Batch 1

1.

Elidad C. Kho vs. Court of Appeals, Summerville General Merchandising Company

and Ang Tiam Chay (G.R. No. 115758, March 19, 2002, 379 SCRA 410)

FACTS: Petitioners allegations are that they are doing business under the name and style of KEC
Cosmetics Laboratory, registered owner of Chin Chun Su and oval facial cream container/case, and
alleges that she also has patent rights on Chin Chun Su and Device and Chin Chun Su Medicated
Cream after purchasing the same from Quintin Cheng, the registered owner thereof in the
supplemental register of the Philippine Patent Office and that Summerville advertised and sold
petitioners 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 petitioners 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 (1) Summerville is the exclusive and
authorized importer, re-packer and distributor of Chin Chun Su products manufactured by Shun Yi
factory of Taiwan, (2) that the said Taiwanese manufacturing company authorized Summerville to
register its trade name Chin Chun Cu Medicated Cream with the Philippine Patent office and Other
appropriate governmental agencies; (3) that KEC Cosmetics Laboratory of the petitioner obtained the
copyrights through misrepresentation and falsification; and, (4) 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 terminated by the said Taiwanese manufacturing company.
ISSUE: Whether or not Kho has the sole right using the package of Chin Chun Su products
RULING: 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 in as much 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 petitioners copyright and patent registration of
the name and container would not guarantee her the right to 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.
NOTE: 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 goods. In relation thereto, a trade name means the name or designation identifying or
distinguishing an enterprise. Meanwhile, the scope of 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 industrial
applicable.

2. Pearl and Dean Inc. v Shoemart Inc. GR No. 148222, August 15, 2003
Facts: Plaintiff P and D is engaged in manufacturing advertising display units called as light boxes.
These are specialty printed posters with plastic sheets and illuminated back lights that are mainly
used as stationeries. They secure copyright registration over these advertising light boxes and
marketed using the trademark poster ads. They applied for the registration of trademark before the

Bureau of Patents, Trademark and Technology Transfer which was approved on September 12, 1988. P
and Dnegotiated with the defendant Shoemart for the lease and installation of the light boxes in SM
City North Edsa but was given an alternative to have them leased to SM Makati and SM Cubao while
the said branch was under construction. Only the contract with SM Makati was returned
with signature. In 1986 the counsel of Shoemart informed P and D that it is rescinding its contract for
SM Makati due to non-performance of the terms thereof. Two years later, the Metro Industrial Services,
the same company contracted by the plaintiff to fabricate their display units offered to construct light
boxes for the Shoemart chain of stores wherein 10 light boxes were created for them. Upon the
termination of contract with Metro Industrial Service, SM hired EYD Rainbow Advertising Co. to make
light boxes. When P and D knew about the exact copies of its light boxes installed at SM City branches
in 1989, it investigated and found out that North Edsa Marketing Inc (NEMI), sister company of SM was
primarily selling ad space in lighted display units. P and D sent letter to both NEMI and
SM enjoining them to cease from using the subject light boxes and remove them from SM
establishments. It also demanded to discontinue the use of its trademark poster ads with
compensatory damages of 20M. SM suspended the lease of light boxes in its branches while NEMI took
down its advertisement for posterads. Claiming both failed to meet its demand P and D filed a case for
infringement of trademark, copyright, unfair competition and damages.
SM denied the charges against it and noted that the registration of mark poster ads is limited to
stationeries like letterhead and envelope. It further stresses that it independently develop its own
poster panels using techniques and available technology without notice to P and D copyright. It further
contends that poster ads is a generic name that cannot be appropriated for a trademark and that P
and Ds advertising display units contained no copyright notice in violation of Section 27 of P.D.
49. NEMI likewise repleaded the averments of SM and denied to have manufactured, installed or
advertised the display units. The RTC decided in favor of P and D but on appeal the Court of Appeals
reversed its decision. In its judgment its stand is that the copyright of the plaintiff is limited to its
technical drawings only and not the light boxes itself. When a drawing is technical, the copyright over
the drawing does not extend to actual object. Thus the CA is constrained to adopt the view of the
respondents that the poster ads is a generic poster term ads and in the absence of convincing proof
that such wording acquired secondary meaning, the P and Ds exclusive right to use poster ads is
limited to what is written on its certificate of registration which is stationaries.
Issue: Whether or not there is patent infringement
Ruling: It held that the petitioner never secured patent for the light boxes. Without any acquired rights
to protect its invention it cannot legally prevent anyone from manufacturing the same. 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. Inventors have no common law
right tomonopoly of his work. He has the right to invent but once he voluntarily discloses it the world
is free to copy and use it. A patent gives the inventor the exclusive right to make, sell, use and
exclude others from using his invention. Assuming the petitioners ad units were patentable, he made
them public by submitting its engineering drawings to the National Library. To legally preclude others
from copying and profiting from ones invention, patent is a primary requirement. The ultimate goal of
a patent system is to bring new designs and technologies into the public domain through
disclosure. Ideas, once disclosed to the public without the protection of a valid patent, are subject to
appropriation without significant restraint. Therefore, without any patent secured to protect ones
work, there is no protection against its use by the public. Petitioner mainly secured copyright in which
its design is classified as class O limited to box wraps, pictorial illustration, labels and tags. Thus its
copyright is covered only the works falling within this category. Moreover, the term poster ads is
generic and incapable to be used as trademark thus the respondents are not held guilty of the charges
against them.

3. Francisco Joaquin vs Franklin Drilon GR No. 108946, January 28, 1999

Facts: BJ Productions, Inc (BJPI) is a holder of a Certificate of Copyright no. M922 issued on January 28,
1971 of Rhoda and Me which is a dating show aired from 1970 to 1977. It submitted to the National
Library an addendum its certificate of copyright specifying the shows format and style of
presentation. While watching the television, its President, Francisco Joaquin saw on RPN Channel 9 the
episode on Its a Date produced by IXL Productions. He wrote a letter to IXLs president Gabriel Zosa
informing him that BJPI has a copyright of the same format as shown on their Its a Date show in
their Rhoda and Me show. Zosa sought to register IXLs copyright to their first episode of Its a
Date to the National Library. Petitioner filed a complaint in violation of PD No. 49 against the
respondent before the RTC of Quezon City. Respondent sought a review of the resolution from the Asst.
City Prosecutor before the Department of Justice.
Sec. of Justice Franklin Drilon directed to move for dismissal of the case against the respondents and
denied the petitioners motion for reconsideration hence this petition before the Supreme Court.
Issue: Whether or not the format or mechanics of the petitioners television show is entitled to a
copyright protection.

Ruling: The Supreme Court held that the format of a show is not copyrightable as provided by Section
2 of PD no. 49 otherwise known as the Decree on Intellectual Property which enumerates the classes
of work that are covered by the copyright protection. Similarly, RA 8293, the Intellectual Property Code
of thePhilippines provides that format or mechanics of a television show is not included in the list of
the protected work by the copyright law of the Philippines. PD 49 enumerates the works subject to
copyright protection which refers to finished works and not on concepts. It does not extend to an idea,
procedure, process, system, method or operation, concept, principles or discovery regardless of the
form to which it is described, explained, and illustrated or embodied in the work.

