District Court Rules on University's Use of Copyrighted Material in E-Reserve System

Practical Law Legal Update 7-519-4749 (Approx. 6 pages)

District Court Rules on University's Use of Copyrighted Material in E-Reserve System

by PLC Intellectual Property & Technology

Key Litigated Issues

The key issue before the US District Court for the Northern District of Georgia in Cambridge University Press v. Becker was whether the unlicensed use of copyrighted materials in Georgia State University's (GSU) electronic course reading system were protected by the fair use doctrine.

Background

In 2008, Cambridge University Press, Oxford University Press and SAGE Publications, sued GSU officials alleging that they infringed copyrights owned by the plaintiffs by allowing excerpts of the copyrighted works to be scanned and made available for students in the university's electronic course reading system. The plaintiffs suit was supported by the Association of American Publishers and costs were partially underwritten by the Copyright Clearance Center (CCC). The plaintiffs sought injunctive and declaratory relief, as well as attorney's fees.

The GSU officials countered that the uses were protected under the fair use doctrine. Based on their position as state actors, they also claimed sovereign immunity and Eleventh Amendment immunity.

In 2009, GSU adopted a new fair use policy (2009 Copyright Policy). The policy required each professor who wanted to post materials to first use a fair use checklist to determine whether the use qualified as fair use or whether permission from the copyright owner should be sought. If the professor found that fair use applied after using the checklist, GSU librarians then copied or scanned the work.

In 2009, the court, in partially granting GSU's motion for summary judgment, limited the plaintiffs' claims for injunctive and declaratory relief to alleged instances of infringement after the introduction the 2009 Copyright Policy.

The district court then held a bench trial beginning on May 17, 2011 on the remaining claims.

Outcome

In its May 11, 2012 order, the district court issued its finding and conclusions of law. It concluded that GSU was liable for infringement in five of the 75 instances of alleged infringement. The court ordered the parties' proposals on prospective injunctive relief to be limited to these five instances.

Sovereign Immunity

The court first analyzed the threshold question of whether the court could issue relief or whether relief was barred by the Eleventh Amendment or sovereign immunity.

It found that the defendants were state actors, acting in their official capacities, and therefore enjoyed immunity from suit under the Eleventh Amendment.

However, the court also found that the exception to Eleventh Amendment and sovereign immunity acknowledged by the Supreme Court in Ex Parte Young applied. Where a state actor's actions would result in a violation of federal law, a party may obtain prospective injunctive relief. Because the GSU officials created and applied the 2009 Copyright Policy that may have resulted in the alleged infringing conduct, the court found that plaintiffs could obtain equitable and declaratory relief under the Copyright Act for the defendant's continuing actions.

General Fair Use Analysis

In its fair use analysis, the court first evaluated the general circumstances of unlicensed use in the non-profit academic environment, based on the four factors set out in Section 107 of the Copyright Act:

The purpose and character of the use.
The nature of the work being used.
The amount of the work being used.
The impact on the market.

It found that most of the factors favored GSU, but that the university's practices must be subject to certain limitations, particularly with respect to the third factor. It then applied those standards to the 75 specific claims of alleged infringement.

The Purpose and Character of the Use

The court found that this factor heavily favored GSU because their copying was done for non-profit educational purposes, as specifically referenced in this applicable section of the Copyright Act (Section 107(1)).

The plaintiffs argued that because the university engaged in non-transformative use by wholesale copying, this factor should favor the plaintiffs. However, the court highlighted that the creation of "multiple copies for classroom use" is an exception to the focus on transformative uses under this factor, as specifically referenced in the preamble to Section 107's fair use factors and by the Supreme Court in Campbell v. Acuff-Rose Music, Inc.

The plaintiffs also relied on Basic Books, Inc. v Kinko's Graphics Corp., American Geophysical Union v. Texaco, in which commercial copiers produced coursepacks, and Princeton University Press v. Michigan Document Services, in which a for-profit company made copies for its own research. However, the court distinguished this case from those cases because the copying was solely for non-profit, educational purposes.

Nature of the Copyrighted Work

The court found that the nature of the work also favored GSU. Because most of the works were informational or factual in nature, it held they were more deserving of public exposure. It noted that the preamble language of Section 107 recognizes "criticism and comments" as more deserving of fair use protection.

