Source: http://www.tomwbell.com/NetLaw/Ch07/LATimes.html
Timestamp: 2019-04-26 12:16:41+00:00

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Plaintiffs publish the Los Angeles Times and The Washington Post in print and online at "http://www.latimes.com" and "http://www.washingtonpost.com." Their respective websites contain the current edition of the newspaper, which can be viewed free of charge, and archived articles that users must pay to view. The Times charges $1.50 to view an archived article, while the Post charges from $1.50 to $2.95 depending on the time of day. In addition to income generated in this fashion, the websites also produce advertising and licensing revenue for the papers. Because advertising is sold "CPM" (cost per thousand), the revenue generated from this source depends on the volume of traffic the sites experience during a given period. The parties dispute the extent to which being able to access archived articles at a different site for free affects plaintiffs' ability to advertise, license, and sell the archived articles.
Defendant Jim Robinson is the owner and operator of . . . Free Republic. . . . Free Republic is a limited liability corporation that operates freerepublic.com. The website, which has been operational since 1996, allows registered visitors to "post" news articles and comments concerning them on the site. Registered members may then post additional comments. Free Republic has approximately 20,000 registered participants. The website receives as many as 100,000 hits per day, and between 25 and 50 million page view each month.
The parties dispute whether Free Republic is a for-profit or not-for-profit entity. Despite this purported disagreement, it appears uncontroverted that Free Republic is presently a for-profit limited liability company. Free Republic's corporate counsel is currently preparing documents seeking tax-exempt status for the Free Republic Institute, a company incorporated on September 27, 1999. Nothing has yet been submitted to the IRS, however, and tax-exempt status has not been granted.
A motion for summary judgment must be granted when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." Fed.R.Civ.P. 56(c). . . .
Fair use is a mixed question of law and fact. It is nonetheless proper to decide the issue at the summary judgment stage if the historical facts are undisputed and the only question is the proper legal conclusion to be drawn from those facts.
"Copyright law protects an author's expression; facts and ideas within a work are not protected." Shaw v. Lindheim, 919 F.2d 1353, 1356 (9th Cir. 1990). To prove copying, plaintiffs must show that defendants had access to the copyrighted work and that there is a substantial similarity between the copyrighted work and defendants' work.
Because fair use is an affirmative defense to a claim of infringement, defendants carry the burden of proof on the issue.
The first factor listed in § 107 is "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. This factor assesses whether "the new work 'merely supersedes the objects' of the original creation, or instead adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message; it asks, in other words, whether and to what extent the new work is 'transformative.'" Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 579 (1995). " . . . 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." Campbell, supra, 510 U.S. at 579.
Inquiry concerning the character and purpose of a challenged use should be guided by the examples provided in the statute -- i.e., whether the use was for purposes of "criticism, comment, news reporting, teaching . . . , scholarship, or research." 17 U.S.C. § 107. The list, however, is not intended to be exhaustive or to single out any particular use as presumptively fair. Indeed, the fact that a use falls within one of these categories "is simply one factor in [the] fair use analysis." Harper & Row, supra, 471 U.S. at 561. Similarly, while the statute draws a distinction between non-profit and commercial use, not every commercial use of a copyrighted work is presumptively unfair.
There is no dispute that at least some of the items posted on the Free Republic website are exact copies of plaintiffs' articles. . . .
Whether 'a substantial portion of the infringing work was copied verbatim' from the copyrighted work is a relevant question, . . . for it may reveal a dearth of transformative character or purpose under the first factor, or a greater likelihood of market harm under the fourth; a work composed primarily of an original, particularly its heart, with little added or changed, is more likely to be a merely superseding use, fulfilling demand for the original.
Campbell, supra, 510 U.S. at 587-88.
Defendants' first argument -- that the copies of plaintiffs' articles found on the Free Republic site do not substitute for those on plaintiffs' sites -- focuses on readers' ability to access and review specific articles in which they are interested. Defendants contend that using the Free Republic site to read current articles would be impractical since there is a delay between the time information is posted to the site and the time it is indexed by third-party search engines. . . .
. . . [T]he articles posted on the Free Republic site ultimately serve the same purpose as "that [for which] one would normally seek to obtain the original -- to have it available . . . for ready reference if and when [website visitors adding comments] need to look at it." American Geophysical Union v. Texaco, Inc., 60 F.3d 913, 918 (2d Cir. 1995) (the court held that the first fair use factor weighed against a defendant that encouraged its employees to make unauthorized photocopies of articles in scientific and medical journals and keep them in their offices for ready reference).
