Author: David Newhoff

David is an author, communications professional, and copyright advocate. After more than 20 years providing creative services and consulting in corporate communications, he shifted his attention to law and policy, beginning with advocacy of copyright and the value of creative professionals to America’s economy, core principles, and culture.

Fair Use & The CASE Act

Although this week marks the eighth annual observation of Fair Use Week, I remain unconvinced that the fair use doctrine is any better understood today than it was before this ritual began. I see fair use errors all the time—e.g. in chat threads where creators are trying to do the right thing—and I maintain that it is often the fair use advocates themselves who cause confusion by promoting theories that have not thrived terribly well in court. And it is confusion about the legal use of works, especially online, that was a major reason why the small-claim copyright provision was finally adopted with the passage of the CASE Act in December.

I mention the CASE Act because the site fairuseweek.org led off this week with a post written by scholar Kenneth D. Crews which asserts the “defense of fair use will be on the docket” when the Copyright Office implements the law and establishes the small-claim copyright tribunal, the Copyright Claims Board (CCB) at the end of this year.

Granted, none of us can say for certain how events will transpire at the CCB, but Crews raises concerns that seem to predict that the doctrine itself may be amended by the decisions of the Board—and presumably not in a way the fair use advocates would endorse. Specifically, one statement by Crews caught my attention because it seems to echo a wishful thinking principle about factor four of the fair use test, and one that was recently rejected (again) in Dr. Seuss Enterprises v. ComicMix. Crews writes:

Think of that fourth factor of fair use: the effect of the use on the market for or value of the work.  A court will often need confidential economic data about the sales of the work in question and the revenue earned.  The Copyright Claims Officers, parties, and staff attorneys do not have clear authority to compel disclosures and discovery.  They can “request” documents and information.  As a result, the Board could frequently be called upon to decide questions of fair use, but without the needed evidence.  The choices at that point will be far from satisfactory.

While financial data may be relevant evidence when considering the potential harm to the rightsholder’s market under the fourth factor, the case law generally holds that this analysis is agnostic with regard to such details. In fact, ComicMix attempted to assert this exact defense, arguing that DSE should be required to prove with financial evidence the direct harm their mash-up book would do to the plaintiff’s market. The district court in that case erred when it agreed with this argument, but that error was overturned by the Ninth Circuit Court of Appeals, which held that ComicMix’s fair use defense failed on all four factors. As the court stated directly on this matter:

Not much about fair use doctrine lends itself to absolute statements, but the Supreme Court and our circuit have unequivocally placed the burden of proof on the proponent of the affirmative defense of fair use. ComicMix tries to plow new ground in contending that fair use is not an affirmative defense and that the burden shifts to Seuss to prove potential market harm.

So, turning to the CCB, it seems the most logical assumption is to expect that, as a small-claims body adjudicating relatively straightforward cases, the Officers will not be eager to “plow new ground” in fair use doctrine. In fact, the Board is obligated by statute to follow the law. Its fourth factor analyses, therefore, should be consistent with the courts and largely ignore detailed financial information (as Crews indicates may be necessary) because those facts are not especially germane to that prong of the test. At the same time, where there may be a circuit split on any matter, including fair use, the CCB is required by the CASE Act to follow the precedent of the circuit where the case would be decided if it went to court.

To reiterate a point made many times on this blog and elsewhere, because potential market harm implies a market the rightsholder has never exploited, including possible derivative works, there is no financial data available in such an instance. And despite attempts to argue the contrary, recent case law has reiterated the principle that fair use does not extinguish the copyright owner’s exclusive right to prepare derivative works, or to prevent the preparation of derivative works if that is the copyright owner’s decision.

I would also add that a fair use analysis is a mix of law and fact, and to the extent that anyone may be concerned about the fate of the doctrine itself, it is opinions of law that matter. When, inevitably, a case is presented to the CCB that contains errors of fact on either side, the outcome of that individual case may be unfair as a result, but the law remains unaffected. Still, I homed in on Crews’s comment about factor four because it highlights why I would question his thesis that fair use doctrine somehow hangs in the balance as the CCB is formed and begins to adjudicate cases. Concerned that the CCB might begin to write its own common law, Crews states:

Decisions from the Copyright Claims Board will not be binding on anyone other than the immediate parties, and they officially will have no precedential value in later actions in a court or before the Board.  Yet conventions of lawyering and the inevitability of human reasoning will surely press to the contrary.  As the Board builds a record of rulings, the outcomes and the reasoning will undoubtedly be fodder for scrutiny and statistical tabulation.  Individual rulings will in some manner be referenced in later proceedings.  Analyses of trends and patterns will be pursued for their scholarly value and as insights for parties and attorneys thinking about the next case to come before the new Board.

