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Fair Use (Part 2)
  • 1 Blanch v. Koons (2006)

    1

    467 F.3d 244

    Andrea BLANCH, Plaintiff-Appellant,
    v.
    Jeff KOONS, the Solomon R. Guggenheim Foundation, and Deutsche Bank AG, Defendants-Appellees.

    Docket No. 05-6433-CV.
    United States Court of Appeals, Second Circuit.
    Argued: May 30, 2006.
    Decided: October 26, 2006.
    As Amended November 16, 2006.

    2

    [245] Robert W. Cinque, Cinque & Cinque, P.C. (James P. Cinque, of counsel) New York, NY, for Plaintiff-Appellant.

    3

    [246] John B. Koegel, The Koegel Group, New York, NY, for Defendant-Appellee Jeff Koons.

    4

    Lawrence B. Friedman, Cleary Gottlieb Steen & Hamilton LLP (Inna Reznik, Hoon-Jung Kim, of counsel) New York, NY, for Defendant-Appellee The Solomon R. Guggenheim Foundation.

    5

    Carol A. Witschel, White & Case LLP (Steven Betensky, Stefan M. Mentzer, of counsel), New York, NY, for Defendant-Appellee Deutsche Bank AG.

    6

    Before: SACK and KATZMANN, Circuit Judges, and MURTHA, District Judge.[*] Judge KATZMANN concurs in a separate opinion.

    7

    SACK, Circuit Judge.

    8

    This appeal presents the question whether an artist's appropriation of a copyrighted image in a collage painting is, under the circumstances, protected "fair use" under the copyright law. See 17 U.S.C. § 107.

    9

    On commission from defendants Deutsche Bank AG, a German corporation ("Deutsche Bank"), and The Solomon R. Guggenheim Foundation, a New York not-for-profit corporation ("Guggenheim"), defendant Jeff Koons created a collage painting, initially for display in Berlin, Germany, in which he copied, but altered the appearance of, part of a copyrighted photograph taken by the plaintiff Andrea Blanch. After seeing the painting on subsequent display at Guggenheim's museum in New York City, Blanch brought this action for copyright infringement. The district court (Louis L. Stanton, Judge) granted summary judgment to the defendants on the ground that Koons's appropriation of Blanch's photograph was fair use. We affirm.

    10
    BACKGROUND
    11

    Jeff Koons is a visual artist. His work has been exhibited widely in museums and commercial galleries and has been the subject of much critical commentary. He is known for incorporating into his artwork objects and images taken from popular media and consumer advertising, a practice that has been referred to as "neo-Pop art" or (perhaps unfortunately in a legal context) "appropriation art."[1] His sculptures and paintings often contain such easily recognizable objects as toys, celebrities, and popular cartoon figures.

    12

    Koons has been the subject of several previous lawsuits for copyright infringement. In the late 1980s, he created a series of sculptures for an exhibition entitled the "Banality Show" ("Banality"). In doing so, he commissioned large three-dimensional reproductions of images taken from such sources as commercial postcards and syndicated comic strips. Although many of the source images were copyrighted, Koons did not seek permission to use them. In separate cases based on three different sculptures from "Banality," this Court and two district courts concluded that Koons's use of the copyrighted images infringed on the rights of the copyright holders and did not constitute fair use under the copyright law. See Rogers v. Koons, 960 F.2d 301 (2d Cir.), cert. denied, 506 U.S. 934, 113 S.Ct. 365, 121 L.Ed.2d 278 (1992); Campbell v. Koons, No. 91 Civ. 6055, 1993 WL 97381, 1993 U.S. Dist. LEXIS 3957 (S.D.N.Y. Apr. 1, 1993); United Feature Syndicate v. Koons, 817 F.Supp. 370 (S.D.N.Y. 1993).

    13

    [247] The present action arises in connection with a later series of Koons's work entitled "Easyfun-Ethereal." It was commissioned in 2000 by Deutsche Bank in collaboration with Guggenheim.

    14

    Deutsche Bank and Guggenheim have jointly established the "Deutsche Guggenheim Berlin," an art exhibition space housed in a Deutsche Bank building in Berlin, Germany. Under their collaboration agreement, Deutsche Bank provides space, underwrites exhibition expenses, and pays for the commission of new works of art. Guggenheim curates the exhibitions and advises as to which work should be commissioned. Pursuant to a separate agreement, Deutsche Bank donates a fifty percent interest in each commissioned work to Guggenheim.

    15
    Koons's Painting
    16

    To create the "Easyfun-Ethereal" paintings, Koons culled images from advertisements or his own photographs, scanned them into a computer, and digitally superimposed the scanned images against backgrounds of pastoral landscapes. He then printed color images of the resulting collages for his assistants to use as templates for applying paint to billboard-sized, 10' x 14' canvasses. The "Easyfun-Ethereal" paintings, seven in all, were exhibited at the Deutsche Guggenheim Berlin from October 2000 to January 2001.

    17

    One of the "Easyfun-Ethereal" paintings, "Niagara," is the subject of this action. Like the other paintings in the series, "Niagara" consists of fragmentary images collaged against the backdrop of a landscape. The painting depicts four pairs of women's feet and lower legs dangling prominently over images of confections — a large chocolate fudge brownie topped with ice cream, a tray of donuts, and a tray of apple danish pastries — with a grassy field and Niagara Falls in the background. The images of the legs are placed side by side, each pair pointing vertically downward and extending from the top of the painting approximately two-thirds of the way to the bottom. Together, the four pairs of legs occupy the entire horizontal expanse of the painting. A black-and-white reproduction of "Niagara" is included in the Appendix to this opinion.

    18

    In an affidavit submitted to the district court, Koons states that he was inspired to create "Niagara" by a billboard he saw in Rome, which depicted several sets of women's lower legs. By juxtaposing women's legs against a backdrop of food and landscape, he says, he intended to "comment on the ways in which some of our most basic appetites — for food, play, and sex — are mediated by popular images." Koons Aff., dated June 10, 2005, at ¶ 10. "By recontextualizing these fragments as I do, I try to compel the viewer to break out of the conventional way of experiencing a particular appetite as mediated by mass media." Id.

    19
    Blanch's Photograph
    20

    Koons drew the images in "Niagara" from fashion magazines and advertisements. One of the pairs of legs in the painting was adapted from a photograph by the plaintiff Andrea Blanch, an accomplished professional fashion and portrait photographer. During her career of more than twenty years, Blanch has published her photographs in commercial magazines, including Details, G.Q., Vogue, and Allure; in photography periodicals and collections; and in advertisements for clients selling products under such widely recognized names as Revlon, Universal Films, Johnny Walker, and Valentino. She is also the author of a book of photographs and interviews entitled Italian Men: Love & Sex.

    21

    The Blanch photograph used by Koons in "Niagara" appeared in the August 2000 [248] issue of Allure magazine. Entitled "Silk Sandals by Gucci" ("'Silk Sandals'"), it depicts a woman's lower legs and feet, adorned with bronze nail polish and glittery Gucci sandals, resting on a man's lap in what appears to be a first-class airplane cabin. The legs and feet are shot at close range and dominate the photograph. Allure published "Silk Sandals" as part of a six-page feature on metallic cosmetics entitled "Gilt Trip." A black-and-white reproduction of the photograph is also in the Appendix.

    22

    Blanch photographed "Silk Sandals" at a "shoot" organized by Conde Nast Publications, Allure's publisher. According to Blanch's deposition testimony, Paul Cavaco, the creative director of Allure, suggested the model, sandals, and nail polish to be used in the photograph. Blanch participated in their selection and retained control over the camera, the film, the lighting, and the composition of the photographs. She testified that it was her idea to use an airplane interior as a backdrop and to place the female model's feet on the male model's lap. She explained that she wanted to "show some sort of erotic sense[;] . . . to get . . . more of a sexuality to the photographs." Blanch Dep., March 8, 2005, at 112-13.

    23
    Koons's Use of Blanch's Photograph
    24

    While working on the "Easyfun-Ethereal" series, Koons saw "Silk Sandals" in Allure. According to Koons, "certain physical features of the legs [in the photograph] represented for me a particular type of woman frequently presented in advertising." He considered this typicality to further his purpose of commenting on the "commercial images . . . in our consumer culture." Koons Aff. at ¶ 10.

    25

    Koons scanned the image of "Silk Sandals" into his computer and incorporated a version of the scanned image into "Niagara." He included in the painting only the legs and feet from the photograph, discarding the background of the airplane cabin and the man's lap on which the legs rest. Koons inverted the orientation of the legs so that they dangle vertically downward above the other elements of "Niagara" rather than slant upward at a 45-degree angle as they appear in the photograph. He added a heel to one of the feet and modified the photograph's coloring. The legs from "Silk Sandals" are second from the left among the four pairs of legs that form the focal images of "Niagara." Koons did not seek permission from Blanch or anyone else before using the image.

    26
    The Parties' Economic Gains and Losses
    27

    Deutsche Bank paid Koons $2 million for the seven "Easyfun-Ethereal" paintings. Koons reports that his net compensation attributable to "Niagara" was $126,877. Deutsche Bank received gross revenues of approximately $100,000 from the exhibition of the "Easyfun-Ethereal" paintings at the Deutsche Guggenheim Berlin, a total that includes admission fees and catalogue and postcard sales. The record does not reflect Deutsche Bank's expenses for that exhibition other than the commission of the paintings.

    28

    The subsequent exhibition of the paintings at the Solomon R. Guggenheim Museum in New York sustained a net loss, although when profits from catalogue and postcard sales are taken into account, Guggenheim estimates that it earned a profit of approximately $2,000 from "Niagara."[2] In 2004, the auction house Sotheby's reportedly appraised "Niagara" at $1 million. [249] The work has not, however, been sold, nor does the record indicate that it or any other painting commissioned by Deutsche Bank has been offered for sale or been the subject of a bid.

    29

    Allure paid Blanch $750 for "Silk Sandals." Although Blanch retains the copyright to the photograph, she has neither published nor licensed it subsequent to its appearance in Allure. Indeed, Blanch does not allege that she has ever licensed any of her photographs for use in works of graphic art or other visual art. At her deposition, Blanch testified that Koons's use of the photograph did not cause any harm to her career or upset any plans she had for "Silk Sandals" or any other photograph in which she has rights. She also testified that, in her view, the market value of "Silk Sandals" did not decrease as the result of Koons's alleged infringement.

    30
    This Lawsuit
    31

    After the initial exhibition of the "Easyfun-Ethereal" painting at the Deutsche Guggenheim Berlin, "Niagara" was exhibited in other museums and public galleries. Blanch did not see the painting until it was on display at the Guggenheim Museum in New York during the summer of 2002. On October 10, 2003, she filed this lawsuit asserting that Koons infringed her copyright in "Silk Sandals" in violation of the Copyright Act of 1976, 17 U.S.C. § 101 et seq. On August 20, 2004, Blanch amended her complaint to add Deutsche Bank and Guggenheim as defendants and later served them with the amended complaint. She alleges that they "participated in, facilitated, and caused the acts of infringement by Koons" by commissioning the work despite knowing, based on Koons's history with, among other things, the "Banality" cases, that Koons was likely to infringe the copyrights of others. First Am. Compl. ¶ 15.

    32

    On November 1, 2005, the district court granted summary judgment to the defendants. The court concluded that Koons's "Niagara" did not infringe Blanch's "Silk Sandals" because its use of the image from "Silk Sandals" constituted fair use. See Blanch v. Koons, 396 F.Supp.2d 476 (S.D.N.Y. 2005). Considering the four non-exclusive statutory factors upon which a fair-use determination is made, see 17 U.S.C. § 107, the court determined that: (1) the purpose and character of Koons's use was "transformative" and therefore favored by copyright law, see Blanch, 396 F.Supp.2d at 480-81; (2) Blanch's copyrighted work was "banal rather than creative," and therefore the nature of the copyrighted work weighed in favor of the defendants, see id. at 481-82; (3) although the women's legs are the "focal point of interest" in Blanch's photograph, the image is of limited originality, so the statutory factor concerning "the amount and substantiality of the portion used in relation to the copyrighted work as a whole," was neutral between the parties, id. at 482 (citing 17 U.S.C. § 107(3)); and (4) Blanch's photograph could not have captured the market occupied by "Niagara," so that the final factor, the effect of the use upon the potential market for the copyrighted work, favored the defendants, see id. Based on its conclusion that, as a matter of law, each of the statutory factors concerning fair use either favored the defendants or was neutral between the parties, the court concluded that the defendants were entitled to summary judgment.

    33

    Blanch appeals.

    34
    DISCUSSION
    35
    I. Standard of Review
    36

    We review a district court's grant of summary judgment de novo. See Tenenbaum v. Williams, 193 F.3d 581, 593 (2d Cir. 1999), cert. denied, 529 U.S. 1098, 120 [250] S.Ct. 1832, 146 L.Ed.2d 776 (2000). Summary judgment should be granted if "there is no genuine issue as to any material fact and . . . the moving party is entitled to a judgment as a matter of law." Fed. R.Civ.P. 56(c). "Although '[f]air use is a mixed question of law and fact,' this court has on a number of occasions resolved fair use determinations at the summary judgment stage where . . . there are no genuine issues of material fact." Castle Rock Entm't, Inc. v. Carol Publ'g Group, Inc., 150 F.3d 132, 137 (2d Cir. 1998) (quoting Harper & Row, Publishers, Inc. v. Nation Enters., 471 U.S. 539, 560, 105 S.Ct. 2218, 85 L.Ed.2d 588 (1985) (other internal quotation marks and citation omitted)).

    37
    II. Fair Use
    38

    The Supreme Court, in its landmark decision addressing the fair-use defense, Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 114 S.Ct. 1164, 127 L.Ed.2d 500 (1994), remarked: "From the infancy of copyright protection, some opportunity for fair use of copyrighted materials has been thought necessary to fulfill copyright's very purpose, 'To promote the Progress of Science and useful Arts.'" Id. at 575, 114 S.Ct. 1164 (quoting U.S. Const., Art. I, § 8, cl. 8).

    39

    As Judge Leval observed in his seminal law review article on the subject, the law of copyright "is intended to motivate the creative activity of authors and inventors by the provision of a special reward. . . . The monopoly created by copyright thus rewards the individual author in order to benefit the public." Pierre N. Leval, Toward a Fair Use Standard, 103 Harv. L.Rev. 1105, 1108 (1990) (quoting Harper & Row, 471 U.S. at 545-46, 105 S.Ct. 2218) (ellipsis in original; internal quotation marks and footnote omitted). At the same time, though, "excessively broad protection would stifle, rather than advance, the [law's] objective." Id. at 1109. "Monopoly protection of intellectual property that impeded referential analysis . . . would strangle the creative process." Id. at 1108. Fair use should therefore be perceived as an "integral part of copyright, whose observance is necessary to achieve the objectives of that law." Id. at 1107.

    40

    Copyright law thus must address the inevitable tension between the property rights it establishes in creative works, which must be protected up to a point, and the ability of authors, artists, and the rest of us to express them — or ourselves by reference to the works of others, which must be protected up to a point. The fair-use doctrine mediates between the two sets of interests, determining where each set of interests ceases to control.

    41

    The fair-use doctrine was first codified in the Copyright Act of 1976, which describes four non-exclusive factors that must be considered in determining fair use.

    42

    [T]he fair use of a copyrighted work . . . for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include —

    (1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;

    (2) the nature of the copyrighted work;

    (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

    (4) the effect of the use upon the potential market for or value of the copyrighted work.

    [251] The fact that a work is unpublished shall not itself bar a finding of fair use if such finding is made upon consideration of all the above factors.

    43

    17 U.S.C. § 107.

    44

    As the words of section 107 indicate, the determination of fair use is an open-ended and context-sensitive inquiry. In Campbell, the Supreme Court warned that the task

    45

    is not to be simplified with bright-line rules, for the statute, like the doctrine it recognizes, calls for case-by-case analysis. The text employs the terms "including" and "such as" in the preamble paragraph to indicate the illustrative and not limitative function of the examples given, which thus provide only general guidance about the sorts of copying that courts and Congress most commonly had found to be fair uses. Nor may the four statutory factors be treated in isolation, one from another. All are to be explored, and the results weighed together, in light of the purposes of copyright.

    46

    Campbell, 510 U.S. at 577-78, 114 S.Ct. 1164 (citations and some internal quotation marks omitted). "The ultimate test of fair use . . . is whether the copyright law's goal of 'promoting the Progress of Science and useful Arts,' U.S. Const., art. I, § 8, cl. 8, 'would be better served by allowing the use than by preventing it.'" Castle Rock Entm't, 150 F.3d at 141 (quoting Arica Inst., Inc. v. Palmer, 970 F.2d 1067, 1077 (2d Cir. 1992) (alteration incorporated)); see also Bill Graham Archives v. Dorling Kindersley Ltd., 448 F.3d 605, 608 (2d Cir. 2006) (similar).

    47
    A. First Factor: The Purpose and Character of the Use
    48

    The first statutory factor in the fair-use inquiry is "the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes." 17 U.S.C. § 107(1).

    49

    1. "Transformative" Use. We have, post-Campbell, addressed and applied this first factor many times. In Davis v. The Gap, Inc., 246 F.3d 152, 174 (2d Cir. 2001), we described it this way:

    50

    The heart of the fair use inquiry is into the first specified statutory factor identified as "the purpose and character of the use." 17 U.S.C. § 107(1). This formulation, as the Supreme Court observed in Campbell, 510 U.S. at 578, 114 S.Ct. 1164, draws on Justice Story's famous reference in Folsom v. Marsh, 9 F. Cas. 342, 348 (C.C.D.Mass. 1841) (No. 4901), to "the nature and objects of the selections made." As the Campbell Court explained,

    The central purpose of this investigation is to see, in Justice Story's words, whether the new work merely "supersedes the objects" of the original creation, or instead adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message. . . , in other words, whether and to what extent the new work is "transformative." Although such transformative use is not absolutely necessary for a finding of fair use, the goal of copyright, to promote science and the arts, is generally furthered by the creation of transformative works. Such transformative works thus lie at the heart of the fair use doctrine's guarantee of breathing space. . . . Campbell, 510 U.S. at 579, 114 S.Ct. 1164 (emphasis added [in Davis]) (alteration in original) (citations omitted).

    51

    Id. If "'the secondary use adds value to the original — if [copyrightable expression in the original work] is used as raw material, transformed in the creation of new information, new aesthetics, new insights [252] and understandings — this is the very type of activity that the fair use doctrine intends to protect for the enrichment of society.'" Castle Rock Entm't, 150 F.3d at 142 (quoting Leval, supra, at 1111; brackets in Castle Rock).[3]

    52

    Koons does not argue that his use was transformative solely because Blanch's work is a photograph and his a painting, or because Blanch's photograph is in a fashion magazine and his painting is displayed in museums. He would have been ill advised to do otherwise. We have declined to find a transformative use when the defendant has done no more than find a new way to exploit the creative virtues of the original work.[4] See Davis, 246 F.3d at 174 (use of plaintiff's eyewear in a clothing advertisement not transformative because it was "worn as eye jewelry in the manner it was made to be worn"); Castle Rock Entm't, 150 F.3d at 142-43 (quiz book called the "Seinfeld Aptitude Test" not transformative when its purpose was "to repackage [the television show] Seinfeld to entertain Seinfeld viewers"); Ringgold v. Black Entm't Television, Inc. 126 F.3d 70, 79 (2d Cir. 1997) (copy of plaintiff's painting used as decoration for a television program's set not transformative because it was used for "the same decorative purpose" as the original).

    53

    But Koons asserts — and Blanch does not deny — that his purposes in using Blanch's image are sharply different from Blanch's goals in creating it. Compare Koons Aff. at ¶ 4 ("I want the viewer to think about his/her personal experience with these objects, products, and images and at the same time gain new insight into how these affect our lives.") with Blanch Dep. at 112-113 ("I wanted to show some sort of erotic sense[;] . . . to get . . . more of a sexuality to the photographs."). The sharply different objectives that Koons had in using, and Blanch had in creating, "Silk Sandals" confirms the transformative nature of the use. See Bill Graham Archives, 448 F.3d at 609 (finding transformative use when defendant's purpose in using copyrighted concert poster was "plainly different from the [253] original purpose for which they were created"); see also 17 U.S.C. § 107(1) (first fair-use factor is the "purpose and character of the use" (emphasis added)).

    54

    Koons is, by his own undisputed description, using Blanch's image as fodder for his commentary on the social and aesthetic consequences of mass media. His stated objective is thus not to repackage Blanch's "Silk Sandals," but to employ it "'in the creation of new information, new aesthetics, new insights and understandings.'" Castle Rock Entm't, 150 F.3d at 142 (quoting Leval, supra, 103 Harv. L.Rev. at 1111). When, as here, the copyrighted work is used as "raw material," Castle Rock Entm't, 150 F.3d at 142 (internal quotation marks and citation omitted), in the furtherance of distinct creative or communicative objectives, the use is transformative. Id.; see also Bill Graham Archives, 448 F.3d at 609 (use of concert posters "as historical artifacts" in a biography was transformative); Leibovitz v. Paramount Pictures Corp., 137 F.3d 109, 113 (2d Cir. 1998) (parody of a photograph in a movie poster was transformative when "the ad [was] not merely different; it differ[ed] in a way that may reasonably be perceived as commenting" on the original).

    55

    The test for whether "Niagara's" use of "Silk Sandals" is "transformative," then, is whether it "merely supersedes the objects of the original creation, or instead adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message." Campbell, 510 U.S. at 579, 114 S.Ct. 1164 (internal quotation marks and citation omitted, alteration incorporated); Davis, 246 F.3d at 174 (same). The test almost perfectly describes Koons's adaptation of "Silk Sandals": the use of a fashion photograph created for publication in a glossy American "lifestyles" magazine — with changes of its colors, the background against which it is portrayed, the medium, the size of the objects pictured, the objects details and, crucially, their entirely different purpose and meaning — as part of a massive painting commissioned for exhibition in a German art-gallery space. We therefore conclude that the use in question was transformative.

    56

    2. Commercial Use. Koons made a substantial profit from the sale of "Niagara." And "whether [the] use [in question] is of a commercial nature or is for nonprofit educational purposes" is an explicit part of the first fair-use factor. 17 U.S.C. § 107(1). In American Geophysical Union v. Texaco Inc., 60 F.3d 913 (2d Cir. 1994), we said:

    57

    The commercial/nonprofit dichotomy concerns the unfairness that arises when a secondary user makes unauthorized use of copyrighted material to capture significant revenues as a direct consequence of copying the original work.

    Consistent with these principles, courts will not sustain a claimed defense of fair use when the secondary use can fairly be characterized as a form of commercial exploitation, i.e., when the copier directly and exclusively acquires conspicuous financial rewards from its use of the copyrighted material. Conversely, courts are more willing to find a secondary use fair when it produces a value that benefits the broader public interest. The greater the private economic rewards reaped by the secondary user (to the exclusion of broader public benefits), the more likely the first factor will favor the copyright holder and the less likely the use will be considered fair.

    58

    Id. at 922 (internal quotation marks and citations omitted).

    59

    [254] But the use at issue in American Geophysical Union was photocopying — "an untransformed duplication" of the copyrighted works. Id. at 923. And we later observed in NXIVM Corp. v. Ross Inst., 364 F.3d 471 (2d Cir. 2004), that

    60

    The Supreme Court in Campbell rejected the notion that the commercial nature of [a] use could by itself be a dispositive consideration. The Campbell opinion observes that "nearly all of the illustrative uses listed in the preamble paragraph of § 107, including news reporting, comment, criticism, teaching, scholarship, and research . . . 'are generally conducted for profit,'" Campbell, 510 U.S. at 584, 114 S.Ct. 1164 (quoting Harper & Row, 471 U.S. at 592, 105 S.Ct. 2218) (Brennan, J., dissenting), and that Congress "could not have intended" a rule that commercial uses are presumptively unfair. Id. The commercial objective of the secondary work is only a subfactor within the first factor. "The more transformative the new work, the less will be the significance of other factors, like commercialism, that may weigh against a finding of fair use." Id. at 579, 114 S.Ct. 1164. Finding the work substantially transformative, the district court properly discounted the secondary commercial nature of the use. We agree.

    61

    Id. at 477-78; see also Campbell, 510 U.S. at 591, 114 S.Ct. 1164 ("When a commercial use amounts to mere duplication of the entirety of an original, it clearly 'supersedes the objects,' Folsom v. Marsh, 9 F. Cas. at 348, of the original and serves as a market replacement for it, making it likely that cognizable actionable market harm to the original will occur. But when, on the contrary, the second use is transformative, market substitution is at least less certain, and market harm may not be so readily inferred."); Davis, 246 F.3d at 174-75 (similar to NXIVM Corp.); Leibovitz, 137 F.3d at 113 (similar); Am. Geophysical Union, 60 F.3d at 921-22 (similar).

