By Carlos Alberto Aguirre Noboa. Candidate for Master of Laws in Intellectual Property Law & Policy. Law P510 Advanced Research And Writing Seminar

Transcription

1 DOES THE FAIR USE DOCTRINE CONSTITUTE A PROPER BALANCE BETWEEN THE RIGHTS OF COPYRIGHT HOLDERS AND THE RIGHTS OF THE GENERAL PUBLIC, IN CASES OF APPROPRIATION OF CHARACTERS? By Carlos Alberto Aguirre Noboa Candidate for Master of Laws in Intellectual Property Law & Policy Law P510 Advanced Research And Writing Seminar Submitted to Professor Signe H. Naeve University of Washington School of Law Seattle, Washington June 2014

2 2 Table of Contents I. Introduction II. Copyright protection III. Exclusive rights IV. The Fair Use doctrine V. Balancing interests of copyright owners and the general public Anderson v. Stallone Warner Bros Entm t Inc v. RDR Books Salinger v. Colting Silverman v. CBS, Inc Leslie S. Klinger v. Conan Doyle Estate. Ltd Rogers v. Koons SunTrust Bank v Houghton Mifflin Co VI. Proposal Courts should give more weight to the first factor of the fair use analysis Two new factors for the fair use analysis The purpose of the appropriation of the character Analyze if there was no other way to do the second work Excluding the bad faith subfactor of the fair use analysis A compulsory license regime to use the original works in the second work, and share a percentage of the profit VII. Conclusion

3 3 I. Introduction Humans do what they love to do, and when they create something new, they are inspired or influenced by something else or by somebody else they like. Even the greatest artists on earth are inspired by others. Michael Jackson s moves and his outfits were inspired by the moves and outfit of Bob Fosse in the movie The Little Prince. The great look of Elvis Presley was inspired in the comic that he admired Capitan Marvel Jr. And with not doubt, Madonna s outfit, make up, and poses for photographs were inspired by Marilyn Monroe. The development of copyright law has been a continuing response to the challenges posed by new technologies that reproduce and distribute human expression. 1 The Statute of Anne constitutes the first copyright act that was passed by the English Parliament in It initially established copyright as a right of limited duration granted by the state for a public purpose. 2 Copyright law in the United States begun by passing state copyright laws that were inspired on the Statute of Anne. However, due to the issue of applying the different conflict laws across state boarders, states realized that a general consensus in order to create a national law was necessary. Therefore, Congress passed the first Copyright Act of In December 1905, president Theodore Roosevelt called for a complete revision of the copyright law to meet modern conditions, and the result of these revisions was the Copyright Act of This new act 1 MARSHALL A. LEAFFER, UNDERSTANDING COPYRIGHT Law, 3 (LexisNexis, 5th ed. 2010). 2 ALFRED C. YEN & JOSEPH P. LIU, COPYRIGHT LAW ESSENTIAL CASES AND MATERIALS 2 (West/Thomson Reuters, 2d ed. 2011). 3 ROBERT P. MERGES, PETER S. MENELL & MARK A. LEMLEY, INTELLECTUAL PROPERTY IN THE NEW TECHNOLOGICAL AGE 432 (Wolters Kluwer Law & Business, 6 th ed. 2012). 4 MARSHALL A. LEAFFER, UNDERSTANDING COPYRIGHT LAW, 3 (LexisNexis, 5th ed. 2010).

4 4 broadened the scope and duration of copyright protection. In 1976 Congress approved the current Copyright Act, which constitutes the principal framework for Copyright protection in the United States. 5 The 1976 Act once again expanded the scope and duration of protection. All written works became protected upon being fixed in a tangible medium of expression, even if they were unpublished. The duration of copyright protection was extended to the life of the author plus 50 years, or 75 years in the case of anonymous works, pseudonymous works, and works made for hire. 6 The formal notice and registration requirements were loosened, but not discarded. 7 In other words, Congress enacted the Copyright Act of 1976 to extent the exclusive rights to authors for their original works of authorship. But, up to what point should courts protect these exclusive rights? The protection of Intellectual Property presents the courts with the necessity of balancing competing interests. On the one hand, we wish to protect and reward the work and investment of those who create Intellectual Property. In so doing, however, we must prevent the creation of a monopoly that would inhibit the creative expressions of others. 8 Imagine that you are a big fan of an American artist, and the works created by this artist constitute your way of inspiration for the works that you create later. Your work independently of what it is, it relies on the artist s work. Therefore, you would think that your work does not infringe the copyright of your favorite artist, because a work need only exhibit a modicum of creativity 5 ROBERT P. MERGES, PETER S. MENELL & MARK A. LEMLEY, INTELLECTUAL PROPERTY IN THE NEW TECHNOLOGICAL AGE 433 (Wolters Kluwer Law & Business, 6 th ed. 2012). 6 Id., at Id. 8 White v. Samsung Electronics America, Inc. 971 F.2d 1395 (9th Cir.1992).

