 Good morning, everyone. We're going to be focusing this morning on fair use, the US doctrine on fair use, and specifically on litigating cases under the auspices of this doctrine. As I think all of you know by now, fair use is commonly and rightly regarded as both one of the most important and one of the most difficult subjects in copyright law. It arises in almost every copyright dispute, in part because, as you know, section 107, which embodies the doctrine, operates as a general affirmative defense. It can be asserted against any of the exclusive rights under section 106, including the visual artist rights act embodied in the United States in 106A. So it is always available as a defense. The second reason why it is so common to see it deployed is it's notoriously amorphous, unpredictable ad hoc character. So it's rarely clearly inapplicable, prompting defendants almost always to assert it in their answers. Final reason why fair use is very important is that, for better or worse, a growing number of countries around the world are moving toward the US model in this regard. So if you conceive of the approaches to exceptions and limitations in the copyright systems as a spectrum in which open-ended ad hoc standards like fair use are at one extreme and highly specific lists of at least ostensibly precise exceptions exemplified by the EU at the other extreme, the world is gradually bit by bit moving from the European end of the spectrum toward the US end of the spectrum. So for that reason, as I say, for better or worse, the residents and lawyers in other countries are increasingly looking to the jurisprudence of fair use in the United States. You have already had several opportunities in this course to examine the doctrine in this area. You've seen one recorded lecture by me on the topic, led several cases. But you've not yet had the benefit of someone who practices in this field. And we have the great good fortune this morning of having such a person. So Bruce Rich is the head of the IP practice at Weill-Gottchell, which is one of the leading firms in the world in general and intellectual property in particular. Bruce has, over the course of his career, litigated many cases implicating fair use, as well as several of the other themes that we've been studying in this course. He has not just applied the doctrine to novel sets of facts. He's been instrumental in shaping the doctrine through the common law process that you have seen several times already. So he has been crucial in advancing unprecedented interpretations of fair use and has seen several of those accepted by the courts. So he's going to be talking today about fair use, and in particular, litigating fair use. The way we're going to proceed is he's going to begin by describing the doctrine in some of the many cases that he has pursued under its auspices. And then we will, as is our custom, move gradually into questions and answers, both from you here and from the various audiences, copyright-ex audiences who are watching this presentation online. So one more word about mechanics. When you ask a question, most likely Bruce, who, among other things, is a teacher in his own right, will call on you, but pause for just a moment to allow either Nathaniel or Ed to provide you a microphone so that the question can be captured on the tape. I will try to oscillate between questions from here and questions from the online audience. So please join me in welcoming Bruce Rich. Thank you very much. It's wonderful to be here. And Terry and I go back a number of years, and I think as testimony to the many challenges which copyright law in general present and the uncharted territory in which we, who practice in the field, find ourselves navigating, Terry has become my consigliari of choice when he's not otherwise conflicted, which unfortunately occasionally is, to help think through some of the more cutting edge issues that present themselves in this field. And I'd like to say we've had a nice partnership of the rigorous intellectual and comprehensive scope of Terry's learning, which we try to translate and marry in the messy practical realities of the courtroom, which many of you will experience in your careers. And we've not had a perfect track record, I'm sad to say, but we've had a pretty darn good track record, at least anticipating the hard arguments and maximizing potential outcomes. It's a fascinating field. I've been privileged to practice in this field for the better part of my career and working now with many next generation lawyers who, it's safe to say, are much more technologically savvy than I am, and that's where the hard issues increasingly are arising. But as I'll talk about a little more, when you practice in any field, and copyright is no exception, you tend to want to urge courts that there's a certain constancy and stability and predictability to the doctrines that they're being asked to apply and not get terribly thrown anyway by the increasingly complex contexts in which these issues arise. I want to start by talking for just a little while about, at a big picture level, the overall tendencies that we experience practicing in this field and especially relate to the fair use doctrine because it is evolving. And I really want to spend more rather than less time today just giving you from the practitioner's perspective the realities, the complexities of the doctrine not only in distilling out from the case law what these first principles are and suggest, but when you map those onto real-world situations, whether you're counseling clients or litigating for clients, what are some of the more daunting challenges that one faces? As Terry indicated, and as you all by now fully appreciate, the fair use doctrine has always been a very challenging one, very case-specific, very unpredictable, often deployed, whether with merit or simply as a last-ditch defense as it were. And we litigate cases both for plaintiffs and for defendants, and so we've been able to experience all facets of the strengths, weaknesses, and uncertainties of the doctrine. You'll find that your clients are always looking for bright-line rules. It's amazing to me how otherwise sophisticated clients will indulge in presumptions that are not more than gossip or hearsay. Oh, surely, says content user X, I use less than X% of a work, and I understand that's a safe harbor under the fair use doctrine. No, wrong. I found it on the internet. It's there. I mean, people can read it, so I simply copied it and distributed it to my advertising clients. What's wrong with that? No. I'm a not-for-profit organization. I don't stand to make anything from using these materials, so I use them. No. And again, these are not necessarily unsophisticated people, but people who are untrained in copyright and whose instincts often are off. A very common misconception is that because something has been longstanding industry practice, it somehow ought to be protected by the fair use doctrine. So for example, in the broadcasting industry without getting into too privileged information, with respect to uses of certain content and particularly music content, there have been longstanding practices, often by omission, implicating incidental or ephemeral, so-called uses of musical works in aid of over-the-air broadcasting. And if you were to search all the way back to the dawn of broadcasting, way back to the late 1940s, you would in fact find that there were certain informal understandings between music publishing companies, for example, and early-year broadcasters, suggestive of the idea that certain incidental reproductions of copyrighted musical works would not be compensable to a copyright owner provided they held a music