from their use, unduly

emphasizing the commercial motivation of a copier will lead

A.V. v. IPARADIGMS, LLC 11
to an overly restrictive view of fair use." American Geophysical Union v. Texaco, Inc., 60 F.3d 913, 921 (2d Cir. 1994);

see Campbell, 510 U.S. at 584 (observing that "[i]f . . . commerciality carried presumptive force against a finding of fairness, the presumption would swallow nearly all of the

illustrative uses listed in the preamble paragraph of § 107,"

which "are generally conducted for profit in this country"

(internal quotation marks omitted)). The Court has made clear

that Sony did not establish a per se rule that a commercial use

barred a fair use finding. See Campbell, 510 U.S. at 585 ("The

Court of Appeals’ elevation of one sentence from Sony to a

per se rule . . . runs as much counter to Sony itself as to the

long common-law tradition of fair use adjudication."). Thus,

although a commercial use finding generally weighs against

a finding of fair use, it must "be weighed along with [the]

other factors in fair use decisions." Sony, 464 U.S. at 449

n.32. 

In this case, the district court determined that the commercial aspect was not significant in light of the transformative

nature of iParadigms’ use. See Campbell, 510 U.S. at 578-79.

The district court simply weighed the commercial nature of

iParadigms’ use along with other fair use factors, as is appropriate under Supreme Court precedent. See id. at 579

(explaining that "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"). 

Plaintiffs also argue that iParadigms’ use of their works

cannot be transformative because the archiving process does

not add anything to the work — Turnitin merely stores the

work unaltered and in its entirety. This argument is clearly

misguided. The use of a copyrighted work need not alter or

augment the work to be transformative in nature. Rather, it

can be transformative in function or purpose without altering

or actually adding to the original work. See, e.g., Perfect 10,

Inc. v. Amazon.com, Inc., 508 F.3d 1146, 1165 (9th Cir. 2007)

(concluding that Google’s use of copyrighted images in

12 A.V. v. IPARADIGMS, LLC
thumbnail search index was "highly transformative" even

though the images themselves were not altered, in that the use

served a different function than the images served).

iParadigms’ use of plaintiffs’ works had an entirely different

function and purpose than the original works; the fact that

there was no substantive alteration to the works does not preclude the use from being transformative in nature. 

Plaintiffs further contend that, even if iParadigms’ use of

their works has a transformative purpose, the use itself is not

transformative if it fails to effect such purpose. Plaintiffs

assert that there is at least a question of fact as to whether

Turnitin effectively prevents plagiarism such that summary

judgment is inappropriate. In support of this contention, plaintiffs offered evidence showing that it is possible to defeat the

Turnitin system by paraphrasing the original copyrighted

work and that the system sometimes does not catch even verbatim copying. In other words, because the Turnitin system is

not fool-proof, the archiving of plaintiffs’ works to compare

and detect plagiarism cannot be transformative. 

We reject this assertion as well. The question of whether a

use is transformative does not rise or fall on whether the use

perfectly achieves its intended purpose. Cf. Campbell, 510

U.S. at 582 (declining to evaluate the quality of the parody

and declaring that "when fair use is raised in defense of parody, [the threshold question] is whether a parodic character

may reasonably be perceived"). Plaintiffs do not dispute that

the Turnitin system does detect some level of plagiarism, even

if, as they assert in the complaint, "[t]he Turnitin system is

capable of detecting only the most ignorant or lazy attempts

at plagiarism by students without significant monetary

resources." J.A. 21. Whether a better plagiarism detection system could be designed is not important to our analysis of

whether the disputed use serves a different purpose or function.

The district court, in our view, correctly determined that the

archiving of plaintiffs’ papers was transformative and favored

A.V. v. IPARADIGMS, LLC 13
a finding of "fair use." iParadigms’ use of these works was

completely unrelated to expressive content and was instead

aimed at detecting and discouraging plagiarism. 

