Pacific and Southern Co., Inc. v. Duncan

• Decision Date: 26 October 1984
• Docket Number: WXIA-T,No. 83-8782,P,83-8782
• Citation: 744 F.2d 1490
• Parties: , 1984 Copr.L.Dec. P 25,720, 11 Media L. Rep. 1135 PACIFIC AND SOUTHERN COMPANY, INC., d/b/alaintiff-Appellee, Cross- Appellant, v. Carol DUNCAN, d/b/a TV News Clips, Defendant-Appellant, Cross-Appellee.
• Court: U.S. Court of Appeals — Eleventh Circuit

Page 1490

744 F.2d 1490

224 U.S.P.Q. 131, 1984 Copr.L.Dec. P 25,720,

11 Media L. Rep. 1135

PACIFIC AND SOUTHERN COMPANY, INC., d/b/a WXIA-TV Plaintiff-Appellee, Cross- Appellant, v. Carol DUNCAN, d/b/a TV News Clips, Defendant-Appellant Cross-Appellee.

No. 83-8782.

United States Court of Appeals Eleventh Circuit.

Oct. 26, 1984.

Rehearing and Rehearing En Banc Denied Dec. 7, 1984.

L. Ray Patterson, Atlanta, Ga., for defendant-appellant, cross-appellee.

James C. Rawls, V. Robert Denham, Jr., Atlanta, Ga., for plaintiff-appellee, cross-appellant.

David R. Aufdenspring, Atlanta, Ga., amicus curiae, for CBS, Inc.

Appeals from the United States District Court for the Northern District of Georgia.

Before FAY and JOHNSON, Circuit Judges, and YOUNG ^*, District Judge.

JOHNSON, Circuit Judge:

Pacific and Southern Company, the owner of a television station, charges that Carol Duncan, d/b/a TV News Clips, has infringed its copyright by videotaping its news broadcasts and selling the tapes to the subjects of the news reports. We hold that the appellant has violated the copyright laws because her activities do not constitute "fair use" of the material. We also conclude that the television station is entitled to a permanent injunction preventing the appellant from continuing to infringe its copyright. Accordingly, we affirm in part and reverse in part.

I. Facts

Pacific and Southern Company does business as WXIA-TV, a television station in Atlanta, Georgia. It broadcasts four local news programs each day and places a notice of copyright at the end of each newscast. A program consists of self-contained news stories originating outside the studio and linked together by live commentary from the anchor persons, along with weather reports and shorter news reports originating from the studio itself. WXIA records the entire program on videotape and audiotape. It retains a written transcript of the program for a year and the audiotape for an indefinite period of time; it also maintains videotape copies of all the news stories taped before broadcast and stories originating live from a location outside the studio. The station erases the videotape of the entire program after seven days, a practice that destroys any record of the visual element of segments of the show broadcast live from within the studio.

WXIA does not currently market videotape copies of its news stories. Nevertheless, some people ask the station for a chance to view a tape at the station or to purchase a copy for personal use. WXIA has always honored requests to view tapes and usually allows persons to buy the tapes they want. ¹ The revenue from tape sales is a small portion of WXIA's total profits.

Carol Duncan operates a business known as TV News Clips, a commercial enterprise belonging to a nationwide association of news clipping organizations. ² TV News Clips videotapes television news programs, identifies the persons and organizations covered by the news reports, and tries to sell them copies of the relevant portion of the newscast. ³ It does not seek the permission of WXIA or any other broadcaster before selling the tapes, nor does it place a notice of copyright on the tapes. A label on each tape does say, however, that it is "for personal use only not for rebroadcast." TV News Clips erases all tapes after one month.

This case began when TV News Clips sold a copy of a news feature to Floyd Junior College, the subject of a story aired by WXIA on March 11, 1981. WXIA obtained the tape purchased by Floyd Junior College, registered its copyright, ⁴ and brought this action to obtain damages for the infringement of its copyright and an injunction preventing unauthorized copying and sales of its news program. The district court, 572 F.Supp. 1186, found that the news feature was protected by the copyright laws and that TV News Clips had not made "fair use" of the material. It rejected the fair use defense without reaching the four factors listed in 17 U.S.C.A. Sec. 107 (1977), because TV News Clips had not met its threshold burden of showing that its activity served a purpose such as "criticism, comment, news reporting, teaching ... scholarship, or research," categories listed in the preamble to Section 107. Yet despite finding that TV News Clips had clearly violated WXIA's copyright, the district court denied the request for an injunction for three reasons. First, the sales did not seriously threaten WXIA's creativity, so an injunction would not significantly further the main objective of the copyright laws, fostering creativity. Second, the court feared that an injunction would threaten First Amendment values served by the increased public availability of the news made possible by TV News Clips. Finally, the court found that WXIA had abandoned its copyright on several portions of the newscasts; it declined to formulate a decree that would distinguish between the abandoned and unabandoned portions.