performance right license from an organization like ASCAP or BMI. And so you wouldn't be surprised to learn that over decades, when that practice becomes entrenched, when a demand letter arrives suddenly one day from a music publishing company to such a client, and they say, how come you haven't been paying us for X or Y? And the client says, well, wait a minute. I've been doing this, and my predecessors have been doing this for 30 years. You may or may not be surprised to understand that while doctrines like latches and other equitable defenses may play some role in forestalling a claim, it is almost certainly not a defense on a going forward basis. Unless, under copyright law, you find a body of case law under the existing statute that authorizes the conduct. And so a lot of what we do is simply clear out the underbrush of misconception as to what ought to be fair use. People seem to think fair use is just a gut instinct equitable matter. If it feels good, if nobody's complained about it, if it's out there on the internet, if I'm not for profit, it ought to be safe. None of those is a guidepost that is especially useful. Now, technological advances have only dramatically complicated the fair use analysis. The very activities that are being examined and put before courts and juries today are no longer activities that are easily observed, or counted, or understood, whether by legal practitioners themselves or by the courts. So that what understands when you take a book and put it on a copy machine, a photocopy machine, and a physical piece of paper emerges, that's not rocket science. I think you say, ah, a copy has been made within the meaning or reproduction has been made within the meaning of 106. Gets one heck of a lot more complicated, for example, if you're streaming a musical file. So you're streaming the bits and bytes of a musical work as many of us do, regularly. Are there reproductions occurring within the meaning of 106.1 of the Copyright Act arising out of the streaming of a musical file? Listen to for the sake of keeping this simple in real time. There's something called progressive streaming, which complicates life. But let's assume we're not complicating it that way. Case is actually litigated through the Second Circuit. Our firm was involved. Music Performing Rights Organization argued that notwithstanding, it clearly appears to contemplate a what? Public performance of the music, yes. It's being rendered in real time. It's perceptible. But the argument was that there is something innate in the technology and the architecture by which, from the server, that musical work is ultimately perceived, and trying to parse certain definitions in the Copyright Act, including transmission and performance in what constitutes public performance, a serious argument was made. I thought it wasn't serious, but I was an advocate. That there was also a reproduction of the work being made. Now, why would it matter? It actually does matter, because many of these disputes as in most litigation involve money at the end of the day. And so if you are a music publishing company and you're able to make a claim not only that a stream of a musical file is a compensable public performance, revenues for which are typically collected in the United States by the so-called Performing Rights Organizations, ASCAP, BMI, CSAC, but that there is, in addition, a separate 106 copyright right, the public performance right is a 106-4 right. What about the 106-1 reproduction? If you can argue there is also a reproduction, at least technically, you have a separate right to control those uses and to be compensated for those uses. Well, through the Second Circuit, cert denied the position we espouse, which is that's hogwash. There's only one meaningful copyright activity associated with that stream that was affirmed by the Second Circuit. But to get to that point involves nothing less than working with the Jonathan Zittrain, which we did in that case at Harvard Law School, to help demystify the technology for the court, to help understand at a very rudimentary level what that stream looks like and feels like. Now, it can be extraordinarily complicated. What if it turns out that as you draw that picture for the court, you see that a musical file is being buffered on its way through the distribution pipes of the internet? Well, buffering involves capturing, at least for some fragmentary period of time, portions of that musical work. Perhaps it's fragments of it. And perhaps at no moment, all of it is captured in one place in the buffer. Well, how do you work through all the definitions of the Copyright Act, which gives the right to reproduce a copy fixed in a tangible medium for a period of more than transitory duration? Every single one of those elements has been the subject now of multiple cases to define when an activity of that sort may constitute a compensable reproduction. So courts need to understand what a buffer is. If it's five seconds of buffering a segment of a stream musical composition, is that a copy of a work or of a fragment of a work? If it's a copy of a work, is it of only transitory duration? Yes, as the second circuit in the cable vision case, as to that second point. Yes, as to a copy. No, as to fixed for more than transitory duration. Or what if it's 15 seconds? What if it's 30 seconds? What if, as I've had to counsel clients, it's a minute or two minutes? What about cached copies, which are attained for longer periods of time, incidental to other activities? We're not going to solve those problems here. But in the technology environment, the point is only that understanding the facts, working literally with IT people, with engineers, the clients, and the lawyers need to understand what it is you're advocating. And then you need equally to translate what can be complicated concepts into jargon that courts and juries will understand. And then, of course, you've got to argue as persuasively as possible depending on which side of the V you are in the case as to whether what is being observed implicates any copyright rights. Or at the end of the day, even after you've established a prima facie 106 right, whether the use is a fair use at the end of the day. So that, for example, we were involved for a period of time in a series of cases that are still going through the courts involving the issue whether there is a state law right in at least several states for owners of sound recordings to be compensated for the public performances of pre-1972 sound recordings. Some of you may know that federal copyright law kicks in only to protect sound recordings after February, created after February of 1972. And for many years, many decades, there has been no enforcement regime at the state law level, even though it has not been preempted, seeking to collect for broadcast performances and now more recently for satellite or Pandora-type performances of pre-1972. So there are a series of lawsuits now challenging that. An incident of modern day performances by a Pandora, by a Sirius XM, involves, again, a distribution process, whether by satellite delivery or by over the internet, where necessarily certain incidental reproductions are being made to enable the performance. So consider from the standpoint of a fair use doctrine the question whether, for the sake of discussion, let's assume a court were to decide there is no prevailing right of public performance with respect to the pre-1972 work, but that there is, the court would find, technically, one or more reproductions being made in aid of this exempted public performance. So now think about the economics of that situation. So if I'm the copyright holder, I say that's the best loss I've ever