Source: https://fairuse.stanford.edu/michigan/supplemental-brief-pup/
Timestamp: 2019-04-21 18:59:35+00:00

Document:
Charles S. Sims Butzel Long, P. C.
Addison-Wesley Publishing Co.. Inc. et al v.
Copyright L. Dec. ¶ 25,544 (S.D.N.Y.
Copyright L. Dec. � 25,145 (D. Conn.
Crooks, 542 F. Supp. 1156 (W.D.N.Y.
Copy Serv., 1981 Copyright L.
Plaintiffs-Appellees (“the Publishers”), publishers who own the copyrights that the district court below held were infringed, submit this brief to supplement the brief they previously filed when this appeal was first heard (the “Publishers’ Brief”) This supplemental brief on rehearing is not a substitute for the Publishers’ Brief, or for the Publishers’ petition for rehearing. We address here only those points which, in view of the panel’s now-vacated decision, warrant additional discussion.
The undisputed facts are fully set forth with citations to the record at pages 2-12 of the Publishers’ Brief.
The Publishers’ Brief also sets forth (at 12-13) the procedural history to that point. Thereafter, on February 12, 1996, by a 2-1 vote, with Judges Ryan and Nelson split and the deciding vote cast by visiting Judge McKay from the Tenth Circuit, this Court reversed the judgment below and held (in “the Panel Opinion”) that defendants’ copying and sale of the Publishers’ copyrighted material in coursepack books was a fair use as a matter of law. The panel majority’s decision was an unprecedented departure from sound and well-established copyright principles. The decision, moreover, by allowing as much as 30% of a copyrighted work to be copied and sold, threatened immense harm to copyright holders and to the creation and dissemination of intellectual property. Why, one must ask, would any teacher assign a book whose price includes a reward for the intellectual labor that created it, when instead the teacher could custom-design a book, taking a third of this text, a third of that one, and so on, and save the students the price of compensatinq those responsible for writing and distributing the works being copied? The Publishers accordingly submitted a Petition For Rehearing With Suggestion For Rehearing En Banc. The petition received wide support from amici , including the Authors Guild and other author groups, the Association of American University Presses, and the Copyright Clearance Center.
On April 9, 1996, a majority of the active judges of this Court voted to vacate the Panel Opinion, requested supplemental briefing, and ordered rehearing.
We hold that the Copyright Act does not prohibit professors and students who may make copies themselves from using the photoreproduction services of a third party in order to obtain those same copies at less cost.
(Panel Opinion, 13). Even if it were correct that professors and students could make copies like those at issue without permission and we show below (at 28-30) that it is decidedly not correct that this kind of systematic copying by anyone would be permitted — defendants’ for-profit business of selling the copyrighted works of others without permission from the copyright holders would still constitute infringement. The language of � 107 itself, the cases decided in the Supreme Court and in other circuits, and the legislative history all draw a distinction between purely commercial uses and not-for-profit uses, and show that the defendants’ copying here was not fair use.
the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes . . .
The defendants’ use of excerpts from the books at issue in this case is no’ less commercial in nature than was The Nation Magazine’s use of the excerpts from President Ford’s book in Harper & Row. Like the students who purchased unauthorized coursepacks, the purchasers of The Nation did not put the contents of the magazine to commercial use — but that did not stop the Supreme Court from characterizing the defendant’s use of excerpts from the copyrighted book as “a publication [that] was commercial as opposed to nonprofit . . . ” Harper & Row, 471 U.S. at 562.
In Harper & Row, the defendant commercial magazine argued that it could copy and sell excerpts of plaintiff’s copyrighted material to its readers, who read the material as news (“news reporting” is specifically listed as a potential fair use in � 107, as is “multiple copies for classroom use”). The Supreme Court distinguished between the non-commercial purpose of the buyers and readers of The Nation Magazine and the profit-seeking purposes of the magazine itself, and held that the challenged use was commercial. 471 U.S. at 562. See also American Geophysical Union v. Texaco Inc., 60 F.3d 913, 922 (2d Cir 1994), stating that “courts will not sustain a claimed defense of fair use when the secondary use can fairly be characterized as a form of commercial exploitation, i.e., when the copier directly and exclusively acquires conspicuous financial rewards from its use of the copyrighted material.” That, of course, is exactly what occurred here.