    62

    We do not mean to suggest that the commercialism of the use by the secondary user of the original is not relevant to the inquiry. But here, since the "new work" is "substantially transformative," NXIVM Corp., 364 F.3d at 478, "the significance of other factors, [including] commercialism, are of [less significance]," id. (quoting Campbell, 510 U.S. at 579, 114 S.Ct. 1164). We therefore "discount[] the secondary commercial nature of the use." Id.

    63

    It can hardly be said, moreover, that the defendants' economic gains from "Niagara" were "to the exclusion of broader public benefits." Am. Geophysical Union, 60 F.3d at 921-22. Notwithstanding the fact that artists are sometimes paid and museums sometimes earn money, the public exhibition of art is widely and we think properly considered to "have value that benefits the broader public interest." Id. at 922; see also 20 U.S.C. § 951 (stating that "access to the arts and the humanities" fosters "wisdom and vision" and makes citizens "masters of their technology and not its unthinking servants").

    64

    3. Parody, Satire, and Justification for the Copying. The secondary work in Campbell was a parody, and some of the language in the opinion, and some of the cases following it, see, e.g., Leibovitz v. Paramount Pictures Corp., supra, are specifically about parody. "Niagara," on the other hand, may be better characterized for these purposes as satire — its message appears to target the genre of which "Silk Sandals" is typical, rather than the individual photograph itself. See Rogers, 960 F.2d at 310 (concluding that a previous work by Koons was not a parody because "the copied work must be, at least in part, an object of the parody" and it was "difficult to discern [in Koons's work] any parody [255] of the photograph . . . itself"); Campbell, 510 U.S. at 581 n. 15, 114 S.Ct. 1164 ("Satire has been defined as a work 'in which prevalent follies or vices are assailed with ridicule,' 14 Oxford English Dictionary, . . . at 500, or are 'attacked through irony, derision, or wit,' American Heritage Dictionary . . . at 1604.").

    65

    We have applied Campbell in too many non-parody cases to require citation for the proposition that the broad principles of Campbell are not limited to cases involving parody. But the satire/parody distinction may nevertheless be relevant to the application of these principles. As the Campbell Court observed, "[p]arody needs to mimic an original to make its point, and so has some claim to use the creation of its victim's (or collective victims') imagination, whereas satire can stand on its own two feet and so requires justification for the very act of borrowing." Id. at 580-81, 114 S.Ct. 1164.

    66

    It is not, of course, our job to judge the merits of "Niagara," or of Koons's approach to art. See Campbell, 510 U.S. at 582, 114 S.Ct. 1164 ("'[I]t would be a dangerous undertaking for persons trained only to the law to constitute themselves final judges of the worth of a work, outside of the narrowest and most obvious limits.'" (quoting Bleistein v. Donaldson Lithographing Co., 188 U.S. 239, 251, 23 S.Ct. 298, 47 L.Ed. 460 (1903) (Holmes, J.))). The question is whether Koons had a genuine creative rationale for borrowing Blanch's image, rather than using it merely "to get attention or to avoid the drudgery in working up something fresh." Id. at 580, 114 S.Ct. 1164. Although it seems clear enough to us that Koons's use of a slick fashion photograph enables him to satirize life as it appears when seen through the prism of slick fashion photography, we need not depend on our own poorly honed artistic sensibilities. Koons explained, without contradiction, why he used Blanch's image:

    67

    Although the legs in the Allure Magazine photograph ["Silk Sandals"] might seem prosaic, I considered them to be necessary for inclusion in my painting rather than legs I might have photographed myself. The ubiquity of the photograph is central to my message. The photograph is typical of a certain style of mass communication. Images almost identical to them can be found in almost any glossy magazine, as well as in other media. To me, the legs depicted in the Allure photograph are a fact in the world, something that everyone experiences constantly; they are not anyone's legs in particular. By using a fragment of the Allure photograph in my painting, I thus comment upon the culture and attitudes promoted and embodied in Allure Magazine. By using an existing image, I also ensure a certain authenticity or veracity that enhances my commentary — it is the difference between quoting and paraphrasing — and ensure that the viewer will understand what I am referring to.

    68

    Koons Aff. at ¶ 12.[5] We conclude that Koons thus established a "justif[ication for] the very act of [his] borrowing." Campbell, 510 U.S. at 581, 114 S.Ct. 1164. Whether or not Koons could have created "Niagara" without reference to "Silk Sandals," we have been given no reason to question his statement that the use of an existing image advanced his artistic purposes.

    69

    4. "Bad Faith." Much has been written about whether good faith was deemphasized by the advent of Campbell or essentially written out of the first part of the fair-use test. The question was thoroughly explored by the majority and concurring opinions in NXIVM Corp., 364 F.3d at 478-79; id. at 483-87 (Jacobs, J., [256] concurring). In any event, the only act of bad faith alleged here is that Koons used Blanch's photograph without first asking her permission. We are aware of no controlling authority to the effect that the failure to seek permission for copying, in itself, constitutes bad faith. See Harper & Row, 471 U.S. at 562-63, 105 S.Ct. 2218 (purloined manuscript); NXIVM Corp., 364 F.3d at 478 (breach of confidentiality agreement); Rogers, 960 F.2d at 309 (tearing off of copyright mark); Weissmann v. Freeman, 868 F.2d 1313, 1324 (2d Cir. 1989) ("total deletion of the original author's name and substitution of the copier's"). And as the Campbell Court noted by way of dictum, "If the use is otherwise fair, then no permission need be sought or granted." Campbell, 510 U.S. at 585 n. 18, 114 S.Ct. 1164; see also Castle Rock Entm't, 150 F.3d at 146 (2d Cir. 1998) ("One factor that is of no relevance to the fair use equation, however, is defendants' continued distribution of [the defendants' work] after [the plaintiff] notified defendants of its copyright infringement claim, because '[i]f the use is otherwise fair, then no permission need be sought or granted. . . . [B]eing denied permission to use a work does not weight against a finding of fair use.'") (citing Campbell, 510 U.S. at 585 n. 18, 114 S.Ct. 1164) (other citation omitted). In light of that statement by the Supreme Court, it can hardly be said to have been an act of bad faith for Koons to have neither "sought [n]or [been] granted" permission for the use of "Silk Sandals" if, as we find, the use is "otherwise fair."

    70

    5. Conclusions as to the First Factor. Because Koons's appropriation of Blanch's photograph in "Niagara" was intended to be — and appears to be — "transformative," because the creation and exhibition of the painting cannot fairly be described as commercial exploitation and the "commerciality" of the use is not dispositive in any event, and because there is insufficient indication of "bad faith," we agree with the district court that the first fair-use factor strongly favors the defendants.

    71
    B. Second Factor: Nature of the Copyrighted Work
    72

    The second statutory factor is "the nature of the copyrighted work." 17 U.S.C. § 107(2). It "calls for recognition that some works are closer to the core of intended copyright protection than others, with the consequence that fair use is more difficult to establish when the former works are copied." Campbell, 510 U.S. at 586, 114 S.Ct. 1164.

    73

    Two types of distinctions as to the nature of the copyrighted work have emerged that have figured in the decisions evaluating the second factor: (1) whether the work is expressive or creative, such as a work of fiction, or more factual, with a greater leeway being allowed to a claim of fair use where the work is factual or informational, and (2) whether the work is published or unpublished, with the scope for fair use involving unpublished works being considerably narrower.

    74

    2 Howard B. Abrams, The Law of Copyright, § 15:52 (2006).

    75

    As noted, Blanch's "Silk Sandals" was published. Under the second of the two considerations mentioned by Abrams, that fact favors the defendants.[6]

    76

    [257] As for the first consideration, we disagree with the district court's characterization of Blanch's photograph as "banal rather than creative." Blanch, 396 F.Supp.2d at 482.[7] Accepting that "Silk Sandals" is a creative work, though, it does not follow that the second fair-use factor, even if it somewhat favors Blanch, has significant implications for on our overall fair-use analysis. As we recently explained, although "the creative nature of artistic images typically weighs in favor of the copyright holder," "the second factor may be of limited usefulness where the creative work of art is being used for a transformative purpose." Bill Graham Archives, 448 F.3d at 612; cf. Campbell, 510 U.S. at 586, 114 S.Ct. 1164 (stating that the second factor is rarely "likely to help much in separating the fair use sheep from the infringing goats in a parody case"). To paraphrase Bill Graham Archives, the second fair-use factor has limited weight in our analysis because Koons used Blanch's work in a transformative manner to comment on her image's social and aesthetic meaning rather than to exploit its creative virtues. See Bill Graham Archives, 448 F.3d at 612-13.

    77
    C. Third Factor: Amount and Substantiality of the Portion Used
    78

    The third factor bearing on fair use is "the amount and substantiality of the portion used in relation to the copyrighted work as a whole." 17 U.S.C. § 107(3). The question is whether "'the quantity and value of the materials used,' are reasonable in relation to the purpose of the copying." Campbell, 510 U.S. at 586, 114 S.Ct. 1164 (quoting Folsom, 9 F. Cas. at 348); see also id. at 587, 114 S.Ct. 1164 (noting that analysis "calls for thought not only about the quantity of the materials used, but about their quality and importance, too."); Nihon Keizai Shimbun, Inc. v. Comline Bus. Data, Inc., 166 F.3d 65, 73 (2d Cir. 1999) (same).

    79

    As we have discussed in part 11.3 of this opinion, above, Koons asserts that his artistic goals led him to incorporate preexisting images such as Blanch's photograph into his paintings in order to reference certain "fact[s] in the world." Koons Aff. at ¶ 12. The issue here is not "justification," which we addressed in part 11.3. The question is whether, once he chose to copy "Silk Sandals," he did so excessively, beyond his "justified" purpose for doing so in the first place — whether the use was "reasonable in relation to the purpose of the copying." Campbell, 510 U.S. at 586, 114 S.Ct. 1164

    80

    It seems to us that Koons's copying of "Silk Sandals" was indeed reasonable when measured in light of his purpose, to convey the "fact" of the photograph to viewers of the painting, Koons Aff. at ¶ 12, and in light of the quantity, quality, and importance of the material used, Campbell, 510 U.S. at 587, 114 S.Ct. 1164. He did not copy those aspects of "Silk Sandals" "whose power lies in [Blanch's] individualized [258] expression." Harper & Row, 471 U.S. at 563, 105 S.Ct. 2218. As Blanch testified in her deposition, her key creative decisions in the shoot were the choice of an airplane cabin as a setting and her placement of the female model's legs on the male model's lap. But neither the airplane background nor the man's lap appear in "Niagara." It depicts only the woman's legs and sandal-clad feet. In light of Koons's choice to extract the legs, feet, and sandals in "Silk Sandals" from their background, we find his statement that he copied only that portion of the image necessary to evoke "a certain style of mass communication," Koons Aff. ¶ 12, to be persuasive. We conclude that the amount and substantiality of Koons's copying was "reasonable in relation to the purpose of the copying." Campbell, 510 U.S. at 586, 114 S.Ct. 1164. The district court said that "[t]he third factor is neutral as between the parties," Blanch, 396 F.Supp.2d at 482; we think that it weighs distinctly in Koons's favor. This modest difference in our views, however, does not alter our ultimate conclusion on fair use.

    81
    D. Fourth Factor: Market Effects
    82

    The fourth and final statutory factor is "the effect of the use upon the potential market for or value of the copyrighted work." 17 U.S.C. § 107(4).[8] "In considering the fourth factor, our concern is not whether the secondary use suppresses or even destroys the market for the original work or its potential derivatives, but whether the secondary use usurps the market of the original work." NXIVM Corp., 364 F.3d at 481-82. "The market for potential derivative uses includes only those that creators of original works would in general develop or license others to develop." Campbell, 510 U.S. at 592, 114 S.Ct. 1164.

    83

    Blanch acknowledges that she has not published or licensed "Silk Sandals" subsequent to its appearance in Allure, that she has never licensed any of her photographs for use in works of graphic or other visual art, that Koons's use of her photograph did not cause any harm to her career or upset any plans she had for "Silk Sandals" or any other photograph, and that the value of "Silk Sandals" did not decrease as the result of Koons's alleged infringement. In light of these admissions, it is plain that "Niagara" had no deleterious effect "upon the potential market for or value of the copyrighted work." 17 U.S.C. § 107(4).[9] The fourth fair-use factor greatly favors Koons.

    84
    [259] CONCLUSION
    85

    Having explored the statutory factors and weighed them together in light of the purposes of copyright, Campbell, 510 U.S. at 78, we think that the district court's conclusion was correct — that copyright law's goal of "promoting the Progress of Science and useful Arts," U.S. Const., art. I, § 8, cl. 8, would be better served by allowing Koons's use of "Silk Sandals" than by preventing it, see Castle Rock Entm't, 150 F.3d at 141. We therefore conclude that neither he nor the other defendants engaged in or are liable for copyright infringement. We affirm the judgment of the district court.

    86

    ----------

    87
    [262] KATZMANN, Circuit Judge, concurring.
    88

    I concur in the disposition of this case and appreciate the very considerable thinking in the majority opinion. I agree that Koons' work is highly transformative of Blanch's, using it as raw material for an entirely different type of art, and that his use of Blanch's work furthered a purpose (art that comments on existing images by juxtaposing them against others) that can make a finding of fair use appropriate. In both respects, the facts of this case are quite distinguishable from those of Rogers v. Koons, 960 F.2d 301 (2d Cir. 1992), in which Koons slavishly recreated a copyrighted work in a different medium without any objective indicia of transforming it or commenting on the copyrighted work. Moreover, the fourth factor of the fair-use analysis dramatically favors Koons, in that Blanch failed to show that Koons' use of her work actually harmed her in any way. She thus stands in stark contrast to the plaintiff in Rogers, for whom licensing of his work in general, and the appropriated work in particular, yielded considerable revenue. On the facts of this case, it is easy to conclude that the copyright law's goals are better served by a finding of fair use.

    89

    I respectfully part company with the majority opinion, however, because I believe it sweeps more broadly in several places than is necessary to decide this simple case. For example, I see no need to state that we "discount[ ] the secondary commercial nature of the use." See Majority Op. at 254. This language was taken from NXIVM Corp. v. Ross Inst., 364 F.3d 471, 478 (2d Cir. 2004), which used it in the context of applying our presumption that the first factor favors the defendant where the use is for one of the purposes specifically listed in 17 U.S.C. § 107. Here, where Koons' use is not for one of the archetypal purposes specifically contemplated by Congress and such a presumption does not apply, it is uncertain whether we have license to "discount" its commercial nature, as opposed to balancing that consideration against the use's transformativeness and other countervailing concerns — particularly because consideration of a use's commercial nature (unlike its "transformativeness") is explicitly part of our statutory mandate. See 17 U.S.C. § 107(1).

    90

    Rather than reaching this question, I would simply apply our established analysis for weighing commercialism, see Am. Geophysical Union v. Texaco, Inc., 60 F.3d 913, 922-23 (2d Cir.1994). As in Am. Geophysical Union, "the link between [the defendant's] commercial gain and [the defendant's] copying is somewhat attenuated," in that the copying of Blanch's work was simply one small part of what made Koons' work so valuable rather than the heart of the enterprise. See 60 F.3d at 922.

    91

    Similarly, there seems to be no need to rely so heavily on what the majority acknowledges is a sentence of dictum in a footnote in Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 114 S.Ct. 1164, 127 L.Ed.2d 500 (1994), to the effect that failure to seek authorization, even where doing so would have been feasible, is not relevant to the fair-use inquiry. See Majority Op. at 256-57. I see no reason, on these facts, to wade into the contentious battle over the role of good faith in the post-Campbell fair use inquiry. Instead, I would simply conclude that whatever bad [263] faith Koons may have exhibited in this case, as well as the limited commercial nature of his use, would not outweigh the much stronger considerations pointing toward a finding of fair use.

    92

    To be clear, I do not argue with the majority's thoughtful discussion of these points, except to question whether its conclusions are compelled by precedent. If and when I encounter a case that requires me to do so, I may well adopt them. I merely believe that this is not such a case, and so I do not now join what I regard as dicta as applied to these facts.

    93

    This is our Circuit's second encounter with Koons' work. His work, like that of other appropriation artists, inherently raises difficult questions about the proper scope of copyright protection and the fair-use doctrine. I would continue to answer those questions as necessary to decide particular cases, mindful that the fair-use inquiry is a fact-specific one that is "not to be simplified with bright-line rules." Campbell, 510 U.S. at 577, 114 S.Ct. 1164.

    94

    ----------

    95

    [*] The Honorable J. Garvan Murtha of the United States District Court for the District of Vermont, sitting by designation.

    96

    [1] See E. Kenly Ames, Note, Beyond Rogers v. Koons: A Fair Use Standard for Appropriation, 93 Colum. L.Rev. 1473, 1477-80 (1993).

    97

    [2] Guggenheim's figures for catalogue and postcard sales include sales at the Deutsche Guggenheim Berlin. It is possible, therefore, that those sales are double-counted in Deutsche Bank's and Guggenheim's earnings calculations.

    98

    [3] As the Supreme Court noted in Campbell, however, a finding of transformativeness "is not absolutely necessary for a finding of fair use." Campbell, 510 U.S. at 579, 114 S.Ct. 1164 (citing Sony Corp. of Am. v. Universal Studios, Inc., 464 U.S. 417, 455 n. 40, 104 S.Ct. 774, 78 L.Ed.2d 574 (1984)); see also 17 U.S.C. § 107 (listing "multiple copies for classroom use" as among the categories of potentially fair uses); Rebecca Tushnet, Copy This Essay: How Fair Use Doctrine Harms Free Speech and How Copying Serves It, 114 Yale L.J. 535, 555 (2004) (noting that historically some forms of "pure copying" were "at the core of fair use"). Nor is transformativeness necessarily the only important factor. See Campbell, 510 U.S. at 578, 114 S.Ct. 1164 ("[T]he four statutory factors . . . [a]re all to be explored, and the results weighed together, in light of the purposes of copyright.").

    99

    [4] It has been suggested that the exploitation of new, complementary markets is the hallmark of fair use. See Ty, Inc. v. Publ'ns Int'l, 292 F.3d 512, 517 (7th Cir. 2002) ("[C]opying that is complementary to the copyrighted work (in the sense that nails are complements of hammers) is fair use, but copying that is a substitute for the copyrighted work (in the sense that nails are substitutes for pegs or screws), or for derivative works from the copyrighted work, is not fair use." (citation omitted)); see also 4-13 Melville B. Nimmer & David Nimmer, Nimmer on Copyright § 13.05[B][1] (2006) ("[I]f . . . the defendant's work, although containing substantially similar material, performs a different function than that of the plaintiff's, the defense of fair use may be invoked."). But as the Seventh Circuit recognized, this reasoning is in tension with the Copyright Act's express grant to copyright holders of rights over derivative works. See Ty, Inc., 292 F.3d at 518 ("Were control of derivative works not part of a copyright owner's bundle of rights, it would be clear that [defendant's] books fell on the complement side of the divide and so were sheltered by the fair-use defense."). A derivative use can certainly be complementary to, or fulfill a different function from, the original.

    100

    [5] Koons's clear conception of his reasons for using "Silk Sandals," and his ability to articulate those reasons, ease our analysis in this case. We do not mean to suggest, however, that either is a sine qua non for a finding of fair use — as to satire or more generally.

    101

    [6] We have said that when "'the copyrighted [material is] unpublished, the second [fair-use] factor weighs heavily in favor'" of the plaintiff. New Era Publ'ns Int'l, ApS v. Henry Holt and Co., Inc., 873 F.2d 576, 583 (2d Cir. 1989) (quoting Salinger v. Random House, Inc., 811 F.2d 90, 97 (2d Cir.), cert. denied, 484 U.S. 890, 108 S.Ct. 213, 98 L.Ed.2d 177 (1987)), cert. denied, 493 U.S. 1094, 110 S.Ct. 1168, 107 L.Ed.2d 1071 (1990). "In 1992, however, Congress amended § 107 to state that: 'The fact that a work is unpublished shall not itself bar a finding of fair use if such finding is made upon consideration of all the above factors.'" Sundeman v. Seajay Soc'y, Inc., 142 F.3d 194, 204 (4th Cir. 1998) (quoting 17 U.S.C. § 107). We have not had occasion to address the published/unpublished distinction since that amendment. But see NXIVM Corp., 364 F.3d at 480 (the parties did not dispute that because the copyrighted work was unpublished, the second fair-use factor favored the plaintiffs).

    102

    [7] The district court did not actually say that Blanch's photograph was banal, but rather that the elements of the photograph copied by Koons were banal. We think that the expressiveness of the copied elements is better considered as part of the third fair-use factor, the amount and substantiality of the portion used.

    103

    [8] The Supreme Court has recently retreated from its earlier cases suggesting that the fourth statutory factor is the most important element of fair use, see Harper & Row, 471 U.S. at 566, 105 S.Ct. 2218, recognizing instead that "all [factors] are to be explored, and the results weighed together, in light of the purposes of copyright," Campbell, 510 U.S. at 578, 114 S.Ct. 1164

    104

    . . . .

    105

    Castle Rock Entm't, 150 F.3d at 145.

    106

    [9] We have sometimes found that the fourth factor favors the plaintiff even in the absence of evidence that the plaintiff has tapped, or even intends to tap, a derivative market. See, e.g., Castle Rock Entm't, 150 F.3d at 145-46 ("Although Castle Rock has evidenced little if any interest in exploiting this market for derivative works . . . the copyright law must respect that creative and economic choice."). But nothing in the record here suggests that there was a derivative market for Blanch to tap into that is in any way related to Koons's use of her work, even if she dearly wanted to. And it is of course circular to assert simply that if we were to hold in her favor she could then charge Koons for his further use of "Silk Sandals." See Am. Geophysical Union, 60 F.3d at 929 n. 17 ("'By definition every fair use involves some loss of royalty revenue because the secondary user has not paid royalties.'" (quoting Leval, supra, 103 Harv. L.Rev. at 1124)).

  • 2 Perfect 10 v. Amazon.com (2007) [Part III.C.]

    1
    508 F.3d 1146
    2
    PERFECT 10, INC., a California corporation, Plaintiff-Appellant,
    v.
    AMAZON.COM, INC., a corporation; A9.Com Inc., a corporation, Defendants-Appellees.
    Perfect 10, Inc., a California corporation, Plaintiff-Appellant,
    v.
    Google Inc., a corporation, Defendant-Appellee.
    Perfect 10, Inc., a California corporation, Plaintiff-Appellee,
    v.
    Google Inc., a corporation, Defendant-Appellant.
    Perfect 10, Inc., a California corporation, Plaintiff-Appellant,
    v.
    Google Inc., a corporation, Defendant-Appellee.
    Perfect 10, Inc., a California corporation, Plaintiff-Appellee,
    v.
    Google Inc., a corporation, Defendant-Appellant.
    Perfect 10, Inc., a California corporation, Plaintiff-Appellee,
    v.
    Google Inc., a corporation, Defendant-Appellant.
    3
    No. 06-55405.
    4
    No. 06-55406.
    5
    No. 06-55425.
    6
    No. 06-55759.
    7
    No. 06-55854.
    8
    No. 06-55877.
    9
    United States Court of Appeals, Ninth Circuit.
    10
    Argued and Submitted November 15, 2006.
    11
    Filed May 16, 2007.
    12
    Amended December 3, 2007.
    13

    [1153] Russell J. Frackman and Jeffrey D. Goldman, Mitchell, Silberberg & Knupp LLP, Los Angeles, CA, Jeffrey N. Mausner, Berman, Mausner & Resser, Los Angeles, CA, Daniel J. Cooper, Perfect 10, Inc., Beverly Hills, CA, for plaintiff-appellant Perfect 10, Inc.

    14

    Andrew P. Bridges and Jennifer A. Golinveaux, Winston & Strawn LLP, San Francisco, CA, Gene C. Schaerr, Winston & Strawn LLP, Washington, DC, for defendant-appellee and cross-appellant Google Inc.

    15

    Mark T. Jansen & Anthony J. Malutta, Townsend and Townsend and Crew LLP, San Francisco, CA, for defendants-appellees Amazon.com and A9.com, Inc.