had in my life because I can capture, essentially, the same value that I was trying to collect from the public performance right by taxing that entity and preventing that entity from disseminating those pre-1972 recordings unless they pay me my ask for the reproductions involved. We briefed but haven't had decided by any court the notion that surely if the ultimate activity is one that's exempt, meaning the public performance, any incidental reproductions in support of it ought to be fair uses. Just one small example of the many twists and turns which the fair use doctrine presents in the technological environment. Another basic point, courts are mesmerized by but also completely fearful of the impact of technology in thinking about copyright and the application of doctrines like fair use. And it's a critical management task for any litigator to demystify the technology before the court. And depending on your perspective, I'm conveying clearly to the judge how the existing body of copyright law, both statutory and common law, should be applied in what may be a new and complicated technological setting. Invariably, the plaintiffs in these cases argue that it's new bottles, what's the phrase? I always mix it up. But it's basically nothing new wine in old bottles. Nothing's really changed. Don't be thrown by it. And that's generally, I think, the correct approach to take in those situations, although courts you see regularly in some of the cases you've read and others you will, struggle with the ill fit between law much of which was written pre the internet era and the increasingly difficult fact patterns that emerge, read the Ray Digi case, Judge Sullivan's ruling in the Southern District of New York, courts are struggling. And they keep saying, I'm not a blogosphere. I'm not a committee of Congress. I'm just a judge doing the best I can. And I'm going to interpret the law as I find it. There may be compelling social arguments that say it's wrong, economic arguments that say it's wrong, not my province. You've got to help the judges deal with the law as it exists. And some people feel that simply, again, marshaling arguments around fair use as the uber equitable doctrine to blow past statutory language that may be completely precise will work. I'll give you one example. Section 112A of the Copyright Act is colloquially called the Ephemeral Recording Provision of the Act. And it was written in an era when television broadcasters, rather than simply have that camera in the studio broadcasting the local news at night live, oh, there's this new thing. We have these sound trucks that now can go around the city and we can prerecord a segment for the evening news, which is, of course, now commonplace. So the idea of the Ephemeral Recording Provision was, using that illustration, not to create copyright liability for the capture in a single copy at the time of videotape material for delayed live broadcast on the evening broadcast. So 112A basically says, the owner of the musical work in my example or other copyrighted material or the sound recording owner of a recording cannot make a claim against that broadcaster for this Ephemeral, meaning temporary use subject to certain limitations. And one of the limitations is you could only make one copy of the broadcast material. If you make more than one, you have to pay. Well, for many years, certainly at the time this was written into copyright law, it was actually technologically feasible. I will tell you it's technologically impossible today for a broadcaster in the current technology environment, and certainly in the digital environment. It is physically impossible to limit any kind of activity today to a single copy, because if you sit with a broadcast engineer, I had one meeting where they identified at least 40 different copies technically that are made simply given the nature of transmission technology today. I'm regularly asked, our firm is regularly asked, but we're complying with the spirit of 112A. Nothing has changed. Why should the outcome be any different? It's got to be at a minimum of fair use, even if, Bruce, you're telling me you can't stretch the word one into 40. That I can't do. I'm a good lawyer, but I'm not that good. But the point is only that that's a dubious fair use position to take, because it's inviting a court. It's really asking a court legislatively to write 40 in place of one. And so there are a lot of places where the fair use doctrine has a lot of power and a lot of vitality. But it cannot bridge some daunting gaps that exist in reality in copyright law, where the statute simply hasn't really kept up with practice. And so what you see are a number of rulings that are frustrating. Then in your bones, you say, don't make sense, like the Ray Digi case, which is a fascinating case, sort of the first sale and rental case. I don't know if you cover that, Terry. We have, yeah. And you say, I've never seen a case that's sort of been more controversial in my copyright classes. Most people say it's just dead wrong. I don't know if it's dead wrong on the laws it stands today. We feel it's wrong. And fair use was just blown away in that case. Sullivan gave it no weight at all, I think, too little weight, perhaps. But the point is it's not a magic bullet solution. Next point, copyright is, like so much common law, a creative, evolutionary, typically slow to change. But those of us who follow this field in the internet environment have been blown away by the pace at which the fair use doctrine has been evolving, and specifically how the concept of transformative use has been expanding dramatically in the face of exceptionally interesting and challenging situations. When the Google Books Project, which you've read about, was first in the offering, we do a lot of work with the book publishing industry. I was asked by a prominent book publisher to provide a legal opinion as to that contemplated activity. Mind you, no exaggeration involving copying virtually every work in copyright in multiple university libraries cover to cover for one of the largest commercial enterprises in the country. You say that quickly enough, you say, wow, that's breathtaking. At the time I gave the opinion, there was really one cutting edge, if you want to call it that, transformative use opinion involving internet commerce. And that was Kelly via Rebusoft. And many people viewed it. I won't reveal the legal advice per se, but you'll get the drift of where I'm going. Many people regarded that as an outlier at the time, that it was such a departure from a traditional conception of what fair use doctrine was designed to shield and designed to foster, which is critical uses, taking a body of copyrighted expression and using it and transforming it into something and building another work of expression out of it, whether it's comment or critique or review, something different, even a collage artistically. And yet here was this behemoth organization appropriating massive volumes, millions of copyrighted works, clearly not for an illimasionary purpose, but to further its commercial interests and not pay anything to the owners of the works. There was certainly basis then to conclude that that work, that the fair use doctrine, as it had then evolved, that it was a serious issue, whether the fair use doctrine would properly encompass that activity. Well, you've read Judge Chin's opinion. And Judge Chin, for those of you who don't know much about him, would be expected by his background and predilections to be extremely supportive of the author community. That is his background, in fact, that he is. I've argued cases before him where he has certainly leaned in favor of the copyright owner, as it