Brief Fact Summary. Texaco, Inc. (Defendant) claimed it did not infringe a copyright by unauthorized photocopying of scholarly articles as it was a fair use.
Synopsis of Rule of Law. The photocopying of copyrighted material to convert scholarly articles into a useful format is not a transformative use of the material and therefore not a fair use.
The commercial/nonprofit dichotomy concerns the unfairness that arises when a secondary user makes unauthorized use of copyrighted material to capture significant revenues as a direct consequence of copying the original work.View Full Point of Law
Held. (Newman, C.J.) No. The photocopying of copyrighted material to convert scholarly articles into a useful format is not a transformative use of the material and therefore not a fair use. The publishers (Plaintiff) have shown a substantial harm to the value of their copyrights through Texaco’s (Defendant) copying due to lost licensing and subscription revenue. Balancing the four non-exclusive considerations bearing on fair use enumerated in Â§ 107 of the Copyright Act, Defendant’s use of the copyrighted material did not establish a fair use. Affirmed.
Dissent. (Jacobs, J.) The purpose and character of Texaco’s (Defendant) use is essential to transformative scientific research with productive results. The adverse effect of Defendant’s use upon the potential market for the work is imagined.
Discussion. This court considered and discussed each of the four statutory factors. It found that the first factor, the purpose and character of the use, weighed against Texaco (Defendant) because the main purpose of the copying was not transformative, but archival. The second factor, the nature of the copyrighted work, favored Defendant since the articles were all factual in nature. The third factor, the amount and substantiality of the portion used, also weighed against Defendant, since each of the articles was copied in its entirety. The fourth factor, the effect upon potential market or value, also was found to weigh against Texaco (Defendant).