P are publishes of scientific and technical journals. D is for-profit company that engages in scientific research.
D's scientists routinely make copies of articles in P's journals; they do so for many reasons: to allow multiple scientists to use the same material, to be able to make notes in the margins, to keep the original safe from accidents in the lab, etc.
The court used a test case of D scientist Dr. Chickering to avoid having to go through each scientist's files. Chickerings files contained 8 copies of material from the journal Catalysis for use in research.
The CCC is a nonprofit, central clearing-house which grants blanket advance permission for a fee to photocopy copyrighted material registered with the CCC and forwards the fees collected to copyright owners. CCC offers two principal services...
Transactional Reporting Service (TRS) provides photocopy users with blanket permission to photocopy from any CCC-registered publication, provided the user subsequently reports the making of the photocopy and pays the fees required by the copyright owner.
Administrative nightmare in keeping up with what journals were copied.
Annual Authorization Service (AAS) grants blanket annual licenses to make photocopies for internal use of any copyrighted material contained in any of the journals registered with the CCC.
100 major companies (including 11 petroleum companies) use this service.
SDNY found for P, infringement.
2nd Cir COA denied cert.
Can a profit-seeking company use the fair use defense when they make unauthorized copies of copyrighted materials published in scientific journals for use by the company's scientists involved in scientific research?
A profit-seeking company may not make unauthorized copies of copyrighted materials published in scientific journals for use by the company's scientists under the fair use doctrine.
The fair use doctrine was codified in the Copyright Act of 1976; there are four factors to be considered…
The purpose and character of the use
Secondary users can win the first factor by reason of either transformative/non-superseding use of the original or noncommercial use, generally for a socially beneficial or widely accepted purpose.
D's use fits neither of these reasons: they copied directly, there was no transformation; the use was for a commercial purpose.
D argues that the use is transformative since it is used for another purpose (keeping it from destruction in the lab). If it were copied onto plastic paper for a wet environment, onto metal so that it would resist extreme heat, or onto microfilm to conserve space, this might be a persuasive transformative use.
The three subscriptions to Catalysis are serving the needs of hundreds of scientists; the principal feature of the photocopying is its capacity to give numerous scientists their own copy based on D's purchase of an original. The copies supersede the original.
While D's scientists are using the copies for a socially beneficial purpose, their research is for commercial gain.
First factor favors P.
The nature of the copyrighted work
Weighs for P in that the articles are created for publication with the purpose and intention of benefitting from the protection of the copyright law. Copyright protection is necessary to the dissemination of articles and finance to the companies that distribute them.
Weighs for D in that the scope of fair use is greater with respect to factual than nonfactual works.
Second factor favors D.
The amount and substantiality of the portion used
D copied the entirety of the copyrighted articles in question. Reproduction of an entire copyrighted work ordinarily militates against a finding of fair use.
Third factor favors P.
The effect of the use on the potential market for the copyright
Without photocopying, D would order more subscriptions from P or would order from the CCC, which would indirectly benefit P as well.
Fourth factor benefits P.
This case is distinguishable from Williams and Wilkins, mostly in that the CCC has created a solution to the problem the court there did not know how to handle.
From 2nd Cir COA cert denial…
Only 30% of the journals subscribed to by D are covered by a CCC license.
No CCC license can assure a scientist that photocopying any given article is legal.
There is no workable market here.
Since the CCC allows fair-use photocopying for only some journals, users will either research which publications are not in this category and copy them longhand or ignore the majority's fair-use formulation as unworkable. Neither option serves scientific inquiry or respect for copyright.