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Plaintiffs' Memo in Support of Motion for Summary Judgment.
Re: whether Free Republic's republication of Plaintiffs' articles constitutes fair use.
Case: Los Angeles Times  v. Free Republic.
Court: U.S. District Court, C.D.Cal., Case No. 98-7840 MMM(AJWx).
Date filed: October 4, 1999.

Editor's Notes:
  Heather Wayland of the law firm of Greines Martin Stein & Richland kindly provided Tech Law Journal with a fax copy of a redacted copy of the document filed with the court.
  There is a protective order in effect in this case. Hence, this version has been redacted. The locations and sizes of redactions are noted.
  Tech Law Journal created this document by scanning a fax copy, and converting to HTML. Several features were lost in the conversion process, such as line numbering. Also, fonts have been changed.
  Footnotes have been converted to endnotes, and two way hyperlinked.
  Hypertext links have been added.
  The caption page and list of authorities have been omitted.
  Otherwise, this document has not been edited for content.
  Copyright Tech Law Journal. All rights reserved.


MEMORANDUM OF POINTS AND AUTHORITIES

1.

SUMARY OF ARGUMENT

Plaintiffs publish the Los Angeles Times and The Washington Post in print and on their own websites.[1] Defendants[2] operate a website called "Free Republic," which is already attracting as many as 100,000 "hits" per day,[3] and between 25 million and 50 million page views each month.[4] On the Free Republic website, Defendants post and encourage their registered members to post complete copies of Plaintiffs' copyrighted articles, which have been copied from Plaintiffs' websites without Plaintiffs' permission. Immediately after each such article, Defendants' members can then post comments on each article. Since September 1996, when they began operating the website, Defendants have also archived Plaintiffs' articles, creating an ever-growing library on Free Republic of Plaintiffs' articles, which already exceeds 5,000 articles.[5]

Defendants claim that their wholesale and continuous infringement of thousands of Plaintiffs' copyrighted articles is protected by the affirmative defense of fair use. Nothing could be further from the truth.

[begin page 2]

Defendants want to take a free ride on Plaintiffs' substantial investments in creating their copyrighted articles, and to use Plaintiffs' valuable intellectual property, without compensation to Plaintiffs -- the admitted copyright owners. Defendants do not contest material facts, but simply insist that the fair use defense somehow entitles them to misappropriate and republish throughout the world via the Internet an ever-increasing library of thousands of Plaintiffs' complete news articles. This motion therefore asks the Court to resolve a single, straightforward and purely legal issue: Is Defendants' copying and republication protected by the fair use doctrine?

To sustain their fair use defense, Defendants rely heavily on Free Republic members' purported "criticism" of and "commentary" on Plaintiffs' articles. These purported new works of criticism and commentary, however, consist of nothing more than complete copies of Plaintiffs' news articles, followed by short threads of off-the-cuff reactions from Free Republic members like "This thing [the stun belt] should be used to punish perjury."[6] Such wholesale mechanical copying is not a fair use:

The traditional fair use analysis, now codified in section 107, developed in an effort to adjust the competing interests of authors -- the author of the original copyrighted work ad the author of the secondary work that "copies" a portion of the original work in the course of producing what Is claimed to be a new work. Mechanical copying of an entire document . . . is obviously an activity entirely different from creating a [new] work of authorship. Whatever social utility copying of this sort achieves, it is not concerned with creative authorship.

American Geophysical Union v. Texaco, Inc., 60 F.3d 913, 917 (2d Cir. 1994) (emphasis added) (photocopying entire articles for personal archival use for scientific research not a fair use). Thus, Plaintiffs' and their members' copying cannot be a fair use because it does [begin page 3] not create new works that use only a limited portion of Plaintiffs' articles. Id. They are plaintiffs, entire articles.

Defendants also contend that Free Republic is somehow a "non-commercial," "non-profit" entity. These assertions grossly mischaracterize reality, and ignore the law. Even when genuine, non-profit status does not confer immunity from liability for copyright infringement. See Section 4(B)(1), below. The law does not allow an entity to steal copyrighted content because it is a non-profit organization, any more than it allows an entity to steal cars because it is a non-profit organization. Moreover, Defendants hold themselves out to the public as for-profit entities, and all the undisputed facts show that Defendants are trying to make a profit. Defendants' commercial advantage lies in the fact that they do not bother creating substantial new material; they simply copy it or encourage their members to copy it from others, including Plaintiffs. This is not fair use; it is theft.

In the end, Defendants' position is that basic copyright principles do not apply on the Internet. Fortunately, it is already established that "unrestricted photocopying practices [would] largely undercut the entire law of copyright." 3 Nimmer on Copyright 13.05[E][1] (1998). This threat is even more potent on the Internet. Not only does the Internet create "easy and accessible means" of "mechanical reproduction of documents," American Geophysical Union v. Texaco, Inc., 60 F.3d 913, 917 (2d Cir. 1994), it also permits inexpensive and virtually simultaneous republication of perfect copies to as many as 200 million Internet users throughout the world.[7] The very purpose of copyright law is to provide authors, like Plaintiffs, with economic returns to cover the cost of creating new copyrighted works, like their articles. If Defendants and all other website operators are free to copy and republish thousands of Plaintiffs' copyrighted articles to millions of readers across the entire world, copyright law and its economic incentives to create new [begin page 4] works are dead. Indeed, given the alternative of simple hypertext linking from Defendants' website to Plaintiffs' websites, there is no conceivable justification for Defendants' republishing and archiving thousands of Plaintiffs' entire articles.