AVRS maintains its clients used the tapes for “research, scholarship and private study,” and therefore AVRS’s use must be considered fair use in light of Sony Corp. . . . Even assuming AVRS’s representations of its’ client use of the tapes to be accurate, Sony does not dictate the result for which AVRS argues. . . . Unlike the claim against the [VCR] distributor in Sony, [plaintiff’s] claim against AVRS is not that AVRS is vicariously liable for alleged infringements by its customers but that it is directly liable for its own infringements. The difference is crucial: Under Sony, a VTR owner who tapes a copyrighted movie broadcast over a public television station to watch at home at a later time is protected by the fair use doctrine but a VTR owner who tapes the movie to sell copies to others without the copyright owner’s consent is subject to a range of civil and criminal sanctions.
* * *[AVRs’s] purposes are “unabashedly commercial.” . . . This factor weighs against [it].
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 Kinko’s claims that its copying was educational and, therefore, qualifies as a fair use. . . . The extent of [Kinko’s] insistence that theirs are educational concerns and not profitmaking ones boggles the mind.
Kinko’s, 758 F. Supp. at 1531-32.
Defendants have tried to treat Kinko’s as an aberrational decision, but as shown above the court’s approach in Kinko’s was consistent with that of the Supreme Court and other courts. Indeed, as far back as the seminal fair use case of Folsom v. Marsh, 9 F. Cas. 342, 344 (C.C.D. Mass. 1841), Justice Story held that defendant’s abridgement and excerpting of the biography of George Washington was copyright infringement, notwithstanding that the ruling would necessarily “interfere, in some measure, with the very meritorious labors of the defendants, in their great undertaking of a series of works adapted to school libraries.” 9 F Cas. at 349. Justice Story analyzed the defendant’s use, not the ultimate use of the pupils at the school library, and accordingly ordered the defendant to account to the plaintiff for the profits it earned by selling the copyrighted material. 9 F. Cas. at 349.
See H.R. Rep. No. 1476, 94th Cong., 2d Sess. at 74 (1976).
The harmful nature of defendants’ commercial infringements is exacerbated here because MDS’s use of the Publishers’ copyrighted works resulted in sales of the copies in the same market as in which the Publishers sell. When a commercial use is competitive in this manner, the “commerciality” is even “more harmful to the copyright holder” and the first factor in � 107 cuts even more strongly against the defendant. See, e.g., Campbell v. Acuff-Rose Music, 114 S. Ct. 1164, 1171 (19?4) (“central purpose” of first factor inquiry “is to see . . . whether the new work merely ‘supersedes the objects’ of the original”); Bridge Publications Inc. v. Vien, 827 F. Supp. 629, 635 (S.D. Cal. 1993) (no fair use when defendant seller of educational materials used plaintiffs’ work “for the same intrinsic purpose as plaintiffs”); Patry, Fair Use in Copyright Law at 425 (in performing “intrinsic purpose” analysis courts should examine whether “the defendant reproduce[d] the copyright owner’s expression for the purpose of marketing the precise form of that expression”); see also authorities cited in the Publishers’ Brief, 24-25.
This was a clear misreading. The reason that defendants are able to charge anything at all is because they are selling valuable intellectual property. That defendants do not charge “extra” for copyrighted pages is irrelevant. E.g., Macmillan Co. v. King, 223 F. 862 (D. Mass. 1914), where the defendant teacher created memoranda-summaries of portions of plaintiff’s book for use in tutoring sessions. The teacher argued that his use was fair because, among other reasons, “his regular fees for instruction are fixed without regard to the use of the memoranda, and are the same whether the memoranda are used or not.” 223 F. at 863. The teacher was held an infringer despite this argument. Id. at 866.
