Harper Row, Publishers Inc v. Nation Enterprises
| Decision Date | 20 May 1985 |
| Docket Number | No. 83-1632,83-1632 |
| Parties | HARPER & ROW, PUBLISHERS, INC. and the Reader's Digest Association, Inc., Petitioners v. NATION ENTERPRISES and the Nation Associates, Inc |
| Court | U.S. Supreme Court |
In 1977, former President Ford contracted with petitioners to publish his as yet unwritten memoirs. The agreement gave petitioners the exclusive first serial right to license prepublication excerpts. Two years later, as the memoirs were nearing completion, petitioners, as the copyright holders, negotiated a prepublication licensing agreement with Time Magazine under which Time agreed to pay $25,000 ($12,500 in advance and the balance at publication) in exchange for the right to excerpt 7,500 words from Mr. Ford's account of his pardon of former President Nixon. Shortly before the Time article's scheduled release, an unauthorized source provided The Nation Magazine with the unpublished Ford manuscript. Working directly from this manuscript, an editor of The Nation produced a 2,250-word article, at least 300 to 400 words of which consisted of verbatim quotes of copyrighted expression taken from the manuscript. It was timed to "scoop" the Time article. As a result of the publication of The Nation's article, Time canceled its article and refused to pay the remaining $12,500 to petitioners. Petitioners then brought suit in Federal District Court against respondent publishers of The Nation, alleging, inter alia, violations of the Copyright Act (Act). The District Court held that the Ford memoirs were protected by copyright at the time of The Nation publication and that respondents' use of the copyrighted material constituted an infringement under the Act, and the court awarded actual damages of $12,500. The Court of Appeals reversed, holding that The Nation's publication of the 300 to 400 words it identified as copyrightable expression was sanctioned as a "fair use" of the copyrighted material under § 107 of the Act. Section 107 provides that notwithstanding the provisions of § 106 giving a copyright owner the exclusive right to reproduce the copyrighted work and to prepare derivative works based on the copyrighted work, the fair use of a copyrighted work for purposes such as comment and news reporting is not an infringement of copyright. Section 107 further provides that in determining whether the use was fair the factors to be considered shall include: (1) the purpose and character of the use; (2) the nature of the copyrighted work; (3) the substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect on the potential market for or value of the copyrighted work.
Held: The Nation's article was not a "fair use" sanctioned by § 107. Pp. 542-569.
(a) In using generous verbatim excerpts of Mr. Ford's unpublished expression to lend authenticity to its account of the forthcoming memoirs, The Nation effectively arrogated to itself the right of first publication, an important marketable subsidiary right. Pp. 545-549.
(b) Though the right of first publication, like other rights enumerated in § 106, is expressly made subject to the fair use provisions of § 107, fair use analysis must always be tailored to the individual case. The nature of the interest at stake is highly relevant to whether a given use is fair. The unpublished nature of a work is a key, though not necessarily determinative, factor tending to negate a defense of fair use. And under ordinary circumstances, the author's right to control the first public appearance of his undisseminated expression will outweigh a claim of fair use. Pp. 549-555.
(c) In view of the First Amendment's protections embodied in the Act's distinction between copyrightable expression and uncopyrightable facts and ideas, and the latitude for scholarship and comment traditionally afforded by fair use, there is no warrant for expanding, as respondents contend should be done, the fair use doctrine to what amounts to a public figure exception to copyright. Whether verbatim copying from a public figure's manuscript in a given case is or is not fair must be judged according to the traditional equities of fair use. Pp. 555-560.