Defendants remaining argument -- that dissemination of news is important, and therefore, Defendants should be free to help themselves to Plaintiffs' property -- ignores equally long-settled principles: "In our haste to disseminate news, it should not be forgotten that the Framers intended copyright itself to be the engine of free expression . . . It is fundamentally at odds with the scheme of copyright to accord lesser rights in those works that are of greatest importance to the public. Such a notion ignores the major premise of copyright and injures author and public alike." Harper & Row Publishers, Inc. v. Nation Enterprises, 441 U. S . 539, 558-59 (1985) (magazine's unauthorized publication of  "the heart" of President Gerald Ford's memoirs about his pardon of President Richard Nixon, including verbatim quotes, paraphrases, and facts drawn exclusively from the Manuscript, not a fair use).

For these reasons, Defendants' fair use arguments are without merit. Therefore, Plaintiffs are entitled to summary adjudication as a matter of law.

2.

STATEMENT OF UNCONTROVERTED FACTS

A.  The Parties

Plaintiffs publish two of the nation's preeminent newspapers: the Los Angeles Times (the "Times"), and The Washington Post (the "Post') in print and online at http://www.latimes.com and http://www.washingtonpost.com.[8] Both websites charge [begin page 5] visitors for accessing archived articles, and also derive advertising and licensing revenue as a function of traffic volume.[9]

Defendant Jim Robinson is the owner and operator of the two website Defendants: Electronic Orchard and Free Republic,[10] Electronic Orchard is a for-profit limited liability company in the business of "Internet Programming & Design Services."[11] Free Republic is a for-profit limited liability company in the business of "Internet discussion and marketing."[12] Both companies are owned and operated by the same three individuals, and run out of the same Fresno, California address.[13]

B.  Free Republic's Infringing Activities

Although created only about three years ago, in September 1996, the Free Republic website touts itself as the "Web's premier conservative news discussion forum."[14] According to Defendants, Free Republic attracts between 25 million and 50 million page [begin page 6] views each month,[15] and has as many as 100,000 active members.[16] To achieve this success, Free Republic relies on the lure of "news of the nation . . . from the mainstream media" and other sources,[17] including "breaking news and up to the minute updates."[18] To put it more bluntly, Defendants are using their tons of thousands of registered members to help them copy and repost thousands of copyrighted articles from others' websites, like Plaintiffs', and then republish them to the world.

The way Free Republic works is simple. "[T]hose who want to post articles" from other websites are invited to do so, so long as they first "register" with Free Republic and agree to Free Republic's Registration and User Agreement.[19] Exercising the supposed "right" to post articles on Free Republic is a simple matter of using Free Republic's tools and following Free Republic's instructions.[20] Free Republic provides the option of adding "comments" at the end of each posted article.[21] The result is a full text, exact copy of an entire article (often including Plaintiffs' photographs, fonts, layout, and even RealAudio analysis) that has been mechanically copied onto Free Republic -- at no cost to the Defendants or their members -- in just a matter of seconds.

[begin page 7]

C.  Alleged "Impracticality" Of Paying For Archived Articles

Defendants allege that it is "impractical" to require users to read articles on Plaintiffs' sites before going. to Defendants' sites to comment on them.[22] In fact, the undisputed facts show that Plaintiffs' copyrighted articles remain on Plaintiffs' respective websites indefinitely and sophisticated search engines snow visitors to locate any specific article within seconds. All one needs is the title of the article, for example, and it is easy to find what one is looking for.[23]

The technology of hypertext linking makes this process even easier.[24] For a limited time from the date of an article's original publication, readers can simply "click" to the specific article on Plaintiffs' websites, and if they so choose, "click" back to Free Republic.[25] Even after the articles are moved to Plaintiffs' archives, a reader can simply "click" to Plaintiffs' archive search page, and once there, conduct an easy search.[26] The only "impracticality" of viewing an archived article from Plaintiffs' websites is that, on Plaintiffs' websites, the viewer is charged a modest fee of $1.50 per article (Los Angeles [begin page 8] Times), or $2.95 per article during business hours (and $1.50 thereafter) (Washingtonpost.Newsweek Interactive Company).[27]

D.  Defendants' Commercial Exploitation Plaintiffs' Works

Free Republic is not now -- and never has been -- a non-profit organization.[28] Free Republic's fictitious business name statement describes Free Republic's business purpose as "Internet discussion and marketing," Wayland Decl., Exh. H (D000257), and [2 LINES REDACTED.] Wayland Decl., Exh. G (D000290-296),

Moreover, the true beauty of Free Republic's website lies not in its graphics and layout, but in its strategic design. By stealing the vast majority of its content from other sites, Defendants have no significant expenses. They are also trying to make money from the "freerepublic.com" (emphasis added)[29] website:

[begin page 9]

  • Commercial Advertising Revenue. Defendants have also used the Free Republic website to carry commercial advertisements for Electronic Orchard's business customers and clients. [4 LINES REDACTED.]
  • Merchandise sales. Defendants have used the Free Republic website to sell t-shirts, "Barbequed Libs" aprons, and other merchandise.[34]
  • Demonstrably effective marketing of Electronic Orchard. Defendants have also used the "website to advertise Electronic Orchard's services, and to encourage people to visit Defendants' other website at "e-orchard.com."[35]

[begin page 10]

  • Saleable Consumer Data, Defendants have collected valuable information on their subscribers. [2 LINES REDACTED, INCLUDING FOOTNOTE [36].]
  • Donations and "voluntary" subscriptions. Defendants further supplement their income by soliciting "donations" from their many readers.[37]
  • Membership Dues. Defendants also use the Free Republic website as a marketing tool to recruit new members and to collect dues.[38]

In summary, the evidence demonstrates that Free Republic is a commercial website that has already generated thousands of dollars in "donations" and other income. Defendants' efforts to disguise Free Republic's commercial nature are transparent, and are motivated by the fact that Defendants have always known that what they are doing is wrong. As Jim Robinson himself admits: "If you're gonna post articles on a commercial site in a limited quantity, you probably could and should get permission from the copyright holders."[39]

3.

