The doctrine of fair use has developed through a series of court decisions over the years, codified in section 107 of copyright law.  For a primer on fair use, check out my first article on the topic.

The courts consider each matter on a case-by-case basis on the following four tests:

1.  The purpose and character of the use, including whether such use is of 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

4.  The effect of the use upon the potential market for, or value of, the copyrighted work

There are many misconceptions about fair use.  In this article, we will look at a handful of cases that can help content creators and rightsholders better understand the parameters of fair use, as cited in the Copyright and Fair Use Overview section of a Stanford Universities website that quotes the book “Getting Permission” by Richard Stim:

In Italian Book Corp., v. American Broadcasting Co., a TV news operation recorded a portion of the song “Dove sta Zaza,”” which was replayed during the news broadcast.  The courts found that to be a case of fair use because only a small snippet of the song was recorded, which did no damage to the composer or to the market value of the underlying work (in fact, it could have been argued that the news broadcast inadvertently promoted the song).

In Campbell v. Acuff-Rose Music, the courts concluded that the rap group 2 Live Crew’s borrowing of the opening to the song “Pretty Woman” was fair use as that constituted the only similarity between the two songs.  Incidentally, the rap group had initially offered to pay for a license but was turned down by the publisher.

In Elvis Presley Enterprises, Inc. et. al. vs. Passport Video et. al., the courts once again stated that commercial uses can be protected by fair use provided there is a “transformative” nature of the new work: “whether the new work merely supersedes the objects of the original creation, or instead adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message.”  The more transformative a new work, the less significant commercialism becomes.  Finally, if commercial use comes into play, it’s more about the degree to which the new user exploits the copyright for commercial gain, and not solely if the new user has a commercial use or not.

In Monster Communications, Inc. v. Turner Broadcasting Sys. Inc., the producers of a film biography of Muhammad Ali used forty-one seconds from a boxing match movie in their biography.  The courts found that to be a case of fair use because a small portion of the film was taken and the purpose was informational, albeit as part of a commercial project which “constituted a combination of comment, criticism, scholarship and research” concerning “a figure of legitimate public concern” and thus the purpose and character of the biography weighed in favor of fair use.  In other words, commercial use does not automatically nullify fair use, as the other tests come into play.  The courts concluded that “the use of film clips in biographies is transformative.”

In many of these cases, when there was a “real, substantial condensation of the materials,” the courts were more prone to conclude that the matter represented fair use.

While those cases focus on tests 1, 3 and 4, it’s important to understand how test #2 (The nature of the copyrighted work) comes into play.  In other words, if you use stock video for something without a license and claim fair use, a court may in all likelihood disagree because that stock video’s sole purpose is to be licensed and used in editorial or advertisement; whereas using a sample of a music video (which is promotional by its very nature) to create a biography is vastly different.

To conclude,

– Dealing for commercial purposes may be fair.
– Commercial use does not nullify fair use.
– The availability of a license is irrelevant in considering alternatives to the deal.
– It is not advisable to circumvent the underlying work, it is much better to transform, summarize and/or add to the underlying work.
– A plaintiff must bring evidence of any detrimental impact upon the market for its work if it wishes to have it considered.  After all, to quote a CBS executive: “3 minutes of a Beyonce song might potentially hurt an entire album of Beyonce, but two minutes of ‘CSI’ might be the greatest thing that could ever to the 44 minutes of ‘CSI’ that we put out weeknight on [CBS] or our affiliate partners.”

That being said, fair use doesn’t come without risks and drawbacks, so make sure you understand the parameters well and act in good faith.