II. "Fair Use" Defense to Statutory Liability

The news feature broadcast by WXIA undoubtedly falls within the protection of the copyright laws. The editorial judgment used to present effectively the events covered by the broadcast made it an "original" work of authorship, Wainwright Securities, Inc. v. Wall Street Transcript Corp., 558 F.2d 91, 95 (2d Cir.1977), cert. denied, 434 U.S. 1014, 98 S.Ct. 730, 54 L.Ed.2d 759 (1978), and the feature became "fixed" in a tangible medium when it was recorded at the time of transmission. ⁵ Thus, it met the requirements of 17 U.S.C.A. Sec. 102 (1977). The fact that the infringing tape is the only exact copy of the transmission still in existence does not nullify the copyright. The statute requires only that the original work be "fixed" for a period of "more than transitory duration," not for the entire term of the copyright. 17 U.S.C.A. Secs. 101, 102 (1977).

A copyright grants to the owner several exclusive rights, including the right to reproduce the copyrighted work and to distribute copies to the public. The courts have, however, developed over the years the concept of "fair use" to describe some limited and useful forms of copying and distribution that are tolerated as exceptions to copyright protection. ⁶ The 1976 Copyright Act codified this judicial doctrine at 17 U.S.C.A. Sec. 107 (1977) without significantly altering it. The statute divides into a "preamble" and a list of factors to consider during the search for fair use:

[T]he fair use of a copyrighted work, including such use by reproduction in copies ... for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include--

(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;

(2) the nature of the copyrighted work;

(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

(4) the effect of the use upon the potential market for or value of the copyrighted work.

17 U.S.C.A. Sec. 107 (1977).

TV News Clips argued in the district court that its use of the news broadcast was a fair use of the material because it served an important societal interest in full access to the news. The court rejected the fair use defense without considering the four statutory factors because TV News Clips did not copy and distribute the material for purposes such as the ones listed in the preamble. The district court reasoned that since TV News Clips' use was not "inherently productive or creative," like each of the preamble uses, analysis of the four factors was unnecessary.

We agree with TV News Clips that the district court should have considered the four factors set out in the statute. The statute uses mandatory language to the effect that in a fair use determination, the "factors to be considered shall include" (emphasis added) the four listed. ⁷ The preamble merely illustrates the sorts of uses likely to qualify as fair uses under the four listed factors.

The approach taken by the district court impedes the ability of the fair use doctrine to function as a "rule of reason." Fair use allows a court to resolve tensions between the ends of copyright law, public enjoyment of creative works, and the means chosen under copyright law, the conferral of economic benefits upon creators of original works. Where strict enforcement of the rights of a copyright holder under 17 U.S.C.A. Sec. 106 (1977) would conflict with the purpose of copyright law or with some other important societal value, courts should be free to fashion an appropriate fair use exemption. The district court fashioned a per se rule that a use must be inherently productive or creative before it can be a fair use, but a doctrine meant to resolve unforeseen conflicts of values should not turn on such a narrow inquiry. The Supreme Court, in its recent fair use decision in Sony Corp. v. Universal City Studios, --- U.S. ----, 104 S.Ct. 774, 78 L.Ed.2d 574 (1984), did not conduct any preliminary tests before analyzing the four statutory factors. It expressly refused to look to productivity alone in determining what constituted a fair use. Id. at n. 40. Hence, the Supreme Court's recent application of the doctrine, as well as the traditional purpose of fair use, points out the error of the district court's reasoning.

Despite the district court's erroneous interpretation of the law, we need not remand this case for further factfinding. The district court resolved all the issues of fact necessary for us to conclude as a matter of law that TV News Clips' activities do not qualify as a fair use of the copyrighted work. See Triangle Publications, Inc. v. Knight-Ridder Newspapers, Inc., 626 F.2d 1171, 1175 (5th Cir.1980) (analyzing usage under the four statutory...