Last Friday, the 11th Circuit Court of Appeals vacated and remanded the Northern District of Georgia’s 350-page fair use analysis of the electronic reserves practices at Georgia State University (“GSU”). Although this reversal is technically a win for the plaintiff publishers, the 11th Circuit left the most important parts of the lower court’s analysis intact, and essentially affirmed the bulk of its reasoning with respect to the first and fourth fair use factors. We have previously written at length about GSU’s electronic reserves, the District Court’s opinion, and the arguments on appeal. Here is our summary of the 11th Circuit’s opinion.
The Transition from Course Packets to Electronic Reserves
College students used to purchase course packets at commercial copy shops. These packets included paper compilations of full chapters or other excerpts from various academic texts. Judicial opinions in the 1990’s held that these copy shops must pay license fees to the authors or publishers whose copyrighted works were included in the packets. Over the last decade, however, schools have been replacing these paper course packets with electronic versions of the same materials, and in many cases avoiding the payment of licensing fees.
When a GSU professor compiles her class materials the old-fashioned way, she picks the excerpts and chapters, a copy shop prepares a course packet and pays license fees to the authors or publishers, and that fee is passed on to the student as part of the course packet price. But since before 2008, GSU also allows professors the alternative of uploading those same chapters to its “ERES” system (or its similar “uLearn” system), where they can be downloaded for free by students in the professor’s class, without any license fees paid to anyone. Not surprisingly, since this alternative became available, most GSU course materials have migrated from licensed paper course packets to unlicensed electronic reserves.
The Publishers Bring Copyright Infringement Claims
In 2008, academic publishers Cambridge University Press, Oxford University Press, and Sage Publications filed a complaint against GSU, alleging copyright infringement and asking for an injunction that would have forced changes to GSU’s copyright policy. GSU responded in 2009 by changing its policy voluntarily, instituting a “Fair Use Checklist” based on a model introduced by Columbia University, which required professors to conduct a fair use analysis before uploading a copyrighted work. However, the publishers claimed that the new policy did not alleviate the problem and the case continued. In 2011, after a round of summary judgment motions had eliminated a few claims and defenses, the parties conducted a 15-day bench trial to determine whether GSU’s copying of 74 copyrighted works pursuant to the new 2009 policy constituted copyright infringement.
The District Court Opinion
On May 11, 2012, a year after the conclusion of the trial, Judge Orinda Dale Evans issued her 350-page opinion in the matter, which consisted of 74 separate mini-opinions, one for each allegedly infringed work. Specifically, the Court concluded that:
- 16 of the claims failed because the plaintiffs were unable to prove ownership of copyright in the specific chapters copied, and thus could not make out a prima facie case;
- 10 of the claims failed because the copying was de minimis, for example, because it was a supplemental reading assignment that no student actually downloaded;
- 43 of the claims failed because the copying was fair use; and
- 5 of the claims succeeded because the copying was not fair use. The Court further held that the GSU policy caused this infringement because GSU failed to place any limit on the amount copied or to provide sufficient guidance to the professors in using the “Fair Use Checklist.”
Following its opinion, the District Court issued an injunction ordering GSU “to maintain copyright policies . . . which are not inconsistent with the” District Court’s opinion. The District Court also decided that, since fair use or non-infringement was found in all but five instances, GSU was the prevailing party. Therefore, the publishers were ordered to pay GSU about $3 million to cover its attorneys’ fees and costs.
In October 2012, the Publishers appealed Judge Evans’ application of the fair use doctrine, the breadth of the injunctive relief ordered, and the award of attorneys’ fees.
The 11th Circuit’s Fair Use Analysis
The 11th Circuit’s 129-page opinion, authored by Judge Gerald Tjoflat, with a concurrence by Judge C. Roger Vinson, was issued on October 17, 2014, and focused on whether the District Court had conducted a proper fair use analysis. The fair use doctrine, codified at 17 U.S.C. § 107, provides that:
[T]he fair use of a copyrighted work, including such use by reproduction in copies . . . for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include-
- The purpose and character of the use, including whether such use is of commercial nature or is for nonprofit educational purposes.
- The nature of the copyrighted work.
- The amount and substantiality of the portion used in relation to the copyrighted work as a whole.
- The effect of the use upon the potential market for, or value of, the copyrighted work.
Before turning to the individual fair use factors, the 11th Circuit addressed the publishers’ arguments with respect to the District Court’s “overarching fair use methodology.” First, the 11th Circuit rejected the publishers’ argument that it was inappropriate for the District Court to conduct a separate fair use analysis for each work rather than focus more broadly on GSU’s “ongoing practices.” Second, the 11th Circuit agreed with the publishers that the District Court had erred in giving each of the four fair use factors equal weight and then simply “adding up the factors” to determine fair use.
Finally, the publishers insisted that the only real difference between this case and the course packet cases of the 1990’s was that the same works that used to be illegally copied on paper are now being illegally copied digitally. Therefore, the argument goes, those cases should dictate the result here, and GSU should not be able to alter the fair use analysis in its favor simply by choosing to distribute copyrighted works in a different medium. The 11th Circuit acknowledged that the course packet cases were useful guidance, but did not agree that they should dictate the result.