This apprehension appears to hinge on an assumption that the Board would make decisions or render opinions that might reshape fair use doctrine, even though, as Crews notes, there is nothing officially controlling about the Board’s opinions. This is doubtful. For one thing, the types of cases in which both parties agree to adjudication by the CCB are very unlikely to present revolutionary legal challenges not already answered by case law. Although we correctly describe fair use as a case-by-case consideration, that does not mean each case presents a novel consideration. Further, if this assumption is not a sufficient guardrail, the CASE Act contains a provision that allows the CCB to dismiss any case that presents a novel theory of law.

In the last ten years alone, we have seen a compelling variety of contemporary fair use defenses; and if the CCB merely follows that guidance, Crews’s concerns should be allayed. Unless, of course, the concern is not that the CCB will be inconsistent with case law but that it will further solidify case law. After all, advocates of a broader, or looser, fair use doctrine have generally not faired too well in a number of headline cases in federal courts. So, I imagine that if the CCB renders decisions that affirm ComicMix, ReDigi, KinderGuides, Brammer, and VidAngel, to name a few, this might not be very popular among those who currently advocate a more expansive approach to fair use.

Crews does state explicitly that fair use can “survive” the work of the Copyright Claims Board, and he is certainly not wrong to say that the efficacy of the Board has to prove itself—frankly in all aspects of copyright litigation, and not just fair use. Moreover, the rubber-meets-road decisions by the CCB may serve to better educate both plaintiffs and respondents about copyright’s protections and limitations. And finally, I disagree with Crews that a respondent who believes he has a fair use defense is safer opting out of a CCB adjudication in the early days of its existence. As discussed in this post about Brammer v. ViolentHues (a very typical digital-age litigation), the defendant might have arrived at the same rejection of his untenable fair use defense for a fraction of the cost.

Photo by Corgarashu

 

Facebook Blocks Oz. But Why Shouldn’t Platforms Pay for News?

This week, Facebook made good on its threat to block Australian news media on its platform. “Australian users cannot share Australian or international news. International users outside Australia also cannot share Australian news,” MSN reports. The move by the social giant is a hardline tactic designed to make the Australian government blink on proposed legislation that requires both Facebook and Google to pay for Australian news media that are shared across the platforms. Google reportedly has entered into agreements in recent days. For an in-depth analysis, especially from a global trade perspective, see Hugh Stephens’s post.

But acknowledging that the details are somewhere between opaque and invisible in the Facebook v. Oz story, I fail to see why the principle itself is terrribly flawed. Why shouldn’t the major online platforms pay for news media?

Google and Facebook (and potentially other platforms) derive substantial value from all those news stories that are shared across their platforms, but which others produce—often at great cost. Nevertheless, Facebook asserts that it does not need the news media as badly as the news media needs its platform. Perhaps that’s true. But in a statement released this week about the blocking decision, Facebook stated, “This is not our first choice – it is our last. But it is the only way to protect against an outcome that defies logic and will hurt, not help, the long-term vibrancy of Australia’s news and media sector.”

Combine that remark with the familiar generalization that the Australian proposal “misunderstands the internet,” and we are left to wonder if those are Facebook’s best arguments against the proposal. Because if the platform giants have ever been the least bit concerned with the “long-term vibrancy” of the news or any other media producing sectors, they must have been tripping balls when they built their business models. The underlying principle of every major online provider since roughly 2000 has been to monetize the flow of content produced by parties other than the platforms themselves.

Whether it’s someone making a joke or sharing a news story from the Washington Post, it’s all just data flow to Facebook. Very valuable data flow. And while we ordinary users may have volunteered to share personal comments or photos on the platform, the journalists whose salaries depend primarily on advertising revenues, did not voluntarily enter into the arrangement. While I recognize that the devil is in the details as to where the money will end up (i.e. does it pay journalists?), the underlying principle still seems sound.

Is really such a radical proposal that Facebook and Google (and potentially others if they achieve certain scale) pay negotiated fees to news producers? Certainly, the existing model has not done journalism much good, so why must we conclude that more of the same is necessary for the “long-term vibrancy” of the industry, as Facebook puts it? I noticed that Techdirt’s Mike Masnick tweeted his endorsement of Facebook’s rebuke to Australia, opining that the proposed legislation is just corporate welfare for Rupert Murdoch.