Amount and Substantiality of the Portion Used

In considering this factor, the court established a bright-line limit based on the quantity and amount copied in relation to the overall book:

Where a book is not divided into chapter or contains fewer than ten chapters, an excerpt less than 10% of the pages of the book favors fair use. The calculation is based on the total page count of a book, even if the book is an edited compilation in which each chapter has a different author. The plaintiffs had argued that each chapter should be considered a separate copyrightable work.
Where a book has ten or more chapters, the unpaid copying of up to, but no more than, one chapter or its equivalent favors fair use.

In its application, this factor may favor either party, depending on whether the excerpt is less than 10% or a single chapter.

In establishing its bright-line rule, the court did not find it persuasive that the "Classroom Guidelines" should specify the standard to be applied. The Classroom Guidelines are a 1976 agreement between certain publishing entities and educational representatives that established a safe harbor for educational copying of copyrighted materials. In particular, the court found that the Classroom Guidelines were not binding and further that their guidance specifies a minimum standard of numerical caps that the plaintiffs inappropriately sought to have enforced as a maximum standard. It also found the Classroom Guideline unduly restrictive, for example the inclusion of a rule that an unlicensed use may be permissible for one semester, but not multiple semesters.

Effect of the Use on the Potential Market for or Value of the Copyrighted Work

For the fourth factor, the court found that:

The use of a small amount of a book, as defined by the third factor, is not likely to harm the market for the book.
However, where license for the digital version of the excerpt is readily available from CCC or the publisher at a reasonable price, this factor favors the publisher. Where a license is not readily available, this factors favors the fair use.

Analyzing the impact on the market, the court found that the unlicensed copying of excerpts within the bounds of its bright-line rule would not have a significant impact on the plaintiffs' ability to publish scholarly works or the incentives for authors to create such works.

However, the court also noted that the defendant will generally be unable to make a prospective determination about the actual or potential effect on the market in advance of litigation. Therefore, where licensed digital excerpts are available, the defendant should likely assume in advance that the fourth factor favors the plaintiffs.

Specific Fair Use Analysis

The court applied its general analysis to the 75 alleged instances of infringement and found GSU liable for infringement in five instances. In those cases, the 2009 Copyright Policy was found to cause the infringement, in that the policy did not limit copying to appropriately small excerpts as defined by the court or prohibit the use of multiple chapters from the same book.

In all other cases, the court found that the use fell within the scope of fair use given the above parameters or the court declined to conduct a fair use analysis because:

Valid copyright ownership was not sufficiently demonstrated.
The copying amounted to de minimis use.

Failure to Establish Copyright Ownership

The court found that the plaintiffs failed to show that they owned valid copyrights in parts of some of the works at issue. In these cases, the plaintiffs failed to establish the prima facie case for copyright infringement because either:

The work was not registered.
The plaintiff did not meet the burden of proving originality.
The plaintiff failed to provide a work-made-for-hire agreement or copyright assignment for the contributing author.

De Minimis Use

Because the works were accessed through an e-reserve system, in certain cases it was established that the students did not actually read the materials. In these cases, the court found the use de minimis and the plaintiff suffered no substantial harm from the use. Therefore, it found that a full fair use analysis was unnecessary to arrive at a non-infringement finding.

Practical Implications

The district court's decision is likely to provide a benchmark for both publishers and academic institutions, given the lack of precedent on the application of fair use to the unlicensed use of copyrighted works by an academic institution for non-profit educational purposes.

Academic institutions may take comfort in the opinion's acknowledgment of robust fair use protections in their favor. However, they must also consider the limits articulated by the court when shaping and monitoring internal policies and practices. In particular:

The court's bright line rule, if upheld in this case and followed by other courts, may become an assumed baseline for the scope of permitted uses. The quantitative nature of the rule may make it harder for institutions to assert fair use using a more flexible qualitative analysis.
The availability of digital licenses must be taken into account when evaluating the fair use of materials in an e-reserve system, particularly when the use falls outside the court's bright-line rule.

For publishers, the opinion demonstrates the high threshold for infringing conduct in these circumstances. It also provides several considerations for publishers' future practices:

If publishers have set up readily available and reasonably priced digital permissions processes for licensing excerpts, they may better be able to exploit and enforce their copyrights.
The court's bright-line rule may provide publishers with the leverage to secure permissions from institutions using excerpted works that fall beyond the rule's limits. At the same time, academic institutions may assert the rule as a safe harbor to protect use within its bounds and resist paying for a license.

The case also serves as a reminder to publishers that to enforce their copyrights they must always ensure that they have accurately secured chain of title for their works and retained all applicable documents.

District Court Rules on University's Use of Copyrighted Material in E-Reserve System | Practical Law