Worldwide Church of God v. Philadelphia Church of God, Inc.
2000 WL 1335890, 227 F.3d 1110 (2000)
Rule of Law:
The fair use doctrine does not protect a non-profit religious organization's verbatim copying and distribution of an entire copyrighted work for the same intrinsic purpose as the original, even if the work is out of print and the copying organization is non-commercial, where the copying significantly benefits the user and impacts the copyright holder's non-monetary value or potential future market.
Facts:
- Herbert W. Armstrong founded the Radio Church of God (later Worldwide Church of God, WCG) in 1934 and served as its spiritual and temporal leader until his death in 1986.
- Armstrong authored his final work, Mystery of the Ages (MOA), between 1984 and 1985, copyrighted it in WCG's name, and WCG subsequently distributed over 9 million free copies in serial and book form.
- Two years after Armstrong's death, WCG discontinued distribution of MOA in 1988, citing changes in its doctrinal positions, outdated views (some racist), and a desire to prevent the proclamation of what it considered ecclesiastical error, while retaining archival copies and indicating interest in future publication of an annotated version.
- In 1989, Gerald Flurry and John Amos, former WCG ministers, founded Philadelphia Church of God (PCG), a new religious organization committed to strictly following Armstrong's original teachings, considering MOA central to its religious practice and required reading for all members.
- Beginning in January 1997, PCG began copying MOA in its entirety, deleting WCG's name and reproduction warning from the copyright page and substituting Herbert Armstrong's name, without seeking permission from WCG.
- PCG distributed approximately thirty thousand copies of its MOA in English and foreign languages to its members and the public, advertised its version, and received substantial contributions from recipients, contributing to its growth to over seven thousand members.
- PCG ignored WCG's demand to cease infringing its copyright and continued distributing its version of MOA.
Procedural Posture:
- Worldwide Church of God (WCG) filed a complaint in federal district court against Philadelphia Church of God (PCG), alleging copyright infringement for reproducing, distributing, promoting, advertising, and offering unauthorized copies of Mystery of the Ages (MOA).
- PCG answered the complaint, denying WCG's copyright ownership and asserting affirmative defenses including fair use, the Free Exercise Clause of the First Amendment, and the Religious Freedom Restoration Act (RFRA), and counterclaimed seeking a declaration of its right to reproduce and distribute MOA.
- The district court granted WCG's motion to strike PCG’s RFRA defense and counterclaim.
- WCG moved for partial summary judgment and for a preliminary injunction to prevent PCG from printing or distributing MOA.
- PCG filed a cross-motion for summary adjudication.
- The district court denied WCG's motions and granted PCG's motion for summary adjudication, concluding that Armstrong was the author of MOA (implying WCG did not own the copyright) and that PCG's use constituted statutorily protected 'fair use' under 17 U.S.C. § 107.
- WCG appealed the order granting summary judgment to PCG, the denial of its motion for a preliminary injunction, and the denial of its motion to amend the judgment to the United States Court of Appeals for the Ninth Circuit.
- The Ninth Circuit granted motions to consolidate these three appeals.
- The district court subsequently entered final judgment for PCG on WCG’s complaint pursuant to Federal Rule of Civil Procedure 54(b).
- WCG filed an additional notice of appeal with respect to that final judgment, which the Ninth Circuit also consolidated.
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Issue:
Does a non-profit religious organization's verbatim copying and free distribution of an entire copyrighted religious text, which the original copyright holder has ceased distributing due to doctrinal changes, constitute fair use under 17 U.S.C. § 107?
