Copyright Cases

1. Pearl & Dean v. Shoemart, G.R. No. 148222, August 15, 2003 - Dyann
FACTS:

"Plaintiff Pearl and Dean (P&D), Inc. is engaged in the manufacture of advertising
display units referred to as light boxes. These units utilize specially printed posters
sandwiched between plastic sheets and illuminated with back lights. P&D was able to
secure a Certificate of Copyright Registration. The advertising light boxes were
marketed under the trademark "Poster Ads". The application for registration of the
trademark was approved. From 1981 to about 1988, P&D employed the services of
Metro Industrial Services to manufacture its advertising displays.

P&D negotiated with defendant Shoemart, Inc. (SMI) for the lease and installation of the
light boxes in SM City. P&D’s General Manager Vergara submitted for signature the
contracts covering SM Cubao and SM Makati to SMI’s Advertising Promotions and
Publicity Division Manager Abano. Only the contract for SM Makati, however, was
returned signed. Vergara wrote Abano inquiring about the other contract and reminding
him that their agreement for installation of light boxes was not only for its SM Makati
branch, but also for SM Cubao. SMI did not bother to reply. SMI’s house counsel
informed P&D 9that it was rescinding the contract for SM Makati due to non-
performance of the terms thereof.

Metro Industrial Services, the company formerly contracted by P&D to fabricate its
display units, offered to construct light boxes for Shoemart’s chain of stores. After its
contract with Metro Industrial was terminated, SMI engaged the services of EYD
Rainbow Advertising Corp. to make the light boxes.

P&D, received reports that exact copies of its light boxes were installed at SM City and
in the fastfood section of SM Cubao. P&D found out that aside from the 2 reported SM
branches, light boxes similar to those it manufactures were also installed in 2 other SM
stores. It further discovered that defendant-appellant North Edsa Marketing Inc. (NEMI),
was set up primarily to sell advertising space in lighted display units located in SMI’s
different branches. P&D noted that NEMI is a sister company of SMI.

P&D sent a letter to both SMI and NEMI enjoining them to cease using the subject light
boxes and to remove the same from SMI’s establishments. It also demanded the
discontinued use of the trademark "Poster Ads,".

SMI suspended the leasing of 224 light boxes and NEMI took down its advertisements
for "Poster Ads" from the lighted display units in SMI’s stores. Claiming that both SMI
and NEMI failed to meet all its demands, P&D filed this instant case for infringement of
trademark and copyright, unfair competition and damages.
SMI maintained that it independently developed its poster panels using commonly
known techniques and available technology, without notice of or reference to P&D’s
copyright. SMI noted that the registration of the mark "Poster Ads" was only for
stationeries such as letterheads, envelopes, and the like. It also stressed that P&D is
not entitled to the reliefs prayed for in its complaint since its advertising display units
contained no copyright notice, in violation of Section 27 of P.D. 49.

NEMI denied having manufactured, installed or used any advertising display units, nor
having engaged in the business of advertising. It repleaded SMI’s averments,
admissions and denials.

RTC decided in favor of P & D.

CA reversed the RTC, to wit:

Since the light boxes cannot, by any stretch of the imagination, be considered as either
prints, pictorial illustrations, advertising copies, labels, tags or box wraps, to be properly
classified as a copyrightable class "O" work, we have to agree with SMI when it posited
that what was copyrighted were the technical drawings only, and not the light boxes
themselves, thus:

42. When a drawing is technical and depicts a utilitarian object, a copyright over
the drawings like plaintiff’s will not extend to the actual object. X X X In Muller vs.
Triborough Bridge Authority, Muller had obtained a copyright over an
unpublished drawing entitled "Bridge Approach – the drawing showed a novel
bridge approach to unsnarl traffic congestion". The defendant constructed a
bridge approach which was alleged to be an infringement of the new design
illustrated in plaintiff’s drawings. In this case it was held that protection of the
drawing does not extend to the unauthorized duplication of the object drawn
because copyright extends only to the description or expression of the object and
not to the object itself. It does not prevent one from using the drawings to
construct the object portrayed in the drawing.

In two other cases, Imperial Homes Corp. v. Lamont, and Scholtz Homes, Inc. v.
Maddox, it was held that there is no copyright infringement when one who,
without being authorized, uses a copyrighted architectural plan to construct a
structure. This is because the copyright does not extend to the structures
themselves.

In fine, we cannot find SMI liable for infringing Pearl and Dean’s copyright over
the technical drawings of the latter’s advertising display units.

The records show that P & D applied for the registration of the trademark "Poster
Ads". Said trademark was recorded in the Principal Register under Registration
No. 41165 covering the following products: stationeries such as letterheads,
envelopes and calling cards and newsletters.
 With this as factual backdrop, we see no legal basis to the finding of liability on
the part of the defendants for their use of the words "Poster Ads", in the
advertising display units in suit. Jurisprudence has interpreted Section 20 of the
Trademark Law as "an implicit permission to a manufacturer to venture into the
production of goods and allow that producer to appropriate the brand name of the
senior registrant on goods other than those stated in the certificate of
registration."

While we do not discount the striking similarity between P & D’s registered
trademark and defendants’ "Poster Ads" design, as well as the parallel use by
which said words were used in the parties’ respective advertising copies, we
cannot find defendants liable for infringement of trademark. "Poster Ads" was
registered by Pearl and Dean for specific use in its stationeries, in contrast to
defendants who used the same words in their advertising display units.

Defendants cannot thus be held liable for infringement of the trademark "Poster
Ads".

Dissatisfied, P & D filed the instant petition

ISSUE #1: Whether or not the light box depicted in the engineering or technical
drawings of an advertising display unit (light box), which were granted copyright
protection, ipso facto also protected by such copyright?

RULING #1: No, the copyright was limited to the drawings alone and not to the
light box itself.

In ruling that there was no copyright infringement, the CA held that the copyright was
limited to the drawings alone and not to the light box itself. We agree with the CA.

First, petitioner’s application for a copyright certificate clearly stated that it was for a
class "O" work under Section 2 (O) of PD 49 (The Intellectual Property Decree) which
was the statute then prevailing. Said Section 2 expressly enumerated the works subject
to copyright:

SEC. 2. The rights granted by this Decree shall, from the moment of creation,
subsist with respect to any of the following works:

(O) Prints, pictorial illustrations, advertising copies, labels, tags, and box
wraps;

Although petitioner’s copyright certificate was entitled "Advertising Display Units" (which
depicted the box-type electrical devices), its claim of copyright infringement cannot be
sustained.

Copyright is purely a statutory right. Being a mere statutory grant, the rights are limited
to what the statute confers. Accordingly, it can cover only the works falling within the
statutory enumeration or description. 8
P & D secured its copyright under the classification class "O" work. This being so,
petitioner’s copyright protection extended only to the technical drawings and not to the
light box itself because the latter was not at all in the category of "prints, pictorial
illustrations, advertising copies, labels, tags and box wraps." Stated otherwise, even as
we find that P & D indeed owned a valid copyright, the same could have referred only to
the technical drawings within the category of "pictorial illustrations." It could not have
possibly stretched out to include the underlying light box. What the law does not include,
it excludes, and for the good reason: the light box was not a literary or artistic piece
which could be copyrighted under the copyright law.

In fine, if SMI and NEMI reprinted P & D’s technical drawings for sale to the public
without license from P & D, then no doubt they would have been guilty of copyright
infringement. But this was not the case. SMI’s and NEMI’s acts complained of by P & D
were to have units similar or identical to the light box illustrated in the technical drawings
manufactured by Metro and EYD Rainbow Advertising, for leasing out to different
advertisers. Was this an infringement of petitioner’s copyright over the technical
drawings? We do not think so.

ISSUE #2: Whether or not the light box should be registered separately and protected
by a patent — in addition to the copyright of the engineering drawings?

RULING #2: Yes

Private respondents cannot be held legally liable for infringement of P & D’s copyright
over its technical drawings of the said light boxes, should they be liable instead for
infringement of patent? We do not think so either.

Petitioner never secured a patent for the light boxes. It therefore acquired no patent
rights which could have protected its invention, if in fact it really was. And because it
had no patent, petitioner could not legally prevent anyone from manufacturing or
commercially using the contraption. In Creser Precision Systems, Inc. vs. CA, we held
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that "there can be no infringement of a patent until a patent has been issued, since
whatever right one has to the invention covered by the patent arises alone from the
grant of patent. A patent, however, gives the inventor the right to exclude all others. As
a patentee, he has the exclusive right of making, selling or using the invention. 13 

To be able to effectively and legally preclude others from copying and profiting from the
invention, a patent is a primordial requirement. No patent, no protection. Ideas, once
disclosed to the public without the protection of a valid patent, are subject to
appropriation without significant restraint.
15

It is only after an exhaustive examination by the patent office that a patent is issued.
Such an in-depth investigation is required because "in rewarding a useful invention, the
rights and welfare of the community must be fairly dealt with and effectively guarded. To
that end, the prerequisites to obtaining a patent are strictly observed and when a patent
is issued, the limitations on its exercise are equally strictly enforced.
There is no such scrutiny in the case of copyrights nor any notice published before its
grant to the effect that a person is claiming the creation of a work. The law confers the
copyright from the moment of creation and the copyright certificate is issued upon
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registration with the National Library of a sworn ex-parte claim of creation.

Therefore, not having gone through the arduous examination for patents, the petitioner
cannot exclude others from the manufacture, sale or commercial use of the light boxes
on the sole basis of its copyright certificate over the technical drawings.

Stated otherwise, what petitioner seeks is exclusivity without any opportunity for the
patent office (IPO) to scrutinize the light box’s eligibility as a patentable invention.

The difference between the two things, letters patent and copyright, may be illustrated
by reference to the subjects just enumerated. Take the case of medicines. Certain
mixtures are found to be of great value in the healing art. If the discoverer writes and
publishes a book on the subject (as regular physicians generally do), he gains no
exclusive right to the manufacture and sale of the medicine; he gives that to the
public. If he desires to acquire such exclusive right, he must obtain a patent for
the mixture as a new art, manufacture or composition of matter. He may copyright
his book, if he pleases; but that only secures to him the exclusive right of printing
and publishing his book. So of all other inventions or discoveries.

Now, whilst no one has a right to print or publish his book, or any material part thereof,
as a book intended to convey instruction in the art, any person may practice and use the
art itself which he has described and illustrated therein. The use of the art is a totally
different thing from a publication of the book explaining it. The copyright of a book
on bookkeeping cannot secure the exclusive right to make, sell and use account books
prepared upon the plan set forth in such book.

The plausibility of the claim put forward by the complainant in this case arises from a
confusion of ideas produced by the peculiar nature of the art described in the books,
which have been made the subject of copyright. x x x The description of the art in a
book, though entitled to the benefit of copyright, lays no foundation for an
exclusive claim to the art itself. The object of the one is explanation; the object of
the other is use. The former may be secured by copyright. The latter can only be
secured, if it can be secured at all, by letters patent.”

ISSUE #3: Can the owner of a registered trademark legally prevent others from using
such trademark if it is a mere abbreviation of a term descriptive of his goods, services or
business?

RULING #3:

This issue concerns the use by respondents of the mark "Poster Ads" which petitioner
said was a contraction of "poster advertising." P & D was able to secure a trademark
certificate for it, but one where the goods specified were "stationeries such as
letterheads, envelopes, calling cards and newsletters." Petitioner admitted it did not
22

commercially engage in or market these goods. On the contrary, it dealt in electrically

operated backlit advertising units and the sale of advertising spaces thereon, which,
however, were not at all specified in the trademark certificate.

Under the circumstances, the CA correctly cited Faberge Inc. vs. Intermediate Appellate
Court, where we, invoking Section 20 of the old Trademark Law, ruled that "the
23

certificate of registration issued by the Director of Patents can confer (upon petitioner)
the exclusive right to use its own symbol only to those goods specified in the
certificate, subject to any conditions and limitations specified in the certificate x x x.
One who has adopted and used a trademark on his goods does not prevent the
adoption and use of the same trademark by others for products which are of a different
description." 24 

Assuming arguendo that "Poster Ads" could validly qualify as a trademark, the failure of
P & D to secure a trademark registration for specific use on the light boxes meant that
there could not have been any trademark infringement since registration was an
essential element thereof.

ISSUE #4: Whether or not there is unfair competition arising from infringement of
patents, copyrights, trademarks?

RULING #4: Qualify, there can be no unfair competition under the law on
copyrights although it is applicable to disputes over the use of trademarks.

By the nature of things, there can be no unfair competition under the law on copyrights
although it is applicable to disputes over the use of trademarks. Even a name or phrase
incapable of appropriation as a trademark or tradename may, by long and exclusive use
by a business (such that the name or phrase becomes associated with the business or
product in the mind of the purchasing public), be entitled to protection against unfair
competition. 27 

In this case, there was no evidence that P & D’s use of "Poster Ads" was distinctive or
well-known. As noted by the CA, petitioner’s expert witnesses himself had testified that "
‘Poster Ads’ was too generic a name. So it was difficult to identify it with any company,
honestly speaking." This crucial admission by its own expert witness that "Poster Ads"
28

could not be associated with P & D showed that, in the mind of the public, the goods
and services carrying the trademark "Poster Ads" could not be distinguished from the
goods and services of other entities.

This fact also prevented the application of the doctrine of secondary meaning. "Poster
Ads" was generic and incapable of being used as a trademark because it was used in
the field of poster advertising, the very business engaged in by petitioner. "Secondary
meaning" means that a word or phrase originally incapable of exclusive appropriation
with reference to an article in the market (because it is geographically or otherwise
descriptive) might nevertheless have been used for so long and so exclusively by one
producer with reference to his article that, in the trade and to that branch of the
purchasing public, the word or phrase has come to mean that the article was his
property. The admission by petitioner’s own expert witness that he himself could not
29
associate "Poster Ads" with petitioner P & D because it was "too generic" definitely
precluded the application of this exception.

Notes:

1. In the leading case of Kho vs. Court of Appeals, we ruled that these three legal
11

rights are completely distinct and separate from one another, and the protection
afforded by one cannot be used interchangeably to cover items or works that
exclusively pertain to the others:

Trademark, copyright and patents are different intellectual property rights that cannot be
interchanged with one another. A trademark is any visible sign capable of distinguishing
the goods (trademark) or services (service mark) of an enterprise and shall include a
stamped or marked container of goods. In relation thereto, a trade name means the
name or designation identifying or distinguishing an enterprise. Meanwhile, the scope of
a copyright is confined to literary and artistic works which are original intellectual
creations in the literary and artistic domain protected from the moment of their creation.
Patentable inventions, on the other hand, refer to any technical solution of a problem in
any field of human activity which is new, involves an inventive step and is industrially
applicable.

2. The law attempts to strike an ideal balance between the two interests:

"(The p)atent system thus embodies a carefully crafted bargain for encouraging the
creation and disclosure of new useful and non-obvious advances in technology and
design, in return for the exclusive right to practice the invention for a number of years.
The inventor may keep his invention secret and reap its fruits indefinitely. In
consideration of its disclosure and the consequent benefit to the community, the patent
is granted. An exclusive enjoyment is guaranteed him for 17 years, but upon the
expiration of that period, the knowledge of the invention inures to the people, who are
thus enabled to practice it and profit by its use."
17

3. The patent law has a three-fold purpose: "first, patent law seeks to foster and
reward invention; second, it promotes disclosures of inventions to stimulate further
innovation and to permit the public to practice the invention once the patent expires;
third, the stringent requirements for patent protection seek to ensure that ideas in the
public domain remain there for the free use of the public." 18

2. Joaquin v. Drilon, G.R. No. 108946, January 28, 1999 - Emman

Facts: Petitioner BJ Productions, Inc. (BJPI) is the holder/grantee of Certificate of
Copyright No. M922, dated January 28, 1971, of Rhoda and Me, a dating game show
aired from 1970 to 1977.
On July 14, 1991, while watching television, petitioner Francisco Joaquin, Jr., president
of BJPI, saw on RPN Channel 9 an episode of It's a Date, which was produced by IXL
Productions, Inc. (IXL). On July 18, 1991, he wrote a letter to private respondent Gabriel
M. Zosa, president and general manager of IXL, informing Zosa that BJPI had a
copyright to Rhoda and Me and demanding that IXL discontinue airing It's a Date.

Upon complaint of petitioners, an information for violation of P.D. No. 49 was filed
against private respondent Zosa together with certain officers of RPN Channel 9 in the
Regional Trial Court of Quezon City. However, private respondent Zosa sought a review
of the resolution of the Assistant City Prosecutor before the Department of Justice.

On August 12, 1992, respondent Secretary of Justice Franklin M. Drilon reversed the
Assistant City Prosecutor's findings and directed him to move for the dismissal of the
case against private respondents.