Admittedly, I find it difficult to defend journalism so broadly that it encompasses the work product of the Murdoch empire, but Masnick’s response is not wholly satisfactory to the question. What Facebook in particular has done to news—including where it has siphoned off revenue streams—has largely exacerbated the plague of alternate realities now threatening to unravel democratic societies worldwide. More specifically, to the extent that Masnick’s comment represents Facebook’s view, it obscures a much bigger truth:  that the major platforms have long been subsidized by the creators of works in nearly every field. That’s corporate welfare.

If the quotes listed on Yahoo! Finance, or the comments in this BBC piece are any indication, Facebook’s decision is not earning the company any goodwill—particularly in the middle of a global pandemic and brushfire season in Australia. And that’s on top of the fact that Zuckerberg & Co. have so reliably equivocated in its responding to demands to remove toxic disinformation and propaganda. “Well, that’s a tantrum. Facebook has exponentially increased the opportunity for misinformation, dangerous radicalism and conspiracy theories to abound on its platform,” said Lisa Davies, Editor of the Sydney Morning Herald, in response to the Facebook block.

Assuming the Australian proposal is a first test, it will be one to watch. There should be little doubt that if the platforms have to start paying for news in Australia and then the EU, we will see proposals to do likewise in the U.S. And that probably scares the hell out of Facebook and, perhaps Google as well. Presumably, Facebook will argue that the portal they built is so essential that they should not have to pay for any of the content that flows through it. But that seems about as irrational as saying that journalism itself is so important it should be free. Besides, I seem to remember a saying about great power coming with something. What was it again?

IP Rights & the Bernie Meme

The Bernie meme has been a lot of good fun and probably the kind of release valve many of us needed by the time we arrived battered, exhausted, and relieved to watch a peaceful Inauguration Day. My personal favorites are Bernie Merch Table, Bernie Yalta, and Bernie Chicago. And by now, almost everyone knows that Sanders’s campaign team had sweatshirts made with the photo and that 100% of the proceeds from the sale of those shirts—nearly $2 million so far—is being donated to Meals on Wheels and other charities in Vermont.

But viral memes—and separately the sweatshirt story—reprise some common copyright issues and likely misconceptions worth mentioning, beginning with a general reminder that no matter how rapidly or broadly a meme goes viral, this does not transfer the original photo into the public domain. The bemittened Bernie photo was taken by staff press photographer Brendan Smialowski and is owned by Agence France-Presse (AFP). It can be licensed for editorial use via Getty Images, which means it’s rather pricey. But what does that even mean after the image has been reproduced in hundreds (thousands?) of satires in the biggest game of Where’s Waldo ever played?

Memes, Fair Use, & Grandma

Memes are a favorite topic whenever the anti-copyright crowd aims to criticize online enforcement. From technical measures used to identify and flag protected works to the small-claim tribunal that will be established by the CASE Act, the critics either predict the death of the meme as a cultural phenomenon and/or that innocent sharers of memes will wind up inadvertently owing some rightsholder a big pile of money. The familiar hypothetical alleges that your grandmother will share, for instance, Bernie at the Last Supper and end up on the hook for a damage award shortly after the Copyright Claims Board (CCB) is formed under the terms of the CASE Act.

But in addition to the many protections for “grandma” in the CASE Act, most memes—and omnipresent Bernie is a good example—would be protected under the doctrine of fair use. To review, the fair use analysis weighs four factors. Factor 1 considers the purpose of the use, including whether that purpose is commercial; Factor 2 considers the nature of the original work, namely whether it is more factual or expressive; Factor 3 considers the amount of the original work used to achieve the purpose; and Factor 4 considers whether the use may cause potential harm to the market for the original work.

These factors are weighed interdependently, and here’s what the Bernie memes look like as a rough analysis:  Under Factor 1, the memes generally add new expression to the original and are not made for commercial purposes; under Factor 2, the original photo is slightly more informative than it is expressive;* under Factor 3, the heart of the work is used in every meme, but the amount used is arguably necessary to the purposes under Factor 1; and under Factor 4, no single meme is likely to cause harm to the market for the original work. But put a pin in that last point because it prompts a slightly different conversation.

