Opinion ID: 784601
Heading Depth: 3
Heading Rank: 4

Heading: Effect of the use upon potential market

Text: 44 The fourth factor asks whether actual market harm resulted from the defendant's use of plaintiff's protected material and whether unrestricted and widespread conduct of the sort engaged in by the defendant ... would result in a substantially adverse impact on the potential market for the original or its derivatives. Id. at 590, 114 S.Ct. 1164 (quoting 3 Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 13.05[A](4), at 13-102.61 (1993)). This inquiry attempts to strike a balance between the benefit the public will derive if the use is permitted and the personal gain the copyright owner will receive if the use is denied. The less adverse effect that an alleged infringing use has on the copyright owner's expectation of gain, the less public benefit need be shown to justify the use. 45 Dr. Seuss, 109 F.3d at 1403 (quoting MCA, Inc. v. Wilson, 677 F.2d 180, 183 (2d Cir.1981)). 46 Mattel argues that Forsythe's work could lead to market harm by impairing the value of Barbie itself, Barbie derivatives, 9 and licenses for use of the Barbie name and/or likeness to non-Mattel entities. 10 Because of the parodic nature of Forsythe's work, however, it is highly unlikely that it will substitute for products in Mattel's markets or the markets of Mattel's licensees. In Campbell, the Court clearly stated, as to parody pure and simple, it is more likely that the new work will not affect the market for the original in a way cognizable under this factor. Campbell, 510 U.S. at 591, 114 S.Ct. 1164. Nor is it likely that Mattel would license an artist to create a work that is so critical of Barbie. [T]he unlikelihood that creators of imaginative works will license critical reviews or lampoons of their own productions removes such uses from the very notion of a potential licensing market. Id. at 592, 114 S.Ct. 1164. 47 As to Mattel's claim that Forsythe has impaired Barbie's value, this fourth factor does not recognize a decrease in value of a copyrighted work that may result from a particularly powerful critical work. Id. at 593, 114 S.Ct. 1164 (The fact that a parody may impair the market for derivative uses by the very effectiveness of its critical commentary is no more relevant under copyright than the like threat to the original market....). We recognize, however, that critical works may have another dimension beyond their critical aspects that may have effects on potential markets for the copyrighted work. Id. at 592, 114 S.Ct. 1164 (recognizing that the new work may have a more complex character, with effects not only in the arena of criticism but also in protectable markets for derivative works). Thus, we look more generally, not only to the critical aspects of a work, but to the type of work itself in determining market harm. Id. at 593, 114 S.Ct. 1164 (looking beyond the critical aspect of 2 Live Crew's rap rendition of Pretty Woman to the derivative market for rap music). Given the nature of Forsythe's photographs, we decline Mattel's invitation to look to the licensing market for art in general. Forsythe's photographs depict nude and often sexualized figures, a category of artistic photography that Mattel is highly unlikely to license. The existence of this potential market cannot be presumed. Lewis Galoob Toys, Inc. v. Nintendo of Am., Inc., 964 F.2d 965, 972(9th Cir.1992), cert. denied, 507 U.S. 985, 113 S.Ct. 1582, 123 L.Ed.2d 149 (1993). 48 In a case almost identical to this one, Mattel, Inc. v. Pitt ( Pitt ), 229 F.Supp.2d 315, 321-22 (S.D.N.Y.2002), the Southern District Court of New York found no danger of potential market harm to derivative uses. In Pitt, Mattel brought a copyright infringement suit against Susanne Pitt, an artist who sold and designed a line of figures called Dungeon Dolls. These dolls were essentially Barbie dolls, physically altered, clothed in sadomasochistic attire, and placed in contexts with like themes. Id. Having found the works sufficiently transformative, the Pitt court concluded that potential market harm was improbable because Mattel was unlikely to develop or license others to develop a product in the adult doll market. Id. at 324. 49 Forsythe's work could only reasonably substitute for a work in the market for adult-oriented artistic photographs of Barbie. We think it safe to assume that Mattel will not enter such a market or license others to do so. As the Court noted in Campbell, the market for potential derivative uses includes only those that creators of original works would in general develop or license others to develop. 510 U.S. at 592, 114 S.Ct. 1164. 50 Finally, the public benefit in allowing artistic creativity and social criticism to flourish is great. The fair use exception recognizes this important limitation on the rights of the owners of copyrights. No doubt, Mattel would be less likely to grant a license to an artist that intends to create art that criticizes and reflects negatively on Barbie's image. It is not in the public's interest to allow Mattel complete control over the kinds of artistic works that use Barbie as a reference for criticism and comment. 51 Having balanced the four § 107 fair use factors, we hold that Forsythe's work constitutes fair use under § 107's exception. His work is a parody of Barbie and highly transformative. The amount of Mattel's figure that he used was justified. His infringement had no discernable impact on Mattel's market for derivative uses. Finally, the benefits to the public in allowing such use — allowing artistic freedom and expression and criticism of a cultural icon — are great. Allowing Forsythe's use serves the aims of the Copyright Act by encouraging the very creativity and criticism that the Act protects. Kelly, 336 F.3d at 819-20. We affirm the district court on its grant of summary judgment on Mattel's copyright infringement claims.