Petitioners assert that the format of Rhoda and Me is a product of ingenuity and skill
and is thus entitled to copyright protection. It is their position that the presentation of a
point-by-point comparison of the formats of the two shows clearly demonstrates the
nexus between the shows and hence establishes the existence of probable cause for
copyright infringement. Such being the case, they did not have to produce the master
tape.

Both public and private respondents maintain that petitioners failed to establish the
existence of probable cause due to their failure to present the copyrighted master
videotape of Rhoda and Me. Respondents contend that petitioner BJPI’s copyright
covers only a specific episode of Rhoda and Me and that the formats or concepts of
dating game shows are not covered by copyright protection under P. D. No. 49.

Petitioners claim that their failure to submit the copyrighted master videotape of the
television show Rhoda and Me was not raised in issue by private respondents during
the preliminary investigation and, therefore, it was an error for the Secretary of Justice
to reverse the investigating prosecutor’s finding of probable cause on this ground.
Petitioners further assail the following portion of the resolution of the respondent
Secretary of Justice:

[T]he essence of copyright infringement is the copying, in whole or in part, of

copyrightable materials as defined and enumerated in Section 2 of P.D. No. 49. Apart
from the manner in which it is actually expressed, however, the idea of a dating game
show is, in the opinion of this Office, a non-copyrightable material. Ideas, concepts,
formats, or schemes in their abstract form clearly do not fall within the class of works or
materials susceptible of copyright registration as provided in PD. No. 49. 

Petitioners contend that the determination of the question whether the format or
mechanics of a show is entitled to copyright protection is for the court, and not the
Secretary of Justice, to make.
Issue #1: Whether or not the presentation of the master videotape is essential in finding
probable cause in the case at bar.

Ruling #1: Yes. Accordingly, by the very nature of the subject of petitioner BJPI’s
copyright, the investigating prosecutor should have the opportunity to compare the
videotapes of the two shows. Mere description by words of the general format of the two
dating game shows is insufficient; the presentation of the master videotape in evidence
was indispensable to the determination of the existence of probable cause. As aptly
observed by respondent Secretary of Justice: 

A television show includes more than mere words can describe because it involves a
whole spectrum of visuals and effects, video and audio, such that no similarity or
dissimilarity may be found by merely describing the general copyright/format of both
dating game shows.

In reviewing resolutions of prosecutors, the Secretary of Justice is not precluded from

considering errors, although unassigned, for the purpose of determining whether there
is probable cause for filing cases in court.

Issue #2: Whether the Secretary of Justice can make a preliminary determination if the
format or mechanics of a show is entitled to copyright protection.

Ruling #2: Yes. It is indeed true that the question whether the format or mechanics of
petitioners’ television show is entitled to copyright protection is a legal question for the
court to make. This does not, however, preclude respondent Secretary of Justice from
making a preliminary determination of this question in resolving whether there is
probable cause for filing the case in court. In doing so in this case, he did not commit
any grave error.

Issue #3: Whether formats or concepts of dating game shows are covered by copyright
protection under P. D. No. 49.

Ruling #3: No. The format of a show is not copyrightable. Section 2 of P.D. No. 49,
otherwise known as the DECREE ON INTELLECTUAL PROPERTY, enumerates the
classes of work entitled to copyright protection:

SECTION 2. The rights granted by this Decree shall, from the moment of creation,
subsist with respect to any of the following classes of works:

(A) Books, including composite and cyclopedic works, manuscripts, directories, and
gazetteers;

(B) Periodicals, including pamphlets and newspapers;

(C) Lectures, sermons, addresses, dissertations prepared for oral delivery;

(D) Letters;

(E) Dramatic or dramatico-musical compositions; choreographic works and

entertainments in dumb shows, the acting form of which is fixed in writing or otherwise;

(F) Musical compositions, with or without words;

(G) Works of drawing, painting, architecture, sculpture, engraving, lithography, and

other works of art; models or designs for works of art;

(H) Reproductions of a work of art;

(I) Original ornamental designs or models for articles of manufacture, whether or not
patentable, and other works of applied art;

(J) Maps, plans, sketches, and charts;

(K) Drawings or plastic works of a scientific or technical character;

(L) Photographic works and works produced by a process analogous to photography;

lantern slides;

(M) Cinematographic works and works produced by a process analogous to

cinematography or any process for making audio-visual recordings;

(N) Computer programs;

(O) Prints, pictorial illustrations advertising copies, labels, tags, and box wraps;

(P) Dramatizations, translations, adaptations, abridgments, arrangements and other

alterations of literary, musical or artistic works or of works of the Philippine government
as herein defined, which shall be protected as provided in Section 8 of this Decree.

(Q) Collections of literary, scholarly, or artistic works or of works referred to in Section 9

of this Decree which by reason of the selection and arrangement of their contents
constitute intellectual creations, the same to be protected as such in accordance with
Section 8 of this Decree.

(R) Other literary, scholarly, scientific and artistic works.

This provision is substantially the same as Section 172 of the INTELLECTUAL

PROPERTY CODE OF THE PHILIPPINES (R.A. No. 8293). The format or mechanics
of a television show is not included in the list of protected works in Section 2 of P.D. No.
49. For this reason, the protection afforded by the law cannot be extended to cover
them.
What then is the subject matter of petitioners’ copyright? This Court is of the opinion
that petitioner BJPI’s copyright covers audio-visual recordings of each episode of Rhoda
and Me, as falling within the class of works mentioned in P.D. 49, Section 2(M), to wit:

Cinematographic works and works produced by a process analogous to

cinematography or any process for making audio-visual recordings;

Thus, petitioner BJPI’s copyright does not extend to the general concept or format of its
dating game show.

Notes:

Copyright, in the strict sense of the term, is purely a statutory right. It is a new or
independent right granted by the statute, and not simply a pre-existing right regulated by
the statute. Being a statutory grant, the rights are only such as the statute confers, and
may be obtained and enjoyed only with respect to the subjects and by the persons, and
on terms and conditions specified in the statute.

Since copyright in published works is purely a statutory creation, a copyright may be

obtained only for a work falling within the statutory enumeration or description.

P.D. No. 49, Section 2, in enumerating what are subject to copyright, refers to finished
works and not to concepts. The copyright does not extend to an idea, procedure,
process, system, method of operation, concept, principle, or discovery, regardless of the
form in which it is described, explained, illustrated, or embodied in such work. Thus, the
new INTELLECTUAL PROPERTY CODE OF THE PHILIPPINES provides:

SECTION 175. Unprotected Subject Matter. — Notwithstanding the provisions of

Sections 172 and 173, no protection shall extend, under this law, to any idea,
procedure, system, method or operation, concept, principle, discovery or mere data as
such, even if they are expressed, explained, illustrated or embodied in a work; news of
the day and other miscellaneous facts having the character of mere items of press
information; or any official text of a legislative, administrative or legal nature, as well as
any official translation thereof.

3. Kho v. CA, G.R. No. 115758, March 19, 2008 - 

Facts:

On December 20, 1991, petitioner Elidad C. Kho filed a complaint for injunction and
damages with a prayer for the issuance of a writ of preliminary injunction against the
respondents Summerville General Merchandising and Company (Summerville, for
brevity) and Ang Tiam Chay.
Petitioner’s complaint alleges that petitioner, doing business under the name and style
of KEC Cosmetics Laboratory, is the registered owner of the copyrights Chin Chun Su
and Oval Facial Cream Container/Case, as shown by Certificates of Copyright
Registration; that she also has patent rights on Chin Chun Su & Device and Chin Chun
Su for medicated cream after purchasing the same from Quintin Cheng, the registered
owner thereof in the Supplemental Register of the Philippine Patent Office; that
respondent Summerville advertised and sold petitioner’s cream products under the
brand name Chin Chun Su, in similar containers that petitioner uses, thereby misleading
the public, and resulting in the decline in the petitioner’s business sales and income;
and, that the respondents should be enjoined from allegedly infringing on the copyrights
and patents of the petitioner.

The respondents, on the other hand, alleged as their defense that Summerville is the
exclusive and authorized importer, repacker and distributor of Chin Chun Su products
manufactured by Shun Yi Factory of Taiwan; that the said Taiwanese manufacturing
company authorized Summerville to register its trade name Chin Chun Su Medicated
Cream with the Philippine Patent Office and other appropriate governmental agencies;
that KEC Cosmetics Laboratory of the petitioner obtained the copyrights through
misrepresentation and falsification; and, that the authority of Quintin Cheng, assignee of
the patent registration certificate, to distribute and market Chin Chun Su products in the
Philippines had already been terminated by the said Taiwanese Manufacturing
Company.

Trial court rendered a Decision barring the petitioner from using the trademark Chin
Chun Su and upholding the right of the respondents to use the same, but recognizing
the copyright of the petitioner over the oval shaped container of her beauty cream.

Issue: WON petitioner’s copyright and patent registration of the name and container
would guarantee her the right to the exclusive use of the same

Ruling: NO.

Petitioner applied for the issuance of a preliminary injunctive order on the ground that
she is entitled to the use of the trademark on Chin Chun Su and its container based on
her copyright and patent over the same. We first find it appropriate to rule on whether
the copyright and patent over the name and container of a beauty cream product would
entitle the registrant to the use and ownership over the same to the exclusion of others.

Trademark, copyright and patents are different intellectual property rights that cannot be
interchanged with one another.

A trademark is any visible sign capable of distinguishing the goods (trademark) or

services (service mark) of an enterprise and shall include a stamped or marked
container of goods. In relation thereto, a trade name means the name or designation
identifying or distinguishing an enterprise.
Meanwhile, the scope of a copyright is confined to literary and artistic works which are
original intellectual creations in the literary and artistic domain protected from the
moment of their creation.

Patentable inventions, on the other hand, refer to any technical solution of a problem
in any field of human activity which is new, involves an inventive step and is industrially
applicable.

Petitioner has no right to support her claim for the exclusive use of the subject
trade name and its container.

The name and container of a beauty cream product are proper subjects of a
trademark inasmuch as the same falls squarely within its definition. In order to be
entitled to exclusively use the same in the sale of the beauty cream product, the user
must sufficiently prove that she registered or used it before anybody else did.

The petitioner’s copyright and patent registration of the name and container would not
guarantee her the right to the exclusive use of the same for the reason that they are not
appropriate subjects of the said intellectual rights.

Consequently, a preliminary injunction order cannot be issued for the reason that the
petitioner has not proven that she has a clear right over the said name and container to
the exclusion of others, not having proven that she has registered a trademark thereto
or used the same before anyone did.

4. Habana v. Roble, G.R. No. 131522, July 19, 1999 - Monique

FACTS: Petitioners are authors and copyright owners over their published works,
produced through their combined resources and efforts, entitled COLLEGE
ENGLISH FOR TODAY (CET), Books 1 and 2. Respondent Felicidad Robles and
Goodwill Trading Co., Inc. are the author/publisher and distributor/seller of
“DEVELOPING ENGLISH PROFICIENCY” (DEP), which book was covered by
copyrights issued to them.

Petitioners saw that DEP was strikingly similar to the contents, scheme of
presentation, illustrations and illustrative examples in their own book, CET. They
made an itemized examination and found that several pages of the respondent’s
book are similar, if not all together a copy of petitioners’ book, which is a case of
plagiarism and copyright infringement.

Petitioners demanded damages from respondents; that they cease and desist
from selling and distributing the books. However, respondents ignored the
demands.
Petitioners filed with the RTC Makati, a complaint for “Infringement and/or unfair
competition with damages” against private respondents; alleging that in 1985,
respondent Felicidad C. Robles without securing their permission plagiarized
certain portions of their book CET. The textual contents and illustrations of CET
were literally reproduced in the book DEP. Respondent Robles filed her answer,
and denied the allegations of plagiarism and copying.

The RTC rendered DISMISSED the complaint. The Court of Appeals rendered
judgment in favor of respondents Robles and Goodwill Trading Co., Inc. Hence,
this petition.

ISSUE #1: Whether despite the apparent textual, thematic and sequential
similarity between DEP and CET, respondents committed no copyright
infringement?

RULING: NO. Respondents committed copyright infringement.

Under Section 177.1 of R.A. No. 8293, copyright or economic rights shall consist
of the exclusive right to carry out, authorize or prevent the reproduction of
the work or substantial portion of the work.

Section 184.1 provides for limitations on copyright; the following shall not
constitute copyright infringement:

(b) The making of quotations from a published work if they are

compatible with fair use and only to the extent justified for the purpose,
including quotations from newspaper articles and periodicals in the form of
press summaries; Provided, that the source and the name of the
author, if appearing on the work are mentioned; 
xxxxxxxxx
(e) The inclusion of a work in a publication, broadcast, or other
communication to the public, sound recording of film, if such inclusion is
made by way of illustration for teaching purposes and is compatible with
fair use: Provided, That the source and the name of the author, if
appearing in the work is mentioned;

In the above quoted provisions, “work” has reference to literary and artistic
creations and this includes books and other literary, scholarly and scientific
works. A perusal of the records yields several pages of the book DEP that are
similar if not identical with the text of CET. On page 100 of the book DEP, also in
the topic of parallel structure and repetition, the same example is found in toto.
The only difference is that petitioners acknowledged the author Edmund Burke,
and respondents did not.

In several other pages the treatment and manner of presentation of the topics of
DEP are similar if not a rehash of that contained in CET.
 We believe that respondent Robles’ act of lifting from the book of petitioners
substantial portions of discussions and examples, and her failure to acknowledge
the same in her book is an infringement of petitioners’ copyrights.

ISSUE #2: Was there substantial reproduction of the book CET?

RULING: YES. In determining the question of infringement, the amount of matter

copied from the copyrighted work is an important consideration. To constitute
infringement, it is not necessary that the whole or even a large portion of the
work shall have been copied. If so much is taken that the value of the original
is sensibly diminished, or the labors of the original author are substantially
and to an injurious extent appropriated by another, that is sufficient in point
of law to constitute piracy.

ISSUE #3: To what extent can copying be injurious to the author of the book
being copied?

RULING: In cases of infringement, copying alone is not what is prohibited. The

copying must produce an “injurious effect.” Here, the injury consists in that
respondent Robles lifted from petitioners’ book materials that were the
result of the latter’s research work and compilation and misrepresented
them as her own. She circulated the book DEP for commercial use and did not
acknowledge petitioners as her source.

Hence, there is a clear case of appropriation of copyrighted work for her benefit
that respondent Robles committed. Petitioners’ work as authors is the
product of their long and assiduous research and for another to represent
it as her own is injury enough.

In copyrighting books the purpose is to give protection to the intellectual product

of an author. This is precisely what the law on copyright protected, under Section
184.1 (b). Quotations from a published work if they are compatible with fair
use and only to the extent justified by the purpose, including quotations from
newspaper articles and periodicals in the form of press summaries are allowed
provided that the source and the name of the author, if appearing on the
work, are mentioned. In the case at bar, the least that respondent Robles could
have done was to acknowledge petitioners Habana, et al. as the source of the
portions of DEP. The final product of an author’s toil is her book. To allow
another to copy the book without appropriate acknowledgment is injury
enough.

5. FILSCAP v. Tan, G.R. No. L-36402, March 16, 1987 - 

LONG STORY SHORT: Naay mga singer na nikanta ug kanta na gi copyright sa mga
songowners/composers sa usa ka restaurant. Ang mga composers syempre, lagot sila
kay ngano kanta kanta man mong amo mana, wala silay halin. So ni pasaka silag kaso.

Ang pangutana ug liable ba# ang restaurant. Ingon ang supreme court na tinuod for
profit siya but dili siya protected under the copyright law kay, under the law, if gigamit na
public ang song/or thing to be copyrote (?) 30 days before siya ni apply ug copyright,
madonate na sa public ang kanta.

So mao to, nakita sa court na dugay na diay gina kanta sa lain-laing tawo ang mga
kanta sa composers before pa nila gi applyan ug copyright so na donate na sa public
ilang mga songs. THE END. 

FACTS: Plaintiff-appellant is a non-profit association of authors, composers and

publishers duly organized under the Corporation Law. 

Defendant-appellee is the operator of a restaurant known as "Alex Soda Foundation

and Restaurant" where a combo with professional singers, hired to play and sing
musical compositions to entertain and amuse customers therein, were playing and
singing the above-mentioned compositions without any license or permission from the
appellant to play or sing the same. appellant demanded from the appellee payment of
the necessary license fee for the playing and singing of aforesaid compositions but the
demand was ignored.

appellee maintains that the mere singing and playing of songs and popular tunes even if
they are copyrighted do not constitute an infringement

ISSUE: 

1.) inside the establishment of the defendant-appellee constitute a public performance

for profit within the meaning and contemplation of the Copyright Law of the Philippines; 

2.) and assuming that there were indeed public performances for profit, whether or not
appellee can be held liable therefor.