The panel majority’s misunderstanding of Harper & Row is akin to defendants’ argument that MDS, unlike the Publishers, is a mere “printer,” and “Publishers use the work; printers do not.” (See Defendants’ Brief, 24-25.) The fundamental infirmity in this position is that it necessarily posits that those who invest the most intellectual effort into works that incorporate prior copyrighted material — and thereby fulfill the social goal of advancing learning by building on what came before in new works — are to be afforded the least amount of fair use protection. There is no support for such a proposition. Printers, moreover, are undoubtedly liable for their “mere” reproduction of copyrighted works. See, e.g., Respect Inc. v. Fremgen, 36 U.S.P.Q.2d 1278 (N.D. Ill. 1995) (printer liable for unauthorized act of reproduction); 3 Nimmer Copyright � l2.04[A] (printer liable for infringement with respect to “acts of printing”); � 8.02[C] (printer liable for acts of copying even when copies are not sold).
[A]t the printing stage the comic books lack real value to any entity other than [plaintiff publisher] [Defendant printer] cannot sell the finished comic books to any other buyer since [plaintiff] holds the copyright. . .
884 F.2d at 1037 (emphasis supplied) Plainly, nothing in the case aids defendants’ fair use arguments.
That the works in which the Publishers hold copyrights can have educational purposes and so are assigned by professors to students; that students are willing to pay money for copies of the assigned materials; that defendants are able to build a profitable business on meeting the demands of the market — under the unanimous authorities discussed above and in the Publishers’ Brief, these facts establish that defendants’ copying and selling is commercial and therefore disfavored.
That In SuitThe panel majority’s conclusion (Panel Opinion, 10) that consideration of any legislative history is inappropriate because the four factors set forth in � 107 of the Copyright Act are “unambiguous” is foreclosed by controlling cases.[FN 3] The Supreme Court has repeatedly consulted the legislative history of the fair use provision of the Copyright Act, as have other circuits. Harper & Row, 471 U.S. at 549-53; Acuff-Rose Music, 114 S Ct. at 1170; Sony Corp. v. Universal City Studios, Inc., 464 U.S. 417, 447, 450- 51 (1984); see also Texaco, 60 F.3d at 919 n.5 (Classroom Guidelines are “persuasive authority marking out certain minimum standards for educational fair uses”); Marcus v. Rowley, 695 F.2d 1171, 1178 (9th Cir. 1983).
The only authority cited by the panel majority for its contrary conclusion was a non-copyright case cited by the defendants (Defendants’ Reply Brief, 13), that goes no further than to recite the familiar rule that “unambiguous” statutory language cannot “be expanded or contracted” with legislative history. West Virginia Univ. Hosps. Inc. v. Casey, 499 U.S 83, 98-99 (1991). However, use of legislative history in the fair use context does not expand or contract the statutory language but instead elucidates the meaning and scope of the generalities of the statute.
The students are charged no more than the actual cost of copying.
H.R. Rep. No. 1476 at 68-7l.
The copying in this case is well outside the Classroom Guidelines. It was done for profit. Each excerpt is far longer than the 1,000 words provided in the Guidelines (the shortest excerpt exceeds 8,000 words). The professors decided to assign the coursepacks in advance, before the start of the semester (when there was time to seek permission) and there were many more than nine works copied in each coursepack. MDS, to make its profit, charged students more than its actual cost.
While the third fair use factor (amount of copying) is not to be applied mechanically, and necessarily relates to the fourth factor (market harm) as well, there is surely no basis for defendants’ argument that copying of from 5% to 30% of a book was permissible in this case as long as the copied amount was not a substitute for a sale of the full book itself. The panel majority accepted this argument, noting that “Each of the professors who delivered the materials at issue to MDS signed a statement that he would not otherwise have assigned the copyrighted work to the class.” (Panel Opinion, 15-16).
It is true that the whole book has not been thus dealt with, but the copyright protects every substantial component part of the book, as well as the whole.
[T]he fact that a substantial portion of the infringing work was copied verbatim is evidence of the qualitative value of the copied material, both to the originator and to the plagiarist who seeks to profit from marketing someone elseVs copyrighted expression.
