Chapter Eight

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Copyright Limitations, Exclusions,

and Compromises

 

 

 

I suspect that most people think of themselves most of the time as copyright users rather than copyright owners. For every book or movie or song we write, we’re likely to read or watch or hear hundreds. So I wouldn’t be surprised if my general enthusiasm for copyright has struck fear into the hearts of most readers. If copyright is really so powerful, and if so much of our consumer technology impinges upon it in one way or another, how in the world can we be expected to avoid an inevitable confrontation with the “copyright police”?

 

            Well, don’t worry. Copyright isn’t nearly as absolute as it may sound: it’s subject to dozens of limitations and exclusions and compromises that preserve a careful balance between the owners and users of copyrighted works. We’ve already seen many of these limitations in the preceding chapters, such as the special rules for library photocopying, the limitation to “original” works of authorship, the limitations from the first sale doctrine, and from various compulsory licenses for the making and performing of phonorecords and for cable television.*

 

*Library photocopying, see p. 20; originality, p. 127; first sale doctrine, p. 167;
  phonorecord compulsory license, p. 38; cable compulsory license, p. 66.

 

            In this chapter, we’ll take a look at other limitations upon copyright. Some of these limitations are very specific, such as those governing certain nonprofit performances. However, several are general in nature, fundamental in principle, and sometimes fiendishly difficult in explanation and application. Perhaps the most abstract and difficult to apply is the doctrine of fair use, which we’ll consider last.

 

[181]

Specific Limitations and Exclusions

 

Nonprofit Musical Performances

 

In 1856, Congress granted copyright owners the exclusive right to perform their works publicly, and in 1897 that exclusive right was extended to musical works. In the case of musical works,* the performance right was limited to public performances “for profit.”  ASCAP was successful, however, in getting the courts to interpret many performances as “for profit,” including “free” musical accompaniments to silent movies, “free” music in bars and restaurants, and “free” radio and television programming on stations that nonetheless were ultimately run for profit.† So users [182] had to get licenses for all such public performances. But truly nonprofit musical performances, such as Girl Scouts singing around the campfire, or high school musicians performing for free, were perfectly okay under the existing statute.

 

*Public performance rights, see p. 168.

†Bars and restaurants, see p. 41; radio, see p. 43.

          Radio Musical Performances in Restaurants and Small Businesses

 

One of the specific exemptions in the 1976 Act allowed for a public performance by means of turning on a radio or television in a public place “on a single receiving apparatus of a kind commonly used in private homes.” This section led to an inordinate amount of litigation and some contentious lobbying in Congress. Cases involved such commercial establishments as the Gap, Claire’s Boutiques, and Plaza Roller Dome, Inc., of Laurinburg, North Carolina, all of which provided radio music to their customers, some using elaborate radio systems that arguably went beyond what was “commonly used in private homes.”

 

            A coalition of commercial businesses generally opposed to paying ASCAP licenses fought for legislation to exempt from the licensing requirement “small” businesses that merely provided radio music to their customers. In 1998, the coalition won a major victory against the performing rights organizations, [183] the so-called Fairness in Music Licensing Act. That act limited the licensing powers of ASCAP, BMI, and other music licensing organizations in several ways. Most importantly, it created an exemption for restaurants and certain small businesses (based upon square footage of the establishment) that previously had to pay the licensing organizations for the privilege of playing the radio on their premises. The immediate effect of the amendments was that these restaurants and business establishments did not have to pay the few hundred dollars per year in licenses that the performing rights organizations had been charging them; and the licensing rights organizations immediately saw their expenses increase and their revenues decrease.

 

            There are several reasons why the small businesses succeeded in getting their victory. For one thing, the advocates were able to convince Congress that the fees they had to pay were a nuisance, and something of a double recovery, since the copyright owners were already paid substantial royalties from the radio and television stations and networks whose music was made available to customers. The advocates of the amendment were also able to make it the price that copyright owners had to pay for getting the 1998 extension of the length of copyright from life of the author plus fifty years to life of the author plus seventy years:* it was clear that the term extension would not pass without some relief to the small business establishments. (In theory, by linking music “fairness” to the extension of the copyright term, musical copyright owners’ decrease in revenues per year would be offset by the longer period they had to receive those revenues.) The advocates of the amendment also got some very good press from some overexuberance by ASCAP in trying to enforce its licensing rights (see sidebar).

 

*Extension of copyright term, see p. 206.