were, in situations of this sort. To me, it's one of the most remarkable opinions in all of copyright jurisdiction that he spends maybe four pages total on a fair use analysis in this monumentally important case makes it seem self-evident that what Google did was of classic fair use. And frankly, his opinion was the culmination of a series of opinions, several of which you've read and others, those of you who will delve into this area will in the future read, that increasingly reflect the power, the sheer force, of technology in society today. If I've come away from studying these cases, as I have with any one overarching thought, transcending the fair use doctrine but looking across the areas of copyright challenge, it's that, as a rule, judges today are very loathe, very loathe to rule in a fashion that could slow this powerful engine of technology and the amazing power of information and information tools that have been unleashed with the economic resources of entities such as Google. And the tool that has been primarily deployed to get there in this process has been to adopt this far more expansive than historic conception of what constitutes transformative use. If you look at the evolving body of fair use doctrine today, including the cases that were assigned to you in the two sets of class readings, I think you'll agree with me that the analysis increasingly is becoming not a four factor but a two factor analysis. That's what we experience. People pay lip service to factor two, nature of the work, published or unpublished, creative or factual. Almost every analysis in almost every case, no matter where the court comes down, says, but this is a minor factor. This favors so-and-so, but I give it very little late. And factor three, which you think would be hugely significant, which is the quantitative and qualitative level of copying and historically was a major factor in the fair use analysis also has become significantly diminished in significance because once a court determines if it does that the use is transformative. And once it determines it's transformative tends almost automatically to say that because it is so different in kind, in nature, in purpose from the original intent of the author, factor four, market harm, unless there's a dramatic showing in the evidence to the contrary, is either irrelevant because a transformative work trumps market harm or complements the likely conclusion that if it's sufficiently different, there isn't likely to be market harm of the type that copyright law protects against, which is superseding the original, superseding the economic market for the original. And so what we're finding increasingly is that these cases are all about, as a matter of evidence, 90% about factor one and factor four. They complement each other. They work together. That if you can fashion an argument, if you're the proponent of fair use, if you can fashion an argument, if you can ride this momentum that's developing in this environment to an ever more expansive conception of what's transformative, frankly, to the point of almost what's in the public interest, which you won't find in the wording of section 107 anywhere, what's in the public interest? What's the public good? What's in society's interest? Infused in Judge Chin's opinion, right? Then you're 2 thirds of the way home. Then you're 2 thirds of the way home. When you think about factor three, by the way, back to my, is there a litmus test? You have on one extreme, you have the Harper and Row nation decision, Supreme Court case, which found the taking of as few as 300 words in a Ford memoir to exceed fair use boundaries. And then look at the more modern cases we're reading, where the Google Books Project, cleaning out entire university libraries, no problem. And I'm going to come back in a few minutes to two examples of cases in which Terry actually consulted with us, in which we shamelessly, for clients, exploited this more expansive view of transformativeness, I think as an intellectual matter, as a matter of sound copyright policy, as a matter of academic interest. Fascinating and challenging questions about whether this direction is wise, as a matter of social policy, let alone one's historic conceptions of copyright. But to me, I don't mean to be crass, irrelevant. Because when you litigate, you've got to take the law as it's developing. You've got to harness it. You've got to use it. You've got to deal with it. So in the luxury of this classroom, we can have wonderful debates about, does it make sense? As a litigator, we have to observe the trends, react to them, and see. By the way, I attended the recent Second Circuit argument in the Google Books case appeal. Interestingly, you may have noticed that the most commonly cited law review article in the Fair Use Doctrine is that of Pierre Laval, now Judge Laval in the Second Circuit, which I think historically had been used by every court to support whatever reasoning it wants, which is the most amazingly flexible article ever. But I think when written, it generally was viewed as supporting the view that you've really got to do something with the actual expression and convert it into something as opposed to the functional transformative sort of view of the world. Well, interestingly, guess who was on the Second Circuit panel, Judge Laval? That's basically why I went, because I wanted to hear whether he himself had been sort of, I'll use the word mesmerized by technology. And I will tell you at the risk of prognosticating an outcome, he has no interest. And he's only one of three panel members. But as I read him, he has no intent of disturbing at least the larger portion of Judge Chin's ruling, namely whether Google's own uses of these copyrighted materials is a fair use. I think he is there in his mind at argument. He questioned a subsidiary part of the case, not lacking interest, which is you may recall from the facts of the Google case that each cooperating university library was supplied its own digital copies of all of these works, of which the library already had the originals. Judge Laval expressed considerable concern about whether the limitations, such as they are, contractually agreed to between Google and the libraries as to how to use that digital archive, so created, would satisfactorily constrain them or could risk infringements of copyright and asked a number of questions about that. So it is conceivable that an opinion will carve a little more narrowly, although I think on the biggest picture issue in the case, likely in affirmance as to the legitimacy of Google's activities. Last of all, before I just talk briefly about two of the cases where we've tried to bring these to life for clients, keep in mind that even though I stated accurately that the fair use doctrine is not a magic bullet and can't be used to fill sometimes daunting gaps in copyright, it is still an equitable doctrine. And when we litigate, we always are mindful of what the defendant's conduct really amounted to. Was it a good, serious, law-abiding actor? Was it someone looking to chisel and avoid making customary payments for copyrighted materials? Judges are very acutely sensitive to that, even though it doesn't always appear in the physical text of an opinion. We carefully think about, as a matter of trial presentation, whether we're the plaintiff offending off a fair use challenge, or whether we're asserting that on behalf of a client, we're very mindful of making it look something either from the plaintiff, the argument is they're trying to get away with something of clear value and simply trying to not pay. And if we're the defendant, obviously, attempting to avoid that kind of portrayal or