Second Factor

In considering the nature of the copyrighted work, the

Supreme Court has instructed that "fair use is more likely to

be found in factual works than in fictional works," whereas "a

use is less likely to be deemed fair when the copyrighted work

is a creative product." Stewart v. Abend, 495 U.S. 207, 237

(1990) (internal quotation marks and alteration omitted). This

postulate recognizes the notion that a work is entitled to

greater copyright protection as it comes closer to "the core of

creative expression." Bond, 317 F.3d at 395. However, if the

disputed use of the copyrighted work "is not related to its

mode of expression but rather to its historical facts," then the

creative nature of the work is mitigated. Id. at 396. And, in

fact, the district court concluded that iParadigms’ use of the

plaintiffs’ works "relate[d] solely to the comparative value of

the works" and did not "diminish[ ] the incentive for creativity

on the part of students." J.A. 55. The district court noted that,

if anything, iParadigms’ use of the students’ works fostered

the development of original and creative works "by detecting

any efforts at plagiarism by other students." J.A. 55.

Plaintiffs contend that the district court’s application of this

factor was flawed in two respects. First, they argue that the

court failed to account for the fact that their works were

unpublished. Because an author enjoys the "right to control

the first public appearance of his undisseminated expression,"

the fair use of an unpublished work is narrower in scope. Harper & Row, 471 U.S. at 555; see id. at 564 ("[T]he author’s

right to control the first public appearance of his expression

weighs against such use of the work before its release."). In

its order, the district court omits mention of this fact; therefore, plaintiffs suggest that the district court’s entire analysis

of the second statutory factor is invalid.

14 A.V. v. IPARADIGMS, LLC
We disagree that the lack of an express reference to the

unpublished status of plaintiffs’ works undermines the court’s

analysis under § 107(2). Not only has the Supreme Court

admonished courts to resist weighing the fair use factors in

isolation, see Campbell, 510 U.S. at 578, but Congress specifically provided that "[t]he fact that a work is unpublished

shall not itself bar a finding of fair use if such finding is made

upon consideration of all the above factors." 17 U.S.C. § 107.

Therefore, in Bond, we were able to conclude that the introduction into a court proceeding of an original work of fiction

constituted fair use under § 107 despite the fact that the copyrighted work was unpublished:

That Bond’s manuscript is unpublished and contains

a stylized mode of expressing his feelings about historical facts weigh against a finding of fair use. But,

as Campbell instructs, we do not consider the § 107

factors in isolation from one another, but we weigh

them together in light of the purposes of copyright.

Where, as here, the use of the work is not related to

its mode of expression but rather to its historical

facts and there is no evidence that the use of Bond’s

manuscript in the state legal proceedings would

adversely affect the potential market for the manuscript, one cannot say the incentive for creativity has

been diminished in any sense.

Id. at 395-96 (emphasis added) (internal quotation marks and

citations omitted). Here, the district court, quoting Bond, concluded that iParadigms’ use was unconnected to any creative

element in plaintiffs’ works. Given that the district court drew

its language verbatim from a passage in Bond discussing the

fair use of unpublished works of fiction, the district court

clearly did not ignore the unpublished nature of these works.

Moreover, it is clear that iParadigms’ use of plaintiffs’

works did not have the "intended purpose" or "incidental

effect" of supplanting plaintiffs’ rights to first publication.

A.V. v. IPARADIGMS, LLC 15
Harper & Row, 471 U.S. at 562. This is significant in that the

primary basis for the close scrutiny courts give the use of an

unpublished work is, as previously noted, an "author’s right

to control the first public appearance of his expression." Id. at

564. iParadigms did not publicly disseminate or display plaintiffs’ works and did not send them to any third party "other

than the instructor to whom plaintiffs submitted their own

papers." S.A. 2. In fact, the Turnitin digital archiving process

does not involve any review of the submitted works at all,

even by those at iParadigms. Thus, no employee of

iParadigms read or reviewed the works submitted by plaintiffs. We find no basis whatsoever for concluding that

iParadigms’ use of the plaintiffs’ papers undermined their

right to first publication. 