ISSUE OF LAW

Is it a "fair use" for Defendants, and their members, over several years, to republish and archive on Defendants' website a growing library of thousands of Plaintiffs' full-text, copyrighted articles?

[begin page 11]

4.

ARGUMENT

A.  Summary Adjudication In Favor Of Plaintiffs Is Required Unless Defendants Can Meet Their Burden Of Proof On Fair Use

Defendants explicitly encourage and instruct their registered members to copy and post full-text, copyrighted news articles from other websites, including Plaintiffs.[40] Jim Robinson, has also personally copied and posted numerous articles.[41] These unauthorized uses constitute copyright infringement unless protected as a fair use.[42] Since fair use is an affirmative defense to a claim of infringement, Defendants "carry[y] the burden of proof as to all issues in the dispute. Texaco, 60 F.3d at 918. Accord Columbia Pictures v. Miramax Films Corp., 11 F. Supp. 2d 1179, 1187 (C.D. Cal. 1998) ("Defendants bear the [begin page 12] burden of proof on all of [the fair use] factors."). Where Defendants are unable to satisfy this burden by affirmative and admissible evidence, summary adjudication should be entered in favor of Plaintiffs as a matter of law, Celotex Corp. v. Cattett, 477 U.S. 317, 325 (1985).

It is also well-established that "[w]here the district court has found facts sufficient to evaluate each of the statutory factors considered in determining fair use, . . . [it] may [be] determine[d] as a matter of law whether the challenged use is a fair one. Los Angeles News Serv. v. Tullo, 973 F.2d 791, 796 (9th Cir. 1992). Accord Fisher v. Does, 794 F.2d 432, 436 (9th Cir. 1986) (Because "the ultimate conclusions to be drawn from the admitted facts" relevant to fair use are "legal in nature, [a court] can make them without usurping the function of the jury.").

B.  The Admitted Facts Compel A Finding Of No Fair Use

Section 106(1) of the 1976 Copyright Act grants the copyright owner, subject to the fair use defense under Section 107, the exclusive rights "to reproduce the copyrighted work in copies" and to authorize others to reproduce the copyrighted work.[43] By granting exclusive rights, the copyright protection under Section 106 "supplies the economic incentive to create and disseminate ideas." Harper & Row Publishers, Inc. v. Nation Enterprises, 471 U.S. 539, 558 (1995); Mazer v. Stein, 347 U.S. 201, 219 (1954).

The fair use doctrine, codified in Section 107, in not a "license for corporate theft, empowering a Court to ignore a copyright whenever it determines the underlying work contains material of possible public importance." Iowa State Univ. Research Pound., Inc. v. ABC, Inc., 621 F.2d 57, 61 (2d Cir. 1980) (ABC's copying and broadcast of portions of a student-produced filmed biography not a fair use, notwithstanding defendant's arguments [begin page 13] that the subject was a public figure and that the biography involved an event of intense public interest). To the contrary, fair use seeks merely to " 'temper the protection of copyright by allowing an author to use a limited amount of copyrighted material under some instances.' " Twin Peaks Prods., Inc. v. Publications Int'l. Ltd., 996 F.2d 1366, 1373 (2d Cir. 1993) (emphasis added) (finding no fair use to publish book about popular television program containing detailed plot summaries and numerous lines of dialogue excerpted from such programs). Accord Supermarket of Homes, Inc. v. San Fernando Valley Bd. of Realtors, Inc., 786 F.2d 1400, 1408 (9th Cir. 1986) (describing fair use as "best understood as a 'privilege . . . to use the copyrighted material in a reasonable manner,' " e.g., the inclusion of a "quotation of a passage in a book review"). As demonstrated below, Defendants' actions are well outside these narrow confines.

1.  Defendants' Verbatim Copying Of Full-Text Articles Is Transparently Motivated By Commercial Advantage And Private Financial Gain, and "Totally Lacking In Transformativeness"

Section 107 identifies four non-exclusive factors to be considered in the fair use analysis. The first factor considers "the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes. 17 U.S.C. 107(1). Transformativeness [i.e., whether the new work merely supersedes the objects of the original creation or instead adds something new] is the critical inquiry under this factor," Infinity Broadcast Corp. v. Kirkwood, 150 F.3d 104, 108 (2d Cir. 1998), although a "commercial nature" also weighs strongly against fair use. Id. (no fair use where the defendant was "simply tak[ing] [plaintiff's unaltered broadcasts] and market[ing] them to a specific clientele").

[begin page 14]

a.  The Commercial Nature Of Defendants' Infringing Site

Under well-established Supreme Court precedent, "the crux of the profit/non-profit distinction [made by Section 107(1)] is not whether the sole motive of the use is monetary gain but whether the user stands to profit from exploitation of the copyrighted material without paying the customary price." Harper Row Publishers, Inc. v. Nation Enterprises, 471 U.S. 539, 562 (1985) (emphasis added).