    16

    Fred von Lohmann, Electronic Frontier Foundation, San Francisco, CA, for amicus curiae Electronic Frontier Foundation, American Library Association, Medical Library [1154] Association, American Association of Law Libraries, Association of Research Libraries, and Special Libraries Association in support of Google Inc.

    17

    Victor S. Perlman, of counsel, American Society of Media Photographers; Nancy E. Wolff, of counsel, Cowan, DeBaets, Abrahams & Sheppard, LLP; Robert W. Clarida and Jason D. Sanders, Cowan, Liebowitz & Latman, P.C., New York, NY, for amicus curiae American Society of Media Photographers, Inc., Picture Archive Council of America, Inc., British Association of Picture Libraries and Agencies, Inc., Stock Artists Alliance, The Graphic Artists Guild, American Society of Picture Professionals and National Press Photographers, in support of Perfect 10 on issue of Google's liability for the display of full-size images.

    18

    Eric J. Schwartz and Steven J. Metalitz, Smith & Metalitz LLP, Washington, DC, for amicus curiae Motion Picture Association of America, Inc. in support of Perfect 10.

    19

    Jonathan Band, Jonathan Band PLLC, Washington, DC, for amicus curiae Net-Coalition, Computer and Communications Industry Association, U.S. Internet Service Provider Association, Consumer Electronics Association, Home Recording Rights Coalition, Information Technology Association of America, and Internet Commerce Coalition in support of Google Inc.

    20

    Kenneth L. Doroshow and Linda J. Zirkelbach, Recording Industry Association of America, Washington, DC; Jacqueline C. Charlesworth, National Music Publishers' Association, Washington, DC; Robert W. Clarida, Richard S. Mandel and Jonathan Z. King, Cowan, Liebowitz & Latman, P.C., New York, NY, for amicus curiae Recording Industry Association of America and National Music Publishers' Association in support of neither party.

    21

    Appeal from the United States District Court for the Central District of California; A. Howard Matz, District Judge, Presiding. D.C. Nos. CV-05-04753-AHM, CV-04-09484-AHM.

    22

    Before: CYNTHIA HOLCOMB HALL, HAWKINS, and SANDRA S. IKUTA, Circuit Judges.

    23

    IKUTA, Circuit Judge:

    24

    In this appeal, we consider a copyright owner's efforts to stop an Internet search engine from facilitating access to infringing images. Perfect 10, Inc. sued Google Inc., for infringing Perfect 10's copyrighted photographs of nude models, among other claims. Perfect 10 brought a similar action against Amazon.com and its subsidiary A9.com (collectively, "Amazon.com"). The district court preliminarily enjoined Google from creating and publicly displaying thumbnail versions of Perfect 10's images, Perfect 10 v. Google, Inc., 416 F.Supp.2d 828 (C.D.Cal.2006), but did not enjoin Google from linking to third-party websites that display infringing full-size versions of Perfect 10's images. Nor did the district court preliminarily enjoin Amazon.com from giving users access to information provided by Google. Perfect 10 and Google both appeal the district court's order. We have jurisdiction pursuant to 28 U.S.C. § 1292(a)(1).[1]

    25

    [1155] The district court handled this complex case in a particularly thoughtful and skillful manner. Nonetheless, the district court erred on certain issues, as we will further explain below. We affirm in part, reverse in part, and remand.

    26
    I
    27
    Background
    28

    Google's computers, along with millions of others, are connected to networks known collectively as the "Internet." "The Internet is a world-wide network of networks ... all sharing a common communications technology." Religious Tech. Ctr. v. Netcom On-Line Commc'n Servs., Inc., 923 F.Supp. 1231, 1238 n. 1 (N.D.Cal.1995). Computer owners can provide information stored on their computers to other users connected to the Internet through a medium called a webpage. A webpage consists of text interspersed with instructions written in Hypertext Markup Language ("HTML") that is stored in a computer. No images are stored on a webpage; rather, the HTML instructions on the webpage provide an address for where the images are stored, whether in the webpage publisher's computer or some other computer. In general, webpages are publicly available and can be accessed by computers connected to the Internet through the use of a web browser.

    29

    Google operates a search engine, a software program that automatically accesses thousands of websites (collections of webpages) and indexes them within a database stored on Google's computers. When a Google user accesses the Google website and types in a search query, Google's software searches its database for websites responsive to that search query. Google then sends relevant information from its index of websites to the user's computer. Google's search engines can provide results in the form of text, images, or videos.

    30

    The Google search engine that provides responses in the form of images is called "Google Image Search." In response to a search query, Google Image Search identifies text in its database responsive to the query and then communicates to users the images associated with the relevant text. Google's software cannot recognize and index the images themselves. Google Image Search provides search results as a webpage of small images called "thumbnails," which are stored in Google's servers. The thumbnail images are reduced, lower-resolution versions of full-sized images stored on third-party computers.

    31

    When a user clicks on a thumbnail image, the user's browser program interprets HTML instructions on Google's webpage. These HTML instructions direct the user's browser to cause a rectangular area (a "window") to appear on the user's computer screen. The window has two separate areas of information. The browser fills the top section of the screen with information from the Google webpage, including the thumbnail image and text. The HTML instructions also give the user's browser the address of the website publisher's computer that stores the full-size version of the thumbnail.[2] By following [1156] the HTML instructions to access the third-party webpage, the user's browser connects to the website publisher's computer, downloads the full-size image, and makes the image appear at the bottom of the window on the user's screen. Google does not store the images that fill this lower part of the window and does not communicate the images to the user; Google simply provides HTML instructions directing a user's browser to access a third-party website. However, the top part of the window (containing the information from the Google webpage) appears to frame and comment on the bottom part of the window. Thus, the user's window appears to be filled with a single integrated presentation of the full-size image, but it is actually an image from a third-party website framed by information from Google's website. The process by which the webpage directs a user's browser to incorporate content from different computers into a single window is referred to as "in-line linking." Kelly v. Arriba Soft Corp., 336 F.3d 811, 816 (9th Cir.2003). The term "framing" refers to the process by which information from one computer appears to frame and annotate the in-line linked content from another computer. Perfect 10, 416 F.Supp.2d at 833-34.

    32

    Google also stores webpage content in its cache.[3] For each cached webpage, Google's cache contains the text of the webpage as it appeared at the time Google indexed the page, but does not store images from the webpage. Id. at 833. Google may provide a link to a cached webpage in response to a user's search query. However, Google's cache version of the webpage is not automatically updated when the webpage is revised by its owner. So if the webpage owner updates its webpage to remove the HTML instructions for finding an infringing image, a browser communicating directly with the webpage would not be able to access that image. However, Google's cache copy of the webpage would still have the old HTML instructions for the infringing image. Unless the owner of the computer changed the HTML address of the infringing image, or otherwise rendered the image unavailable, a browser accessing Google's cache copy of the website could still access the image where it is stored on the website publisher's computer. In other words, Google's cache copy could provide a user's browser with valid directions to an infringing image even though the updated webpage no longer includes that infringing image.

    33

    In addition to its search engine operations, Google generates revenue through a business program called "AdSense." Under this program, the owner of a website can register with Google to become an AdSense "partner." The website owner then places HTML instructions on its webpages that signal Google's server to place advertising on the webpages that is relevant to the webpages' content. Google's computer program selects the advertising automatically by means of an algorithm. AdSense participants agree to share the revenues that flow from such advertising with Google.

    34

    [1157] Google also generated revenues through an agreement with Amazon.com that allowed Amazon.com to in-line link to Google's search results. Amazon.com gave its users the impression that Amazon.com was providing search results, but Google communicated the search results directly to Amazon.com's users. Amazon.com routed users' search queries to Google and automatically transmitted Google's responses (i.e., HTML instructions for linking to Google's search results) back to its users.

    35

    Perfect 10 markets and sells copyrighted images of nude models. Among other enterprises, it operates a subscription website on the Internet. Subscribers pay a monthly fee to view Perfect 10 images in a "members' area" of the site. Subscribers must use a password to log into the members' area. Google does not include these password-protected images from the members' area in Google's index or database. Perfect 10 has also licensed Fonestarz Media Limited to sell and distribute Perfect 10's reduced-size copyrighted images for download and use on cell phones.

    36

    Some website publishers republish Perfect 10's images on the Internet without authorization. Once this occurs, Google's search engine may automatically index the webpages containing these images and provide thumbnail versions of images in response to user inquiries. When a user clicks on the thumbnail image returned by Google's search engine, the user's browser accesses the third-party webpage and in-line links to the full-sized infringing image stored on the website publisher's computer. This image appears, in its original context, on the lower portion of the window on the user's computer screen framed by information from Google's webpage.

    37

    Procedural History. In May 2001, Perfect 10 began notifying Google that its thumbnail images and in-line linking to the full-size images infringed Perfect 10's copyright. Perfect 10 continued to send these notices through 2005.

    38

    On November 19, 2004, Perfect 10 filed an action against Google that included copyright infringement claims. This was followed by a similar action against Amazon.com on June 29, 2005. On July 1, 2005 and August 24, 2005, Perfect 10 sought a preliminary injunction to prevent Amazon.com and Google, respectively, from "copying, reproducing, distributing, publicly displaying, adapting or otherwise infringing, or contributing to the infringement" of Perfect 10's photographs; linking to websites that provide full-size infringing versions of Perfect 10's photographs; and infringing Perfect 10's username/password combinations.

    39

    The district court consolidated the two actions and heard both preliminary injunction motions on November 7, 2005. The district court issued orders granting in part and denying in part the preliminary injunction against Google and denying the preliminary injunction against Amazon.com. Perfect 10 and Google cross-appealed the partial grant and partial denial of the preliminary injunction motion, and Perfect 10 appealed the denial of the preliminary injunction against Amazon.com. On June 15, 2006, the district court temporarily stayed the preliminary injunction.

    40
    II
    41
    Standard of Review
    42

    We review the district court's grant or denial of a preliminary injunction for an abuse of discretion. A & M Records, Inc. v. Napster, Inc., 239 F.3d 1004, 1013 (9th Cir.2001). The district court must support a preliminary injunction with findings of fact, which we review for clear error. Earth Island Inst. v. U.S. Forest Serv., 442 F.3d 1147, 1156 (9th Cir.2006). We review the district court's conclusions of law de novo. Napster, 239 F.3d at 1013.

    43

    [1158] Section 502(a) of the Copyright Act authorizes a court to grant injunctive relief "on such terms as it may deem reasonable to prevent or restrain infringement of a copyright." 17 U.S.C. § 502(a). "Preliminary injunctive relief is available to a party who demonstrates either: (1) a combination of probable success on the merits and the possibility of irreparable harm; or (2) that serious questions are raised and the balance of hardships tips in its favor. These two formulations represent two points on a sliding scale in which the required degree of irreparable harm increases as the probability of success decreases." Napster, 239 F.3d at 1013 (internal quotation and citation omitted).

    44

    Because Perfect 10 has the burden of showing a likelihood of success on the merits, the district court held that Perfect 10 also had the burden of demonstrating a likelihood of overcoming Google's fair use defense under 17 U.S.C. § 107. Perfect 10, 416 F.Supp.2d at 836-37. This ruling was erroneous. At trial, the defendant in an infringement action bears the burden of proving fair use. See Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 590, 114 S.Ct. 1164, 127 L.Ed.2d 500 (1994). Because "the burdens at the preliminary injunction stage track the burdens at trial," once the moving party has carried its burden of showing a likelihood of success on the merits, the burden shifts to the non-moving party to show a likelihood that its affirmative defense will succeed. Gonzales v. O Centro Espirita Beneficente Uniao do Vegetal, 546 U.S. 418, 429, 126 S.Ct. 1211, 163 L.Ed.2d 1017 (2006); see also Abbott Labs. v. Andrx Pharms., Inc., 473 F.3d 1196, 1201 (Fed. Cir.2007) (to defeat a motion for preliminary injunctive relief in a patent infringement case, the non-moving party must establish a likelihood of success in proving its defenses of invalidity or unenforceability); PHG Techs., LLC v. St. John Cos., 469 F.3d 1361, 1365 (Fed.Cir.2006). Accordingly, once Perfect 10 has shown a likelihood of success on the merits, the burden shifts to Google to show a likelihood that its affirmative defenses will succeed.

    45

    In addition to its fair use defense, Google also raises an affirmative defense under title II of the Digital Millennium Copyright Act ("DMCA"), 17 U.S.C. § 512. Congress enacted title II of the DMCA "to provide greater certainty to service providers concerning their legal exposure for infringements that may occur in the course of their activities." Ellison v. Robertson, 357 F.3d 1072, 1076 (9th Cir. 2004) (internal quotation omitted). Sections 512(a) through (d) limit liability for (respectively): "(1) transitory digital network communications; (2) system caching; (3) information residing on systems or networks at the direction of users; and (4) information location tools." Id. at 1077. A service provider that qualifies for such protection is not liable for monetary relief and may be subject only to the narrow injunctive relief set forth in section 512(j). 17 U.S.C. § 512(a). If Perfect 10 demonstrates a likelihood of success on the merits, Google must show a likelihood of succeeding in its claim that it qualifies for protection under title II of the DMCA.[4][1159]

    46
    III
    47
    Direct Infringement
    48

    Perfect 10 claims that Google's search engine program directly infringes two exclusive rights granted to copyright holders: its display rights and its distribution rights.[5] "Plaintiffs must satisfy two requirements to present a prima facie case of direct infringement: (1) they must show ownership of the allegedly infringed material and (2) they must demonstrate that the alleged infringers violate at least one exclusive right granted to copyright holders under 17 U.S.C. § 106." Napster, 239 F.3d at 1013; see 17 U.S.C. § 501(a). Even if a plaintiff satisfies these two requirements and makes a prima facie case of direct infringement, the defendant may avoid liability if it can establish that its use of the images is a "fair use" as set forth in 17 U.S.C. § 107. See Kelly, 336 F.3d at 817.

    49

    Perfect 10's ownership of at least some of the images at issue is not disputed. See Perfect 10, 416 F.Supp.2d at 836.

    50

    The district court held that Perfect 10 was likely to prevail in its claim that Google violated Perfect 10's display right with respect to the infringing thumbnails. Id. at 844. However, the district court concluded that Perfect 10 was not likely to prevail on its claim that Google violated either Perfect 10's display or distribution right with respect to its full-size infringing images. Id. at 844-45. We review these rulings for an abuse of discretion. Napster, 239 F.3d at 1013.

    51
    A. Display Right
    52

    In considering whether Perfect 10 made a prima facie case of violation of its display right, the district court reasoned that a computer owner that stores an image as electronic information and serves that electronic information directly to the user ("i.e., physically sending ones and zeroes over the [I]nternet to the user's browser," Perfect 10, 416 F.Supp.2d at 839) is displaying the electronic information in violation of a copyright holder's exclusive display right. Id. at 843-45; see 17 U.S.C. § 106(5). Conversely, the owner of a computer that does not store and serve the electronic information to a user is not displaying that information, even if such owner in-line links to or frames the electronic information. Perfect 10, 416 F.Supp.2d at 843-45. The district court referred to this test as the "server test." Id. at 838-39.

    53

    Applying the server test, the district court concluded that Perfect 10 was likely to succeed in its claim that Google's thumbnails constituted direct infringement but was unlikely to succeed in its claim that Google's in-line linking to full-size infringing images constituted a direct infringement. [1160] Id. at 843-45. As explained below, because this analysis comports with the language of the Copyright Act, we agree with the district court's resolution of both these issues.

    54

    We have not previously addressed the question when a computer displays a copyrighted work for purposes of section 106(5). Section 106(5) states that a copyright owner has the exclusive right "to display the copyrighted work publicly." The Copyright Act explains that "display" means "to show a copy of it, either directly or by means of a film, slide, television image, or any other device or process...." 17 U.S.C. § 101. Section 101 defines "copies" as "material objects, other than phonorecords, in which a work is fixed by any method now known or later developed, and from which the work can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device." Id. Finally, the Copyright Act provides that "[a] work is `fixed' in a tangible medium of expression when its embodiment in a copy or phonorecord, by or under the authority of the author, is sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration." Id.

    55

    We must now apply these definitions to the facts of this case. A photographic image is a work that is "`fixed' in a tangible medium of expression," for purposes of the Copyright Act, when embodied (i.e., stored) in a computer's server (or hard disk, or other storage device). The image stored in the computer is the "copy" of the work for purposes of copyright law. See MAI Sys. Corp. v. Peak Computer, Inc., 991 F.2d 511, 517-18 (9th Cir.1993) (a computer makes a "copy" of a software program when it transfers the program from a third party's computer (or other storage device) into its own memory, because the copy of the program recorded in the computer is "fixed" in a manner that is "sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than transitory duration" (quoting 17 U.S.C. § 101)). The computer owner shows a copy "by means of a ... device or process" when the owner uses the computer to fill the computer screen with the photographic image stored on that computer, or by communicating the stored image electronically to another person's computer. 17 U.S.C. § 101. In sum, based on the plain language of the statute, a person displays a photographic image by using a computer to fill a computer screen with a copy of the photographic image fixed in the computer's memory. There is no dispute that Google's computers store thumbnail versions of Perfect 10's copyrighted images and communicate copies of those thumbnails to Google's users.[6] Therefore, Perfect 10 has made a prima facie case that Google's communication of its stored thumbnail images directly infringes Perfect 10's display right.

    56

    Google does not, however, display a copy of full-size infringing photographic images for purposes of the Copyright Act when Google frames in-line linked images that appear on a user's computer screen. Because Google's computers do not store the photographic images, Google does not have a copy of the images for purposes of the Copyright Act. In other words, Google does not have any "material objects ... in [1161] which a work is fixed ... and from which the work can be perceived, reproduced, or otherwise communicated" and thus cannot communicate a copy. 17 U.S.C. § 101.

    57

    Instead of communicating a copy of the image, Google provides HTML instructions that direct a user's browser to a website publisher's computer that stores the full-size photographic image. Providing these HTML instructions is not equivalent to showing a copy. First, the HTML instructions are lines of text, not a photographic image. Second, HTML instructions do not themselves cause infringing images to appear on the user's computer screen. The HTML merely gives the address of the image to the user's browser. The browser then interacts with the computer that stores the infringing image. It is this interaction that causes an infringing image to appear on the user's computer screen. Google may facilitate the user's access to infringing images. However, such assistance raises only contributory liability issues, see Metro-Goldwyn-Mayer Studios, Inc. v. Grokster, Ltd., 545 U.S. 913, 929-30, 125 S.Ct. 2764, 162 L.Ed.2d 781 (2005), Napster, 239 F.3d at 1019, and does not constitute direct infringement of the copyright owner's display rights.

    58

    Perfect 10 argues that Google displays a copy of the full-size images by framing the full-size images, which gives the impression that Google is showing the image within a single Google webpage. While in-line linking and framing may cause some computer users to believe they are viewing a single Google webpage, the Copyright Act, unlike the Trademark Act, does not protect a copyright holder against acts that cause consumer confusion. Cf. 15 U.S.C. § 1114(1) (providing that a person who uses a trademark in a manner likely to cause confusion shall be liable in a civil action to the trademark registrant).[7]

    59

    Nor does our ruling that a computer owner does not display a copy of an image when it communicates only the HTML address of the copy erroneously collapse the display right in section 106(5) into the reproduction right set forth in section 106(1). Nothing in the Copyright Act prevents the various rights protected in section 106 from overlapping. Indeed, under some circumstances, more than one right must be infringed in order for an infringement claim to arise. For example, a "Game Genie" device that allowed a player to alter features of a Nintendo computer game did not infringe Nintendo's right to prepare derivative works because the Game Genie did not incorporate any portion of the game itself. See Lewis Galoob Toys, Inc. v. Nintendo of Am., Inc., 964 F.2d 965, 967 (9th Cir.1992). We held that a copyright holder's right to create derivative works is not infringed unless the alleged derivative work "incorporate[s] a protected work in some concrete or permanent `form.'" Id. In other words, in some contexts, the claimant must be able to claim infringement of its reproduction right in order to claim infringement of its right to prepare derivative works.

    60

    [1162] Because Google's cache merely stores the text of webpages, our analysis of whether Google's search engine program potentially infringes Perfect 10's display and distribution rights is equally applicable to Google's cache. Perfect 10 is not likely to succeed in showing that a cached webpage that in-line links to full-size infringing images violates such rights. For purposes of this analysis, it is irrelevant whether cache copies direct a user's browser to third-party images that are no longer available on the third party's website, because it is the website publisher's computer, rather than Google's computer, that stores and displays the infringing image.

    61
    B. Distribution Right
    62

    The district court also concluded that Perfect 10 would not likely prevail on its claim that Google directly infringed Perfect 10's right to distribute its full-size images. Perfect 10, 416 F.Supp.2d at 844-45. The district court reasoned that distribution requires an "actual dissemination" of a copy. Id. at 844. Because Google did not communicate the full-size images to the user's computer, Google did not distribute these images. Id.

    63

    Again, the district court's conclusion on this point is consistent with the language of the Copyright Act. Section 106(3) provides that the copyright owner has the exclusive right "to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending." 17 U.S.C. § 106(3). As noted, "copies" means "material objects ... in which a work is fixed." 17 U.S.C. § 101. The Supreme Court has indicated that in the electronic context, copies may be distributed electronically. See N.Y. Times Co. v. Tasini, 533 U.S. 483, 498, 121 S.Ct. 2381, 150 L.Ed.2d 500 (2001) (a computer database program distributed copies of newspaper articles stored in its computerized database by selling copies of those articles through its database service). Google's search engine communicates HTML instructions that tell a user's browser where to find full-size images on a website publisher's computer, but Google does not itself distribute copies of the infringing photographs. It is the website publisher's computer that distributes copies of the images by transmitting the photographic image electronically to the user's computer. As in Tasini, the user can then obtain copies by downloading the photo or printing it.

    64

    Perfect 10 incorrectly relies on Hotaling v. Church of Jesus Christ of Latter-Day Saints and Napster for the proposition that merely making images "available" violates the copyright owner's distribution right. Hotaling v. Church of Jesus Christ of Latter-Day Saints, 118 F.3d 199 (4th Cir.1997); Napster, 239 F.3d 1004. Hotaling held that the owner of a collection of works who makes them available to the public may be deemed to have distributed copies of the works. Hotaling, 118 F.3d at 203. Similarly, the distribution rights of the plaintiff copyright owners were infringed by Napster users (private individuals with collections of music files stored on their home computers) when they used the Napster software to make their collections available to all other Napster users. Napster, 239 F.3d at 1011-14.

    65

    This "deemed distribution" rule does not apply to Google. Unlike the participants in the Napster system or the library in Hotaling, Google does not own a collection of Perfect 10's full-size images and does not communicate these images to the computers of people using Google's search engine. Though Google indexes these images, it does not have a collection of stored full-size images it makes available to the public. Google therefore cannot be deemed to distribute copies of these images under the reasoning of Napster or [1163] Hotaling. Accordingly, the district court correctly concluded that Perfect 10 does not have a likelihood of success in proving that Google violates Perfect 10's distribution rights with respect to full-size images.

    66
    C. Fair Use Defense
    67

    Because Perfect 10 has succeeded in showing it would prevail in its prima facie case that Google's thumbnail images infringe Perfect 10's display rights, the burden shifts to Google to show that it will likely succeed in establishing an affirmative defense. Google contends that its use of thumbnails is a fair use of the images and therefore does not constitute an infringement of Perfect 10's copyright. See 17 U.S.C. § 107.

    68

    The fair use defense permits the use of copyrighted works without the copyright owner's consent under certain situations. The defense encourages and allows the development of new ideas that build on earlier ones, thus providing a necessary counterbalance to the copyright law's goal of protecting creators' work product. "From the infancy of copyright protection, some opportunity for fair use of copyrighted materials has been thought necessary to fulfill copyright's very purpose...." Campbell, 510 U.S. at 575, 114 S.Ct. 1164. "The fair use doctrine thus `permits [and requires] courts to avoid rigid application of the copyright statute when, on occasion, it would stifle the very creativity which that law is designed to foster.'" Id. at 577, 114 S.Ct. 1164 (quoting Stewart v. Abend, 495 U.S. 207, 236, 110 S.Ct. 1750, 109 L.Ed.2d 184 (1990)) (alteration in original).

    69

    Congress codified the common law of fair use in 17 U.S.C. § 107, which provides:

    70

    Notwithstanding the provisions of sections 106 and 106A, the fair use of a copyrighted work, including such use by reproduction in copies or phonorecords or by any other means specified by that section, for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include—

    (1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;

    (2) the nature of the copyrighted work;

    (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

    (4) the effect of the use upon the potential market for or value of the copyrighted work.