Plaintiffs contend that the district court’s consideration of

the "nature of the copyrighted works" factor was flawed for

a second reason: the district court ignored the fact that the

works in question were works of fiction and poetry, which are

considered "highly creative" in nature and deserving of the

strongest protection. This argument is unpersuasive as well in

that the district court expressly acknowledged its obligation to

consider whether the works in question came within the "core

of creative expression." J.A. 55. Rather than ignore it, however, the district court simply concluded that even if the plaintiffs’ works were highly creative in nature, iParadigms’ use of

the plaintiffs’ works was not related to the creative core of the

works. In concluding that the second factor favored neither

plaintiffs nor iParadigms, the district court was merely applying Bond in which we concluded that the use of an unpublished work of fiction in a court proceeding constituted fair

use because such use was "not related to its mode of expression but rather to its historical facts." 317 F.3d at 396.

iParadigms’ use of the works in the case—as part of a digitized database from which to compare the similarity of typewritten characters used in other student works—is likewise

unrelated to any creative component. Thus, we find no fault

in the district court’s application of the second fair use factor.

16 A.V. v. IPARADIGMS, LLC
Third Factor

The third fair use factor requires us to consider "the amount

and substantiality of the portion used in relation to the copyrighted work as a whole." 17 U.S.C. § 107(3). Generally

speaking, "as the amount of the copyrighted material that is

used increases, the likelihood that the use will constitute a

‘fair use’ decreases." Bond, 317 F.3d at 396. But this statutory

factor also requires courts to consider, in addition to quantity,

the "quality and importance" of the copyrighted materials

used, Campbell, 510 U.S. at 587, that is, whether the portion

of the copyrighted material was "the heart of the copyrighted

work." Sundeman v. The Seajay Soc’y, Inc., 142 F.3d 194,

205 (4th Cir. 1998) (internal quotation marks omitted).

Although "[c]opying an entire work weighs against finding a

fair use, . . . it does not preclude a finding of fair use"; therefore, "[t]he extent of permissible copying varies with the purpose and character of the use." Id. at 205-06 (internal

quotation marks omitted) (emphasis added).

The district court found that this factor, like the second factor, did not favor either party. The court concluded that

although iParadigms uses substantially the whole of plaintiffs’

works, iParadigms’ "use of the original works is limited in

purpose and scope" as a digitized record for electronic "comparison purposes only." J.A. 56. Having already concluded

that such use of plaintiffs’ works was transformative, the district court concluded that iParadigms’ use of the entirety of

plaintiffs’ works did not preclude a finding of fair use.

The plaintiffs contend that the district court erred by referring to the transformative nature of iParadigms’ use in its

analysis of the amount and substantiality of the portion of the

copyrighted work used under § 107(3). In our view, the district court did not analytically merge the first and third fair

use factors by referring to iParadigms’ transformative use of

the students’ works. Plaintiffs’ argument, in fact, fails to recognize the overlap that exists between the fair use factors. The

A.V. v. IPARADIGMS, LLC 17
first and third factors, for example, take into account to some

degree the purpose of the disputed use. Compare 17 U.S.C.

§ 107(1); and Sundeman, 142 F.3d at 202 (explaining that

"[t]he ‘further purpose’ and ‘different character’ of [the

defendant’s use] make it transformative" under § 107(1)),

with Bond, 317 F.3d at 396 (concluding that § 107(3) did not

favor plaintiffs because the defendant’s "sole purpose and

intent" was not to use the expressive content in the plaintiffs’

works but "to obtain admissions of fact" in a court proceeding). We find no error in the district court’s analysis.

