Administering fair use.

• Author: Mazzone, Jason
• Position: Boundaries of Intellectual Property Symposium

ABSTRACT

Fair use is not working. As written by Congress and applied by the courts, the fair use law fails to give individuals sufficiently clear guidance to determine in advance whether their uses of copyrighted works are fair and therefore noninfringing. When the law does not regulate adequately, markets can supply the rules. Thus, copyright owners and prospective users of copyrighted works can--and do--negotiate over and enter into contracts specifying permissible uses. However. leaving fair use to the market is far from desirable. Fair use is not meant to be something that is sold and bought like other market goods. Fair use is free use. Nobody is meant to be paying for the privilege of using a copyrighted work in a manner that the law deems not to infringe the copyright in the work. Moreover, the fair use market is not a fair market. The failure of Congress and of the courts to provide clear guidance on the meaning of fair use permits copyright owners to leverage the vagueness of the law and persuade prospective users that virtually any unauthorized use constitutes copyright infringement--and that if the use is not paid for it will result in a lawsuit and substantial damages.

This Article offers a new approach to fair use. It proposes a role for the one branch of the federal government that has so far been left out of the picture: the executive branch. In most areas of the law where clear legal directives are needed to guide behavior in particular contexts and where Congress and the courts are unable to supply the clarity, we turn to administrative agencies. An administrative agency can, and should, regulate fair use. Accordingly, the Article offers two possible models of agency regulation. In the first model, an agency is responsible for generating regulations that determine what constitutes fair use in specific contexts as well as preventing efforts to interfere with fair uses of copyrighted works. In the second model, an agency issues fair use regulations and determines prior to any copyright infringement claim being brought in court whether the use in question constitutes fair use. Agency regulation can bring much needed clarity and predictability to fair use in ways that neither Congress nor the courts are able to accomplish; an agency can also protect fair use in ways that the market does not.

TABLE OF CONTENTS INTRODUCTION I. FAIR USE IN CONGRESS AND THE COURTS II. FAIR USE AND MARKETS III. FAIR USE AND THE ADMINISTRATIVE STATE A. Model One: The Office for Fair Use B. Model Two: The Copyright Infringement Review Office C. Fair Use Regulations D. Locating the Agency IV. THE BENEFITS OF AGENCY ADMINISTRATION CONCLUSION INTRODUCTION

Who should regulate fair use? Codifying the judicially-recognized fair use doctrine, Congress incorporated a fair use defense in the 1976 Copyright Act, which established that a fair use of a copyrighted work does not infringe the exclusive rights the Act grants to the copyright owner. Courts have been responsible for applying the fair use provision of the Copyright Act when they adjudicate copyright infringement claims. Yet neither Congress in enacting the fair use law nor the courts in applying it have supplied sufficiently clear guidance to permit individuals who wish to make use of a copyrighted work--and who also desire to avoid infringing the copyright in the work--to determine whether their proposed use is fair. Where law does not regulate, markets can, of course, supply the rules. Thus, copyright owners and prospective users of copyrighted works can--and do--negotiate over and enter into contracts specifying permissible uses. Yet leaving fair use to the market is far from desirable. Fair use is not meant to be something that is sold and bought like other market goods. Fair use is free use. Nobody is meant to pay for the privilege of using a copyrighted work in a manner that the law already deems not to infringe the copyright. Moreover, the fair use market is not a fair market. The failure of Congress and of the courts to provide clear guidance on the meaning of fair use permits copyright owners to leverage the vagueness of the law and persuade prospective users that virtually any unauthorized use constitutes copyright infringement--and that if the use is not paid for it will result in a lawsuit and substantial damages.

