David Melaugh

A fair-use exception to the property rights copyright affords has existed practically since copyright itself was first recognized. ¹ Possible justifications for the exception abound. Judge Pierre Leval offers a utilitarian justification in line with what he argues are the motivations behind the Copyright Act itself. ² Professor Wendy Gordon argues that fair-use is a solution for the failure of the market to achieve an efficient outcome. ³ Professor William Fisher suggests two alternatives: fair-use as justified through economic efficiency, and fair-use justified via appeal to a conception of "the good life." ⁴ Professor Lloyd Weinreb calls upon justices to investigate the word "fair," itself, moving beyond a purely utilitarian analysis. ⁵ Suffice it to say, fair-use, both in its scope and in its justification, is anything but clear.

New technology, in particular the Internet, promises radical change for the fair-use exception which may, in the end, bring greater clarity. On the one hand technology expands fair-use, by making reproduction of copyrighted material easier and cheaper. One would imagine that the demographic tempted to make fair-use of such material -- educators, newspeople, social commentators -- are precisely those that are in need of such price reductions.

On the other, new technology has also brought with it two arguments for sharply curtailing fair-use. The upcoming wave of trusted systems will allow micropayment schemes which, especially when combined with the scheme of quasi-compulsory licenses that several scholars have argued for, may render the fair-use exception unnecessary. Trusted systems, in the words of one recent commentator, may shift "fair-use" to "fared-use." ⁶ As well, new technology makes reference to copyrighted works, without actual infringement, easier. Put another way, authors who had previously depended upon the fair-use exception may be able to achieve their objectives without any worry of infringement. "Linking," for instance, allows a user to comment on another work without actually copying the work in any way. Though some, especially abroad, consider linking to potentially violate copyright, there is a growing consensus that such activity is, and should be, permissible.

This paper will explore the changes that technology promises for the fair-use regime. Throughout this paper, FreeRepublic.com, a website which is testing the limits of electronic fair-use, will serve as an example to guide the discussion, along with Congress’s statement on fair-use, 17 U.S.C. §107. I align myself with Prof. Wendy Gordon’s argument that fair-use is, and should be, applied when the market fails to allow socially desirable access to, and use of, copyrighted material. While this may mean that users who were heretofore freely able to user material now have to pay (via micropayment systems and the like), or pursue other non-infringing alternatives, it also means that copyright owners should be restricted from utilizing either intellectual property law, contract law, or technological means to restrict fair-use. This creates a quasi-compulsory license: the most a copyright holder can extract from a potential fair-user is reasonable compensation, and, as in the present regime, such an owner is unable to entirely prevent the use their copyrighted material. Seen in this context, FreeRepublic.com’s behavior likely steps past the limits, due to the availability of non-infringing equivalent behavior: linking.

FreeRepublic.com (hereinafter Free Republic) is a conservative webpage that has attracted a considerable following. Media estimates place Free Republic’s regular readership anywhere between 12,000 and 150,000 (these readers are referred to, interestingly, as "Freepers"). Free Republic’s recent "March for Justice," a demonstration in Washington, D.C. calling for President Clinton’s impeachment, attracted over 2,000 marchers. The VIP list at the march ran the gamut of Clinton-haters: Lucianne Goldberg (literary agent who encouraged Linda Tripp to record telephone conversations with Monica Lewinksy), Matt Drudge (self-styled Internet newsman), Rep. Robert Barr (leader of the movement in the House to impeach Clinton), Alan Keyes (one-time presidential candidate), L.D. Brown (former Clinton bodyguard), and Gary Aldrich (former FBI agent).

The webpage is maintained by Jim Robinson, founder of Free Republic. Robinson is a fifty-three year-old Vietnam vet confined to a wheelchair. The site is "non-commercial, not for profit," supported through donations and advertising revenue. ⁷ Robinson also runs a web design company, Electronic Orchard ⁸, that is advertised on the site. The core of the webpage, and of the Free Republic group, is a large set of discussion boards, organized around a wide variety of political topics. Visitors post to these discussion boards; Ms. Goldberg is said to visit daily. Participation on these boards is quite active, as there are several thousand messages posted. At issue is the particular behavior of many of the visitors: it is normal practice on the webpage to post for commentary the entire contents of news articles, taken from sources such as the Los Angeles Times and the Washington Post. ⁹ In response, the Los Angeles Times and the Washington Post filed suit against Robinson in U.S. District Court in California on September 28, 1998. ¹⁰

17 U.S.C. §107 provides that "use [of a copyrighted work] by reproduction . . . for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright." §107 goes on to list four factors involved in the consideration of whether a particular use is "fair":

• the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
• the nature of the copyrighted work;
• the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
• the effect of the use upon the potential market for or value of the copyrighted work.