RULING:

1.)YES. We concede that indeed there were "public performances for profit."cralaw
virtua1aw library

The word ‘perform’ as used in the Act has been applied to "One who plays a musical
composition on a piano, thereby producing in the air sound waves which are heard as
music . . . and if the instrument he plays on is a piano plus a broadcasting apparatus, so
that waves are thrown out, not only upon the air, but upon the other, then also he is
performing the musical composition.
while it is possible in such establishments for the patrons to purchase their food and
drinks and at the same time dance to the music of the orchestra, the music is furnished
and used by the orchestra for the purpose of inducing the public to patronize the
establishment and pay for the entertainment in the purchase of food and drinks. The
defendant conducts his place of business for profit, and it is public; and the music is
performed for profit.

It is therefore obvious that the expenses entailed thereby are added to the overhead
of the restaurant which are either eventually charged in the price of the food and
drinks or to the overall total of additional income produced by the bigger volume
of business which the entertainment was programmed to attract. Consequently, it
is beyond question that the playing and singing of the combo in defendant-appellee’s
restaurant constituted performance for profit contemplated by the Copyright Law. 

2.) NO. Nevertheless, appellee cannot be said to have infringed upon the Copyright
Law. 

Appellee’s allegation that the composers of the contested musical compositions waived
their right in favor of the general public when they allowed their intellectual creations to
become property of the public domain before applying for the corresponding copyrights
for the same is correct.

charobles lawlibrary : rednad

The Supreme Court has ruled that "Paragraph 33 of Patent Office Administrative Order
No. 3 provides among other things that an intellectual creation should be copyrighted
thirty (30) days after its publication, if made in Manila, or within sixty (60) days if made
elsewhere, failure of which renders such creation public property."

if the general public has made use of the object sought to be copyrighted for
thirty (30) days prior to the copyright application the law deems the object to have
been donated to the public domain and the same can no longer be copyrighted.

A careful study of the records reveals that the song "Dahil Sa Iyo" which was registered
on April 20, 1956 became popular in radios, juke boxes, etc. long before registration
while the song "The Nearness Of You" registered on January 14, 1955 had become
popular twenty five (25) years prior to 1968, (the year of the hearing) or from 1943 and
the songs "Sapagkat Ikaw Ay Akin" and "Sapagkat Kami Ay Tao Lamang" both
registered on July 10, 1966, appear to have been known and sang by the witnesses as
early as 1965 or three years before the hearing in 1968. 

Under the circumstances, it is clear that the musical compositions in question had
long become public property, and are therefore beyond the protection of the
Copyright Law.
 6. NBI-Microsoft v. Hwang, G.R. No. 147043, June 21, 2005 - Emman
FACTS: Petitioner Microsoft Corporation ("Microsoft"), a Delaware, United States corporation,
owns the copyright and trademark to several computer software.

In May 1993, Microsoft and Beltron entered into a Licensing Agreement ("Agreement"). Under
Section 2(a) of the Agreement, as amended in January 1994, Microsoft authorized Beltron, for a
fee, to:

(i) xxx reproduce and install no more than one (1) copy of [Microsoft] software on each
Customer System hard disk or Read Only Memory ("ROM"); [and]

(ii) xxx distribute directly or indirectly and license copies of the Product (reproduced as per
Section 2(a)(i) and/or acquired from Authorized Replicator or Authorized Distributor) in object
code form to end users[.] xxxx

The Agreement also authorized Microsoft and Beltron to terminate the contract if the other fails
to comply with any of the Agreement's provisions. Microsoft terminated the Agreement effective
22 June 1995 for Beltron's non-payment of royalties.

Afterwards, Microsoft learned that respondents were illegally copying and selling Microsoft
software.

ISSUE: Whether there was probable cause for copyright infringement in the case at bar.

RULING: Yes.Respondents mass-produced the CD-ROMs in question without securing

Microsoft's prior authorization. Section 5 of PD 49 ("Section 5") enumerates the rights vested
exclusively on the copyright owner. The gravamen of copyright infringement is not merely the
unauthorized "manufacturing" of intellectual works but rather the unauthorized performance of
any of the acts covered by Section 5. Hence, any person who performs any of the acts under
Section 5 without obtaining the copyright owner's prior consent renders himself civilly and
criminally liable for copyright infringement. We held in Columbia Pictures, Inc. v. Court of
Appeals:

Infringement of a copyright is a trespass on a private domain owned and occupied by the

owner of the copyright, and, therefore, protected by law, and infringement of copyright,
or piracy, which is a synonymous term in this connection, consists in the doing by any
person, without the consent of the owner of the copyright, of anything the sole right to do
which is conferred by statute on the owner of the copyright.

Significantly, under Section 5(A), a copyright owner is vested with the exclusive right to "copy,
distribute, multiply, [and] sell" his intellectual works.

Being the copyright and trademark owner of Microsoft software, Microsoft acted well within its
rights in filing the complaint based on the incriminating evidence obtained from respondents.

Some of the counterfeit CD-ROMs bought from respondents were "installer" CD-ROMs
containing Microsoft software only or both Microsoft and non-Microsoft software. These articles
are counterfeit per se because Microsoft does not (and could not have authorized anyone to)
produce such CD-ROMs. The copying of the genuine Microsoft software to produce these fake
CD-ROMs and their distribution are illegal even if the copier or distributor is a Microsoft
licensee. As far as these installer CD-ROMs are concerned, the Agreement (and the alleged
question on the validity of its termination) is immaterial to the determination of respondents'
liability for copyright infringement and unfair competition.

The Court finds that the 12 CD-ROMs ("installer" and "non-installer") and the CPU with pre-
installed Microsoft software bought from respondents and the 2,831 Microsoft CD-ROMs seized
from respondents suffice to support a finding of probable cause to indict respondents for
copyright infringement under Section 5(A) in relation to Section 29 of PD 49 for unauthorized
copying and selling of protected intellectual works. The installer CD-ROMs with Microsoft
software, to repeat, are counterfeit per se. On the other hand, the illegality of the "non-installer"
CD-ROMs purchased from respondents and of the Microsoft software pre-installed in the CPU
is shown by the absence of the standard features accompanying authentic Microsoft products,
namely, the Microsoft end-user license agreements, user's manuals, registration cards or
certificates of authenticity.

On the 2,831 Microsoft CD-ROMs49 seized from respondents, respondent Beltron, the only
respondent who was party to the Agreement, could not have reproduced them under the
Agreement as the Solicitor General and respondents contend. Beltron's rights under the
Agreement were limited to:

(1) the "reproduc[tion] and install[ation of] no more than one copy of [Microsoft] software on
each Customer System hard disk or Read Only Memory ("ROM")"; 

(2) the "distribut[ion] xxx and licens[ing of] copies of the [Microsoft] Product [as reproduced
above] and/or acquired from Authorized Replicator or Authorized Distributor) in object code form
to end users."
The Agreement defines an authorized replicator as "a third party approved by [Microsoft] which
may reproduce and manufacture [Microsoft] Product[s] for [Beltron] xxx." 

Being a mere reproducer/installer of one Microsoft software copy on each customer's hard disk
or ROM, Beltron could only have acquired the hundreds of Microsoft CD-ROMs found in
respondents' possession from Microsoft distributors or replicators.

However, respondents makes no such claim. What respondents contend is that these CD-
ROMs were left to them for safekeeping. But neither is this claim tenable for lack of
substantiation. Indeed, respondents Keh and Chua, the only respondents who filed counter-
affidavits, did not make this claim in the DOJ. These circumstances give rise to the reasonable
inference that respondents mass-produced the CD-ROMs in question without securing
Microsoft's prior authorization.

NOTE: The counterfeit "non-installer" CD-ROMs bought from respondents also suffice to
support a finding of probable cause to indict respondents for unfair competition under Article
189(1) of the Revised Penal Code for passing off Microsoft products. From the pictures of the
CD-ROMs' packaging, one cannot distinguish them from the packaging of CD-ROMs containing
genuine Microsoft software. Such replication, coupled with the similarity of content of these fake
CD-ROMs and the CD-ROMs with genuine Microsoft software, implies intent to deceive.

Article 189(1)43 of the Revised Penal Code:

(a) That the offender gives his goods the general appearance of the goods of another
manufacturer or dealer;
(b) That the general appearance is shown in the (1) goods themselves, or in the (2) wrapping of
their packages, or in the (3) device or words therein, or in (4) any other feature of their
appearance[;]
(c) That the offender offers to sell or sells those goods or gives other persons a chance or
opportunity to do the same with a like purpose[; and]
(d) That there is actual intent to deceive the public or defraud a competitor.

The element of intent to deceive may be inferred from the similarity of the goods or their
appearance.

7. Feist Publications v. Rural Telephone Service, 499 U.S. 340 (1991) - Mikko
FACTS: Respondent Rural Telephone is a certified public utility providing telephone
service to several communities in Kansas. It publishes a typical telephone directory,
consisting of white pages and yellow pages. Feist Publications is a publishing company
that specializes in area-wide telephone directories. To obtain white pages listings for its
area-wide directory, Feist approached to pay Rural the right to use its white page
listings. Rural refused to license its listings to Feist. Thus, Feist used them without
Rural’s consent. Rural sued for copyright infringement in the District Court. Feist
responded that the information copied was beyond the scope of copyright protection.

ISSUE: Are Rural’s white pages entitled to copyright and therefore Feist’s unauthorized
use of them is constitute infringement?

RULING: No.

There is no doubt that Feist took from the white pages of Rural’s directory a substantial
amount of factual information. At a minimum, Feist copied the names of towns, and
telephone numbers of 1,309 of Rural’s subscribers. Not all copying, however, is
copyright infringement. To establish infringement, two elements must be proved:
(1) ownership of a valid copyright, and (2) copying of constituent elements of the
work that are original. The first element is not at issue here; Feist appears to concede
that Rural's directory, considered as a whole, is subject to a valid copyright because it
contains some foreword text, as well as original material in its yellow pages
advertisements.

The question is whether Rural has proved the second element. In other words, did
Feist, by taking 1,309 names, towns, and telephone numbers from Rural's white pages,
copy anything that was "original" to Rural? Certainly, the raw data does not satisfy the
originality requirement. Rural may have been the first to discover and report the names,
towns, and telephone numbers of its subscribers, but this data does not "owe its origin'"
to Rural. Rather, these bits of information are uncopyrightable facts; they existed before
Rural reported them, and would have continued to exist if Rural had never published a
telephone directory. The originality requirement "rules out protecting . . . names,
addresses, and telephone numbers of which the plaintiff, by no stretch of the
imagination, could be called the author."

The selection, coordination, and arrangement of Rural's white pages do not satisfy the
minimum constitutional standards for copyright protection. As mentioned at the outset,
Rural's white pages are entirely typical. Persons desiring telephone service in Rural's
service area fill out an application, and Rural issues them a telephone number. In
preparing its white pages, Rural simply takes the data provided by its subscribers and
lists it alphabetically by surname. The end product is a garden-variety white pages
directory, devoid of even the slightest trace of creativity.

The selection featured in Rural's white pages may also fail the originality requirement for
another reason. Feist points out that Rural did not truly "select" to publish the names
and telephone numbers of its subscribers; rather, it was required to do so by the Kansas
Corporation Commission as part of its monopoly franchise. Accordingly, one could
plausibly conclude that this selection was dictated by state law, not by Rural.

Nor can Rural claim originality in its coordination and arrangement of facts. The white
pages do nothing more than list Rural's subscribers in alphabetical order. This
arrangement may, technically speaking, owe its origin to Rural; no one disputes that
Rural undertook the task of alphabetizing the names itself. But there is nothing remotely
creative about arranging names alphabetically in a white pages directory. It is an age-
old practice, firmly rooted in tradition and so commonplace that it has come to be
expected as a matter of course. Alphabetical arrangement "is universally observed in
directories published by local exchange telephone companies". It is not only unoriginal,
it is practically inevitable. This time-honored tradition does not possess the minimal
creative spark required by the Copyright Act and the Constitution.

US SC conclude that the names, towns, and telephone numbers copied by Feist were
not original to Rural, and therefore were not protected by the copyright in Rural's
combined white and yellow pages directory. As a constitutional matter, copyright
protects only those constituent elements of a work that possess more than a de minimis
quantum of creativity. Rural's white pages, limited to basic subscriber information and
arranged alphabetically, fall short of the mark. As a statutory matter, the law does not
afford protection from copying to a collection of facts that are selected, coordinated, and
arranged in a way that utterly lacks originality. Given that some works must fail, we
cannot imagine a more likely candidate. Indeed, were we to hold that Rural's white
pages pass muster, it is hard to believe that any collection of facts could fail. Because
Rural's white pages lack the requisite originality, Feist's use of the listings cannot
constitute infringement. This decision should not be construed as demeaning Rural's
efforts in compiling its directory, but rather as making clear that copyright rewards
originality, not effort. As this Court noted more than a century ago, "'great praise may be
due to the plaintiffs for their industry and enterprise in publishing this paper, yet the law
does not contemplate their being rewarded in this way.'"
 8. Manly Sportswear v. Dadodette, G.R. No. 165306, September 20, 2005 -
Dyann

FACTS:

Special Investigator Salcedo of NBI applied for a search warrant based on the
information that Dadodette Enterprises and/or Hermes Sports Center were in
possession of goods, the copyright of which belonged to Manly Sportswear Mfg., Inc.
(MANLY). 5

After finding reasonable grounds that a violation of Sections 172 and 217 of RA No.
8293 has been committed, RTC issued a Search Warrant.
6

Respondents  moved to quash and annul the search warrant contending that the same
is invalid since the requisites for its issuance have not been complied with. They
insisted that the sporting goods manufactured by and/or registered in the name of
MANLY are ordinary and common hence, not among the classes of work protected
under Section 172 of RA 8293.

RTC granted the motion to quash and declared the Search Warrant null and void based
on its finding that the copyrighted products of MANLY do not appear to be original
creations and were being manufactured and distributed by different companies locally
and abroad under various brands, and therefore unqualified for protection under Section
172 of RA 8293.

CA found that the RTC correctly granted the motion to quash and that its ruling in the
ancillary proceeding did not preempt the findings of the intellectual property court as it
did not resolve with finality the status or character of the seized items.

MANLY filed the instant petition for review on certiorari

ISSUE: Whether or not copyrighted products of MANLY are original creations subject to
the protection of RA 8293?

RULING: No.

The trial court properly quashed the search warrant it earlier issued after finding upon
reevaluation of the evidence that no probable cause exists to justify its issuance in the
first place. As ruled by the trial court, the copyrighted products do not appear to be
original creations of MANLY and are not among the classes of work enumerated
under Section 172 of RA 8293. The trial court, thus, may not be faulted for overturning
its initial assessment that there was probable cause in view of its inherent power to
issue search warrants and to quash the same.

Moreover, the trial court was acting within bounds when it ruled, in an ancillary
proceeding, that the copyrighted products of petitioner are not original creations. This is
because in the determination of the existence of probable cause for the issuance or
quashal of a warrant, it is inevitable that the court may touch on issues properly
threshed out in a regular proceeding. In so doing, it does not usurp the power of, much
less preclude, the court from making a final judicial determination of the issues in a full-
blown trial.

As pertinently held in Solid Triangle Sales Corp. v. Sheriff, RTC, Q.C., Br. 93: 13

When the court, in determining probable cause for issuing or quashing a search
warrant, finds that no offense has been committed, it does not interfere with or encroach
upon the proceedings in the preliminary investigation.

The finding by the court that no crime exists does not preclude the authorized officer
conducting the preliminary investigation from making his own determination that a crime
has been committed and that probable cause exists for purposes of filing the
information.

As correctly observed by the CA, the trial court’s finding that the seized products are not
copyrightable was merely preliminary as it did not finally and permanently adjudicate
on the status and character of the seized items. MANLY could still file a separate
copyright infringement suit against the respondents because the order for the
issuance or quashal of a warrant is not res judicata. Such an order does not
ascertain and adjudicate the permanent status or character of the seized property. By
its very nature, it is provisional, interlocutory. It is merely the first step in the process to
determine the character and title of the property. That determination is done in the
criminal action involving the crime or crimes in connection with which the search warrant
was issued. Hence, such a criminal action should be prosecuted, or commenced if not
yet instituted, and prosecuted. The outcome of the criminal action will dictate the
disposition of the seized property.

Further, the copyright certificates issued in favor of MANLY constitute merely prima
facie evidence of validity and ownership. However, no presumption of validity is created
where other evidence exist that may cast doubt on the copyright validity. Hence, where
there is sufficient proof that the copyrighted products are not original creations but
are readily available in the market under various brands, as in this case, validity and
originality will not be presumed and the trial court may properly quash the issued
warrant for lack of probable cause.

Besides, no copyright accrues in favor of MANLY despite issuance of the certificates

of registration and deposit pursuant to Section 2, Rule 7 of the Copyrights
16

Safeguards and Regulations which states:

17

Sec. 2 Effects of Registration and Deposit of Work. The registration and deposit
of the work is purely for recording the date of registration and deposit of the work
and shall not be conclusive as to copyright ownership or the term of the
copyrights or the rights of the copyright owner, including neighboring rights.