471 U.S. at 564-65. Here, defendants’ coursepacks are educationally useful because they contain verbatim excerpts of educationally useful works published by the Publishers. Otherwise, no student would have bought the coursepacks and defendants would not have been able to “profit from marketing someone else’s copyrighted expression,” as occurred in Harper & Row.
It is said, that the defendant has selected only such materials, as suited his own limited purpose as a biographer. That is, doubtless true; and he has produced an exceedingly valuable book. . . . It is certainly not necessary, to constitute an invasion of copyright, that the whole of a work should be copied, or even a large portion of it, in form or substance. If so much is taken, that the value of the original is sensibly diminished, or the labors of the original author are substantially to an injurious extent appropriated by another, that is sufficient, in point of law, to constitute a piracy pro tanto. The entirety of the copyright is the property of the author; and it is no defence, that another person has appropriated a part, and not the whole, of any property.
9 F Cas. at 348 (emphasis Supplied).
[I]f the defendants may take three hundred and nineteen letters, included in the plaintiffs’ copyright, and exclusively belonging to them, there is no reason why another bookseller may not take [an]other five hundred other letters, and a third, one thousand letters, and so on, and thereby the plaintiffs’ copyright be totally destroyed.
Potential Markets.Sony held that market harm to copyright holders should be presumed when the defendants’ use is commercial. 464 U.S. at 450. In Acuff-Rose Music, 114 S. Ct. at 1l77, the Court did not presume harm because “[n]o ‘presumption’ or inference of market harm that might find support in Sony is applicable to a case involving something beyond mere duplication for commercial purposes.” (emphasis added). If any case involves no more than “mere duplication for commercial purposes,” it is this one. MDS’s sales should therefore be presumed to cause economic harm to the Publishers.
Evidence of lost permission fees does not bear on market effect. The right to permission fees is precisely what is at issue here. It is circular to argue that a use is unfair, and a fee therefore is required, on the basis that a fee is otherwise required.
Professor Nimmer’s treatise, which the Supreme Court has repeatedly cited with approval, calls the Court of Claims’ holding in Williams & Wilkins “seriously in error, with implications that might well justify its description by one of the dissenting judges as ‘the Dred Scott decision of copyright law.'” 3 Nimmer Copyright � l3.O5[E], at 13-104 (citation omitted). The implications of Williams & Wilkins are indeed devastating: for example, there is no reason the circularity argument would not similarly apply when an infringer sells complete copies of entire books. If MDS made multiple copies of a full book and sold them to students who used them in course work, and if the copyright holders challenged those sales on the grounds that they replaced sales of the copyrighted books, MDS would argue that the copyright holders’ claims were circular because the copyright holders’ entitlement to the sales in question would only be established if MDS’s copying of the entire book was not a fair use.
Williams & Wilkins, decided before the 1976 Copyright Act, is also irreconcilable with the language of � 107 itself, which specifically directs the courts to consider “the effect of the use upon the potential market for or value of a copyrighted work.” That “potential market” language would be rendered meaningless if the circularity argument were correct — All new markets for copyrighted works would be developed by infringers, who would say that they are having no impact on existing markets and that considerations of the impact on the potential market is irrelevant because it is circular.
A preferable approach is to give effect to the plain meaning of the term “potential” to include not only uses currently being exploited, but also uses that the copyright owner might have an interest in exploiting in the future. If the copyright owner is required to demonstrate that such an interest already exists, many potential sources of income would be excluded from the analysis.
Patry, Fair Use In Copyright Law, p. 558.
The circularity argument, moreover, was implicitly rejected by the Supreme Court in Stewart v. Abend and Harper & Row. In both cases, theSupreme Court found fourth factor market harm because the copyright holder lost the royalty it would have charged for a use like defendants’ The concept that the lost royalty income should be disregarded was not even addressed by the Supreme Court in those cases.
These Supreme Court authorities are entirely irreconcilable with the panel decision here refusing to consider the Publishers’ lost royalties, and require the opposite result from that reached by the panel majority.
* * *[S]ince there currently exists a viable market for licensing these rights for individual journal articles, it is appropriate that potential licensing revenues for photocopying be considered in a fair use analysis.