    The fact that a work is unpublished shall not itself bar a finding of fair use if such finding is made upon consideration of all the above factors.

    71

    17 U.S.C. § 107.

    72

    We must be flexible in applying a fair use analysis; it "is not to be simplified with bright-line rules, for the statute, like the doctrine it recognizes, calls for case-by-case analysis.... Nor may the four statutory factors be treated in isolation, one from another. All are to be explored, and the results weighed together, in light of the purposes of copyright." Campbell, 510 U.S. at 577-78, 114 S.Ct. 1164; see also Kelly, 336 F.3d at 817-18. The purpose of copyright law is "[t]o promote the Progress of Science and useful Arts," U.S. CONST. art. I, § 8, cl. 8, and to serve "`the welfare of the public.'" Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 429 n. 10, 104 S.Ct. 774, 78 L.Ed.2d 574 (quoting H.R.Rep. No. 2222, 60th Cong., 2d Sess. 7 (1909)).

    73

    [1164] In applying the fair use analysis in this case, we are guided by Kelly v. Arriba Soft Corp., which considered substantially the same use of copyrighted photographic images as is at issue here. See 336 F.3d 811. In Kelly, a photographer brought a direct infringement claim against Arriba, the operator of an Internet search engine. The search engine provided thumbnail versions of the photographer's images in response to search queries. Id. at 815-16. We held that Arriba's use of thumbnail images was a fair use primarily based on the transformative nature of a search engine and its benefit to the public. Id. at 818-22. We also concluded that Arriba's use of the thumbnail images did not harm the photographer's market for his image. Id. at 821-22.

    74

    In this case, the district court determined that Google's use of thumbnails was not a fair use and distinguished Kelly. Perfect 10, 416 F.Supp.2d at 845-51. We consider these distinctions in the context of the four-factor fair use analysis.

    75

    Purpose and character of the use. The first factor, 17 U.S.C. § 107(1), requires a court to consider "the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes." The central purpose of this inquiry is to determine whether and to what extent the new work is "transformative." Campbell, 510 U.S. at 579, 114 S.Ct. 1164. A work is "transformative" when the new work does not "merely supersede the objects of the original creation" but rather "adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message." Id. (internal quotation and alteration omitted). Conversely, if the new work "supersede[s] the use of the original," the use is likely not a fair use. Harper & Row Publishers, Inc. v. Nation Enters., 471 U.S. 539, 550-51, 105 S.Ct. 2218, 85 L.Ed.2d 588 (1985) (internal quotation omitted) (publishing the "heart" of an unpublished work and thus supplanting the copyright holder's first publication right was not a fair use); see also Wall Data Inc. v. L.A. County Sheriff's Dep't, 447 F.3d 769, 778-82 (9th Cir.2006) (using a copy to save the cost of buying additional copies of a computer program was not a fair use).[8]

    76

    As noted in Campbell, a "transformative work" is one that alters the original work [1165] "with new expression, meaning, or message." Campbell, 510 U.S. at 579, 114 S.Ct. 1164. "A use is considered transformative only where a defendant changes a plaintiff's copyrighted work or uses the plaintiff's copyrighted work in a different context such that the plaintiff's work is transformed into a new creation." Wall Data, 447 F.3d at 778.

    77

    Google's use of thumbnails is highly transformative. In Kelly, we concluded that Arriba's use of thumbnails was transformative because "Arriba's use of the images serve[d] a different function than Kelly's use—improving access to information on the [I]nternet versus artistic expression." Kelly, 336 F.3d at 819. Although an image may have been created originally to serve an entertainment, aesthetic, or informative function, a search engine transforms the image into a pointer directing a user to a source of information. Just as a "parody has an obvious claim to transformative value" because "it can provide social benefit, by shedding light on an earlier work, and, in the process, creating a new one," Campbell, 510 U.S. at 579, 114 S.Ct. 1164, a search engine provides social benefit by incorporating an original work into a new work, namely, an electronic reference tool. Indeed, a search engine may be more transformative than a parody because a search engine provides an entirely new use for the original work, while a parody typically has the same entertainment purpose as the original work. See, e.g., id. at 594-96, 114 S.Ct. 1164 (holding that 2 Live Crew's parody of "Oh, Pretty Woman" using the words "hairy woman" or "bald headed woman" was a transformative work, and thus constituted a fair use); Mattel, Inc. v. Walking Mountain Prods., 353 F.3d 792, 796-98, 800-06 (9th Cir.2003) (concluding that photos parodying Barbie by depicting "nude Barbie dolls juxtaposed with vintage kitchen appliances" was a fair use). In other words, a search engine puts images "in a different context" so that they are "transformed into a new creation." Wall Data, 447 F.3d at 778.

    78

    The fact that Google incorporates the entire Perfect 10 image into the search engine results does not diminish the transformative nature of Google's use. As the district court correctly noted, Perfect 10, 416 F.Supp.2d at 848-49, we determined in Kelly that even making an exact copy of a work may be transformative so long as the copy serves a different function than the original work, Kelly, 336 F.3d at 818-19. For example, the First Circuit has held that the republication of photos taken for a modeling portfolio in a newspaper was transformative because the photos served to inform, as well as entertain. See Nunez v. Caribbean Int'l News Corp., 235 F.3d 18, 22-23 (1st Cir.2000). In contrast, duplicating a church's religious book for use by a different church was not transformative. See Worldwide Church of God v. Phila. Church of God, Inc., 227 F.3d 1110, 1117 (9th Cir.2000). Nor was a broadcaster's simple retransmission of a radio broadcast over telephone lines transformative, where the original radio shows were given no "new expression, meaning, or message." Infinity Broad. Corp. v. Kirkwood, 150 F.3d 104, 108 (2d Cir.1998). Here, Google uses Perfect 10's images in a new context to serve a different purpose.

    79

    The district court nevertheless determined that Google's use of thumbnail images was less transformative than Arriba's use of thumbnails in Kelly because Google's use of thumbnails superseded Perfect 10's right to sell its reduced-size images for use on cell phones. See Perfect 10, 416 F.Supp.2d at 849. The district court stated that "mobile users can download and save the thumbnails displayed by Google Image Search onto their phones," and concluded "to the extent that users may choose to download free images to their [1166] phone rather than purchase [Perfect 10's] reduced-size images, Google's use supersedes [Perfect 10's]." Id.

    80

    Additionally, the district court determined that the commercial nature of Google's use weighed against its transformative nature. Id. Although Kelly held that the commercial use of the photographer's images by Arriba's search engine was less exploitative than typical commercial use, and thus weighed only slightly against a finding of fair use, Kelly, 336 F.3d at 818-20, the district court here distinguished Kelly on the ground that some website owners in the AdSense program had infringing Perfect 10 images on their websites, Perfect 10, 416 F.Supp.2d at 846-47. The district court held that because Google's thumbnails "lead users to sites that directly benefit Google's bottom line," the AdSense program increased the commercial nature of Google's use of Perfect 10's images. Id. at 847.

    81

    In conducting our case-specific analysis of fair use in light of the purposes of copyright, Campbell, 510 U.S. at 581, 114 S.Ct. 1164, we must weigh Google's superseding and commercial uses of thumbnail images against Google's significant transformative use, as well as the extent to which Google's search engine promotes the purposes of copyright and serves the interests of the public. Although the district court acknowledged the "truism that search engines such as Google Image Search provide great value to the public," Perfect 10, 416 F.Supp.2d at 848-49, the district court did not expressly consider whether this value outweighed the significance of Google's superseding use or the commercial nature of Google's use. Id. at 849. The Supreme Court, however, has directed us to be mindful of the extent to which a use promotes the purposes of copyright and serves the interests of the public. See Campbell, 510 U.S. at 579, 114 S.Ct. 1164; Harper & Row, 471 U.S. at 556-57, 105 S.Ct. 2218; Sony, 464 U.S. at 431-32, 104 S.Ct. 774.

    82

    We note that the superseding use in this case is not significant at present: the district court did not find that any downloads for mobile phone use had taken place. See Perfect 10, 416 F.Supp.2d at 849. Moreover, while Google's use of thumbnails to direct users to AdSense partners containing infringing content adds a commercial dimension that did not exist in Kelly, the district court did not determine that this commercial element was significant. See id. at 848-49. The district court stated that Google's AdSense programs as a whole contributed "$630 million, or 46% of total revenues" to Google's bottom line, but noted that this figure did not "break down the much smaller amount attributable to websites that contain infringing content." Id. at 847 & n. 12 (internal quotation omitted).

    83

    We conclude that the significantly transformative nature of Google's search engine, particularly in light of its public benefit, outweighs Google's superseding and commercial uses of the thumbnails in this case. In reaching this conclusion, we note the importance of analyzing fair use flexibly in light of new circumstances. Sony, 464 U.S. at 431-32, 104 S.Ct. 774; id. at 448 n. 31, 104 S.Ct. 774 ("`[Section 107] endorses the purpose and general scope of the judicial doctrine of fair use, but there is no disposition to freeze the doctrine in the statute, especially during a period of rapid technological change.'" (quoting H.R.Rep. No. 94-1476, p. 65-66 (1976), U.S.Code Cong. & Admin. News 1976, p. 5680)). We are also mindful of the Supreme Court's direction that "the more transformative the new work, the less will be the significance of other factors, like commercialism, that may weigh against a finding of fair use." Campbell, 510 U.S. at 579, 114 S.Ct. 1164.

    84

    [1167] Accordingly, we disagree with the district court's conclusion that because Google's use of the thumbnails could supersede Perfect 10's cell phone download use and because the use was more commercial than Arriba's, this fair use factor weighed "slightly" in favor of Perfect 10. Perfect 10, 416 F.Supp.2d at 849. Instead, we conclude that the transformative nature of Google's use is more significant than any incidental superseding use or the minor commercial aspects of Google's search engine and website. Therefore, this factor weighs heavily in favor of Google.

    85

    The nature of the copyrighted work. With respect to the second factor, "the nature of the copyrighted work," 17 U.S.C. § 107(2), our decision in Kelly is directly on point. There we held that the photographer's images were "creative in nature" and thus "closer to the core of intended copyright protection than are more fact-based works." Kelly, 336 F.3d at 820 (internal quotation omitted). However, because the photos appeared on the Internet before Arriba used thumbnail versions in its search engine results, this factor weighed only slightly in favor of the photographer. Id.

    86

    Here, the district court found that Perfect 10's images were creative but also previously published. Perfect 10, 416 F.Supp.2d at 850. The right of first publication is "the author's right to control the first public appearance of his expression." Harper & Row, 471 U.S. at 564, 105 S.Ct. 2218. Because this right encompasses "the choices of when, where, and in what form first to publish a work," id., an author exercises and exhausts this one-time right by publishing the work in any medium. See, e.g., Batjac Prods. Inc. v. Good-Times Home Video Corp., 160 F.3d 1223, 1235 (9th Cir.1998) (noting, in the context of the common law right of first publication, that such a right "does not entail multiple first publication rights in every available medium"). Once Perfect 10 has exploited this commercially valuable right of first publication by putting its images on the Internet for paid subscribers, Perfect 10 is no longer entitled to the enhanced protection available for an unpublished work. Accordingly the district court did not err in holding that this factor weighed only slightly in favor of Perfect 10.[9] See Perfect 10, 416 F.Supp.2d at 849-50.

    87

    The amount and substantiality of the portion used. "The third factor asks whether the amount and substantiality of the portion used in relation to the copyrighted work as a whole ... are reasonable in relation to the purpose of the copying." Campbell, 510 U.S. at 586, 114 S.Ct. 1164 (internal quotation omitted); see also 17 U.S.C. § 107(3). In Kelly, we held Arriba's use of the entire photographic image was reasonable in light of the purpose of a search engine. Kelly, 336 F.3d at 821. Specifically, we noted, "[i]t was necessary for Arriba to copy the entire image to allow users to recognize the image and decide whether to pursue more information about the image or the originating [website]. If Arriba only copied part of the image, it would be more difficult to identify it, thereby reducing the usefulness of the visual search engine." Id. Accordingly, we concluded that this factor did not weigh in favor of either [1168] party. Id. Because the same analysis applies to Google's use of Perfect 10's image, the district court did not err in finding that this factor favored neither party.

    88

    Effect of use on the market. The fourth factor is "the effect of the use upon the potential market for or value of the copyrighted work." 17 U.S.C. § 107(4). In Kelly, we concluded that Arriba's use of the thumbnail images did not harm the market for the photographer's full-size images. See Kelly, 336 F.3d at 821-22. We reasoned that because thumbnails were not a substitute for the full-sized images, they did not harm the photographer's ability to sell or license his full-sized images. Id. The district court here followed Kelly's reasoning, holding that Google's use of thumbnails did not hurt Perfect 10's market for full-size images. See Perfect 10, 416 F.Supp.2d at 850-51. We agree.

    89

    Perfect 10 argues that the district court erred because the likelihood of market harm may be presumed if the intended use of an image is for commercial gain. However, this presumption does not arise when a work is transformative because "market substitution is at least less certain, and market harm may not be so readily inferred." Campbell, 510 U.S. at 591, 114 S.Ct. 1164. As previously discussed, Google's use of thumbnails for search engine purposes is highly transformative, and so market harm cannot be presumed.

    90

    Perfect 10 also has a market for reduced-size images, an issue not considered in Kelly. The district court held that "Google's use of thumbnails likely does harm the potential market for the downloading of [Perfect 10's] reduced-size images onto cell phones." Perfect 10, 416 F.Supp.2d at 851 (emphasis omitted). The district court reasoned that persons who can obtain Perfect 10 images free of charge from Google are less likely to pay for a download, and the availability of Google's thumbnail images would harm Perfect 10's market for cell phone downloads. Id. As we discussed above, the district court did not make a finding that Google users have downloaded thumbnail images for cell phone use. This potential harm to Perfect 10's market remains hypothetical. We conclude that this factor favors neither party.

    91

    Having undertaken a case-specific analysis of all four factors, we now weigh these factors together "in light of the purposes of copyright." Campbell, 510 U.S. at 578, 114 S.Ct. 1164; see also Kelly, 336 F.3d at 818 ("We must balance[the section 107] factors in light of the objectives of copyright law, rather than view them as definitive or determinative tests."). In this case, Google has put Perfect 10's thumbnail images (along with millions of other thumbnail images) to a use fundamentally different than the use intended by Perfect 10. In doing so, Google has provided a significant benefit to the public. Weighing this significant transformative use against the unproven use of Google's thumbnails for cell phone downloads, and considering the other fair use factors, all in light of the purpose of copyright, we conclude that Google's use of Perfect 10's thumbnails is a fair use. Because the district court here "found facts sufficient to evaluate each of the statutory factors ... [we] need not remand for further factfinding." Harper & Row, 471 U.S. at 560, 105 S.Ct. 2218 (internal quotation omitted). We conclude that Google is likely to succeed in proving its fair use defense and, accordingly, we vacate the preliminary injunction regarding Google's use of thumbnail images.

    92
    IV
    93
    Secondary Liability for Copyright Infringement
    94

    We now turn to the district court's ruling that Google is unlikely to be secondarily [1169] liable for its in-line linking to infringing full-size images under the doctrines of contributory and vicarious infringement.[10] The district court ruled that Perfect 10 did not have a likelihood of proving success on the merits of either its contributory infringement or vicarious infringement claims with respect to the full-size images. See Perfect 10, 416 F.Supp.2d at 856, 858. In reviewing the district court's conclusions, we are guided by the Supreme Court's recent interpretation of secondary liability, namely: "[o]ne infringes contributorily by intentionally inducing or encouraging direct infringement, and infringes vicariously by profiting from direct infringement while declining to exercise a right to stop or limit it." Grokster, 545 U.S. at 930, 125 S.Ct. 2764 (internal citations omitted).

    95

    Direct Infringement by Third Parties. As a threshold matter, before we examine Perfect 10's claims that Google is secondarily liable, Perfect 10 must establish that there has been direct infringement by third parties. See Napster, 239 F.3d at 1013 n. 2 ("Secondary liability for copyright infringement does not exist in the absence of direct infringement by a third party.").

    96

    Perfect 10 alleges that third parties directly infringed its images in three ways. First, Perfect 10 claims that third-party websites directly infringed its copyright by reproducing, displaying, and distributing unauthorized copies of Perfect 10's images. Google does not dispute this claim on appeal.

    97

    Second, Perfect 10 claims that individual users of Google's search engine directly infringed Perfect 10's copyrights by storing full-size infringing images on their computers. We agree with the district court's conclusion that Perfect 10 failed to provide sufficient evidence to support this claim. See Perfect 10, 416 F.Supp.2d at 852. There is no evidence in the record directly establishing that users of Google's search engine have stored infringing images on their computers, and the district court did not err in declining to infer the existence of such evidence.

    98

    Finally, Perfect 10 contends that users who link to infringing websites automatically make "cache" copies of full-size images and thereby directly infringe Perfect 10's reproduction right. The district court rejected this argument, holding that any such reproduction was likely a "fair use." Id. at 852 n. 17. The district court reasoned that "[l]ocal caching by the browsers of individual users is noncommercial, transformative, and no more than necessary to achieve the objectives of decreasing network latency and minimizing unnecessary bandwidth usage (essential to the [I]nternet). It has a minimal impact on the potential market for the original work...." Id. We agree; even assuming such automatic copying could constitute direct infringement, it is a fair use in this context. The copying function performed automatically by a user's computer to assist in accessing the Internet is a transformative use. Moreover, as noted by the district court, a cache copies no more than is necessary to assist the user in Internet use. It is designed to enhance an individual's computer use, not to supersede the copyright holders' exploitation of their works. Such automatic background copying has no more than a minimal effect on Perfect 10's rights, but a considerable public benefit. Because the four fair use factors weigh in favor of concluding that [1170] cache copying constitutes a fair use, Google has established a likelihood of success on this issue. Accordingly, Perfect 10 has not carried its burden of showing that users' cache copies of Perfect 10's full-size images constitute direct infringement.

    99

    Therefore, we must assess Perfect 10's arguments that Google is secondarily liable in light of the direct infringement that is undisputed by the parties: third-party websites' reproducing, displaying, and distributing unauthorized copies of Perfect 10's images on the Internet. Id. at 852.

    100
    A. Contributory Infringement
    101

    In order for Perfect 10 to show it will likely succeed in its contributory liability claim against Google, it must establish that Google's activities meet the definition of contributory liability recently enunciated in Grokster. Within the general rule that "[o]ne infringes contributorily by intentionally inducing or encouraging direct infringement," Grokster, 545 U.S. at 930, 125 S.Ct. 2764, the Court has defined two categories of contributory liability: "Liability under our jurisprudence may be predicated on actively encouraging (or inducing) infringement through specific acts (as the Court's opinion develops) or on distributing a product distributees use to infringe copyrights, if the product is not capable of `substantial' or `commercially significant' noninfringing uses." Id. at 942, 125 S.Ct. 2764 (Ginsburg, J., concurring) (quoting Sony, 464 U.S. at 442, 104 S.Ct. 774); see also id. at 936-37, 125 S.Ct. 2764.

    102

    Looking at the second category of liability identified by the Supreme Court (distributing products), Google relies on Sony, 464 U.S. at 442, 104 S.Ct. 774, to argue that it cannot be held liable for contributory infringement because liability does not arise from the mere sale of a product (even with knowledge that consumers would use the product to infringe) if the product is capable of substantial non-infringing use. Google argues that its search engine service is such a product. Assuming the principle enunciated in Sony is applicable to the operation of Google's search engine, then Google cannot be held liable for contributory infringement solely because the design of its search engine facilitates such infringement. Grokster, 545 U.S. at 931-32, 125 S.Ct. 2764 (discussing Sony, 464 U.S. 417, 104 S.Ct. 774, 78 L.Ed.2d 574). Nor can Google be held liable solely because it did not develop technology that would enable its search engine to automatically avoid infringing images. See id. at 939 n. 12, 125 S.Ct. 2764. However, Perfect 10 has not based its claim of infringement on the design of Google's search engine and the Sony rule does not immunize Google from other sources of contributory liability. See id. at 933-34, 125 S.Ct. 2764.

    103

    We must next consider whether Google could be held liable under the first category of contributory liability identified by the Supreme Court, that is, the liability that may be imposed for intentionally encouraging infringement through specific acts.[11] Grokster tells us that contribution to infringement must be intentional for liability to arise. Grokster, 545 U.S. at 930, 125 S.Ct. 2764. However, Grokster also directs us to analyze contributory liability in light of "rules of fault-based liability derived from the common law," id. at 934-35, 125 S.Ct. 2764, and [1171] common law principles establish that intent may be imputed. "Tort law ordinarily imputes to an actor the intention to cause the natural and probable consequences of his conduct." DeVoto v. Pac. Fid. Life Ins. Co., 618 F.2d 1340, 1347 (9th Cir. 1980); RESTATEMENT (SECOND) OF TORTS § 8A cmt. b (1965) ("If the actor knows that the consequences are certain, or substantially certain, to result from his act, and still goes ahead, he is treated by the law as if he had in fact desired to produce the result."). When the Supreme Court imported patent law's "staple article of commerce doctrine" into the copyright context, it also adopted these principles of imputed intent. Grokster, 545 U.S. at 932, 125 S.Ct. 2764 ("The [staple article of commerce] doctrine was devised to identify instances in which it may be presumed from distribution of an article in commerce that the distributor intended the article to be used to infringe another's patent, and so may justly be held liable for that infringement."). Therefore, under Grokster, an actor may be contributorily liable for intentionally encouraging direct infringement if the actor knowingly takes steps that are substantially certain to result in such direct infringement.

    104

    Our tests for contributory liability are consistent with the rule set forth in Grokster. We have adopted the general rule set forth in Gershwin Publishing Corp. v. Columbia Artists Management, Inc., namely: "one who, with knowledge of the infringing activity, induces, causes or materially contributes to the infringing conduct of another, may be held liable as a `contributory' infringer," 443 F.2d 1159, 1162 (2d Cir.1971). See Ellison, 357 F.3d at 1076; Napster, 239 F.3d at 1019; Fonovisa, Inc. v. Cherry Auction, Inc., 76 F.3d 259, 264 (9th Cir.1996).

    105

    We have further refined this test in the context of cyberspace[12] to determine when contributory liability can be imposed on a provider of Internet access or services. See Napster, 239 F.3d at 1019-20. In Napster, we considered claims that the operator of an electronic file sharing system was contributorily liable for assisting individual users to swap copyrighted music files stored on their home computers with other users of the system. Napster, 239 F.3d at 1011-13, 1019-22. We stated that "if a computer system operator learns of specific infringing material available on his system and fails to purge such material from the system, the operator knows of and contributes to direct infringement." Id. at 1021. Because Napster knew of the availability of infringing music files, assisted users in accessing such files, and failed to block access to such files, we concluded that Napster materially contributed to infringement. Id. at 1022.

    106

    The Napster test for contributory liability was modeled on the influential district court decision in Religious Technology Center v. Netcom On-Line Communication Services, Inc. (Netcom), 907 F.Supp. 1361, 1365-66 (N.D.Cal.1995). See Napster, 239 F.3d at 1021. In Netcom, a disgruntled former Scientology minister posted allegedly infringing copies of Scientological works on an electronic bulletin board service. Netcom, 907 F.Supp. at 1365-66. The messages were stored on the bulletin board operator's computer, then automatically copied onto Netcom's computer, and from there copied onto other computers comprising "a worldwide community" of electronic bulletin board systems. Id. at 1366-67 & n. 4 (internal quotation omitted). Netcom held that if plaintiffs [1172] could prove that Netcom knew or should have known that the minister infringed plaintiffs' copyrights, "Netcom [would] be liable for contributory infringement since its failure to simply cancel [the former minister's] infringing message and thereby stop an infringing copy from being distributed worldwide constitute[d] substantial participation in [the former minister's] public distribution of the message." Id. at 1374.

