Question: A.V. v. iParadigms, LLC, 562 F.3d 630 (4th Cir. 2009)
Plaintiffs brought this copyright infringement action against defendant iParadigms, LC, based on its use of essays and other papers written by plaintiffs for submission to their high school teachers through an online plagiarism detection service operated by iParadigms. The district court granted summary judgment in favor of iParadigms on plaintiffs' copyright infringement claim based on the doctrine of fair use. We affirm the grant of summary judgment on the plaintiffs' copyright infringement claim ....
I. Defendant iParadigms owns and operates "Turnitin Plagiarism Detection Service," an online technology system designed to "evaluate[ ] the originality of written works in order to prevent plagiarism." According to iParadigms, Turnitin offers high school and college educators an automated means of verifying that written works submitted by students are originals and not the products of plagiarism. When a school subscribes to iParadigms' service, it typically requires its students to submit their written assignments "via a web-based system available at www.turnitin.com or via an integration between Turnitin and a school's course management system."
After a student submits a writing assignment, Turnitin performs a digital comparison of the student's work with content available on the Internet, including "student papers previously submitted to Turnitin, and commercial databases of journal articles and periodicals." For each work submitted, Turnitin creates an "Originality Report" suggesting a percentage of the work, if any, that appears not to be original. The assigning professor may, based on the results of the Originality Report, further explore any potential issues. The Turnitin system gives participating schools the option of"archiving"the student works. When this option is selected, Turnitin digitally stores the written works submitted by students "so that the work becomes part of the database used by Turnitin to evaluate the originality of other student's works in the future." The archived student works are stored as digital code, and employees of iParadigms do not read or review the archived works. When they initiated the lawsuit, the four plaintiffs were minor high school students [enrolled at two different schools]. According to the complaint, both schools required students to submit their written assignments via Turnitin.com to receive credit; failure to do so would result in a grade of "zero" for the assignment under the policy of both schools.
Plaintiffs filed a complaint alleging that iParadigms infringed their copyright interests in their works by archiving them in the Turnitin database without their permission. The district court granted summary judgment to iParadigms ....*** [T]he court determined that iParadigms' use of each of the plaintiffs' written submissions qualified as a "fair use" under 17 U.S.C. § 107 and, therefore, did not constitute infringement. In particular, the court found that the use was transformative because its purpose was to prevent plagiarism by comparative use, and that iParadigms' use of the student works did not impair the market value for high school term papers and other such student works.
II. Plaintiffs' Appeal
The owner of a copyright enjoys "a bundle of exclusive rights" under section 106 of the Copyright Act, including the right to copy, the right to publish and the right to distribute an author's work. These rights "vest in the author of an original work from the time of its creation." "‘Anyone who violates any of the exclusive rights of the copyright owner,' that is, anyone who trespasses into his exclusive domain by using or authorizing the use of the copyrighted work is an infringer of the copyright.' " The ownership rights created by the Copyright Act, however, are not absolute; these rights, while exclusive, are "limited in that a copyright does not secure an exclusive right to the use of facts, ideas, or other knowledge." Rather, copyright protection extends only to the author's manner of expression. Moreover, the copyright owner's rights are subject to several exceptions enumerated by the Copyright Act. One of these statutory exceptions codifies the common-law "fair use" doctrine, which "allows the public to use not only facts and ideas contained in a copyrighted work, but also expression itself in certain circumstances." "From the infancy of copyright protection, some opportunity for fair use of copyrighted materials has been thought necessary to fulfill copyright's very purpose, ‘[t]o promote the Progress of Science and useful Arts" Courts have traditionally regarded "fair use" of a copyrighted work as "a privilege in others than the owner of the copyright to use the copyrighted material in a reasonable manner without his consent." *** Section 107 provides that "the fair use of a copyrighted work ... for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright." Congress provided four nonexclusive factors for courts to consider in making a "fair use" determination:
(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.
