Making Sense of “Fair Use”

Neil Netanel, a professor at UCLA Law School and my former colleague when I was with Fulbright & Jaworski, has written an excellent study of the evolution of how courts apply the fair use doctrine entitled Making Sense of Fair Use, forthcoming in the Lewis & Clark Law Review (v.15, No.3) and available here.

As Prof. Netanel describes, commentators have long complained about the seemingly ad-hoc and arbitrary outcomes of copyright infringement cases in which defendants adopt a “fair use” defense.  After reviewing several prominent law review articles that survey the case law in an attempt to determine a predictable pattern in fair use cases, Prof. Netanel conducts his own study and finds that the fair use landscape is less arbitrary than other scholars have suggested.

Prof. Netanel begins by defining the two dominate fair use analysis paradigms: “market-centered” and “transformative use.”

“The market-centered paradigm treats fair use as an anomalous exception to the copyright owner’s exclusive rights, applicable only in cases of irremediable market failure.  It owes its origin to Professor Wendy Gordon’s highly influential law review article, published in 1982, Fair Use as Market Failure: A Structural Analysis of the Betamax Case and Its Predecessors, in which Gordon argued that fair use should be available only when the defendant meets the heavy burden of proving both that high transaction costs pose an insurmountable obstacle to copyright licensing and that the use serves an identifiable public benefit that would outweigh any harm caused to the copyright owner by granting fair use.”  This interpretation of fair use was adopted by the Supreme Court in Harper & Row, Publishers, Inc. v. Nation Enters., 471 U.S. 539 (1985).

“The transformative use paradigm … was set out by Judge Pierre Leval in his law review article, Toward a Fair Use Standard, published in 1990, and adopted by the Supreme Court in 1994 in Campbell v. Acuff-Rose [510 U.S. 569 (1994)].  Under this paradigm, the key question in fair use analysis is whether the defendant’s use is ‘transformative,’ not whether the defendant might have obtained a license or the copyright owner would have reasonably consented to the use.  The transformative use paradigm views fair use as integral to copyright’s purpose of promoting widespread dissemination of creative expression, not a disfavored exception to copyright holders’ exclusive rights.”

Rather than finding that courts arbitrarily apply fair use analysis, as previous studies have suggested, Prof. Netanel finds that “[since] 2005, the transformative use paradigm has come to dominate fair use case law and the market-centered paradigm has largely receded into the pages of history.  Today, the key question for judicial determination of fair use is not whether the copyright holder would have reasonably consented to the use, but whether the defendant used the copyrighted work for a different expressive purpose from that which the work was created.”