. . . [V]isitors can read copies of plaintiffs' current and archived articles at the Free Republic site. For those who visit the site regularly, therefore, the articles posted there serve as substitutes for the originals found on plaintiffs' websites or in their newspapers.
Defendants next argue that their use of plaintiffs' works is transformative because registered Free Republic users add comments and criticism concerning the articles following a posting. Copying portions of a copyrighted work for the purpose of criticism or commentary is often considered fair use. The fact that criticism is involved, however, does end the inquiry. Rather, it must be considered in combination with other circumstances to determine if the first factor favors defendants.
Since the first posting of an article to the Free Republic site often contains little or no commentary, it does not significantly transform plaintiffs' work. . . .
Additionally, even where copying serves the "criticism, comment and news reporting" purposes highlighted in § 107, its extent cannot exceed what is necessary to the purpose. . . .
Here, it seems clear that the primary purpose of the postings to the Free Republic site is to facilitate discussion, criticism and comment by registered visitors. Defendants contend that copying all or parts of articles verbatim is necessary to facilitate this purpose. They argue that full text posting is required because links expire after a week or two, and because unsophisticated Internet users will have difficulty accessing a linked site. Defendants' assertion that links expire after a period of time is presumably a reference to the fact that articles are available on plaintiffs' websites free of charge only for a certain number of days. Thereafter, there is a charge for viewing and/or printing them. That this is so does not make linking plaintiffs' websites to the Free Republic site "impractical." It merely requires that Free Republic visitors pay a fee for viewing plaintiffs' articles just as other members of the public do. Similarly, defendants' suggestion that articles are posted to the Free Republic site long after they are published is not supported by the representative postings they have submitted. These reflect that the vast majority of comments are posted the same day the articles appear or within one to three days afterwards. Finally, defendants' assertion that unsophisticated Internet users would be confused by links is unpersuasive. Linking is familiar to most Internet users, even those who are new to the web.
As evidence that verbatim copying is in fact not necessary to defendants' purpose, plaintiffs cite the fact that defendants provided a hypertext link to Jewish World Review's website at its request, and requested that registered Free Republic visitors no longer copy the publication's articles verbatim. . . .
The fact that linking the text of an article as it appears on plaintiffs' websites to the Free Republic site, or summarizing the article's text, is not as easy or convenient for Free Republic users as full text posting does not render the practice a fair use. Rather, the focus of the inquiry must be whether verbatim copying is necessary to defendants' critical purpose.
Defendants . . . . argue that the purpose of full text posting is to enable Free Republic users to criticize the manner in which the media covers current events. . . . In fact, a review of the representative articles submitted by defendants reveals that visitors' commentary focuses much more on the news of the day than it does on the manner in which the media reports that news. . . . [T]he court concludes that verbatim posting of plaintiffs' articles is "more than is necessary" to further defendants' critical purpose. See Castle Rock Entertainment, Inc. v. Carol Publishing Group, Inc., 150 F.3d 132, 144 (2d Cir. 1998).
In addition to examining defendants' purpose in copying plaintiffs' articles, the first fair use factor also directs that the court evaluate the "character" of the use. The mere fact that a use is commercial does not "give rise to a presumption of unfairness." Sony Computer Entertainment, Inc. v. Connectix Corp., 203 F.3d 596, 606 (9th Cir. 2000). Rather, a defendant's commercial purpose is only "a separate factor that tends to weigh against a finding of fair use." Campbell, supra, 510 U.S. at 585. Thus, a court evaluating the first fair use factor "must weigh the extent of any transformation . . . against the significance of other factors, including commercialism, that militate against fair use." Sony Computer, supra, 203 F.3d at 607.
. . . [A]ttempting the "sensitive balancing of interests" required for application of the fair use doctrine (Campbell, supra, 510 U.S. at 584; Sony, supra, 464 U.S. at 455, n. 40), the court finds that the operation of the Free Republic site is only minimally commercial.