characterization, but rather emphasize that the activity is part of that tension and balance the copyright law creates between, on the one hand, stimulating creativity and rewarding the authors, but on the other, enriching the storehouse of knowledge. So two examples quickly, and then I want to open it up to questions. Actually, three examples. Some of you have expressed interest already on the iPad today in a case that I've spent a lot of time on, very controversial. Lawsuit brought by the book publishing industry against Georgia State University and what I call generation three, copying of works for consumption in the classroom. Generation one is when I went to college, I carried home the stacks of textbooks. And when I needed a supplemental reading, I went to the library reserve room, borrowed the hard copy of the text. It was fairly new at the time to push the button on the copy machine. If I wanted to, generally, we'd read an original, return it within the two-hour window or whatever we were given. And that's how we consumed material. And obviously, the textbooks were purchased. Generation two, course packs, in which professors, typically at the time the course pack litigations came, went to the corner copy shops, the Kinkos, the Nomans, the Tykos, et cetera, with customized readings for a course, chapter here, chapter there, Velo-bound. Students would pay the copy costs, bring them back. For many years, many of these copy shops did not seek, nor did the professors seek any permissions from the copyright owners of those materials. There were a series of lawsuits, including a case called Kinkos and a case called MDS, Michigan Document Delivery Services, Kinkos in the Southern District of New York, the MDS case through the Sixth Circuit, which established that it was not a fair use, not a fair use for the commercial copy shops, who were the defendants in those cases, to offer these materials to students, these anthologies of course readings, without seeking permission to use the materials, that is, copyright permission from the various publishers, beyond, in the injunctions of those cases, one page, very stringent, one page could be used, but no more. So what we observe, the publishing industry observes in the current environment is a migration of consumption of course materials in the universities, from the course packs to electronic provision of the same materials. Through web pages, through postings, you're familiar with it. With a student password and a course password, you can access the same readings. You can display them on your computer. You can download them. You can print them. You can bind them together yourself. You can bring them to class. And what we observed, our clients observed, was that in a number of cases, the very same institutions who were observing the protocols as the course packs under the law, namely, paying permissions, ceased paying permissions by supplying the very same materials in the very same quantities to the very same students electronically. And they asked our law firm to test that proposition, arguing that the doctrine of meaty neutrality, which you may have read about in the Tassini case and others, makes it improper simply to allow the mode of distribution, the mode of copying electronic versus paper, to dictate a different result under copyright law. We tested that in a trial down in Atlanta in Federal District Court. And we selected Georgia State University because of the schools whose copy activity our clients were able to observe without breaching firewall protections. Georgia State was clearly the most extreme. They had, for a decade, not paid a dollar of permissions fees for any so-called e-reserves materials, so distributed to students. And the case was a pure fair use case. And it raised a number of the issues that the cases you've raised. And it reached a surprising result, at least to me, in the District Court. The District Court held that the not-for-profit nature of the activity, because the defendant there was not a commercial copy shop, but the not-for-profit university, was not only a salient but probably a dispositive distinction from the other cases, notwithstanding that the market harm to the publishers was exactly the same, notwithstanding that the fact that these materials were concededly not transformative. There was no argument made by the defendants that it was transformative. These clearly superseded consumption of the originals, either purchases or licenses through an organization called the Copyright Clearance Center, notwithstanding which the court said, I don't buy the doctrine of media neutrality. And I believe it's dispositively the case in favor of fair use that this was in a not-for-profit educational environment and the court determined that there should be a bright line rule for how much you could copy. Nobody advocated it, neither side. But the District Judge, observing the evidence, I would argue tailoring the ruling to the evidence in a improper way, had observed that, on average, 10% of a given work was taken, 9. something percent, across the range of works tested. So the District Court, I think, not coincidentally said, I'm going to decide that any taking of 10% or less of course material, or one chapter or less of a work of more than 10 chapters, is per se safe. And notwithstanding that the court admitted that there was a prospect of market harm here, and notwithstanding that there was no transformativeness, and showing the exception to my rule, which is one in four, factors one in four tend to govern, said on balance, this is most of these works of fair use, except those works that exceeded that. So we went to the 11th Circuit. And the 11th Circuit reversed, not too long ago, on fairly narrow grounds, but found that the court didn't give enough weight to market harm, surprisingly seemed to be reasonably comfortable with the strong weight to be given the not-for-profit status of the activity, even in the absence of transformativeness, reversed saying there is no bright line, 10% one chapter rule, but gave absolutely no guidance to any of us about how otherwise to apply factor three. And the case is now back in the hands of the district court. We think the same judge who tried this case, and we're eagerly all awaiting further guidance, as we say. So stay tuned, a very interesting case. But the two other cases, very quickly I want to mention, and Terry has no complicity in the GSU case whatsoever. The two cases in which he and I did collaborate and which reached favorable outcomes are really both fascinating. We do a lot of work for eBay in the IP space. I tried this great trademark infringement case, the eBay Tiffany case some time ago, and to a group of your predecessors several years ago, talked about that, about contributory liability on the trademark side, fascinating. But this was a copyright case. The facts are fairly simple. A self-proclaimed professional photographer, although someone who hasn't sold a photo in a decade, sued Tiffany and sued others, including Amazon, because certain listings for resales of magazines on eBay contained depictions in the listing of photographs that were licensed by this photographer to the magazine publisher years earlier, including covers of magazines. This fellow specialized in rather racy photographs, shall we say, of celebrities and even celebrity sports figures, female sports figures. But that's how he made something of a living. And so here's a situation where somebody pulls out of their attic, a magazine they owned, for a sale doctrine you're familiar, certainly allows one to sell or dispose of it as one wishes, and the vehicle increasingly that are being used for reselling copyrighted goods are an