(d) Taking into account the four factors enumerated in § 107 as especially relevant in determining fair use, leads to the conclusion that the use in question here was not fair. (i) The fact that news reporting was the general purpose of The Nation's use is simply one factor. While The Nation had every right to be the first to publish the information, it went beyond simply reporting uncopyrightable information and actively sought to exploit the headline value of its infringement, making a "news event" out of its unauthorized first publication. The fact that the publication was commercial as opposed to nonprofit is a separate factor tending to weigh against a finding of fair use. Fair use presupposes good faith. The Nation's unauthorized use of the undisseminated manuscript had not merely the incidental effect but the intended purpose of supplanting the copyright holders' commercially valuable right of first publication. (ii) While there may be a greater need to disseminate works of fact than works of fiction, The Nation's taking of copyrighted expression exceeded that necessary to disseminate the facts and infringed the copyright holders' interests in confidentiality and creative control over the first public appearance of the work. (iii) Although the verbatim quotes in question were an insubstantial portion of the Ford manuscript, they qualitatively embodied Mr. Ford's distinctive expression and played a key role in the infringing article. (iv) As to the effect of The Nation's article on the market for the copyrighted work, Time's cancellation of its projected article and its refusal to pay $12,500 were the direct effect of the infringing publication. Once a copyright holder establishes a causal connection between the infringement and loss of revenue, the burden shifts to the infringer to show that the damage would have occurred had there been no taking of copyrighted expression. Petitioners established a prima facie case of actual damage that respondents failed to rebut. More important, to negate a claim of fair use it need only be shown that if the challenged use should become widespread, it would adversely affect the potential market for the copyrighted work. Here, The Nation's liberal use of verbatim excerpts posed substantial potential for damage to the marketability of first serialization rights in the copyrighted work. Pp. 560-569.
723 F.2d 195 (CA2 1983), reversed and remanded.
Edward A. Miller, New York City, for petitioners.
Floyd Abrams, New York City, for respondents.
This case requires us to consider to what extent the "fair use" provision of the Copyright Revision Act of 1976, (here- inafter the Copyright Act) 17 U.S.C. § 107, sanctions the unauthorized use of quotations from a public figure's unpublished manuscript. In March 1979, an undisclosed source provided The Nation Magazine with the unpublished manuscript of "A Time to Heal: The Autobiography of Gerald R. Ford." Working directly from the purloined manuscript, an editor of The Nation produced a short piece entitled "The Ford Memoirs—Behind the Nixon Pardon." The piece was timed to "scoop" an article scheduled shortly to appear in Time Magazine. Time had agreed to purchase the exclusive right to print prepublication excerpts from the copyright holders, Harper & Row Publishers, Inc. (hereinafter Harper & Row), and Reader's Digest Association, Inc. (hereinafter Reader's Digest). As a result of The Nation article, Time canceled its agreement. Petitioners brought a successful copyright action against The Nation. On appeal, the Second Circuit reversed the lower court's finding of infringement, holding that The Nation's act was sanctioned as a "fair use" of the copyrighted material. We granted certiorari, 467 U.S. 1214, 104 S.Ct. 2655, 81 L.Ed.2d 362 (1984), and we now reverse.
In February 1977, shortly after leaving the White House, former President Gerald R. Ford contracted with petitioners Harper & Row and Reader's Digest, to publish his as yet unwritten memoirs. The memoirs were to contain "significant hitherto unpublished material" concerning the Watergate crisis, Mr. Ford's pardon of former President Nixon and "Mr. Ford's reflections on this period of history, and the morality and personalities involved." App. to Pet. for Cert. C-14—C-15. In addition to the right to publish the Ford memoirs in book form, the agreement gave petitioners the exclusive right to license prepublication excerpts, known in the trade as "first serial rights." Two years later, as the memoirs were nearing completion, petitioners negotiated a prepublication licensing agreement with Time, a weekly news magazine. Time agreed to pay $25,000, $12,500 in advance and an additional $12,500 at publication, in exchange for the right to excerpt 7,500 words from Mr. Ford's account of the Nixon pardon. The issue featuring the excerpts was timed to appear approximately one week before shipment of the full length book version to bookstores. Exclusivity was an important consideration; Harper & Row instituted procedures designed to maintain the confidentiality of the manuscript, and Time retained the right to renegotiate the second payment should the material appear in print prior to its release of the excerpts.
Two to three weeks before the Time article's scheduled release, an unidentified person secretly brought a copy of the Ford manuscript to Victor Navasky, editor of The Nation, a political commentary magazine. Mr. Navasky knew that his possession of the manuscript was not authorized and that the manuscript must be returned quickly to his "source" to avoid discovery. 557 F.Supp. 1067, 1069 (SDNY 1983). He hastily put together what he believed was "a real hot news story" composed of...
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