[A defendant] cannot gain fair use insulation for [] archival photocopying of articles simply because such copying is done by a company doing research. It would be equally extravagant for a newspaper to contend that because its business is "news reporting" it may line the shelves of its reporters with photocopies of books on journalism or that schools engaged in "teaching" may supply its faculty members with personal photocopies of books on educational techniques or substantive fields. Whatever benefit copying and reading such books might contribute to the process of "teaching" would not for that reason satisfy die test of a "teaching" purpose."

Texaco, 60 F.3d at 924 ("personal convienience" and "research purposes do not negate a finding of "commercial use").

Applying this standard, Defendants cannot deny their commercial use of Plaintiffs' material by trying to suggest that posting a verbatim copy of an entire article followed by a thread of off-the-cuff remarks combines to create a single new work of "criticism " and comments."[44] The question, rather, is whether Defendants "stand to profit," i.e., gain [begin page 15] from such infringements by not paying the customary price. The answer is a resounding yes. See Section 2(D), above. As the undisputed facts set forth there demonstrate. Defendants pay nothing for Plaintiffs' articles but use them extensively to gain income and viewers, Thus, not only do Defendants not pay the customary price; they pay nothing at all.

Even if Free Republic were truly a non-profit organization, this would not change the outcome here. Even non-profit entities can "stand to profit" from their infringing activities. See, e.g., Television Digest, Inc. v. United States Telephone Association, 841 F. Supp. 5, 9-10 (D.D.C. 1993) (non-profit national trade association's duplication and distribution of copyrighted newsletter held not a non-commercial use); Marobie-FL, Inc. v. National Assoc. of Fire Equipment Distributors, 993 F. Supp. 1167, 1175 (N.D. Ill. 1997) (Even where a defendant "is a non-profit organization and d[oes] not receive any compensation for placing the [copyrighted material] on its Web page its conduct may still be considered commercial.").[45] Non-profit status is not a license to infringe the rights of copyright owners. See, e.g., Marcus v. Rowley, 695 F.2d 1171, 1175 (9th Cir. 1983) (the first factor favored the plaintiff, even though it was "uncontroverted that [defendant's] use [incorporating a substantial portion of plaintiff's copyrighted work into a booklet prepared by defendant, a school teacher, for use in her classes] was for a nonprofit educational purpose").

[begin page 16]

b.  No Transformation By Posting Verbatim Copies

Even if Defendants could demonstrate that their use was somehow "non-commercial," the first factor would still decisively disfavor a fair use finding because of the utterly untransformed character of Defendants' purported "works." As Nimmer explains, where a defendant copies all or substantially all of a copyrighted work, "whatever the intent of the copier, a verbatim reproduction will of necessity serve the function of the plaintiff's work." 3 Nimmer on Copyright 13.05[D][1].

Defendants do not even attempt to transform Plaintiffs' works. Instead, they offer the perfect substitute for Plaintiffs' copyrighted news articles -- exact copies. This "total absence of transformativeness" precludes a fair use. Infinity Broadcast Corp. v. Kirkwood, 150 F.3d 104, 109 (2d Cir. 1998) (defendant's retransmission of unaltered radio broadcasts is not a fair use); Nihon Keizai Shimbun, Inc. v. Comline Business Data, Inc., 166 F.3d 65, 72 (2d Cir. 1999) (the first factor "weighs strongly against fair use" where the infringing "abstracts" are "for the most part direct translations of Nikkei articles; defendants added almost nothing new in their works"). See also Texaco, 60 F.3d at 922 (no fair use even though photocopying of scientific articles to facilitate "research in the sciences . . . might well serve a broader public purpose"); Basic Books, Inc. v. Kinko's Graphics Corp., 758 F. Supp. 1522, 1530 (S.D.N.Y. 1991) (copying "that merely repackages or republishes the original is unlikely to pass the test" under the first fair use factor).

In summary, both the untransformed character of Defendants' copies, as well as the commercial nature of Defendants' infringing activities, are each independently sufficient to compel a finding against Defendants. The first factor, the purpose and character of the use, thus decisively favors Plaintiffs.

[begin page 17]

2.  Plaintiffs' News Articles And Editorials Reflect Creative And Original Expression

The second statutory factor examines "the nature of the copyrighted work," i.e., whether the copyrighted work represents a rote assembly of pure factual data, a work of creative and original expression, or something in between. 17 U.S.C. 107(2).

News articles are not analogous to phone books. residential housing listings, or other "purely informational material." Supermarket of Homes, Inc. v. San Fernando Valley Bd. of Realtors, 786 F. 2d 1440. 1408 (9th Cir. 1996) (adding that the "purely informational" nature of multiple listings of residential housing only "superficially favors a fair use finding as far as it goes"). Unlike rote regurgitations of pure factual data, a news reporter or journalist is required first to gather the facts and then make decisions regarding what facts are significant and newsworthy, and then to express them in a way that is accurate, interesting, and appealing. Depending on the nature of the article, this process is bound to convey professional journalistic judgments, ideas, analysis, or some combination thereof -- not just fact. Moreover, the " 'creation of a nonfiction work, even a compilation of pure fact, entails originality. See, e.g., Harper & Row, 471 U.S. at 548 (republishing excerpts from a book about newsworthy political events is not a fair use).