 

            I’m hard-pressed to think of a single other example in the 210-year history of copyright in which Congress has cut back on already established rights of copyright owners. The closest analogy is a 1948 court decision that ASCAP could not charge movie theaters for playing the music recorded on movie soundtracks, but instead had to rely on “synchronization” licenses with the movie producers.  The rationale for [184] such an outcome is the same: you get one licensing opportunity at the source, but not multiple licenses with everyone else down the distribution chain.

 

Compulsory Licenses

 

In several instances involving the challenge of new technologies, Congress has come up with “compulsory licenses” that allow users to “take” works upon payment of predetermined fees. The first such compulsory license, the phonorecord compulsory license, was introduced in 1909.* It provided that, once a music copyright owner made a recording of the work, anyone else could make and distribute recordings of the same work for a set fee.

 

*Phonorecord compulsory license, see p. 38.

 

            The next set of compulsory licenses was introduced in the Copyright Act of 1976. The cable television issue had held up copyright revision for many years. The ultimate resolution of the problem was to adopt a compulsory license that allowed cable systems to import distant television signals upon payment of a statutory fee.† Also in 1976, Congress adopted a compulsory license for the playing of music in jukeboxes for the payment of a set fee, originally set at $8 per jukebox, and gradually increased to $63 and upwards per jukebox. (This particular compulsory license has been repealed, in favor of industry-negotiated arrangements for payments of fees. The current agreed-upon fees are $275 per year for an operator’s first jukebox; $55 per year for each of the second through tenth jukeboxes; and $48 per year for each additional jukebox thereafter.)  The third new compulsory license in the 1976 Act provided for licensing of music and certain pictorial works for noncommercial television and radio broadcasts.

 

†Cable compulsory license, see p. 66.

 

            Each of these compulsory arrangements represented congressional compromises between granting an exemption and holding copyright users fully accountable for their uses of copyrighted works. Each of these arrangements also resulted in a complicated payment scheme that was less than satisfactory, but perhaps the best that could be done in the circumstances.

 

            Right after the 1976 Act, it was unclear whether the compulsory licenses were solutions for an isolated set of problems, or whether they were the wave of the future. Since 1976, it appears that they were the wave [185] of the future. Congress has adopted a compulsory licensing scheme to handle satellite television systems that work similarly to cable systems; to handle digital audio home recorders;* and to handle subscription digital audio transmissions.† And there are other limited situations in which people or companies that would otherwise be infringers will be allowed to continue using copyrighted works upon payment of a reasonable fee—essentially, a compulsory license. Whether one loves or hates these arrangements, they do indicate that there are options available in the copyright scheme that steer a middle course between full liability and no liability at all. 

 

*Digital audio compulsory license, see p. 50.

†Digital audio transmission compulsory license, see p. 51.

 

General Limitations

 

Works of Utility

 

 

“Pictorial, graphic, and sculptural works” . . . shall include works of artistic craftsmanship insofar as their form but not their mechanical or utilitarian aspects are concerned; the design of a useful article, as defined in this section, shall be considered a pictorial, graphic, or sculptural work only if, and only to the extent that, such design incorporates pictorial, graphic, or sculptural features that can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the article.

 

            What in the world does this mean? A sculpture is generally copyrightable. If the sculpture is in the shape of a chair, then it’s not copyrightable as a chair, because the “sculptural” features of the chair don’t exist independently of the chair.

 

            The distinction helps to elucidate what copyright law is and what it is not. Copyright is directed primarily at the aesthetic, but cannot be used to create monopolies in functional aspects of works. To some extent, the “works of utility” doctrine is explained by bearing in mind the distinction between copyrights and patents. It’s primarily the role of patent law to grant exclusive rights in the functional aspects of works, and there’s even a special category of “design patents” to cover the design aspects of [186] certain utilitarian products. The problem is that most works don’t meet the higher standard of “novelty”* required by the patent statute, so most designs of useful articles don’t qualify for design patent protection. In recent years, there have been some cases suggesting an expansion of trademark and unfair competition law† to cover the “trade dress” of certain products, but there are still gaps in effective protection.

 

*Higher patent standard, see p. 128.

†Expansion of unfair competition, see p. 224. 
 

 

‡Architectural works, see p. 146. 

 

 

•Boat hull designs, see p. 146.
 

[187]

          The Fact-Expression Distinction

 

 

*The Feist case, see p. 129.

 

            While facts are not protected as such, compilations of facts can be protected, if their selection and arrangement are the result of sufficient originality. The Supreme Court made clear in the Feist  case that the alphabetical listing of telephone subscribers and numbers was not such an original compilation, and so could not be protected against duplication. [188] That case, which held that “originality” could not be found merely in the labor or expense of acquiring and organizing data, raises a serious hurdle to the copyright protection of databases, such as databases of financial or geographical information.