There is widespread--though not universal--agreement that fair use does not function well and that reform is needed. A variety of commentators have suggested ways to reform fair use. For example, some commentators have suggested that in implementing the fair use provision of the Copyright Act, courts should take greater account of First Amendment interests and of social practices. (1) Other commentators have called on Congress to amend the fair use law with safe harbors that specify amounts of permissible copying. (2) Different proposals eliminate or reduce damages against defendants who have a good faith basis for believing their use of a copyrighted work was fair. (3) One commentator suggests that Congress create an arbitration system for users of copyrighted material who are unable to negotiate a license agreement with the copyright owner. (4) Another commentator advocates a fair use procedure similar to the process for obtaining a private letter ruling from the IRS. (5)

This Article offers a new approach. It proposes a role for the one branch of the federal government that so far has been left out of the picture: the executive branch. In most areas of the law where clear legal directives are needed to guide behavior in particular contexts and where Congress and the courts are unable to supply the clarity, we turn to administrative agencies. An administrative agency can, and should, regulate fair use. Accordingly, this Article offers two possible models of agency regulation. In the first model, an agency is responsible for generating regulations that determine what constitutes fair use in specific contexts as well as preventing efforts to interfere with fair uses of copyrighted works. In the second model, an agency issues fair use regulations and determines whether the use in question constitutes fair use prior to any copyright infringement claim being brought in court. Agency regulation can bring much needed clarity and predictability to fair use in ways that neither Congress nor the courts can; an agency can also protect fair use in ways that the market does not.

Parts I and II set out the deficiencies of current approaches to fair use, examining respectively the inadequacy of the law of fair use and the problems that market regulation produces. Part III offers the proposal for agency regulation and describes the two models. Part IV discusses the benefits of agency regulation.

1. FAIR USE IN CONGRESS AND THE COURTS

   The 1976 Copyright Act permits fair uses of copyrighted works, (6) but nobody knows whether any proposed use would be fair. Cognizant of the "endless variety of situations and combinations of circumstances that can rise" and wanting to avoid "freez[ing] the doctrine in the statute, especially during a period of rapid technological change," (7) Congress adopted a notoriously vague fair use provision. Section 107 of the Copyright Act, which governs fair use, comprises a nonexclusive list of purposes for which use of a copyrighted work could be deemed fair, (8) along with a list of four factors derived from case law that must be taken into account in making a fair use determination. (9) Given these elements, the statute provides little advance guidance. For the critic who seeks to quote a copyrighted passage, the sampler who wants to incorporate the drum introduction to a copyrighted song, the documentary filmmaker whose camera has captured a television playing in the background, and for others who propose to make use of a copyrighted work, it is hard to determine in advance whether a given use would be fair. Indeterminacy, of course, is not without benefit. The upside of the vague fair use statute is that it is also flexible. The statutory factors can be applied to a variety of uses and in a range of contexts--including to uses and in contexts that Congress may not have anticipated at the time it passed the law.

   Certainty as to fair use comes only through litigation. Applying [section] 107, courts determine whether a use is fair and therefore noninfringing. If Congress was too general in enacting the fair use provision, the judicial decisions construing [section] 107 entail the opposite problem. Whereas Congress refused to think in terms of specific cases, judges necessarily issue rulings closely tied to the facts of individual disputes. The question a judge is asked to resolve is whether a particular defendant's copying of a specified amount of a given work for a certain purpose falls within the protections of fair use. (10) Judicial decisions therefore fail to provide general guidance about when a proposed use is fair--again, making future determinations difficult. Judges themselves have recognized this problem. As one federal judge has put it, judicial opinions "reflect widely differing notions of the meaning of fair use," and "[e]arlier decisions provide little basis for predicting later ones," so parties "can only guess and pray" as to whether a court will find any particular use fair. (11) Fair use law, then, exists at one extreme as a body of vague statutory language and at the other extreme as a collection of narrow, fact-specific, judicial decisions. (12) Neither Congress nor the courts have supplied sufficient clarity to guide prospective users of copyrighted works.

   Stated differently, the fair use provision of [section] 107 provides standards rather than rules. In the classic formulation, legal directives fall somewhere on a continuum between rules at one end and standards at the other. (13) A rule provides clarity but it is also rigid; a standard allows for flexibility but, because it depends upon judgment...