Source: https://fairuse.stanford.edu/michigan/amicus-curiae-aaup/
Timestamp: 2019-04-23 08:33:37+00:00

Document:
8.3.1 A. The Majority Erroneously Analazed The Purpose And Character Of The Use.
8.3.2 B. The Majority Erroneously Analyzed The Amount And Substantiality Of The Portion Used In Relation To The Copyrighted Work As A Whole.
8.3.3 C. The Majority Erroneously Analyzed The Market Impact Of The Infringement.
Is said party a subsidiary or affiliate of a publicly-owned corporation?As to amicus: No.
Is there a publicly-owned corporation, not a party to this appeal, that has a financial interest in the outcome?As to amicus: No.
The Rockefeller University Press Inc.
IN SUPPORT OF PETITION FOR REHEARING AND SUGGESTION.
PRINCETON UNIVERSITY PRESS, MACMILLAN, INC.
AND ST. MARTIN’S PRESS, INC.
Prospective amicus curiae the Association of American University Presses (“AAUP”), by and through its undersigned counsel, respectfully moves this Court, pursuant to Rules 27, 29, 35, and 40 of the Federal Rules of Civil Procedure, for an Order permitting the filing of a brief amicus curiae, attached to this motion, in support of the Petition for Rehearing and Suggestion for Rehearing En Banc filed by Plaintlffs-Appellees Princeton University Press, Macmillan, Inc. and St. Martin’s Press, Inc. (the “publishers”). The publishers’ petition concerns the February 12, 1996 decision of a divided panel, which reversed an order of the District Court granting the publishers’ motion for summary judgment and denying the cross-motion for summary judgment of defendant Michigan Document Services (“MDS”), with directions to grant MDS’s cross-motion. See Princeton University Press v Michigan Document Services, 1996 U.S. App. LEXIS 1919 (6th Cir. 1996).
The petition presents issues of critical importance to the AAUP and its member presses. The works published by university presses, after a rigorous process of academic peer review managed by press staff, stimulate and enrich American intellectual life. The AAUP is an incorporated trade organization whose members, primarily not-for-profit university presses, are the entities (some of which are separately incorporated, but most of which are part of the universities they serve) that publish works by scholars at their own universities and other centers of learning. While some of these presses are subsidized by their parent universities, all depend for their survival on revenues from sales and licensing of their books and journals (over 7,OOO books and 500 journals published by them collectively in 1994). Sales of.their scholarly titles derive mainly from the academic market; for many of these titles, it is the only market they have.
Scholarly publishing is subsidized publishing. In 1995, approximately 18% of all books published in the United States appeared under the imprint of AAUP member presses; these books, however, accounted for less than 2% of the publishing industry’s total sales. With unIversities experiencing ever more stringent financial constraints, any diminution of revenues, and thus, of financial incentives for dissemination, threatens the university presses’ ability to continue to publish works whose significance vastly exceeds their popular appeal.
Protection of the ability of authors and publishers to create and disseminate these works is the principal purpose of the Copyright Act. The means by which the Copyright Act accomplishes this goal is its grant of the exclusive right to reproduce and control the reproduction of copyrighted works and the concomitant ability to earn revenue. The abilIty of university presses to continue to serve their Irreplaceable function depends on this essential protection. This revenue creates one incentive for authors to continue to publish, and for publishers to invest in the editing, design, production, and marketing of scholarly works.
Traditionally, academic authors transfer all rights in their works to unIversity presses, which then function both as publishers in the first instance and as literary agents for the sale of subsidiary rights, income from which constitutes an import ant ,source of support for carrying on their publishing business. Denial of copyright protection in the case of commercially prepared for-profit “coursepacks,” such as those involved In this case, deprives university presses of this important source of income (sales and licenses) which enables them to continue to publish specialized works that are often at the frontier of knowledge — works that otherwise might never be disseminated to the public.
