SCOTUS Expansion of Fair Use Erodes Copyright Protection

The Supreme Court in 'Google v. Oracle' dramatically expands fair use to allow copyrighted materials to be used more freely in technology settings. The ruling will likely expand fair use in other environments, as it is applied to a recent Second Circuit ruling.

September 29, 2022  New Jersey Law Journal

By Jonathan Bick | Jonathan Bick is counsel at Brach Eichler in Roseland, and chairman of the firm’s Patent, Intellectual Property & Information Technology group. He is also an adjunct professor at Pace and Rutgers law schools.

Traditionally, copyright rights were zealously enforced, as evidenced by the fact that copyright infringement is a strict liability tort (intent is not relevant to copyright infringement liability). Customarily, the doctrine of Fair Use (17 U.S. Code §107) which was the most significant limitation on copyright rights was restricted to criticism, comment, news reporting, teaching, scholarship, or research. However, the Supreme Court’s expansion of the Fair Use Doctrine has eroded copyright protections. More precisely, the Supreme Court in Google LLC v. Oracle America, Inc., 141 S.Ct. 1183 (2021), dramatically expands fair use to allow copyrighted materials to be used more freely in technology settings. The Google v. Oracle ruling will likely expand fair use in other environments, as it is applied to the recent Second Circuit ruling.

Copyright law protects control ownership, use, and distribution of creative and expressive works (17 U.S. Code §106). Copyright protection, as constitutionally enacted, authorizes Congress to provide authors financial incentives to publish by granting them exclusive rights to their creations for a limited time.

The Fair Use Doctrine permits limited use of copyrighted material without having to first acquire permission from the copyright holder. Copyright rights granted by 17 U.S. Code §106 are limited by Section 107 of the Copyright Act which offers four non-exclusive factors for a judicial determination as to whether a particular use is a “fair” use. More specifically, the four factors are:

The purpose and character of the use;

The nature of the work at issue;

The amount and substantiality of the portion used in relation to the work at issue as a whole; and

Potential market value change to the fair use of the work at issue.

The “new message or meaning” test, which expands the application of the Fair Use Doctrine, was first disclosed in Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569 (1994), and reaffirmed in Google v. Oracle. In both decisions, the Supreme Court found fair use when an original work was transformed by adding something new, with a different purpose, or a new meaning or message.

At issue in the Google v. Oracle case were pre-written directions known as application program interfaces (APIs). These APIs provide instructions for such functions as connecting to the Internet or accessing particular file types. When APIs are used by programmers, the programs don’t have to write original code for functions used in their software, or for changing software to accommodate each and every device type.

Generally speaking, APIs are specifications that allow programs to communicate with each other. Such specifications allows an Apple product user to communicate with a Google product user by clicking on an icon. More precisely, at issue in Oracle v. Google is whether Oracle can claim a copyright on Java APIs and, if so, whether Google infringes these copyrights.

The high court in Google v. Oracle, citing the Constitutional objective of copyright to promote the progress of science and useful arts, found that no more copying than necessary occurred when Google copied 11,500 lines of software code for the application of a fair use defense to Oracle’s $8.8 billion copyright infringement suit. The Google v. Oracle decision expanded the use of fair use in technology, by legitimizing the integration of copyrighted materials for the purpose of improving technological innovation.

The Supreme Court’s decision in Google v. Oracle found that all four factors favored Google (140 S. Ct. 520 at 1202, 1204, 1206, 1208). The high court also held that Google’s copying was fair use as a matter of law.

Some courts have raised objections, arguing that the dominance of the transformative use analysis will significantly reduce the value of certain copyright rights. For example, they argue that such dominance will supersede the derivative works right entirely (see Kienitz v. Sconnie Nation LLC, 766 F.3d 756 (7th Cir. 2014)). The most recent challenge to the dominance of the transformative use analysis is found in Andy Warhol Foundation for the Visual Arts, Inc. v. Goldsmith, 11 F.4th 26 (2d Cir. 2021).

At issue in the Andy Warhol Foundation v. Goldsmith case is whether Andy Warhol’s use of Goldsmith’s photograph of the late musician Prince to create a series of portraits was “transformative” for purposes of protection under the fair-use doctrine. The Second Circuit found that it was not.

The Second Circuit, in Andy Warhol Foundation v. Goldsmith, found that the “new message or meaning” test which expands the application of the Fair Use Doctrine should be limited to transformations that render the original work fundamentally unrecognizable. In doing so, the following issue arose: Whether a work of art is “transformative” when it conveys a different meaning or message from its source material (as per Google v. Oracle), or whether a court is prohibited from considering the meaning of the accused work where it is recognizably derivative of the original work.

The Andy Warhol Foundation v. Goldsmith court moves away from its prior caselaw, from both the Supreme Court’s and from other circuit court’s assessment of fair use due to “transformativeness.” The Second Circuit’s decision discloses a novel limitation as to when fair use may be applied.

Consequently, the Second Circuit’s limitations on the application of fair use will likely be reversed or severely limited by the Supreme Court. At the very least, it is likely that the Supreme Court will limit the Andy Warhol Foundation v. Goldsmith court’s ruling to works of visual art. The reasons for this are threefold.

First, the Second Circuit suggested that its ruling in Goldsmith was “fully consistent” with the Google v. Oracle decision, which seems incorrect. More specifically, the Google v. Oracle court found that fair use was applicable if the accused work adds something new and has a different purpose or conveys a new meaning or message. This was the case in the Warhol matter.

Second, the Second Circuit’s proposed limitation (i.e., restrict the application of the fair use doctrine to cases where the changes in the subsequent work must be so substantial as to render the original work unrecognizable) would overturn Campbell. The original work in the Campbell case was recognizable in the subsequent work in the Campbell case.

Third, the Second Circuit’s proposed limitation to require “an entirely distinct [creative] purpose” is inconsistent with Google, because Google’s reuse of Oracle’s copyrighted material was intended to have the same purpose as Oracle’s use. In particular, the reuse of the Oracle code in the Google work was to be used by Java programmers who made apps for the Android platform.