online marketplace like eBay. And so there's a listing for, these were Polish magazines for the most part, believe it or not. So here are these listings, and there are pictures, and sometimes multiple pictures, to allow potential buyers to see what it is they're being asked to pay for. And along comes the plaintiff and says you can't do that. That's an unlawful reproduction, distribution and public display, all of those of my work, and you eBay are either directly or contributorily responsible for that. So our first reaction was that can't be right. That just seems crazy that the implications of a ruling in favor of the plaintiff would shut down. Countless categories of listings by an entity like eBay, the purpose of which are not to take away any market opportunity of that photographer, but simply to facilitate the lawful commerce in used goods. The problem is it's pretty hard to find fair use cases that are close on point there, or that would suggest that the doctrine of transformative use is broad enough to encompass this kind of activity, because the facially easy argument for the other side to make is, it's a direct unaltered image of my photograph, nothing was done to it, nothing expressive, nothing creative, nothing anything, no derivative work, nothing. It is simply that by a for-profit enterprise, the entire photograph was taken. So they go, boom, boom, boom, one, two, three. I went on Factors one, two, three. Factors four, they had trouble with no market harm. And so I consulted the expert behind me, and we said, well, at least the cases seem to be lining up auspiciously in terms of, again, not making normative judgments about is this right or wrong for Uber copyright, but again, in a real world of litigation, you use what you have. And so we fashioned a fair use argument, which was absolutely adopted by the district judge on summary judgment in San Francisco, which essentially adopted the common sense reasoning, which is there's nothing at all impinging on the commercial opportunities of this photographer. In whatever eBay and the listing seller did, there's no effort here to take away a market opportunity and that the purpose for which these listings and these displays of the photographs serve is completely far removed. When his market was create artistic photographs and entertainment, sell it to magazines and did and made his copyright license fee, this is simply to allow this engine of commerce to move forward, serving an entirely different purpose and without any demonstrable harm. Now again, as a litigator, what you wanna do is take a deposition of the plaintiff, we did, and ask that plaintiff, tell us how you've been harmed that all important factor for. He completely fell on his face. He couldn't identify anything. He had not licensed an image in over a decade. He was basically out of the business. He didn't even attempt to articulate this critical market harm factor. And so it made it frankly, fairly easy on that element of it for the district court to come our way. And so eBay won that case. There were other elements of the case I won't go into on a very again outer edges interpretation of transformative use. Lastly, we represented West Publishing Company with respect to a challenge to one of their online products. You may have read about this one called the litigator product in which for a subscription, you can access court filings. So who sues, first a lawyer in New York and then a lawyer in Connecticut in a copyright case, both claiming they represented a class, I'm serious, of all lawyers who ever made any court filings. And that West Publishing had without their consent copied and commercially disseminated, therefore distributed their copyrighted work product reflected in the briefs, complaints, notices of motion, you name it, papers. First thing we did in those cases was to get very technical, which was to try to destroy the class because in order to maintain a litigation, as many of you know, you've got to register your copyrighted works. And we said, how many lawyers on this planet actually go and register their briefs and court filings? And the answer is probably three of which the plaintiffs were one and two, okay? And so we were very strategically successful early on because the economics of these cases, as you can appreciate it, is they're contingent fee cases. And unless you can get a big enough group of plaintiffs, the economics for pushing these cases goes away. So class action 101 is you try to get rid of the class. And so we got some wonderful opinions both from Judge Rakoff in New York and our judging Connecticut saying, sorry, these are not representative plaintiffs because there's just no showing that anybody but these guys ever registered their works. You can maintain your own case plaintiff for all of the three examples that they each cited of anything they'd ever filed in court. But then it did come to a not trivial fair use question. When these cases were brought, the pundits, and there are always legal pundits, were predicting a possible loss for West publishing and also Lexus Nexus was sued as a co-defendant. People were saying, well, if you parse the four fair use factors, let's see. You've got a commercial use. You've got a taking, which looks like it's just, substituting for the original, so not transformative. You've got creative works of authorship because, you know, brief writing, everybody's brilliant. You've got the whole work taken, so factor three. And nobody really had a theory of, again, factor four market harm, but people were saying, West and Lexus Nexus have their work cut out for them. So we had to, again, creatively argue and successfully argue at the end of the day that, again, as a matter of common sense, it is absurd to think that there's any potential market displacement here for this activity. Lawyers are paid by their clients to create a work product. There is no aftermarket for my briefs, as far as I know. And, again, the deposition was like shooting fish in a barrel on this because, you know, anybody with a law license has to admit the economics of the law business and the fact that they are not going to be further, there's no derivative market, as it were, to, you know, license your works or to prevent third parties from accessing it from court records, but we also had, here's the public interest. With eBay, it was secondary market. Here it was affidavits from people saying, how important this is to the entire ecosystem of law. The ability of people to learn from, to understand the facts of cases, to see creative legal arguments, to build on it, to accrete legal jurisprudence. Boy, did we play all that up, as you can imagine. And we said, you're gonna bring it all to a halt if you buy this crazy theory that there are infringements here. So the combination of the fact that it was sort of an off the wall claim, not typical at all of any serious economic interests sought to be pursued by large numbers of people. And as Judge Rakoff, in particular, indicated in his brief, but to the point summary, judgment order, affirming this missile, that he said it is, in fact, transformative. It's transformative for two reasons. Number one, again, there is zero overlap in terms of the purpose for which this litigator product is offered and he wax poetic about all the benefits to legal profession. It doesn't supplant any interest on their part, factors one and four, but also he observed interestingly that the cleaning up of that goes on in the back room at a West Publishing, which is the indexing, the coding, the selection, he actually gave that weight in the fair use calculus, which was very interesting and said that that's another reason here that I find it's