The market in which university presses operate is thus, in many respects, unique. By their very nature, and despite their unquestioned contribution to knowledge, the works they publish have limited sales potential The market that provides the AAUP members’ principal source of revenue — the sale and licensIng of scholarly works,within the academic community — is the very market in which MDS has chosen to compete. Diversion of any part of the member presses’ revenue stream, such as license fees (as appropriate) for the copying and use of their intellectual property, to unauthorized copyshops eliminates an important financial incentive for the creation and publication of works of scholarship and poses a direct threat to the ability of scholars to find publishers willing to publish their works, and thus, to the ability of students, teachers and the public to have access to such works.
The panel majority held that commercial copyshops may, in the guise of “fair use,” engage in uncontrolled copying of scholarly works owned by publishers and authors, without permission or payment of license fees, and may sell those copies in the very markets from which those publishers earn revenues. By allowing copying and sale of those works by a competing commercial enterprise, which has not undertaken any of the costs or risks associated with the original publication, the panel’s decision places at risk the very ability of university presses to contInue publishing scholarly works.
In this important case, the brief of the amicus curiae will illuminate the harmful and wIdespread impact that the panel’s decision would have, not only on presses which primarily publish scholarly works for academic use, but also on the authors whose works they disseminate to the public, the academic world, and the public at large. The amicus seeks leave to file the attached brief because the panel majority’s decision misconstrues fundamental copyright principles, thereby di,rectly impacting the ability of university presses to earn revenues in the prImary markets which university presses serve and depriving them of the exclusive rights granted by copyright law to control the reproduction of their copyrighted works. The majority opinion, which grants competing copyshops the unfettered right to reproduce copyrighted works and sell them in the same markets from which university presses derive their primary revenues, dIrectly threatens the market for published scholarly works and therefore, access to the research, knowledge, and ideas they contain. In short, the panel majority’s ruling runs counter to the essential purpose of copyright protection: “To promote the Progress of Science and the Useful Arts, by securing for limited Times to Authors and Inventors the Exclusive Right to their respective Writings and Discoveries.” U.S. Const., Article 1, � 8, cl. 8.
The panel’s decision is in direct conflict with the holdings of the Supreme Court and several Courts of Appeal, as well as with the essential purposes of the Copyright Act as described in those opinions, making rehearing en banc essential.
The prospective amicus has conditionally filed its amicus brief, together with this motion, within 14 days of entry of judgment. The AAUP does not request oral argument in connection with the petition. Amicus has obtained the written consent of the plaintiff publishers, annexed hereto,, to the filing of this brief.
WHEREFORE, prospective amicus curiae The American Association of University Presses, Inc. respectfully requests that an Order be entered to permIt the filing of the brief amicus curiae attached hereto in support of the Petition for Rehearing and Suggestion of Rehearing En Banc filed by Plaintiffs-AppeIlees Princeton UnIversity Press, MacmIllan, Inc. and St. Martin’s Press, Inc.
On behalf of the plaintiff-appellees, you have our consent to the filing an amicus brief in support of the petition for rehearing with suggestion for reherring en banc.
American Geophysical Union, Inc. v. Texaco, Inc.
Prospective amicus curiae The Association of American University Presses, Inc. (the “AAUP”) is a trade assocIation comprised of 114 publishing entities, some of whIch are separately incorporated, but most of which are Integral parts of universities. In establishing the nation’s first continuously operating university press at The Johns Hopkins University in 1878, the University’s presIdent, Daniel Colt Gilman, described the three paramount functions of a university as teaching, research, and the dissemination of the results of scholarly inquiry, not only in the classroom but beyond its walls. University presses serve the third function, dissemination of knowledge, whose protection Is the very essence of copyright law.