Fourth Factor

Finally, § 107 directs us to examine the market of the copyrighted work to determine "the effect of the use upon the

potential market for or value of the copyrighted work." 17

U.S.C. § 107(4). The Supreme Court described this factor as

the "single most important element of fair use," Harper &

Row, 471 U.S. at 566, considering that a primary goal of

copyright is to ensure that "authors [have] the opportunity to

realize rewards in order to encourage them to create." Leval,

Toward a Fair Use Standard, 103 Harv. L. Rev. at 1124. By

contrast, "a use that has no demonstrable effect upon the

potential market for, or the value of, the copyrighted work

need not be prohibited in order to protect the author’s incentive to create." Sony, 464 U.S. at 450. 

Our task is to determine whether the defendants’ use of

plaintiffs’ works "would materially impair the marketability

of the work[s] and whether it would act as a market substitute" for them. Bond, 317 F.3d at 396. We focus here not

upon "whether the secondary use suppresses or even destroys

the market for the original work or its potential derivatives,

but [upon] whether the secondary use usurps the market of the

original work." NXIVM Corp. v. The Ross Institute, 364 F.3d

471, 482 (2nd Cir. 2004) (emphasis added). An adverse market effect, in and of itself, does not preclude application of the

fair use defense. "The fair use doctrine protects against a

18 A.V. v. IPARADIGMS, LLC
republication which offers the copyrighted work in a secondary packaging, where potential customers, having read the

secondary work, will no longer be inclined to purchase again

something they have already read." Sundeman, 142 F.3d at

207 (internal quotation marks omitted). 

The analysis of whether the disputed use offers a market

substitute for the original work overlaps to some extent with

the question of whether the use was transformative. See

Campbell, 510 U.S. at 591 (distinguishing a secondary use

that simply duplicates an original work in its entirety, thereby

superseding it, from a secondary use that is transformative).

To the extent this issue arises in fair use cases, it often does

so when the secondary use at issue involves a scholarly critique or parody of the original work. See Campbell, 510 U.S.

at 592 ("[T]he role of the courts is to distinguish between biting criticism that merely suppresses demand and copyright

infringement, which usurps it." (internal quotation marks and

alterations omitted)); see also Sundeman, 142 F.3d at 207

(holding that defendant’s critique of a novel "did not have the

purpose or effect of supplanting the copyrighted work" and

that its use of the novel was transformative and thus did not

create a market substitute for the original work); Davis v. The

Gap, Inc., 246 F.3d 152, 175 (2d Cir. 2001) (explaining that

"[i]f the harm resulted from a transformative secondary use

that lowered the public’s estimation of the original (such as a

devastating review of a book that quotes liberally from the

original to show how silly and poorly written it is), this transformative use will be found to be a fair use, not withstanding

the harm"). 

But regardless of whether the defendant used the original

work to critique or parody it, the transformative nature of the

use is relevant to the market effect factor. See Suntrust Bank

v. Houghton Mifflin Co., 268 F.3d 1257, 1274 n.28 (11th Cir.

2001) ("Whereas a work that merely supplants or supersedes

another is likely to cause a substantially adverse impact on the

potential market of the original, a transformative work is less

A.V. v. IPARADIGMS, LLC 19
likely to do so." (internal quotation marks omitted)); Davis,

246 F.3d at 176 (noting that "the market effect must be evaluated in light of whether the secondary use is transformative").

The district court concluded that iParadigms’ Turnitin system did not serve as a market substitute or even harm the market value of the works, highlighting the deposition testimony

of the plaintiffs — each of whom denied that iParadigms’

"impinged on the marketability of their works or interfered

with their use of the works." J.A. 58. The district court also

noted that, although the pleadings alleged iParadigms’ use

would adversely impact plaintiffs’ ability to market their

works to other high school students seeking to purchase completed term papers or essays, each plaintiff indicated that such

transactions were dishonest and that he or she would not sell

their original works for submission by other students. 