. . . Defendants do not generate revenue or profits from posting plaintiffs' articles on the Free Republic website. At most, they derive indirect economic benefit by enhancing the website's cachet, increasing registrations, and hence increasing donations and other forms of support. Coupled with the fact that Free Republic has many of the attributes of a non-profit organization, this indirect benefit argues against a finding that the use is strictly commercial. Rather, it is more appropriate to conclude that, while defendants do not necessarily "exploit" the articles for commercial gain, their posting to the Free Republic site allows defendants and other visitors to avoid paying the "customary price" charged for the works. See Harper & Row, Publishers, Inc. v. Nation Enter., 471 U.S. 539, 562 (1985).
Following Campbell, it is clear that the court must balance and weigh the various elements of the first fair use factor in deciding whether it favors plaintiffs or defendants. In the process, it must bear in mind that "the concept of a 'transformative use' is central to a proper analysis under the first factor." American Geophysical, supra, 60 F.3d at 923. For this reason, "the more critical inquiry under the first factor and in fair use analysis generally is . . . whether and to what extent the new work is transformative," not whether the use is commercial. Castle Rock, supra, 150 F.3d at 142.
[T]he non-transformative character of the copying in this case tips the scale in plaintiffs' favor, and outweighs the non-profit/public benefit nature of the purpose for which the copying is performed. This is particularly true since the posting of plaintiffs' articles to the Free Republic site amounts to "systematic . . . multiplying [of] the available number of copies" of the articles, "thereby serving the same purpose" for which licenses are sold or archive charges imposed. See American Geophysical, supra, 60 F.3d at 924. The first fair use factor thus favors plaintiffs.
The second factor identified in § 107 recognizes "that some works are closer to the core of intended copyright protection than others, with the consequence that fair use is more difficult to establish when the former works are copied." . . .
While plaintiffs' news articles certainly contain expressive elements, they are predominantly factual. Consequently, defendants' fair use claim is stronger than it would be had the works been purely fictional. The court concludes that the second factor weighs in favor of a finding a fair use of the news articles by defendants in this case.
Defendants concede that they have copied and posted entire articles published in plaintiffs' newspapers, although they dispute that all of plaintiffs' articles posted to the Free Republic site are verbatim copies. . . .
The fact that exact copies of plaintiffs' article are posted to the Free Republic site weighs strongly against a finding of fair use in this case.
Citing the fact that plaintiffs' copyright registration covers their newspapers as a whole, defendants contend that the papers are plaintiffs' "works," and not the individual articles that appear in them. Thus, they contend, the copying of a single article constitutes reproduction of only a small portion of the work. This proposition is not supported by the case law.
Defendants also contend that copying all or a substantial portion of the articles is essential to the critical purpose of the Free Republic website. . . .
As detailed in the court's consideration of the first fair use factor, defendants have not offered a persuasive argument that full-text copying is essential to the critical purpose of the Free Republic site. Contrasted with the purpose and character of the use, the wholesale copying of plaintiffs' articles weighs against a finding of fair use.
The fourth factor examines "the effect of the use upon the potential market for or value of the copyrighted work." 17 U.S.C. § 107(4). It requires evaluating not only the extent of market harm caused by the alleged infringer's use, but also . . . . if widespread use of the type in which the defendant is engaged would "diminish potential sales, interfer[e] with marketability, or usurp the market" for the original. Sega Enterprises Ltd. v. Accolade, Inc., 977 F.2d 1510, 1523 (9th Cir. 1993). Markets for derivative works, i.e., those markets "that creators of original works would in general develop or license others to develop," must be considered in addition to the market for the original. Campbell, supra, 510 U.S. at 590, 592.
Applying these principles to the present case, the undisputed evidence shows that the Free Republic website has approximately 20,000 registered users, receives as many as 100,000 hits per day, and attracts between 25 and 50 million page views each month. The evidence also shows that visitors to the site are able to read full text copies of articles from plaintiffs' newspapers and archives without purchasing the papers, visiting plaintiffs' websites or paying the fee plaintiffs charge for retrieving an article from their archives. While defendants argue that the Free Republic site is a "poor substitute" for locating plaintiffs' articles on their websites, the court has found that for those individuals who visit the site, the articles posted to freerepublic.com do substitute for the original works. Given the number of registered visitors, hits and page views Free Republic attracts, the court cannot accept defendants' assertion that the site has only a de minimis effect on plaintiffs' ability to control the market for the copyrighted works.