    107

    Although neither Napster nor Netcom expressly required a finding of intent, those cases are consistent with Grokster because both decisions ruled that a service provider's knowing failure to prevent infringing actions could be the basis for imposing contributory liability. Under such circumstances, intent may be imputed. In addition, Napster and Netcom are consistent with the longstanding requirement that an actor's contribution to infringement must be material to warrant the imposition of contributory liability. Gershwin, 443 F.2d at 1162. Both Napster and Netcom acknowledge that services or products that facilitate access to websites throughout the world can significantly magnify the effects of otherwise immaterial infringing activities. See Napster, 239 F.3d at 1022; Netcom, 907 F.Supp. at 1375. The Supreme Court has acknowledged that "[t]he argument for imposing indirect liability" is particularly "powerful" when individuals using the defendant's software could make a huge number of infringing downloads every day. Grokster, 545 U.S. at 929, 125 S.Ct. 2764. Moreover, copyright holders cannot protect their rights in a meaningful way unless they can hold providers of such services or products accountable for their actions pursuant to a test such as that enunciated in Napster. See id. at 929-30, 125 S.Ct. 2764 ("When a widely shared service or product is used to commit infringement, it may be impossible to enforce rights in the protected work effectively against all direct infringers, the only practical alternative being to go against the distributor of the copying device for secondary liability on a theory of contributory or vicarious infringement."). Accordingly, we hold that a computer system operator can be held contributorily liable if it "has actual knowledge that specific infringing material is available using its system," Napster, 239 F.3d at 1022, and can "take simple measures to prevent further damage" to copyrighted works, Netcom, 907 F.Supp. at 1375, yet continues to provide access to infringing works.

    108

    Here, the district court held that even assuming Google had actual knowledge of infringing material available on its system, Google did not materially contribute to infringing conduct because it did not undertake any substantial promotional or advertising efforts to encourage visits to infringing websites, nor provide a significant revenue stream to the infringing websites. Perfect 10, 416 F.Supp.2d at 854-56. This analysis is erroneous. There is no dispute that Google substantially assists websites to distribute their infringing copies to a worldwide market and assists a worldwide audience of users to access infringing materials. We cannot discount the effect of such a service on copyright owners, even though Google's assistance is available to all websites, not just infringing ones. Applying our test, Google could be held contributorily liable if it had knowledge that infringing Perfect 10 images were available using its search engine, could take simple measures to prevent further damage to Perfect 10's copyrighted works, and failed to take such steps.

    109

    The district court did not resolve the factual disputes over the adequacy of Perfect 10's notices to Google and Google's responses to these notices. Moreover, there are factual disputes over whether there are reasonable and feasible means for Google to refrain from providing access [1173] to infringing images. Therefore, we must remand this claim to the district court for further consideration whether Perfect 10 would likely succeed in establishing that Google was contributorily liable for in-line linking to full-size infringing images under the test enunciated today.[13]

    110
    B. Vicarious Infringement
    111

    Perfect 10 also challenges the district court's conclusion that it is not likely to prevail on a theory of vicarious liability against Google. Perfect 10, 416 F.Supp.2d at 856-58. Grokster states that one "infringes vicariously by profiting from direct infringement while declining to exercise a right to stop or limit it." Grokster, 545 U.S. at 930, 125 S.Ct. 2764. As this formulation indicates, to succeed in imposing vicarious liability, a plaintiff must establish that the defendant exercises the requisite control over the direct infringer and that the defendant derives a direct financial benefit from the direct infringement. See id. Grokster further explains the "control" element of the vicarious liability test as the defendant's "right and ability to supervise the direct infringer." Id. at 930 n. 9, 125 S.Ct. 2764. Thus, under Grokster, a defendant exercises control over a direct infringer when he has both a legal right to stop or limit the directly infringing conduct, as well as the practical ability to do so.

    112

    We evaluate Perfect 10's arguments that Google is vicariously liable in light of the direct infringement that is undisputed by the parties, namely, the third-party websites' reproduction, display, and distribution of unauthorized copies of Perfect 10's images on the Internet. Perfect 10, 416 F.Supp.2d at 852; see supra Section IV.A. In order to prevail at this preliminary injunction stage, Perfect 10 must demonstrate a likelihood of success in establishing that Google has the right and ability to stop or limit the infringing activities of third party websites. In addition, Perfect 10 must establish a likelihood of proving that Google derives a direct financial benefit from such activities. Perfect 10 has not met this burden.

    113

    With respect to the "control" element set forth in Grokster, Perfect 10 has not demonstrated a likelihood of showing that Google has the legal right to stop or limit the direct infringement of third-party websites. See Grokster, 545 U.S. at 930, 125 S.Ct. 2764. Unlike Fonovisa, where by virtue of a "broad contract" with its vendors the defendant swap meet operators had the right to stop the vendors from selling counterfeit recordings on its premises, Fonovisa, 76 F.3d at 263, Perfect 10 has not shown that Google has contracts with third-party websites that empower Google to stop or limit them from reproducing, displaying, and distributing infringing copies of Perfect 10's images on the Internet. Perfect 10 does point to Google's AdSense agreement, which states that Google reserves "the right to monitor and terminate partnerships with entities that violate others' copyright[s]." Perfect 10, 416 F.Supp.2d at 858. However, Google's right to terminate an AdSense partnership does not give Google the right to [1174] stop direct infringement by third-party websites. An infringing third-party website can continue to reproduce, display, and distribute its infringing copies of Perfect 10 images after its participation in the AdSense program has ended.

    114

    Nor is Google similarly situated to Napster. Napster users infringed the plaintiffs' reproduction and distribution rights through their use of Napster's proprietary music-file sharing system. Napster, 239 F.3d at 1011-14. There, the infringing conduct was the use of Napster's "service to download and upload copyrighted music." Id. at 1014 (internal quotation omitted). Because Napster had a closed system requiring user registration, and could terminate its users' accounts and block their access to the Napster system, Napster had the right and ability to prevent its users from engaging in the infringing activity of uploading file names and downloading Napster users' music files through the Napster system.[14] Id. at 1023-24. By contrast, Google cannot stop any of the third-party websites from reproducing, displaying, and distributing unauthorized copies of Perfect 10's images because that infringing conduct takes place on the third-party websites. Google cannot terminate those third-party websites or block their ability to "host and serve infringing full-size images" on the Internet. Perfect 10, 416 F.Supp.2d at 831.

    115

    Moreover, the district court found that Google lacks the practical ability to police the third-party websites' infringing conduct. Id. at 857-58. Specifically, the court found that Google's supervisory power is limited because "Google's software lacks the ability to analyze every image on the [I]nternet, compare each image to all the other copyrighted images that exist in the world ... and determine whether a certain image on the web infringes someone's copyright." Id. at 858. The district court also concluded that Perfect 10's suggestions regarding measures Google could implement to prevent its web crawler from indexing infringing websites and to block access to infringing images were not workable. Id. at 858 n. 25. Rather, the suggestions suffered from both "imprecision and overbreadth." Id. We hold that these findings are not clearly erroneous. Without image-recognition technology, Google lacks the practical ability to police the infringing activities of third-party websites. This distinguishes Google from the defendants held liable in Napster and Fonovisa. See Napster, 239 F.3d at 1023-24 (Napster had the ability to identify and police infringing conduct by searching its index for song titles); Fonovisa, 76 F.3d at 262 (swap meet operator had the ability to identify and police infringing activity by patrolling its premises).

    116

    Perfect 10 argues that Google could manage its own operations to avoid [1175] indexing websites with infringing content and linking to third-party infringing sites. This is a claim of contributory liability, not vicarious liability. Although "the lines between direct infringement, contributory infringement, and vicarious liability are not clearly drawn," Sony, 464 U.S. at 435 n. 17, 104 S.Ct. 774 (internal quotation omitted), in general, contributory liability is based on the defendant's failure to stop its own actions which facilitate third-party infringement, while vicarious liability is based on the defendant's failure to cause a third party to stop its directly infringing activities. See, e.g., Ellison, 357 F.3d at 1077-78; Fonovisa, 76 F.3d at 261-64. Google's failure to change its operations to avoid assisting websites to distribute their infringing content may constitute contributory liability, see supra Section IV.A. However, this failure is not the same as declining to exercise a right and ability to make third-party websites stop their direct infringement. We reject Perfect 10's efforts to blur this distinction.

    117

    Because we conclude that Perfect 10 has not shown a likelihood of establishing Google's right and ability to stop or limit the directly infringing conduct of third-party websites, we agree with the district court's conclusion that Perfect 10 "has not established a likelihood of proving the [control] prong necessary for vicarious liability." Perfect 10, 416 F.Supp.2d at 858.[15]

    118
    C. Digital Millennium Copyright Act
    119

    Google claims that it qualifies for the limitations on liability set forth in title II of the DMCA, 17 U.S.C. § 512. In particular, section 512(d) limits the liability of a service provider "for infringement of copyright by reason of the provider referring or linking users to an online location containing infringing material or infringing activity, by using information location tools, including a directory, index, reference, pointer, or hypertext link" if the service provider meets certain criteria. We have held that the limitations on liability contained in 17 U.S.C. § 512 protect secondary infringers as well as direct infringers. Napster, 239 F.3d at 1025.

    120

    The parties dispute whether Google meets the specified criteria. Perfect 10 claims that it sent qualifying notices to Google and Google did not act expeditiously to remove the infringing material. Google claims that Perfect 10's notices did not comply with the notice provisions of section 512 and were not adequate to inform Google of the location of the infringing images on the Internet or identify the underlying copyrighted work. Google also claims that it responded to all notices it received by investigating the webpages identified by Perfect 10 and suppressing links to any webpages that Google confirmed were infringing.

    121

    Because the district court determined that Perfect 10 was unlikely to succeed on its contributory and vicarious liability claims, it did not reach Google's arguments under section 512. In revisiting the question of Perfect 10's likelihood of success on its contributory infringement claims, the district court should also consider whether Google would likely succeed in showing that it was entitled to the limitations on injunctive relief provided by title II of the DMCA.

    122
    V
    123
    Amazon.com
    124

    Perfect 10 claims that Amazon.com displays and distributes Perfect 10's copyrighted images and is also secondarily [1176] liable for the infringements of third-party websites and Amazon.com users. The district court concluded that Perfect 10 was unlikely to succeed in proving that Amazon.com was a direct infringer, because it merely in-line linked to the thumbnails on Google's servers and to the full-size images on third-party websites.[16] Perfect 10 v. Amazon, No. 05-4753, consolidated with 04-9484 (C.D.Cal. February 21, 2006) (order denying preliminary injunction). In addition, the district court concluded that Perfect 10's secondary infringement claims against Amazon.com were likely to fail because Amazon.com had no program analogous to AdSense, and thus did not provide any revenues to infringing sites. Id. Finally, the district court determined that Amazon.com's right and ability to control the infringing conduct of third-party websites was substantially less than Google's. Id. Therefore, the district court denied Perfect 10's motion for a preliminary injunction against Amazon.com. Id.

    125

    We agree that Perfect 10 has not shown a likelihood that it would prevail on the merits of its claim that Amazon.com directly infringed its images. Amazon.com communicates to its users only the HTML instructions that direct the users' browsers to Google's computers (for thumbnail images) or to a third party's computer (for full-size infringing images). Therefore, Amazon.com does not display or distribute a copy of the thumbnails or full-size images to its users.

    126

    We also agree with the district court's conclusion that Amazon.com does not have "the right and ability to supervise the infringing activity" of Google or third parties. The district court did not clearly err in concluding that Amazon.com lacked a direct financial interest in such activities. Therefore, Perfect 10's claim that Amazon.com is vicariously liable for third-party infringement is unlikely to succeed.

    127

    However, the district court did not consider whether Amazon.com had "actual knowledge that specific infringing material is available using its system," Napster, 239 F.3d at 1022 (emphasis in original), and could have "take[n] simple measures to prevent further damage" to copyrighted works, Netcom, 907 F.Supp. at 1375, yet continued to provide access to infringing works. Perfect 10 has presented evidence that it notified Amazon.com that it was facilitating its users' access to infringing material. It is disputed whether the notices gave Amazon.com actual knowledge of specific infringing activities available using its system, and whether Amazon.com could have taken reasonable and feasible steps to refrain from providing access to such images, but failed to do so. Nor did the district court consider whether Amazon.com is entitled to limit its liability under title II of the DMCA. On remand, the district court should consider Amazon.com's potential contributory liability, as well as possible limitations on the scope of injunctive relief, in light of our rulings today.

    128
    VI
    129

    We conclude that Google's fair use defense is likely to succeed at trial, and therefore we reverse the district court's determination that Google's thumbnail versions of Perfect 10's images likely constituted a direct infringement. The district court also erred in its secondary liability [1177] analysis because it failed to consider whether Google and Amazon.com knew of infringing activities yet failed to take reasonable and feasible steps to refrain from providing access to infringing images. Therefore we must also reverse the district court's holding that Perfect 10 was unlikely to succeed on the merits of its secondary liability claims. Due to this error, the district court did not consider whether Google and Amazon.com are entitled to the limitations on liability set forth in title II of the DMCA. The question whether Google and Amazon.com are secondarily liable, and whether they can limit that liability pursuant to title II of the DMCA, raise fact-intensive inquiries, potentially requiring further fact finding, and thus can best be resolved by the district court on remand. We therefore remand this matter to the district court for further proceedings consistent with this decision.

    130

    Because the district court will need to reconsider the appropriate scope of injunctive relief after addressing these secondary liability issues, we do not address the parties' arguments regarding the scope of the injunction issued by the district court. For the same reason, we do not address the parties' dispute over whether the district court abused its discretion in determining that Perfect 10 satisfied the irreparable harm element of a preliminary injunction.

    131

    Therefore, we reverse the district court's ruling and vacate the preliminary injunction regarding Google's use of thumbnail versions of Perfect 10's images.[17] We reverse the district court's rejection of the claims that Google and Amazon.com are secondarily liable for infringement of Perfect 10's full-size images. We otherwise affirm the rulings of the district court. We remand this matter for further proceedings consistent with this opinion. Each party shall bear its own costs on appeal. See FED. R. APP. P. 39(a)(4).

    132

    AFFIRMED IN PART; REVERSED IN PART; REMANDED.

    133

    [1] Google argues that we lack jurisdiction over the preliminary injunction to the extent it enforces unregistered copyrights. Registration is generally a jurisdictional prerequisite to a suit for copyright infringement. See 17 U.S.C. § 411. But section 411 does not limit the remedies a court can grant. Rather, the Copyright Act gives courts broad authority to issue injunctive relief. See 17 U.S.C. § 502(a). Once a court has jurisdiction over an action for copyright infringement under section 411, the court may grant injunctive relief to restrain infringement of any copyright, whether registered or unregistered. See, e.g., Olan Mills, Inc. v. Linn Photo Co., 23 F.3d 1345, 1349 (8th Cir.1994); Pac. & S. Co., Inc. v. Duncan, 744 F.2d 1490, 1499 n. 17 (11th Cir.1984). Because at least some of the Perfect 10 images at issue were registered, the district court did not err in determining that it could issue an order that covers unregistered works. Therefore, we have jurisdiction over the district court's decision and order.

    134

    [2] The website publisher may not actually store the photographic images used on its webpages in its own computer, but may provide HTML instructions directing the user's browser to some further computer that stores the image. Because this distinction does not affect our analysis, for convenience, we will assume that the website publisher stores all images used on its webpages in the website publisher's own computer.

    135

    [3] Generally, a "cache" is "a computer memory with very short access time used for storage of frequently or recently used instructions or data." United States v. Ziegler, 474 F.3d 1184, 1186 n. 3 (9th Cir.2007) (quoting MERRIAM-WEBSTER'S COLLEGIATE DICTIONARY 171 (11th ed.2003)). There are two types of caches at issue in this case. A user's personal computer has an internal cache that saves copies of webpages and images that the user has recently viewed so that the user can more rapidly revisit these webpages and images. Google's computers also have a cache which serves a variety of purposes. Among other things, Google's cache saves copies of a large number of webpages so that Google's search engine can efficiently organize and index these webpages.

    136

    [4] Perfect 10 argues that we are bound by the language and structure of title II of the DMCA in determining Google's liability for copyright infringement. We have noted that the DMCA does not change copyright law; rather, "Congress provided that [the DMCA's] limitations of liability apply if the provider is found to be liable under existing principles of law." Ellison, 357 F.3d at 1077 (emphasis and internal quotation omitted). As a result, "[c]laims against service providers for direct, contributory, or vicarious copyright infringement, therefore, are generally evaluated just as they would be in the non-online world." Id.; see also 17 U.S.C. § 512(l) ("The failure of a service provider's conduct to qualify for limitation of liability under this section shall not bear adversely upon the consideration of a defense by the service provider that the service provider's conduct is not infringing under this title or any other defense."). Therefore, we must consider Google's potential liability under the Copyright Act without reference to title II of the DMCA.

    137

    [5] 17 U.S.C. § 106 states, in pertinent part:

    138

    Subject to sections 107 through 122, the owner of copyright under this title has the exclusive rights to do and to authorize any of the following:

    (1) to reproduce the copyrighted work in copies or phonorecords;

    ....

    (3) to distribute copies or phonorecords of the copyrighted work to the public by sale or other transfer of ownership, or by rental, lease, or lending;

    ....

    (5) in the case of literary, musical, dramatic, and choreographic works, pantomimes, and pictorial, graphic, or sculptural works, including the individual images of a motion picture or other audiovisual work, to display the copyrighted work publicly....

    139

    [6] Because Google initiates and controls the storage and communication of these thumbnail images, we do not address whether an entity that merely passively owns and manages an Internet bulletin board or similar system violates a copyright owner's display and distribution rights when the users of the bulletin board or similar system post infringing works. Cf. CoStar Group, Inc. v. LoopNet, Inc., 373 F.3d 544 (4th Cir.2004).

    140

    [7] Perfect 10 also argues that Google violates Perfect 10's right to display full-size images because Google's in-line linking meets the Copyright Act's definition of "to perform or display a work `publicly.'" 17 U.S.C. § 101. This phrase means "to transmit or otherwise communicate a performance or display of the work to ... the public, by means of any device or process, whether the members of the public capable of receiving the performance or display receive it in the same place or in separate places and at the same time or at different times." Id. Perfect 10 is mistaken. Google's activities do not meet this definition because Google transmits or communicates only an address which directs a user's browser to the location where a copy of the full-size image is displayed. Google does not communicate a display of the work itself.

    141

    [8] We reject at the outset Perfect 10's argument that providing access to infringing websites cannot be deemed transformative and is inherently not fair use. Perfect 10 relies on Video Pipeline, Inc. v. Buena Vista Home Entm't, Inc., 342 F.3d 191 (3d Cir.2003), and Atari Games Corp. v. Nintendo of Am. Inc., 975 F.2d 832, 843 (Fed.Cir.1992). But these cases, in essence, simply apply the general rule that a party claiming fair use must act in a manner generally compatible with principles of good faith and fair dealing. See Harper & Row, 471 U.S. at 562-63, 105 S.Ct. 2218. For this reason, a company whose business is based on providing scenes from copyrighted movies without authorization could not claim that it provided the same public benefit as the search engine in Kelly. See Video Pipeline, 342 F.3d at 198-200. Similarly, a company whose overriding desire to replicate a competitor's computer game led it to obtain a copy of the competitor's source code from the Copyright Office under false pretenses could not claim fair use with respect to its purloined copy. Atari Games, 975 F.2d at 843.

    142

    Unlike the alleged infringers in Video Pipeline and Atari Games, who intentionally misappropriated the copyright owners' works for the purpose of commercial exploitation, Google is operating a comprehensive search engine that only incidentally indexes infringing websites. This incidental impact does not amount to an abuse of the good faith and fair dealing underpinnings of the fair use doctrine. Accordingly, we conclude that Google's inclusion of thumbnail images derived from infringing websites in its Internet-wide search engine activities does not preclude Google from raising a fair use defense.

    143

    [9] Google contends that Perfect 10's photographic images are less creative and less deserving of protection than the images of the American West in Kelly because Perfect 10 boasts of its un-retouched photos showing the natural beauty of its models. Having reviewed the record, we conclude that the district court's finding that Perfect 10's photographs "consistently reflect professional, skillful, and sometimes tasteful artistry" is not clearly erroneous. Perfect 10, 416 F.Supp.2d at 849 n. 15. We agree with the district court that there is no basis for concluding that photos of the American West are more deserving of protection than photos of nude models. See id.

    144

    [10] Because the district court concluded that Perfect 10 was likely to prevail on its direct infringement claim with respect to Google's use of thumbnails, but not with respect to its in-line linking to full-size images, the district court considered Google's potential secondary liability only on the second issue.

    145

    [11] Google's activities do not meet the "inducement" test explained in Grokster because Google has not promoted the use of its search engine specifically to infringe copyrights. See Grokster, 545 U.S. at 935-37, 125 S.Ct. 2764. However, the Supreme Court in Grokster did not suggest that a court must find inducement in order to impose contributory liability under common law principles.

    146

    [12] "Cyberspace is a popular term for the world of electronic communications over computer networks." Religious Tech. Ctr. v. Netcom On-Line Commc'n Servs., Inc., 907 F.Supp. 1361, 1365 n. 1 (N.D.Cal.1995).

    147

    [13] Perfect 10 claims that Google materially contributed to infringement by linking to websites containing unauthorized passwords, which enabled Google users to access Perfect 10's website and make infringing copies of images. However, Perfect 10 points to no evidence that users logging onto the Perfect 10 site with unauthorized passwords infringed Perfect 10's exclusive rights under section 106. In the absence of evidence that Google's actions led to any direct infringement, this argument does not assist Perfect 10 in establishing that it would prevail on the merits of its contributory liability claim. See Napster, 239 F.3d at 1013 n. 2 ("Secondary liability for copyright infringement does not exist in the absence of direct infringement by a third party.").

    148

    [14] Napster's system included "Napster's MusicShare software, available free of charge from Napster's Internet site, and Napster's network servers and server-side software." Napster, 239 F.3d at 1011. By downloading Napster's MusicShare software to the user's personal computer, and registering with the Napster system, a user could both upload and download music files. Id. at 1011-13. If the Napster user uploaded a list of music files stored on the user's personal computer to the Napster system, such music files would be automatically available to other Napster users whenever the user was logged on to the Napster system. Id. at 1012. In addition, the Napster user could download music files directly from other users' personal computers. Id. We explained the infringing conduct as "Napster users who upload file names to the [Napster] search index for others to copy violate plaintiffs' distribution rights. Napster users who download files [through the Napster system] containing copyrighted music violate plaintiffs' reproduction rights." Id. at 1014.

    149

    [15] Having so concluded, we need not reach Perfect 10's argument that Google received a direct financial benefit.

    150

    [16] Amazon.com states that it ended its relationship with Google on April 30, 2006. Perfect 10's action for preliminary injunction against Amazon.com is not moot, however, because Amazon.com has not established "that the allegedly wrongful behavior cannot reasonably be expected to recur." F.T.C. v. Affordable Media, LLC, 179 F.3d 1228, 1238 (9th Cir.1999) (internal quotation omitted).

    151

    [17] Because we vacate the injunction, Google's motion for stay of the injunction is moot.

  • 3 Gaylord v. United States (2010)

    1

    595 F.3d 1364

    2
    Frank GAYLORD, Plaintiff-Appellant,
    v.
    UNITED STATES, Defendant-Appellee.
    3

    No. 2009-5044.
    United States Court of Appeals, Federal Circuit.
    February 25, 2010.

    4

    [1367] Anthony L. Fletcher, Fish & Richardson P.C., of New York, NY, argued for plaintiff-appellant. On the brief was Heidi E. Harvey, of Boston, MA.

    5

    Scott Bolden, Senior Trial Counsel, Commercial Litigation Branch, Civil Division, United States Department of Justice, of Washington, DC, argued for defendant-appellee. With him on the brief were Tony West, Assistant Attorney General, John J. Fargo, Director. Of counsel on [1368] the brief was Gary L. Hausken, Assistant Director.

    6

    Anthony T. Falzone, Stanford Law School, Center for Internet & Society, of Stanford, CA, for amici curiae Andy Warhol Foundation for the Visual Arts, Inc., et al. With him on the brief were Julie A. Ahrens, and Sarah Hinchliff Pearson. Of counsel on the brief were Zachary Alinder and Erica Brand Portnoy, Bingham McCutchen LLP, of San Francisco, CA.

    7

    Before NEWMAN, MAYER, and MOORE, Circuit Judges.

    8

    Opinion for the court filed by Circuit Judge MOORE. Dissenting opinion filed by Circuit Judge NEWMAN.

    9

    MOORE, Circuit Judge.

    10

    Mr. Frank Gaylord appeals the decision of the United States Court of Federal Claims that a stamp issued by the United States Postal Service made fair use of a copyrighted work, specifically, soldier sculptures in formation constituting part of the Korean War Veterans Memorial (Memorial). The court determined that Mr. Gaylord was the sole author of the soldier sculptures and that his sculptures were not exempt from copyright protection under the Architectural Works Copyright Protection Act (AWCPA). Because the court erred when it determined that the stamp made fair use of Mr. Gaylord's work, but it correctly determined that the government was not a joint author and that the AWCPA did not bar an infringement suit, we affirm-in-part, reverse-in-part, and remand for a determination of damages.

