Academic publishers win appeal in U.S. “George State University” case

On 17 October 2014, U.S. academic publishers won an important legal debate about digital access to copyrighted works under the U.S. “fair use” doctrine.

In a unanimous decision, a three-judge panel of the U.S. Court of Appeals for the 11th Circuit reversed the lower court’s opinion in Cambridge v. Patton (often referred to as the “Georgia State University” or “GSU” case) and remanded the case back for further proceedings consistent with the appeal court’s opinion.

The case concerns an initiative created by Georgia State University (GSU) since 2014, which let faculty members scan book and journal excerpts and host them in the university’s e-reserves. Three publishers, Cambridge University Press, Oxford University Press and Sage Publications, claimed that GSU’s actions constituted copyright infringements under the U.S. “fair use” doctrine.

The appeals court found that the four “fair use” factors under 17 U.S.C. § 107 should not have been given equal weight, but rather used in a “holistic analysis”, while also dismissing the “blanket 10-percent-or-one-chapter benchmark”. Instead, each excerpt should have been considered on its own: “If copyright’s utilitarian goal is to be met, we must be careful not to place overbroad restrictions on the use of copyrighted works, because to do so would prevent would-be authors from effectively building on the ideas of others. Some unpaid use of copyrighted materials must be allowed in order to prevent copyright from functioning as a straightjacket that stifles the very creative activity it seeks to foster. If we allow too much unpaid copying, however, we risk extinguishing the economic incentive to create that copyright is intended to provide.” (cf. page 4 of the opinion)

Accordingly, the appeals court concluded that the lower court “erred in giving each of the four factors equal weight, and in treating the four factors as a simple mathematical formula.” (cf. page 57 of the opinion) “The District Court should have analyzed each instance of alleged copying individually, considering the quantity and the quality of the material taken—including whether the material taken constituted the heart of the work—and whether that taking was excessive in light of the educational purpose of the use and the threat of market substitution.” (cf. pages 91-92 of the opinion) In addition, the ruling reconfirmed the role of collective management: “There exists a well-established system for the licensing of excerpts of copyrighted works. Copyright Clearance Center (“CCC”) (…) licenses excerpts from copyrighted works for a fee, acting on behalf of publishers who choose to make their works available through CCC.” (cf. page 9 of the opinion)

All in all, the lower court used a “legally flawed methodology in balancing the four fair use factors”. (cf. page 112 of the opinion). Because: “How much unpaid use should be allowed is the bailiwick of the fair use doctrine. To further the purpose of copyright, we must provide for some fair use taking of copyrighted material. This may be viewed as a transaction cost, incidental to the business of authorship. But if we set this transaction cost too high by allowing too much taking, we run the risk of eliminating the economic incentive for the creation of original works that is at the core of copyright and—by driving creators out of the market—killing the proverbial goose that laid the golden egg. Thus, the proper scope of the fair use doctrine in a given case boils down to an evidentiary question. As a conceptual matter, in making fair use determinations, we must conjure up a hypothetical, perfect market for the work in question, consisting of the whole universe of those who might buy it, in which everyone involved has perfect knowledge of the value of the work to its author and to potential buyers, and excluding for the moment any potential fair uses of the work. Then, keeping in mind the purposes animating copyright law—the fostering of learning and the creation of new works—we must determine how much of that value the implied licensee-fair users can capture before the value of the remaining market is so diminished that it no longer makes economic sense for the author—or a subsequent holder of the copyright—to propagate the work in the first place.“ (cf. page 51 of the opinion)

Judge Roger Vinson highlighted in his concurring opinion that “(…) proper fair use analysis should focus primarily on the use of the work, not on the user. So, in analyzing fair use in a given case, the court should step back a little, just as you would at an art museum, and view the work and its use in its entirety. Viewed in this way, and after applying traditional common law principles to the use at issue here, this is a rather simple case. Checking the four statutory factors to ensure that they have been considered merely affirms the conclusion that what GSU is doing is not fair use.” (cf. page 115) And: “The digital format is merely another way of displaying the same paginated materials as in a paper format and for the same underlying use. Electronic reproduction is faster, cheaper, and almost unlimited in its scope and duration, but there is no discernable difference in its use, purpose, and effect.” (cf. page 120) “In short, establishing market harm does not require a showing of lost profits, nor is it dependent on the availability of a digital license.” (cf. page 127)

The complete opinion is available here.