The works published by university presses stimulate, educate, inform, and enhance our society’s cultural and intellectual lIfe to a degree not reflected in their sales figures. They typically dominate scholarly, regional, and state awards and are consIstent recipients of the most prestigious national publishing awards, such as the Pulitzer Prize and National Book Award. The Intellectual resources available to the academic communIty and the public at large would be Immeasurably impoverished if such works could not be published. The opinion of the panel majority places at risk the presses’ ability to publish such works and the public’s access to the research, knowledge, and ideas they contain.
Before the panel’s opinion, three fundamental principles of copyright law as interpreted by the Supreme Court and several Courts of Appeal’ seemed both uncontroversial and self-evident. First, far from inhibiting access to works of scholarship, as the panel erroneously assumed was the case, Op. at 5, the copyright monopoly is the very “engine of free expressIon. By establishing a marketable right to the use of one’s expression, copyright supplies the economic incentive to create and disseminate ideas.” Harper & Row, Publishers Inc. v. Nation Entertrises, 471 U. S. 539, 558 (1985) . Copyright protection seeks to “motivate the creative activity of authors and inventors by the provision of a special reward.” Sony Corp. of America v. Universal City Studios Inc., 464 U.S. 417, 429 (1984). The “special reward” to which the Supreme Court referred in Sony is the right to control reproduction of the copyrighted work and to profit from its licensing and reproduction. As the Supreme Court has recognized, those rights are essential to the creation and dissemination of ideas. The panel majority mistakenly relied on the doctrine of fair use to counteract what it characterized as the “potentially stifling effects” of the copyright monopoly. Princeton University Press v. Michigan Document Services, 1996 U. S. App. LEXIS 1919 *12 (6th Cir. 1996).
Second, the mere fact that students and teaching faculty do not themselves have commercial motives does not make the commercial activity of a copyshop – – which competes directly for sales with amicus’ member presses — “non-commercial.” As Judge Nelson correctly concluded, the mere fact that students did not themselves make money from coursepacks did not make MDS’s activities non-commercial, anymore than The Nation’s publication of excerpts from President Ford’s book was non-commercial — even though readers of The Nation did not themselves market the contents of the magazine. See Harper & Row, 471 U.S. at 562.
The panel majority overlooked settled law, dismissed the commercial nature of MDS itself and focused instead on the “non-commercial” end use, classroom teaching. But this case was never about the rIght of educators and students to read and learn from published works and nothing in plaintiffs’ lawsuit seeks to deny that right. It is, instead, about the right of copyright owners to prevent other commercial entities from pirating profits essential to their own ability to publish scholarly works. MDS is a concededly for-profit enterprise which, for its own benefit, repackages and republishes works to which plaintiffs and other publishers own the copyrights, without paying the required license fees for such use. As Judge Nelson recognized, Princeton University Press, 1996 U.S. App. LEXIS *37, MDS gives itself a competitive advantage over other copyshops by its infringement, and makes substantial profits which it declines to share with the authors of the works it copies. Such blatant profiteering is clearly commercial and should weigh against fair use. The mere fact that the commercial copying in question may produce some educational benefit is no justification for such illegal conduct.
Third, it is equally well-established that “use” of copyrighted material is not “fair” if it harms derivative markets. Some derivative markets for scholarly publishing include customized publishing endeavors, paperback publication, and the revenue stream from copyright permissions, to the extent works or parts of works are reproduced.[FN 1] The Supreme Court observed that “[T]o negate fair use one need only show that if the challenged use ‘should become widespread, it would adversely affect the potential market for the copyrighted work.'” The inquiry must take account not only of harm to the original but also of harm to the market for derivative works.” Harper & Row, 471 U.S. at 568 (citations omitted). The panel majority simply turned its back on ‘plaintiffs’ licensing income from permission fees, deeming the publishers’ argument “circular,” Princeton University Press, 1996 U.S. App. LEXIS *29, and disdaining evidence of the market effect of those lost fees. This precise question was decided in American Geophysica1 Union Inc. v. Texaco Inc., 60 F.3d 913, 930-31 (2d Cir. 1994), where the Court concluded that where, as here, a viable licensing market exists, such revenues should be considered in any fair use analysis.