5 5 and be fixed in a tangible medium of expression in order to be protected by copyright. 9 However, this is not how it works, courts have analyzed these kinds of cases in a different perspective. If you use a part of the work, the characters, or some elements of a copyrighted work in order to develop your own work, without authorization of the artist, you would probably infringe the intellectual property rights of that artist. However, these exclusive rights of authors are limited in several ways. One of them and the most important is the fair use doctrine, intended to create leeway for criticism, comment, news reporting, teaching, scholarship, and research, applying a balancing test to determine whether a use of copyrighted material should be permitted without the owner s authorization. 10 The purpose of this essay is to analyze whether the fair use doctrine developed by the courts and later adopted by Congress in the 1976 Copyright Act, properly balances the simultaneous needs to protect copyrighted material and to allow others to build new works upon them. In doing so, I will discuss several cases, however, in order to determine if the fair use doctrine constitutes a proper balance between the rights of the copyright holders and the general public, I will mainly focus in two cases Anderson v. Stallone, and Warner Bros. Entm t Inc. v. RDR Books, where courts have decided whether a previous work have been infringed by the latter that relied on it. After analyzing the fair use doctrine in each of these cases, I will also comment whether the final decisions made by these courts promote or affect the progress of science and useful arts. If these decisions affect the main purpose of the copyright clause, I will provide 9 ROBERT P. MERGES, PETER S. MENELL & MARK A. LEMLEY, INTELLECTUAL PROPERTY IN THE NEW TECHNOLOGICAL AGE 434 (Wolters Kluwer Law & Business, 6 th ed. 2012). 10 Id., at 435.

6 6 some possible solutions for the courts to apply in future cases. The four main proposals that I will discuss are: The fair use analysis should give more weight to the first factor of the fair use analysis, the purpose and character of the use. 11 Especially discussing about Transformativeness of the work. The application of two new factors for the fair use analysis, the exclusion of the bad faith subfactor, and a compulsory license regime to use characters of an original work in a second work, and share a percentage of the sale profit. II. Copyright protection Copyright law constitutes the primary means for protecting original works of authorship. Courts and scholars often mention that copyright is an economic incentive to authors for the production of new works. 12 Therefore, below an explanation about how the copyright law protects these works, and a description of each one of the elements of copyright, will be provided: Section 102 of the Copyright Act establishes the subject matter protectable by copyright that includes literary works, musical works, dance, pantomimes and choreography, paintings, graphics, sculptures, movies, photography, sounds, architectural works and computer programing. 13 Some of the limitations of copyright protection are: ideas themselves, procedures, process, system, method of operation, concept, principle or discoveries. 14 All of these original works of authorship that are subject of protection must complete two requirements. The first one, they must be fixed in any tangible medium of expression, and the second, that they should exhibit a U.S.C. 107 (2012). 12 ALFRED C. YEN & JOSEPH P. LIU, COPYRIGHT LAW ESSENTIAL CASES AND MATERIALS 7 (West/Thomson Reuters, 2d ed. 2011) U.S.C. 102(a) (2012) U.S.C. 102(b) (2012).

7 7 minimum degree of originality. 15 As the Second Circuit have stated, all that is needed to satisfy both the Constitution and the statute, is that the author contributes something more than a merely trivial variation, something recognizable his own. 16 The Supreme Court also established a definition for originality in the case Feist Publications v. Rural Telephone Service Co. in which it mentioned that original means only that the work was independently created by the author (as opposed to copied from other works), and that it possesses at least some minimal degree of creativity 17. In other words, originality entails independent creation of a work reflecting a modicum of creativity. Regarding the formalities, it is important to mention that registration of the copyright is not mandatory and does not constitute a condition for copyright protection, copyright protection applies once the work is fixed in a tangible medium. 18 This rule is governed internationally by the Berne Convention. 19 However, registration is required for works created in the United States in order to claim infringement and award of statutory damages. 20 Additionally, The registration of the copyright before the U.S. Copyright Office brings some advantages that are listed below: - Registration establishes a public record of the copyright claim. 15 Copyright Basics, United States Copyright Office (2012) Alfred Bell & Co. v. Catalda Fine Arts, Inc., 191 F.2d 99 (2d Cir. N.Y. 1951). 17 Feist Publications, Inc. v. Rural Tel. Service Co., 111 S. Ct. 40 (U.S. 1990). 18 Copyright Basics, United States Copyright Office (2012) Bern Convention for the Protection of Literary and Artistic Works, World Intellectual Property Organization, available at (last visited May. 30, 2014). 20 Copyright Basics, United States Copyright Office (2012).

