Basic Books Incorporated v. Kinko's Graphics Corp.
From Library Copyright
Books Incorporated v. Kinko’s Graphics Corporation (758 F. Supp. 1522 (S.D.N.Y. 1991))
Contents |
Parties
The plaintiffs in this case are eight major New York publishing houses. The defendant is a large duplication business known as Kinko’s Graphics Corporation (“Kinko’s”).
Facts
Kinko’s was engaged in photocopying substantial portions of copyrighted books for course packets and anthologies designed by professors and purchased by students. Kinko’s did not have the permission of the publisher’s and they were selling these materials for a profit. The publishers sued Kinko’s claiming copyright infringement. Kinko’s defended their actions on the basis that (1) their use of the excerpts was “fair use,” (2) the plaintiffs misused their copyright by trying to create an industry standard beyond that established by congress, (3) the plaintiffs are estopped from bringing suit against the defendants since Kinko’s has been copying their work for 20 years, and (4) with respect to two of the alleged infringements, the plaintiffs had not recorded their copyrights before bringing suit. Additionally, Kinko’s claims that their actions are protected through the “Agreement on Guidelines for Classroom Copying in Not-For-Profit Educational Institutions,” which relate to fair use and the reproduction of copyrighted material for educational and scholarly purposes.
Question Presented
Is a for-profit duplication business able to defend against a copyright infringement case where they copied substantial excerpts of copyrighted works for course packets and anthologies designed by professors and sold to students without the permission of the publisher and then sold them to students?
Discussion
Fair Use
In answering the question presented it is necessary to consider all of the defenses raised by Kinko’s. The first of these defenses is the “fair use” doctrine. In determining whether the use made of a work falls within the scope of the fair use exemption, courts typically consider the following: (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 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. 17 U.S.C. § 107.
With regard to the first of the factors, the court typically considers whether the work is of a non-profit or commercial nature and whether the work has a transformative value. As District Court Judge Leval has stated, “the use …must employ the quoted matter in a different manner or for a different purpose from the original. A quotation of copyrighted material that merely repackages or republishes the original is unlikely to pass the test.” quoted at 1530. Here, the type of copying being performed by Kinko’s fails the transitory test because all that the company is doing is making multiple copies for the same purpose as the original.
Although, in cases such as Williams v. Wilkins the “fair use” doctrine has protected copying of the original, the distinction is that the reproductions were being made by a non-profit government organization for the sole purpose of benefiting society. 487 F. 2d 1345. In Sony Corp. v. Universal City Studios, the Court upheld the widespread use of home video recorders which enabled copying of tapes without any enhancement to them on the justification that the at home viewers were not selling their copies of these tapes for later viewing. 464 U.S. 417. In contrast, Kinko’s is a non-government for-profit company whose motivation is commercially motivated.
The second factor is concerned with the nature of the copyrighted work. Courts have generally held that “the scope of fair use is greater with respect to factual than nonfactual works.” New Era Publications Int’l ApS v. Carol Publishing Group, 904 F.2d 152 at 157 (2nd Cir.). For example, biographical works, reviews and critism, which are fact-based are more likely to be protected by fair use than fictional works which are largely subjective. The works in question here are primarily factual in nature and therefore this factor cuts in favor of Kinko’s.
The third factor evaluates the “amount and substantiality of the portion used in relation to the copyrighted work as a whole.” Although there is no absolute rule as to how much of a work can be copied without exceeding the boundaries of fair use, the third factor places emphasis on the quality of the segment that is used. New Era Publications Int’l ApS v. Carol Publishing Group, 904 F.2d 152 at 157 (2nd Cir.). In discussing the current situation the court stated, “a short piece which is ‘the heart of’ a work may not be fair use and a longer piece which is pedestrian in nature may be fair use.” The mere fact that the portions copied by Kinko’s were those that the college professor singled out as being critical parts of the books demonstrates that even if not “the heart of” the works in question, the parts copied were substantial in quality. Thus, with regard to this factor, the court finds for the publishers because Kinko’s is copying substantial portions of the work.
The fourth factor is “the effect of the use on potential markets for or value of the copyrighted work.” Essentially, this factor turns on whether widespread practice of the challenged use would cost the publishers money, regardless of how well they may be doing otherwise. Sony Corp. v. Universal City Studios, 464 U.S. 417. The fact that Kinko’s has 200 stores nationwide and services hundreds of educational institutions which enroll thousands of students means that the potential loss of income by the publishers due to copying and selling of their work by Kinko’s is large. Moreover, since Kinko’s has been operating its Professor Publishing program for approximately 20 years, there is a substantial amount of the market that has already been lost by the publishers. Accordingly, the court finds for the publishers with regard to the fourth factor and with regard to the fair use defense in general.