4. ABS-CBN Broadcasting Corporation v Philippine Multi-Media System, Inc. G.R. Nos.

175769-70, January 19, 2009
ABS-CBN Broadcasting Corporation v Philippine Multi-Media System, Inc. G.R. Nos. 175769-70, January
19, 2009
Facts: Philippine Multi-Media System, Inc. (PMSI), operator of Dream Broadcsating System, delivers a
digital direct-to-home (DTH) television satellite to its subscribers all over the Philippines, was granted
a legislative franchise under Republic Act 8630 and was given a Provisional Authority by the National
Telecommunications Commission (NTC) to install, operate and maintain a nationwide DTH satellite
service. When it commenced operations, it offered as part of its program line-up, together with other
paid premium program channels, ABS-CBN Channels 2 and 23, NBN, Channel 4, ABC, Channel 5, GMA,
Channel 7, RPN, Channel 9, and IBC, Channel 13, pursuant to Memorandum Circular 4-08-88 which
mandated all cable television system operators, operating within the Grade A and B CONTOURS to
carry
out
the
television
signals
of
the
authorized
television
broadcast
stations.
ABS-CBN Broadcasting Corporation (ABS-CBN), a licensed television and radio broadcasting network,
demanded PMSI to cease and desist from rebroadcasting Channels 2 and 23. In its reply, PMSI
contended that the rebroadcasting was in accordance with the authority granted by NTC under its
obligations under NTC MC 4-08-88.
Negotiations were ensued between the parties in an effort to reach a settlement; however, the same
was terminated by ABS-CBN allegedly due to PMSIs inability to ensure the prevention of illegal

retransmission and further rebroadcast of its signals, as well as the adverse effect of the
rebroadcasts on the business operations of its regional television stations.
ABS-CBN filed with the Intellectual Property Rights Office (IPO) a complaint for Violation of Laws
Involving Property Rights, with Prayer for the Issuance of a Temporary Restraining Order and/or Writ of
Preliminary Injunction alleging that PMSIs unauthorized rebroadcasting of Channels 2 and 23
infringed on its broadcasting rights and copyright. The TRO was granted by the Bureau of Legal Affairs
(BLA) of IPO. PMSI, pursuant to the TRO, suspended the retransmission of PMSI of Channels 2 and 23
and likewise filed a petition for certiorari with the Court of Appeals. The Court of Appeals granted the
petition of PMSI and reversed the decision of the BLA. ABS-CBN filed its appeal however it was
dismissed by the Court of Appeals. Furthermore, ABS-CBNs motion for reconsideration was denied.
Issue:
1. Whether or not PMSI violated the Laws on Property Rights.
2. Whether or not the issuance MC 4-08-88 by the NTC is a valid exercise of the police power of the
State.
Held:
1. NO. PMSI did not violate the Laws on Property Rights because it is not engaged in rebroadcasting
Channels 2 and 23. Rebroadcasting has been defined as the simultaneous broadcasting by one
broadcasting organization of the broadcast of another broadcasting organization. It is also the
transmission by wireless means for the public reception of sounds or of images or of representations
thereof; such transmission by satellite is also broadcasting where the means for decrypting are
provided to the public by the broadcasting organization or with its consent. PMSI is only engaged in
the carrying of signals of ABS-CBN coming from ABS-CBN and transmitting signals. PMSI is not the
origin nor does it claim to be the origin of the programs broadcasted by the ABS-CBN. PMSI did not
make and transmit on its own but merely carried the existing signals of the ABS-CBN. When PMSI
subscribers view ABS-CBNs programs in Channels 2 and 23, they know that the origin thereof was the
ABS-CBN.
The nature of broadcasting is to scatter the signals in its widest area of coverage as possible. On this
score, it may be said that making public means that accessibility is undiscriminating as long as it is
within the range of the transmitter and equipment of the broadcaster. That the medium through which
the PMSI carries the ABS-CBNs signal, that is via satellite, does not diminish the fact that it operates
and functions as a cable television. It remains that the PMSIs transmission of signals via its DTH
satellite television service cannot be considered within the purview of broadcasting.
Furthermore, there is no rebroadcasting on the part of the PMSI of the ABS-CBMs programs on
Channels 2 and 23, as defined under the Rome Convention, which defines rebroadcasting as the
simultaneous broadcasting by one broadcasting organization of the broadcast of another broadcasting
organization. ABS-CBN creates and transmits its own signals; PMSI merely carries such signals which
the viewers receive in its unaltered form. PMSI does not produce, select, or determine the programs to
be shown in Channels 2 and 23. Likewise, it does not pass itself off as the origin or author of such
programs. Insofar as Channels 2 and 23 are concerned, PMSI merely retransmits the same in
accordance with Memorandum Circular 04-08-88. With regard to its premium channels, it buys the
channels from content providers and transmits on an as-is basis to its viewers. Clearly, PMSI does not
perform the functions of a broadcasting organization; thus, it cannot be said that it is engaged in
rebroadcasting Channels 2 and 23.
Therefore, the retransmission of ABS-CBNs signals by PMSI which functions essentially as a cable
television does not constitute rebroadcasting in violation of the formers intellectual property rights
under the IP Code.
2. YES. The law on copyright is not absolute. The carriage of ABS-CBNs signals by virtue of the mustcarry rule in Memorandum Circular No. 04-08-88 is under the direction and control of the government

though the NTC which is vested with exclusive jurisdiction to supervise, regulate and control
telecommunications and broadcast services/facilities in the Philippines. The imposition of the mustcarry rule is within the NTCs power to promulgate rules and regulations, as public safety and interest
may require, to encourage a larger and more effective use of communications, radio and television
broadcasting facilities, and to maintain effective competition among private entities in these activities
whenever
the
Commission
finds
it
reasonably
feasible.
The Must-Carry Rule is in consonance with the principles and objectives underlying Executive Order
No. 436, to wit:
The Filipino people must be given wider access to more sources of news, information, education,
sports event and entertainment programs other than those provided for by mass media and afforded
television programs to attain a well informed, well-versed and culturally refined citizenry and enhance
their socio-economic growth.
Moreover, radio and television waves are mere franchised which may be reasonably burdened with
some form of public service. It is a privilege subject, among other things, to amendment by Congress
in accordance with the constitutional provision that any such franchise or right granted . . . shall be
subject to amendment, alteration or repeal by the Congress when the common good so requires.
The must carry rule is a valid exercise of the police power of the State. It favors both broadcasting
organizations and the public. It prevents cable television companies from excluding broadcasting
organization especially in those places not reached by signal. Also, the rule prevents cable television
companies from depriving viewers in far-flung areas the enjoyment of programs available to city
viewers. In fact, this Office finds the rule more burdensome on the part of the cable television
companies. The latter carries the television signals and shoulders the costs without any recourse of
charging. On the other hand, the signals that are carried by cable television companies are dispersed
and scattered by the television stations and anybody with a television set is free to pick them up.

ISSUE: whether or not the playing and signing of musical compositions which have been copyrighted
under the provisions of the Copyright Law (Act 3134) inside the establishment of the defendantappellee constitute a public performance for profit within the meaning and contemplation of the
Copyright Law of the Philippines; and assuming that there were indeed public performances for profit,
whether or not appellee can be held liable therefor.
Held: NO. It has been held that "The playing of music in dine and dance establishment which was paid
for by the public in purchases of food and drink constituted "performance for profit" within a Copyright
Law." Thus, it has been explained that 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.
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.
The Supreme Court has ruled that "Paragraph 33 of Patent Office Administrative Order No. 3 (as
amended, dated September 18, 1947) entitled 'Rules of Practice in the Philippines Patent Office
relating to the Registration of Copyright Claims' promulgated pursuant to Republic Act 165, provides
among other things that an intellectual creation should be copyrighted thirty (30) days after its
publication, if made in Manila, or within the (60) days if made elsewhere, failure of which renders such
creation public property." Indeed, 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.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.
5.