    11
    BACKGROUND
    12

    This case arises from the Postal Service's decision to issue a 37-cent stamp depicting a portion of the Memorial. The path from the concept of the Memorial to the creation of the stamp spans more than 15 years.

    13

    In 1986, Congress enacted legislation to erect a memorial in Washington, D.C. to honor veterans of the Korean War. Authorization of Memorial, Pub.L. No. 99-572, § 1, 100 Stat. 3226 (1986). The legislation authorized the American Battle Monuments Commission (Commission) to establish the Memorial, and the Commission sponsored a contest to select the designer of the Memorial. A team from the Pennsylvania State University (the Penn State Team) won the contest with a proposal to create 38 larger-than-life granite soldiers in formation. According to the Penn State Team, "[f]rom a distance, one [would see] the Memorial as an elusive, dream-like presence of ghostly figures moving across a remote landscape." Although its original concept undoubtedly influenced the design of the Memorial, the Penn State Team eventually withdrew from the project.[1]

    14

    The Army Corps of Engineers selected Cooper-Lecky Architects, P.C. (Cooper-Lecky) as the prime contractor for the creation, construction, and installation of the Memorial. Cooper-Lecky sponsored a competition to select the sculptor for the Memorial. Mr. Gaylord, a nationally recognized sculptor, won the contest.

    15

    In 1990, Mr. Gaylord began work on the project. Although the Penn State Team's proposal called for 38 granite soldiers, "the final design featured 19 stainless steel statues representing a platoon of foot soldiers in formation," referred to as The Column. Gaylord, 85 Fed.Cl. at 63. Mr. Gaylord prepared successively larger models of the soldiers, transforming them [1369] along the way in response to critiques and suggestions by Cooper-Lecky, members of the Korean War Veterans Memorial Advisory Board (VAB), and the Commission on Fine Arts (CFA). Once Mr. Gaylord completed models for the soldiers, they were cast in stainless steel and installed at the site of the Memorial on the National Mall in Washington, D.C. At the suggestion of a member of the VAB, Mr. Gaylord staggered the statues, thereby creating the composition of The Column. Cooper-Lecky, the VAB, and the CFA all participated in incorporating The Column into the Memorial, which also includes landscaping, a mural, and granite plates representing the reflection of rice paddies at the soldiers' feet. A picture of The Column— taken on a sunny day—is below.

    16

    NOTE: OPINION CONTAINING TABLE OR OTHER DATA THAT IS NOT VIEWABLE

    17

    Mr. Gaylord received five copyright registrations relating to the soldier sculptures from 1990 to 1995. Each certificate listed Mr. Gaylord as the sole author. The registrations include pictures of the clay models for the sculptures as they evolved over the years, and eventually, the sculptures themselves. For example, in his November 11, 1993 registration, he described the work as clay "statuettes—fully approved—19 soldiers—National Korean War Veterans Memorial." His August 12, 1994 registration concerned "19 7'-6" tall clay soldiers to be cast in stainless steel for the National Korean War Veterans Memorial on the mall in Washington, D.C." Shortly after the statues were installed, on May 1, 1995, Mr. Gaylord filed a certificate of copyright registration for the soldiers as they appeared before and after casting. This certificate included photographs of the soldiers as installed on the National Mall.

    18

    In 1995, shortly after the Memorial was dedicated, a photographer named John Alli took a photograph of the Memorial as a retirement gift for his father, a veteran of the Korean War. Mr. Alli visited the Memorial on five or six occasions, taking photographs at various times of year and day. One such visit occurred in January 1996 just after a snowstorm. Over the course [1370] of about two hours on that cold winter morning, Mr. Alli took about 100 photographs of the Memorial, including photographs of individual soldiers, from various angles using different exposures and lighting conditions. Mr. Alli selected one of his photographs for his father's retirement gift. The photograph, titled "Real Life," is reproduced below. No one questions that Mr. Alli is entitled to his own copyright protection in his photograph as a derivative work.

    19

    NOTE: OPINION CONTAINING TABLE OR OTHER DATA THAT IS NOT VIEWABLE

    20

    Mr. Alli decided to sell prints of the photograph. He therefore sought permission from the copyright owner of the underlying work, eventually locating Mr. Lecky of Cooper-Lecky, who held himself out as the "outright" owner of the copyright. Mr. Alli agreed to pay a 10% royalty on sales of prints of his photographs to a licensing entity established by Mr. Lecky. Mr. Lecky did not notify Mr. Gaylord about the agreement with Mr. Alli.[2]

    21

    In 2002, the Postal Service decided to issue a 37-cent stamp commemorating the 50th anniversary of the armistice of the Korean War. The Postal Service selected Mr. Alli's photograph for the stamp and paid him $1500 for its use. Mr. Alli told the Postal Service that it would need the permission of the owner of the copyright of the underlying work and referred the Postal Service to Mr. Lecky.

    22

    The Postal Service issued the stamp, titled "Korean War Veterans Memorial." The stamp features Mr. Alli's photo and depicts 14 of the 19 soldier sculptures (see below).

    23

    NOTE: OPINION CONTAINING TABLE OR OTHER DATA THAT IS NOT VIEWABLE

    24

    [1371] The Postal Service produced approximately 86.8 million stamps before retiring the stamp on March 31, 2005. The Postal Service acknowledged that it received over $17 million from the sale of nearly 48 million stamps. It was estimated that in 2003, the Postal Service generated $5.4 million from the sales of stamps to collectors who did not use the stamps to send mail. In addition, the Postal Service sold retail goods such as commemorative panels and framed art featuring images of the stamp. It did not seek or obtain Mr. Gaylord's permission to use the sculptures in the stamp or in any related retail goods.

    25

    Mr. Gaylord sued the government in the Court of Federal Claims on July 25, 2006, alleging infringement of his copyright. On June 16-20, 2008, the Court of Federal Claims conducted a trial, at which the government argued that the stamp made fair use of the work, excepting it from copyright liability. The government further argued that it had rights to the work as a joint author, which would provide it an unlimited license in the work. Finally, the government argued that the stamp fell under the exclusion from liability for copyright infringement for architectural works under the AWCPA. The Court of Federal Claims determined that Mr. Gaylord was the sole copyright owner of The Column and that The Column did not qualify as an architectural work under the AWCPA. Gaylord v. United States, 85 Fed.Cl. 59, 67, 72 (2008). However, the Court of Federal Claims also determined that the government was not liable for copyright infringement because the government's use of The Column was fair use. Id. at 71. Mr. Gaylord appeals the court's decision as to fair use, and the government challenges the court's determinations of ownership and the inapplicability of the AWCPA. We have jurisdiction pursuant to 28 U.S.C. § 1295(a)(3).

    26
    DISCUSSION
    27

    We review the Court of Federal Claims' legal conclusions de novo and its factual findings for clear error. Columbia Gas Sys., Inc. v. United States, 70 F.3d [1372] 1244, 1246 (Fed.Cir.1995). Infringement requires two elements: "(1) ownership of a valid copyright, and (2) copying of constituent elements of the work that are original." Feist Publ'ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361, 111 S.Ct. 1282, 113 L.Ed.2d 358 (1991). The government does not dispute the validity of the copyright or that the stamp copied original elements of The Column. This appeal concerns whether the government can establish fair use, ownership rights through a joint author, or an exemption to liability under the AWCPA.

    28
    I. Fair Use
    29

    Fair use of a copyrighted work "for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright." 17 U.S.C. § 107. "The fair use doctrine thus `permits [and requires] courts to avoid rigid application of the copyright statute when, on occasion, it would stifle the very creativity which the law is designed to foster.'" Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 577, 114 S.Ct. 1164, 127 L.Ed.2d 500 (1994) (alteration in original) (citation omitted).

    30

    Fair use is a mixed question of law and fact. Harper & Row, Publishers, Inc. v. Nation Enter., 471 U.S. 539, 560, 105 S.Ct. 2218, 85 L.Ed.2d 588 (1985). Because "the doctrine is an equitable rule of reason, no generally applicable definition is possible, and each case raising the question must be decided on its own facts." Id. at 560, 105 S.Ct. 2218 (citation omitted). Section 107 requires courts to consider four nonexclusive factors when evaluating fair use:

    31

    (1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;

    (2) the nature of the copyrighted work;

    (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and

    (4) the effect of the use upon the potential market for or value of the copyrighted work.

    32

    17 U.S.C. § 107. Each factor is "to be explored, and the results weighed together, in light of the purposes of copyright." Campbell, 510 U.S. at 577, 114 S.Ct. 1164.

    33
    A. Purpose and Character of the Infringing Use
    34

    When evaluating the purpose and character of the use, one must consider "whether the new work merely `supersede[s] the objects' of the original creation or instead adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message; it asks, in other words, whether and to what extent the new work is `transformative.'" Id. at 579, 114 S.Ct. 1164. Although "transformative use is not absolutely necessary for a finding of fair use, the goal of copyright, to promote science and the arts, is generally furthered by the creation of transformative works. Such works thus lie at the heart of the fair use doctrine's guarantee of breathing space within the confines of copyright." Id. (citation omitted).

    35

    The Court of Federal Claims concluded that this factor weighed heavily in favor of fair use because the stamp was transformative. Gaylord, 85 Fed.Cl. at 69. The court determined that "while both the Stamp and `The Column' are intended to honor veterans of the Korean War, the Stamp is transformative, providing a different expressive character than `The Column.'" Id. at 68. It explained that Mr. Alli transformed the three-dimensional sculpture with his photograph by "creating [1373] a surrealistic environment with snow and subdued lighting where the viewer is left unsure whether he is viewing a photograph of statues or actual human beings." Id. at 68-69. The court determined that the Postal Service further transformed The Column by "making it even grayer, creating a nearly monochromatic image. This adjustment enhanced the surrealistic expression ultimately seen in the Stamp by making it colder." Id. at 69. The Court of Federal Claims concluded that the stamp was "a transformative work, having a new and different character and expression than Mr. Gaylord's `The Column.'" Id.

    36

    We disagree. As a preliminary matter, we note that the inquiry must focus on the purpose and character of the stamp, rather than that of Mr. Alli's photograph. The stamp does not reflect any "further purpose" than The Column. See Campbell, 510 U.S. at 579, 114 S.Ct. 1164. As the Court of Federal Claims found, both the stamp and The Column share a common purpose: to honor veterans of the Korean War.

    37

    Works that make fair use of copyrighted material often transform the purpose or character of the work by incorporating it into a larger commentary or criticism. For example, in Blanch v. Koons, an artist incorporated a copyrighted photograph of a woman's feet adorned with glittery Gucci sandals into a collage "commenting on the `commercial images ... in our consumer culture.'" 467 F.3d 244, 248 (2d Cir.2006). The court determined that this was fair use in part because the collage was transformative. Id. at 252-53. It reasoned that the collage and the photo had "sharply different" purposes and that the collage was intended to be a "commentary on the social and aesthetic consequences of mass media." Id. Such transformation of a copyrighted work into a larger commentary or criticism fall squarely within the definition of fair use.

    38

    The government points to Lennon v. Premise Media Corp., 556 F.Supp.2d 310 (S.D.N.Y.2008), as an example of a case where a secondary use was deemed transformative fair use without commenting on the original. In Lennon, defendants-filmmakers used a 15-second clip of John Lennon's "Imagine" that they believed envisioned a world without religion. Id. at 322 ("Nothing to kill or die for/And no religion too"). The filmmakers played this audio clip while showing Cold War-era images of marching soldiers and an image of Stalin, "express[ing] the filmmakers' view that the song's secular utopian vision `cannot be maintained without realization in a politicized form' and that the form it will ultimately take is dictatorship." Id. at 323. The court concluded that "[t]he movie thus use[d] the excerpt of `Imagine' to criticize what the filmmakers see as the naïveté of John Lennon's views." Id. This use appears clearly transformative, and (as in Blanch) falls safely within the definition of fair use. By contrast, here the stamp did not use The Column as part of a commentary or criticism.[3]

    39

    We conclude that the stamp does not transform the character of The Column. Although the stamp altered the appearance of The Column by adding snow and muting the color, these alterations do not [1374] impart a different character to the work. To the extent that the stamp has a surreal character, The Column and its soldiers themselves contribute to that character. Indeed, the Penn State Team suggested that the Memorial have a "dream-like presence of ghostly figures." Capturing The Column on a cold morning after a snowstorm—rather than on a warm sunny day—does not transform its character, meaning, or message. Nature's decision to snow cannot deprive Mr. Gaylord of an otherwise valid right to exclude.

    40

    Analysis of the purpose and character of the use also includes whether the "use is of a commercial nature or is for nonprofit educational purposes." 17 U.S.C. § 107. The Postal Service acknowledged receiving $17 million from the sale of nearly 48 million 37-cent stamps. An estimated $5.4 million in stamps were sold to collectors in 2003. The stamp clearly has a commercial purpose. The Court of Federal Claims did not address how the commercial purpose of the stamp affected this factor of the fair use analysis.

    41

    Because the stamp did not have a further purpose or different character, and because it had a commercial use, we conclude that this factor weighs strongly against fair use.

    42
    B. Nature of the Copyrighted Work
    43

    We next consider the nature of the copyrighted work, The Column. "This factor calls for recognition that some works are closer to the core of intended copyright protection than others, with the consequence that fair use is more difficult to establish when the former works are copied." Campbell, 510 U.S. at 586, 114 S.Ct. 1164. Relevant to this factor, courts consider: "(1) whether the work is expressive or creative, such as a work of fiction, or more factual, with a greater leeway being allowed to a claim of fair use where the work is factual or informational, and (2) whether the work is published or unpublished, with the scope for fair use involving unpublished works being considerably narrower." Blanch, 467 F.3d at 256.

    44

    The Court of Federal Claims acknowledged the expressive and creative nature of The Column, which weighs against fair use. Gaylord, 85 Fed.Cl. at 69. We see no clear error in the Court of Federal Claims' finding that The Column is expressive and creative. However, it noted that "when a creative work has been copied, the second factor may be of limited utility to the fair use analysis where the challenged work is transformative." Id. (citing Blanch, 467 F.3d at 257). Therefore, because it had previously determined that the stamp was transformative, it gave this factor "limited weight" in its fair use analysis. Id.

    45

    In Blanch, the Court of Appeals for the Second Circuit determined that the creative nature of a copyrighted work had limited weight in the fair use analysis because the secondary work used the original "in a transformative manner to comment on her image's social and aesthetic meaning rather than to exploit its creative virtues." 467 F.3d at 257. In this case, the stamp did not use The Column in a transformative manner—the purpose and character of the use were identical. Thus, we see no reason to discount the expressive and creative nature of The Column.

    46

    Although The Column is part of a national monument—perhaps the epitome of a published work—given the overall creative and expressive nature of the work, we conclude that this factor weighs against fair use. See Twin Peaks Prods., Inc. v. Publ'n Int'l, Ltd., 996 F.2d 1366, 1376 (2d Cir.1993) (concluding that for a very successful, published, creative work, this factor weighed against fair use).

    47
    [1375] C. The Amount and Substantiality of the Portion Used
    48

    The third factor concerns whether "the amount and substantiality of the portion used in relation to the copyrighted work as a whole ... are reasonable in relation to the purpose of the copying." Campbell, 510 U.S. at 587, 114 S.Ct. 1164. Courts consider both the quantity and quality of the materials used. Id.

    49

    As to the quantity, the Court of Federal Claims found that the stamp depicted a substantial number (14 of the 19) of the soldier sculptures, weighing against fair use. As to the quality, the court determined that "Mr. Alli and the Postal Service used variables to lessen the quality and importance of `The Column' and to alter the expression of the Stamp," changing "the qualitative message of `The Column.'" Gaylord, 85 Fed.Cl. at 70. The court concluded that while the use of many of the soldier statues weighed against fair use, the weight of this factor was "somewhat mitigated" by the quality and importance of the statues to the stamp. Id.

    50

    We agree that the government's use of many of the soldiers in the stamp weighs against fair use, however, we disagree that the weight is mitigated by the quality and importance of The Column to the stamp. The Column constitutes the focus—essentially the entire subject matter—of the stamp. The stamp itself is titled "Korean War Veterans Memorial." Although the snow and muted coloring lessen the features of the soldier sculptures, the stamp clearly depicts an image of The Column. Thus, we conclude that this factor weighs against fair use.

    51
    D. Market Impact
    52

    The fourth fair use factor is "the effect of the use upon the potential market for or value of the copyrighted work." 17 U.S.C. § 107. This factor requires courts to consider "whether unrestricted and widespread conduct of the sort engaged in by the defendant ... would result in a substantially adverse impact on the potential market." Campbell, 510 U.S. at 590, 114 S.Ct. 1164 (quoting 3 M. Nimmer & D. Nimmer, Nimmer on Copyright § 13.05[A][4] (1993)). "In evaluating this factor, a court must consider not only the primary market for the copyrighted work, but the current and potential market for derivative works." Twin Peaks, 996 F.2d at 1377.

    53

    The Court of Federal Claims found that the stamp caused no harm to either the value of The Column or the market for derivative works. Gaylord, 85 Fed.Cl. at 70. It noted that Mr. Gaylord conceded that the stamp actually increased the value of The Column. Id. The court further determined that the stamp did not impact Mr. Gaylord's prior efforts to market derivative works, and that it was not likely to impact such efforts in the future because the stamp was an inadequate market substitute for The Column. Id. at 70-71. The court reasoned that the stamp was analogous to the thumbnail images in Kelly v. Arriba Soft Corp., 336 F.3d 811, 821 (9th Cir.2003), and Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146 (9th Cir. 2007). The court therefore concluded that this factor weighed in favor of fair use. Gaylord, 85 Fed.Cl. at 71.

    54

    We see no clear error in the court's determination that the stamp has not and will not adversely impact Mr. Gaylord's efforts to market derivative works of The Column. Someone seeking to take a photograph of The Column or otherwise create a derivative work would not find the stamp to be a suitable substitute for The Column itself. Thus, we agree that this factor favors fair use.

    55
    [1376] E. No Fair Use
    56

    Weighing the factors, we conclude that the government's use of The Column in the stamp was not a fair use. Even though the stamp did not harm the market for derivative works, allowing the government to commercially exploit a creative and expressive work will not advance the purposes of copyright in this case. We turn now to whether The Column is a joint work or governed by the AWCPA.

    57
    II. Joint Authorship
    58

    The government asserts that it has rights to The Column through the contributions of Cooper-Lecky, the VAB, and/or the CFA (collectively, the government entities). Joint authors each possess an independent right to use or license the copyrighted work, subject only to a duty to account to the other coauthor(s) for any profits earned on the work. Cmty. for Creative Non-Violence v. Reid, 846 F.2d 1485, 1498 (D.C.Cir.1988) (CCNV), aff'd, 490 U.S. 730, 109 S.Ct. 2166, 104 L.Ed.2d 811 (1989). Cooper-Lecky granted the government a license to use any work that Cooper-Lecky might hold copyright in, and the VAB and CFA are government entities. Thus, if Cooper-Lecky, the VAB, or the CFA are joint authors with Mr. Gaylord, the government would have a right to use The Column free from Mr. Gaylord's claims of infringement, subject to its duty to account to Mr. Gaylord.

    59

    On appeal, the government alleges that the trial court erred by misreading the certificates of registration, by failing to treat the presumption of validity as rebuttable, and by concluding that The Column was not a joint work. We conclude that the Court of Federal Claims treatment on each issue was proper.

    60

    The Court of Federal Claims first noted that Mr. Gaylord was entitled to a prima facie presumption of the validity of his copyright registrations. Gaylord, 85 Fed.Cl. at 66; see also 17 U.S.C. § 410(c) ("In any judicial proceedings the certificate of a registration made before or within five years after first publication of the work shall constitute prima facie evidence of the validity of the copyright and of the facts stated in the certificate. The evidentiary weight to be accorded the certificate of a registration made thereafter shall be within the discretion of the court."). On appeal, the government challenges this presumption, arguing that statements of Mr. Gaylord's sole authorship are rendered facially ambiguous because certain of his copyright registration certificates indicate that the underlying work was "fully approved" or "[f]ully approved by all federal commissions." These notations appear in the section titled "Nature of Authorship," describing the nature of the work, rather than in the space provided for the "Name of Author." The statements of approval do not undermine Mr. Gaylord's assertions on his registration forms that he is the sole author of The Column. Approval—much like comment and criticism—does not amount to authorship. See PODS, Inc. v. Porta Stor, Inc., 484 F.3d 1359, 1370 (Fed.Cir.2007).

    61

    The government next argues that the Court of Federal Claims erred by failing to treat the presumption of validity as rebuttable. It asserts that "Gaylord bears the burden of establishing sole ownership of `The Column'" because "the court should have shifted the burden back to Gaylord in light of the government's evidence." We disagree. The Court of Federal Claims thoroughly discussed the government's evidence and concluded that "Defendant's proffered contributions of the various committees to `The Column' are not evidence of joint ownership, but rather of suggestion and criticism." Gaylord, 85 Fed.Cl. at 67. The Court of Federal Claims committed [1377] no error in its treatment of the burdens or in the presumption of validity—the court treated the presumption as unrebutted, not unrebuttable.

    62

    Finally, the government argues that the Court of Federal Claims erred in not concluding that the copyright at issue was a joint work. We see no clear error in the Court of Federal Claims' finding that The Column is not a joint work. "A `joint work' is a work prepared by two or more authors with the intention that their contributions be merged into inseparable or interdependent parts of a unitary whole." 17 U.S.C. § 101. Authorship is a question of fact. S.O.S., Inc. v. Payday, Inc., 886 F.2d 1081, 1086 (9th Cir.1989); see also Medforms, Inc. v. Healthcare Mgmt. Solutions, Inc., 290 F.3d 98, 110 (2d Cir.2002).

    63

    Joint authorship requires "an original work of authorship" from each author. CCNV, 846 F.2d at 1495. "To be an author, one must supply more than mere direction or ideas: one must `translate [] an idea into a fixed, tangible expression entitled to copyright protection.'" S.O.S., 886 F.2d at 1087 (quoting CCNV, 490 U.S. at 737, 109 S.Ct. 2166); see also PODS, 484 F.3d at 1370 ("Mere participation in, contributions to, and review of the work of [another person] would not necessarily create a joint work."). As a general rule, each joint author must make an independently copyrightable contribution to the work. [4] See Aalmuhammed v. Lee, 202 F.3d 1227, 1234 (9th Cir.1999); Thomson v. Larson, 147 F.3d 195, 200 (2d Cir.1998); Erickson v. Trinity Theatre, Inc., 13 F.3d 1061, 1071 (7th Cir.1994); M.G.B. Homes, Inc. v. Ameron Homes, Inc., 903 F.2d 1486, 1493 (11th Cir.1990). Thus, "[a] co-authorship claimant bears the burden of establishing that each of the putative co-authors (1) made independently copyrightable contributions to the work; and (2) fully intended to be co-authors." Thomson, 147 F.3d at 200.

    64

    The government argues that the contributions of the various government entities merged with Mr. Gaylord's contributions to create a joint work, analogizing to CCNV, 846 F.2d 1485. In CCNV, the Community for Creative Non-Violence (CCNV) decided to sponsor a display to "dramatize the plight of the homeless." CCNV, 846 F.2d at 1487. Members of the CCNV conceived of a detailed plan for the display, involving a modern Nativity scene depicting two homeless adults and one infant huddling for warmth over a steam grate placed atop a pedestal from which simulated steam would flow through the grate. Id. The CCNV also decided that the display would include a shopping cart containing the belongings of the homeless family. Id. at 1497 n. 16. A sculptor, James Earl Reid, sculpted the three human figures and the shopping cart, making changes along the way to accommodate CCNV's requests. Id. at 1487-88. A cabinetmaker created the steam grate pedestal. Id. at 1488. The two portions were joined and the entire work was placed on display. Id. A dispute later arose over the copyright in the work, and CCNV sought a declaration of copyright ownership. Id.

    65

    [1378] The primary issue in the case was whether the display was a work made for hire, which would have given CCNV rights to the display. The United States Court of Appeals for the District of Columbia Circuit concluded that the display was not a work made for hire because the statutory requirements set forth in 17 U.S.C. § 101(2) were not met, but remanded for the lower court to determine whether CCNV might have rights as a joint author. Id. at 1494-98. It noted that CCNV contributed the steam grate pedestal, created the initial concept of the display, and provided ongoing direction of the realization of the display. Id. at 1497. It also noted "various indicia of the parties' intent, from the outset, to merge their contributions into a unitary whole, and not to construct and separately preserve discrete parts as independent works." Id.

