Fair use is a statutory defense to an allegation of copyright infringement. The fair use defense permits a defendant, that would otherwise be liable under the copyright statute, from being held liable and subject to the significant remedies available under federal law, including an injunction, statutory damages and an award of attorneys fees.

For importers and distributors of various types of goods, copyright infringement claims can arise out of products that draw on popular icons or recent events.  These second-generation type of items may draw on some copyrighted element, but use it in a different way.  For example the recent well-publicized case involving an artist’s use of the “Hope” emblem – which itself incorporated a photograph originally published by the Associated Press – in a fairly short order drew a t-shirt distributor into the dispute.

When is Fair Use Applicable?

In assessing whether the fair use defense applies, there are some key considerations, elements over which the courts seem to give more weight: the extent to which the challenged work is “transformative,” whether the creation of the second work was commercially motivated, and whether the second work competes in the marketplace with the original copyrighted work.

Determining whether fair use is applicable in any given case, however, is often extremely difficult. It requires an examination of the specific facts present in a contested use of copyrighted material, and the statutory criteria for application of the fair use defense is at best amorphous. Fair use is, to loosely paraphrase the remarks of another Supreme Court Justice, difficult to define but readily apparent in viewing the work.

In assessing whether the fair use defense is applicable to any particular copyright dispute, the courts will look at such factors as the extent to which the new work is “transformative” and is itself the creation of something new or different from the work from which it was copied; the commercial purposes of the parties — in particular, whether the “infringing” work is intended to supplant or replace its predecessor — and the amount of the copyrighted work that was actually copied.

Fair use is defined by federal copyright law through “factors to be considered” and the statute merely codifies principles that have existed under common law permitting the copying of copyrighted works for “purposes such as criticism, comment, news reporting, teaching …, scholarship or research.” These elements to be considered include: the purpose and character of the use, including whether the uses of a commercial nature or for a nonprofit or educational purposes; the nature of the copyrighted work; the amount and substantiality of the copied work used in proportion to the whole; and the effect of the use on the market for the copyrighted work. See 17 U.S.C. section 107.

The question of whether the fair use defense is available is typically one that is determined by a court as a matter of law. In making this determination, courts look very carefully at the issue of whether the work is “transformative,” that is whether the new work in some way comments upon, draws upon or in some manner incorporates the prior work to create something new or different.

Determining Transformative Works

Parodies, news reports, scholarly articles and derivative works of art may often copy liberally from a copyrighted work and still fall within the scope of the fair use defense. In trying to determine whether a work is transformative, courts often look at the issue of whether the resulting work furthers the purposes of the copyright act, which is to stimulate creativity and originality.

Cases involving the fair use defense will also consider whether the work is commercially motivated, but this factor clearly receives less weight than the transformative nature of the work that is being challenged. Works that are intended to be sold for profit but that are nonetheless transformative in nature often are found to be a fair use.

On the other hand, a fair use defense is less likely to be successful when the new work is, in some way, seen to have a negative impact on the commercial value of the original copyrighted work. If the second work, for which a fair use defense is being asserted, competes with the original work, a court is less likely to apply the defense.