At most, the certificates of registration and deposit issued by the National Library and
the Supreme Court Library serve merely as a notice of recording and registration of
the work but do not confer any right or title upon the registered copyright owner
or automatically put his work under the protective mantle of the copyright law. It
is not a conclusive proof of copyright ownership. As it is, non-registration and deposit of
the work within the prescribed period only makes the copyright owner liable to pay a
fine.
18

9. Campbell v. Acuff-Rose Music, 364 F. 3d 471 (1994) - Emman

FACTS:  In 1964, Roy Orbison and William Dees wrote a rock ballad called "Oh, Pretty Woman"
and assigned their rights in it to respondent Acuff-Rose Music, Inc. Acuff-Rose registered the
song for copyright protection.

"Oh, Pretty Woman" by Roy Orbison and William Dees:

Pretty Woman, walking down the street, Pretty Woman, the kind I like to meet, Pretty
Woman, I don't believe you, you're not the truth, No one could look as good as you

Mercy, Pretty Woman, won't you pardon me, Pretty Woman, I couldn't help but see,
Pretty
Woman, that you look lovely as can be, Are you lonely just like me?

Pretty Woman, stop a while, Pretty Woman, talk a while, Pretty Woman give your
smile to me Pretty woman, yeah, yeah, yeah Pretty Woman, look my way, Pretty
Woman, say you'll stay with me Cause I need you, I'll treat you right Come to me
baby, Be mine tonight...

Petitioners are collectively known as 2 Live Crew, a popular rap music group. In 1989, Campbell
wrote a song entitled "Pretty Woman," which he later described in an affidavit as intended,
"through comical lyrics, to satirize the original work. . . ."

"Pretty Woman" as Recorded by 2 Live Crew:

Pretty woman walkin' down the street Pretty woman girl you look so sweet Pretty
woman you bring me down to that knee Pretty woman you make me wanna beg
please Oh, pretty woman.

Big hairy woman you need to shave that stuff Big hairy woman you know I bet it's
tough Big hairy woman all that hair it ain't legit Cause you look like "Cousin It" Big
hairy woman.

Bald headed woman girl your hair won't grow Bald headed woman you got a teeny
weeny afro Bald headed woman you know your hair could look nice Bald headed
woman first you got to roll it with rice Bald headed woman here, let me get this hunk
of biz for ya Ya know what I'm saying you look better than rice a roni Oh bald
headed woman...
Almost a year later, after nearly a quarter of a million copies of the recording had been sold,
Acuff-Rose sued 2 Live Crew and its record company for copyright infringement. 

The District Court granted summary judgment for 2 Live Crew, reasoning that the commercial
purpose of 2 Live Crew's song was no bar to fair use; that 2 Live Crew's version was a parody,
which "quickly degenerates into a play on words; that 2 Live Crew had taken no more than was
necessary to "conjure up" the original in order to parody it; and that it was "extremely unlikely
that 2 Live Crew's song could adversely affect the market for the original." The District Court
weighed these factors and held that 2 Live Crew's song made fair use of Orbison's original.

The Court of Appeals for the Sixth Circuit reversed and remanded. Although it assumed for the
purpose of its opinion that 2 Live Crew's song   was a parody of the Orbison original , the Court of
Appeals thought the District Court had put too little emphasis on the fact that "every commercial
use . . . is presumptively . . . unfair," and it held that "the admittedly commercial nature" of the
parody "requires the conclusion" that the first of four factors relevant under the statute weighs
against a finding of fair use. Next, the Court of Appeals determined that, by "taking the heart of
the original and making it the heart of a new work," 2 Live Crew had, qualitatively, taken too
much. Finally, after noting that the effect on the potential market for the original (and the market
for derivative works) is "undoubtedly the single most important element of fair use," the Court of
Appeals faulted the District Court for "refusing to indulge the presumption" that "harm for
purposes of the fair use analysis has been established by the presumption attaching to
commercial uses." In sum, the court concluded that its "blatantly commercial purpose . . .
prevents this parody from being a fair use." 

ISSUE: Whether 2 Live Crew's commercial parody of the song “Pretty Woman” be considered
as fair use?

RULING: Qualify (Reversed and Remanded.) 2 Live Crew's commercial parody may be a fair
use within the meaning of §107. It is uncontested here that 2 Live Crew's song would be an
infringement of Acuff-Rose's rights in "Oh, Pretty Woman," under the Copyright Act of 1976, but
for a finding of fair use through parody. 

Since the infancy of copyright protection, some opportunity for fair use of copyrighted materials
has been thought necessary to fulfill copyright's very purpose, "to promote the Progress of
Science and useful Arts. . . "Justice Story explained, "in truth, in literature, in science and in art,
there are, and can be, few, if any, things, which in an abstract sense, are strictly new and
original throughout. Every book in literature, science and art borrows, and must necessarily
borrow, and use much which was well known and used before." 

Thus expressed, fair use was an exclusively judge-made doctrine until the passage of the 1976
Copyright Act, in which Justice Story's summary is discernible:

"§ 107. Limitations on exclusive rights: Fair use

"Notwithstanding the provisions of sections 106 and 106A, the fair use of a copyrighted
work, including such use by reproduction in copies or phonorecords or by any other
means specified by that section, 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:
 "(1) the purpose and character of the use, including whether such use is of a commercial
nature or is for non-profit educational purposes;

"(2) the nature of the copyrighted work;

"(3) the amount and substantiality of the portion used in relation to the copyrighted work
as a whole; and

"(4) the effect of the use upon the potential market for or value of the copyrighted work.

"The fact that a work is unpublished shall not itself bar a finding of fair use if such finding
is made upon consideration of all the above factors."

The fair use doctrine thus "permits and requires courts to avoid rigid application of the copyright
statute when, on occasion, it would stifle the very creativity which that law is designed to foster."
The task is not to be simplified with bright-line rules, for the statute, like the doctrine it
recognizes, calls for case-by-case analysis. The text employs the terms "including" and "such
as" in the preamble paragraph to indicate the "illustrative and not limitative" function of the
examples given, which thus provide only general guidance about the sorts of copying that courts
and Congress most commonly had found to be fair uses. Nor may the four statutory factors be
treated in isolation, one from another. All are to be explored, and the results weighed together,
in light of the purposes of copyright.

The considering the above cited four factors in § 107 of the 1976 Copyright Act, the Court
observes that:

Parody, like other comments and criticism, may claim fair use. Under the first of the four §107
factors, "the purpose and character of the use, including whether such use is of a commercial
nature . . . ," the enquiry focuses on whether the new work merely supersedes the objects of the
original creation, or whether and to what extent it is "transformative," altering the original with
new expression, meaning, or message. 

Suffice it to say now that parody has an obvious claim to transformative value, as Acuff-Rose
itself does not deny. The more transformative the new work, the less will be the significance of
other factors, like commercialism, that may weigh against a finding of fair use. The heart of any
parodist's claim to quote from existing material is the use of some elements of a prior author's
composition to create a new one that, at least in part, comments on that author's work. But that
tells courts little about where to draw the line. Thus, like other uses, parody has to work its way
through the relevant factors.

The Court of Appeals properly assumed that 2 Live Crew's song contains parody commenting
on and criticizing the original work, but erred in giving virtually dispositive weight to the
commercial nature of that parody by way of a presumption, ostensibly culled from Sony Corp. of
America v. Universal City Studios, Inc., 464 U.S. 417, 451, that "every commercial use of
copyrighted material is presumptively . . . unfair . . . ." The statute makes clear that a work's
commercial nature is only one element of the first factor enquiry into its purpose and character,
and Sony itself called for no hard evidentiary presumption. The Court of Appeals's rule runs
counter to Sony and to the long common law tradition of fair use adjudication.
The second §107 factor, "the nature of the copyrighted work," is not much help in resolving this
and other parody cases as this factor calls for recognition that some works are closer to the core
of intended copyright protection than others, with the consequence that fair use is more difficult
to establish when the former works are copied. Parodies almost invariably copy publicly known,
expressive works, like the Orbison song here. 

The Court of Appeals erred in holding that, as a matter of law, 2 Live Crew copied excessively
from the Orbison original under the third §107 factor, which asks whether "the amount and
substantiality of the portion used in relation to the copyrighted work as a whole" are reasonable
in relation to the copying's purpose. Even if 2 Live Crew's copying of the original's first line of
lyrics and characteristic opening bass riff may be said to go to the original's "heart," that heart is
what most readily conjures up the song for parody, and it is the heart at which parody takes aim.
Moreover, 2 Live Crew thereafter departed markedly from the Orbison lyrics and produced
otherwise distinctive music. As to the lyrics, the copying was not excessive in relation to the
song's parodic purpose. As to the music, this Court expresses no opinion whether repetition of
the bass riff is excessive copying, but remands to permit evaluation of the amount taken, in light
of the song's parodic purpose and character, its transformative elements, and considerations of
the potential for market substitution.

(f) The Court of Appeals erred in resolving the fourth §107 factor, "the effect of the use upon the
potential market for or value of the copyrighted work," by presuming, in reliance on Sony, supra,
at 451, the likelihood of significant market harm based on 2 Live Crew's use for commercial
gain. No "presumption" or inference of market harm that might find support in Sony is applicable
to a case involving something beyond mere duplication for commercial purposes. The
cognizable harm is market substitution, not any harm from criticism. As to parody pure and
simple, it is unlikely that the work will act as a substitute for the original, since the two works
usually serve different market functions. The fourth factor requires courts also to consider the
potential market for derivative works. If the later work has cognizable substitution effects in
protectable markets for derivative works, the law will look beyond the criticism to the work's
other elements. 2 Live Crew's song comprises not only parody but also rap music. The absence
of evidence or affidavits addressing the effect of 2 Live Crew's song on the derivative market for
a non parody, rap version of "Oh, Pretty Woman" disentitled 2 Live Crew, as the proponent of
the affirmative defense of fair use, to summary judgment.

Taken as a whole, it was an error for the Court of Appeals to conclude that the commercial
nature of 2 Live Crew's parody of "Oh, Pretty Woman" rendered it presumptively unfair. No such
evidentiary presumption is available to address either the first factor, the character and purpose
of the use, or the fourth, market harm, in determining whether a transformative use, such as
parody, is a fair one. The court also erred in holding that 2 Live Crew had necessarily copied
excessively from the Orbison original, considering the parodic purpose of the use. 

Thus, after applying the four §107 factors, the Court unanimously finds that 2 Live Crew's
commercial parody may be a fair use within the meaning of §107. 

The Court reverses the judgment of the Court of Appeals and remands the case for further
proceedings consistent with this opinion rendered. REVERSED AND REMANDED.

10. Universal City Studios v. Sony, 464 US 417 (1984) - 

Doctrines (syllabus): The sale of the VTR's to the general public does not constitute
contributory infringement of respondents' copyrights.

(a) The protection given to copyrights is wholly statutory, and, in a case like this, in which
Congress has not plainly marked the course to be followed by the judiciary, this Court must be
circumspect in construing the scope of rights created by a statute that never contemplated such
a calculus of interests. Any individual may reproduce a copyrighted work for a "fair use";
the copyright owner does not possess the exclusive right to such a use.

(b) Kalem Co. v. Harper Brothers does not support respondents' novel theory that
supplying the "means" to accomplish an infringing activity and encouraging that activity
through advertisement are sufficient to establish liability for copyright infringement. This
case does not fall in the category of those in which it is manifestly just to impose vicarious
liability because the "contributory" infringer was in a position to control the use of copyrighted
works by others and had authorized the use without permission from the copyright owner. Here,
the only contact between petitioners and the users of the VTR's occurred at the moment
of sale. And there is no precedent for imposing vicarious liability on the theory that
petitioners sold the VTR's with constructive knowledge that their customers might use
the equipment to make unauthorized copies of copyrighted material. The sale of copying
equipment, like the sale of other articles of commerce, does not constitute contributory
infringement if the product is widely used for legitimate, unobjectionable purposes, or, indeed, is
merely capable of substantial non-infringing uses.

(c) The record and the District Court's findings show (1) that there is a significant likelihood that
substantial numbers of copyright holders who license their works for broadcast on free television
would not object to having their broadcast time-shifted by private viewers (i.e., recorded at a
time when the VTR owner cannot view the broadcast so that it can be watched at a later time);
and (2) that there is no likelihood that time-shifting would cause non-minimal harm to the
potential market for, or the value of, respondents' copyrighted works. The VTR's are therefore
capable of substantial non-infringing uses. Private, noncommercial time-shifting in the home
satisfies this standard of non-infringing uses both because respondents have no right to prevent
other copyright holders from authorizing such time-shifting for their programs and because the
District Court's findings reveal that even the unauthorized home time-shifting of
respondents' programs is legitimate fair use.

FACTS:

Short facts: Petitioners manufacture and sell home videotape recorders. Respondents own the
copyrights on some of the television programs that are broadcast on the public airwaves. Some
members of the general public use videotape recorders sold by petitioners to record some of
these broadcasts, as well as a large number of other broadcasts. The question presented is
whether the sale of petitioners' copying equipment to the general public violates any of the
rights conferred upon respondents by the Copyright Act.

Respondents commenced this copyright infringement action against petitioners. Respondents

alleged that some individuals had used Betamax videotape recorders (VTRs) to record some of
respondents' copyrighted works which had been exhibited on commercially sponsored
television, and contended that these individuals had thereby infringed respondents' copyrights.
Respondents further maintained that petitioners were liable for the copyright infringement
allegedly committed by Betamax consumers because of petitioners' marketing of the Betamax
VTRs.
Findings of the lower court: the average member of the public uses a VTR principally to
record a program he cannot view as it is being televised, and then to watch it once at a later
time. This practice, known as "time-shifting," enlarges the television viewing audience.

The two respondents in this action, Universal City Studios, Inc., and Walt Disney Productions,
produce and hold the copyrights on a substantial number of motion pictures and other
audiovisual works.

Petitioner Sony manufactures millions of Betamax videotape recorders and markets these
devices through numerous retail establishments, some of which are also petitioners in this
action. Sony's Betamax VTR is a mechanism consisting of three basic components: (1) a tuner,
which receives electromagnetic signals transmitted over the television band of the public
airwaves and separates them into audio and visual signals; (2) a recorder, which records such
signals on a magnetic tape; and (3) an adapter, which converts the audio and visual signals on
the tape into a composite signal that can be received by a television set.

Several capabilities of the machine are noteworthy. The separate tuner in the Betamax enables
it to record a broadcast off one station while the television set is tuned to another channel,
permitting the viewer, for example, to watch two simultaneous news broadcasts by watching
one "live" and recording the other for later viewing. Tapes may be reused, and programs that
have been recorded may be erased either before or after viewing. A timer in the Betamax can
be used to activate and deactivate the equipment at predetermined times, enabling an intended
viewer to record programs that are transmitted when he or she is not at home. Thus a person
may watch a program at home in the evening even though it was broadcast while the viewer
was at work during the afternoon. The Betamax is also equipped with a pause button and a fast-
forward control. The pause button, when depressed, deactivates the recorder until it is released,
thus enabling a viewer to omit a commercial advertisement from the recording, provided, of
course, that the viewer is present when the program is recorded. The fast-forward control
enables the viewer of a previously recorded program to run the tape rapidly when a segment he
or she does not desire to see is being played back on the television screen.

The respondents and Sony both conducted surveys of the way the Betamax machine was used
by several hundred owners during a sample period in 1978. Although there were some
differences in the surveys, they both showed that the primary use of the machine for most
owners was "time-shifting" -- the practice of recording a program to view it once at a later
time, and thereafter erasing it. Time-shifting enables viewers to see programs they otherwise
would miss because they are not at home, are occupied with other tasks, or are viewing a
program on another station at the time of a broadcast that they desire to watch. Both surveys
also showed, however, that a substantial number of interviewees had accumulated libraries of
tapes.

Sony introduced considerable evidence describing television programs that could be copied
without objection from any copyright holder, with special emphasis on sports, religious, and
educational programming.

Respondents offered opinion evidence concerning the future impact of the unrestricted sale of
VTR's on the commercial value of their copyrights.

The two respondents in this case do not seek relief against the Betamax users who have
allegedly infringed their copyrights. Moreover, this is not a class action on behalf of all copyright
owners who license their works for television broadcast, and respondents have no right to
invoke whatever rights other copyright holders may have to bring infringement actions based on
Betamax copying of their works.

As was made clear by their own evidence, the copying of the respondents' programs represents
a small portion of the total use of VTR's. It is, however, the taping of respondents' own
copyrighted programs that provides them with standing to charge Sony with contributory
infringement. To prevail, they have the burden of proving that users of the Betamax have
infringed their copyrights, and that Sony should be held responsible for that infringement.

ISSUE: WON Sony is vicariously liable for copyright infringement for being the supplier of
Betamax

RULING: NO.