Furthermore, the court rejected plaintiffs’ contention that

iParadigms’ use would adversely impact the value of the

works if a recipient such as a college admissions department

or a literary journal used the Turnitin system to verify originality. Because their works are now archived, plaintiffs

argued, the Turnitin system would report that their own original works were plagiarized. In light of how the Turnitin system works, the district court rejected the argument as

speculative at best:

Anyone who is reasonably familiar with Turnitin’s

operation will be able to recognize that the identical

match is not the result of plagiarism, but simply the

result of Plaintiff’s earlier submission. Individuals

familiar with Turnitin, such as those in the field of

education, would be expecting the works submitted

to have been previously submitted. 

J.A. 59. 

20 A.V. v. IPARADIGMS, LLC
On appeal, plaintiffs’ primary contention is that the district

court focused on whether there was evidence of actual damages, failing to consider the effect of iParadigms’ use on the

"potential market" for plaintiffs’ works.6 Clearly, this assertion is incorrect. The district court considered the potential

market effects suggested by plaintiffs but concluded that

plaintiffs’ arguments were theoretical and speculative. Plaintiffs’ most plausible theory was that iParadigms’ archiving of

their papers impaired the sale of the papers to high school students in the market for unpublished term papers, essays and

the like. Undoubtedly, there is a market for students who wish

to purchase such works and submit them as their own for academic credit.7

 And, iParadigms’ archiving of such papers on

the Turnitin website might well impair the marketability of

such works to student buyers intending to submit works they

did not author without being identified as plagiarists. 

As noted by the district court, however, the plaintiffs testified that they would not sell the works at issue here to any

dealer in such a market because such a transaction would

make them party to cheating and would encourage plagiarism.

Furthermore, to the extent that iParadigms’ use would

adversely affect plaintiffs’ works in this particular market, we

must consider the transformative nature of the use. Clearly no

market substitute was created by iParadigms, whose archived

student works do not supplant the plaintiffs’ works in the

"paper mill" market so much as merely suppress demand for

them, by keeping record of the fact that such works had been

previously submitted. Cf. Davis, 246 F.3d at 175 (noting that

fair use occurs where "the harm resulted from a transforma6Plaintiffs note emphatically that the fourth statutory fair use factor

"specifically uses the word ‘potential’ . . . and nowhere uses the word

‘damage.’" Brief of Appellants at 29. This point of emphasis is somewhat

ironic in that the district court did not use the word "damage" either, but

did discuss potential market effect. 

7Web sites such as www.ibuytermpapers.com, for example, offer completed papers and essays purchased from high school students. 

A.V. v. IPARADIGMS, LLC 21
tive secondary use that lowered the public’s estimation of the

original" rather than from a market substitute). In our view,

then, any harm here is not of the kind protected against by

copyright law.

The plaintiffs offer a few additional theories under which

iParadigms’ use of their papers could conceivably affect marketability. For example, plaintiffs point to the possibility that

if they submitted all or a portion of their own works to a periodical for publishing or to a college admissions board, and the

magazine or college used Turnitin, then their submitted works

might potentially be discredited as a product of plagiarism.

Like the district court, we conclude that these theories are

implausible in light of how the Turnitin system generally

operates. We find nothing in the record to suggest that any of

these scenarios envisioned by plaintiffs are anything more

than unfounded speculation. 

In sum, we conclude, viewing the evidence in the light

most favorable to the plaintiffs, that iParadigms’ use of the

student works was "fair use" under the Copyright Act and that

iParadigms was therefore entitled to summary judgment on

the copyright infringement claim.8

III. iParadigms’ Cross Appeal

A.

iParadigms asserted a counterclaim against plaintiff A.V.

under the Computer Fraud and Abuse Act ("CFAA"), see 18

U.S.C. § 1030, a statute generally intended to deter computer

hackers.9 Although the CFAA is primarily a criminal statute,

8

In light of our "fair use" analysis, we decline to address the question

of whether the terms of the Clickwrap Agreement created an enforceable

contract between plaintiffs and iParadigms. 