FILIPINO SOCIETY OF COMPOSERS, AUTHORS AND PUBLISHERS, INC., plaintiffappellant, vs. BENJAMIN TAN, defendant-appellee. G.R. No. L-36402. March 16,
1987.

PACITA I. HABANA, ALICIA L. CINCO and JOVITA N. FERNANDO vs. FELICIDAD C.

ROBLES and GOODWILL TRADING CO., INC. G.R. No. 131522, July 19, 1999

*is the owner of certain musical compositions among which are the songs entitled: "Dahil Sa Iyo",
"Sapagkat Ikaw Ay Akin," "Sapagkat Kami Ay Tao Lamang" and "The Nearness Of You."

FACTS: Pacita Habana et al., are authors and copyright owners of duly issued of the book, College
English For Today (CET). Respondent Felicidad Robles was the author of the book Developing English
Proficiency (DEP). Petitioners found that several pages of the respondent's book are similar, if not all
together a copy of petitioners' book. Habana et al. filed an action for damages and injunction, alleging
respondents infringement of copyrights, in violation of P.D. 49. They allege respondent Felicidad C.
Robles being substantially familiar with the contents of petitioners' works, and without securing their
permission, lifted, copied, plagiarized and/or transposed certain portions of their book CET.

*filed a complaint with the lower court for infringement of copyright against defendant-appellee for
allowing the playing in defendant-appellee's restaurant of said songs copyrighted in the name of the
former.

On the other hand, Robles contends that the book DEP is the product of her own intellectual creation,
and was not a copy of any existing valid copyrighted book and that the similarities may be due to the
authors' exercise of the "right to fair use of copyrighted materials, as guides."

Defendant-appellee,

The trial court ruled in favor of the respondents, absolving them of any liability. Later, the Court of
Appeals rendered judgment in favor of respondents Robles and Goodwill Trading Co., Inc. In this
appeal, petitioners submit that the appellate court erred in affirming the trial court's decision.

Plaintiff-appellant:

*countered that the complaint states no cause of action. While not denying the playing of said
copyrighted compositions in his establishment, appellee maintains that the mere singing and playing
of songs and popular tunes even if they are copyrighted do not constitute an infringement under the
provisions of Section 3 of the Copyright Law.

ISSUE: Whether Robles committed infringement in the production of DEP.

HELD: A perusal of the records yields several pages of the book DEP that are similar if not identical
with the text of CET. The court finds 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.
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.

7. NBI-Microsoft Corporation & Lotus Development Corporation v. Judy C. Hwang, et. al.
(G.R. No. 147043, 21 June 2005)
Microsoft Corp. and Beltron Computer Phils., Inc. entered into a Licensing Agreement where Beltron
was authorized to reproduce and install no more than one copy of Microsoft software on each
customer system hard disk. Microsoft Corp. terminated the agreement for non-payment of royalties.
Upon learning that Beltron was illegally copying and selling Microsoft software, Microsoft Corp. secured
search warrants leading to the search of Beltrons premises which resulted in the seizure of counterfeit
Microsoft software.
Microsoft filed a complaint for copyright infringement and unfair competition with the Department of
Justice. The DOJ dismissed the complaint on the ground that Beltron had no intent to defraud the
public as the software products seized came from an alleged Microsoft licensee in Singapore, and that
it did not manufacture the seized software products.
The Supreme Court ruled in favor of Microsoft Corp. and held that copyright infringement under the
Presidential decree 49 (the Old Copyright Law) is not confined to the unauthorized manufacturing of
intellectual works but covers the unauthorized performance of any of the acts covered by Section 05
of the said Law (i.e., copying, distributing, multiplying and selling), which acts were done by Beltron to
the prejudice and damage of Microsoft Corp. Moreover, the Supreme Court held that the counterfeit
cd-roms bought from Beltron suffice to support a finding of probable cause for unfair competition
under Article 189 (1) of the Revised Penal Code (now repealed by the IP Code) considering that the
packaging of these products could not be distinguished from those of authentic Microsoft software.
Such replication, together with the similarity in the content of the counterfeit cd-roms, implies an
intent to deceive the public.

Ruling: The court ruled that the petitioner is not protected by the copyright law despite the issuance
of the copyright certificate of registration as it merely gives prima facie evidence of the validity and
ownership. Therefore if the there are sufficient evidence that the copyrighted products are not original
creations and are readily available in the market under various brands, validity and originality will not
be presumed therefore the trial court has the right to quash the issued warrant for lack of probable
cause. Moreover no copyright accrues to the petitioner since Sec. 2, Rule 7 of the Copyrights
Safeguards and Regulations provides that the registration and deposit of work is purely for recording
the date of registration and is not conclusive as to the copyright ownership. It is not a proof of
copyright ownership and non-payment for registration within the prescribed period shall only make the
copyright owner liable to pay a fine.

Batch 2
9.

Campbell v. Acuff-Rose Music, 510 U.S. 569 (1994)

A United States Supreme Court copyright law case that established that a commercial parody can
qualify as fair use. That money is made does not make it impossible for a use to be fair; it is merely
one of the components of a fair use analysis.
History: The members of the rap music group 2 Live CrewLuke, Fresh Kid Ice, Mr. Mixx and Brother
Marquiscomposed a song called "Pretty Woman," a parody based on Roy Orbison's rock ballad, "Oh,
Pretty Woman." The group's manager asked Acuff-Rose Music if they could get a license to use
Orbison's tune for the ballad to be used as a parody. Acuff-Rose Music refused to grant the band a
license but 2 Live Crew nonetheless produced and released the parody.
Almost a year later, after nearly a quarter of a million copies of the recording had been sold, AcuffRose sued 2 Live Crew and its record company, Luke Skyywalker Records, for copyright infringement.
The District Court granted summary judgment for 2 Live Crew, holding that their song was a parody
that made fair use of the original song under 107 of the Copyright Act of 1976 (17 U.S.C. 107). The
Court of Appeals reversed and remanded, holding that the commercial nature of the parody rendered
it presumptively unfair under the first of four factors relevant under 107; that, by taking the "heart"
of the original and making it the "heart" of a new work, 2 Live Crew had taken too much under the
third 107 factor; and that market harm for purposes of the fourth 107 factor had been established
by a presumption attaching to commercial uses.

8. Manly Sportswear Manufacturing Inc. v Dadodette Enterprises and/or Hermes Sports

Center GR No. 165306, September 20, 2005

Holding: The Supreme Court held that 2 Live Crew's commercial parody may be a fair use within the
meaning of 107.

Facts: The NBI secured a search warrant on March 14, 2003 from the RTC to act upon the information
that respondents were in possession of goods copyright of which belongs to the petitioner. Finding
reasonable grounds in violation of Section 172 and 217 of RA 8293 a search warrant was issued.
Respondents move to quash and annul the search warrant contending it is invalid and the requisites
for its issuance are not complied with. They insist that the sporting goods manufactured and
registered in the name MANLY is just ordinary and common and not among the classes protected
under RA 8293. The court granted the motion to quash declaring the search warrant null and void
because there were certificates of registrations issued earlier than MANLY for the same sporting goods
under various brands thereby negating the fact that their products are copyrighted and original
creations. Motion for reconsideration was denied by the appellate court sustaining the lower courts
decision thus this instant petition for review for certiorari.