8 8 - If the registration is made before or within five years of publication, registration will establish prima facie evidence in court of the validity of the copyright and of the facts stated in the certificate. - If registration is made within three months after publication or prior to an infringement of the work, statutory damages and attorney s fees will be available to the copyright owner in court actions. Otherwise, only an award of actual damages and profits is available to the copyright owner. - Registration allows the owner of the copyrighted work to record the registration with the U.S. Custom Service for protection against the importation of infringing copies. 21 Moreover, the term of duration of copyright lasts the life of the author plus additional 70 years for the works created after January 1 st, In the case of anonymous works, pseudonymous works, and works made for hire the term of durations lasts 95 years from the date of first publication or 120 years from the date of creation, whichever occurs first. 22 The final scenario is the case of joint works prepared by two or more authors who did not work for hire, for this kind of works, the term of duration of the copyright lasts for the life of the authors, and 70 additional years from the last surviving author s death 23. III. EXCLUSIVE RIGHTS Section 106 of the Copyright Act lists six exclusive rights that owners of copyrighted works are entitled to: The right of reproduction, the adaptation right, the right of distribution, the right to perform the copyrighted work publicly, the right to display the copyrighted work publicly, and sound recording 21 Id., at Id., at Id.

9 9 digital audio transmission rights. 24 These are the rights that belong to the copyright owner according to the statutory provision of the Copyright Act. This chapter will mainly focus in the right to prepare derivative works, which is the right in question for the purpose of this essay. 17 U.S.C. 106 (2) establishes that the copyright owner has the exclusive right to prepare derivative works 25, and according to 101 of the same statute a derivative work is a work based upon one or more preexisting works, such as a translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgment, condensation, or any other form in which a work may be recast, transformed, or adapted. A work consisting of editorial revisions, annotations, elaborations, or other modifications, which, as a whole, represent an original work of authorship, is a derivative work. 26 In other words, the Copyright Act permits a new work that is based in a substantial part upon a preexisting work to obtain an independent copyright protection, but this right covers only the original contribution of the author who prepares the derivative work. 27 The scope of protection in a derivative work extends only to the additional materials created by the author of the derivative work 28. If the additional material makes only a trivial contribution to the pre- existing work, then no separate derivative copyright will be U.S.C. 106 (2012) U.S.C. 106 (2) (2012) U.S.C. 101 (2012). 27 Originality Requirements under U.S. an E.U. Copyright Law, Software Freedom Law Center, available at requirements.html (last visited May 31, 2014). 28 ROGER E. SCHECHTER & JOHN R. THOMAS, PRINCIPLES OF COPYRIGHT LAW, 86 (Thomson/West, 2010).

10 10 established. 29 If the author of the derivative work is not the same author of the original work, in order to obtain a valid copyright in the derivative work, the author of the second work must either base his work on an underlying work that is in the public domain, or obtain permission from the owner of the copyright, otherwise he would be infringing copyrighted material. 30 When we talk about the exclusive right of adaptation, we must think about licensing as well. As it was stated before, a new author needs authorization in order to create a derivative work. For example, a new author must obtain a license from the original author in order to prepare a translation of a novel from one language to another, or an author of a book might grant a license to a production studio in order to prepare a movie based on that book. 31 In conclusion, it can be stated that according to the Copyright Act, an author owns not only the copyright of a work, he is also entitled to the exclusive right to prepare derivative works, Furthermore, the author has not only the right to sell or license the copyrighted work, but also has the right to prevent others from preparing derivative works based on the original work. 32 It seems like the rights of the copyright owner are very broad. However, it is important to keep in mind that there are some limits to these exclusive rights. The first limit is that a derivative work is not created unless there is new material added. A second limit could be found in the rule that no infringement occurs unless the alleged derivative work is substantially similar to the copyrighted work. Infringement requires copying of the protected elements of 29 Id., at Id. 31 STEPHEN M. MCJOHN, COPYRIGHT EXAMPLES & EXPLANATIONS 250 (Wolters Kluwer Law & Business, (3th ed. 2006). 32 Id., at 250.

11 11 the work. 33 Moreover, copyright does not apply to any portion of a derivative work in which material is used unlawfully. 34 Additionally, is very important to explain that if the new version of a work is done in such a creative way that could constitute a parody, the second work would not be consider as a derivative work. 35 Finally, in a case of infringement, if a defendant can prove that his work is sufficiently transformed from the underlying work, then, the fair use should come into play. In the cases that will be discussed in the next chapters, we will see examples of derivative works that infringed on the original work, and also cases where even when the second work was considered a transformative work, it did not comply with all the elements of the fair use doctrine and therefore also infringed the original work. IV. THE FAIR USE DOCTRINE The Fair Use doctrine constitutes the principal limitation to the exclusive rights that copyright grants to authors of original works. This flexible doctrine allows use of copyrighted material without permission or payment to the copyright holder. 36 In other words, the fair use doctrine is often defined as the privilege in others than the owner to use the copyrighted material in a reasonable manner, without consent, notwithstanding the monopoly granted to the owner. 37 This judicially created defense to copyright infringement had its first statutory recognition in the Copyright Act of 1976, although it had been 33 Id. 34 Anderson v. Stallone, 1989 U.S. Dist. LEXIS (C.D. Cal. Apr. 25, 1989). 35 STEPHEN M. MCJOHN, COPYRIGHT EXAMPLES & EXPLANATIONS, 251 (Wolters Kluwer Law & Business, 3th ed. 2006). 36 Id., at Rosemont Enters. v. Random House, Inc., 336 F.2d 303, 306 (2d Cir. 1966).