Copyright Misuse and Unclean Hands
The second argument Kinko’s unsuccessfully makes is that the publishers have misused their copyrights by trying to broaden the monopoly of their copyright to prevent industry competition. The judicial concept of “unclean hands” means that where the plaintiff has engaged in improper behavior, the court is hesitant to get involved. Theoretically speaking, the court does not want “dirty it’s hands” by getting involved. This is sometimes an effective defense because the court will let the defendant get away if the plaintiff has unclean hands as well. Here, however, the court concludes that the facts of this case do not equate to copyright abuse. There was no effort on the part of the publishers to use their copyright in any unconventional way nor had they ever advocated for an expansion of the copyright beyond fair use. In summary, what the defendant’s are arguing is an unfair attempt to restrain competition is really an effort on the part of the publishers to stop Kinko’s from infringing on their copyright.
Estoppel
The third argument that Kinko’s makes is that because the plaintiffs have allowed them to engage in the process of reproducing and selling the texts for nearly 20 years, it is unfair to ask them to stop now. The concept of estoppel is based upon the theory that when one party acquiesces and allows the other to do something they are effectively barred from later taking a contrary position. Thus, Kinko’s is claiming that the publisher’s have missed their window to bring suit. The court finds that although the publisher’s could be estopped had they aided or induced the defendant’s to make copies, they can not be barred from defending their own rights where they had no knowledge of the infringement. The publishers claimed that they as soon as they were made aware of the copying without permission they complained and demanded fees. They further claim that only through the investigation related to the lawsuit did they learn the extend of the infringement.
Failure to Record Transfer Instruments
The fourth argument that Kinko’s advances relates to 17 U.S.C. §205(d) which requires that before a suit can be brought claiming infringement of a work, that work must be recorded as copyrighted. Kinko’s claims that because two of the allegedly infringed works were not recorded at the time that the suit was initiated the publishers should be barred from bringing suit. This argument was also turned down by the Court on the basis that the works were in fact recorded months before the initiation of proceedings and although not included in the original complaint, the publishers filed a supplementary complaint which cured the defect.
Educational Guidelines
The final way that Kinko’s tries to avoid responsibility for their actions is through the “Agreement on Guidelines for Classroom Copying in Not-For-Profit Educational Institutions,” which relates to fair use and the reproduction of copyrighted material for educational and scholarly purposes. The guidelines provided in this section support a public policy, which contrasts commercial copying with library copying. Classroom and library copying are viewed more sympathetically than the former since they “involve no commercial exploitation and [have] socially useful objectives…[This] is not true of photocopy shops, which reproduce for profit.” Nimmer, § 13.05 [E], at 13-93—13-94, & n. 69. The judges in the present case held that even if the copying by Kinko’s warranted review under the classroom guidelines, it would fall short of meeting them.
Specifically, the guidelines allow a teacher to make multiple copies of a copyrighted work if the reproduction meets the requirements of brevity, spontaneity and cumulative effect and so long as each copy includes a notice of copyright. Brevity is defined as “a complete article, story or essay of less than 2,500 words,” or an excerpt of “not more than 1,000 words or 10% of the work, whichever is less.” The copying being done by Kinko’s exceeded the brevity requirement. Spontaneity requires that the “inspiration and decision to use the work and the moment of its use for maximum teaching effectiveness [be] so close in time that it would be unreasonable to expect a timely reply to a request for permission.” Since Kinko’s copying was coordinated with the start of each semester and was prompted to a list of course materials prepared by professors well in advance of that, Kinko’s copying cannot be considered spontaneous. The cumulative effect requirement stipulates that there cannot be more than “nine instances of multiple copying for one course during one class term.” Kinko’s fails this requirement as well. Finally, Kinko’s did not include copyright notices on any of the copies it made.
Holding
Hypothetically there are ways in which a for-profit business would be able to defend against copyright infringement on the basis of (1) fair use, (2) anti-trust law, (3) estoppel, (4) improper recording of copyright by the plaintiff or (5) application of the educational guidelines. This defenses could potentially excuse an infringement or minimize the repercussions thereof, regardless of whether the organization was for-profit or not. This decision did not consider the copying of materials by students, libraries nor on-campus copy shops whether conducted for-profit or not.
Unfortunately, in the case at hand none of these defenses were found to be reason enough to excuse the infringement. The “fair use” defense was rejected because the work was neither transformatory or non-profit in nature. Kinko’s failed to establish an anti-competitive scheme on the part of the plaintiffs which would in effect establish an unclean hands defense. The plaintiffs were not estopped from bringing claims against the defendant because they did not have knowledge that Kinko’s had been copying without their permission. The publishers had filed a supplementary brief in which the works in question had all been filed. The education guidelines were found to be inapplicable to Kinko’s, since it was a business and not an educational institution and even if it were Kinko’s actions were in violation of them.
As a result of these defenses failing to substantiate the infringement, Kinko’s was ordered to pay statutory damages, and attorneys fees and costs to the publishers which totaled $1.8 million dollars. Additionally the court permanently enjoined Kinko’s from copying without permission.
Modified. Original Source: Juliet Spiesman - Creative Commons Deed - In Carrie Russell's Complete Copyright: An Everyday Guide for Librarians