 

            In 1996, a European Community directive extended special protection to databases in countries of the European Union. But so far, similar efforts in the United States have failed. Since such a database protection gap puts American database companies at a competitive disadvantage, we can expect pressure on Congress to change the law to protect databases.
 

The Idea-Expression Distinction

 

Let’s go to the statute: “In no case does copyright protection for an original work of authorship extend to any 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.”

 

            Many of the traditional examples are actually more properly viewed as examples of the works of utility doctrine just discussed. For example, if someone “discovers” a previously obscure medicine or medical treatment, or invents a previously unknown medicine or technique, and writes a treatise explaining the discovery, the author is protected in the particular words used to explain the process; but the book creates no specific rights in their use. That right may be granted if the process is novel, and the author applies for and receives a patent; but the book itself doesn’t protect the substance of the “discovery.” Similarly, a treatise on relativity or perspective or accounting creates rights in the words used to explain the principles, but doesn’t give any exclusive rights in the use of the principles themselves. These examples could all be explained either [189] because the principles are to some extent “functional,” and therefore not protected under the works of utility doctrine, or because they are “ideas,” separate and apart from any description of the principles.

 

 

*Abie’s Irish Rose, see p. 153.

 

            The idea-expression distinction is most firmly entrenched in the context of factual works, where the doctrine obviously overlaps with the fact-expression distinction. It is quite clear that we don’t want an author to be able to monopolize the “idea” or theory or interpretation of historical events. A. A. Hoehling, for example, developed the theory that the airship Hindenburg,  which caught fire and crashed in 1937, was destroyed by a saboteur. He sued Universal City Studios for making a movie that incorporated some of the same elements as his book. The court found, however, that he could not stop the movie.
 

            Of course, the trick for all of these general principles limiting copyright is to come up with a test for distinguishing between protectable expression on the one hand, and unprotectable function, fact, or idea, on the other. While the principles are theoretically clear, the distinctions can be frustratingly complex in particular cases. A sense of the law can be derived by looking at how the courts have decided particular cases, but summarizing the range of factors can be frustrating for both teachers and students of the law.

 

[190]

Fair Use

 

 

*Copyrightability, see chapter 6.

†Infringement, see chapter 7.

 

[191]    First developed by judges to decide individual cases, the defense is now authorized by the copyright statute itself. Although the term “fair use” is not defined, it is fleshed out by the following statutory “factors”:

 

[T]he fair use of a copyrighted work, including such use by reproduction in copies or phonorecords or by any other means . . . 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 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.

 

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.

 

[192]    This is not to say that the fair use analysis is straightforward. In fact, of the cases that have made it to the Supreme Court, the typical pattern is a district court decision reversed by an appellate court reversed again by the Supreme Court, usually by a split decision, frequently 5 to 4. Reasonable people may certainly, maybe even inevitably, disagree in many of the cases where fair use has been called upon to distinguish between permissible use and copyright infringement.

 

            A few examples will illustrate the range of what might be considered fair use.
 

 

 

There’s a long tradition protecting parody as a fair use, even though it’s not specifically mentioned in the statute, if the parody otherwise seems reasonable under the four statutory factors. Here are some examples of what has been found to be within the ambit of fair use: From Here To Obscurity,  a Sid Caesar television takeoff of the movie From Here to Eternity;  MAD     Magazine parody lyrics to be sung to the tunes of famous songs (such as “The First Time I Saw Maris,” sung to the tune of “The Last Time I Saw Paris”); “I Love Sodom,” a Saturday Night Live  spoof of the New York jingle, “I Love New York”; and an advertising poster for Naked Gun 33-1/3, showing Leslie Nielson in a pregnant spoof of the Annie Leibovitz photograph of Demi Moore on the cover of Vanity Fair.

 

            Not all examples of parody qualify for the exemption, however. In some cases, courts have found that purported parodies did not qualify for protection under the fair use doctrine, and thus constituted copyright infringement. Among these are Autolight, a Jack Benny television takeoff of the movie Gaslight;  Air Pirates Funnies, a 1970s counterculture spoof of Walt Disney comic books; Jeff Koons’s String of Puppies, a sculpture [193] lifted from an Art Rogers photograph of Jim Scanlon and his wife with their eight German shepherd puppies; and a book using Dr. Seuss characters and style to tell a purportedly humorous version of the O.J. Simpson story.