9

See, e.g., Charlotte Decker, Note, Cyber Crime 2.0: An Argument to

Update the United States Criminal Code to Reflect the Changing Nature

of Cyber Crime, 81 S. Cal. L. Rev. 959, 980-81 (2008) ("The CFAA,

§ 1030(a)(5), is the primary tool used to investigate and prosecute hacking

crimes."). 

22 A.V. v. IPARADIGMS, LLC
it permits private parties to bring a cause of action to redress

a violation of the CFAA: "Any person who suffers damage or

loss by reason of a violation of this section may maintain a

civil action . . . to obtain compensatory damages and injunctive relief or other equitable relief." 18 U.S.C. § 1030(g).

iParadigms alleged that by gaining unauthorized access to

Turnitin through a password assigned to UCSD students,

plaintiff A.V. violated § 1030(a)(5)(A)(iii), which prohibited

any person from "intentionally access[ing] a protected computer without authorization, and as a result of such conduct,

caus[ing] damage," and, by such conduct, caused, in violation

of § 1030(a)(5)(B)(i), "loss to 1 or more persons during any

1-year period . . . aggregating at least $5,000 in value." Additionally, the CFAA imposed this limit: "Damages for a violation involving only . . . [§ 1030(a)(5)(B)(i)] are limited to

economic damages." 18 U.S.C. § 1030(g) (emphasis added).10

iParadigms offered evidence that when it learned that A.V.

was able to register and submit papers as a student of a university in which he was not enrolled and had never attended,

it feared the possibility of a technical glitch in the Turnitin

system and concluded an investigation was necessary.

Unaware that A.V. had simply obtained a password posted on

the Internet, iParadigms assigned several employees to determine what happened. According to iParadigms, over the

course of about one week, numerous man-hours were spent

responding to A.V.’s use of the UCSD password. 

The district court concluded that iParadigms’ counterclaim

failed as a matter of law because § 1030(g) limited damages

10The CFAA was amended after the district court issued its decision in

this case. See Pub.L. 110-326, § 204(a). These amendments largely reorganized § 1030, but left subsection (g) essentially intact and do not bear

upon the limited issue before the panel — whether the district court correctly interpreted "economic damages" as that terms is used in § 1030(g).

We take no position, of course, as to what effect, if any, the amendments

otherwise have on the legal sufficiency of iParadigms’ CFAA counterclaim. 

A.V. v. IPARADIGMS, LLC 23
for a violation of § 1030(a)(5)(B)(i) to "economic damages."

The court found that iParadigms "failed to produce any evidence of actual or economic damages," J.A. 64, and "only

presented evidence of consequential damages resulting from

the steps taken by iParadigms in response to A.V.’s submissions." J.A. 63. Implicit in the district court’s conclusion was

the assumption that "economic damages" in § 1030(g) does

not encompass any "consequential damages" whatsoever. 

iParadigms counters that "economic damages" ought to be

accorded its ordinary meaning, which would include consequential damages but exclude recovery for pain and suffering

or emotional distress. See Creative Computing v. Getloaded.com LLC, 386 F.3d 930, 935 (9th Cir. 2004) (concluding

that the "economic damages" limitation "precludes damages

for death, personal injury, mental distress, and the like" but

includes "loss of business and business goodwill"). We agree

that the district court construed the "economic damages" provision too narrowly. To maintain a civil action under the

CFAA, a person first must have "suffer[ed] damage or loss by

reason of a violation of this section." 18 U.S.C. § 1030(g).