Section 107 contemplates that the question of whether a given use of copyrighted material is "fair" requires a case-by-case analysis in which the statutory factors are not "treated in isolation" but are "weighed together, in light of the purposes of copyright." With these general principles in mind, we consider each of the statutory factors. First Factor The first fair use factor requires us to consider "the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes." A use of the copyrighted material that has a commercial purpose "tends to weigh against a finding of fair use." "The crux of the profit/ nonprofit distinction 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." In assessing the "character" of the use, we should consider the specific examples set forth in section 107's preamble, "looking to whether the use is for criticism, or comment, or news reporting, and the like," with the goal of determining whether the use at issue "merely supersedes the objects of the original creation, or instead adds something new, with a further purpose or different character."
Courts, therefore, must examine "whether and to what extent the new work is transformative .... [T]he more transformative the new work, the less will be the significance of other factors, like commercialism, that may weigh against a finding of fair use. A "transformative" use is one that "employ[s] the quoted matter in a different manner or a different purpose from the original," thus transforming it. In considering the character and purpose of iParadigms' use of the student works, the district court focused on the question of whether the use was transformative in nature. The court concluded that "iParadigms, through Turnitin, uses the papers for an entirely different purpose, namely, to prevent plagiarism and protect the students' written works from plagiarism ... by archiving the students' works as digital code." Although the district court recognized that iParadigms intends to profit from its use of the student works, the court found that iParadigms' use of plaintiffs' works was "highly transformative," and "provides a substantial public benefit through the network of educational institutions using Turnitin." Accordingly, the court concluded that the first factor weighed in favor of a finding of fair use. Plaintiffs argue the district court's analysis contained several flaws. First, they suggest that the district court ignored the commercial nature of iParadigms' use of their materials, highlighting the fact that iParadigms is a for-profit company that enjoys millions of revenue dollars based on its ever-increasing database of student works. [T]he fact that the disputed use of copyrighted material is commercial is not determinative in and of itself. [A]lthough a commercial use finding generally weighs against a finding of fair use, it must "be weighed along with [the] other factors in fair use decisions." In this case, the district court determined that the commercial aspect was not significant in light of the transformative nature of iParadigms' use.
The district court simply weighed the commercial nature of iParadigms' use along with other fair use factors, as is appropriate under Supreme Court precedent. Plaintiffs also argue that iParadigms' use of their works cannot be transformative because the archiving process does not add anything to the work-Turnitin merely stores the work unaltered and in its entirety. This argument is clearly misguided. The use of a copyrighted work need not alter or augment the work to be transformative in nature. Rather, it can be transformative in function or purpose without altering or actually adding to the original work. iParadigms' use of plaintiffs' works had an entirely different function and purpose than the original works; the fact that there was no substantive alteration to the works does not preclude the use from being transformative in nature. *** The district court, in our view, correctly determined that the archiving of plaintiffs' papers was transformative and favored a finding of "fair use." iParadigms' use of these works was completely unrelated to expressive content and was instead aimed at detecting and discouraging plagiarism.
Second Factor
In considering the nature of the copyrighted work, the Supreme Court has instructed that "fair use is more likely to be found in factual works than in fictional works," whereas "a use is less likely to be deemed fair when the copyrighted work is a creative product." This postulate recognizes the notion that a work is entitled to greater copyright protection as it comes closer to "the core of creative expression." However, if the disputed use of the copyrighted work "is not related to its mode of expression but rather to its historical facts," then the creative nature of the work is mitigated. And, in fact, the district court concluded that iParadigms' use of the plaintiffs' works "relate[d] solely to the comparative value of the works" and did not "diminish[ ] the incentive for creativity on the part of students." The district court noted that, if anything, iParadigms' use of the students' works fostered the development of original and creative works "by detecting any efforts at plagiarism by other students." *** Plaintiffs contend that the district court's consideration of the "nature of the copyrighted works" factor was flawed for a second reason: the district court ignored the fact that the works in question were works of fiction and poetry, which are considered "highly creative" in nature and deserving of the strongest protection. * * * Rather than ignore it, however, the district court simply concluded that even if the plaintiffs' works were highly creative in nature, iParadigms' use of the plaintiffs' works was not related to the creative core of the works. * * * iParadigms' use of the works in the case-as part of a digitized database from which to compare the similarity of typewritten characters used in other student works-is likewise unrelated to any creative component. Thus, we find no fault in the district court's application of the second fair use factor.