Emphasizing newspapers' factual elements also loses the forest for the trees. One of the foremost goals of the fair use doctrine, reflected in particular by the second factor, is the public interest in not restraining the free flow of factual information. Harper & Row, 471 U.S. at 563 (identifying the second factor as "recogniz[ing] a greater need to disseminate factual works than works of fiction or fantasy"). No such concern is implicated here because the very same factual works that Defendants seek to copy are already publicly available on the Internet, and can be accessed at no or minimal expense in a matter of seconds on Plaintiffs' websites.

In summary, even if this Court were to find Plaintiffs' articles to be "predominantly factual, "the second factor does not favor a finding of fair use. See, e.g., Nihon, 166 F.3d. [begin page 18] at 72 (refusing to overlook the "expressive elements" of the news article contained in certain Japanese-language business journals, and concluding that the second fair use factor was "at most neutral"; no fair use).

3.  Defendants' Verbatim Copying Of Entire Works Could Not Be More Substantial

The third factor concerns "the amount and substantiality of the portion used in relation to the copyrighted work as a whole." 17 U.S.C. 107(3). Since each of Plaintiffs' news articles represents an independent copying one of them in its entirety constitutes a copying of the entire work. See, American Union v. Texaco, Inc., 60 F.3d 913, 925-26 (2d Cir. 1994) (copying an entire article from a journal whose copyright was only registered as a whole still constituted copying the entire work), Hustler Magazine, Inc. v. Moral Majority, Inc., 796 F.2d I 148, 1155 (9th Cir. 1986) ("A creative work does not deserve less protection just because it is part of a composite work.)

Applying these standards, the third factor militates strongly in favor of Plaintiffs. Defendants have copied literally thousands of Plaintiffs' copyrighted works, in their entirety, This verbatim copying could not be more substantial. Moreover, such wholesale misappropriation of entire copyrighted works is "evidence of the qualitative value of the copyrighted material, both to the originator and to the plagiarist who seeks to profit from marketing someone else's copyrighted expression." Harper & Row, 471 U.S. at 565 (verbatim copying of even a "substantial portion" weighs strongly in favor of Plaintiffs).

Numerous cases reaffirm the principle that verbatim copying of entire articles is not a fair use. See, e.g., Infinity Broadcast Corp. v. Kirkwood, 150 F.3d 104. 109 (2d Cir. 1009) ("Through not an absolute rule, 'generally, it may not constitute a fair use if the entire work is reproduced.' ") (quoting 3 Nimmer on Copyright 13.05[A][3]); Supermarket of Homes, Inc. v. San Fernando Valley Bd. of Realtors, 796 F.2d 1440, 1409 (9th Cir. 1986) [begin page 19] ("Generally, no more of a work may be taken than is necessary to making the accompanying comment understandable.").

Defendants insist that readers need to see the entirety of Plaintiffs' articles to analyze it for any "bias." Defendants cannot demonstrate, however, how republishing verbatim copies of entire copyrighted articles -- as opposed too, say, singling out specific language and/or paraphrasing -- is "reasonable in relation the purpose of the copying." Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 539 (1994) (requiring that "no more [be] taken than necessary"). Moving Plaintiffs' articles to Defendants' website does not create a new work of criticism or commentary; at best, it merely may make it easier to read the article and possibly write a critique. This is no more permissible than if a university were to copy and distribute books to all of its students, so that it was easier for them to write critiques. This would deprive the books' authors of precisely what copyright law protects -- the right to an economic return for their work in creating books. Because Defendants are republishing unaltered, entire works, the third factor weighs strongly in Plaintiffs' favor.[46]

4.  Republication And Archiving By Third Party Republishers Would Destroy Or Seriously Dimish The Value of Plaintiffs' Copyrighted Works

The fourth factor concerns "the effect of the use upon the potential market for or value of the copyrighted work." 17 U.S.C. Section 107(4). "If the intended use is for [begin page 20] commercial gain, that likelihood [of future harm] may be presumed. " Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417, 451 (1984)). Defendants cannot deny the obvious: that their infringing actions are intended to -- and do -- make money. See Section 2(D), above. Defendants are unable to overcome this powerful evidence favoring Plaintiffs under Sony.

Even without this evidence, relatively little need be shown for the copyright owner to prevail on the fourth factor, "To negate fair use one need only show that if the challenged use 'should become widespread, it would adversely affect the potential market for the copyrighted work.' " Harper & Row, supra, 471 U.S. at 568 (quoting Sony, 464 U.S. at 451). "Actual present harm need not be shown" and it is not "necessary to show with certainty that future harm will result from the use." Sony, 464 U.S. at 451. As explained by the Ninth Circuit:

[A]lthough [plaintiff] could not prove loss of subsequenet sales of works, and hence actual adverse effect on the market for videotape footage, defendants' actions should not go unpunished. Such actions if permitted would result in a substantially adverse impact on the potential market for the original works.

Los Angeles News Service v. Reuters, 149 F.3d 987, 994 (9th Cir. 1998) (emphasis added) (unauthorized exploitation of plaintiff's s copyrighted videotaped footage of the Reginald Denny beatings not protected as fair use).