Here, plaintiffs have shown that they are attempting to exploit the market for viewing their articles online, for selling copies of archived articles, and for licensing others to display or sell the articles. Defendants' use "substitutes" for the originals, and has the potential of lessening the frequency with which individuals visit plaintiffs' websites [and, thus, of lowering ad revenues], of diminishing the market for the sale of archived articles, and decreasing the interest in licensing the articles.
Defendants counter that there is no evidence that people who view the articles on the Free Republic site would ever have visited plaintiffs' websites. It is not necessary, however, to show with certainty that future harm will result. That likelihood is present when articles that would otherwise be available only at sites controlled or licensed by plaintiffs are available at a different site as well. The likelihood only increases when one considers the impact on the market if defendants' practice of full text copying were to become widespread.
Defendants assert the evidence regarding referral hits demonstrates that Free Republic is creating a demand for plaintiffs' works. Even if this is the case, it does not mandate a conclusion that the fourth fair use factor favors defendants. Courts have routinely rejected the argument that a use is fair because it increases demand for the plaintiff's copyrighted work.
In short, plaintiffs have demonstrated that they are attempting to exploit the market for viewing their articles online, for selling copies of archived articles, and for licensing others to display or sell the articles. They have demonstrated that the availability of verbatim copies of the articles at the Free Republic site has the potential to interfere with these markets, particularly if it becomes a widespread practice. Defendants, who bear the burden of proof on fair use, have not rebutted this showing by proving "an absence of 'usurpation' harm to" plaintiffs. Infinity Broadcast Corp. v. Kirkwood,. 150 F.3d 104, 111 (2d Cir. 1998). Accordingly, the fourth factor weighs against a finding of fair use in this case.
In sum, three of the four fair use factors weigh in plaintiffs' favor. Moreover, the factor that favors defendants -- the nature of the copyrighted work -- does not provide strong support for a fair use finding, since defendants copied both the factual and the expressive elements of plaintiffs' news articles. Conversely, the amount and substantiality of the copying and the lack of any significant transformation of the articles weigh heavily in favor of plaintiffs on this issue. The court thus finds that defendants may not assert a fair use defense to plaintiffs' copyright infringement claim.
In Harper & Row, supra, Nation magazine reprinted, without authorization, 300 words from the memoirs of President Gerald Ford. The Court noted that factual information concerning current events contained in news articles is not protected by copyright. It stated, however, that "copyright assures those who write and publish factual narratives . . . that they may at least enjoy the right to market the original expression contained therein as just compensation for their investment." Id. at 556-57. It stressed that copyright fosters free expression because it "supplies the economic incentive to create and disseminate ideas" by "establishing a marketable right to the use of one's expression." Id. at 558. It noted that copyright also promotes the countervailing First Amendment right to refrain from speech by protecting the owner of a copyrighted work from being forced to publish it. Id. at 559. For all these reasons, the Court concluded that "that copyright's idea/expression dichotomy 'strike[s] a definitional balance between the First Amendment and the Copyright Act by permitting free communication of facts while still protecting an author's expression.'" Id. at 556. Accordingly, it rejected defendant's First Amendment argument that material could be copied because it was "newsworthy," . . . . Courts have generally interpreted this discussion in Harper & Row to mean that First Amendment considerations are subsumed within the fair use Analysis.
[D]efendants have failed to show that copying plaintiffs' news articles verbatim is essential to communication of the opinions and criticisms visitors to the website express. As discussed above in connection with analysis of defendants' fair use defense, visitors' comments more often concern the underlying news event than they do the manner in which that event was covered by the media. And, even where media coverage is the subject of the critique, the gist of the comments (which concern the fact that a particular media outlet published a story or approached the story from a particular angle can generally be communicated without full text copying of the article. The availability of alternatives -- such as linking and summarizing -- further undercuts any claim that First Amendment rights are implicated. While defendants and other users of the Free Republic site may find these options less ideal than copying plaintiffs' articles verbatim, this does not demonstrate that a First Amendment violation will occur if full text posting is prohibited.
57 While the Supreme Court's decision in Sony suggests that some potential markets should be considered "too insubstantial [or speculative] to tilt the fourth fair use factor in favor of the copyright holder" (see American Geophysical, supra, 60 F.3d at 930, n. 18), the market is presently being exploited by plaintiffs via their websites, and thus cannot be said to be of this type.

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