Respondents argue that Kalem case stands for the proposition that supplying the "means" to
accomplish an infringing activity and encouraging that activity through advertisement are
sufficient to establish liability for copyright infringement.

This argument rests on a gross generalization that cannot withstand scrutiny. The producer in
Kalem did not merely provide the "means" to accomplish an infringing activity; the producer
supplied the work itself, albeit in a new medium of expression. Sony in the instant case does
not supply Betamax consumers with respondents' works; respondents do. Sony supplies
a piece of equipment that is generally capable of copying the entire range of programs
that may be televised: those that are uncopyrighted, those that are copyrighted but may be
copied without objection from the copyright holder, and those that the copyright holder would
prefer not to have copied. The Betamax can be used to make authorized or unauthorized uses
of copyrighted works, but the range of its potential use is much broader than the particular
infringing use of the film Ben Hur involved in Kalem. Kalem does not support respondents' novel
theory of liability.

Justice Holmes stated that the producer had "contributed" to the infringement of the copyright,
and the label "contributory infringement" has been applied in a number of lower court copyright
cases involving an ongoing relationship between the direct infringer and the contributory
infringer at the time the infringing conduct occurred. In such cases, as in other situations in
which the imposition of vicarious liability is manifestly just, the "contributory" infringer was in a
position to control the use of copyrighted works by others, and had authorized the use without
permission from the copyright owner.

This case, however, plainly does not fall in that category. The only contact between Sony and
the users of the Betamax that is disclosed by this record occurred at the moment of sale.

If vicarious liability is to be imposed on Sony in this case, it must rest on the fact that it
has sold equipment with constructive knowledge of the fact that its customers may use
that equipment to make unauthorized copies of copyrighted material. There is no
precedent in the law of copyright for the imposition of vicarious liability on such a theory. The
closest analogy is provided by the patent law cases to which it is appropriate to refer because of
the historic kinship between patent law and copyright law.

ISSUE: WON a seller of the equipment that expands those producers' audiences can be a
contributory infringer
RULING: YES, if he has direct involvement with any infringing activity, which is not
attendant in this case of Sony.

Authorized Time-Shifting

Each of the respondents owns a large inventory of valuable copyrights, but, in the total
spectrum of television programming, their combined market share is small. The exact
percentage is not specified, but it is well below 10%. If they were to prevail, the outcome of this
litigation would have a significant impact on both the producers and the viewers of the remaining
90% of the programming in the Nation. No doubt, many other producers share respondents'
concern about the possible consequences of unrestricted copying. Nevertheless the findings of
the District Court make it clear that time-shifting may enlarge the total viewing audience, and
that many producers are willing to allow private time-shifting to continue, at least for an
experimental time period.

If there are millions of owners of VTRs who make copies of televised sports events, religious
broadcasts, and educational programs, and if the proprietors of those programs welcome the
practice, the business of supplying the equipment that makes such copying feasible
should not be stifled simply because the equipment is used by some individuals to make
unauthorized reproductions of respondents' works. The respondents do not represent a
class composed of all copyright holders. Yet a finding of contributory infringement would
inevitably frustrate the interests of broadcasters in reaching the portion of their audience that is
available only through time-shifting.

Of course, the fact that other copyright holders may welcome the practice of time-shifting does
not mean that respondents should be deemed to have granted a license to copy their programs.
Third-party conduct would be wholly irrelevant in an action for direct infringement of
respondents' copyrights. But in an action for contributory infringement against the seller of
copying equipment, the copyright holder may not prevail unless the relief that he seeks affects
only his programs, or unless he speaks for virtually all copyright holders with an interest in the
outcome.

In this case, the record makes it perfectly clear that there are many important producers of
national and local television programs who find nothing objectionable about the enlargement in
the size of the television audience that results from the practice of time-shifting for private home
use. The seller of the equipment that expands those producers' audiences cannot be a
contributory infringer if, as is true in this case, it has had no direct involvement with any
infringing activity.

ISSUE: WON Sony's sale of such equipment to the general public constitutes contributory
infringement of respondents' copyrights

RULING: NO.

Unauthorized time-shifting

Even unauthorized uses of a copyrighted work are not necessarily infringing. An unlicensed use
of the copyright is not an infringement unless it conflicts with one of the specific exclusive rights
conferred by the copyright statute.
Moreover, the definition of exclusive rights in § 106 of the present Act is prefaced by the words
"subject to sections 107 through 118." Those sections describe a variety of uses of copyrighted
material that "are not infringements of copyright" "notwithstanding the provisions of section 106."
The most pertinent in this case is § 107, the legislative endorsement of the doctrine of "fair
use."

That section identifies various factors that enable a court to apply an "equitable rule of reason"
analysis to particular claims of infringement.

Although not conclusive, the first factor requires that "the commercial or nonprofit character of
an activity" be weighed in any fair use decision. If the Betamax were used to make copies for
a commercial or profit-making purpose, such use would presumptively be unfair. The
contrary presumption is appropriate here, however, because the District Court's findings plainly
establish that time-shifting for private home use must be characterized as a noncommercial,
nonprofit activity. Moreover, when one considers the nature of a televised copyrighted
audiovisual work and that time-shifting merely enables a viewer to see such a work which he
had been invited to witness in its entirety free of charge, the fact that the entire work is
reproduced, does not have its ordinary effect of militating against a finding of fair use.

This is not, however, the end of the inquiry, because Congress has also directed us to consider
"the effect of the use upon the potential market for or value of the copyrighted work." The
purpose of copyright is to create incentives for creative effort. Even copying for noncommercial
purposes may impair the copyright holder's ability to obtain the rewards that Congress intended
him to have. But a use that has no demonstrable effect upon the potential market for, or the
value of, the copyrighted work need not be prohibited in order to protect the author's incentive to
create. The prohibition of such noncommercial uses would merely inhibit access to ideas
without any countervailing benefit.

Thus, although every commercial use of copyrighted material is presumptively an unfair

exploitation of the monopoly privilege that belongs to the owner of the copyright,
noncommercial uses are a different matter.

A challenge to a noncommercial use of a copyrighted work requires proof either that the
particular use is harmful or that, if it should become widespread, it would adversely affect the
potential market for the copyrighted work. Actual present harm need not be shown; such a
requirement would leave the copyright holder with no defense against predictable damage. Nor
is it necessary to show with certainty that future harm will result. What is necessary is a showing
by a preponderance of the evidence that some meaningful likelihood of future harm exists. If the
intended use is for commercial gain, that likelihood may be presumed. But if it is for a
noncommercial purpose, the likelihood must be demonstrated.

In this case, respondents failed to carry their burden with regard to home time-shifting.

The District Court's conclusions are buttressed by the fact that to the extent time-shifting
expands public access to freely broadcast television programs, it yields societal benefits.

In Community Television of Southern California v. Gottfried (1983), we acknowledged the public

interest in making television broadcasting more available. Concededly, that interest is not
unlimited. But it supports an interpretation of the concept of "fair use" that requires the
copyright holder to demonstrate some likelihood of harm before he may condemn a
private act of time-shifting as a violation of federal law.
When these factors are all weighed in the "equitable rule of reason" balance, we must conclude
that this record amply supports the District Court's conclusion that home time-shifting is fair use.

In summary, the record and findings of the District Court lead us to two conclusions. First, Sony
demonstrated a significant likelihood that substantial numbers of copyright holders who license
their works for broadcast on free television would not object to having their broadcasts time-
shifted by private viewers. And second, respondents failed to demonstrate that time-shifting
would cause any likelihood of non-minimal harm to the potential market for, or the value of, their
copyrighted works. The Betamax is, therefore, capable of substantial non-infringing uses.
Sony's sale of such equipment to the general public does not constitute contributory
infringement of respondents' copyrights.

NOTES:

1) Copyright protection "subsists . . . in original works of authorship fixed in any tangible medium
of expression." This protection has never accorded the copyright owner complete control over
all possible uses of his work. Rather, the Copyright Act grants the copyright holder "exclusive"
rights to use and to authorize the use of his work in five qualified ways, including reproduction of
the copyrighted work in copies. All reproductions of the work, however, are not within the
exclusive domain of the copyright owner; some are in the public domain. Any individual may
reproduce a copyrighted work for a "fair use"; the copyright owner does not possess the
exclusive right to such a use.

"Anyone who violates any of the exclusive rights of the copyright owner," that is, anyone who
trespasses into his exclusive domain by using or authorizing the use of the copyrighted work in
one of the five ways set forth in the statute, "is an infringer of the copyright." Conversely,
anyone who is authorized by the copyright owner to use the copyrighted work in a way specified
in the statute or who makes a fair use of the work is not an infringer of the copyright with
respect to such use.

The Copyright Act provides the owner of a copyright with a potent arsenal of remedies against
an infringer of his work, including an injunction to restrain the infringer from violating his rights,
the impoundment and destruction of all reproductions of his work made in violation of his rights,
a recovery of his actual damages and any additional profits realized by the infringer or a
recovery of statutory damages, and attorney's fees.

2) The Copyright Act does not expressly render anyone liable for infringement committed by
another. In contrast, the Patent Act expressly brands anyone who "actively induces infringement
of a patent" as an infringer and further imposes liability on certain individuals labeled
"contributory" infringers. The absence of such express language in the copyright statute does
not preclude the imposition of liability for copyright infringements on certain parties who have
not themselves engaged in the infringing activity. For vicarious liability is imposed in virtually all
areas of the law, and the concept of contributory infringement is merely a species of the broader
problem of identifying the circumstances in which it is just to hold one individual accountable for
the actions of another.

In the Patent Act, both the concept of infringement and the concept of contributory infringement
are expressly defined by statute. The prohibition against contributory infringement is confined to
the knowing sale of a component especially made for use in connection with a particular patent.
There is no suggestion in the statute that one patentee may object to the sale of a product that
might be used in connection with other patents. Moreover, the Act expressly provides that the
sale of a "staple article or commodity of commerce suitable for substantial noninfringing use" is
not contributory infringement.

When a charge of contributory infringement is predicated entirely on the sale of an article of

commerce that is used by the purchaser to infringe a patent, the public interest in access to that
article of commerce is necessarily implicated. A finding of contributory infringement does not, of
course, remove the article from the market altogether; it does, however, give the patentee
effective control over the sale of that item. Indeed, a finding of contributory infringement is
normally the functional equivalent of holding that the disputed article is within the monopoly
granted to the patentee.

For that reason, in contributory infringement cases arising under the patent laws, the Court has
always recognized the critical importance of not allowing the patentee to extend his monopoly
beyond the limits of his specific grant. These cases deny the patentee any right to control the
distribution of unpatented articles unless they are "unsuited for any commercial noninfringing
use." Unless a commodity "has no use except through practice of the patented method," the
patentee has no right to claim that its distribution constitutes contributory infringement. "To form
the basis for contributory infringement, the item must almost be uniquely suited as a component
of the patented invention."

"[A] sale of an article which though adapted to an infringing use is also adapted to other and
lawful uses, is not enough to make the seller a contributory infringer. Such a rule would block
the wheels of commerce."

We recognize there are substantial differences between the patent and copyright laws. But in
both areas, the contributory infringement doctrine is grounded on the recognition that adequate
protection of a monopoly may require the courts to look beyond actual duplication of a device or
publication to the products or activities that make such duplication possible. The staple article of
commerce doctrine must strike a balance between a copyright holder's legitimate demand for
effective -- not merely symbolic -- protection of the statutory monopoly, and the rights of others
freely to engage in substantially unrelated areas of commerce. Accordingly, the sale of copying
equipment, like the sale of other articles of commerce, does not constitute contributory
infringement if the product is widely used for legitimate, unobjectionable purposes. Indeed, it
need merely be capable of substantial non-infringing uses.

3) "The direction of Art. I, § 8, of the Constitution is that Congress shall have the power to
promote the progress of science and the useful arts. When, as here, the Constitution is
permissive, the sign

of how far Congress has chosen to go can come only from Congress." One may search the
Copyright Act in vain for any sign that the elected representatives of the millions of people who
watch television every day have made it unlawful to copy a program for later viewing at home,
or have enacted a flat prohibition against the sale of machines that make such copying possible.

4) It was settled that the protection given to copyrights is wholly statutory. Sound policy, as well
as history, supports our consistent deference to Congress when major technological innovations
alter the market for copyrighted materials. Congress has the constitutional authority and the
institutional ability to accommodate fully the varied permutations of competing interests that are
inevitably implicated by such new technology. We are guided by Justice Stewart's exposition of
the correct approach to ambiguities in the law of copyright:
 
"The limited scope of the copyright holder's statutory monopoly, like the limited copyright
duration required by the Constitution, reflects a balance of competing claims upon the
public interest: creative work is to be encouraged and rewarded, but private motivation
must ultimately serve the cause of promoting broad public availability of literature, music,
and the other arts. The immediate effect of our copyright law is to secure a fair return for
an 'author's' creative labor. But the ultimate aim is, by this incentive, to stimulate artistic
creativity for the general public good.”

11. Dr. Seuss v. Penguin Books, March 27, 1997 - Monique

FACTS: Seuss, a California limited partnership, owns most of the copyrights and trademarks to
the works of the late Theodor S. Geisel aka “Dr. Seuss,” one of which is “The Cat in the Hat.”
The character of The Cat is depicted with his distinctive scrunched and somewhat shabby red
and white stove-pipe hat. Seuss owns the common law trademark rights to the words “Dr.
Seuss” and “Cat in the Hat,” as well as the character illustration of the Cat's stove-pipe hat. In
addition, Seuss has trademark registrations for the marks currently pending with the United
States Trademark Office. Seuss has licensed the Dr. Seuss marks, including The Cat in the Hat
character, for use on clothing, in interactive software, and in a theme park.

In 1995, Alan Katz and Chris Wrinn, respectively, wrote and illustrated The Cat NOT in the Hat!
A Parody by Dr. Juice, satirizing the O.J. Simpson double murder trial. Penguin and Dove, the
publishers and distributors, were not licensed or authorized to use any of the works, characters
or illustrations owned by Seuss. They also did not seek permission from Seuss to use these
properties. Seuss filed a complaint for copyright and trademark infringement, an application for
a temporary restraining order and a preliminary injunction.

Seuss filed suit under the enforcement provisions of the Copyright Code; the Lanham Act,; the
Federal Trademark Dilution Act of 1995; and the California Unfair Competition Statute. The
district court granted Seuss' request for a preliminary injunction prohibiting the publication and
distribution of the books. Penguin and Dove interlocutorily appeal the district court's preliminary
injunction

Penguin and Dove, maintain that they have not infringed on any one of Seuss' exclusive rights
of copyright because The Cat NOT in the Hat! employed elements of the copyrighted work that
are either uncopyrightable or that have fallen into the public domain. Penguin and Dove's
argument is based on an analytic dissection of the following elements: (1) infringement cannot
be based on the title of the parody because it is “clear, as a matter of statutory construction by
the courts (as well as Copyright Office regulations), that titles may not claim statutory copyright.”
(2) the design of the lettering of the words used in the accused work cannot be found to infringe,
because Congress decided not to award copyright protection to design elements of letters; (3)
the poetic meter used in Cat in the Hat known as anapestic tetrameter is no more capable of
exclusive ownership than its well-known counterpart, iambic pentameter; (4) no claim of
ownership may be based on the whimsical poetic style that employs neologisms and
onomatopoeia. and (5) the visual style of illustration using line drawing, coloring, and shading
techniques similar to those used in The Cat in the Hat are not copyrightable. 

ISSUE #1: whether The Cat NOT in the Hat! infringes on Seuss' rights under the Copyright Act
of 1976?

RULING: Yes. To prove a case of copyright infringement, Seuss must prove both (1) ownership
of a valid copyright and (2) infringement of that copyright by invasion of one of the five exclusive
rights. First, Seuss is the owner of the Dr. Seuss copyrights and holds valid copyright
registration certificates. Second, Katz admitted that the “style of the illustrations and lettering
used in [The Cat NOT in the Hat! ] were inspired by [The Cat in the Hat ]. ․” To satisfy the
infringement test, Seuss must demonstrate “substantial similarity ” between the
copyrighted work and the allegedly infringing work. “Substantial similarity” refers to similarity of
expression, not merely similarity of ideas or concepts. To demonstrate “substantial similarity,”
an inquiry must first be made if there is copying and second if an audience of reasonable
persons will perceive substantial similarities between the accused work and protected
expression of the copyrighted work. The first question is labeled the “extrinsic” test and asks if
there is similarity of ideas. “Analytic dissection” is allowed. The second is labeled the
“intrinsic” test and asks if an “ordinary reasonable person” would perceive a substantial taking
of protected expression. At this stage, “analytical dissection” is not appropriate.