12 12 judicially recognized at least since 1841 in the case Folsom v. Marsh. 38 It is clear that many individuals desire and sometimes need to use copyrighted materials in order to create a new work, but up to what point are they allowed to use the copyrighted material? This is a question that courts have answered by applying the fair use doctrine. Section 107 of the Copyright Act protects copying if the use of the work is made for the purposes of criticism, comment, news reporting, teaching, (including multiple copies for classroom use), scholarship, or research. 39 However, the statute does not provide a definition of the fair use doctrine, instead it establishes four non- exclusive factors that the courts must consider in order to determine if the defendant s work should be protected under the fair use defense. These four factors are: 1. The purpose and character of the use, in this factor courts should discuss whether the use was for a commercial purpose or for nonprofit educational purposes, and If the work was transformative. 2. The nature of the copyrighted work, courts will analyze if the work is published or unpublished, fiction or factual. 3. The amount and substantiality of the portion used in relation to the copyrighted work as whole. There are some cases in which courts have found fair use even when the entire work was used. 4. The effect of the use upon the potential market for or value of the copyrighted work. Many scholars mention that this is the most important factor, because if the market is harmed, defendant is less 38 HARRY G. HENN, HEN ON COPYRIGHT LAW A PRACTITIONER S GUIDE, 223 (Practicing Law Institute, 1991) U.S.C. 107 (2012).

13 13 likely to prevail in a fair use claim 40 Taking into account that Congress, in codifying the fair use defense, expected the courts to continue developing fair use in a case- by- case fashion. 41 Each of the four factors will be analyzed in depth in the cases that are going to be discussed in the following chapters of this essay. In conclusion, it can be stated that the concept of fair use is extremely slippery, embodying both copyright doctrine and competing policy values. This flexibility often makes fair use a hard standard to apply in specific cases. Court decisions are sometimes hard to predict, making it often difficult to decide whether to rely on fair use. 42 For this reason, and due to the fact that the wording of section 107 of the Copyright Act makes clear that the four statutory factors are not exclusive and that courts are free to consider other factors. 43 This essay will propose new factors in order to make the fair use doctrine a proper balance between the rights of copyright owners and the rights of the general public. V. BALANCING INTERESTS OF COPYRIGHT OWNERS AND THE GENERAL PUBLIC Despite the fact that the current Copyright Act protects original works of authorship, it is important to keep in mind that just because a work is copyrighted, does not mean that every element of the work is protected against copying. The primary objective of copyright is to promote the Progress of 40 Id. 41 ALFRED C. YEN & JOSEPH P. LIU, COPYRIGHT LAW ESSENTIAL CASES AND MATERIALS 361 (West/Thomson Reuters, 2d ed. 2011). 42 STEPHEN M. MCJOHN, COPYRIGHT EXAMPLES & EXPLANATIONS, pag ALFRED C. YEN & JOSEPH P. LIU, COPYRIGHT LAW ESSENTIAL CASES AND MATERIALS 361 (West/Thomson Reuters, 2d ed. 2011).

14 14 Science and useful Arts 44. Therefore, it is important to understand what was the real intent of Congress when it enacted the Copyright Act and specifically section 106 (Exclusive rights in copyrighted works) 45 and section 107 (limitations on exclusive rights, fair use) 46. By adding these two provisions in the Copyright Act, Congress desire was to balance the interests of copyright owners and the community of users and new authors, by creating exclusive rights for proprietors, but also drawing a line and delineating the scope of those rights. 47 Therefore, this part of the essay will analyze two specific cases in which, it can be clearly seen how the interests of copyright owners and new authors are in dispute, and how the courts balanced these rights in favor of one or another. 5.1 Anderson v. Stallone: The first case is Anderson v. Stallone a copyright case in which, the right to prepare derivative works was infringed. This is a 1989 case where a screenwriter named Timothy Anderson, who, after watching the third movie of a very successful series, decided to write a thirty- one page treatment that incorporated the same characters of the previous movies, hoping that it would be used by Sylvester Stallone, the author of the extremely successful motion pictures, entitled Rocky I, II, and III, and MGM the producer studio 48. Although, Sylvester Stallone had descripted his idea to make Rocky IV before the members of the press, Anderson met with the studio executives in order to discuss the treatment, and the possibility to use it as the script for the Rocky IV movie. No written contract was signed between the parties, but 44 Allison S. Brehm & Eric W. May, Copyright Protection for Fictional Characters, 84 Patent Trademark & Copyright J. 285 (2012) U.S.C. 106 (2012) U.S.C. 107 (2012). 47 MELVILLE B. NIMMER, NIMMER ON COPYRIGHT, volumen 4, Anderson v. Stallone, 1989 U.S. Dist. LEXIS (C.D. Cal. Apr. 25, 1989).