    66

    The Supreme Court granted certiorari and determined that the display was not a work made for hire, but noted that "CCNV nevertheless may be a joint author of the sculpture if, on remand, the District Court determines that CCNV and Reid prepared the work `with the intention that their contributions be merged into inseparable or interdependent parts of a unitary whole.'" Cmty. for Creative Non-Violence v. Reid, 490 U.S. 730, 753, 109 S.Ct. 2166, 104 L.Ed.2d 811 (1989). The case settled without a decision on the merits of the joint authorship issue. See Cmty. for Creative Non-Violence v. Reid, Civ. No. 86-1507, 1991 WL 415523 (D.D.C. Jan. 7, 1991).

    67

    The government asserts that the facts of CCNV are "nearly identical" to this case. As an analogy to the steam grate pedestal that CCNV contributed, the government points to the physical contributions of Cooper-Lecky: a reflecting pool, landscaping around The Column, and irregular polished granite bands representing rice paddies. Notably, none of these features appear in the stamp. Even more notably, none of these features appear in the copyright that Mr. Gaylord obtained. Cooper-Lecky's physical contributions relate to the Memorial as a whole, not The Column. Mr. Gaylord did not copyright the Memorial. His copyright does not include the reflecting pool, the landscaping, or the rice paddies. The copyright over which we are deciding ownership is the copyright of The Column. None of these contributions by Cooper-Lecky establish entitlement to joint authorship over The Column—they are completely independent from the copyrighted matter in this case.

    68

    Focusing on The Column, the government lists several contributions by Cooper-Lecky, the VAB, and the CFA as evidence of joint authorship. The VAB created the story of each soldier, including the ethnicity, military service, and equipment representative of soldiers in the Korean War. At one point, the VAB told Mr. Gaylord to change the ethnicity of one soldier from Italian to Hispanic. The VAB also told Mr. Gaylord to sculpt certain soldiers clean shaven and others with buckled chin-straps. Although the government argues that Mr. Gaylord, Mr. Nelson, and Cooper-Lecky all decided that the soldiers would wear ponchos, we see no clear error in the Court of Federal Claims' finding that "the poncho concept was based on models produced by Mr. Gaylord." Gaylord, 85 Fed.Cl. at 67. According to the government, Cooper-Lecky instructed Mr. Gaylord to reduce the amount of wind in the ponchos and to reduce the age of the soldiers by removing wrinkles from their faces. Cooper-Lecky and the CFA had Mr. Gaylord change the position of the first soldier in The Column from a celebratory squatting pose to standing. Finally, a member of the VAB suggested that Mr. Gaylord stagger the placement of the [1379] statues in formation. The government asserted that Cooper-Lecky, the VAB, and the CFA "each collaborated to modify the entire compositional structure and setting of `The Column.'" Id. at 66. The Court of Federal Claims found, however, that "Mr. Gaylord created the composition of `The Column,' using Colonel Bill Weber's [a member of the VAB] suggestion to stagger the statues." Id. The Court of Federal Claims addressed the contributions of Cooper-Lecky, the VAB, and the CFA and concluded that they did not constitute evidence of joint authorship "but rather of suggestion and criticism." Id. at 67. The court explained that "Mr. Gaylord was able to translate the competing and conflicting ideas, comments, and suggestions of multiple committee members into a new set of figures." Id. The Court of Federal Claims' conclusions regarding the contributions by Mr. Gaylord and the government entities are not clearly erroneous. While the government entities provided some direction and ideas, this effort did not rise to the level necessary for a joint work.

    69

    If one commissioned a work for a cowboy riding a horse, that contribution would not constitute copyrightable expression. See 17 U.S.C. § 102(b) (no copyright protection for ideas). If one later instructed the artist to depict the cowboy as weathered, wearing a cowboy hat, and riding slowly in calm wind, that would not rise to the level of copyrightable expression. See S.O.S., 886 F.2d at 1087 ("A person who merely describes to an author what the commissioned work should do or look like is not a joint author for purposes of the Copyright Act."). The contributions to The Column by Cooper-Lecky, the VAB, and the CFA amount to no more here. The VAB may have suggested ethnicities and equipment to make the soldiers appear representative of those in the Korean War, but it was Mr. Gaylord who transformed those ideas into copyrightable expression. Cooper-Lecky may have suggested that Mr. Gaylord depict more youthful soldiers with less wind in their ponchos, but those ideas are not copyrightable. The government makes much of Cooper-Lecky's role in changing the stance of the first soldier. But as the Court of Federal Claims found, upon receiving suggestions and criticism from Cooper-Lecky and members of the committees, Mr. Gaylord transformed the statues himself. The Court of Federal Claims did not apply a "sole laborer" test as the government alleges, rather, it found that the contributions made by Cooper-Lecky, the VAB, and the CFA to The Column do not amount to independently copyrightable expression. We see no clear error in the Court of Federal Claims' conclusion that Mr. Gaylord is the sole author and sole owner of the copyright in The Column.

    70

    Moreover, the Court of Federal Claims determined that the parties never intended to create a joint work in The Column, as distinct from the Memorial. Gaylord, 85 Fed.Cl. at 67. Section 101 requires that a joint work "is a work prepared by two or more authors with the intention that their contributions be merged into inseparable or interdependent parts of a unitary whole." 17 U.S.C. § 101. We see no clear error in the Court of Federal Claims' determination that Cooper-Lecky and Mr. Gaylord did not intend The Column to be a joint work. As the Court of Federal Claims indicates, "The history of `The Column' project thus shows an open and contentious dispute regarding copyright ownership, ultimately with [Cooper-Lecky's] concession that Mr. Gaylord was the sole owner of the copyright." Gaylord, 85 Fed.Cl. at 67. In 1994, before the soldier statues were cast in their final form, Cooper-Lecky and Mr. Gaylord [1380] agreed that "[t]he copyright for this work will be held by the Artist [Mr. Gaylord]." The agreement goes on to specify that the terms of the use of the copyright are articulated under a separate contract. The 1994 agreement was signed by Mr. Lecky of Cooper-Lecky on January 27, 1994, and by Mr. Gaylord on February 7, 1994. According to the government, the final full-sized soldiers were created in August 1994.

    71

    The separate agreement referenced in the 1994 contract is a 1995 agreement in which Mr. Gaylord granted Cooper-Lecky royalty-bearing licensing rights in Mr. Gaylord's copyrighted work. The agreement acknowledged the separate contributions of Cooper-Lecky and Mr. Gaylord to the Memorial, which the agreement characterized as a collective work. The 1995 agreement, like the 1994 agreement, recognizes that Mr. Gaylord "is the sole author of the soldier sculptures to become part of the overall Memorial." The government asserts that the 1995 agreement cannot dispose of the authorship dispute because it arose after Mr. Gaylord created the final full-sized soldiers, and copyright ownership vests at the moment the work is fixed in any tangible form. Although it arose after the creation of the statues in their final form, the 1995 agreement reflects the understandings of Cooper-Lecky and Mr. Gaylord with respect to authorship of The Column and ownership of its copyright. The 1995 agreement crystallizes the intentions of the parties, which are manifest from the 1994 agreement and actions of the parties preceding the creation of The Column. We see no clear error in the Court of Federal Claims' determination that the parties never intended The Column to be a joint work.

    72

    The dissent argues that the government escapes liability for copyright infringement either by virtue of a contract with Cooper-Lecky or 28 U.S.C. § 1498. These issues were raised sua sponte by the dissent—we received no argument or briefing on either issue. The government cannot escape liability under its DACA31-90-C-0057 contract because Mr. Gaylord is not a party to that contract. Moreover, neither section of DACA31-90-C-0057 cited by the dissent concerns works by Mr. Gaylord. Section I-28 concerns works to which Cooper-Lecky could assert or establish authorship. Section I-29 concerns works made for hire, and the government has not provided any evidence establishing that The Column was a work made for hire. See 17 U.S.C. §§ 101, 201. Nor can the government escape liability under 28 U.S.C. § 1498, because there is no evidence that Mr. Gaylord created The Column in the service of the United States or using government time, material, or facilities. We decline to engage in appellate fact-finding to cobble together an excuse for the government's copyright infringement.

    73

    We conclude that the Court of Federal Claims did not clearly err in determining that authorship of The Column rested solely with Mr. Gaylord.

    74
    III. Architectural Works
    75

    The government asserts that it should escape liability because The Column is an architectural work. The AWCPA "did not afford architectural works full copyright protection; rather, it exempted the making of pictorial representations of architectural works from copyright infringement." Leicester v. Warner Bros., 232 F.3d 1212, 1217 (9th Cir.2000). The AWCPA provides:

    76

    The copyright in an architectural work that has been constructed does not include the right to prevent the making, distributing, or public display of pictures, paintings, photographs, or other pictorial representations of the work, if the building in which the work is embodied [1381] is located in or ordinarily visible from a public place.

    77

    17 U.S.C. § 120(a). Thus, if The Column is an architectural work under § 120, then Mr. Gaylord's copyright does not extend to pictorial representations of his work.

    78

    The Copyright Act defines an architectural work as "the design of a building as embodied in any tangible medium of expression, including a building, architectural plans, or drawings." 17 U.S.C. § 101. The applicable regulation defines buildings as "humanly habitable structures that are intended to be both permanent and stationary, such as houses and office buildings, and other permanent and stationary structures designed for human occupancy, including but not limited to churches, museums, gazebos, and garden pavilions." 37 C.F.R. § 202.11(b)(2). The definition excludes "[s]tructures other than buildings, such as bridges, cloverleafs, dams, walkways, tents, recreational vehicles, mobile homes, and boats." Id. § 202.11(d)(1).

    79

    The Court of Federal Claims found that The Column is not a building, and therefore it is not an architectural work governed by the AWCPA. The court explained that the work "is an artistic expression intended to convey a message rather than to be occupied by individuals.... Much like a walkway or a bridge, the memorial permits individuals to access through it, but is not intended for occupancy." Gaylord, 85 Fed.Cl. at 72. We see no clear error in the court's determination that The Column is not an architectural work under the AWCPA.

    80
    CONCLUSION
    81

    For the foregoing reasons, we reverse the court's decision with respect to fair use, affirm its conclusions that the government does not have rights as a joint owner and that The Column is not an architectural work under the AWCPA, and remand for a determination of damages.

    82

    AFFIRMED-IN-PART, REVERSED-IN-PART, and REMANDED

    83

    ---------------

    84

    NEWMAN, Circuit Judge, dissenting.

    85

    The Korean War Veterans Memorial is a work of public art and a national monument. It was authorized by Congress, installed on the National Mall, and paid for by appropriated funds. My colleagues on this panel now hold that the persons who produced this public monument for the United States, under a contract which requires that copyright is in the United States, can nonetheless require the United States to pay damages for copyright infringement based on use of a photograph of the Memorial in snow on a postage stamp. This holding is contrary to the contract provisions, contrary to statute for works done in the service of the United States, contrary to copyright law, and contrary to national policy governing access to public monuments. I respectfully dissent from the court's holding that the United States is liable for infringement of an improperly obtained and unlawfully enforced copyright.

    86
    DISCUSSION
    87

    The United States, through the Department of the Army, entered into Architect-Engineer Contract No. DACA31-90-C-0057 (April 11, 1990), with Cooper-Lecky Architects as the prime contractor, to design and then to build the Korean War Veterans Memorial. After various procedures, Mr. Frank C. Gaylord was selected as the sculptor for The Column, a collection of nineteen larger-than-life steel soldiers, which was the focal point of the Memorial. Several groups, including the Korean War Veterans Memorial Advisory Board, the American Battle Monuments Commission, the National Capital Planning [1382] Commission, the National Capital Memorial Commission, and the Fine Arts Commission, were active participants in the design of the Memorial. The Memorial is a powerful and beautiful achievement. My colleagues rule that the United States is liable for copyright infringement by placing a photograph of the Memorial on a postage stamp.[1] However, my colleagues on this panel are incorrect in ruling that the United States has no right to use an image of the Memorial for governmental purposes.

    88
    I
    89

    The Contract between the United States and Cooper-Lecky Architects bars them from "assert[ing] or authoriz[ing] others to neither assert any rights nor establish any claim under the design patent or copyright laws." DACA31-90-C-0057 (April 11, 1990). The contract contains the following provisions with respect to copyright:

    90

    I-28 GOVERNMENT RIGHTS (UNLIMITED) (MAR 1979).

    The Government shall have unlimited rights, in all drawings, designs, specifications, notes and other works developed in the performance of this contract, including the right to use same on any other Government design or construction without additional compensation to the Contractor. The contractor hereby grants to the Government a paid-up license throughout the world to all such works to which he may assert or establish any claim under design patent or copyright laws ...

    I-29 DRAWINGS AND OTHER DATA TO BECOME PROPERTY OF GOVERNMENT (MAR 1979).

    All designs, drawings, specifications, notes and other works developed in the performance of this contract shall become the sole property of the Government. ... The Government shall be considered the "person for whom the work was prepared" for the purpose of authorship in any copyrightable work under 17 U.S.C. § 201(b). With respect thereto, the contractor agrees not to assert or authorize others to assert any rights nor establish any claim under the design patent or copyright laws....

    91

    The term "works" includes "graphic and sculptural works," DFARS 252.227-7020(a), and it is not disputed that the graphic and sculptural works of the Memorial are included in this definition. The Contract refers to § 201(b), which provides as follows:

    92

    17 U.S.C. § 201(b) Works made for hire.

    In the case of a work made for hire, the employer or other person for whom the work was prepared is considered the author for purposes of this title, and, unless the parties have expressly agreed otherwise in a written instrument signed by them, owns all of the rights comprised in the copyright.

    93

    No such "written instrument" has been shown. To the contrary, the United States has consistently declared its copyright ownership with respect to the Memorial. The Contracting Officer has demanded the assignment of any copyrights that Cooper-Lecky or Mr. Gaylord has obtained. See infra. These are the copyrights that this court now holds to be enforceable against the United States.

    94

    In addition, 28 U.S.C. § 1498(b) bars copyright enforcement against the United States under the conditions that here exist. This statute provides that:

    95

    [1383] Hereafter, whenever the copyright in any work protected under the copyright laws of the United States shall be infringed by the United States, by a corporation owned or controlled by the United States,.. the exclusive action which may be brought for such infringement shall be an action by the copyright owner against the United States in the Court of Federal Claims for the recovery of his reasonable and entire compensation as damages for such infringement, including the minimum statutory damages ...: Provided, however, That this subsection shall not confer a right of action on any copyright owner or any assignee of such owner with respect to any copyrighted work prepared by a person while in the employment or service of the United States ... or in the preparation of which Government time, material, or facilities were used....

    96

    28 U.S.C. § 1498(b). This is the statute under which Mr. Gaylord brought this suit. Thus, even if Mr. Gaylord held a valid copyright, enforcement against the United States is barred by the terms of this statute, for the sculptures were prepared "in the service of the United States," and "Government time, material, or facilities were used." Work "in the service of the United States" does not require being an "employee," and "one may have a `service' relationship with the federal government that does not constitute an `employment relationship'," as explained in Walton v. United States, 551 F.3d 1367, 1370 (Fed. Cir.2009) (federal prisoner was in "service of the United States" for artistic work for which he received compensation).

    97

    Mr. Gaylord's position as subcontractor under the prime contract with Cooper-Lecky plainly, without dispute, places this work in the service of the United States. This contract established the relationship between the United States and the prime contractor Cooper-Lecky and subcontractors including Mr. Gaylord, and identified the United States as the "person for whom the work was prepared" pursuant to 17 U.S.C. § 201(b). The various federal agencies oversaw the overall design of the Memorial and The Column, and provided design details of the soldiers, their ethnicity, their military rank, their equipment, their arrangement. These collaborators oversaw, on behalf of the United States, the work for which Mr. Gaylord had been hired. Although the panel majority argues that this does not convert them into joint authors, that is irrelevant to the undisputed fact that this work was done in the service of the United States, with payment for the work by the United States, as agreed with the United States.

    98

    The record states that the United States paid Mr. Gaylord $775,000 for his work, including the design of smaller and then full size models for the nineteen soldiers and supervision of the steel casting, and that Cooper-Lecky was paid over five million dollars, including casting, construction, and other costs. All work was done as agreed by the United States, and the initial contract underwent nineteen modifications.

    99

    Despite the copyright provisions in the contract, Cooper-Lecky and Mr. Gaylord registered various copyrights as the work progressed, and the record reports assorted debates concerning the right to profit from peripheral commercial activity, the record mentioning such items as coffee mugs, framed pictures, and small models of the soldiers in The Column. In May 1993 Cooper-Lecky wrote Mr. Gaylord that "the American Battle Monuments Commission had withdrawn their claim for copyright ownership and/or royalties received from same," and Cooper-Lecky and Mr. Gaylord entered an "Agreement for [1384] Copyright Licensing Program," which states that

    100

    1. ... Gaylord is entitled to retain sole ownership of the copyright for the Soldier Sculptures [including] the sketches, reproductions, photographs, prints and all drawings.

    . . .

    5. Gaylord acknowledges that Cooper-Lecky is the sole author of the collective work embodied by the overall Memorial [including] the individual soldier sculptures authored by Gaylord.

    101

    Neither the United States nor any government agency was a party to this agreement. Whatever this agreement accomplished as between its parties, it cannot constitute a relinquishment of the government's rights under the contract or pursuant to 28 U.S.C. § 1498(b). Indeed, when the government was later asked, the Army's Contracting Officer made a strong and unequivocal demand for assignment of the "improperly registered copyrights," and sending the Decision to contractor Cooper-Lecky and subcontractor Gaylord:

    102

    6. In accordance with the contract terms, Cooper-Lecky was paid for its services and work on the KWVM, and the Government was given exclusive control over the data, design, and the completed work of the KWVM. The contract clauses ensure the Government's unlimited rights to the KWVM and prevent the contractor or subcontractors from restricting the Government or the public's use of the KWVM.

    7. The Contractor having taken an action that is proscribed by the contract, an appropriate remedy is to execute assignments of the improperly registered copyrights to the Government, so that they may remain in the public domain as intended. Cooper-Lecky (or its successor) shall assign its copyrights in the KWVM to the Government, and enlist its subcontractors to do the same.

    . . . .

    11. The contractor, and all others who might purport to derive copyrights with respect to work performed under contract number DACA31-90-C-0057, shall immediately cease and desist any communication or suggestion to the public or to any Government agency to the effect that there is a copyright on the KWVM or any elements thereof.

    103

    Final Decision of the Engineers Contracting Officer of the U.S. Army Engineer District, Baltimore, February 23, 2000. This document, marked as Trial Exhibit 14, is in the record provided to this court, as are the other contracts and other material relevant to these relationships. See Datascope Corp. v. SMEC, Inc., 879 F.2d 820, 822 n. 1 (Fed.Cir.1989) (noting that the decision on appeal may be affirmed on alternative grounds that are supported by the record). Yet my colleagues on this panel hold that the entirety of these events must be ignored.

    104

    The panel majority suggests that it is improper for the court to consider the government's rights, stating that they were not briefed on this appeal. These aspects were before the Court of Federal Claims, and the record is replete with all of the contracts, as well as the Contracting Officer's decision on copyright ownership. See Kamen v. Kemper Fin. Services, Inc., 500 U.S. 90, 99, 111 S.Ct. 1711, 114 L.Ed.2d 152 (1991) ("When an issue or claim is properly before the court, the court is not limited to the particular legal theories advanced by the parties, but rather retains the independent power to identify and apply the proper construction of governing law.").

    105

    Section 1498(b) of Title 28 is the statute under which this suit was brought, and its provisions control Mr. Gaylord's right of [1385] enforcement of these copyrights. Mr. Gaylord invoked § 1498(b) in his complaint, and the copyrights he now seeks to enforce against the United States are for the work he performed for the United States. The panel majority holds that these copyrights are indeed enforceable against the United States, despite the contractual and statutory obligations under which he was hired, worked, and was paid by the United States. However, the court's disregard of the public's ownership of its War Memorial, and casual negation of contractual and statutory provisions relating to copyright, is simply untenable. Cf. Dorris v. Absher, 179 F.3d 420, 426 (6th Cir.1999) (concluding that a court may raise aspects sua sponte "when the failure to do so would constitute a miscarriage of justice.").

    106

    The provisions of the contract with the United States, and the statutory constraints of § 1498(b) are unambiguous as to the copyright issues concerning the Korean War Veterans Memorial. Whatever artistic or commercial rights remain with or could be allocated to Mr. Gaylord, the contractual and statutory rights of the United States control. With respect to the issue presented, the United States has an unencumbered right to use a picture of the Korean War Veterans Memorial for governmental purposes.

    107

    It is not disputed that use of a photograph of the Memorial on a postage stamp is use by the United States; indeed, that is the basis for the panel majority's ruling of copyright infringement by the United States. My colleagues are incorrect in ruling that Mr. Gaylord can enforce, against the United States, copyrights on the work he did for the United States. This is an important question, of significant public concern, and should not be decided by default. See, e.g., United States Nat. Bank of Ore. v. Independent Ins. Agents of America, Inc., 508 U.S. 439, 445-46, 113 S.Ct. 2173, 124 L.Ed.2d 402 (1993) ("[A] court may consider an issue `antecedent to ... and ultimately dispositive of' the dispute before it, even an issue the parties fail to identify and brief."); Arcadia v. Ohio Power Co., 498 U.S. 73, 77, 111 S.Ct. 415, 112 L.Ed.2d 374 (1990)(same).

    108
    II
    109

    The Court of Federal Claims decided the case on the ground of fair use, holding that the depiction of the Korean War Veterans Memorial on the postage stamp is a "transformative" work. The court explained that the image on the stamp has a "new and different character" from the sculpture at the Memorial, depicting a "surrealistic environment with snow and subdued lighting where the viewer is left unsure whether he is viewing a photograph of statutes or actual human beings." Gaylord v. United States, 85 Fed.Cl. 59, 68-69 (2008). Mr. Alli's photograph was further edited by the Postal Service, to amplify the stark effect of the snowy image.

    110

    Clear error has not been shown in the Court of Federal Claims' factual findings supporting the statutory factors of fair use. A transformative work is generally deemed a fair use of a copyrighted work. See Bill Graham Archives v. Dorling Kindersley Ltd., 448 F.3d 605 (2d Cir. 2006); Blanch v. Koons, 467 F.3d 244 (2d Cir.2006); Kelly v. Arriba Soft Corp., 336 F.3d 811, 818-20 (9th Cir.2003). This finding of fair use of itself establishes the right of the United States to use a picture of the Memorial on a United States postage stamp, without liability for copyright infringement.

    111

    The Contracting Officer observed that the contractors' assertion of copyright "unreasonably and unfairly impact[s] the end users of the Memorial," and "produce[s] a [1386] chilling effect on the public's ability to use the [Memorial] as intended." Final Decision of the Engineers Contracting Officer of the U.S. Army Engineer District, Baltimore, February 23, 2000 at 7. The use for governmental purposes of a photograph of the Korean War Veterans Memorial, a public monument that was designed and built with public money, is unambiguously covered by the contract and statutes under which this Memorial was built. The court errs in its holding that Mr. Gaylord is entitled to damages for copyright infringement.

    112

    ---------------

    113

    Notes:

    114

    [1] The members of the Penn State Team are not parties to this litigation, and no one has suggested that they have copyrights in the Memorial.

    115

    [2] In 2006, Mr. Gaylord sued Mr. Alli for copyright infringement. Mr. Alli settled the dispute and agreed to pay Mr. Gaylord 10% of his net sales.

    116

    [3] Nor does the stamp incorporate The Column into a larger biographical work. "[C]ourts have frequently afforded fair use protection to the use of copyrighted material in biographies, recognizing such works as forms of historic scholarship, criticism, and comment that require incorporation of original source material for optimum treatment of their subjects." Bill Graham Archives v. Dorling Kindersley Ltd., 448 F.3d 605, 609 (2d Cir.2006); see also Hofheinz v. A & E Television Networks, 146 F.Supp.2d 442, 446-47 (S.D.N.Y.2001).

    117

    [4] The Seventh Circuit carved out an "exception" to this rule in a case where neither collaborator made independently copyrightable contributions, but the result of the collaboration produced a copyrightable work. Gaiman v. McFarlane, 360 F.3d 644, 658 (7th Cir.2004). The court explained that "it would be paradoxical if though the result of [the contributors'] joint labors had more than enough creativity and originality to be copyrightable, no one could claim copyright." Id. Because the government does not argue that Mr. Gaylord's work was not worthy of copyright protection, this exception does not apply here.