Examining the evidence in this case, the potential for market ham to Plaintiffs is clear:

  • Inevitable Market Substitution. Defendants' republication of Plaintiffs' works over the Internet, where as many as 200 million users have ready access to them, creates a ready substitute for Plaintiffs' works. These perfect substitutes -- verbatim copies of entire articles -- "fulfill[s] the 'demand for the original' works and 'dimish[es] or prejudices[s]' their potential sale." Bridge Publs., Inc. v. Vien, 827 F. Supp. 629, 631-34, 636 (S.D. Cal. 1993) (teacher's copying or directing her students to copy plaintiff's copyrighted works as part of course on "Dynamism" she sold to students was not a fair use). Accord [begin page 21] Harper & Row, 471 U.S. at 567-69 (a use that effectively usurps the market for the copyrighted work by supplanting that work is not a fair use).
  • Lost Advertising Revenue. Plaintiffs' advertising rates are a function of traffic volume. For every Free Republic visitor who views Plaintiffs' articles on Free Republic, Plaintiffs lose a potential "hit" or "page view." When this happens, overall traffic volume goes down, and advertising on Plaintiffs' websites loses value.
  • Lost Archive Sales. People will not pay to view on Plaintiffs' websites the same articles that they can view for free on Free Republic.[47] Thus, Plaintiffs are losing the ability to charge for their archived articles.[48]
  • Licensing Revenue. If the Court expands the fair use doctrine as Defendants want, publishers' ability to demand licensing fees from Free Republic other website operators would be destroyed. This market exists, as we know from the licensing revenue that Plaintiffs are already generating.[49] "Since the Copyright Act explicitly provides that copyright holders have the 'exclusive rights' to 'reproduce' and 'distribute copies of their works, and since there currently exists a viable market for licensing these rights for individual journal articles, it is appropriate that [these] potential licensing revenues [for [begin page 22] copying privileges and other valuable rights] be considered in a fair use analysis." Texaco, 60 F.3d at 930.[50]

In short, the evidence is clear that Plaintiffs have and will be harmed by Defendants' actions. Even without this evidence, the commercial purposes of Free Republic's infringing uses give rise to a presumption of harm that Defendants have no evidence to overcome. For both of these independent reasons, the fourth factor weighs heavily in favor of Plaintiffs.

5.  Further Equitable Considerations Merely Compel The Same Conclusion

The four statutory factors discussed above are not exclusive. " 'Beyond a very broad statutory explanation of what fair use is and some of the criteria applicable to it, the courts must be free to adopt the doctrine to particular cases on a case-by-case basis.' Hustler Magazine, Inc. v. Moral Majority, Inc., 796 F.2d 1148, 1151 n. 4 (9th Cir. 1986) (quoting from the House Report of the Judiciary Committee).

Further equitable considerations, however, merely confirm the inappropriateness of Defendants' actions. As demonstrated above, Defendants' verbatim republishing activities provide no appreciable public benefit justifying continuance under the fair use [begin page 23] doctrine.[51] To the contrary, the only difference between the original article on Plaintiffs' sites, and the infringing article on Defendants' site, is that on Plaintiffs' 1 sites, the WOW r will have to pay for them if they have been archived. The only impact of rejecting the Defendants' fair use claim here would be to protect the economic incentives to create new works by requiring Defendants and others like them to obtain a license to copy them.

In short, Defendants' practices of diverting valuable traffic and creating opportunities for readers to evade Plaintiffs' archive fees violate sound public policy:

The immediate effect of our copyright law is to secure a fair return for an 'author's' creative labor. But the ultimate aim is, by this incentive, to stimulate artistic creativity for the general public good.

Sony, 464 U.S. at 432 (quoting Twentieth Century Music Corp. v. Aiken, 422 U.S. 151, 156 (1975)). Allowing Defendants to use thousands of Plaintiffs' articles for free destroys important economic incentives to create these works, resulting in fewer new works of expression for everyone,

Finally, if readers want to read Plaintiffs' articles to assess their supposed bias (or for any other reason), they should simply obtain an authorized copy from Plaintiffs. With the Internet, this access is easier than ever before, Typing in Plaintiffs' Internet addresses and using Plaintiffs' high-tech search engines is far less burdensome than searching the shelves of a library, store, or newsstand, for example. Even without a link, locating a particular article with Plaintiffs' search engines takes seconds, and there is not even a need to stand up. Linking makes it even easier, and Plaintiffs would have absolutely no objection if this were done, so long as their logos were not used. In short, there is no [begin page 24] reason why Plaintiffs should be denied economic incentives that copyright law confers on those, like Plaintiffs, who create new works of expression.

CONCLUSION

All of the four statutory factors weigh strongly in favor of Plaintiffs. On this basis, and because the equities merely confirm the same conclusion, summary adjudication in favor of Plaintiffs should be granted.

October 4, 1999 GIBSON, DUNN & CRUTCHER LLP

By:___________________________
               Heather L. Wayland

Attorneys for Plaintiffs Los Angeles Times, The
Washington Post Company and
Washingtonpost.Newsweek Interactive Company

 

FOOTNOTES

[1] This action is brought by the Los Angeles Times, The Washington Post Company, and Washingtonpost.Newsweek Interactive Company.

[2] The named defendants are Jim Robinson, Electronic Orchard, and Free Republic.

[3] See Wayland Decl., Exhs. A (D0004390 & C (D000449) Demonstrating Free Republic's exponential growth, this figure is up from approximately 8,000 hits per day on December 19, 1997. Id., Exh. X (D000072).

[4] Wayland Decl., 18, Exh. R.

[5] Wayland Decl., 5-6, Exhs. D & E (admitting to Defendants' republication and archiving of thousands of entire news articles from the Los Angeles Times (1,101) and The Washington Post (4,275)); Robinson Depo., 61:10 - 62:2, 62:25 - 63:13 (Exh. BB to Wayland Deal.). See also Aldridge Decl., 5.

[6] See Wayland Decl., Exh. D (TM 055; commenting on a July 9, 1991 Los Angeles Times article about the use of a stun belt in the Los Angeles Superior Court).