15 15 Anderson affirms that Mr. Fields, who was the president of MGM at that time, told him that if MGM and Stallone use his treatment, big amounts of money were going to be paid to Anderson. 49 Subsequently, the studio released the new movie based in the story created by Anderson, without compensation. Anderson filed a suit claiming copyright infringement and the court found that Anderson s treatment is not entitled to copyright protection for the following reasons: The characters created by Stallone in the movies Rocky I, II and III constitute expressions that are subject to copyright protection, regardless of the story in which they are contained. The second argument of the court was that Anderson s treatment appropriated the characters of these movies, and based upon these characters and without permission of the original author, he created a derivative work in violation of section 106(2) of the Copyright Act. Finally, the court held that taking into account that Anderson s treatment was made based upon the characters that appeared in the three previous movies, no part of Anderson s treatment was entitled to copyright protection. 50 In order to determine if the characters created by Stallone in the first three movies are entitled to copyright protection, the court applied two tests. The first one is the Sufficient Delineation Test. Under this test, characters that are sufficiently delineated and that display consistent, widely identifiable traits merit copyright protection. 51 The second test is the Story Being Told Test, this test requires that the character be so central to the story that it is the story in 49 Id., at Id., at 6 51 Nichols v. Universal Pictures Corp., 45 F.2d 119 (2d Cir. N.Y. 1930)

16 16 order to merit copyright protection. 52 By applying these two tests to the Anderson case, the court established that the characters in the three Rocky movies are: One of the most highly delineated group of characters in modern America cinema Rocky Balboa is such a highly delineated character that his name is the title of all four Rocky movies and his character has become identified with specific character traits ranging from his speaking mannerisms to his physical characteristics. 53 Furthermore, the court also found that Rocky characters were so highly developed and central to the three movies made before Anderson s treatment that they constituted the story being told. As it can be easily seen in this case, plaintiff created a derivative work that constituted the same work that defendant previously created. In other words, he created the story for another movie with the same characters, in violation of defendant s exclusive right to prepare derivative works. The issue of the creation of an unauthorized derivative work was also discussed in the court opinion, and the court determined that Anderson has bodily appropriated the Rocky characters in his treatment, that Anderson retained the names, relationships, and built on the experiences of these characters from the three prior movies. Therefore, the unauthorized appropriation of these characters infringes upon Stallone's copyright and renders his work as an unauthorized derivative work. 54 Nevertheless, Anderson argued that the non- infringing portions of his treatment are entitled to copyright protection under section 103(a) of the Copyright Act 52 Allison S. Brehm & Eric W. May, Copyright Protection for Fictional Characters, 84 Patent Trademark & Copyright J. 285 (2012). 53 Anderson v. Stallone. 54 Id., at 8.

17 17 that establishes that the subject matter of copyright includes derivative works, but protection for a work employing preexisting material in which copyright subsists does not extend to any part of the work in which such material has been used unlawfully. 55 The second part of this provision is what the court emphasizes, and it mentions that plaintiff did not provide with any case that has held that an infringer of copyright is entitled to sue a third party for copyright infringement of the original parts of his derivative work. 56 The court also relied on the House Report and Professor Nimmer s interpretation of section 103(a) that mentioned that this provision was not intended to apply to derivative works. Therefore, the court held that Stallone and MGM are entitled to summary judgment on plaintiff s copyright claims. 57 The main purpose of this essay is to analyze whether courts are balancing the property rights that copyright establishes in creative works and the right of the general public and other authors to rely on these existing works, in order to create new works. One of the primary goals of Intellectual Property law is to maximize creative expression, and the law attempts to achieve this goal by striking a proper balance between the right of a creator to the fruits of his labor and the right of future creators to free expression. Underprotection of intellectual property reduces the incentive to create but, in the other hand, over protection of this branch of law would create a monopoly over the raw material of creative expression. 58 Therefore, the question for courts to answer in these kind of cases is how much is too much protection? As is clearly seen, the balance U.S.C. 103 (a) (2012). 56 Anderson v. Stallone. 57 Id., at Cardtoons, L.C. v. Major League Baseball Players Association 95 F.3d 959 (10th Cir. 1996).