The Supreme Court has interpreted §107 in Harper & Row Publishers v. Nation Enterprises. ¹¹ Harper involved circumstances similar in some respects to the instant case. Without permission, The Nation printed excerpts from a soon-to-be published autobiography of former President Ford. The excerpts constituted 200-300 words of a 2,500 word article. In so doing, The Nation scooped Time, which has contracted with Harper to publish an excerpt. Time subsequently cancelled the contract. After finding that Harper held valid copyright to the autobiography, the Court considered each of §107’s four factors in its analysis of Nation’s claimed fair-use defense.

The Court in Harper indicated that non-commercial publication is more deserving of fair-use protection. Determining precisely what is meant by "commercial" can prove to be a difficult task, however. The Nation argued that its behavior was news reporting, and thus non-commercial. The Harper Court disagreed: it found that the crux of the issue was "not whether the sole motive of the use is monetary gain but whether the user stands to profit from exploitation of the copyrighted material without paying the customary price." ¹² By publishing the material in the manner it did, The Nation avoided the $25,000 fee Harper had intended to charge Time for a similar privilege. As well, the chance to scoop Time, perhaps gaining readership in the process, motivated The Nation. Accordingly, the Court found that The Nation’s use of the material was commercial in nature.

It is unclear whether the use Free Republic makes of the articles posted to its site is commercial in nature. As mentioned above, Free Republic holds itself out as a non-profit organization. So, strictly speaking, no one stands to "profit from exploitation of the copyrighted material without paying the customary price."¹³ That said, the site is funded through donations and advertising, both of which require visitors to the site. There are also strong ties on the site to Mr. Robinson’s commercial web publishing company, Electronic Orchard; it is likely that increased traffic to freerepublic.com has an effect on the volume of business Electronic Orchard does. Such a wide definition of commercial would seem to draw many websites into its purview, however, as most sites contain links to other sites, often with the understanding that reciprocal linking will occur. Better to draw the line between sites whose primary purpose is commercial (say, a travel agent’s webpage) and a site whose commercial nature is only ancillary (as appears to be the case with Free Republic).

The character of the use is important, as well. In Harper, The Nation took its material from a stolen copy of the autobiography, and did not deny that its use of the material served a competitive purpose. This put something of a moral stain on The Nation’s behavior. ¹⁴ No such dirty dealing is present in the instant case, however. Free Republic users simply copy news stories from other sites on the Internet (generally from a newspaper’s site itself) and post it to the Free Republic site.

New technology opens up a whole host of unusual uses. For instance, Mark Napier created a site which showcased electronically distorted images of Barbie, the popular doll produced by Mattel. ¹⁵ In response, Mattel’s lawyers sent letters threatening suit to Napier’s web host and an electronic magazine running a story on Napier’s work. ¹⁶ Mattel has since taken no further action. That said, even these new uses are not without old-media analogs; one might imagine distortion of the Barbie image that does not require the use of computers. Here, technology lowers the barriers to entry into the "distortion market," meaning more people will attempt such fair-use, and more people will have the opportunity to view such work, making a clear understanding of the boundaries of fair-use all the more important, both in the judiciary and in the public.

Pivotal to the Court in Harper was the fact that, at the time of the release of The Nation article, the autobiography was still unpublished. Copyright holders have a strong right to control the manner and timing of the release of their works. ¹⁷ This factor weighed heavily against The Nation, and was likely the primary cause of their loss at the Supreme Court. Free Republic, of course, has no such problem.

However, the Court also held that factual works inherently have less protection against fair-use than fictional works, as so much of the work is already in the public domain. The Court declined to hold much of the material taken from the autobiography copyrightable. Likewise, much of the material posted on Free Republic is a particular reporter’s take on the facts at hand.

Most damning, of course, is the portion of copyrighted material used in the posts on the Free Republic site. Each article is a separately copyrightable work, and the articles are generally posted in their entirety on the Free Republic site. This is surely a strike against Free Republic -- it was enough in Harper that The Nation printed what where described as the "most interesting and moving parts" of the autobiography. ¹⁸ Had The Nation printed the entire Ford autobiography, followed by commentary, the case against the magazine would have been even stronger. The Harper court found that the proportion that the quoted material makes up of the new work is irrelevant -- one need only focus on the importance of the material to the work from which it was taken. ¹⁹

One might conceivably argue that the articles are themselves small portions of a greater whole: the newspaper itself. Given that it is the newspapers that have brought suit, and not the authors (presumably they have sold their rights to the newspapers), this avenue seems tempting. Furthermore, the court in Tasini v. New York Times ²⁰ held that periodicals are free to republish in electronic media compilations without securing permission of the particular authors whose works are included (on the basis of their copyright in the whole). However, in a recent case, Ryan v. Carl Corp. ²¹, the court held that "calling the reproduction of a single article a "revision" of a collected work . . . is more strained than even a flexible interpretation can withstand." Thus, it appears unlikely that a court would regard the articles in question as anything other than separate, copyrighted works.

