Eleventh Circuit Takes District Court to School Over Educational Fair-Use Copyright Dispute

In Cambridge University Press v. Albert, 2018 WL 5095004 (11th Cir. Oct. 19, 2018), the Eleventh Circuit issued its second decision in a decade-long dispute over Georgia State University’s practice of distributing digital excerpts of copyrighted works to students without paying a royalty.  The district court now faces its third trial to assess the fair-use defense as to 48 excerpted works, with little more guidance than the four fair-use factors, and an admonition to give each accused excerpt a “holistic, qualitative, and individual analysis.”

Judge Bill Pryor’s opinion for the court vacated the judgment entered after a second bench trial, held after remand following the court’s review of the first bench trial.  This panel’s substantive legal decision—that the district court misapplied the defense of fair use for a second time—points up the practical difficulties posed by the fair-use defense as currently construed.  The panel decision remanded the whole case yet again, with the instruction that, among other issues, the district court “must eschew a quantitative approach to the weighing and balancing of the fair-use factors” and give each excerpt the “holistic, qualitative, and individual analysis that the Act demands.”

First trial and appeal

This litigation began in 2008 when three publishers filed a complaint against officials of the University for direct, contributory, and vicarious copyright infringement.  The publishers accused the University of a pattern and practice of distributing substantial unlicensed excerpts of dozens of copyrighted works using digital delivery platforms instead of traditional paper coursepacks.

The University asserted fair use, a defense governed by a four-factor legal standard notoriously difficult to convert into workable, objective standards in practice.  Under the Copyright Act, “the fair use of a copyrighted work . . . for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright.”  17 U.S.C. § 107.  To decide whether a particular copy is fair use, “the factors to be considered shall include” (1) the purpose and character of the use, such as commercial versus nonprofit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion copied; and (4) the effect of the use upon the potential market for or value of the copyrighted work.  Id.

The district court’s first decision attempted to provide the parties with objective guidance, with mixed results.  For factor one, because the excerpts were used for an educational purpose, the district court held this factor strongly favored fair use; the Eleventh Circuit affirmed this decision.  Similarly, the district court’s decision on factor four—market impact—survived the first appeal.  If the publisher proved that it offered a digital rights permission royalty that the University did not pay, the two courts agreed this factor strongly favored infringement.

On the remaining two factors, the courts diverged.  The district court held that factor two favored fair use because the original works were informational, a typically less-protected type of content.  The Eleventh Circuit held otherwise, concluding the district court erred because it did not analyze each excerpt’s content.  Instead of finding that all excerpts were informational, the district court should have concluded that there are excerpts in which “evaluative, analytical, or subjectively descriptive material” predominated.  For this content, the district court should have held that the second factor was neutral, or even weighted against fair use.

For factor three—the extent of the original work copied—the district court set a presumptive rule that this factor would favor fair use only in cases where the excerpt was less than 10% or one chapter of the original work.  The Eleventh Circuit rejected this approach as too mechanistic.  Instead, the district court was directed to consider the quality of the text, not just its quantity, in light of the purported use.  Excessive verbatim copying can weigh against fair use under this factor, while also raising the threat of market substitution.

Finally, the Eleventh Circuit also vacated the district court’s judgment because the district court weighed the four fair-use factors equally in its overall analysis.  The Eleventh Circuit’s critique boiled down to three points:  (1) the four factors do not carry equal weight in each instance; (2) the court must consider not only the relative quantity of text excerpted, but also the nature of that text; and (3) the type of copying involved in this case has economic impact on the copyright holder, because of the threat of substitution of the excerpt for the copyright-protected full text publication.  The fourth factor should have more weight in the overall fair-use analysis because “the threat of market substitution is severe” in light of the “verbatim copying” of the source works.

Second trial and appeal

Upon remand, the district court did change its approach to the analysis, but ultimately reached very similar conclusions:  holding 43 of the excerpts to be protected by fair use, and finding only one new instance of infringement.  The publishers appealed.

In its latest opinion, the Eleventh Circuit vacated all of the fair-use findings, for two main reasons.  First, the district court revisited factor four, despite the earlier ruling approving the district court’s first application of this factor.

Second, the district court’s overall analysis of the four factors for each excerpt also failed to conform to the earlier mandate, using the previously prohibited mathematical formula approach.  The district court had assigned initial, approximate respective weights of the four factors—25% for factor one, 5% for factor two, 30% for factor three, and 40% for factor four.  Although the district court did adjust those weights based on individual factors, the Eleventh Circuit found that only one of the factors was actually adjusted, and always in the direction of supporting fair use.  This approach did not provide the required “holistic review.”

On remand, the district court is directed not to “apply a mathematical formula at any step of its analysis,” but to evaluate the four factors qualitatively, not quantitatively, and to take care to consider them holistically “in light of the purposes of copyright.”  One may wonder whether the parties and the court have the stamina for a third trial.

Posted by Ann Fort and Chris Mann.

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