“The Cat in the Hat” is the central character in the original work, appearing in nearly every page
of the Dr. Seuss work (26 times). Penguin and Dove appropriated the Cat's image, copying the
Cat's Hat and using the image on the front and back covers and in the text (13 times). We
conclude that substantial similarity exists on an objective and subjective level (see
attachments # 1 and # 2). Penguin and Dove, however, maintain that they have not infringed on
any one of Seuss' exclusive rights of copyright because The Cat NOT in the Hat! employed
elements of the copyrighted work that are either uncopyrightable or that have fallen into the
public domain.

Penguin and Dove's argument is based on an analytic dissection. However, this kind of analytic
dissection is not appropriate when conducting the subjective or “intrinsic test” (asking if an
“ordinary reasonable person” would perceive a substantial taking of protected expression) under
Krofft. Penguin and Dove's contentions on this issue are thus unavailing.

As for the objective analysis of expression, the district court's preliminary injunction was granted
based on the back cover illustration and the Cat's Hat, not the typeface, poetic meter, whimsical
style or visual style. For these reasons, we conclude that the court's findings that Penguin and
Dove infringed on Seuss' copyrights are not clearly erroneous.

ISSUE #2: Even if Seuss establishes a strong showing of copyright infringement on these facts,
can Penguin and Dove be excused under the fair use doctrine?

RULING: NO. The fair use defense “permits courts to avoid rigid application of the copyright
statute when, on occasion, it would stifle the very creativity which that law is designed to foster.”

Four factors are to be considered and weighed by the courts in determining if a fair use defense
exists in a given case: 
First Factor: the purpose and character of the accused use. The inquiry is whether The Cat NOT
in the Hat! merely supersedes the Dr. Seuss creations, or whether and to what extent the new
work is “transformative,” i.e., altering The Cat in the Hat with new expression, meaning or
message. Parody is regarded as a form of social and literary criticism, having a socially
significant value as free speech under the First Amendment. This court has adopted the
“conjure up” test where the parodist is permitted a fair use of a copyrighted work if it takes no
more than is necessary to “recall” or “conjure up” the object of his parody. Accordingly, the
critical issue under this factor is whether The Cat NOT in the Hat! Is a parody. (“The threshold
question when fair use is raised in defense of parody is whether a parodic character may
reasonably be perceived.”)

For the purposes of copyright law, the nub of the definitions, and the heart of any parodist's
claim to quote from existing material, is the use of some elements of a prior author's
composition to create a new one that, at least in part, comments on that author's works ․
If, on the contrary, the commentary has no critical bearing on the substance or style of the
original composition, which the alleged infringer merely uses to get attention or to avoid the
drudgery in working up something fresh, the claim to fairness in borrowing from another's work
diminishes accordingly (if it does not vanish), and other factors, like the extent of its
commerciality, loom larger.

“The parody must target the original, and not just its general style, the genre of art to which it
belongs, or society as a whole (although if it targets the original, it may target those features as
well).”

The stanzas in “The Cat NOT in the Hat!” and the illustrations simply retell the Simpson tale.
Although The Cat NOT in the Hat! does broadly mimic Dr. Seuss' characteristic style, it does not
hold his style up to ridicule. The stanzas have “no critical bearing on the substance or style
of” The Cat in the Hat. Katz and Wrinn merely use the Cat's stove-pipe hat, the narrator
(“Dr.Juice”), and the title (The Cat NOT in the Hat! ) “to get attention” or maybe even “to
avoid the drudgery in working up something fresh.”

Because there is no effort to create a transformative work with “new expression,

meaning, or message,” the infringing work's commercial use further cuts against the fair
use defense.

Second factor: the nature of the copyrighted work. Recognizes that creative works are “closer to
the core of intended copyright protection” than informational and functional works, “with the
consequence that fair use is more difficult to establish when the former works are copied.” While
this factor typically has not been terribly significant in the overall fair use balancing, the
creativity, imagination and originality embodied in The Cat in the Hat and its central character
tilts the scale against fair use.

Third factor: the importance of the portion used in relation to the copyrighted work as a whole.
Asks whether “the amount and substantiality of the portion used in relation to the copyrighted
work as a whole,” are reasonable in relation to the purpose of the copying. This factor really
raises the question of substantial similarity discussed in the preceding section, rather than
whether the use is “fair.” The district court concluded that “The Cat in the Hat” is the central
character, appearing in nearly every image of The Cat in the Hat. Penguin and Dove
appropriated the Cat's image, copying the Cat's Hat and using the image on the front and back
covers and in the text (13 times). We have no doubt that the Cat's image is the highly
expressive core of Dr. Seuss' work.

Under this factor, we also turn our attention “to the persuasiveness of a parodist's justification
for the particular copying done. Katz and Wrinn insist that they selected The Cat in the Hat as
the vehicle for their parody because of the similarities between the two stories: Nicole Brown
and Ronald Goldman were surprised by a “Cat” (O.J.Simpson) who committed acts contrary to
moral and legal authority. We completely agree with the district court that Penguin and Dove's
fair use defense is “pure shtick” and that their post-hoc characterization of the work is
“completely unconvincing.”

Fourth factor: the effect of the use upon the potential market for or value of the copyrighted
work. Under this factor, we consider both the extent of market harm caused by the publication
and distribution of The Cat NOT in the Hat! and whether unrestricted and widespread
dissemination would hurt the potential market for the original and derivatives of The Cat in the
Hat. The good will and reputation associated with Dr. Seuss' work is substantial. Because, on
the facts presented, Penguin and Dove's use of The Cat in the Hat original was non
transformative, and admittedly commercial, we conclude that market substitution is at least
more certain, and market harm may be more readily inferred. Given their failure to submit
evidence on this point, instead confining “themselves to uncontroverted submissions that there
was no likely effect on the market for the original,” we conclude that “it is impossible to deal with
the fourth factor except by recognizing that a silent record on an important factor bearing on fair
use disentitle[s] the proponent of the defense.

In light of the fair use analysis, we conclude that the district court's finding that Seuss showed a
likelihood of success on the merits of the copyright claim was not clearly erroneous.

ISSUE #3: Is there trademark infringement?

RULING: No. A federal claim under Lanham Act § 43(a) for infringement of an unregistered
mark is triggered by a use which “is likely to cause confusion, or to cause mistake, or to deceive
as to the affiliation, connection, or association” of The Cat NOT in the Hat! with Seuss' The Cat
in the Hat.

The eight-factor Sleekcraft test is used in the Ninth Circuit to analyze the likelihood of confusion
question in all trademark infringement cases, both competitive and non-competitive. The eight
factors are as follows: (1) strength of the mark; (2) proximity of the goods; (3) similarity of the
marks; (4) evidence of actual confusion; (5) marketing channels used; (6) type of goods and the
degree of care likely to be exercised by the purchaser; (7) defendant's intent in selecting the
mark; (8) likelihood of expansion of the product lines.

We agree with the district court's findings that under Sleekcraft many of the factors for analysis
of trademark infringement were indeterminate and posed serious questions for litigation. First,
Penguin and Dove do not dispute that the Cat's stovepipe hat, the words “Dr. Seuss,” and the
title “The Cat in the Hat” are widely recognized trademarks.15 Second and third, the proximity
and similarity between the marks and the infringing items are substantial: figures on the front
and back of the infringing work; the Cat's stove-pipe hat; the narrator (“Dr. Seuss” versus “Dr.
Juice”); and the title (The Cat in the Hat versus The Cat NOT in the Hat! ).
Fourth, there is no evidence of actual confusion. Because The Cat NOT in the Hat! has been
enjoined from distribution, there has been no opportunity to prove confusion in the market place.
Fifth, the marketing channels used are indeterminate. Sixth, the use of the Cat's stove-pipe hat
or the confusingly similar title to capture initial consumer attention, even though no actual sale is
finally completed as a result of the confusion, may be still an infringement. Seventh, Penguin
and Dove's likely intent in selecting the Seuss marks was to draw consumer attention to what
would otherwise be just one more book on the O.J. Simpson murder trial. Eighth and last, the
likelihood of expansion of the product lines is indeterminate.

12. Castle Rock Entertainment v. Carol Publishing, 150 F. 3d 132 (2d Cir.
1998) - Jeck

FACTS: Plaintiff Castle Rock Entertainment, Inc. owned the copyrights for the entire Seinfeld
television series. Defendants, author Beth B. Golub and publisher Carol Publishing Group, Inc.,
released a book titled The Seinfeld Aptitude Test (The SAT), a 132-page book that contained
643 trivia questions and answers about the characters and events in Seinfeld. The book drew
from eighty-four of the eighty-six Seinfeld episodes broadcast up to that time and included direct
quotes. The district court ruled against defendants, finding that this was not fair use. Defendants
appealed.

ISSUE: Whether defendants’ use of copyright protected aspects of a television series to create
a trivia book for fans of the series constituted fair use.

RULING: The Second Circuit held that defendants’ unauthorized use of the copyright protected
aspects of the television series was not fair use. The court determined that defendants’ use was
commercial and, more importantly, non- transformative because The SAT did not provide
commentary or analysis about Seinfeld or act as a research tool, but instead “[repackaged]
Seinfeld to entertain Seinfeld viewers.” The court then noted that defendants’ creation of 643
questions based on the television series was more than was necessary to advance defendants’
purported “commentary” of the show, further suggesting that the book’s purpose was
entertainment. Turning to the effect on the potential market, the court found that although Castle
Rock had shown little interest in exploiting the market for Seinfeld-related books, the
defendants’ work substituted for the derivative market for such books, and the court noted that
“copyright law must respect [the] creative and economic choice” of plaintiffs not to exploit a
particular market.

DIGEST DIRECTLY FROM THE US GOVERNMENT

13. Monster Communications v. Turner Broadcasting, 935 F. Supp 490

(S.D. N.Y. 1996) - Mikko

FACTS: Monster made and owns an 84-minute motion picture called “When We Were Kings”
(Kings) which is scheduled for world theatrical release in October 1996. The film is on account
of the 1974 heavyweight title fight between Muhammed Ali and George Foreman. It is a serious
film, and it recently won a grand jury award at the Sundance Film Festival. Monster claims that a
documentary called “Ali The Whole Story” (Story), which is scheduled to premiere on Turner
Network TV infringes its copyright in film footage contained in Kings because Story contains a
number of film clips aggregating approximately between 41 seconds and two minutes, that
appear in Kings and allegedly are owned by Monster. Monster filed an action for preliminary
injunction. 

Turner argues that (1) Monster has failed to present a copyright registration in the allegedly
infringed film footage, which Turner argues is an absolute prerequisite to a suit for infringement,
(2) the registration for Kings extends only to that film and not to the underlying footage, and (3)
Story’s use of the disputed footage is a fair use and de minimis.

ISSUE: Did Monster fail to present a copyright registration and if it did, does it extend only to
Kings and not to its underlying footage?

RULING: No.

Registration is a prerequisite to a suit for statutory damages under the Copyright Act, but not to
a suit for injunctive relief. Also, registration of  “a collective work satisfies the requirements
under the law for purposes of bringing an action for infringement of any of the constituent parts.”
Whether Kings is properly characterized as a collective rather than a derivative work is an
interesting question. However, they need not be decided in order to dispose of this motion

ISSUE: Does Story’s use of the disputed footage a fair use and de minimis?

RULING: Yes.

Section 107 of the Copyright Act, codifies the defense of fair use. One may use and reproduce a
copyrighted work "for purposes such as criticism, comment, news reporting, teaching ...,
scholarship, or research" provided the use is a fair one. The factors to be considered in
determining the fairness of the use include " (1) the purpose and character of the use, including
whether such use is of a commercial nature or is for nonprofit educational purposes; (2) the
nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation
to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or
value of the copyrighted work."

The allegedly infringing work, Story, is a biography. While it is commercial in nature, it

"undeniably constitutes a combination of comment, criticism, scholarship and research, all of
which enjoy favored status. As Turner argues, there can be little doubt that Ali is a figure of
legitimate public concern and that his television biography is a subject of public interest. Hence,
the first of the fair use factors cuts in favor of Turner

The second of the factors, the nature of the copyrighted work, focuses on the degree of
creativity of the copyrighted work. "[T]he more creative the primary work, the more protection it
should be accorded from copying." Here there is no doubt in the Court's mind that plaintiff's film,
Kings, is a creative and notable work. But defendants are not alleged to be infringing Kings.
Rather, the claim is that Story uses certain film clips photographic images of actual historical
events that appear also in Kings. Hence, without denying for a moment the creativity inherent in
the film clips of actual events relating to the Zaire fight, the degree of protection that properly
may be afforded to them must take into account that too narrow a view of the fair use defense
could materially undermine the ability of other Ali biographers to tell, in motion picture or
perhaps still photographic form, an important part of his story. This of course is not to say that
historical film footage loses all copyright protection,[8] only that its character as historical film
footage may strengthen somewhat the hand of a fair use defendant as compared with an
alleged infringer of a fanciful work or a work presented in a medium that offers a greater variety
of forms of expression. Moreover, having viewed both films, the Court finds that Story would not
have been diminished in any material way had it not included the allegedly infringing footage.
On the other hand, the level of creativity inherent in this footage, as distinguished from the use
made of the footage in Kings, appears not to be especially substantial. All things considered, the
second of the fair use factors is essentially neutral.

The third of the fair use factors is the amount and substantiality of the portion used, a factor that
cuts very heavily in favor of Turner for several reasons.

The first is that Kings is 84 minutes in length; Story is 94. The allegedly infringing portions of
Story consist of nine to fourteen film clips aggregating a minimum of 41 seconds and a
maximum of one to two minutes, which is 0.7 to 2.1 percent of the film. A number of the
allegedly infringing clips are less than three seconds long. From any quantitative standpoint, the
allegedly infringing use is small.

Second, the allegedly infringing footage is by no means the focus of Story. Indeed, the two
movies are quite different. Kings is devoted almost entirely to the Zaire fight. It touches only
fleetingly on the rest of Ali's life and career. It focuses heavily on the fact that the Zaire fight
involved two African-American fighters traveling to fight in Africa, the continent of their
ancestors' origin, and the impact of that experience on them and on Zaire. Story, on the other
hand, is a biography of Ali from childhood to the present. It is, as its title promises, "Muhammed
Ali The Whole Story." The segment concerning the Zaire fight occupies approximately nine of its
94 minutes. It is a very different work.

Third, the Court viewed both movies within a short span of hours, Kings first and then Story, for
the purpose of attempting to detect in Story, without prompting, whether and to what extent it
employed footage used in Kings. Although there were a couple of occasions on which such
uses were apparent, they were far fewer than the seventeen that plaintiff claims exist. That of
course is not to say that the parties are mistaken. Rather, the conclusion that flows is that the
allegedly infringing uses are not particularly noticeable even if one is looking for them. For all of
these reasons, the Court finds that the "amount and substantiality" factor strongly favors the
defendants.

The final fair use factor, the effect of the infringing use on the market for the original copyrighted
work, is the most important. In considering it, however, it is critical to bear in mind that the only
effect of which plaintiff properly may complain is that caused by the alleged infringement. In
other words, the issue here is not whether the wide dissemination of Turner's television
biography of Ali only weeks before the theatrical release of Monster's film will undercut the
market for Kings. It is whether the use in Turner's film of up to fourteen clips of historical
footage, aggregating between 41 seconds and two minutes, will undercut the market for Kings.
Having viewed both movies, the Court concludes that the segments in Story are unlikely to have
any such effect. The uses in Story are too few, too short, and too small in relation to the whole.
If the broadcast of Story impacts Kings' reception, it almost surely will be as a result of their
common subject, not their minute or so of common footage.

14. Kelly v. Arriba-Soft, 336 F. 3d 811 (9 Cir. 2003) - Mikko

th

FACTS: This case involves the application of copyright law to the vast world of the internet and
internet search engines. The plaintiff, Leslie Kelly, is a professional photographer who has
copyrighted many of his images of the American West. Some of these images are located on
Kelly's web site or other web sites with which Kelly has a license agreement. The defendant,
Arriba Soft Corp.,1 operates an internet search engine that displays its results in the form of
small pictures rather than the more usual form of text. Arriba obtained its database of pictures
by copying images from other web sites. By clicking on one of these small pictures, called
"thumbnails," the user can then view a large version of that same picture within the context of
the Arriba web page. When Kelly discovered that his photographs were part of Arriba's search
engine database, he brought a claim against Arriba for copyright infringement.

ISSUE: WON Arriba’s use of Kelly’s pictures were fair use?

RULING: Qualify.

The district court's decision in this case involves two distinct actions by Arriba that warrant
analysis. The first action consists of the reproduction of Kelly's images to create the thumbnails
and the use of those thumbnails in Arriba's search engine. The second action involves the
display of Kelly's larger images when the user clicks on the thumbnails. We conclude that, as to
the first action, the district court correctly found that Arriba's use was fair. However, as to the
second action, we conclude that the district court should not have reached the issue because
neither party moved for summary judgment as to the full-size images and Arriba's response to
Kelly's summary judgment motion did not concede the prima facie case for infringement as to
those images.