The CFAA defines "loss" as "any reasonable cost to any victim, including the cost of responding to an offense, conducting a damage assessment, and restoring . . . the system . . . to

its condition prior to the offense, and any revenue lost, cost

incurred, or other consequential damages incurred because of

interruption of service." 18 U.S.C. § 1030(e)(11) (emphasis

added). This broadly worded provision plainly contemplates

consequential damages of the type sought by iParadigms —

costs incurred as part of the response to a CFAA violation,

including the investigation of an offense. See, e.g., Modis, Inc.

v. Bardelli, 531 F. Supp. 2d 314, 320 (D. Conn. 2008) (noting

that "the costs of responding to the offense are recoverable"

including "costs to investigate and take remedial steps" (internal quotation marks omitted)); SuccessFactors, Inc. v. Softscape, Inc., 544 F. Supp. 2d 975, 980-81 (N.D. Cal. 2008)

(holding that the cost of investigating and identifying the

CFAA offense, including "many hours of valuable time away

24 A.V. v. IPARADIGMS, LLC
from day-to-day responsibilities, causing losses well in excess

of $5,000," qualified as "cost[s] of responding to an offense"

under § 1030(e)(11)). 

Accordingly, we remand for further consideration of this

claim, expressing no opinion as to whether the evidence is

otherwise sufficient to establish a viable CFAA claim or

whether the alleged consequential damages were reasonable,

sufficiently proven, or directly causally linked to A.V.’s

alleged CFFA violation. 

B.

iParadigms asserted another counterclaim against plaintiff

A.V. under the Virginia Computer Crimes Act ("VCCA"),

which provides that "[a]ny person who uses a computer or

computer network, without authority and . . . [o]btains property or services by false pretenses . . . is guilty of the crime

of computer fraud." Va. Code Ann. § 18.2-152.3. Moreover,

"[a]ny person who willfully obtains computer services without authority is guilty of the crime of theft of computer services." Va. Code Ann. § 18.2-152.6. Section 18.2-152.12

provides that "any person whose property or person is injured

by reason of a violation of [the VCCA] . . . may sue therefor

and recover for any damages sustained and the costs of suit."

The factual basis for this counterclaim was essentially the

same as that for the CFAA counterclaim — that A.V., a Virginia resident, obtained access to the Turnitin service by using

passwords and enrollment codes that A.V. did not have authorization to use. The district court granted summary judgment

to A.V. on iParadigms’ VCCA claim, as it had on the CFAA

claim, based on its conclusion that iParadigms failed to present evidence of actual or economic damages caused by

A.V.’s submission of papers as a UCSD student. 

iParadigms contends that because the district court rejected

the CFAA and the VCCA counterclaims for the same reasons,

the district court was necessarily construing the phrase "any

A.V. v. IPARADIGMS, LLC 25
damages" under the VCCA to exclude consequential damages. iParadigms suggests that there is no indication in the

statute that the Virginia General Assembly intended to so

limit the meaning of "any damages." Finding nothing in the

statute to suggest that consequential damages are not available

under section 18.2-152.12, we agree that it was error to dismiss the VCCA claim solely on this basis. Moreover, we

decline A.V.’s invitation to affirm on other grounds, such as

the lack of evidence to establish a causal link between the

submission of A.V.’s paper and any damages, consequential

or otherwise.

We conclude that the evidence of consequential damages

presented by iParadigms came within the "any damages" language of the VCCA, and therefore that the district court erroneously granted summary judgment because there was no

evidence of "actual or economic damages." We express no

opinion, however, as to whether iParadigms is a "person

whose property or person is injured by reason of a violation

of [the VCCA]," Va. Code Ann. § 18.2-152.12, or whether

this claim is otherwise viable. 

IV.

For the foregoing reasons, we affirm the order of the district court granting summary judgment to iParadigms as to

plaintiffs’ copyright infringement claim. As to iParadigms’

counterclaims, however, we reverse the grant of summary

judgment to plaintiffs and remand for further consideration.

AFFIRMED IN PART,

REVERSED IN PART,

AND REMANDED

26 A.V. v. IPARADIGMS, LLC