Justice Souter began by describing the inherent tension created by the need to simultaneously protect
copyrighted material and allow others to build upon it, quoting Lord Ellenborough: "While I shall think
myself bound to secure every man in the enjoyment of his copyright, one must not put manacles upon
science."

Issue: Whether or not the certificate of registration in favor of MANLY sustains the action against the
respondents.

The Court elaborated on this tension, looking to Justice Story's analysis in Folsom v. Marsh, 9 F. Cas.
342 (C.C.D. Mass. 1841), where he stated, "look to the nature and objects of the selections made, the
quantity and value of the materials used, and the degree in which the use may prejudice the sale, or
diminish the profits, or supersede the objects, of the original work." This analysis was eventually
codified in the Copyright Act of 1976 in 107 as follows:
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 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.

Notably, Justice Souter attached the lyrics of both songs as appendixes to his majority opinion for the
Court. As a result, both songs were reproduced in the United States Reports along with the rest of the
opinion, and may now be found in every major law library in the United States.

10. Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417 (1984)

The Supreme Court then found the aforementioned factors must be applied to each situation on a
case by case basis. '"The fact that parody can claim legitimacy for some appropriation does not, of
course, tell either parodist or judge much about where to draw the line. Like a book review quoting the
copyrighted material criticized, parody may or may not be fair use, and petitioner's suggestion that
any parodic use is presumptively fair has no more justification in law or fact than the equally hopeful
claim that any use for news reporting should be presumed fair."

Also known as the Betamax case, is a decision by the Supreme Court of the United States which
ruled that the making of individual copies of complete television shows for purposes of time
shifting does not constitute copyright infringement, but is fair use. The Court also ruled that the
manufacturers of home video recording devices, such as Betamax or other VCRs (referred to
as VTRs in the case), cannot be liable for infringement. The case was a boon to the home video market
as it created a legal safe haven for the technology. Ironically, the popularity of VCRs significantly
benefited the film industry through the sale of pre-recorded movies.

When looking at the purpose and character of 2 Live Crew's use, the Court found that the more
transformative the new work, the less will be the significance of the other three factors. The court
found that, in any event, a work's commercial nature is only one element of the first factor enquiry
into its purpose and character, quoting Sony Corp. of America v. Universal City Studios, Inc., 464 U.S.
417. The Supreme Court found the Court of Appeals analysis as running counter to this proposition.

The broader legal consequence of the Court's decision was its establishment of a general test for
determining whether a device with copying or recording capabilities ran afoul of copyright law. This
test has created some interpretative challenges to courts in applying the case to more recent file
sharing technologies available for use on home computers and over the Internet.

Justice Souter then moved onto the second 107 factor, "the nature of the copyrighted work", finding
it has little merit in resolving this and other parody cases, since the artistic value of parodies is often
found in their ability to invariably copy popular works of the past.
The Court did find the third factor integral to the analysis, finding that the Court of Appeals erred in
holding that, as a matter of law, 2 Live Crew copied excessively from the Orbison original. Souter
reasoned that the "amount and substantiality" of the portion used by 2 Live Crew was reasonable in
relation to the band's purpose in creating a parody of "Oh, Pretty Woman". The majority reasoned
"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." The Supreme Court then looked to the new
work as a whole, finding that 2 Live Crew thereafter departed markedly from the Orbison lyrics,
producing otherwise distinctive music.
Looking at the final factor, the Supreme Court found that the Court of Appeals erred in finding a
presumption or inference of market harm (such as there had been in Sony). Parodies in general, the
Court said, will rarely substitute for the original work, since the two works serve different market
functions. While Acuff-Rose found evidence of a potential "derivative" rap market in the very fact that
2 Live Crew recorded a rap parody of "Oh, Pretty Woman" and another rap group sought a license to
record a rap derivative, the Court found no evidence that a potential rap market was harmed in any
way by 2 Live Crew's parodic rap version. In fact, the Court found that it was unlikely that any artist
would find parody a lucrative derivative market, noting that artists "ask for criticism, but only want
praise."
The Supreme Court reversed the court of appeals and remanded the case. On remand, the parties
settled the case out of court. According to press reports, under terms of the settlement, Acuff-Rose
dismissed its lawsuit, and 2 Live Crew agreed to license the sale of its parody of the song. Although
Acuff-Rose stated that it was paid under the settlement, the terms were not otherwise disclosed.

Background
of
the
case:
In
the
1970s, Sony developed
the Betamax video
tape
recording format. Universal Studios and the Walt Disney Company were among the film industry
members who were wary of this development, but were also aware the U.S. Congress was in the final
stages of a major revision of copyright law and would likely be hesitant to undertake any new
protections for the film industry. The companies therefore opted to sue Sony and its distributors
in California District Court in 1976, alleging that because Sony was manufacturing a device that could
be used for copyright infringement, they were thus liable for any infringement committed by its
purchasers. The complaint additionally included an unfair competition claim under the Lanham Act,
but this was dismissed early in the course of the lawsuit.
Two years later, the District Court ruled for Sony, on the basis that noncommercial home use recording
was considered fair use, that access to free public information is a First Amendment public interest
served by this use. However, this ruling was reversed in part by the Ninth Circuit Court, which held
Sony liable for contributory infringement. The court also held Betamax was not a staple article
because its main purpose was copying. It went on to suggest damages, injunctive relief,
and compulsory licenses in lieu of other relief.
The Court's decision:
After hearing oral arguments in the case, the Supreme Court was conflicted as to the outcome. The
papers of Justice Thurgood Marshall, released nearly a decade later, reveal that a majority of justices
were initially inclined to affirm the Ninth Circuit. Justice Harry Blackmun was assigned to write a
majority opinion to that effect, while Justice John Paul Stevens drafted a dissenting opinion. Sensing
that some members of the Court might be persuaded to change their votes, Stevens wrote a dissent
that read like a majority opinion, and could be changed to one with the substitution of a few words.
Stevens, in his initial draft, expressed great concern with the possibility that an individual might be
liable for copyright infringement for copying a single program in his own home, and for his own use. At
the same time, Justice Brennan was wavering on affirming based on the presence of non-infringing
uses of the technologybut Brennan was not prepared to say that making home copies for repeated
personal use did not constitute an infringement. Justice White, noting Brennan's position, suggested