In the Kinko’s case, decided in 1991, the eight plaintiff- publishers established that they had in place permissions departments that responded to requests to copy excerpts coursepacks and captured the income from such licensing. See, e.g., 758 F. Supp. at 1529 n.4 (“Plaintiffs derive a significant part of their income from textbook sales and permissions fees“); see also 758 F. Supp. at 1534.
Indeed, any contention that charging permission fees to copy excerpts is a new practice is further belied by several suits in the early 1980’s where publishers — including, again, two of the plaintiffs here — brought enforcement actions against coursepack makers like MDS, in order to protect their economically valuable permissions licenses These cases were resolved by consent decrees that adopted the standards of the Classroom Guidelines and thus ensured that the plaintiffs would continue to be compensated for copying like that in suit. See Basic Books. Inc. v. Gnomon Corp., 1980 Copyright L Dec. � 25,145 (D. Conn. 1980) (Princeton University Press, plaintiff); Addison-Wesley Publishing Co. v. New York Univ., 1983 Copyright L. Dec. � 25,544 (S.D.N.Y. 1983) (Macmillan Inc.’s predecessor, plaintiff); Harper & Row Publishers Inc. v. Tyco Copy Serv., Inc., 1981 Copyright L. Dec � 25,230 (D. Conn. 1981); see also R. 61 Exhibit G, pp. 1344-45, submitted by defendants (uncontroverted deposition testimony from St. Martin’s Press establishing existence of its classroom permissions business at least as far back as fifteen years ago).
education is the textbook publishers’ only market, and . . . many authors receive their main income from licensing reprints in anthologies and textbooks; if an unlimited number of teachers could prepare and reproduce their own anthologies, the cumulative effect would be disastrous.
H.R. Rep. No. 2237, 89th Cong., 2d Sess. at 62 (1966) (emphasis supplied). The evidence of an existing market that has existed for years — the very type of market envisioned by the Texaco court — is overwhelming.
Defendants also argue that the use of excerpts in coursepacks stimulates increased book sales. (Defendants’ Brief1 31.) Even if this were somehow true, it would make no difference. The use in Stewart v. Abend, for example, would also increase interest in and sales of plaintiff `s work but was nonetheless found unfair. 495 U.S. at 237. The owner of a copyright in a story is entitled to both the royalty from a motion picture producer and the increased sales of the story. Similarly, Harper & Row was entitled to royalties from the publication of an excerpt and the increased sales of President Ford’s memoirs that publication of the excerpt might stimulate. See also Acuff-Rose Music, 114 S. Ct. at 1177 n.21 (use of song that enjoys increased sales via unauthorized inclusion in film is not fair use).
The panel majority also concluded that there had been no harm shown to “the potential market for derivative works, such as published anthologies.” (Panel Opinion, 18; emphasis in original.) This portion of the panel majority’s opinion is not clear, but it seems that the majority considered defendants’ anthologies not to be “published”, and that this had significance for purposes of fair use analysis. The published anthologies the majority would seem to have in mind consist of printed pages perfect bound in soft or hard covers; the defendants’ anthologies consist of photocopied pages that are spiral bound in a less attractive format. The rights of the copyright holder surely do not turn on such differences.
The coursepack in suit entitled “History of the Vietnam Era” (R. 43, No. 35) contains an excerpt from St. Martin’s Press’s Vietnam war anthology entitled Light At The End Of The Tunnel: A Vietnam War Anthology (at p. 259). Specifically, MDS copied The Tet Offensive by Larry Berman, which had been included in the St. Martin’s Press anthology with permission of the copyright holder. (See id. at p 261).
Under the majority’s approach, St Martin’s Press was required to obtain permission when it published its anthology including Larry Berman’s work because it was a “published” anthology. MDS, however, could copy the same excerpt without seeking permission because the MDS anthology is somehow different. Such an outcome is not Sustainable.