Opinions:
Majority - Schwarzer, Senior District Judge
No, PCG's copying and dissemination of MOA does not constitute fair use under the Copyright Statute. WCG is the rightful owner of the MOA copyright, having acquired it through Herbert Armstrong's will. PCG's argument of an implied license is meritless as it provided no evidence Armstrong intended third parties to reprint the entire book. The court then analyzed the four statutory fair use factors: 1. Purpose and character of the use: This factor weighs against fair use. PCG's copying was verbatim, lacking any transformative element, and merely "supersedes the object" of the original MOA for religious practice and education. Although PCG is a non-profit, it "profited" by obtaining the core text for its religious observance at no cost, attracting new members who tithe, and enabling its ministry's growth. The "profit" distinction includes any advantage or benefit, not solely monetary gain. 2. Nature of the copyrighted work: This factor weighs against fair use. MOA is described as embodying creativity, imagination, and originality, rather than being a purely informational work, thus deserving greater copyright protection. 3. Amount and substantiality of the portion used: This factor weighs against fair use. PCG copied the entire MOA verbatim. While wholesale copying is not a per se bar to fair use, it generally "militates against a finding of fair use," especially when, unlike in Sony Corp. (time-shifting), the purpose of the use is the same intrinsic purpose for which the copyright owner intended it. 4. Effect of the use upon the potential market for or value of the copyrighted work: This factor also weighs against fair use (or is at worst neutral). The absence of a conventional market for a non-profit's work does not negate copyright protection. Copyright holders have the right to control their work, including choosing not to distribute it or planning future annotated versions. PCG's distribution of MOA diverts potential members and contributions from WCG, harming its goodwill and potential market for an annotated version or future republication. WCG's right to refrain from speaking is protected, and its reasons for withdrawal (doctrinal changes, social sensitivity) are legitimate. Finally, the court held that PCG's defense under the Religious Freedom Restoration Act (RFRA) fails. Requiring PCG to ask for permission and potentially pay for a copyrighted work is an inconvenience, not a "substantial burden" on its exercise of religion. PCG never sought permission, undermining its claim of burden. Therefore, PCG is not entitled to claim fair use, and WCG is entitled to a permanent injunction.
Dissenting - Brunetti, Circuit Judge
Yes, PCG's publication and distribution of MOA constitutes fair use of WCG's copyrighted work. The fair use doctrine is an equitable rule, and each case must be decided on its own facts. Considering the four statutory fair use factors: 1. Purpose and character of the use: This factor weighs in favor of fair use. PCG is a non-profit organization that copied and distributed MOA free of charge for a religious purpose (spreading a divinely inspired message). Altering MOA would defeat this religious purpose. The claim that PCG "profits" from attracting tithing members is weak, as printing costs likely exceed unsolicited donations, and WCG itself ceased publication due to cost. Crucially, MOA had been out of print for nine years and was difficult to obtain, which supports a finding of fair use. 2. Nature of the copyrighted work: This factor is mostly irrelevant. As a religious text, MOA defies easy classification as purely informational or creative. 3. Amount and substantiality of the portion used: This factor does not weigh against fair use. Wholesale copying is consistent with PCG's noncommercial, religious purpose, as the entire text is considered divinely inspired and central to their beliefs, much like the wholesale copying for time-shifting in Sony Corp.. 4. Effect of the use upon the potential market for or value of the copyrighted work: This factor weighs in favor of fair use. WCG intentionally removed MOA from circulation, destroyed inventory, and disavowed its message, indicating it no longer values the work for its original purposes. Therefore, PCG's actions cause no market interference for the original MOA. WCG's plans for an annotated version are speculative and slow-moving, and such an annotation (criticizing Armstrong's errors) would serve a fundamentally different function and target a different market than PCG's verbatim distribution. PCG's use might even expand the market for WCG's future annotated version by familiarizing new readers with the original text. WCG appears more interested in suppressing Armstrong’s outdated ideas than in protecting its copyright for economic exploitation. In light of these factors, the district court correctly found that PCG's distribution of MOA constitutes fair use.
Analysis:
This case clarifies the application of the fair use doctrine in the context of religious and non-profit organizations, particularly when the copyright holder has ceased distribution of the work. It establishes that "profit" in the fair use analysis extends beyond monetary gain to include organizational benefits like membership growth. The ruling reinforces a copyright holder's right to control distribution, even to withdraw a work from circulation or plan for future modified versions, without necessarily triggering fair use for others. Furthermore, it sets a high bar for religious freedom claims under RFRA in copyright infringement cases, requiring a demonstration of a substantial burden beyond mere inconvenience or cost for obtaining a license.