that Stevens shift the basis of his opinion away from arguments about whether home-use was, in fact,
an infringement. White pointed out that the issue need not be resolved, because the suit was not
against home-users, but against the producers of the technology that enabled them.
Justice O'Connor, also initially inclined to affirm the Ninth Circuit, had concerns about the potential to
shift the burden of proving harm away from the plaintiff. The District Court had found that
the plaintiffs had failed to prove that they were harmed; O'Connor was unable to come to terms with
Blackmun's reluctance to agree that the actual harm must be provable.
Stevens therefore adjusted his draft to accommodate the positions taken by Brennan and O'Connor. In
so doing, he shifted the vote of the Court from a 6-3 majority for affirming the Ninth Circuit to a 5-4
majority for reversing the Ninth Circuit.
Majority opinion: The Court's 5-4 ruling to reverse the Ninth Circuit in favor of Sony hinged on the
possibility that the technology in question had significant non-infringing uses, and that the plaintiffs
were unable to prove otherwise.
On the question of whether Sony could be described as "contributing" to copyright infringement, the
Court stated:
[There must be] 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
noninfringing uses....
The question is thus whether the Betamax is capable of commercially significant noninfringing uses ...
one potential use of the Betamax plainly satisfies this standard, however it is understood: private,
noncommercial time-shifting in the home. It does so both (A) because respondents have no right to
prevent other copyright holders from authorizing it for their programs, and (B) because the District
Court's factual findings reveal that even the unauthorized home time-shifting of respondents'
programs is legitimate fair use.
If there are millions of owners of VTR's 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....
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.
Combined with the noncommercial, nonprofit nature of time-shifting, he concluded that it was indeed
a fair use.
Children's television personality Mr. Rogers' testimony supporting the manufacturers of VCRs before
the District Court was taken into consideration for the decision. The Court stated that his views were a
notable piece of evidence "that many [television] producers are willing to allow private time-shifting to
continue" and even quoted his testimony in a footnote.
11. Dr. Seuss Enters., LP v. Penguin Books USA, Inc., 109 F.3d 1394 (9th Cir. 1997)

Facts: Defendants, Penguin Books and Dove Audio, Inc., were book publishers who sought to publish
and distribute a book titled The Cat NOT in the Hat! A Parody by Dr. Juice, a rhyming summary of the
O.J. Simpson trial. Plaintiff Dr. Seuss Enterprises, LP owned most of the copyright and trademark rights
for the childrens books written and illustrated by Theodor S. Geisel under the pseudonym Dr. Seuss,
including The Cat in the Hat. Defendants were not authorized to use any element of plaintiffs original
books and did not attempt to obtain permission. Defendants book had many similarities to the
original work, including rhyme scheme, thematic and narrative elements, and certain chief character
identifiers, such as the distinctive red and white striped hat. Plaintiff filed suit, and the district court
granted a preliminary injunction. Defendants filed an interlocutory appeal.
Issue: Whether unauthorized copying of an original works artistic style, plot, themes, and certain key
character elements qualified as fair use.
Ruling: The Ninth Circuit concluded that the district courts finding that plaintiff had shown a likelihood
of success on the merits was not clearly erroneous, in light of fair use analysis of defendants work,
and affirmed the preliminary injunction. First, the court found that the use was not transformative. The
work was not a parody, because it did not hold up Dr. Seusss style, but merely mimicked it to attract
attention or avoid the difficult work of developing original material. Furthermore, according to the
court there was no effort to create a transformative work with new expression, meaning, or
message. Second, the court found that the creative, imaginative and original nature of plaintiffs
work weighed against fair use. Third, the court found that defendant had copied substantial portions,
because the character of the cat, used in both works, was the highly expressive core of plaintiffs
work. Other principal thematic and narrative elements were also copied. Finally, because the use was
commercial and non-transformative, harm to the market for the original work could be more readily
inferred. Further, because fair use is an affirmative defense, and defendants failed to submit evidence
on the fourth factor, this disentitled defendants from relief from the preliminary injunction
12. Castle Rock Entertainment Inc. v. Carol Publishing Group, 150 F.3d 132 (2nd Cir.
1998),
Was a U.S. copyright infringement case involving the popular American sitcom Seinfeld. Some U.S.
copyright law courses use the case to illustrate modern application of the fair use doctrine. The United
States Court of Appeals for the Second Circuit upheld a lower court's summary judgment that the
defendant
had
committed
copyright
infringement.
The
decision
is
noteworthy
for
classifying Seinfeld trivia not as unprotected facts, but as protectable expression. The court also
rejected the defendants fair use defense finding that any transformative purpose possessed in
the derivative work was "slight to non-existent" under the Supreme Court ruling in Campbell v. AcuffRose Music, Inc., 510 U.S. 569 (1994).
Facts of the case
Castle Rock Entertainment is the copyright holder and producer of each episode of the
sitcom, Seinfeld. Beth Golub wrote SAT: The Seinfeld Aptitude Test a 132-page book containing 643
trivia questions and answers about the events and characters depicted in Seinfeld through her
publisher, Carol Publishing Group. The book contained 211 multiple choice questions, in which only
one out of three to five answers were correct; 93 matching questions; and a number of short-answer
questions. The questions were divided into five levels of difficulty, labeled (in increasing order of
difficulty) "Wuss Questions," "This, That, and the Other Questions," "Tough Monkey Questions,"
"Atomic Wedgie Questions," and "Master of Your Domain Questions." An example from the public
record of one of the "Wuss Questions":
1. To impress a woman, George passes himself off as
a) a gynecologist
b) a geologist
c) a marine biologist

d) a meteorologist
The book drew from 84 Seinfeld episodes that had been broadcast as of the time that the Carol Group
published The SAT. While Golub had created the incorrect answers, the questions and correct answers
were grounded in some part to a Seinfeld episode. A significant number of questions contained
dialogue from the show. The name "Seinfeld" was displayed prominently throughout the book, and it
contained pictures of the show's actors on several pages. The back cover contained a disclaimer which
read, "This book has not been approved or licensed by any entity involved in creating or
producing Seinfeld."

Nevertheless, Carol Publishing urged the court to consider the "total concept and feel" approach
rather than the subtraction method. The court noted that because the two works were of different
genres, other approaches would be less helpful. An "ordinary observer", the intended audience, might
be misguided in the differences between a book and television program to accurately compare each
work's total concept. The book contained no theme or plot, but only a random and scattered collection
of questions, its only concept being a test of Seinfeld trivia. From this analysis, the court justified its
approach and illustrated the possible different outcome it may have reached had it accepted the
defendant's proposed analysis.

At first publication, the book did not provoke a lawsuit. Instead, NBC requested several free copies and
distributed them with promotions for the program. One of the show's executive producers exclaimed
that The SAT was a "fun little book." Seinfeld's audience grew after The SAT was first published.
Nevertheless, Castle Rock had been very selective in its licenses of Seinfeld merchandise, and had
rejected numerous products previously to the publication of The SAT.