[7] Perruso Decl., 20; Koefoot Decl., 21. See also Thomas v. Network Solutions, Inc., 1999 U.S. App. LEXIS 9065, *3 (D.C. Cir. May 14, 1999) (estimating as many as 200 million Internet users by the end of 1999).

[8] The latter website is operated through The Washington Post Company's wholly-owned subsidiary, Washingtonpost.Newsweek Interactive Company. Koefoot Decl., 2.

[9] Koefoot Decl., 8, 10-13, 22-23; Perruso Decl., 8, 10-13, 21-22.

[10] Tim Robinson owns [NUMBER REDACTED] % of Electronic Orchard and [NUMBER REDACTED] % of Free Republic; Amy De Fendis, Jim Robinson's accountant and business colleague of 25 years, owns [NUMBER REDACTED] % and [NUMBER REDACTED] %, respectively; and John Robinson, Jim Robinson's son, owns [NUMBER REDACTED] % and [NUMBER REDACTED] %, respectively. Robinson Depo. 26:6-10, 49:16-19; Wayland Decl., Exhs. G & J. See also Wayland Decl., Exh. Z (recounting Jim Robinson's employment history).

[11] Wayland Decl., Exh. I (fictitious business name statement for Electronic Orchard, filed Much 25, 1997).

[12] Wayland Decl., Exh. H (fictitious business name statement for Free Republic, dated October 6, 1998). See also id., Exh. G [1 LINE REDACTED] Robinson Depo. 26:11-18.

[13] Id., Exhs. H & I (fictitious business name statements for Free Republic and Electronic Orchard, identifying a single Fresno, California business address of 6245 N. Prospect); Robinson Depo. 9:17-24.

[14] See Wayland Decl., Exh. T.

[15] Wayland Decl., Exh. R.

[16] Id., Exh. S (reporting from an interview with Jim Robinson).

[17] Id., (quoting Jim Robinson as describing Free Republic as a "news source").

[18] Wayland Decl., Exh. C (D000448).

[19] Wayland Decl., Exh, B (D000441).

[20] Id., Exh. B (D000445).

[21] Id. Once posted, the entire article is available on the Free Republic website for viewing by anyone with Internet access. Registered members can then "reply," i.e., post comments on the original comment. This creates a thread. Representative examples of these are attached. Wayland Decl., Exh. D.

[22] See, e.g., Robinson Depo. 75:3-77:10.

[23] Koefoot Decl. 5, 7 & Exh. A; Perruso Decl., 5, 7 & Exh. A. See also Aldridge Decl., 2-3 & Exh. A.

[24] Linking is a viable alternative to what Defendants do. Indeed, when conservative publications have asked Defendants and Defendants' registered members to link to them instead of post, the result has been precisely as requested -- linking. Robinson Depo. 94:7-25, 95:12-18, 96:4-18; Wayland Decl., 17, Exh. Q (confirming agreement with Jewish World Review to link instead of post). In other words, linking has proved to be a perfectly acceptable alternative to unauthorized republication of Plaintiffs' articles on the Free Republic site.

[25] Perruso Decl., 6; Koefoot Decl., 6.

[26] Perruso Decl., 7; Koefoot Decl., 7; Aldridge Decl., 2-5 & Exh. A.

[27] Perruso Decl., 9; Koefoot Decl., 8; Aldridge Decl., 4.

[28] One would never know this from the public statements of Jim Robinson. In interviews about the Free Republic website for example, Jim Robinson has repeatedly attempted to characterize it as a "nonprofit, noncommercial forum." See, e.g., Wayland Decl., Exhs. A (D000440; "Free Republic, LLC is a non-commercial not-for-profit limited liability company.") & S.

[29] The ".com" in "freerepublic.com" (as opposed to ".org") indicates that Defendants intended this domain name for commercial (and not non-profit) uses. Koefoot Decl., 20; Perruso Decl., 16. See also Thomas v. Network Solutions. Inc., 1999 U.S. App. LEXIS 9065, *5 (D.C. Cir. May 14, 1999) (explaining that ".com" is for commercial organizations).

[30] Wayland Decl., Exh. F (D000035).

[31] Id.

[32] See Wayland Decl., Exh. U (D000175; [2 LINES REDACTED] id. (D000176; [2 LINES REDACTED] (D000180-183; [2 LINES REDACTED]

[33] [3 LINES REDACTED] Wayland Decl., Exh. W (D000157-169).

[34] See Wayland Decl., 14, Exh. N.

[35] See, e.g., Wayland Decl., 16, Exh. P (prominent link to Electronic Orchard on almost every page of Free Republic).

[36] See Wayland Deal., Exh. P (D000034; [2 LINES REDACTED]

[37] See Wayland Decl., Exh. M (Free Republic "support" form, providing that "all profits" from Electronic Newsletter Subscriptions will "go[] to Free Republic," a/k/a Jim Robinson).

[38] Wayland Decl., Exh. 0.

[39] Wayland Decl., Exh. Y (D000213).

[40] See, e.g., Wayland Decl., Exh. V (D000121): "[S]ince the very idea of [Free Republic's] White Water forum is to post articles and editorials from newspapers and other media outlets around the globe, but here it goes anyway . . . . Is giving credit and adding the disclaimer 'for discussion purposes only, not for commercial use' enough to defend against a copyright infringement suit?" Jim Robinson's Response: "That is my understanding according to the 'fair use' exemption to the copyright laws. Not surprisingly, the media companies don't see it that way."

[41] Wayland Decl., Exh. D; Robinson Depo. 53:8-19.