transformative. In other words, they didn't just slavishly take the work product. They both culled the right work product and they shaped it and they did whatever editing around it to make it a more user friendly product. He actually credited in the transformativeness balance. So while these are really good results, they do certainly, though, also indicate, I think fairly dramatically, the diverse directions in which the transformativeness element has moved. So let me stop there. I wanted to really leave some time for questions. Excellent. Questions? Sir. Given the fact that you're so often litigating fair use issues for so many different clients, do you ever find yourself in a position where you're dealing with a kind of legal but not technical conflict because one conception of fair use that you're fighting for would be adverse to the fair use conception another client wants and you're forced to recuse yourself or move away from a case for fear of creating that adverse precedent? Unheard of. Look, your question really needs to be generalized because when you practice law in any field and you are public in filings, it's two levels. Certainly in any public filings, you sometimes find yourself in a position where client A says X, client B wants to say Y and they're polar opposites. And I find that the way to work through that is to be candid with B and say, look, it's your choice. You ought to know what I said for A and if you're comfortable or feel it's not a conflict for me to argue for you, I'll do that. There are occasional times when it's so obvious that the position will be impeachable that we decline. Generally, our view is their facts make all the difference that we're paid advocates, that we're not bound by advocacy for a client. And what often happens, not often, what occasionally happens is we'll advocate a position for A but lose and then B comes along espousing the position that prevailed. There's no reason in that situation, we lost. The law has moved and we'll therefore take it on, although maybe not happily, but it's a dynamic situation. It's part of the broader ethical set of conundrum we face all the time. And even where there aren't legal conflicts, we face what we call positional conflicts regularly in the firm. Had a tremendously difficult one a week ago where there isn't any ethical bar on arguing something, but you know that a different client who hasn't even engaged you with respect to that issue would bridle at the position you're taking. And firms like ours make business judgments all the time about whether the risk to the continuity of a relationship could be impaired by that. And those are really tough judgment calls because as you can appreciate, we're mostly in business to take business and to represent people who pass to represent them, but it can come at a considerable cost and you know law firms all have some horror stories about situations where they may have misread that situation or the seriousness of it in terms of blowback from clients. So we have an ethics committee in the firm, we have a general counsel in the firm who spends most of her time dealing with precisely those kinds of issues which are delicate, but it's a fair question and we have to navigate carefully. So here's a related theme. In some fields of law, there has long been a polarization of positions not just by the principal players, but by law firms. Labor law would be an example. A firm that has a significant labor law practice will typically represent only employers or only unions. My impression, but now this is where it turns into a question, is that intellectual property and copyright in particular has not traditionally been like that, but seems to be moving in that direction. A growing number of firms seem to be specializing in broadly speaking pro copyright or plaintiff positions and other specialized and defendant positions. Is that accurate and is it a good thing and a bad thing if it's happening? We've managed, it is happening, we've managed to navigate it so that we still appear one third of the time for copyright owners, two thirds of the time for copyright consumers, but our firm for example does a huge amount of IP counseling for Facebook and somewhat less amount for eBay. Their perspectives are obvious. There's an enormous body of hosting platform, intellectual property issues, secondary liability issues. There's no firm in the country that's litigated more issues around secondary liability, both trademark and copyright. There's no doubt that if another client of the firm, for example, say Walt Disney Company came to us and wanted us to take a position that was starkly more expansive in terms of interpreting doctrine of contributory, say copyright liability, we would probably decline to take that because it would clearly run adverse to the everyday counseling activity and in a sense the biases that we are expressing for those other clients in those relationships. I am presently involved in a case for client X in which the client itself is conflicted and this is a very common phenomenon today. These conglomerates today where all kinds of hats when it comes to consumption of intellectual property. Many are enormous content providers but also enormous content consumers. This particular client was sued in its copyright consuming mode, claiming copyright infringement out of a series of activities. We've been asked to defend it. We provided a brilliant memorandum in my estimation of all of the defenses and the client came back saying we can't make those arguments. So and so down the hall would go crazy wearing the other hat and so that's just the reality of practice. You're not always, even if there's no internal conflict, you are absolutely constrained by the limitations your own clients will place on you as to the advocacy that will be comfortable. The one place that we've observed church and state scrupulously in the firm which is a little vestigial is the first amendment area. We do, we represent the book publishing industry, we do first amendment work, we do libel defense work and there you are virtually expelled from the possibility of future actions if you ever donned a plaintiff's libel hat, let's say. Again, there isn't a lot of activity commercially but people in the firm know before you bring a libel so you better call Bruce and make sure he's comfortable with that and but that's one of the few areas where we've had a bright line. So here's a question from one of the participants in the online courses, Marshall asks, do you find it difficult when defending fair use cases that you must admit infringement in order to use that defense? Now of course technically you don't have to admit infringement, you can argue in the alternative, commonly do argue in the alternative but as a practical matter, when presenting either to a judge or perhaps differently to a jury, do you feel obliged to pick one path or another? Pick a path of conceding more or less the existence of a 106 or 106A violation and concentrating on fair use or vice versa? There are occasional cases where whether there has been a prima facie infringement meaning one or more acts violative of section 106 is close enough. For example, you're challenging whether their copy was made or something where you argue in the alternative, you argue in the first instance there was no infringement so there's nothing that even needs the fair use defense but more often than not in our experience the fair use defense is used in circumstances where there is a prima facie infringement but I've never seen a bias, I think the courts, federal courts and all these copyright cases you know are litigated in federal district court and tend to understand readily that