18 18 in this case weighed on favor of the copyright owner, but did the court supersede the constitutional right to promote the progress of science and useful arts with the exclusive right to prepare derivative works in this decision? Does this decision means that in order to create new art, new authors cannot rely in other works, or this decision is preventing potential new authors to unlawfully use a copyrighted work in order to create a new work and later sue the original author if he uses the latest infringing work. I believe that the court in this case did the correct analyzes in order to determine if the non infringing parts of the derivative work created by Anderson are entitled to copyright protection, it did not undermine the copyright clause of the United States Constitution, and the reason to agree with the court opinion is because the derivative work that Anderson prepared was the same work that Stallone had previously prepared. In simple words, Anderson also prepared the script for a movie. In my opinion, an analysis to determine the purpose of the appropriation of the character is another factor that courts should apply in order to balance the rights of copyright holders and the rights of the general public. This proposal will be explain in detail in the following chapter. Now we turn to the second case, which discusses about fair use and appropriation of art: 5.2 Warner Bros Entm t Inc v. RDR Books: The second case that I will analyze is Warner Bros Entm t Inc v. RDR Books. This is the case of the famous Harry Potter Lexicon (Encyclopedia). In this case, plaintiffs Warner Bros. Entertainment Inc. and J.K. Rowling sued defendant RDR books alleging copyright infringement seeking injunctive relief and damages. Defendant

19 19 counterclaimed alleging the affirmative defense of fair use. 59 J.K Rowling is the author of the well- recognized Harry Potter book series and also is the author of other works, as the two short companion books. Since 1998 Rowling has stated several times that in addition of these two books she plan to publish a Harry Potter Encyclopedia. 60 Steven Vander Ark a big fan of the Harry Potter novels is the author of the Lexicon, an A to Z guide that describes and principally explains each of the characters, creatures, objects and places that appear in the Harry Potter fantasy world, Vander Ark took personal notes to keep track of every element and detail of the Harry Potter world. In 1999, he started working in the Lexicon website which, was open one year after, the purpose of the website is to create an encyclopedia that collects all the information about Harry Potter books for fans to use, the content of the encyclopedia was mainly obtained from the Harry Potter series and the companion books written by Rowling. The new work created by Vander Ark was so useful that even Rowling recognize how useful it was. Publishers and editors of the books, David Heyman the producer of the Harry Potter movies, and Electronic Arts, they all referred to the encyclopedia to verify information regarding the Harry Potter world. 61 Defendant RDR Books a publishing company proposed Vander Ark to make a publication of the content of the Lexicon website in a book. After several meetings, the publishing company convinced Vander Ark to make the publication and the president of the company agreed to add a clause to the publishing 59 Warner Bros. Entm't Inc. v. RDR Books, 575 F. Supp. 2d 513 (S.D.N.Y. 2008). 60 Id., at Id., at 6.

20 20 contract providing that RDR would defend Vander Ark from any possible lawsuit. 62 Plaintiffs discovered about the idea to publish a book of the Lexicon and after several failed tries to stop RDR Books from the publication of the Lexicon book, Rowling and Warner Bros filed the suit on October 31, 2007, claiming copyright infringement and seeking a court order for a preliminary injunction. 63 The District Court made the following conclusion regarding the copyright infringement claim in this case: 1. Ownership and copying: Regarding ownership of the works the court held that plaintiff s claims of copyright infringement will be addressed just with respect to the seven Harry Potter books and the two companion books. Regarding copying the court held that plaintiff have shown that the Lexicon copies a sufficient quantity of the Harry Potter series to support a finding of substantial similarity between the Lexicon and the Harry Potter novels, the court ruled that reproducing original expression in fragments or in a different order, however, does not preclude a finding of substantial similarity. 64 Similarly, the Second Circuit in the case Horgan v. Macmillan, Inc., established that regardless of how the original expression is copied, the standard for determining copyright infringement is not whether the original could be recreated from the allegedly infringing copy, but whether the latter is substantially similar to the former Derivative work: The court held that the Lexicon does not fall under any example of derivative works listed in the statute, and plaintiffs have failed to 62 Id., at Id., at Id., at Horgan v. Macmillan, Inc., 789 F.2d 157, 162 (2d Cir. 1986).

21 21 show that the Lexicon is a derivative work. In order to determine that the Lexicon does not constitute a derivative work, the court argued that the Lexicon s use of plot elements is far from an elaborate recounting and does not follow the same plot structure as the Harry Potter novels. The court also mentioned that by condensing, synthesizing, and reorganizing the preexisting material in an A- to- Z reference guide, the Lexicon does not recast the material in another medium to retell the story of Harry Potter, but instead gives the copyrighted material another purpose Fair use: Purpose and Character of the Use: Regarding the first factor of fairs use, the court held that the fair use doctrine seeks to protect a secondary work if it adds value to the original, if it is used as raw material, transformed in the creation of new information, new aesthetics, new insights and understandings because such a work contributes to the enrichment of society, and where defendant uses a copyrighted work in a different context to serve a different function than the original. 67 In this case, the purpose of the Lexicon s use of Harry Potter series is transformative because it uses material from the series for the practical purpose of making information about the world of Harry Potter readily accessible to readers in a reference guide. The Lexicon clearly adds value to the original work because even Rowling, David Heyman, and Electronic Arts used the Lexicon at some point as a reference guide. Furthermore, the Lexicon seeks not to entertain but to aid the reader or student of Harry Potter by providing references about the elements encountered in the series. The Lexicon also occasionally offer new information, new aesthetics, new 66 Warner Bros. Entm't Inc. v. RDR Books, 575 F. Supp. 2d 513 (S.D.N.Y. 2008). 67 Id., at 20.