[42] Unauthorized copying and distribution of entire copyrighted news articles is prima facie an infringement of the copyright. 17 U.S.C. 501 ("Anyone who violates any of the exclusive rights of the copyright owner [e.g., to copy and/or to distribute copies to the public] is an infringer."). See, e.g., Fonavisa, Inc. v. Auction, Inc., 76 F.3d 259 (9th Cir. 1995) (vicarious infringement demonstrated by defendant's control over materials offered at swap meet and financial benefit from the use of plaintiff's intellectual property); Sega Enter., Ltd. v. Maphia, 857 F. Supp. 679, 686-87 (N.D. Cal. 1994) (fact that unauthorized copies of Plaintiffs' games were uploaded to defendant's bulletin board with defendant's knowledge was prima facie evidence of direct infringement, and also satisfied the knowledge and material contribution elements of contributory infringement). See also Plaintiffs' Separate Statement of Undisputed Facts, Nos. 3-10, 17.

[43] Defendants (rightfully) do not contest Plaintiffs' ownership of their articles. See 17 U.S.C. 410(c); Perruso Decl., Exh. C; Koefoot Decl., Exh. D.

[44] While the Court does not need to reach this issue, it is fair to say that Defendants' "post-hoc characterization" of their verbatim copies as works of "commentary" is "completely unconvincing." See, e.g., Seuss Enter., L.P. v. Penguin Do USA, Inc., 109 F.3d 1394, 1403 (9th Cir. 1997) (rejecting defendant's argument that they were using the "childish style and moral content of the classic works of Dr. Seuss" to "comment on the mix of frivolousness and moral gravity that characterized the culture's reaction to the events surrounding the Brown/Goldman murders", etc., as "pure shtick").

[45] As emphasized by the court in Marobie-FL even non-profits can "stand to benefit" by making unauthorized copies of copyrighted works. In that case, the defendant had "obtained copies of plaintiff's clip art filed for free although they ordinarily cost money," and "placed these files on its web page and made them available free of cost to its members and other Internet users." The court found that the defendant was "us[ing] its Web Page for the commercial purposes a promoting the association (whose members pay dues)," and that "[t]he clip art files enhanced the web page and furthered these commercial purposes.' Id.

[46] Even taking Defendants' supposed "critique" and "commentary" purposes at face value, Free Republic "could have provided editorial or commentary without copying [the plaintiffs'] protected expression. Ty, Inc. v. West Higland Publ'g, Inc., 1998 U.S. Dist. LEXIS 15869, #42 (N.D. Ill. 1998) ("Beanie Baby Handbook" comprising color photographs of plaintiff's copyrighted images was not a fair use). "Not using Plaintiff's copyrighted works) of course [might] result in [defendants'] product having less commercial appeal," but that prospect merely demonstrates how little Free Republic really adds, Id. at *50 (finding in favor of the plaintiffs on all four statutory fair use factors).

[47] See, e.g., Aldridge Decl., 4-6, Perruso Decl., 20-23. Koefoot Decl, 21-24.

[48] "Since fair use is an affirmative defense, [defendants] must bring forward favorable evidence about relevant markets.' Dr. Seuss Enter., L.P. v. Penguin Book USA. Inc., 109 F.3d 1394, 1403 (9th Cir. 1997). Defendants offer "breaking news" to readers who follow current events. See Wayland Decl., Exh. A. This is precisely the market Plaintiffs are in. Perruso Decl., 3, 20-22; Koefoot Decl. 3, 19, 21-23, See also Aldridge Decl., 2, 5-6. Los Angeles News Service v. Tullo, 973 F.2d 791 (9th Cir. 1992) (finding that the fourth factor favored Plaintiffs, and rejecting the proffered fair use defense, based merely on an "overlap between the [defendants' news clipping] market and the [plaintiff's] potential [] market").

[49] See Koefoot Decl., 12, 22-23; Perruso Decl., 12, 21-22.

[50] See also Harper & Row, 471, U.S. at 568 (harm under the fourth factor is shown by any adverse effect upon "the value of any of the rights in the copyrighted work. . . ."); Financial Info., Inc. v. Moody's Investor Serv., Inc., 751 F.2d 501, 509-510 (2d Cir. 1984) ("[I]f Moody's were unable to copy from [plaintiff's works, plaintiff) might be in a position to license that use for a fee."); Hi-Tech Video Prod., Inc. v. Capital Cites/ABC, Inc., 804 F. Supp. 950, 955 (W.D. Mich. 1992) ("deprivation of a would be licensing fee  . . . constitutes sufficient harm"). Accord Los Angeles News Serv. v. KCAL-TV Channel 9, 108 F.3d 1119, 1122-23 (9th Cir. 1997) (lost potential licensing revenue is market harm under fourth factor); Princeton Univ. Press v. Michigan Document Servs., Inc., 99 F.3d 1381, 1387-88 & n.4 (6th Cir. 1996) (en banc) (same).

[51] Defendants' unauthorized use of copyrighted material is also not "excused by the public's interest" in the subject matter. Harper & Row, 471 U.S. at 569; id. at 555-59. As the Supreme Court has emphasized; "It is fundamentally at odds with the scheme of copyright to accord lesser rights in those works that are of greatest importance to the public." Id. , 471 U.S. at 539. See also Weissmann v. Freeman, 868 F.2d 1313, 1324 (2d Cir.). cert. denied, 493 U.S. 883 (1989) (giving no weight to the fact that the purpose of the use was for "teaching", "scholarship" and "research").

 

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