ISSUE: Discuss the four fair use factors as applied in the case.

RULING: 1. Purpose and character of the use

There is no dispute that Arriba operates its web site for commercial purposes and that Kelly's
images were part of Arriba's search engine database. As the district court found, while such use
of Kelly's images was commercial, it was more incidental and less exploitative in nature than
more traditional types of commercial use. Arriba was neither using Kelly's images to directly
promote its web site nor trying to profit by selling Kelly's images. Instead, Kelly's images were
among thousands of images in Arriba's search engine database. Because the use of Kelly's
images was not highly exploitative, the commercial nature of the use weighs only slightly
against a finding of fair use.

The second part of the inquiry as to this factor involves the transformative nature of the use. We
must determine if Arriba's use of the images merely superseded the object of the originals or
instead added a further purpose or different character. We find that Arriba's use of Kelly's
images for its thumbnails was transformative.

This case involves more than merely a retransmission of Kelly's images in a different medium.
Arriba's use of the images serves a different function than Kelly's use — improving access to
information on the internet versus artistic expression. Furthermore, it would be unlikely that
anyone would use Arriba's thumbnails for illustrative or aesthetic purposes because enlarging
them sacrifices their clarity. Because Arriba's use is not superseding Kelly's use but, rather, has
created a different purpose for the images, Arriba's use is transformative.

2. Nature of the copyrighted work

"Works that are creative in nature are closer to the core of intended copyright protection than
are more fact-based works." Photographs that are meant to be viewed by the public for
informative and aesthetic purposes, such as Kelly's, are generally creative in nature. The fact
that a work is published or unpublished also is a critical element of its nature. Published works
are more likely to qualify as fair use because the first appearance of the artist's expression has
already occurred. Kelly's images appeared on the internet before Arriba used them in its search
image. When considering both of these elements, we find that this factor weighs only slightly in
favor of Kelly.

3. Amount and substantiality of portion used

This factor neither weighs for nor against either party because, although Arriba did copy each of
Kelly's images as a whole, it was reasonable to do so in light of Arriba's use of the images. It
was necessary for Arriba to copy the entire image to allow users to recognize the image and
decide whether to pursue more information about the image or the originating web site. If Arriba
only copied part of the image, it would be more difficult to identify it, thereby reducing the
usefulness of the visual search engine.

4. Effect of the use upon the potential market for or value of the copyrighted work.

Arriba's use of Kelly's images in its thumbnails does not harm the market for Kelly's images or
the value of his images. By showing the thumbnails on its results page when users entered
terms related to Kelly's images, the search engine would guide users to Kelly's web site rather
than away from it. Even if users were more interested in the image itself rather than the
information on the web page, they would still have to go to Kelly's site to see the full-sized
image. The thumbnails would not be a substitute for the full-sized images because the
thumbnails lose their clarity when enlarged. If a user wanted to view or download a quality
image, he or she would have to visit Kelly's web site. This would hold true whether the
thumbnails are solely in Arriba's database or are more widespread and found in other search
engine databases.

Arriba's use of Kelly's images also would not harm Kelly's ability to sell or license his full-sized
images. Arriba does not sell or license its thumbnails to other parties.  Anyone who downloaded
the thumbnails would not be successful selling full-sized images enlarged from the thumbnails
because of the low resolution of the thumbnails. There would be no way to view, create, or sell a
clear, full-sized image without going to Kelly's web sites. Therefore, Arriba's creation and use of
the thumbnails does not harm the market for or value of Kelly's images. This factor weighs in
favor of Arriba.

Having considered the four fair use factors and found that two weigh in favor of Arriba,
one is neutral, and one weighs slightly in favor of Kelly, we conclude that Arriba's use of
Kelly's images as thumbnails in its search engine is a fair use.

NOTES:

The district court granted summary judgment to Arriba as to the full-size images as well.
However, because the court broadened the scope of both the parties' motions for partial
summary judgment and Arriba's concession on the prima facie case, we must reverse this
portion of the court's opinion.

With limited exceptions that do not apply here, a district court may not grant summary judgment
on a claim when the party has not requested it. The parties did not move for summary judgment
as to copyright infringement of the full-size images. Further, Arriba had no opportunity to contest
the prima facie case for infringement as to the full-size images. Accordingly, we reverse this
portion of the district court's opinion and remand for further proceedings.

15. Kienitz v. Sconnie Nation, No. 13-3004 (7 Cir. September 15, 2014) -
th

Dyann

FACTS:

In 1969, Paul Soglin attended the first Mifflin Street Block Party. Now, as as Mayor of
Madison, Wisconsin, Soglin wants to shut down the annual event.

 For the 2012 Block Party, Sconnie Nation made some t-shirts and tank tops displaying
an image of Soglin's face and the phrase “Sorry for Partying.” The 54 sales, on which
Sconnie Nation cleared a small profit, led to this suit, in which photographer Michael
Kienitz accuses Sconnie Nation and its vendor of copyright infringement.

 Sconnie Nation concedes starting with a photograph that Kienitz took at Soglin's
inauguration. Soglin (with Kienitz's permission) had posted it on the City's website, from
which Sconnie Nation downloaded a copy. The photograph was posterized, the
background was removed, and Soglin's face was turned lime green and surrounded by
multi-colored writing.

A magistrate judge granted summary judgment for the defendants, holding that Sconnie
Nation had made fair use of the photo. Fair use is a statutory defense to
infringement. The Copyright Act sets out 4 non-exclusive factors for a court to
consider.

The district court and the parties have debated whether the t-shirts are a “transformative
use” of the photo—and, if so, just how “transformative” the use must be. That's not one
of the statutory factors, though the SC mentioned it in Campbell v. Acuff–Rose Music,
Inc. The Second Circuit has run with the suggestion and concluded that “transformative
use” is enough to bring a modified copy within the scope of the law.

ISSUE: Whether or not the contested use is a complement to the protected work
(allowed) or a substitute for it (prohibited)?

RULING: It is a complement to the protected work.

A t-shirt or tank top is no substitute for the original photograph. Nor does Kienitz say
that defendants disrupted a plan to license this work for apparel. Kienitz does not argue
that defendants' products have reduced the demand for the original work or any use of it
that he is contemplating.

Here is the list in § 107:

In determining whether the use made of a work in any particular case is a fair
use the factors to be considered shall include—
 (1) the purpose and character of the use, including whether such use is of a
commercial nature or is for nonprofit educational purposes;

(2) the nature of the copyrighted work;

(3) the amount and substantiality of the portion used in relation to the copy
righted work as a whole; and

(4) the effect of the use upon the potential market for or value of the copyrighted
work.

Other than factor (4), only (3)—the amount taken in relation to the copyrighted work as
a whole—has much bite in this litigation. Defendants removed so much of the original
that, as with the Cheshire Cat, only the smile remains.

Defendants started with a low resolution version posted on the City's website, so much
of the original's detail never had a chance to reach the copy; the original's background
is gone; its colors and shading are gone; the expression in Soglin's eyes can no longer
be read; after the posterization (and reproduction by silk-screening), the effect of the
lighting in the original is almost extinguished. What is left, besides a hint of Soglin's
smile, is the outline of his face, which can't be copyrighted. Defendants could have
achieved the same effect by starting with a snap-shot taken on the street.

The other statutory factors don't do much in this case. Consider (1), for example.
Defendants sold their products in the hope of profit, and made a small one, but they
chose the design as a form of political commentary. Factor (2) is unilluminating, and as
we have mentioned Kienitz does not argue that defendants' acts have reduced the
value of this photograph, which he licensed to Soglin at no royalty and which is posted
on a public website for viewing and downloading without cost.

Two things can be said for Kienitz. First, defendants did not need to use the copyrighted
work. They wanted to mock the Mayor, not to comment on Kienitz's skills as a
photographer or his artistry in producing this particular photograph. There's no good
reason why defendants should be allowed to appropriate someone else's copyrighted
efforts as the starting point in their lampoon, when so many non-copyrighted
alternatives (including snapshots they could have taken themselves) were available.
The fair-use privilege under § 107 is not designed to protect lazy appropriators.
Its goal instead is to facilitate a class of uses that would not be possible if users
always had to negotiate with copyright proprietors. (Many copyright owners would
block all parodies, for example, and the administrative costs of finding and obtaining
consent from copyright holders would frustrate many academic uses.)

Second, this use may injure Kienitz's long-range commercial opportunities, even though
it does not reduce the value he derives from this particular picture. He promises his
subjects that the photos will be licensed only for dignified uses. Fewer people will hire or
cooperate with Kienitz if they think that the high quality of his work will make the photos
more effective when used against them! But Kienitz does not present an argument
along these lines, and the consideration in the preceding paragraph is not enough to
offset the fact that, by the time defendants were done, almost none of the copyrighted
work remained. The district court thus reached the right conclusion.

16. Cariou v. Prince, No. 11-1197 (2d Cir. 2013) - Emman

FACTS: Cariou is a professional photographer who, over the course of six years in the mid-
1990s, lived and worked among Rastafarians in Jamaica. The relationships that Cariou
developed with them allowed him to take a series of portraits and landscape photographs that
Cariou published in 2000 in a book titled Yes Rasta. Cariou’s publisher, PowerHouse Books,
Inc., printed 7,000 copies of Yes Rasta, in a single printing. As of January 2010, PowerHouse
had sold 5,791 copies, over sixty percent of which sold below the suggested retail price of sixty
dollars. 

Prince is a well-known appropriation artist. Appropriation art is defined as “the more or less
direct taking over into a work of art a real object or even an existing work of art.” Prince’s work,
going back to the mid-1970s, has involved taking photographs and other images that others
have produced and incorporating them into paintings and collages that he then presents, in a
different context, as his own. He is a leading exponent of this genre and his work has been
displayed in museums around the world. 

Between December 2007 and February 2008, Prince had a show at the Eden Rock hotel in St.
Barth’s that included a collage, titled Canal Zone (2007), comprising 35 photographs torn out of
Yes Rasta and pinned to a piece of plywood. Prince altered those photographs significantly, by
among other things painting “lozenges” over their subjects’ facial features and using only
portions of some of the images. In June 2008, Prince purchased three additional copies of Yes
Rasta. He went on to create thirty additional artworks in the Canal Zone series, twenty-nine of
which incorporated partial or whole images from Yes Rasta. The portions of Yes Rasta
photographs used, and the amount of each artwork that they constitute, vary significantly from
piece to piece. In certain works, such as James Brown Disco Ball, Prince affixed headshots
from Yes Rasta onto other appropriated images, all of which Prince placed on a canvas that he
had painted. In these, Cariou's work is almost entirely obscured. The Prince artworks also
incorporate photographs that have been enlarged or tinted, and incorporate photographs
appropriated from artists other than Cariou as well. Yes Rasta is a book of photographs
measuring approximately 9.5″ × 12″. Prince's artworks, in contrast, comprise inkjet printing and
acrylic paint, as well as pasted-on elements, and are several times that size. For instance,
Graduation measures 72 3/4″ × 52 1/2″ and James Brown Disco Ball 100 1/2″ × 104 1/2″. The
smallest of the Prince artworks measures 40″ × 30″, or approximately ten times as large as each
page of Yes Rasta. In other works, such as Graduation, Cariou's original work is readily
apparent: Prince did little more than paint blue lozenges over the subject's eyes and mouth, and
paste a picture of a guitar over the subject's body.

Cariou learned about the Gagosian Canal Zone show in December 2008. On December 30,
2008, he sued Prince, the Gagosian Gallery, and Lawrence Gagosian, raising claims of
copyright infringement. The defendants asserted a fair use defense, arguing that Prince's
artworks are transformative of Cariou's photographs and, accordingly, do not violate Cariou's
copyrights.

Ruling on the parties' subsequently-filed cross-motions for summary judgment, the district court
"imposed a requirement that the new work in some way comment on, relate to the historical
context of, or critically refer back to the original works" in order to be qualify as fair use, and
stated that "Prince's Paintings are transformative only to the extent that they comment on the
Photos." The court concluded that "Prince did not intend to comment on Cariou, on Cariou's
Photos, or on aspects of popular culture closely associated with Cariou or the Photos when he
appropriated the Photos," and for that reason rejected the defendants' fair use defense and
granted summary judgment to Cariou. The district court also granted sweeping injunctive relief,
ordering the defendants to "deliver up for impounding, destruction, or other disposition, as
Cariou determines, all infringing copies of the Photographs, including the Paintings and unsold
copies of the Canal Zone exhibition book, in their possession."  

Thus this appeal.

ISSUE: Whether Prince’s  art works in this case constitute fair use and do not violate Cariou’s
copyrights.

RULING: Qualify. Twenty-five of Prince’s artworks are deemed to have not infringed on Cariou’s
copyrights while the determination as to the other five of Prince’s artworks are remanded back
to the district court.

The Court ruled that their observation of Prince's artworks themselves convinces them of the
transformative nature of all but five. These twenty-five of Prince's artworks manifest an entirely
different aesthetic from Cariou's photographs.

As to the twenty-five artworks:

The Copyright Act of 1976 lists four non-exclusive factors that must be considered in
determining fair use. Under the statute:
 [T]he 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. In determining whether the use made of a
work in any particular case is a fair use the factors to be considered shall include — 

(1) the purpose and character of the use, including whether such use is of a commercial
nature or is for nonprofit educational purposes;

(2) the nature of the copyrighted work; 

(3) the amount and substantiality of the portion used in relation to the copyrighted work
as a whole; and 

(4) the effect of the use upon the potential market for or value of the copyrighted work. 

In relation to the above cited law, the first statutory factor to consider, which addresses the
manner in which the copied work is used, is "the heart of the fair use inquiry." We ask whether
the new work merely `supersedes the objects' of the original creation, or instead adds
something new, with a further purpose or different character, altering the first with new
expression, meaning, or message, in other words, whether and to what extent the new work is
transformative. Transformative works lie at the heart of the fair use doctrine's guarantee of
breathing space... 51 Campbell, 510 U.S. "If `the secondary use adds value to the original — if
the original work is used as raw material, transformed in the creation of new information, new
aesthetics, new insights and understandings — this is the very type of activity that the fair use
doctrine intends to protect for the enrichment of society.'" For a use to be fair, it "must be
productive and must employ the quoted matter in a different manner or for a different purpose
from the original."

The district court based its conclusion that Prince's work is not transformative in large part on
Prince's deposition testimony that he "doesn't really have a message," that he was not "trying to
create anything with a new meaning or a new message," and that he "doesn't have any ...
interest in [Cariou's] original intent." On appeal, Cariou argues that we must hold Prince to his
testimony and that we are not to consider how Prince's works may reasonably be perceived
unless Prince claims that they were satire or parody. No such rule exists, and we do not analyze
satire or parody differently from any other transformative use. The law imposes no requirement
that a work comment on the original or its author in order to be considered transformative, and a
secondary work may constitute a fair use even if it serves some purpose other than those
(criticism, comment, news reporting, teaching, scholarship, and research) identified in the
preamble to the statute.

What is critical is how the work in question appears to the reasonable observer, not simply what
an artist might say about a particular piece or body of work. Prince's work could be
transformative even without commenting on Cariou's work or on culture, and even without
Prince's stated intention to do so. Rather than confining our inquiry to Prince's explanations of
his artworks, we instead examine how the artworks may "reasonably be perceived" in order to
assess their transformative nature. The focus of our infringement analysis is primarily on the
Prince artworks themselves, and we see twenty-five of them as transformative as a matter of
law. 
Here, looking at the artworks and the photographs side-by-side, we conclude that Prince's
images, except for those we discuss separately below, have a different character, give Cariou's
photographs a new expression, and employ new aesthetics with creative and communicative
results distinct from Cariou's. Our conclusion should not be taken to suggest, however, that any
cosmetic changes to the photographs would necessarily constitute fair use. A secondary work
may modify the original without being transformative. For instance, a derivative work that merely
presents the same material but in a new form, such as a book of synopses of televisions shows,
is not transformative. In twenty-five of his artworks, Prince has not presented the same material
as Cariou in a different manner, but instead has "added something new" and presented images
with a fundamentally different aesthetic.

The first fair use factor — the purpose and character of the use — also requires that we
consider whether the allegedly infringing work has a commercial or nonprofit educational
purpose. Although there is no question that Prince's artworks are commercial, we do not place
much significance on that fact due to the transformative nature of the work.

We turn next to the fourth statutory factor, the effect of the secondary use upon the potential
market for the value of the copyrighted work, because such discussion further demonstrates the
significant differences between Prince's work, generally, and Cariou's. Much of the district
court's conclusion that Prince and Gagosian infringed on Cariou's copyrights was apparently
driven by the fact that a potential client decided not to host a Yes Rasta show at her gallery
once she learned of the Gagosian Canal Zone show. The district court determined that this
factor weighs against Prince because he "has unfairly damaged both the actual and potential
markets for Cariou's original work and the potential market for derivative use licenses for
Cariou's original work."