Meme makers are everywhere, and those of us who share their lampoons number in the millions. But aside from the practical reality that memes cannot be stopped, it also happens to be true that, very often, there would be no legal basis for stopping them. But having said that, there were quite a few commercial enterprises that jumped into the fray with their own Bernie variations, promoting everything from local stores to major brands. And that’s where things can get a little trickier, both from the perspectives of the copyright owners and the subjects in the photographs.

Using a work for a commercial purpose tilts away from fair use under Factor 1; and in these examples, Factor 4, potential harm to the market for the original, would likely be the deciding consideration if, say AFP were to sue a business for turning their Bernie image into an advertisement. But even this consideration may be influenced by the fact that AFP does not have the independent right to license the photo for commercial use either.

As with nearly all photographs of famous people, AFP only offers a license for editorial use. Photojournalists do not obtain commercial releases, and no subject in his right mind would sign such a thing on the spot. Although confusion on this matter persists, the simple rule to remember is that the photographer (or his employer) owns the copyright in the image, but the subject(s) own their right of publicity (ROP). So, in this example, Bernie may not mind if the local bookshop memes him sitting in front of their store, but he might feel quite different if his likeness were used to promote, say, a Wall Street firm.

The point is that with regard to both copyrights and rights of publicity—and ROP vary state to state—commercial users both large and small should at least think about what they’re doing before leaping into a meme mosh pit. Just because everyone is doing it does not mean the rules are the same for commercial users as non-commercial ones. And without careful consideration, the commercial user could easily find itself on the wrong side of a litigation under copyright or ROP law, or both.

The Sweatshirt is a Commercial Use

Prospective users of photos, etc. should also remember that commercial use is not about profit per se. Raising money for charity is still commercial use under the law. I sent an email to Friends of Bernie asking whether they had contacted AFP regarding the sweatshirt, and I was not very surprised that they did not respond (**see note below). But regardless of this unusual circumstance involving a popular progressive senator, a sudden meme frenzy, and raising money for charities, nobody following this story should be confused about the fact that you do not automatically own the right to reproduce an image of yourself. In general, if you want to make shirts or coffee mugs or keychains—even to raise money exclusively for a worthy cause—you need permission from the copyright owner.

At the time of first publication, I did not know whether Bernie’s people obtained permission, but I am confident that the this story will confuse many potential users of photos into thinking that Team Bernie did not have to consider doing so. To put this in perspective, as a matter of copyright law, Bernie’s reproduction of the photo onto sweatshirts is no different from the McCloskeys’ reproduction of their infamous gun-wielding photo onto Christmas cards. And in that case, the photographer did take legal action. So, prospective users of works should remember that the legal standard is not one thing because we applaud Bernie’s use and another because we revile the McCloskeys’ use—or vice versa for some.

The Market Value of Photographs

I mentioned above that most memes under Factor 4 of the fair use test will be considered non-harmful to the market for the underlying work; but this is a tough subject that provokes lot of sympathy for professional photographers. A single meme, analyzed on its own, would likely be considered non-harmful, depending on certain aspects of the original photo and how it was used in the meme. But it cannot be ignored that the cumulative effect of a meme gone viral—or even widespread sharing of an unaltered image—can obliterate the market value of an original photograph—and licensing photos is how photographers pay their bills.

In this instance, Smialowski commented to Rolling Stone, “The picture itself is not that nice. It’s not a great composition. I’m not going to be putting this in a portfolio.” But the broader point is that meme frenzies make no distinction about the relative market value of the image being used. On that topic, photographers and all authors of works are acutely aware that the insidious commercial users in these viral phenomena are the social platforms themselves. While it is true that the meme-maker who put Bernie on Forrest Gump’s bench had no commercial interest, and neither did anyone who shared the image with friends, the data produced by all the sharing is worth a fortune to Facebook, Google, Twitter, et al.

Resolving that issue remains a challenge for professional journalists and millions of authors of creative works in the digital age. And in that effort, I hope that Senator Sanders himself, as an avowed champion of labor, takes note that creative professionals comprise a substantial segment of the American middle class and that copyrights are the equivalent of their labor rights.

*As stated in the Rolling Stone quote, even the photographer would likely say that the photo is not highly expressive with respect to his authorship.

**NOTE: Thanks to comments on Twitter, according to ABC and other news sources, Getty Images was contacted and agreed to donate licensing fees to the causes. Bernie Sanders’ mittens, memes help raise $1.8M for charity – ABC News (go.com)