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Untangling Fair Use: When is it Acceptable to Use Another’s Work Without a License?

Almost everyone, at some time or another, has used or has wanted to use someone else’s work in their own projects, presentations, marketing materials and creative works. Thanks to the Internet, it is essentially effortless to access, download and share videos, written works, graphics, photos, code and much more. The sharing of information and media has become so prolific in recent years, it is almost second nature to many. However, there is great risk in using the works of others without permission–particularly in the commercial environment.
 
For example, a book publisher was recently found liable for copyright infringement by using stock photos in its books prior to obtaining permission and by printing more copies than it received permission to print. See Psihoyos v. John Wiley & Sons Inc., Case No. 1:11-cv-01416 (S.D.N.Y. 2012). The photos would have cost only about $200 if properly licensed, but now the publisher may be ordered to pay up to $150,000 per photo in damages. This is just one example of the severe ramifications a company may face if it uses the works of others without obtaining the appropriate permissions. However, in limited circumstances, companies may use the works of others without permission. This is when the use constitutes a “fair use” under the Copyright Act, 17 U.S.C. § 107.
 
What is Fair Use?
Fair use is a defense to a copyright infringement claim. Generally speaking, you may use another’s work without incurring infringement liability if the work is used for purposes such as criticism, comment, news reporting, teaching, scholarship or research. Highly transformative uses (e.g., the original work is altered in expression, meaning or message) such as a parody are also fair uses. Unfortunately, however, there is no clear test to determine whether a use is fair. To the contrary, it is decided on a highly factually specific case-by-case basis by the federal district courts.
 
Determining Whether a Use is Fair
The Copyright Act provides four factors courts use to determine whether a work is being put to fair use. None of the factors standing alone are determinative, and all should be reviewed to determine whether, as a whole, the use is a fair use:
  1. What is the purpose and character of the use? Are you using the work for commercial purposes, or to describe or explain something? Note, however, that simply because you are using a work commercially does not mean your use cannot be a fair use, but it does make it harder to show. Likewise, simply because you are using the work in a teaching environment does not mean it is automatically a fair use. Generally, you can only use the amount of work actually necessary to demonstrate your point.

  2. What is the nature of the copyrighted work? Is the work published or unpublished? Is the work factual or is it highly creative? If a work is primarily factual, you are more likely to be able to fairly use it. If the work is highly creative, it will be much more difficult to demonstrate that you should be able to use it without permission.

  3. How much of the work is being used? Are you using a short sound bite or the entire work? Are you using a relatively unimportant segment or the most creative/important portion? It is much safer to use a small portion of a work than copy the entire thing.

  4. How will use of the work affect the market or value of the copyrighted work? Stated another way, would someone look to your work rather than purchase or use the original? Could your new work reduce the demand for the original work?
In reviewing these factors, always keep in mind that the goal of copyright fair use is to achieve a balance between the copyright owner’s exclusive rights and the rights of the public to free expression and fair comment. The more you use a work to explain or demonstrate a concept, the safer you will be. The more you use it for financial gain, the more likely it is that you need a license.
 
What are the Best Practices When Using Others’ Works?
The best course of action is to always ask for permission before using another’s work. Many photographers, bloggers, artists and content providers may be willing to allow others to use their works free of charge so long as the company also provides attribution to the owner of the work. Alternatively, it is often easy and inexpensive to obtain commercial rights to use works such as stock photos and videos.
 
More importantly, the risks of incorrectly determining whether a use is fair are substantial. Not only may the owner of the work recover its lost profits and any profits you make, but it may also recover statutory damages that range from $750 - $150,000 per infringement plus attorney’s fees and costs.
 
When in doubt, it is always a good idea to contact an attorney to discuss and weigh the potential business risks.
 
On the Horizon
The courts often provide guidance to businesses and individuals through their judicial opinions. We are currently watching a pending copyright infringement action against Westlaw and LexisNexis. See White v. West Publishing Corp. & Reed Elsevier Inc. (S.D.N.Y. filed Feb. 22, 2012). For years, Westlaw and LexisNexis have publicly published legal briefs and motions that users could access for a charge through their online databases. A class of lawyers is claiming that commercially publishing the briefs infringes upon their copyrights in the materials, since the briefs are protected by copyright the moment they are written. Westlaw and LexisNexis are claiming that their use of the briefs is transformative and that they provide a valuable service to educators and researchers. The court will have to weigh each of the four fair use factors to decide if the commercial posting of the briefs is copyright infringement or if the online databases are transformative enough to qualify as fair use. The court may take the opportunity to provide more guidance to businesses and individuals on fair use.
 
We will keep you updated of any developments. In the meantime, we advise our clients to tread carefully and to always seek permission and/or legal advice before using the works of others.

Gina Carter is the chair of the Intellectual Property Practice Group at the Wisconsin law firm of Whyte Hirschboeck Dudeck and is resident in the firm's Madison office. She can be reached at gcarter@whdlaw.com.
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Melinda Giftos is an attorney with Whyte Hirschboeck Dudek S.C. that specializes in helping clients with trademarks, copyrights, domain names and more. She belongs to the Wisconsin Intellectual Property Law Association (WIPLA) and the International Trademark Association (INTA). For more information, please contact Melinda Giftos at (608) 234-6076 or mgiftos@whdlaw.com.

The opinions expressed herein or statements made in the above column are solely those of the author, and do not necessarily reflect the views of WTN Media LLC. WTN accepts no legal liability or responsibility for any claims made or opinions expressed herein.

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