Am. Geophysical Union v. Texaco Inc.
60 F. 3d 913 (1995)
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Rule of Law:
The institutional, systematic photocopying of entire copyrighted articles by a for-profit entity for archival purposes to avoid purchasing additional subscriptions or paying licensing fees is not fair use. This practice harms the potential market for the copyrighted work, especially when a viable licensing market exists.
Facts:
- Texaco Inc., a for-profit corporation, employed between 400 and 500 research scientists to develop new products and improve its commercial performance.
- As part of its research operations, Texaco's library subscribed to numerous scientific journals, including the 'Journal of Catalysis,' published by Academic Press, Inc.
- The library circulated issues of the journals to its scientists on routing lists.
- Dr. Donald H. Chickering, II, a Texaco research scientist, would make or request photocopies of entire articles from these journals.
- Chickering maintained these photocopies in his personal files for his convenience and for future reference in his research activities.
- The authors of the scientific articles had transferred their copyrights to the journal publishers and were not paid royalties for the publication of their work.
- A licensing system, operated by the Copyright Clearance Center (CCC), was available for institutions like Texaco to pay royalties for the right to photocopy articles from participating journals.
Procedural Posture:
- American Geophysical Union and other publishers filed a class action lawsuit against Texaco Inc. in the U.S. District Court for the Southern District of New York for copyright infringement.
- Texaco raised the affirmative defense of fair use under the Copyright Act.
- The parties agreed to a limited-issue bench trial focusing solely on the fair use defense, based on the photocopying of eight articles by a single, randomly selected Texaco scientist.
- The District Court found that Texaco's photocopying did not constitute fair use.
- The District Court certified its ruling for an interlocutory appeal, which Texaco (appellant) filed with the U.S. Court of Appeals for the Second Circuit against the publishers (appellees).
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Issue:
Does a for-profit company's systematic photocopying of entire copyrighted scientific journal articles for archival purposes by its research scientists constitute fair use under Section 107 of the Copyright Act?
Opinions:
Majority - Chief Judge Newman
No. A for-profit company's systematic photocopying of entire copyrighted scientific journal articles for archival purposes by its research scientists does not constitute fair use. The court's analysis under the four statutory factors of § 107 of the Copyright Act leads to the conclusion that the copying is an infringement. The first factor, 'purpose and character of the use,' weighs against Texaco because the copying was primarily 'archival' and institutional, designed to multiply the number of available copies, rather than being transformative. The second factor, 'nature of the copyrighted work,' favors Texaco because the articles are predominantly factual. The third factor, 'amount and substantiality of the portion used,' weighs against Texaco as it copied the entire works (the individual articles). Critically, the fourth factor, 'effect upon the potential market,' weighs heavily against Texaco. The court found that widespread, systematic copying of this nature would cause substantial harm to the publishers' potential market, primarily through the loss of licensing revenues that could be collected via established mechanisms like the Copyright Clearance Center (CCC).
Dissenting - Judge Jacobs
Yes. The photocopying of scientific journal articles by a research scientist for personal use in research should constitute fair use. The first factor weighs in favor of fair use because the copying is for 'research,' a purpose expressly listed in the statute's preamble, and is a transformative part of the scientific process akin to note-taking. The fourth factor also favors fair use because the 'market' for licensing fees is not a traditional or normal market but an artificial one whose existence should not determine the fair use question itself; the circular reasoning is that a use is unfair because a market to license it exists, but that market only exists if the use is deemed unfair. Furthermore, equitable considerations, such as the fact that authors receive no payment and desire the widest possible dissemination of their work, support a finding of fair use as the court's holding hinders rather than promotes the progress of science.
Analysis:
This decision significantly narrowed the fair use defense for corporate and institutional users engaging in internal photocopying of copyrighted materials. It established that systematic copying for archival or convenience purposes, even when related to research, is unlikely to be considered fair use for a for-profit entity. The ruling gave substantial legal weight to the existence of a viable licensing market, such as the Copyright Clearance Center (CCC), making the failure to pay for available licenses a strong factor against a fair use claim. Consequently, this case prompted many corporations and research institutions to enter into blanket licensing agreements to mitigate the risk of copyright infringement for internal document reproduction.
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