The panel’s determination is particularly pernicious in this case because the market for scholarly works is not self-supporting. Many university presses operate on a subsidy. Widespread application of the fair use defense in the manner in which the majority would permit will simply dry up one of the limited revenue sources available to sustain publication of significant works. Given the decrease in subsidies for presses in today’s academic environment, it will constrain the ability of publishers to continue to afford to publish such books.
The consequences of the majority’s opinion go far beyond this case. Modern technologies facilitate massive and routine copying at the photocopy machine, at the video recorder, or at the computer, where simply pushing a single button can create instantaneously hundreds of thousands, even millions of unauthorized copies. Unlike old fashioned “pirates,” who invested in costly equipment, who could only copy one work at a time, and whose copies degraded, modern technology makes possible inexpensive, rapid, and high-volume copying of copyrighted works that are physically indistinguishable from the original in part or in their entirety. Contrary to the presumption of the panel majority that coursepacks are always “poor substitutes for a published work,” Princeton University Press, 1996 U. S. App. LEXIS *29, copyshops like MDS can produce anthologies that look just like books, thus making their products indistinguishable from those of the originating publishers. By endorsing MDS’s piracy, the opInion facilitates the creation of lucrative commercial enterprises whose core business activities consist of unlawful appropriation and sale of copyrighted material on an unprecedented scale. The impact upon universIty presses, in particular, and on the works they disseminate, is devastating.
The fair use defense “‘tempers the protection of copyright,'” American Geophysical Union, 60 F.3d at 916 (citation omitted), and Is properly limited to “an exception to authors’ monopoly privileges needed in order to fulfill copyright’s purpose to promote the arts and sciences.” Id. Thus, it must be applied to further that purpose, not to impede it. The majority’s interpretation of fair use does not “fulfill copyright’s purpose.”[FN 2] As Judge Nelson observed, the majority’s holding contravenes the fundamental goals of copyright law. “If our sister circuits follow our lead, it seems likely that some academics will find it harder to get their books published book publishIng, as we know it, will have taken a hit.” Princeton University Press, 1996 U.S. App. LEXIS *46.
The first fair use factor requires a court to consider whether copying is for commercial gain and whether it involves transformation of the original, as opposed to mere rote copyIng. Campbell v. Acuff-Rose Music Inc., 114 5. Ct. 1164, 1175 (1994) (existence of for-profit motive wIll weigh agaInst finding of faIr use unless outweighed by substantial transformative elements, such as parody or criticism) Here, MDS is engaged in purely mechanical copying, without transformation of the original works, and it does so for profit alone. It was therefore error to conclude that the first factor protects its activities.
This competition occurs at two levels. First, the coursepacks compete with the publishers’ original publications. indeed, coursepacks are, In many instances, texts that intrude upon the market for the original work . The majority’s disingenuous characterization of coursepacks as “materials . . . not so central to the course . . . as to justify . . . requiring students to purchase the entire original work in which the relevant portions appear,” Princeton University Press, l996 U.S. App. LEXIS *10, is belied by the fact that professors assigned these precise materials. Second, and equally important, MDS directly competes with authorized copy shops and traditional publishers through which the publishers have licensed republication of such works for profit. While MDS argues that it has deprived the publishers of no revenue, because the assigning professors aver that they would not otherwise have utilized the particular works they in fact chose to use,[FN 4] this argument cannot apply to the competing copy shops to which the publishers license their works.
The majority opinion completely ignored this for-profit motIve of the infringer, MDS and looked instead to the educational motives of the infringer’s customers, students and facuIty. But ignorIng the motives of the infringing party and looking instead to the motives of its various individual customers turns the law of copyright infringement on its head. See Harper & Row, 471 U.S. at 562. It is fair to say that most, if not virtually all, “end-users” of copyrighted works (namely, the readers) do not read for profit, but for other reasons which are as diverse as the human personality – – e. g., interest, education, pleasure, self-improvement. This is particularly true of scholarly works. To adopt the majority’s approach would expand the fair use defense beyond any rational limitation.