Defendant's infringement does not constitute fair use

Procedural history
In November 1994, Castle Rock contacted Carol Publishing Group concerning its copyright
and trademark infringement claims. Carol Publishing continued to publish The SAT and in February
1995, Castle Rock filed an action in Federal District Court alleging federal copyright and trademark
infringement and state law unfair competition. Both defendant and plaintiff moved for summary
judgment.
Castle Rock succeeded in its motion for summary judgment. In 1997, Judge Sonia Sotomayor of
the United States District Court for the Southern District of New York held that Carol had infringed on
Castle Rock's copyrights in Seinfeld and further that the copying was not fair use. The district court
entered final judgment against Carol and awarded Castle Rock $403,000 with interest in damages.
It permanently enjoined Carol from publishing or distributing The SAT, and ordered that all copies in
Carol's possession be destroyed. Carol appealed.
Ruling of the appeals court
Plaintiff has a prima facie case for copyright infringement
The appeals court noted that there was no dispute as to whether Castle Rock owned a valid copyright
in Seinfeld nor was it disputed that Carol Publishing copied material from the shows. The question was
only of misappropriation of protectable material.
The appeals court employed both a "qualitative vs. quantitative" method and a "total concept and
feel" approach in determining if Carol Publishing had misappropriated Seinfeld.
The qualitative vs. quantitative approach sought to determine if the quality of the copied work was
actionable in an infringement lawsuit and if the quantity of the copied work was enough to stake a
claim. The court chose to take the Seinfeld series as a whole, rather than compare the quantity of
copied work from each of the 84 episodes individually. Altogether, The SAT contained 643 fragments
from the entire series. The court held that this was a sufficient quantity of copying to overcome the de
minimis threshold alleged by Carol Publishing. When analyzing the quality of the copied material, the
court rejected the defendant's position that Seinfeld trivia constituted facts and was therefore not
covered by copyright protection. It reasoned that the "facts" portrayed in Seinfeld originated in the
fictitious expression by the writers of the show. The court noted that the book did not quiz readers on
such facts as the location of the Seinfeld set or the biographies of the actors, but on characters and
events springing from the imagination of the show's authors. Normally, the court would have
eliminated those elements that did not meet the quality requirements through the subtraction method
in misappropriation analysis, but in finding nothing to subtract the court held that the plaintiffs had
established a prima facie case.

The court provided a substantial analysis of Carol Publishing's fair use defense. Of particular interest
was its handling of the "transformative use" standard established in the Supreme Court's opinion
in Campbell. The court noted that the fundamental purpose of the fair use doctrine is "promoting the
Progress of Science and Useful Arts."
Transformative use under the purpose and character standard
The court held that the book's intended commercial use weighed against a finding of fair use. In
citing Campbell, "no man but a blockhead ever wrote, except for money." But the court further held
that the more critical inquiry was whether The SAT merely supplanted the Seinfeld episodes or rather
if it added something new, providing new insights, new aesthetics in the manner that the fair use
doctrine was meant to enrich society.
The defendants claimed two arguments of transformative qualities in The SAT: first that the subject
matter of the work did not bar a finding of fair use, and second that the book was a critique of the
show. Specifically, the defendants stylized The SAT as a work "decoding the obsession with and
mystique that surrounds Seinfeld by critically restructuring Seinfeld's mystique into a system complete
with varying levels of 'mastery' that relate the reader's control of the show's trivia to knowledge of and
identification with their hero, Jerry Seinfeld." In response, Castle Rock retorted that "had defendants
been half as creative in creating The SAT as were their lawyers in crafting these arguments about
transformation, defendants might have a colorable fair use claim."
The court rejected the defendants' arguments holding that any transformative purpose posed by the
book was slight or non-existent. It concluded that the purpose of the book was to entertain
the Seinfeld audience with a book about Seinfeld, much the same purpose as the television show.
Finally, the court noted a potential source of confusion between the "transformative use" doctrine and
derivative works. The court emphasized that derivative works were based upon preexisting works.
They transformed an original work into a new mode of expression, but unlike a work of fair use
expression, a derivative work's purpose was not transformed. In addition, when a derivative work
transformed an original work into a new mode of expression such that little similarity remained, it
would not infringe the copyright of the original work.
Nature of the copyrighted work
The court looked to the second statutory factor under the Copyright Act of 1976: the nature of the
copyrighted work. A work's nature "calls for recognition that some works are closer to the core of
intended copyright protection than others, with consequence that fair use is more difficult to establish
when the former works are copied." The court held that the nature of Seinfeld was fictional, and the
second factor tends to favor works based on fact. Works of fiction generally enjoy greater copyright
protection because of their higher content of protectible material. However, the court noted that
transformative use can lessen the importance of the nature of the copyrighted work, but since The
SAT held slight or non-existent transformative purpose, the fictional nature of Seinfeld disfavored a
finding a fair use.

Amount and substantiality of the portion taken

The third factor analyzed by the court was whether the portion of copying furthered the purpose and
character of use or whether it went beyond what was necessary. Here again, the transformative use
affected the court's analysis. Use of a substantial part or the "heart" of a protected work is justified
when the character of the work is criticism or parody, because these expressions necessarily demand
a greater quantity to be useful. The court reasoned that a greater degree of material
from Seinfeld would be necessary for an accurate critique of the show's "nothingness", but because
the court found little transformative use for the purposes of critique, this weighed against defendants.
Indeed, the court reasoned that the 643 copied elements in the trivia questions was a substantial
portion taken for the rather "straight forward" commentary of Seinfeld's meaninglessness, and this
weighed against fair use.
Effect of use on the market
The court noted that the fourth factor was not to be given the greatest weight, but to be taken equally
with the other three in a determination of fair use. The analysis for market effect does not look to
whether the secondary work detracts from market of the copyrighted work, but rather does it
substitute the market of the original (the nature of copyright as a monopoly on publication does not
permit a substitution). The court held that the differences in form between The SAT and Seinfeld and
the lack of transformative purpose made the book a derivative work in a derivative market. Because
the SAT was the only Seinfeld trivia book in existence, it completely substituted this derivative market
for the show. The court further reasoned that even though Castle Rock did not intend to enter the
trivia book market, the existence of The SAT effectively usurped its right to do so. If the derivative
market was one that the copyright holder would generally develop or license, a secondary author
would be barred from entering it. On the other hand, if the market was one generally protected by fair
use, such as criticism, parody, or academic scholarship, the copyright holder could not enter those
markets and attempt to preclude secondary authors from entering.
Other factors affecting fair use
The court noted that the four factors enumerated in the fair use statute are not exclusive, but are only
a guide in the analysis. The court held that it was irrelevant whether Carol Publishing continued to
distribute The SAT after Castle Rock notified it of its infringement claim, because such distribution
would have been justified if the book was a fair use of Seinfeld. The court concluded that other
considerations affecting fair use such as the 1st Amendment and the public interest were not relevant
to the case. When taking all factors together, the court held that the book was not fair use. In a final
footnote, the opinion provided an answer key to all trivia questions contained therein.
13. Monster Commcns, Inc. v. Turner Broad. Sys., Inc., 935 F. Supp. 490 (S.D.N.Y.
1996)
Facts: Plaintiff Monster Communications, Inc. owned the film rights for the movie When We Were Kings
(Kings) that contained historic footage documenting the 1974 title boxing match, often called the
Rumble in the Jungle, between Mohammed Ali and George Foreman. Defendant Turner Broadcasting
System, Inc. made the documentary AliThe Whole Story (Story), which contained a number of film
clips, aggregating approximately between forty one seconds and two minutes, that appear in Kings
and allegedly are owned by Monster. Plaintiff sued Turner for infringing its copyright in the historic
film footage, seeking to enjoin the company from exhibiting the documentary.
Issue: Whether defendant would be likely to establish that its use of plaintiffs historic film footage in a
documentary constituted fair use.
Ruling: The court denied plaintiffs motion for injunctive relief because it concluded that defendant
was likely to prevail on its argument that use of the historic footage in its documentary was a fair use.