22 22 insights and understandings, because the Lexicon discusses some characters, it contains some reflections on the character, and it provides examples of how that nature is exhibit in the story. For all of these reasons the Lexicon is transformative. 68 Regarding the commercial purpose of the work, the court held that courts will not find fair use when the secondary use can fairly be characterized as a form of commercial exploitation, but are more willing to find a secondary use fair when it produces a value that benefits the broader public interest. In this case, even when defendant s use of the copyrighted work is for commercial purposes, it also benefits the public. Therefore, the commercial nature only weighted slightly against the finding of fair use. 69 Nature of the copyrighted work: In order to discuss this factor, courts must rely in the well- settled rule that creative and fictional works are generally more deserving of protection than factual works. 70 In this case the court of the Southern District of New York mentioned that in creating the Harry Potter novels and the companion books, Rowling has given life to a wholly original universe of people, creatures, places, and things. Such highly imaginative and creative fictional works are close to the core of copyright protection. Therefore, the second factor weighted against the finding of fair use 71. Amount and Substantiality of the Use: The question to analyze this factor is whether the quantity and value of materials used are reasonably in relation to the transformative purpose of the copying, and the court found that determining 68 Id., at Id. 70 Stewart v. Abend, 495 U.S. 207 (U.S. 1990). 71 Warner Bros. Entm't Inc. v. RDR Books.

23 23 how much copying of fictional facts and plot elements from the Harry Potter series is reasonably necessary to create a useful and complete reference guide presents a difficult task. However, the court found that the Lexicon disturbs the balance and takes more than is reasonably necessary to create a reference guide, because it appears to retell parts of the storyline rather than report fictional facts and where to find them. 72 Regarding the two companion books, the court mentioned that the Lexicon s purpose is only slightly transformative of the companion book s original purpose. For these reasons, the third factor, the amount and substantiality of the portion copied from the companion books weighted more heavily against finding of fair use. 73 Market Harm: The fourth factor analyze whether unrestricted and widespread conduct of the sort engaged in by defendant would result in a substantially adverse impact on the potential market for the original 74. Regarding this last factor, the court held that publication of the Lexicon could harm sales of Rowling s two companion books because the Lexicon s use of the companion books is only marginally transformative, the Lexicon is likely to supplant the market for the companion books. Furthermore, the court held that the fourth factor favors plaintiffs if publication of the Lexicon would impair the market for derivative works that Rowling is entitled or likely to license. Therefore, the four factor weighted against the finding of fairs use 75. In this case, even when the court found the Lexicon to be a transformative work, and not a derivative work of the Harry Potter Books, the District Court 72 Id., at Id., at Campbell v. Acuff- Rose Music, 510 U.S. 569 (U.S. 1994). 75 Warner Bros. Entm't Inc. v. RDR Books.

24 24 found copyright infringement and decided the case in Rowling s favor. I find this opinion to be overprotection of intellectual property rights. Therefore, this case will be analyzed in each one of the proposals discussed in the following chapter. Following this line of cases, and in order to have a better understanding of how the courts have been ruling in the majority of these cases, a most recent case will be analyzed below: 5.3 Salinger v. Colting: This is another copyright infringement case in which plaintiff J.D. Salinger sued defendants Fredrik Colting and Windupbird Publishing, Ltd., claiming that Colting s book entitled 60 Years Later Coming Through the Rye (hereinafter 60 Years Later) was a sequel of his famous book Catcher in the Rye (hereinafter Catcher) and for this reason, the second work constitutes an infringing derivative work. 76 The 1951 novel Catcher was a coming- of- age story about a disaffected 16 years old boy named Holden Caulfield, this book was an instant success and it was on the New York Times best seller list and sold one million copies in its first ten years. Furthermore, the main character of the novel was consider a cultural icon. Salinger did register and renew his copyright in Catcher with the U.S. Copyright Office. In the other hand, the accused infringer s 2009 novel told the story of the same character 60 years later, in a world that included a fictionalized Salinger, but the author of this second work did not request permission from Salinger in order to publish the new novel. When Salinger brought the suit he reiterated the similarity between the two works, considering that both share the same characters, even when the second work refers to Holden Caulfield as Mr. C, and they also share similar scenes. In contrast, defendant argued that his work was not intended to be a 76 Salinger v. Colting, 607 F.3d 68 (2d Cir. N.Y. 2010).