The proper approach, and the approach consistently followed by the Supreme Court, is to look to the motive of the infringer, not its customers See, e. g., Harper & Row, 471 U.S. 539 (looking to commercial nature of the magazine enterprise, without exploring the motives of its various readers); Basic Books, 758 F. Supp. at 1531 (“The use of the Kinko’s packets, In the hands of the students, was no doubt educational. However, the use in the hands of Kinko’s employees is commercial”).
While MDS’ commercial motive alone is compelling, the lack of any transformative aspect to the infringement is dispositive of the first fair use factor. Compare Campbell, 114 S. Ct. at 1171 (where parody deviated from original and constituted social commentary, fair use was found) Campbell provides no refuge for MDS, because MDS engaged in mere mechanical copying of entire chapters, without analysis, criticism or other transformatIve aspects. See American Geophysical Union, 60 F.3d at 917 (mechanical copying is obviously an activity that is different from creating a work of authorship); Basic Books, 758 F. Supp. at 1530 (“The copying was just that — copying — and did not ‘transform’ the works in suit, that is, interpret them or add any value to the material copied, as would a biographer’s or critic’s use of a copyrighted quotation or excerpt”). Indeed, the very reason the works were selected was the inherent value of the message each work carried.
B. The Majority Erroneously Analyzed The Amount And Substantiality Of The Portion Used In Relation To The Copyrighted Work As A Whole.
In considering the third fair use factor, courts must evaluate the qualitative aspects as well as the quantity of material copied. Harper & Row, 471 U.S. at 564-565. (1990). Here, both quantitative and qualitative factors favor denial of the fair use defense.
First, it was uncontroverted that the copying in this case ranged from five to thirty percent of the complete original works. This can hardly be considered de minimis. Courts have routinely found use of much smaller portions of copyrighted works to constitute infringement. See Harper & Row, 471 U.S. at 564-565 (copying of only 300 words out of an entire book was not fair use, because the words constituted “‘essentially the heart of the book'”); Iowa State University Research Found., Inc. v. Am. Broadcasting Co., 621 F.2d 57 (2d Cir. 1980) (copying of eight percent of videotape not fair use).
More important, this copying involved portions which truly can be considered the heart of the authors’ works. The very fact that these excerpts were chosen by distinguished faculty for use in their courses speaks to their significance.[FN 5] Many of the excerpts copied by MDS consisted of entire chapters of books, which therefore could stand alone “as a complete representation of the concept explored in the chapter.” Basic Books, 758 F. Supp. at 1534.
C. The Majority Erroneously Analyzed The Market Impact Of The Infringement.
The fourth factor, “the effect of the use upon the potential market for or value of the copyrighted work,” 17 U. S. C. � 107(4), is the single most important element of fair use. Harper & Row, 471 U.S. at 568 (“to negate fair use one need only show that if the challenged use ‘should become widespread, it would adversely affect the potential market for the copyrighted work'”). Not only does market impact unquestionably exist in this case; that impact would be devastating if MDS’s practices were upheld and replicated on a widespread basis.
Here, market impact is plainly present. The Supreme Court has specIfically held that analysis of the fourth factor requires analysis of both the market for the original work and the market for derivative works licensed by the copyright holder, “because the licensing of derivatives is an important economic incentive to the creation of originals.” Campbell, 114 5. Ct. at 1175; see also Harper & Row, 471 U.S. at 569 (“fair use” analysis “must take account not only of harm to the original but also of harm to the market for derivative works”).
MDS’s infringing use directly harms both markets in a manner that is particularly destructive to the amicus’ member companies. MDS is no different from a publishing house that publishes unauthorized anthologies. If students and faculty can purchase these competing “anthologies” for less than they can from the publisher, that cannot help but harm the ability of the publishers to exploit their works.