 

 

            Judge James Carter, who decided both the Jack Benny and the Sid Caesar cases in the district court, felt that the important distinguishing feature in those cases was in the amount taken. Jack Benny simply took too much from the original movie—the locale and period, the main setting, the characters, the story points, the development of the story, the incidents and sequence of events, the points of suspense, the climax, and much of the dialogue, although the story was of course a burlesque of the original, with gags added throughout. Sid Caesar’s spoof, on the other hand, had parallels to the original movie, but transformed it substantially. The judge found that “There is no substantial similarity between said [194] burlesque and said motion picture as to theme, characterizations, general story line, detailed sequence of incidents, dialogue, points of suspense, subclimax or climax.” If you want to make an informed judgment on your own, I suggest that you see the movie and the spoof, both of which are available on videotape.

 

 

            Maybe the cartoonists who made the “Air Pirates” (p. 198) went too far precisely in their lack of subtlety. In that case, the appellate court disallowed the fair use defense, emphasizing that “given the widespread public recognition of the major characters involved here . . . very little would have been necessary to place Mickey Mouse and his image in the minds of the readers” to “conjure up” the original being spoofed. The court also [197] concluded that “when the medium involved is a comic book, a recognizable caricature is not difficult to draw, so that an alternative that involves less copying is more likely to be available than if a speech, for instance, is parodied.”

 

            Yet, the degree of similarity, the “amount taken,” cannot be the only factor here. There have been other instances in which Mickey has been spoofed just as graphically as in the “Air Pirates” case. For example, MAD     Magazine has spoofed Disney characters, as well as just about every other cultural icon around. And yet MAD  generally is not sued, or wins lawsuits brought against it. How does MAD  Magazine get away with it?

 

 

            But how can you capture all of these elements in a precise definition of fair use? No formulation of the rule can anticipate the wide range of potentially legitimate activities, and yet adequately capture the fine distinctions. Fair use “factors” are about all that we can expect, plus a sensitivity of the courts to the nuances of the particular cases.

           

[200]    It may be that the pendulum in this area is currently swinging in favor of parodists. A recent Supreme Court case considered 2 Live Crew’s rap version of Roy Orbison’s musical hit, Pretty Woman. The Court emphasized the “transformative” nature of parody, and implied that the work in that case was sufficiently transformative to meet the test. Interestingly, the Court did not find that the spoof was a fair use, instead remanding the case for the lower courts to make their own determination. In a bit of overstatement, the press’s general description of the case was that it “found” the 2 Live Crew song to be a fair use. In any event, the language of the opinion makes clear the Court’s tolerance for parodies, and it would be a bold lower court or law professor who would ignore the Court’s language about the wide berth to be given to parodies under the fair use doctrine.

 

          Compromise on Public Policy Grounds

 

            The fair use doctrine is also available as a tool for deciding difficult cases involving new situations and raising major policy concerns that have not otherwise been specifically addressed by Congress. It can serve as something of an “escape valve” when literal application of the law would otherwise lead to undesirable results. For example, we’ve seen how fair use has been used to analyze the difficult issues raised by the educational photocopying* of copyrighted materials.

 

*Library photocopying, see p. 20; classroom photocopying, p. 25.

 

             In the Betamax case, the Supreme Court invoked the doctrine to hold that the Sony Corporation, makers of the Betamax video recorder, was not liable for copyright infringement when users of its machines made unauthorized copies of copyrighted works.† As part of its decision, the Court held that the home recording of television programs, which were otherwise delivered to homes for free over the public airwaves, for the purpose of “time-shifting”—viewing at another time, after which the copy is erased—did not constitute copyright infringement because it qualified as a fair use. The Court did not say that all copying of programs in the home—particularly the “librarying” of programs to be viewed more than once—was a fair use; but since the court found that there was at least some legitimate, noninfringing use for video recorders, Sony wouldn’t be held liable for the potentially infringing actions that others might undertake.

 

†The Betamax case, see p. 66.

           

[201]    Another fascinating technology case involved the copying of a Sega game cartridge by Accolade, Inc. Here’s what happened: Sega made the popular Genesis game system, which, together with Nintendo and later Sony systems accounted for the vast majority of game systems bought by millions of kids throughout the world. Selling the game machines was only half the road to success, however—the real money was in selling the game cartridges to run on the system. In order to assure that only it or its licensees sold such cartridges, Sega built into its console a system that would check to see if cartridges contained the appropriate code indicating that the cartridge was authorized to run on the system.

