On October 16, 2015, the Second Circuit affirmed the district court’s ruling in Authors Guild, Inc. v. Google Inc., 954 F. Supp. 2d 282 (S.D.N.Y. 2013), previously reported here, that Google’s digitization of complete copyrighted works, without author permission, and the creation of excerpt “snippets,” accessible to the public by contracting libraries for research, is a transformative fair use.

More than 10 years ago, Google embarked on its Library Project in cooperation with major international research libraries to digitize more than 2 million works in order to provide enhanced scholarly research capabilities. Although some of the works were in the public domain, many were still under copyright, and including orphan works. Plaintiff copyright holders, including individual author class representatives, brought a class action suit asserting that this unauthorized use of their works constituted direct and contributory copyright infringement. Google defended the Library Project (available to the public as the “Google Books” search engine) as a transformative fair use.

A U.S. copyright owner’s enumerated rights under the Copyright Act to use and control its work are limited by the doctrine of “fair use,” which permits what would otherwise constitute an infringing use, if the use is made for criticism, comment, news reporting, teaching, or scholarship and research. 17 U.S.C. § 107. Fair use is considered necessary to fulfill the mandate of copyright law to “promote the Progress of Science and useful Arts.” U.S. Const. art. 1, § 8, cl. 8. However, what is precisely fair is dependent on consideration of (1) the purpose and character of the use; (2) the nature of the use; (3) the amount and substantiality of the portion of the use; and (4) the effect of the use on the potential market for the work.

As the Second Circuit explained in affirming the district court’s decision, Google’s use constitutes a transformative fair use because it “adds something new, with a further purpose or different character, altering the first with new expression, meaning or message.” The snippets are transformative because they give the viewer a searching context that was not previously available, as the snippets are available to the public for word searches, text mining, and data mining for statistical information. This is a new research capability that was not contemplated by the copyright holder and provides a new benefit to the public.

Although the plaintiffs argued that providing the viewer with a sufficient-size snippet would result in the viewer no longer needing to purchase the underlying work, the Second Circuit reasoned that the snippet itself has no independent value to the viewer, and thus would not be considered a substitute for the work. Google placed safeguards against access to substantial portions of text through a “blacklisting” function that prevents website users from using different search terms to access an entire work. Furthermore, while the research libraries were given access to the full digitized versions of those works that they had submitted for digitization, they were contractually obligated to abide by copyright law and prevent dissemination to the public at large. There was no evidence that the libraries breached these agreements, or that viewers misused the materials.

The Second Circuit’s decision clarified the distinction between a transformative fair use and an author’s derivative work right, through which the author’s work may be “recast [or] transformed.” 17 U.S.C. § 106 (2). A derivative work is one in which “the author of the original enjoys exclusive rights ordinarily [that] are those that re-present the protected aspects of the original work, i.e., its expressive content, converted into an altered form, such as the conversion of a novel into a film, the translation of a writing into a different language, the reproduction of a painting in the form of a poster or post card, recreation of a cartoon character in the form of a three-dimensional plush toy, adaptation of a musical composition for different instruments, or other similar conversions.” However, a transformative work creates something new and different from the original expressive content. Thus, the court held that there was no merit to the plaintiffs’ argument that they had derivative rights in the application of the search and snippet view functions by saying, “The copyright resulting from the Plaintiffs’ authorship of their works does not include an exclusive derivative right . . . to supply such information through query of a digitized copy.”

The plaintiffs also contended that Google’s real intention was to capitalize on the Library Project – although Google pointed out that it did not reap any commercial benefit from the project. The court disregarded the question of commercialization in this context, since commercial use is not presumptively unfair – especially where the use is held transformative: “. . . we see no reason in this case why Google’s overall profit motivation should prevail as a reason for denying fair use over its highly convincing transformative purpose, together with the absence of significant substitutive competition, as reasons for granting fair use. Many of the most universally accepted forms of fair use, such as news reporting and commentary, quotation in historical or analytic books, reviews of books, and performances, as well as parody, are all normally done commercially for profit.”

Finally, the Second Circuit held that the plaintiffs’ arguments that Google’s storage of the digitized copies of the books makes the works vulnerable to hackers – while theoretically plausible – was not supported by the evidence, which showed the security measures taken by Google to protect the works.

The court concluded that “Google’s unauthorized digitizing of copyright-protected works, creation of a search functionality, and display of snippets from those works are non-infringing fair uses.” This result is not entirely surprising, given the Second Circuit’s earlier ruling, last year, that Google Books and the creation and administration of text-searchable digital libraries are fair use in Authors Guild, Inc. v. HathiTrust, 755 F.3d 87 (2d Cir. 2014), which we reported here. The Second Circuit’s jurisprudence on the fair use nature of the Google Library Project as a transformative work is both consistent and considered, and it is worth noting that this latest decision was authored by Judge Pierre Leval, a leading proponent of the current emphasis on transformative fair use and author of the influ3D 87ential 1990 law review article Toward a Fair Use Standard. Although the plaintiffs have announced an intention to seek review of the decision by the Supreme Court, the lack of a circuit split on this issue makes it unlikely that a petition for certiorari will be granted.