25 25 sequel of the Catcher, rather the author mentioned that his work was a critical examination of the character Holden and the way he is portrayed in the Catcher. 77 The District Court held that defendants have infringed Salinger s copyright in both, the work and the main character; the fair use defense is likely to fail; and a preliminary injunction was granted to Salinger. The court argued that the main character of the Catcher was sufficiently delineated; there is substantial similarity between both works, and between the characters in each novel 78. Regarding the fair use defense, the court found that none of the four factors supports defendant s claim of fair use. Below a brief description about what the court said regarding the four statutory factors: Regarding the first factor, the purpose and character of the use, the court found that the novel 60 Years Later was not sufficiently transformative. The court ruled that one recognized form of transformative value is parody, which requires a reasonably discernable rejoinder or specific criticism or any character or theme. 79 However, the court found that Colting s novel was not a parody. Furthermore, the court observed that 60 years later s commercial nature further cuts against defendants on the purpose and character of the use factor. For all of these reasons the first factor weighted against of fair use 80. Regarding the second factor, the nature of the copyrighted work, the court held that the Catcher is a creative expression for public dissemination that falls 77 Id., at Id., at Id. 80 Id.

26 26 within the core of the copyright s protective purposes. For this reason the second factor did not favor fair use 81. Regarding the third factor, the amount and substantiality of the portion used in relation to the copyrighted work as a whole, the court concluded that Colting took well more from Catcher, in both substance and style, than is necessary for the alleged transformative purpose of criticizing Salinger. For this reason, the third factor weighted against fair use 82. Finally, with respect to the market harm factor, the court concluded that this factor weighs slightly in Salinger s favor. The court observed that 60 Years Later is unlikely to impact the sales of Catcher itself, but it found that an unauthorized sequel might undermine the potential market for an authorized. 83 The Second Circuit determined that plaintiff had a likelihood of success on the merits of the copyright infringement claim because the novels were substantially similar and because defendants were not likely to prevail in the fair use defense, since it was simply not credible for defendant Colting to assert that his primary purpose was to critique Salinger. Therefore, the appellate court affirmed the district court s finding. 84 As it can be clearly seen, this is another case where the fair use doctrine did not apply when appropriation of high delineated characters come into play. As well as in the two previous cases, it seems like the fair use doctrine weighed in favor of the copyright holder, what make us presume that, up to this point, this doctrine does not constitute the proper balance between the rights of the 81 Id. 82 Id. 83 Id. 84 Id., at 12.

27 27 copyright holders and the rights of the general public. Therefore, a proposal, stating new solutions is needed, but first let s analyze other cases that even when they are not fair use cases, they still deal with the issue of appropriation of characters, and I will start with the following case: 5.4 Silverman v. CBS, Inc: This is another copyright infringement case, where appellant wrote a script for a musical based on characters that originally appeared on defendant s radio programs. Appellant filed a lawsuit seeking a declaration that these radio program broadcast before 1948 were in the public domain, and appellee counterclaimed, alleging that appellant s script violated appellee s copyright. 85 The District Court ruled that although pre radio programs were in the public domain, appellee had copyrights in scripts for post radio programs and that appellant had infringed these copyrights. 86 The Court of Appeals held that copyrights in post radio scripts provided protection only for increments of expression beyond what was contained in earlier radio scripts. Therefore, some parts of appellant s script infringed the copyrighted work A similar more recent case is Leslie S. Klinger v. Conan Doyle Estate. Ltd: where plaintiff sought a declaration that public was free to use characters, character traits and story elements from Conan Doyle s works because those elements have entered in the public domain. Defendant Conan Doyle argued that because his characters (Sherlock Holmes and Dr. Watson) continued to be developed throughout the copyrighted post stories, they should remain 85 Silverman v. CBS, Inc., 870 F.2d 40 (2d Cir. N.Y. 1989). 86 Id., at Id., at 9.

28 28 under copyright protection. 88 The District Court first concluded that plaintiff and the public may use any story elements that were first introduced in the pre public domain stories without seeking permission from the copyright holder. However, the court also held that under the increments of expression test, the 10 post story elements were copyrightable because there was substantial evidence that the characters, character trait, and storylines constituted original expression beyond what was contained in the public domain portion of the stories. Therefore, those story elements were protected from unauthorized use. 89 Although these two cases do not deal with first use, they are still important for the purpose of this essay because they shows the big scope of protection of characters, through copyright law. As it was stated before, in order to use a protected character in a new work, the new author must use a character that is already in the public domain, or must obtain permission from the original author. Otherwise, he will be infringing. But what would happen if the new author uses these characters in a completely different and transformative work? Nowadays, the answer would be the same, copyright infringement. Therefore, in order to promote the creation of new works and the development of arts, this essay will propose new factors for this specific kind of cases. Going a little further in this line of cases, it is important to mention that no just cases about appropriation of characters have been found to be copyright infringement. There are other several cases where appropriation of other kind of art has not been defendable under the fair use doctrine. 88 Klinger v. Conan Doyle Estate, Ltd., 2013 U.S. Dist. 89 Id., at 12.