In reaching that conclusion, the court found that defendants work, while commercial in nature,
undeniably constitute[d] a combination of comment, criticism, scholarship and research. The court
also determined that the amount used weighed in favor of finding fair use because the footage used
was not the focus of defendants documentary. Additionally, the court found that defendants use of
the footage was unlikely to harm the market for plaintiffs work because the use was 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 the minute or so of common footage.
Finally, the historic nature of the allegedly infringed films clips also supported a finding of fair use.
14. Kelly v. Arriba Soft Corporation, 280 F.3d 934 (9th Cir. 2002) withdrawn, re-filed at
336 F.3d 811 (9th Cir. 2003),
Is a U.S. court case between a commercial photographer and a search engine company. During the
case ownership of Arriba Soft changed to Sorceron, the operator of the Internet search
engine Ditto.com. The court found that US search engines may use thumbnails of images (size limits
not determined), though the issue of inline linking to full size images instead of going to the original
site was not resolved.
Facts: The plaintiff Kelly sold pictures to various publications from his web site. The defendants Arriba
Soft Inc. and its CEO Michael J. Lyons ran a search engine. Defendant Arriba's search engine indexed
pictures from the web so that web users can conduct image searches. The search engine returns a set
of postage stamp-size image thumbnails that relate directly to the specific term searched on. Kelly's
pictures appeared as thumbnails on defendants' search engine along with millions of other thumbnail
images from all over the web. Clicking on the thumbnails from Kelly's website would connect the user
with Kelly's website via a deep link. In addition to the display, a postage stamp size thumbnail image
the user could also link to the full picture in a new web browser window. The thumbnail image was
stored on Arriba's system, but the full picture was not stored in Arriba's system. The picture is
displayed on the user's screen as a "thumbnail", and if the full picture was linked to by the user then it
was presented in a frame environment provided by Arriba. Kelly sued Arriba for copyright infringement
for both use of the thumbnail image and use of the full image.
Case history
The United States District Court for the Central District of California, Gary L. Taylor, J., 77 F.Supp. 2d
1116, granted summary judgment for search engine operator based on finding of fair use and owner
appealed.
In 2002, the Ninth Circuit United States Court of Appeals in San Francisco, California affirmed the
District Court's holding that thumbnails were prima facie infringing Kelly's copyright, but that the fair
use doctrine permitted the use of the thumbnails in the image index. It upheld the right of image
search engines to display thumbnail copies of images within their search results. However, the Circuit
Court overturned a portion of the lower court summary judgment ruling in favor of the defendant,
holding that fair use did not permit the inline linking or framing processes that displayed Kelly's
images in the context of Arriba's web site.
On July 7, 2003, the Ninth Circuit modified its initial decision. The Court let stand the ruling about
thumbnails and fair use but withdrew its decision on inline links and remanded the case to the District
Court for trial, holding that the District Court had made a decision it shouldn't have made at that stage
of the proceedings. On denial of rehearing and withdrawing and superseding its prior opinion, 280 F.3d
934, the Court of Appeals, T. G. Nelson, Circuit Judge, held that operator's use of owner's images as
"thumbnails" in its search engine was fair use. 280 F.3d 934 (CA9 2002).
Kelly has posted online that after failure to reach a settlement, default judgment in his favor was
obtained on the remaining issues on March 18, 2004. However, at that point the owner of the Arriba
search engine (Sorceron Inc.) had gone out of business and there was no one for Kelly to settle with.

With no one left to defend the case, Kelly managed to get a judgement against Arriba Soft Inc., an
entity that no longer existed in any form.
Judgment shall be entered in favor of Plaintiff LESLIE A. KELLY, and individual and d/b/a LES KELLY
PUBLICATIONS, LES KELLY ENTERPRISES, and SHOW ME THE GOLD and against Defendant ARRIBA
SOFT CORPORATION, aka DITTO.COM in the sum of $345,000.00, plus reasonable attorney's fees in the
sum of $6,068.20. s/Gary L. Taylor, UNITED STATES DISTRICT COURT JUDGE."
Fair use analysis
Each of the courts that reviewed the summary judgment application conducted an analysis of the four
factors which are stated in of the United States Copyright Act. What follows is the analysis done in the
revised Ninth Circuit opinion of July 2003.
Purpose and character of the use
The use was found to be commercial and transformative, not of the same type as the original work,
because the images were not being sold as pictures but were to facilitate the identification of the
images in the search engine: "This first factor weighs in favor of Arriba's due to the public benefit of
the search engine and the minimal loss of integrity to Kellys images."
Nature of the copyrighted work
The pictures are a published creative work available on the internet. A creative work favors a finding
of infringement. As a published work, the use is more likely to be fair: "This factor weighs only slightly
in favor of Kelly."
Amount and substantiality of portion used
The court found this factor to be neutral: "Copying an entire work militates against a finding of fair use
... If the secondary user only copies as much as is necessary for his or her intended use, then this
factor will not weigh against him or her ... This factor neither weighs for nor against either party ... It
was necessary for Arriba to copy the entire image to allow users to recognize the image and decide
whether to pursue more information."
Effect of the use upon the potential market for or value of the copyrighted work
This requires considering the effect if the actions were widespread, not solely the effect of the
particular user. A transformative work is less likely to have an adverse effect than one which merely
supersedes the original: "Arribas use of Kellys images in its thumbnails does not harm the market for
Kellys images or the value of his images". The thumbnails would guide people to Kelly's work rather
than away from it and the size of the thumbnails makes using them instead of the original
unattractive.
Result of the analysis
"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 Arribas use of Kellys images as thumbnails
in its search engine is a fair use."

15. Kienitz v. Sconnie Nation, LLC

Source 1: While a student at University of Wisconsin in 1969, Soglin attended the first Mifflin Street
Block Party. Now in his seventh term as Mayor of Madison, Wisconsin, Soglin wants to shut down the
annual event. For the 2012 Block Party, Sconnie sold 54 t-shirts and tank tops displaying an image of

Soglins face and the phrase Sorry for Partying. Photographer Kienitz accused Sconnie of copyright
infringement. Sconnie conceded starting with a photograph that Kienitz took at Soglins inauguration
that it downloaded from the citys website. The picture was posterized, background was removed, and
Soglins face was turned lime green and surrounded by multi-colored writing. The district court
granted summary judgment for the defendants, applying the fair use statutory defense to
infringement, 17 U.S.C. 107. The Seventh Circuit affirmed, concluding that a shirt is no substitute for
the original photograph; Kienitz does not argue that defendants reduced demand for the original work
or any use that he is contemplating. Defendants removed so much of the original that, as with the
Cheshire Cat, only the smile remains. What is left, besides a hint of Soglins smile, is the outline of his
face, which cannot be copyrighted. Defendants chose the design as a form of political commentary,
not for profit.
Source 2: is a copyright case in the United States Court of Appeals for the Seventh Circuit, on the
question of whether the use of a photograph by Michael Kienitz by printing and t-shirt company,
Sconnie Nation LLC, was a copyright infringement or fair use. The Seventh Circuit held in 2014 that
Sconnie Nation's use was fair use, applying the fair use statutory defense. While granting summary
judgment to the defendants, the judgement notes that Kienitz did not present an argument for loss of
commercial opportunity nor questioned why the defendants needed to use the specific photograph.