it is not only an appropriate defense but often the very conduct giving rise to the litigation was informed by a view that it was a fair use to undertake it so that in our eBay Rosen case that I briefly discussed we actually argued correctly to the judge that these magazines were not taken down when a demand was made to take them down under the DMCA because of an expressed view held by the client informed by its lawyers that it was a fair use and so it creates a less defensive posture when it inoculates you from oh you're just an infringer unless you can demonstrate when actually you're motivated in good faith by a belief that it was fair use and there's actually some interesting case law that speaks to that sort of situation particularly in the secondary liability area which as you know involves a branch have you covered that yet? Knowledge, knowledge prong for contributory infringement is a fascinating case law which says relevant to determining knowledge of infringement is whether you believe that the seller the putative direct infringer pardon me the user itself had a fair use defense and if you in good faith believed that the originating seller the originating user pardon me had a fair use defense you can't easily or automatically impute knowledge of infringement on your part and we use that as well in the eBay case so that's very interesting I knew once I hadn't thought of but it was about to suggest your description of what eBay did in the Rosen case which we worked on together contrast sharply with YouTube which we just actually talked about yesterday where YouTube through its content ID system and practices avails itself of the 512 safe harbor and does not undertake to defend substantively the position even of clear cases of fair use by its users and eBay seems to have forfeited the benefit of the 512 safe harbor with a more forthright defense of the user's capacity to invoke successfully fair use but your nuance suggests it's not quite that courageous by eBay because they are tacitly availing themselves indirectly of a 512 defense that's true and we find there's a spectrum of it's a fascinating issue a lot of the counseling we do on the user side and on the hosting platform side involves how mechanically for lack of a better word these services ought to invoke the protections of the safe harbor provisions and the notice and take down provisions and the answer is not so much legal driven as policy driven by the clients as a matter of philosophy some clients simply say if we're too automatic, if we're too knee jerk we're gonna stifle free speech we're gonna take down content over broadly and instead come to law firms like us literally case by case Facebook does this case by case with us is this a take down situation? Are there meaningful defenses? And if we say to them we think the use was appropriate they're likely to take that advice and refuse to take it down even though it creates more exposure for them as a matter of principle they feel they want to open a community as uninhibited in an environment as is legally appropriate and sometimes will forfeit or limit the availability of statutory defenses very interesting. Other questions? Yes. Hi, I'm interested in learning what has attributed to your success in this practice area so how did you start off practicing copyright and specifically fair use and how have you been able to become so successful if you could give us a brief history of professional practice? The last part of that you'll have to ask others how I became successful but I'm glad you asked because I like to talk to law students about what I call the serendipity of law practice so what I started 100 years ago practicing law I had a nascent interest in this area but had no expectation whatsoever of practicing and I began as an antitrust litigator at my law firm and surely by coincidence about a year into that experience my mentor asked me to come down to his office and I didn't even know it at the time we were acting and we still are as the general counsel to the Association of American Publishers which is the leading book publishing trade association in the United States and it turns out that a lawyer in the firm another litigator was leaving and her role had been to be a first amendment advisor to what's called the freedom to read committee isn't that great of the trade association and my mentor said how would you like to take that over and I said I don't have any special qualifications for that and he said you're a great brief writer all you need to do is file a few amicus briefs a year in the Supreme Court, no big deal and I showed up literally green around the years to a meeting of editors and chief of the major book publishing houses and their general counsels and it ripened into a monthly ritual where I would come in and tell them everything that was going on of potential relevance in the first amendment field of the book publishing industry and the committee would deliberate and they'd say well you know on this obscenity case or this libel case or this prior restraint case we ought to file a brief and I would then go and start writing these great labors of love amicus briefs celebrating freedom of the press and that the firm to be sure had a long history of intellectual property and copyright involvement one of our founding partners Horace Manjes while actual Manjes was a luminary in the copyright bar he was college roommate this is a nice we should all have such good fortune he was college roommates of Bennett Surf one of the founders of Random House and I guess one of his early law clients was and but Horace had gotten on and hadn't grown the practice and a group of us this is where initiative works a group of us simply decided we're farming out all of this copyright work to other boutique law firms why can't Wild Gatchel do what we've done historically and we started to convince then even as an associate partners in the office that we were capable of doing this and so we sort of rebuilt and then there are these again serendipitous events of clients coming in an area and I'm getting a bit of a reputation but the biggest boost to our reputation to the size of the engagements to the number of lawyers practicing was something called the internet because what happened was until then most disputes were pretty discreet in nature the implications of an infringement were calculable and all of a sudden as everything went viral the stakes of the disputes like a GSU type ERES case became much larger and it was easier, still painful but easier for clients on either side to hire a firm of our scale and with our building structure and the true answer to your question about success which is I was trained to just become the best lawyer I could be whatever field I was in and I had a very rigorous, you know, mentor doing it and he was a great role model he said if you go to court be the best prepared lawyer in that courtroom know your side of the case know the other side of the case better than anybody else be honest with the court be a forceful advocate and that's all you can do and the rest, you know, it's fortunate that it came together we have a good track record we're not always successful but we are vigorous we're rigorous we hire brilliant people like Terry and the likes to think hard about issues we write forceful briefs about it we've had, you know, a good track record and there aren't that many firms of our size platform that host a non-patent intellectual property practice which is the practice we run so it's a combination of history serendipity hard work luck and keeping at it and, you know, you all have the gifts to make that work in your career and, of course, brilliance thank you very much