The Purpose and Character of the Use
The District Court held that the first factor weighed “strongly” in favor of GSU for each and every work because of the educational context of the use, and the 11th Circuit basically came to the same conclusion. The 11th Circuit stated that its analysis of the first factor had two “facets:” (1) whether the defendants’ use is “transformative;” i.e., whether it put the copyrighted work to a new purpose rather than merely superseding the original; and (2) whether the use was for a “nonprofit educational purpose, as opposed to a commercial purpose.” GSU did not seriously argue that its use was transformative, or that it did not supersede the original, so the 11th Circuit focused on the latter issue.
As to the second “facet,” the 11th Circuit stated that it “must consider not only the nature of the user, but the use itself.” Here, the user was obviously educational and noncommercial. As to the use, GSU’s avoidance of licensing fees was a direct monetary gain, and in that sense somewhat commercial. However, this alone could not remove the use from the non-profit realm and render its commercial exploitation (otherwise, all unlicensed use would be considered commercial exploitation). The Court then turned to the legislative history of the Copyright Act as evidencing a particular concern that fair use apply to educational and classroom contexts. Based on the foregoing analysis, the 11th Circuit ruled that the District Court “did not err in holding that the first factor favors a finding of fair use,” despite its undisputed nontransformative nature.
The Nature of the Copyrighted Work
The District Court held that “because all of the excerpts are informational and educational in nature and none are fictional, fair use factor two weighs in favor of” GSU. The 11th Circuit disagreed. The academic works in question were more than simply compilations of facts, but contained “evaluative, analytical or subjectively descriptive material that surpasses the bare facts necessary to communicate information.” Therefore, the 11th Circuit held that, although this factor was of little importance in the case, the District Court’s analysis was flawed.
The Amount and Substantiality of the Portion Used
In its analysis of the third factor, the District Court established a rule: if GSU copied no more than 10% of a work, or only one chapter in a book of ten or more chapters, this factor favored fair use. The 11st Circuit held that this “mechanistic . . . benchmark was improper” and an “abdication” of the District Court’s duty to analyze this factor on work-by-work basis, and would have to be revisited on remand without any mathematical rules.
However, the 11th Circuit didn’t completely disagree with the District Court, and rejected several additional arguments by the publishers regarding the third factor. Most notably, the publishers had argued that, because many of the books copied consisted of multiple chapters, each by a separate author, GSU’s copying of any one chapter is equivalent to copying an entire work. However, the 11th Circuit held that GSU had waived this argument by failing to raise it until after trial. The Court also rejected the publisher’s reliance on the “Classroom Guidelines,” a nonbinding statement of standards included in the legislative history of the 1976 Copyright Act.
The Effect of the Use Upon the Potential Market
The District Court ruled that, if a digital license was available for any work during the relevant period, this factor weighed against fair use, and it was the publishers’ burden to show that a digital license was available (while GSU retained the overall burden of persuasion on its fair use defense). The 11th Circuit found that the District Court’s analysis of the fourth factor was proper in most respects. However, the 11th Circuit held that it was error to give equal weight to this factor because, since GSU’s “copying was nontransformative and the threat of market substitution was therefore serious,” the fourth factor should have been given additional weight.
The District Court’s Additional Considerations
The District Court had also “enumerated two additional, purportedly non-statutory considerations” which favored fair use. First, the District Court held that “limited unpaid copying of excerpts will not deter academic authors from creating new academic works.” The 11th Circuit held that this proposition should have been considered not as an “additional” issue but as part of the first factor analysis. Moreover, the 11th Circuit criticized District Court’s focus on incentives for authors because “it is the publishers – not academic authors – that are holders of the copyrights at issue here.” Therefore, the District Court should have been “primarily concerned with the effect of [GSU’s] copying on Plaintiffs’ incentive to publish, not on academic authors’ incentive to write.”
Second, the District Court opined that “it is consistent with the principles of copyright to apply the fair use doctrine in a way that promotes the dissemination of knowledge, and not simply its creation.” The 11th Circuit agreed with the proposition, but held that this also was not an “additional” consideration, and that it too should have been considered under the rubric of the first fair use factor.
Judge Vinson’s Concurrence
Judge Vinson of the Northern District of Florida, sitting on the panel by designation, agreed with the reversal but felt that the “District Court’s error was broader and more serious than the majority’s analysis concludes.” Judge Vinson viewed this as a “rather simple case”: GSU used to pay license fees for paper course packets, but now it uses electronic reserves as substitutes to avoid those fees. “Thus, [GSU had] the burden to show by a preponderance of the evidence why this aggregated use in electronic form is fair use — when the exact same use in paper form is not.” From Judge Vinson’s perspective, GSU did “not even come close to doing so.” Thus, he wrote, “I simply cannot agree that the first factor weighs in favor of fair use just because the works are being used for educational purpose at a non-profit university.”
The matter has been remanded to Judge Evans for further proceedings consistent with the 11th Circuit’s decision. Although this opinion is a short-term victory for the publishers, any celebration will likely be restrained. Judge Evans’ holdings were reversed as to the second and third factors, but essentially affirmed with respect to the far more important first and fourth factors. Thus, the 11th Circuit left enough of Judge Evans’ reasoning intact that, unless she is persuaded by the concurrence, she may come to the same result, or a very similar result, on remand.