 

            In order to produce compatible programs, Accolade did the following. First, it “reverse engineered” several existing Sega cartridges. It copied the programs contained on the cartridges, and “disassembled” the object code to produce printouts of the source code. It studied the source code of the different game cartridges to see what parts of the code were present on all of the cartridges. It was thus able to determine the appropriate short code that had to be on any cartridge to make it run on a Sega Genesis console. Accolade did not copy any of Sega’s actual games, but it did copy the short code—about 20-25 bytes—which was necessary to trick the Sega Genesis console into “thinking” that the Accolade cartridges were licensed, and therefore run the Accolade programs—Ishido, Star Control, Hardball, Onslaught, Turrican, and Mike Ditkas Power Football—on the Sega console.

 

            Sega sued for copyright infringement. Because the amount of actual code taken, the 20-25 bytes, was arguably minimal, and arguably entirely functional, Sega chose in its suit to focus upon Accolade’s “intermediate” copying, arguing that the intermediate copies that Accolade had admittedly made were infringing copies of Sega’s copyrighted game cartridges. Accolade raised several defenses, most of which were rejected. However, the appellate court accepted Accolade’s fair use argument. The court held that “disassembly of copyrighted object code is, as a matter of law, a fair use of the copyrighted work if such disassembly provides the only means of access to those elements of the code that are not protected by copyright and the copier has a legitimate reason for seeking such access.” Accordingly, the court dissolved the preliminary injunction that had been granted by the lower court, and allowed Accolade to continue selling its Sega-compatible game cartridges.

 

[202]    Implicit in the court’s holding is the assessment that Accolade’s goal of creating Sega-compatible cartridges was a valid one, supported by public policy. The court pointed out that

 

Accolade’s identification of the functional requirements for Genesis compatibility has led to an increase in the number of independently designed video game programs offered for use with the Genesis console. It is precisely this growth in creative expression, based on the dissemination of other creative works and the unprotected ideas contained in those works, that the Copyright Act was intended to promote. . . . [Sega’s] attempt to monopolize the market by making it impossible for others to compete runs counter to the statutory purpose of promoting creative expression and cannot constitute a strong equitable basis for resisting the invocation of the fair use doctrine. . . . Because Sega’s video game programs contain unprotected aspects that cannot be examined without copying, we afford them a lower degree of protection than more traditional literary works.

 

            The case did not hold Sega’s copyright in its cartridges invalid. Sega could clearly prevent any other company from pirating and selling copies of its game cartridges. But Accolade produced its own original games, which did not copy Sega’s. Under the unique facts of the case, the intermediate copying that Accolade had to do in order to make Sega-compatible games, and the minimal amount of code that it actually had to take in order to make its cartridges work on the Sega console, were excused under the fair use doctrine.

 

            In addition to the technology setting, the “public interest” occasionally excuses what would otherwise be a copyright infringement. Perhaps the best example is the case involving the Zapruder movie* of the Kennedy assassination—the most explicit movie footage of that important historical event. The movie was copyrighted by Abraham Zapruder and immediately sold to Time, Inc. Josiah Thompson made unauthorized drawings of many of the frames in order to illustrate his analysis in the book Six Seconds in Dallas. When Time, Inc. sued for copyright infringement, the court identified the public interest as overriding the rights of the copyright owner, in the context of a complete analysis under the standards of fair use.

 

*The Zapruder case, see p. 143.

  

            This does not mean that every work on a matter of public interest should get a fair use free ride. For example, in the Harper & Row case,* [204] The Nation  had argued that fair use gave it the right to publish excerpts from former President Ford’s A Time To Heal prior to its authorized “first serialization” in an exclusive Time  magazine article.  The Supreme Court held that the lifting of three to four hundred words was not excused by fair use, but instead constituted an infringement of the author’s and Harper & Row’s copyright. The public interest did not require the taking, since Ford and Harper & Row were already in the process of trying to get the work to the public. As stated by Justice O’Connor in that case, “[I]t should not be forgotten that the Framers [of the Constitution] intended copyright itself to be the engine of free expression. By establishing a marketable right to the use of one’s expression, copyright supplies the economic incentive to create and disseminate ideas. . . .” Justice O’Connor cites Lionel Sobel for the proposition that “If every volume that was in the public interest could be pirated away by a competing publisher, . . . the public [soon] would have nothing worth reading.”

 

*Harper & Row, see p. 155.

 

Conclusion

 

We’ve now seen so many doctrines limiting copyright that it’s hard to believe that copyright owners ever win lawsuits at all. Between the difficulties of discovering violations highlighted in chapter 5, and the limitations on enforcing rights highlighted here, there are certainly a lot of hurdles along the way. Maybe that’s the reason Congress grants such broad rights (outlined in chapter 7), to those copyright owners who are successful in navigating the hurdles—to compensate successful copyright owners for the difficulties in enforcing their rights.

 

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