Contrary to the district court's conclusion, the application of this factor does not focus principally
on the question of damage to Cariou's derivative market. We have made clear that "our concern
is not whether the secondary use suppresses or even destroys the market for the original work
or its potential derivatives, but whether the secondary use usurps the market of the original
work." Our court has concluded that an accused infringer has usurped the market for
copyrighted works, including the derivative market, where the infringer's target audience and the
nature of the infringing content is the same as the original. We are mindful that "the more
transformative the secondary use, the less likelihood that the secondary use substitutes for the
original," even though "the fair use, being transformative, might well harm, or even destroy, the
market for the original."

Although certain of Prince's artworks contain significant portions of certain of Cariou's

photographs, neither Prince nor the Canal Zone show usurped the market for those
photographs. Prince's audience is very different from Cariou's, and there is no evidence that
Prince's work ever touched — much less usurped — either the primary or derivative market for
Cariou's work. There is nothing in the record to suggest that Cariou would ever develop or
license secondary uses of his work in the vein of Prince's artworks. Nor does anything in the
record suggest that Prince's artworks had any impact on the marketing of the photographs.
Indeed, Cariou has not aggressively marketed his work, and has earned just over $8,000 in
royalties from Yes Rasta since its publication. He has sold four prints from the book, and only to
personal acquaintances. 

Prince's work appeals to an entirely different sort of collector than Cariou's. Certain of the Canal
Zone artworks have sold for two million or more dollars. The invitation list for a dinner that
Gagosian hosted in conjunction with the opening of the Canal Zone show included a number of
the wealthy and famous. Prince sold eight artworks for a total of $10,480,000, and exchanged
seven others for works. Cariou on the other hand has not actively marketed his work or sold
work for significant sums, and nothing in the record suggests that anyone will not now purchase
Cariou's work, or derivative non-transformative works (whether Cariou's own or licensed by him)
as a result of the market space that Prince's work has taken up. This fair use factor therefore
weighs in Prince's favor.

The next statutory factor that we consider, the nature of the copyrighted work, "calls for
recognition that some works are closer to the core of intended copyright protection than others,
with the consequence that fair use is more difficult to establish when the former works are
copied."  We consider "`(1) whether the work is expressive or creative, with a greater leeway
being allowed to a claim of fair use where the work is factual or informational, and (2) whether
the work is published or unpublished, with the scope for fair use involving unpublished works
being considerably narrower.'" Here, there is no dispute that Cariou's work is creative and
published. Accordingly, this factor weighs against a fair use determination. However, just as with
the commercial character of Prince's work, this factor "may be of limited usefulness where," as
here, "the creative work of art is being used for a transformative purpose."

The final factor that we consider in our fair use inquiry is "the amount and substantiality of the
portion used in relation to the copyrighted work as a whole." We ask "whether the quantity and
value of the materials used are reasonable in relation to the purpose of the copying." In other
words, we consider the proportion of the original work used, and not how much of the secondary
work comprises the original.

The district court determined that Prince's "taking was substantially greater than necessary." We
are not clear as to how the district court could arrive at such a conclusion. In any event, the law
does not require that the secondary artist may take no more than is necessary. We consider not
only the quantity of the materials taken but also "their quality and importance" to the original
work. Prince used key portions of certain of Cariou's photographs. In doing that, however, we
determine that in twenty-five of his artworks, Prince transformed those photographs into
something new and different and, as a result, this factor weighs heavily in Prince's favor.

As to the five artworks remanded to the district court:

 Picture from “Yes Rasta compared” with “Graduation” (2008)

As indicated above, there are five artworks that, upon our review, present closer questions.
Specifically, Graduation, Meditation, Canal Zone (2008), Canal Zone (2007), and Charlie
Company do not sufficiently differ from the photographs of Cariou's that they incorporate for us
confidently to make a determination about their transformative nature as a matter of law.
Although the minimal alterations that Prince made in those instances moved the work in a
different direction from Cariou's classical portraiture and landscape photos, we can not say with
certainty at this point whether those artworks present a "new expression, meaning, or message.

We believe the district court is best situated to determine, in the first instance, whether such
relatively minimal alterations render Graduation, Meditation, Canal Zone (2007), Canal Zone
(2008), and Charlie Company fair uses (including whether the artworks are transformative) or
whether any impermissibly infringes on Cariou's copyrights in his original photographs. We
remand to the District Court for that determination.

17. BMG Music v. Gonzales, 430 F.3d 888 (7 Cir. 2005) - 

th

FACTS:

Cecilia Gonzalez, who downloaded copyrighted music through the KaZaA file-sharing network,
denies the premise of Grokster and Aimster that people who post or download music files are
primary infringers.

It is undisputed, however, that she downloaded more than 1,370 copyrighted songs during a few
weeks and kept them on her computer until she was caught. Her position is that she was just
sampling music to determine what she liked enough to buy at retail. Because this suit was
resolved on summary judgment, we must assume that Gonzalez is telling the truth when she
says that she owned compact discs containing some of the songs before she downloaded them
and that she purchased others later. She concedes, however, that she has never owned
legitimate copies of 30 songs that she downloaded.

Instead of erasing songs that she decided not to buy, she retained them. It is these 30 songs
about which there is no dispute concerning ownership that formed the basis of the damages
award.

She contends that her activities were fair use rather than infringement.

ISSUE: WON Gonzalez violated the copyright law

RULING: YES.

A “fair use” of copyrighted material is not infringement. Gonzalez insists that she was engaged
in fair use. We rule otherwise.

This case is not a form of time-shifting, along the lines of Sony Corp. of America v. Universal
City Studios. A copy downloaded, played, and retained on one's hard drive for future use is a
direct substitute for a purchased copy-and without the benefit of the license fee paid to the
broadcaster. The premise of Betamax is that the broadcast was licensed for one transmission
and thus one viewing. Betamax held that shifting the time of this single viewing is fair use.

The files that Gonzalez obtained, by contrast, were posted in violation of copyright law;
there was no license covering a single transmission or hearing-and, to repeat, Gonzalez kept
the copies.

Time-shifting by an authorized recipient this is not.

Section 107 provides that when considering a defense of fair use the court must take into
account “(1) the purpose and character of the use, including whether such use is of a
commercial nature or is for nonprofit educational purposes; (2) the nature of the copyrighted
work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as
a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted
work.” Gonzalez was not engaged in a nonprofit use; she downloaded (and kept) whole
copyrighted songs (for which, as with poetry, copying of more than a couplet or two is deemed
excessive); and she did this despite the fact that these works often are sold per song as well as
per album.

This leads her to concentrate on the fourth consideration: “the effect of the use upon the
potential market for or value of the copyrighted work.”

As she tells the tale, downloading on a try-before-you-buy basis is good advertising for copyright
proprietors, expanding the value of their inventory. The Supreme Court thought otherwise in
Grokster, with considerable empirical support. As file sharing has increased over the last
four years, the sales of recorded music have dropped by approximately 30%. Perhaps
other economic factors contributed, but the events likely are related. Music downloaded for
free from the Internet is a close substitute for purchased music; many people are bound
to keep the downloaded files

without buying originals. That is exactly what Gonzalez did for at least 30 songs.

It is no surprise, therefore, that the only appellate decision on point has held that downloading
copyrighted songs cannot be defended as fair use, whether or not the recipient plans to buy
songs she likes well enough to spring for.

Although BMG Music sought damages for only the 30 songs that Gonzalez concedes she has
never purchased, all 1,000+ of her downloads violated the statute. All created copies of an
entire work. All undermined the means by which authors seek to profit. Gonzalez proceeds as if
the authors' only interest were in selling compact discs containing collections of works. Not so;
there is also a market in ways to introduce potential consumers to music.

NOTES:

Think of radio. Authors and publishers collect royalties on the broadcast of recorded music,
even though these broadcasts may boost sales. Downloads from peer-to-peer networks such as
KaZaA compete with licensed broadcasts and hence undermine the income available to
authors. This is true even if a particular person never buys recorded media. Many radio stations
stream their content over the Internet, paying a fee for the right to do so. Gonzalez could have
listened to this streaming music to sample songs for purchase; had she done so, the authors
would have received royalties from the broadcasters (and reduced the risk that files saved to
disk would diminish the urge to pay for the music in the end).

Licensed Internet sellers, such as the iTunes Music Store, offer samples – but again they pay
authors a fee for the right to do so, and the teasers are just a portion of the original. Other
intermediaries (not only Yahoo! Music Unlimited and Real Rhapsody but also the revived
Napster, with a new business model) offer licensed access to large collections of music;
customers may rent the whole library by the month or year, sample them all, and purchase any
songs they want to keep. New technologies, such as SNOCAP, enable authorized trials over
peer-to-peer systems.

Authorized previews share the feature of evanescence: if a listener decides not to buy (or stops
paying the rental fee), no copy remains behind. With all of these means available to consumers
who want to choose where to spend their money, downloading full copies of copyrighted
material without compensation to authors cannot be deemed “fair use.”

Copyright law lets authors make their own decisions about how best to promote their works;
copiers such as Gonzalez cannot ask courts (and juries) to second-guess the market and call
wholesale copying “fair use” if they think that authors err in understanding their own economic
interests or that Congress erred in granting authors the rights in the copyright statute. Nor can
she defend by observing that other persons were greater offenders; Gonzalez's theme that she
obtained “only 30” (or “only 1,300”) copyrighted songs is no more relevant than a thief's
contention that he shoplifted “only 30” compact discs, planning to listen to them at home and
pay later for any he liked

18. Leibovits v. Paramount Pictures Corp., 137 F.3d 109 (2d Cir. N.Y.
1998) - Monique

FACTS: Leibovitz is a well known and widely published photographer. Among her most
recognizable works is the photograph alleged to be infringed in this case, the photograph of the
then pregnant actress Demi Moore that appeared on the cover of the August 1991 issue of
Vanity Fair magazine, whose posing was evocative of Botticelli's Birth of Venus. A ring adorns
the middle finger of Moore's right hand. Moore's facial expression is serious, without a trace of a
smile. The appearance of the photograph attracted widespread attention, and that issue
became one of Vanity Fair's best selling issues of all time.

As an advertising for its movie “Naked Gun,” starring Leslie Nielsen, Paramount commissioned
another photograph to be taken of a nude, pregnant woman, similarly posed. Great effort was
made to ensure that the photograph resembled in meticulous detail the one taken by Leibovitz.
A large ring was placed on the same finger as the one appearing on Moore's hand. The
photograph was digitally enhanced by a computer to make the skin tone and shape of the body
more closely match those of Moore in the Leibovitz photograph. The final step was to
superimpose on the model's body a photograph of Nielsen's face, with his jaw and eyes
positioned roughly at the same angle as Moore's, but with her serious look replaced by
Nielsen's mischievous smirk.

Paramount ran its teaser in a magazine ad campaign in early 1994. Leibovitz protested the use,
and ultimately brought this action in District Court. On crossmotions for summary judgment, the
District Court granted Paramount's motion, ruling that the undisputed facts demonstrated that
Paramount was entitled to the defense of fair use.

Paramount argues that its work is a parody, and should be evaluated under the standards set
forth in Campbell for determining whether parodic uses are "fair." Leibovitz responds that even if
the advertisement is appropriately considered a parody of her photograph, it should fail the fair
use test because it was employed for commercial purposes and because it replicated more of
her original than was necessary.

ISSUE: Is the fair use defense available to Paramount on account of parody?

RULING:  Yes. The fair use doctrine "permits other people to use copyrighted material without
the owner's consent in a reasonable manner for certain purposes."

The doctrine is now codified in section 107 of the 1976 Copyright Act. Section 107 provides an
illustrative list of the purposes for which the doctrine may be invoked, including "comment" and
"criticism," id., as well as a now familiar list of factors that courts should consider in determining
whether a use is "fair." These factors are (1) the purpose and character of the use, (2) the
nature of the copyrighted work, (3) the amount and substantiality of the work used, and (4) the
effect of the use on the market for the original.

Although the statute does not specifically list "parodies" among the categories of potentially
"fair" uses, we have long afforded such works some measure of protection under this doctrine,
and the Supreme Court authoritatively confirmed the applicability of the fair use doctrine to
parodies in Campbell, 510 U.S. at 579, 114 S.Ct. at 1171. 

A. First factor. We inquire whether Paramount's advertisement "may reasonably be perceived,"

as a new work that "at least in part, comments on" Leibovitz's photograph, id. Plainly, the ad
adds something new and qualifies as a "transformative" work. Whether it "comments" on the
original is a somewhat closer question. Because the smirking face of Nielsen contrasts so
strikingly with the serious expression on the face of Moore, the ad may reasonably be perceived
as commenting on the seriousness, even the pretentiousness, of the original. The contrast
achieves the effect of ridicule that the Court recognized in Campbell would serve as a sufficient
"comment" to tip the first factor in a parodist's favor. 

Being different from an original does not inevitably "comment" on the original. Nevertheless, the
ad is not merely different; it differs in a way that may reasonably be perceived as commenting,
through ridicule, on what a viewer might reasonably think is the undue self-importance
conveyed by the subject of the Leibovitz photograph. A photographer posing a well known
actress in a manner that calls to mind a well known painting must expect, or at least tolerate, a
parodist's deflating ridicule.

Apart from ridiculing pretentiousness, the ad might also be reasonably perceived as interpreting
the Leibovitz photograph to extol the beauty of the pregnant female body, and, rather
unchivalrously, to express disagreement with this message. The District Court thought such a
comment was reasonably to be perceived from the contrast between "a serious portrayal of a
beautiful woman taking great pride in the majesty of her pregnant body ... [and] a ridiculous
image of a smirking, foolish looking pregnant man."
The fact that the ad makes a parodic comment on the original does not end the first factor
analysis, however, because the ad was created and displayed to promote a commercial
product, the film. This advertising use lessens the "indulgence" to which the parodic ad is
entitled.

On balance, the strong parodic nature of the ad tips the first factor significantly toward fair use,
even after making some discount for the fact that it promotes a commercial product. "[L]ess
indulgence," does not mean no indulgence at all.

B. Second Factor. Though Paramount concedes the obvious point that Leibovitz's photograph
exhibited significant creative expression, Campbell instructs that the creative nature of an
original will normally not provide much help in determining whether a parody of the original is
fair use. Campbell, 510 U.S. at 586, 114 S.Ct. at 1175. The second factor therefore favors
Leibovitz, but the weight attributed to it in this case is slight.

C. Third Factor. In assessing the amount and substantiality of the portion used, we must focus
only on the protected elements of the original. Leibovitz is entitled to no protection for the
appearance in her photograph of the body of a nude, pregnant female. Only the photographer's
particular expression of such a body is entitled to protection. Thus, to whatever extent Leibovitz
is contending that the ad takes the "heart" of the original, she must limit her contention to the
particular way the body of Moore is portrayed, rather than the fact that the ad copies the
appearance of a nude, pregnant body.

Paramount went to great lengths to have its ad copy protectable aspects of the Leibovitz
photograph. Even though the basic pose of a nude, pregnant body and the position of the
hands, if ever protectable, were placed into the public domain by painters and sculptors long
before Botticelli,[6] Leibovitz is entitled to protection for such artistic elements as the particular
lighting, the resulting skin tone of the subject, and the camera angle that she selected.

The copying of these elements, carried out to an extreme degree by the technique of digital
computer enhancement, took more of the Leibovitz photograph than was minimally necessary to
conjure it up, but Campbell instructs that a parodist's copying of more of an original than is
necessary to conjure it up will not necessarily tip the third factor against fair use. Campbell, 510
U.S. at 588, 114 S.Ct. at 1176. On the contrary, "[o]nce enough has been taken to assure
identification," id., as plainly occurred here, the reasonableness of taking additional aspects of
the original depends on the extent to which the "overriding purpose and character" of the copy
"is to parody the original," id., and "the likelihood that the parody may serve as a market
substitute for the original," id. That approach leaves the third factor with little, if any, weight
against fair use so long as the first and fourth factors favor the parodist. Since those factors
favor fair use in this case, the third factor does not help Leibovitz, even though the degree of
copying of protectable elements was extensive.

D. Fourth Factor. Leibovitz all but concedes that the Paramount photograph did not interfere
with any potential market for her photograph or for derivative works based upon it. She appears
to have conceded as much in her deposition testimony, as well. See Joint Appendix at 35. Her
only argument  for actual market harm is that the defendant has deprived her of a licensing fee
by using the work as an advertisement. See Brief for Plaintiff-Appellant at 44. But she is not
entitled to a licensing fee for a work that otherwise qualifies for the fair use defense as a parody.
The fourth factor favors the defendant.
In light of Campbell, with its significant depreciation of the second factor where parodies
commenting on an original are concerned, we are satisfied that the balance here markedly
favors the defendant. We affirm the District Court.