16. Cariou v. Prince, 714 F. 3d 694 (2d Cir. 2013)

is a copyright case in the United States Court of Appeals for the Second Circuit, on the question of
whether artist Richard Prince's appropriation art treatment of Patrick Cariou's photographs was a
copyright infringement or a fair use. The Second Circuit held in 2013 that Prince's appropriation
art could constitute fair use, and that a number of his works were transformative fair uses of Cariou's
photographs. The Court remanded to the United States District Court for the Southern District of New
York for reconsideration of five of Prince's works. The Supreme Court denied Cariou's petition for a writ
of certiorari, and the case settled in 2014.
Background
Photographer Patrick Cariou published in 2000 Yes, Rasta a book of photographs of
the rastafarian community in Jamaica. Richard Prince in 2008 created Canal Zone, a series of art works
incorporating Cariou's photographs. Prince's works involved copying the original photographs and
engaging in a variety of transformations. These included printing them, increasing them in size,
blurring or sharpening, adding content (sometimes in color), and sometimes compositing multiple
photographs together or with other works. Prince exhibited his collection at Gagosian
Gallery as appropriation art.
In 2009, Cariou filed a copyright infringement suit against Richard Prince, as well as Gagosian Gallery,
Larry Gagosian (the founder and owner of the gallery), and RCS MediaGroup (which printed the exhibit
catalog).
Findings
The Southern District of New York (SDNY), in March 2011, held that Prince's works were infringing. At
that point, the Cariou v. Prince case received significant attention, because the SDNY ordered that
Prince's unsold works, and Rizzoli's catalogs, be impounded and destroyed. The SDNY found that the
works were not transformative, in part because Richard Prince did not claim to be "commenting upon"
the original works.

Prince, whose works often sell in galleries for many thousands of dollars, appealed to the Second
Circuit. The case was of high interest to the art world, which largely favored Prince's position, and to
the photographic community, which largely favored Cariou's position.

Turning to the defense of fair use, the Court of Appeals acknowledged that it was obliged to apply the
four statutory factors given in Section 107 of the Copyright Act of 1976 for determining whether the
defendant's copying of the plaintiffs' works qualified as a lawful "fair use."

In April 2013, the Second Circuit reversed the SDNY's decision, finding that most of Prince's works
were indeed "transformative" to a "reasonable observer" and therefore fair use. In particular, the
Court found that the lower court erred in requiring that the appropriating artist claim to be
commenting on the original work, and found works to be transformative if they presented a new
aesthetic. The court found 25 of 30 works to be transformative fair use under its standard, and
remanded the case to the lower court for reconsideration of 5 of the works under the Second Circuit's
new standard.

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.

On March 18, 2014, Cariou and Prince announced that they had settled the case.

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.

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

Most of these factors, the Court noted, weighed against the defendant:

Was a civil case in which the United States Court of Appeals for the Seventh Circuit upheld a lower
court's summary judgment that the defendant had committed copyright infringement. The decision is
noteworthy for rejecting the defendant's fair use defense, which had rested upon the defendant's
contention that she was merely "sampling" songs with the intention of possibly purchasing the
downloaded songs in the future, which is known as "Try before you buy".

The defendant argued that downloading songs for the purpose of "sampling" would have a positive
effect on the market for those songs, spurring sales of the songs the defendant enjoyed enough to
purchase. The Court of Appeals declared that this argument was both factually unsupported and
inconsistent with the Supreme Court's recentbGrokster decision and with other cases involving filesharing and copyright infringement:

Facts

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.

Over a period of several weeks, the defendant downloaded a estimated 1,370 copyrighted songs onto
her computer using the KaZaA peer-to-peer file-sharing software, without authorization from the
holders of the copyrights in the underlying compositions and sound recordings. The defendant
owned compact discs containing some fraction of the songs that she downloaded. The parties
disagreed on precisely how many of the defendant's downloads represented songs that the defendant
already owned on CD, but it was undisputed that the defendant had never owned authorized copies of
30 of the songs she downloaded. The defendant retained at least these 30 songs on her computer's
hard drive even after deciding not to purchase them on CD.
Lower Court Proceedings
Four recording companies who held the copyrights in the songs that the defendant downloaded filed
a lawsuit accusing the defendant of copyright infringement. The United States District Court for the
Northern District of Illinois agreed with the plaintiffs, and entered summary judgment for the plaintiffs.
The trial court rejected the defendant's "fair use" defense. As a remedy, the trial court (1) awarded the
plaintiffs $22,500 in statutory damages (representing the statutory minimum of $750 times the
defendant's 30 infringing downloads), and (2) issued a permanent injunction forbidding the defendant
to download copyrighted recordings owned by the plaintiffs.
The defendant appealed to the Seventh Circuit.
Ruling of the Court of Appeals
The Court of Appeals affirmed the district court's decision in its entirety. The court first reasoned that
the copies of the songs that the defendant had downloaded were infringing copies, rejecting the
defendant's analogy to the "time-shifting" doctrine enunciated in the Supreme Court's
landmark Sony decision.

Although the copyright holders might indeed benefit if downloaders purchased additional CDs
containing songs they had "sampled" and enjoyed, the court continued, "sampling" nevertheless
deprived copyright holders of the revenues they might have earned from licensing authorized
downloads of their works.
The court also upheld the award of $22,500 in statutory damages against the defendant, noting that
this amount represented the minimum award provided under the statute for works (such as the
plaintiffs') that had been published with an adequate copyright notice. The court rejected the
defendant's argument that the Seventh Amendment guaranteed her the right to a jury trial as to the
appropriate amount of damages. The court reasoned, in essence, that where the plaintiff sought only
the minimum amount of damages provided under the statute, there were no disputed issues as to the
proper amount of damages for a jury to resolve, and the issue of damages was appropriate for
summary resolution. Finally, the court upheld the district court's permanent injunction against the
defendant's downloading of copyrighted works.
18. Leibovitz v. Paramount Pictures Corp.
is an influential 1998 Second Circuit fair use case.
Case background

Annie Leibovitz is a professional portrait photographer who had published a photograph of

celebrity Demi Moore while seven months pregnant. The photograph, published on the front cover
of Vanity Fair in August, 1991 with the title More Demi Moore, had achieved significant fame and
notoriety on publication, and Paramount Pictures chose to parody it in 1993 as part of a promotional
campaign for its new film Naked Gun 33: The Final Insult. Paramount's commissioned photograph
featured Leslie Nielsen's face superimposed over the body of a pregnant woman, shot and digitally
manipulated in such a way as to closely resemble Leibovitz' photograph of Demi Moore. Paramount
ran the ad nationally, and Leibovitz sued for copyright infringement.
Proceedings and analysis
At trial, the Southern District of New York found the use to be fair.
On appeal, the United States Court of Appeals for the Second Circuit affirmed.

Examining the four fair use factors, the court found that although Paramount's photographer drew
heavily from Leibovitz' composition, in light of Paramount's parodic purpose and absence of market
harm the use of the photograph was a fair use. While Leibovitz had argued that she was entitled to
licensing revenue from the photograph, the court found that parodies were likely to generate little or
no licensing revenue.
The Court took particular note that, while the composition and posing of the models is the same, other
elements are different. For instance, the lighting between the two photos is different: in the Paramount
photo the lighting is more garish, including greater contrasts and brighter colors while in the Leibovitz
photo the lighting is warmer and more subdued. In the Paramount photo the ring on the model's righthand is, again, garish, and much larger than the ring Demi Moore is wearing on her right hand. These
artistic choices on the part of Paramount's designers heighten the parodic effect. The expressions on
the models' faces are also significant: Moore's face has a serious expression, hearkening back to the
classical "Venus Pudica" pose, while Nielsen's face bears a smirk, disrupting serious appreciation. The
ultimate contrast is that of a healthy pregnant woman, compared with an older man's face
superimposed onto a woman's body.