Of no less significance is the market for licensing the works. It is uncontroverted that most, if not all, copyshops with which MDS competes obtain authorization and pay license fees for use of the copyrighted works, either directly to publishers or through licensed agencies such as the Copyright Clearance Center’s Academic Permissions Service and the Author’s Registry. So, too, do custom publishing operations like Ginn and McGraw-Hill’s Primis. There is, therefore, a workable mechanism for obtaining such licenses and a derivatIve market exists through which plaintiffs exploit their copyrights in the works, as authorized by the CopyrIght Act. The existence of a such workable market supports a finding of market effect simply from the infringer’s activities. See American Geophysical Union, 60 F .3d at 930.
The panel majority gave undue weight to the declaratIons of various authors, who stated that their principal motivation in producing their scholarly works was not profit. While laudable, these statements are not persuasive, because they are not from the holders of the copyrights. In scholarly publishing, authors typically assign all rights to the university presses which are the copyright holders. The AAUP’s member companies, not individual scholars, make scholarship available within the academic community. For those member companies, revenues from permission fees are a significant incentive to undertake scholarly publishing. Although the authors may insist that the’y would wrIte even without the promise of profits, their abilIty to have their works published and distributed ultimately depends on the willIngness of publishing houses to disseminate their works. Without recompense and the ability to offset risk and investment, scholarly works may not be published. Denying or diminishing copyright protection in this important area by divertIng revenues from copyright holders to infringing copyshops like MDS, which take no risks and bear none of the costs, will make publishers less willing to publish scholarly and thought-provoking works. Any short-term benefit conferred by the majority’s misguided approach is more than outweighed by the severe and permanent harm that would be suffered by education and society at large.
Thus, the fourth factor strongly weighs against application of the “fair use” defense to this case. When combined with the other factors, it is dispositive.
As the American Geophysical Union court warned, “As with the development of other easy and accessible means of mechanical reproduction of documents, the invention and widespread availability of photocopying technology threatens to disrupt the delicate balances established by the copyright Act.” 60 F.3d at 917. Amicus’ members and the works they publish are particularly vulnerable. If the panel’s decision is allowed to stand, the door is open not only to competing unauthorized photocopying that would further diminish those revenues but to unauthorized copying and dissemination by &her technologies, at a scale heretofore unanticipated. The constitutional principles governing the grant of copyright incentives will have no meaning and educational institutions and the public will be deprived of access to significant works of scholarship.
For the foregoing reasons, amicus curiae respectfully requests that rehearing en banc be granted.
It is simply untrue that “the publishing industry does not offer such highly customized and current materials, and indeed is not equipped to do so,” as the panel majority alleges, PrInceton University Press, 1996 U.S. App. LEXIS *17-18. One company, now named Silver Burdett Ginn (a division of Simon & Schuster’s Education Group), has been in the business of publishing customized anthologies since 1973 and has provided licensing income to presses for many years. McGraw-Hill has been engaged in such a venture since 1990. Its customized textbook business is called Primis Publishing.
The panel conceded that the works in question are subject to copyrIght protection, Op. at 8.
Basic Books rejected the “fair use” defense in circumstances identical to those here, and is the only known precedent dealing with this precise situation.
As Judge Nelson pointed out, Princeton University Press, 1996 U.S. App. LEXIS’*39, the professors’ affidavits do not assert that, had a fee been charged, a particular work would not have been assIgned.
See Harper & Row, 471 U.S. at 565 (“the fact that a substantial portIon of the infrInging work was copied verbatim is evidence of the qualitative value of the copied material”); Basic Books, 758 F. Supp. at 1533 (“the portions copied were critical parts of the books copied, since that is the likely reason the college professors used them In their classes”).
Executed this 23rd day of February, 1996, at Los Angeles, California.

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