Here, technology has facilitated a use that never would have been practical using old media. The Nation could hardly have included the several hundred pages of Ford’s biography as an addendum to their monthly magazine; instead, they found it necessary to excerpt the choicest bits of the work. New technology makes the addition of extra material nearly costless. In fact, as compared against the effort is takes to paraphrase and excerpt, wholesale copying is far easier; there is anecdotal evidence that some Free Republic users copy material because they do not know how to embed HTML codes into text (to make "active" links).

Section 107 further protects copyrighted works by drawing attention not just to the actual market for the works, but the potential markets. In Harper, the market effect was easy to judge: Time withdrew from its contract to purchase excerpts from the work upon the release of the same material in The Nation’s article. Here, online publications like the Los Angeles Times and the Washington Post derive revenue from their articles in much the same fashion Free Republic does: through advertising revenue and by directing consumers to other products (namely, their print-media products). The market effect becomes clearer when one compares Free Republic’s current behavior with a non-infringing equivalent: linking. Free Republic commentary postings could simply contain links to the original articles. In fact, various participants -- in reaction to the threat of the suit to their site -- have suggested that users adopt precisely this behavior. ²² Each participant in the commentary would then have to visit the original site, adding to that site’s click-through rate, a essential feature in the determination of advertising rates on websites.

Even so, the damages Free Republic is causing are likely to be minimal, and may even be non-existent. Even granting Free Republic a generous readership, the traffic drawn away from the plaintiffs constitutes only a small fraction of their total viewers. To the contrary, to the degree that the plaintiffs websites are meant as a lure for the print media, Free Republic does them disservice -- in fact, the website may even broaden the impact of the plaintiffs’ media, adding more subscriptions.

Both Mark Napier and Jim Robinson are making socially desirable use of protected material; each facilitate commentary on the meaning-making elite. Both Mattel and the Los Angeles Times object to such use. In both instances, it is unlikely that commercial impact is motivating the suits -- the costs of legal counsel alone far exceeds the possible damage posed. Though there is surely some price that Mattel and the Times would agree to allow license to their property, it is unlikely to be within the means of either Napier or Robinson, and is also likely to exceed the actual economic impact of Napier and Robinson’s actions. As such, market failure has occurred: a bargain that we would like to see occur has not.

For the time being, such market failures are likely to occur frequently. Among other factors, transaction costs make dealing individually with every possible fair-user unfeasible. As mentioned before, technology opens up publishing, along with concomitant fair-use, to a whole new population. On the heels of this advance, however, is technology -- called variously trusted systems, automated rights management, and micropayment -- which will open up content licensing to the same population.

Likewise, technology has the potential to provide non-infringing alternative uses to would-be publishers. As has been discussed at several points, Free Republic users could simply link to the desired content. What would the impact be of forcing such behavior? Some users would no longer post -- those that found linking either too difficult or that it did not accomplish their goals. The rest would shift to linking. Readers would then have to go through the added inconvenience of visiting another site to look at the content. Depending on whether deep-linking was used (linking directly to the article in question, rather than the site’s main page), this inconvenience might be minimal or significant. It is unlikely, however, that the shift to linking would significantly impact the core function and vitality of the Free Republic website: commentary on today’s political and media elite.

The advent of new technology has made publishing nearly costless. It has not done the same for content licensing. This means, for the time being, fair-use standards should be slackened, allowing for greater freedom in this new medium. Once transaction costs reduce over licensing, courts should allow copyright holders to charge a reasonable fee for the use of their material ²³, but where there is not such an option, courts should continue to restrict the ability of copyright holders to resort to the protections of copyright or contract law to effect limitations on fair-use. By the same token, webpages such as Free Republic should continue their vital criticism of our society’s elite, but should take full advantage of the non-infringing avenues that new technology has opened up.

FOOTNOTES

7. See http://www.freerepublic.com/about.htm. Mr. Robinson is reported to have said that last year’s revenues were less than $500. Mr. Robinson elsewhere claims that: “Nothing of value was given or offered for any links or ads on FreeRepublic.” See http://www.freerepublic.com/forum/a33408.htm. There are, at the least, several advertisements from organizations listed as “sponsors.”

8. http://www.e-orchard.com.

9. See http://www.freerepublic.com/forum/a36531ced0a3a.htm for an excellent example. This page, in the course of discussing the “Y2K Conspiracy,” contains at least three copyrighted articles, in their entirety. Of the 12,000+ words on the page, approximately 2,000 of them are copyrighted material; the remainder is commentary or uncopyrighted material (e.g. a lengthy press release from a power consortium discussing Y2K preparedness).

15. See http://www.interport.net/~napier/barbie. Note that this involves a trademark dispute, not copyright (fair-use of trademark is sufficiently close to copyright fair-use for these purposes).

16. See http://ezone.org/xian//barbie/9711.html.