The majority’s reference to “derivative works” in this context was also misplaced “Derivative work” has a technical definition in � 101 of the Copyright Act; the majority apparently has concluded that it does not extend to defendants’ anthologies. This would make no difference. The statutory direction in � 107 to consider the impact on the markets for the copyrighted work makes no mention of derivative works and plainly extends to all markets for the copyrighted work. Our undisputed showing that there is a market in which copyshops and others pay license fees to include excerpts from copyrighted works in coursepacks, and that defendants are depriving the Publishers of income from that market, therefore establishes harmful impact regardless of whether defendants’ coursepacks are derivative works.
The cases confirm the irrelevance of whether a coursepack is a derivative work. They recognize that copyright holders earn licensing income from authorizing copying which would not result in the creation of derivative works, and they find fourth factor market harm for fair use purposes when such licensing income is lost. See, e.g., Texaco (photocopying); Los Angeles Times v. Tullo (videotaping); Wolff v. Institute of Elec. & Electronics Engineers, Inc., 768 F. Supp. 66, 69 (S.D.N.Y. 1991) (photographs); Peer Int’l Corp. v. Pausa Records, Inc., 909 F.2d 1332, 1336 (9th Cir. 1990) (music), cert. denied, 498 U.S. 1109 (1991); see also H.R. Rep. No. 2237, 89th Cong., 2d Sess. at 62 (1966) (licensing of reprints in classroom anthologies).
E. There Is No Exemption For Educational Copying.Finally, we note our belief that this case does not require a decision about what professors and students may or may not do. As the Kinko’s court said: “Expressly, the decision of this court does not consider copying performed by students, libraries, nor on-campus copy-shops, whether conducted for profit or not.” 758 F. Supp. at 1537 n.13.
Here, however, the panel majority assumed as a central basis for its holding that the copying in suit would be exempt from liability if it had been conducted by professors and students. This is not correct.
It is certainly the case that a professor or student — like anyone else — may on an isolated occasion copy a small amount of material and successfully assert fair use. But the systematic copying and distribution of anthologies comprised of substantial excerpts from copyrighted materials is not a fair use, regardless of who performs it.
While the commercial nature of defendants’ use here weighs heavily against them, it is not necessary for a finding of infringement. “The mere fact that a use is educational and not for profit does not insulate it from a finding of infringement. . . . Acuff-Rose Music, 114 5. Ct. at 1174 (1994); see also, e.g., Sony, 464 U.S. at 450 (“Even copying for noncommercial purposes may impair the copyright holder’s ability to obtain the rewards that Congress intended him to have”); Harper & Row, 471 U.S. at 561 (there are no “presumptive categories” of fair use); Marcus v. Rowley, 695 F.2d at 1175 (“a finding of a nonprofit educational purpose does not automatically compel a finding of fair use”).
The courts have, on at least four prior occasions, held that verbatim, substantial, copying of course materials for distribution to students is a copyright infringement and not fair use, even in the absence of a profit motive. For cases where the copying was no more harmful to the copyright holder than that here, see Marcus v. Rowley, 695 F.2d at 1175 (summary judgment granted against defendant teacher who copied eleven pages from another teacher’s home economics instructional book; copying for same purpose as original 1sweighs against fair use”); Wihtol v. Crow, 309 F.2d 777 (8th Cir. 1962) (no fair use where defendant teacher arranged plaintiff’s original musical composition for school choirs and distributed copies); Macmillan Co. v. King, 223 F. 862 (D. Mass. 1914) (professor who tutored students infringed plaintiff’s work by providing students with memoranda quoting and paraphrasing sections of plaintiff’s work); see also Encyclopedia Britannica Educ. Corp. v. Crooks, 542 F. Supp. 1156 (W.D.N.Y. 1982) (denying fair use defense asserted by non-profit educational consortium that copied plaintiff’s educational films for use in schools); See Publishers’ Brief, 18.
Among the rewards Congress assured to copyright holders is the ability to sell to their intended market, including the ability to earn license fees for the reproduction of substantial excerpts, even if the reproduction is done by not-for-profit educational copiers. Copying like defendants’ here would be infringing regardless of by whom it was conducted. However, the issue of professor and student copying is not before the Court.