Third Factor
The third fair use factor requires us to consider "the amount and substantiality of the portion used in relation to the copyrighted work as a whole." Generally speaking, "as the amount of the copyrighted material that is used increases, the likelihood that the use will constitute a ‘fair use' decreases." But this statutory factor also requires courts to consider, in addition to quantity, the "quality and importance" of the copyrighted materials used, that is, whether the portion of the copyrighted material was "the heart of the copyrighted work." Although "[c]opying an entire work weighs against finding a fair use, it does not preclude a finding of fair use"; therefore, "[t]he extent of Chapter
2: Protection of Intellectual Property Assets: Patent and Copyright Law 63 permissible copying varies with the purpose and character of the use." The district court found that this factor, like the second factor, did not favor either party. The court concluded that although iParadigms uses substantially the whole of plaintiffs' works, iParadigms' "use of the original works is limited in purpose and scope" as a digitized record for electronic "comparison purposes only." We find no error in the district court's analysis. Fourth Factor Finally, § 107 directs us to examine the market of the copyrighted work to determine "the effect of the use upon the potential market for or value of the copyrighted work." The Supreme Court described this factor as the "single most important element of fair use," considering that a primary goal of copyright is to ensure that "authors [have] the opportunity to realize rewards in order to encourage them to create."
By contrast, "a use that has no demonstrable effect upon the potential market for, or the value of, the copyrighted work need not be prohibited in order to protect the author's incentive to create." Our task is to determine whether the defendants' use of plaintiffs' works "would materially impair the marketability of the work[s] and whether it would act as a market substitute" for them. We focus here not upon "whether the secondary use suppresses or even destroys the market for the original work or its potential derivatives, but [upon] whether the secondary use usurps the market of the original work." An adverse market effect, in and of itself, does not preclude application of the fair use defense. "The fair use doctrine protects against a republication which offers the copyrighted work in a secondary packaging, where potential customers, having read the secondary work, will no longer be inclined to purchase again something they have already read." The analysis of whether the disputed use offers a market substitute for the original work overlaps to some extent with the question of whether the use was transformative. To the extent this issue arises in fair use cases, it often does so when the secondary use at issue involves a scholarly critique or parody of the original work. But regardless of whether the defendant used the original work to critique or parody it, the transformative nature of the use is relevant to the market effect factor.
The district court considered the potential market effects suggested by plaintiffs but concluded that plaintiffs' arguments were theoretical and speculative. Plaintiffs' most plausible theory was that iParadigms' archiving of their papers impaired the sale of the papers to high school students in the market for unpublished term papers, essays and the like. Undoubtedly, there is a market for students who wish to purchase such works and submit them as their own for academic credit. And, iParadigms' archiving of such papers on the Turnitin website might well impair the marketability of such works to student buyers intending to submit works they did not author without being identified as plagiarists. As noted by the district court, however, the plaintiffs testified that they would not sell the works at issue here to any dealer in such a market because such a transaction would make them party to cheating and would encourage plagiarism. Furthermore, to the extent that iParadigms' use would adversely affect plaintiffs' works in this particular market, we must consider the transformative nature of the use. Clearly no market substitute was created by iParadigms, whose archived student works do not supplant the plaintiffs' works in the "paper mill" market so much as merely suppress demand for them, by keeping record of the fact that such works had been previously submitted. In our view, then, any harm here is not of the kind protected against by copyright law. In sum, we conclude, viewing the evidence in the light most favorable to the plaintiffs, that iParadigms' use of the student works was "fair use" under the Copyright Act and that iParadigms was therefore entitled to summary judgment on the copyright infringement claim.
QUESTIONS FOR DISCUSSION FOR CASE 2.5
1. What is the test for evaluating whether a defendant's actions constitute "fair use" under copyright law? Is that test found in the Copyright Act or in case law?
2. Why does the court state in the last paragraph that it "view[s] the evidence in the light most favorable to the plaintiffs"?
3. The court seems to say that turnitin.com affects only the market for unethical uses of the papers submitted (e.g., resale to other students or a "paper mill"). Can you think of any legitimate uses of student papers that would be impeded by this service?