When fair use becomes copyright infringement

“Fair use” is a copyright principle meant to accommodate common sense use of creative works and prevent abuses that could stifle speech or hinder innovation and competition. However, thanks to our digital economy and the ease and speed of sharing online, many grey areas have been popping up, causing concerns on both sides of the equation within corporations and other entities:

• Employees that include content found on the internet in their own work such as sales presentations, internal training and articles, without ensuring copyright permission. Whether the person meant no harm or intentionally committed plagiarism, the company can be liable for the employee’s actions.
• Protection of the company’s own intellectual property, which may include logos, other trademarks, blog articles, reports and similar content.

This article will cover some fair use basics and common use questions as they pertain to users within enterprise organizations.

PLEASE NOTE: this information is for educational purposes only and is not intended as legal advice. Every organization should consult with its own legal counsel, and communicate and enforce copyright policies to employees.

U.S. copyright protections for fair use

The United States is particularly strong in the area of fair use, which started as common law and became enacted into US copyright laws in 1976. Fair use gives US federal judges the power to consider four factors when determining copyright infringement:

1. Purpose and character of the use

Generally speaking, copyright law favors scholarship, science, research and education—in essence, non-commercial use. Yet even educational or scientific content that is used for commercial purposes could be denied.

A US Supreme Court ruling in 1995 introduced the concept of “transformative” use, in which a new statement that is made from the use of the material can be fair use. Commentary, criticism or parody also have counted as fair use of copyrighted materials.

2. Nature of the copyrighted work

Whether or not the copyrighted work is informational or entertaining in nature will be taken under consideration. Material copied from factual work like a biography or newspaper article may be more likely viewed as fair use compared to a fictional, creative work like a novel or movie.

3. Amount and substantiation of the portion taken

The less you use the work, the less likely it will be viewed as infringement. A case in which the defendant quoted from various unpublished letters and journal entries by novelist Richard Wright was permitted as the court determined that no more than 1% of the works were copied. Yet, in another case, using one minute and 15 seconds of footage from a 72-minute Charlie Chaplin film was considered substantial and not permitted as fair use.

4. Effect of the use upon the potential market

This allows the court to strike a balance between the benefit that could be derived in the market if the use is permitted, and the personal gain the copyright owner could realize if it’s denied. It applies primarily to copyright owners who derive income from selling or licensing their creative works. If your use could deprive the owner of potential income, it could fail the fair use test—even the “transformative use” argument.

Finally, in regards to international copyright laws, fair use has not been so well-defined. The Berne Convention, which dates back to the late 19th century, introduced important copyright principles, including that countries must recognize the copyrights held by citizens of all other parties to the convention.

Regarding fair use, the convention was revised in 1967 to create a three-step test that’s similar to the four factors used in US courts—copyright exceptions must be limited to certain special cases, must not “conflict with the normal exploitation of the work” and do not “unreasonably prejudice the legitimate interests” of the right holder.

Avoid crossing the line from fair use to infringement

Following are some common questions and concerns we hear from our copyright research clients:

• Using another company’s logo: Courts generally have protected the right to use trademarks as long as the use is non-commercial and not intended to deceive your intended audience or usurp the rights of the logo owner. That includes the use of the logo to identify and represent the company that owns the trademark.
• Quoting from someone else’s work: Sharing a comment from a news article, quoting a presenter from a conference, copying a direct quote from a blog post—these are common uses that could be fair use, depending on the four factors. In all cases, the person and the source should be clearly stated and referenced, including links to the material itself.
• Using photos or video clips found online: Just because it’s on YouTube or Flickr or Instagram or any other social media platform does not make it freely available for anyone to use, even if you have a relationship with the person who uploaded it. Begin by reviewing the markings and credits within the actual content in order to identify rights holders. Then, contact the individuals or entities listed directly in order to obtain the permission of use, explaining how and why it will be used. Otherwise, a variety of websites (like Unsplash) now offer high-quality images that can be used for free for commercial and non-commercial purposes. Look for works with a Creative Commons license, which come in different flavors with various permissions. If you are a commercial entity be sure to check the Creative Commons license includes “commercial use.” In some cases, this isn’t explicitly stated. Therefore, permission still needs to be obtained from the rightsholder to use the content.
• Using infographics found online: Infographics are popular and ubiquitous but don’t copy one into your presentation or report without explicit permission. If the work you’re creating is digital and online, simply link to the infographic on the originator’s website.

Important fair use caveats

• Acknowledging the copyright owner or source does not equal permission: It’s a good thing to do but, in and of itself, it’s no defense against an infringement claim.
• The “De Minimis Defense” is not guaranteed protection: De Minimis means “too small for fair use” and sometimes the court has permitted it and used it in lieu of full fair use analysis, but not always. “Too small” can vary more than you think.
• The only solid defense is explicit permission from the copyright holder: Seek permission first. If your request is rejected or you don’t have time to wait for a response, move on or find an alternative.

Fair use in media and entertainment

Fictional works like movies or live performances, created for entertainment purposes, are the most vigorously defended copyrights because they are an income-producing business.

A little bit of sharing in this arena can be a boon to the entertainment content owners—for example, it can be free, word-of-mouth advertising. But as two recent examples point out, the spirit of fair use is being newly tested.

The first example involves the use of public domain footage in a commercial movie:

• Emilio Estevez wrote, directed and acted in a movie called THE PUBLIC about a group of homeless library patrons who refused to leave a public library during a bitter, cold winter. Universal Pictures acquired the rights and released the movie earlier this year. As a standard practice, Universal did what most movie studios now do: go to YouTube’s ContentID tool to find illegally pirated copies. In this case, it stumbled across a gray area—a public domain clip that a real-world librarian had uploaded legally to his personal YouTube account. However, it was the same public domain footage that Estevez included in his work. As an automated tool, ContentID didn’t make the distinction.

The second example applies to performance art:

• Anyone attending a comedy club lately has probably experienced the club’s requirement that cell phones be placed in a special pouch, to be returned after the performance ends. Comedian Louis CK also has imposed a kind of gag order to ticket buyers for his comedy club performances. As reported in The New York Times, the order clearly states that the comedian’s material may not be used, “in whole or in part, in any form,” without written consent.

Fair use principles have made US copyright laws more flexible, but the internet and digitization have altered the landscape forever. The best policy is to understand the power and limitations of copyrights and to always get permission from the rights holder.