In view of the district court1s decision to award statutory damages in the “standard” range under 17 U.S.C. � 504(c)(l) (the award was $5,000 per work infringed, well within the standard available damages of from $500 to $20,000 per work infringed), rather than the enhanced damages available for willful infringements (up to $100,000 per work infringed), it is doubtful if defendants have standing to appeal the district court’s willfulness finding. Assuming arguendo, however, that the court’s willfulness finding has some practical consequence here, it was plainly correct.
Smith’s claim to have a subjectively sincere belief that his conduct is not infringing makes no difference. The undisputed facts of his refusal to accept his lawyer’s advice to the contrary, and his inability to heed the contrary conclusion of the district judge, demonstrate the willfulness of his conduct. Smith’s and MDS’s is a knowing, and consistently defiant, course of conduct.
A defendant is on sufficient notice [that he may be a willful copyright infringer] as long as the law is clear enough so that he is informed that the course of conduct he contemplates may fall perilously close to the line which separates what is legal from that which is not.
598 F. Supp. at 173 (emphasis supplied) (material in brackets added). Steerwell was a criminal case. If the standard articulated there is enough to support a finding of criminal willfulness, it is certainly enough to establish willfulness here.
There is no factual issue here about Smith’s state of mind; however unlikely it may be, for purposes of their summary judgment motion below the Publishers took as true his claim that he studied copyright law closely and did not have a subjective belief that he was violating it. The issue is the objective reasonableness of those beliefs. Once Smith had read Kinko’s, had been advised by his lawyer, and heard the district judge, he could not reasonably have held-such a belief, and yet he continued to infringe.
For all the foregoing reasons, the decision of the district court should be upheld.
Defendants have argued (Reply Brief, 5) that “in those cases, the copier conceived of a product for sale to the public and decided what to copy.” This is not correct. In the video clip cases (e.g., Tullo and Pacific & Southern, above), it is the customers who decide what copied material is of interest to them and should be copied and sold to them. Additionally, there is no doubt that defendants here “conceived of a product for sale” as surely as did, for example, the defendants in Tullo and Pacific & Southern. And defendants here actively advertised those products in order to stimulate demand for them. (Publishers’ Brief, 4; 10-11.) Finally, there is no reason to make the identity of who decides what to copy significant in a fair use analysis.
See Stewart v Abend, 495 U.S. 207, 225 (1990), citing Ringer, First Thoughts on the Copyright Act of 1976, 13 Copyright 187, 188-89 (1977). With respect to photocopying and fair use, that article observed that the fair use defense in � 107 “must be read with the exhaustive legislative reports, fleshing out the probable application of the ‘fair use’ doctrine in classroom situations,” citing reports the Publishers cite here.
That students are willing to spend money on coursepacks is irrefutable evidence that the material in the coursepacks has economic value. The panel majority found relevant the fact that students could buy copyrighted excerpts from MDS for less money than from other sources, including the university copy machines. (Panel Opinion, 14.) As Judge Nelson observed, however, the only relevance of the low prices of a “black market” copyshop like MDS is not that it can beat the university machines, but that it can beat its competitors, who also sell to students but obey the law and pay required fees. (Panel Opinion, 26.) Defendants submitted no evidence that suggested that students are unwilling or unable to pay the costs of coursepacks that come from typical copyshops that obtain permission and pay royalties. If MDS were to obtain permission like its competitors, and its prices were like everyone else’s, there is no reason to believe that students would stop buying coursepacks or that their education would be harmed.
I, HERMAN L. GOLDSMITH, certify that on May 16th, 1996 I served two true copies of the attached “SUPPLEMENTAL BRIEF OF PLAINTIFFS-APPELLEES PRINCETON UNIVERSITY PRESS, MACMILLAN, INC. AND ST. MARTIN’S PRESS, INCORPORATED” upon defendants-appellants MICHIGAN DOCUMENT SERVICES, INC. and JAMES M. SMITH at the address designated by them for that purpose, Bodman, Longley & Dahling, 110 Miller, Suite 300, Ann Arbor, Michigan 48104, by depositing the papers enclosed in a prepaid sealed wrapper, properly addressed, in an official depository under the care and custody of The United States Postal Service within New York State.

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