    118

    ---------------

    119

    [1] The photographer, Mr. John Alli, was paid for the use of his photograph on the stamp. The record states that Mr. Alli paid Mr. Gaylord a royalty on all receipts based on this photograph.

  • 4 Cariou v. Prince (2013)

    1
    714 F.3d 694 (2013)
    2
    Patrick CARIOU, Plaintiff-Appellee,
    v.
    Richard PRINCE, Defendant-Appellant,
    Gagosian Gallery, Inc., Lawrence Gagosian, Defendants-Cross-Defendants-Appellants.
    3
    Docket No. 11-1197-cv.
    4

    United States Court of Appeals, Second Circuit.

    5
    Argued: May 21, 2012.
    6
    Decided: April 25, 2013.
    7

    [697] Joshua I. Schiller (Jonathan D. Schiller, George F. Carpinello, on the brief), Boies, Schiller & Flexner LLP, New York, NY, for Defendant-Appellant Richard Prince.

    8

    Hollis Anne Gonerka Bart, Chaya Weinberg-Brodt, Dara G. Hammerman, Azmina N. Jasani, Withers Bergman LLP, New York, NY, for Defendants-Appellants Gagosian Gallery, Inc. and Lawrence Gagosian.

    9

    Daniel J. Brooks (Seth E. Spitzer, Eric A. Boden, on the brief), Schnader Harrison Segal & Lewis LLP, New York, NY, for Plaintiff-Appellee Patrick Cariou.

    10

    Anthony T. Falzone, Julie A. Ahrens, Daniel K. Nazer, Stanford Law School Center for Internet and Society, Stanford, CA; Virginia Rutledge, New York, NY; Zachary J. Alinder, John A. Polito, Bingham McCutchen LLP, San Francisco, CA, [698] for Amicus The Andy Warhol Foundation for the Visual Arts.

    11

    Joseph C. Gratz, Durie Tangri, LLP, San Francisco, CA; Oliver Metzger, Google Inc., Mountain View, CA, for Amicus Google Inc.

    12

    Clifford M. Sloan, Bradley A. Klein, Skadden, Arps, Slate, Meagher & Flom LLP, Washington, DC, for Amici The Association of Art Museum Directors, The Art Institute of Chicago, The Indianapolis Museum of Art, The Metropolitan Museum of Art, The Museum of Modern Art, Museum Associates d.b.a. Los Angeles County Museum of Art, The New Museum, The Solomon R. Guggenheim Foundation, The Walker Art Center, and The Whitney Museum of American Art.

    13

    Michael Williams, Dale M. Cendali, Claudia Ray, Kirkland & Ellis LLP, Washington, DC, for Amici American Society of Media Photographers, Inc., and Picture Archive Council of America.

    14

    Before: B.D. PARKER, HALL, and WALLACE,[1] Circuit Judges.

    15

    B.D. PARKER, J., delivered the opinion of the Court, in which HALL, J., joined. WALLACE, J., filed an opinion concurring in part and dissenting in part.

    16
    BARRINGTON D. PARKER, Circuit Judge:
    17

    In 2000, Patrick Cariou published Yes Rasta, a book of classical portraits and landscape photographs that he took over the course of six years spent living among Rastafarians in Jamaica. Richard Prince altered and incorporated several of Cariou's Yes Rasta photographs into a series of paintings and collages, called Canal Zone, that he exhibited in 2007 and 2008, first at the Eden Rock hotel in Saint Barthélemy ("St. Barth's") and later at New York's Gagosian Gallery.[2] In addition, Gagosian published and sold an exhibition catalog that contained reproductions of Prince's paintings and images from Prince's workshop.

    18

    Cariou sued Prince and Gagosian, alleging that Prince's Canal Zone works and exhibition catalog infringed on Cariou's copyrights in the incorporated Yes Rasta photographs. The defendants raised a fair use defense. After the parties cross-moved for summary judgment, the United States District Court for the Southern District of New York (Batts, J.) granted Cariou's motion, denied the defendants', and entered a permanent injunction. It compelled the defendants to deliver to Cariou all infringing works that had not yet been sold, for him to destroy, sell, or otherwise dispose of.

    19

    Prince and Gagosian principally contend on appeal that Prince's work is transformative and constitutes fair use of Cariou's copyrighted photographs, and that the district court imposed an incorrect legal standard when it concluded that, in order to qualify for a fair use defense, Prince's work must "comment on Cariou, on Cariou's Photos, or on aspects of popular culture closely associated with Cariou or the Photos." Cariou v. Prince, 784 F.Supp.2d 337, 349 (S.D.N.Y.2011). We agree with Appellants that the law does not require that a secondary use comment on the original artist or work, or popular culture, and we conclude that twenty-five of Prince's artworks do make fair use Cariou's copyrighted [699] photographs. With regard to the remaining five artworks, we remand to the district court, applying the proper standard, to consider in the first instance whether Prince is entitled to a fair use defense.[3]

    20
    BACKGROUND
    21

    The relevant facts, drawn primarily from the parties' submissions in connection with their cross-motions for summary judgment, are undisputed. Cariou is a professional photographer who, over the course of six years in the mid-1990s, lived and worked among Rastafarians in Jamaica. The relationships that Cariou developed with them allowed him to take a series of portraits and landscape photographs that Cariou published in 2000 in a book titled Yes Rasta. As Cariou testified, Yes Rasta is "extreme classical photography [and] portraiture," and he did not "want that book to look pop culture at all." Cariou Dep. 187:8-15, Jan. 12, 2010.

    22

    Cariou's publisher, PowerHouse Books, Inc., printed 7,000 copies of Yes Rasta, in a single printing. Like many, if not most, such works, the book enjoyed limited commercial success. The book is currently out of print. As of January 2010, PowerHouse had sold 5,791 copies, over sixty percent of which sold below the suggested retail price of sixty dollars. PowerHouse has paid Cariou, who holds the copyrights to the Yes Rasta photographs, just over $8,000 from sales of the book. Except for a handful of private sales to personal acquaintances, he has never sold or licensed the individual photographs.

    23

    Prince is a well-known appropriation artist. The Tate Gallery has defined appropriation art as "the more or less direct taking over into a work of art a real object or even an existing work of art." J.A. 446. Prince's work, going back to the mid-1970s, has involved taking photographs and other images that others have produced and incorporating them into paintings and collages that he then presents, in a different context, as his own. He is a leading exponent of this genre and his work has been displayed in museums around the world, including New York's Solomon R. Guggenheim Museum and Whitney Museum, San Francisco's Museum of Modern Art, Rotterdam's Museum Boijmans van Beuningen, and Basel's Museum fur Gegenwartskunst. As Prince has described his work, he "completely tr[ies] to change [another artist's work] into something that's completely different." Prince Dep. 338:4-8, Oct. 6, 2009.

    24

    Prince first came across a copy of Yes Rasta in a bookstore in St. Barth's in 2005. Between December 2007 and February 2008, Prince had a show at the Eden Rock hotel in St. Barth's that included a collage, titled Canal Zone (2007), comprising 35 photographs torn out of Yes Rasta and pinned to a piece of plywood. Prince altered those photographs significantly, by among other things painting "lozenges" over their subjects' facial features and using only portions of some of the images. In June 2008, Prince purchased three additional copies of Yes Rasta. He went on to create thirty additional artworks in the Canal Zone series, twenty-nine of which incorporated partial or whole images from Yes Rasta.[4] The portions of Yes Rasta [700] photographs used, and the amount of each artwork that they constitute, vary significantly from piece to piece. In certain works, such as James Brown Disco Ball, Prince affixed headshots from Yes Rasta onto other appropriated images, all of which Prince placed on a canvas that he had painted. In these, Cariou's work is almost entirely obscured. The Prince artworks also incorporate photographs that have been enlarged or tinted, and incorporate photographs appropriated from artists other than Cariou as well. Yes Rasta is a book of photographs measuring approximately 9.5″ × 12″. Prince's artworks, in contrast, comprise inkjet printing and acrylic paint, as well as pasted-on elements, and are several times that size. For instance, Graduation measures 72 3/4″ × 52 1/2″ and James Brown Disco Ball 100 1/2″ × 104 1/2″. The smallest of the Prince artworks measures 40″ × 30″, or approximately ten times as large as each page of Yes Rasta.

    Patrick Cariou, Photographs from Yes Rasta, pp. 11, 59

    26

    Patrick Cariou, Photographs from Yes Rasta, pp. 11, 59

    27

    [701]

    Richard Prince, James Brown Disco Ball

    29

    Richard Prince, James Brown Disco Ball

    30

    In other works, such as Graduation, Cariou's original work is readily apparent: Prince did little more than paint blue lozenges over the subject's eyes and mouth, and paste a picture of a guitar over the subject's body.

    31

    [702]

    Patrick Carious, Photograph from Yes Rasta

    33

    Patrick Carious, Photograph from Yes Rasta, p. 118

    34

    [703]

    Richard Prince, Graduation

    36

    Richard Prince, Graduation

    37

    Between November 8 and December 20, 2008, the Gallery put on a show featuring twenty-two of Prince's Canal Zone artworks, and also published and sold an exhibition catalog from the show. The catalog included all of the Canal Zone artworks (including those not in the Gagosian show) except for one, as well as, among other things, photographs showing Yes Rasta photographs in Prince's studio. Prince never sought or received permission from Cariou to use his photographs.

    38

    Prior to the Gagosian show, in late August, 2008, a gallery owner named Cristiane Celle contacted Cariou and asked if he would be interested in discussing the possibility of an exhibit in New York City. Celle did not mention Yes Rasta, but did express interest in photographs Cariou took of surfers, which he published in 1998 in the aptly titled Surfers. Cariou responded that Surfers would be republished in 2008, and inquired whether Celle might also be interested in a book Cariou had recently completed on gypsies. The two subsequently met and discussed Cariou's exhibiting work in Celle's gallery, including prints from Yes Rasta. They did not select a date or photographs to exhibit, nor [704] did they finalize any other details about the possible future show.

    39

    At some point during the Canal Zone show at Gagosian, Celle learned that Cariou's photographs were "in the show with Richard Prince." Celle then phoned Cariou and, when he did not respond, Celle mistakenly concluded that he was "doing something with Richard Prince.... [Maybe] he's not pursuing me because he's doing something better, bigger with this person.... [H]e didn't want to tell the French girl I'm not doing it with you, you know, because we had started a relation and that would have been bad." Celle Dep. 88:15-89:7, Jan. 26, 2010. At that point, Celle decided that she would not put on a "Rasta show" because it had been "done already," and that any future Cariou exhibition she put on would be of photographs from Surfers. Celle remained interested in exhibiting prints from Surfers, but Cariou never followed through.

    40

    According to Cariou, he learned about the Gagosian Canal Zone show from Celle in December 2008. On December 30, 2008, he sued Prince, the Gagosian Gallery, and Lawrence Gagosian, raising claims of copyright infringement. See 17 U.S.C. §§ 106, 501. The defendants asserted a fair use defense, arguing that Prince's artworks are transformative of Cariou's photographs and, accordingly, do not violate Cariou's copyrights. See, e.g., Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 578-79, 114 S.Ct. 1164, 127 L.Ed.2d 500 (1994). Ruling on the parties' subsequently-filed cross-motions for summary judgment, the district court (Batts, J.) "impose[d] a requirement that the new work in some way comment on, relate to the historical context of, or critically refer back to the original works" in order to be qualify as fair use, and stated that "Prince's Paintings are transformative only to the extent that they comment on the Photos." Cariou v. Prince, 784 F.Supp.2d 337, 348-49 (S.D.N.Y.2011). The court concluded that "Prince did not intend to comment on Cariou, on Cariou's Photos, or on aspects of popular culture closely associated with Cariou or the Photos when he appropriated the Photos," id. at 349, and for that reason rejected the defendants' fair use defense and granted summary judgment to Cariou. The district court also granted sweeping injunctive relief, ordering the defendants to "deliver up for impounding, destruction, or other disposition, as [Cariou] determines, all infringing copies of the Photographs, including the Paintings and unsold copies of the Canal Zone exhibition book, in their possession." Id. at 355.[5] This appeal followed.

    41
    DISCUSSION
    42
    I.
    43

    We review a grant of summary judgment de novo. See Blanch v. Koons, 467 F.3d 244, 249-50 (2d Cir.2006). The well known standards for summary judgment set forth in Rule 56(c) apply. See Fed.R.Civ.P. 56. "Although fair use is a mixed question of law and fact, this court has on numerous occasions resolved fair use determinations at the summary judgment stage where ... there are no genuine issues of material fact." Blanch, 467 F.3d at 250 (quotation marks and brackets omitted); see also Harper & Row, Publishers, Inc. v. Nation Enters., 471 U.S. 539, 560, 105 S.Ct. 2218, 85 L.Ed.2d 588 (1985); Castle Rock Entm't, Inc. v. Carol Publ'g Grp., Inc., 150 F.3d 132, 137 (2d Cir.1998). This case lends itself to that approach.

    44
    [705] II.
    45

    The purpose of the copyright law is "[t]o promote the Progress of Science and useful Arts...." U.S. Const., Art. I, § 8, cl. 8. As Judge Pierre Leval of this court has explained, "[t]he copyright is not an inevitable, divine, or natural right that confers on authors the absolute ownership of their creations. It is designed rather to stimulate activity and progress in the arts for the intellectual enrichment of the public." Pierre N. Leval, Toward a Fair Use Standard, 103 Harv. L.Rev. 1105, 1107 (1990) (hereinafter "Leval"). Fair use is "necessary to fulfill [that] very purpose." Campbell, 510 U.S. at 575, 114 S.Ct. 1164. Because "`excessively broad protection would stifle, rather than advance, the law's objective,'" fair use doctrine "mediates between" "the property rights [copyright law] establishes in creative works, which must be protected up to a point, and the ability of authors, artists, and the rest of us to express them — or ourselves by reference to the works of others, which must be protected up to a point." Blanch, 467 F.3d at 250 (brackets omitted) (quoting Leval at 1109).

    46

    The doctrine was codified in the Copyright Act of 1976, which lists four non-exclusive factors that must be considered in determining fair use. Under the statute,

    47
    [T]he fair use of a copyrighted work ... for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include —
    48
    (1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
    49
    (2) the nature of the copyrighted work;
    50
    (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
    51
    (4) the effect of the use upon the potential market for or value of the copyrighted work.
    52

    17 U.S.C. § 107. As the statute indicates, and as the Supreme Court and our court have recognized, the fair use determination is an open-ended and context-sensitive inquiry. Campbell, 510 U.S. at 577-78, 114 S.Ct. 1164; Blanch, 467 F.3d at 251. The statute "employs the terms `including' and `such as' in the preamble paragraph to indicate the illustrative and not limitative function of the examples given, which thus provide only general guidance about the sorts of copying that courts and Congress most commonly had found to be fair uses." Campbell, 510 U.S. at 577-78, 114 S.Ct. 1164 (quotation marks and citation omitted). The "ultimate test of fair use ... is whether the copyright law's goal of `promoting the Progress of Science and useful Arts' ... would be better served by allowing the use than by preventing it." Castle Rock, 150 F.3d at 141 (brackets and citation omitted).

    53

    The first statutory factor to consider, which addresses the manner in which the copied work is used, is "[t]he heart of the fair use inquiry." Blanch, 467 F.3d at 251. We ask

    54
    whether the new work merely `supersedes the objects' of the original creation, or instead adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message[,] ... in other words, whether and to what extent the new work is transformative.... [T]ransformative works ... lie at the heart of [706] the fair use doctrine's guarantee of breathing space....
    55

    Campbell, 510 U.S. at 579, 114 S.Ct. 1164 (citations and some quotation marks omitted) (quoting Folsom v. Marsh, 9 F.Cas. 342, 348 *No. 4,901) (C.C.D.Mass.1841) (Story, J.). "If `the secondary use adds value to the original — if [the original work] is used as raw material, transformed in the creation of new information, new aesthetics, new insights and understandings — this is the very type of activity that the fair use doctrine intends to protect for the enrichment of society.'" Castle Rock, 150 F.3d at 142 (quoting Leval 1111). For a use to be fair, it "must be productive and must employ the quoted matter in a different manner or for a different purpose from the original." Leval at 1111.

    56

    The district court imposed a requirement that, to qualify for a fair use defense, a secondary use must "comment on, relate to the historical context of, or critically refer back to the original works." Cariou, 784 F.Supp.2d at 348. Certainly, many types of fair use, such as satire and parody, invariably comment on an original work and/or on popular culture. For example, the rap group 2 Live Crew's parody of Roy Orbison's "Oh, Pretty Woman" "was clearly intended to ridicule the white-bread original." Campbell, 510 U.S. at 582, 114 S.Ct. 1164 (quotation marks omitted). Much of Andy Warhol's work, including work incorporating appropriated images of Campbell's soup cans or of Marilyn Monroe, comments on consumer culture and explores the relationship between celebrity culture and advertising. As even Cariou concedes, however, the district court's legal premise was not correct. The law imposes no requirement that a work comment on the original or its author in order to be considered transformative, and a secondary work may constitute a fair use even if it serves some purpose other than those (criticism, comment, news reporting, teaching, scholarship, and research) identified in the preamble to the statute. Id. at 577, 114 S.Ct. 1164; Harper & Row, 471 U.S. at 561, 105 S.Ct. 2218. Instead, as the Supreme Court as well as decisions from our court have emphasized, to qualify as a fair use, a new work generally must alter the original with "new expression, meaning, or message." Campbell, 510 U.S. at 579, 114 S.Ct. 1164; see also Blanch, 467 F.3d at 253 (original must be employed "in the creation of new information, new aesthetics, new insights and understandings" (quotation marks omitted)); Castle Rock, 150 F.3d at 142.

    57

    Here, our observation of Prince's artworks themselves convinces us of the transformative nature of all but five, which we discuss separately below. These twenty-five of Prince's artworks manifest an entirely different aesthetic from Cariou's photographs. Where Cariou's serene and deliberately composed portraits and landscape photographs depict the natural beauty of Rastafarians and their surrounding environs, Prince's crude and jarring works, on the other hand, are hectic and provocative. Cariou's black-and-white photographs were printed in a 9 1/2″ × 12″ book. Prince has created collages on canvas that incorporate color, feature distorted human and other forms and settings, and measure between ten and nearly a hundred times the size of the photographs. Prince's composition, presentation, scale, color palette, and media are fundamentally different and new compared to the photographs, as is the expressive nature of Prince's work. See Campbell, 510 U.S. at 579, 114 S.Ct. 1164.

    58

    Prince's deposition testimony further demonstrates his drastically different approach and aesthetic from Cariou's. Prince testified that he "[doesn't] have any really interest in what [another artist's] [707] original intent is because ... what I do is I completely try to change it into something that's completely different.... I'm trying to make a kind of fantastic, absolutely hip, up to date, contemporary take on the music scene." Prince Dep. 338:4-339:3, Oct. 6, 2009. As the district court determined, Prince's Canal Zone artworks relate to a "post-apocalyptic screenplay" Prince had planned, and "emphasize themes [of Prince's planned screenplay] of equality of the sexes; highlight `the three relationships in the world, which are men and women, men and men, and women and women'; and portray a contemporary take on the music scene." Cariou, 784 F.Supp.2d at 349; see Prince Dep. 339:3-7, Oct. 6, 2009.

    59

    The district court based its conclusion that Prince's work is not transformative in large part on Prince's deposition testimony that he "do[es]n't really have a message," that he was not "trying to create anything with a new meaning or a new message," and that he "do[es]n't have any ... interest in [Cariou's] original intent." Cariou, 784 F.Supp.2d at 349; see Prince Dep. 45:25-46:2, 338:5-6, 360:18-20, Oct. 6, 2009. On appeal, Cariou argues that we must hold Prince to his testimony and that we are not to consider how Prince's works may reasonably be perceived unless Prince claims that they were satire or parody. No such rule exists, and we do not analyze satire or parody differently from any other transformative use.

    60

    It is not surprising that, when transformative use is at issue, the alleged infringer would go to great lengths to explain and defend his use as transformative. Prince did not do so here. However, the fact that Prince did not provide those sorts of explanations in his deposition — which might have lent strong support to his defense — is not dispositive. What is critical is how the work in question appears to the reasonable observer, not simply what an artist might say about a particular piece or body of work. Prince's work could be transformative even without commenting on Cariou's work or on culture, and even without Prince's stated intention to do so. Rather than confining our inquiry to Prince's explanations of his artworks, we instead examine how the artworks may "reasonably be perceived" in order to assess their transformative nature. Campbell, 510 U.S. at 582, 114 S.Ct. 1164; Leibovitz v. Paramount Pictures Corp., 137 F.3d 109, 113-14 (2d Cir.1998) (evaluating parodic nature of advertisement in light of how it "may reasonably be perceived"). The focus of our infringement analysis is primarily on the Prince artworks themselves, and we see twenty-five of them as transformative as a matter of law.

    61

    In this respect, the Seventh Circuit's recent decision in Brownmark Films, LLC v. Comedy Partners, 682 F.3d 687 (7th Cir.2012), is instructive. There, the court rejected the appellant's argument that copyright infringement claims cannot be disposed of at the motion-to-dismiss stage, and affirmed the district court's dismissal of such a claim under Fed.R.Civ.P. 12(b)(6). Brownmark Films, 682 F.3d at 690. Considering whether an episode of the animated television show South Park presented a parody (and therefore a protected fair use) of a viral internet video titled "What What (In The Butt)," the court concluded that "[w]hen the two works ... are viewed side-by-side, the South Park episode is clearly a parody of the original ... video." Id. at 692. For that reason, "the only two pieces of evidence needed to decide the question of fair use in [Brownmark were] the original version of [the video] and the episode at issue." Id. at 690.

    62

    Here, looking at the artworks and the photographs side-by-side, we conclude [708] that Prince's images, except for those we discuss separately below, have a different character, give Cariou's photographs a new expression, and employ new aesthetics with creative and communicative results distinct from Cariou's. Our conclusion should not be taken to suggest, however, that any cosmetic changes to the photographs would necessarily constitute fair use. A secondary work may modify the original without being transformative. For instance, a derivative work that merely presents the same material but in a new form, such as a book of synopses of televisions shows, is not transformative. See Castle Rock, 150 F.3d at 143; Twin Peaks Prods., Inc. v. Publ'ns Int'l, Ltd., 996 F.2d 1366, 1378 (2d Cir.1993). In twenty-five of his artworks, Prince has not presented the same material as Cariou in a different manner, but instead has "add[ed] something new" and presented images with a fundamentally different aesthetic. Leibovitz, 137 F.3d at 114.

    63

    The first fair use factor — the purpose and character of the use — also requires that we consider whether the allegedly infringing work has a commercial or nonprofit educational purpose. See, e.g., Blanch, 467 F.3d at 253. That being said, "nearly all of the illustrative uses listed in the preamble paragraph of § 107, including news reporting, comment, criticism, teaching, scholarship, and research... are generally conducted for profit." Campbell, 510 U.S. at 584, 114 S.Ct. 1164 (quotation marks omitted). "The commercial/nonprofit dichotomy concerns the unfairness that arises when a secondary user makes unauthorized use of copyrighted material to capture significant revenues as a direct consequence of copying the original work." Am. Geophysical Union v. Texaco Inc., 60 F.3d 913, 922 (2d Cir.1994). This factor must be applied with caution because, as the Supreme Court has recognized, Congress "could not have intended" a rule that commercial uses are presumptively unfair. Campbell, 510 U.S. at 584, 114 S.Ct. 1164 Instead, "[t]he more transformative the new work, the less will be the significance of other factors, like commercialism, that may weigh against a finding of fair use." Id. at 579, 114 S.Ct. 1164. Although there is no question that Prince's artworks are commercial, we do not place much significance on that fact due to the transformative nature of the work.

    64

    We turn next to the fourth statutory factor, the effect of the secondary use upon the potential market for the value of the copyrighted work, because such discussion further demonstrates the significant differences between Prince's work, generally, and Cariou's. Much of the district court's conclusion that Prince and Gagosian infringed on Cariou's copyrights was apparently driven by the fact that Celle decided not to host a Yes Rasta show at her gallery once she learned of the Gagosian Canal Zone show. The district court determined that this factor weighs against Prince because he "has unfairly damaged both the actual and potential markets for Cariou's original work and the potential market for derivative use licenses for Cariou's original work." Cariou, 784 F.Supp.2d at 353.

    65

    Contrary to the district court's conclusion, the application of this factor does not focus principally on the question of damage to Cariou's derivative market. We have made clear that "our concern is not whether the secondary use suppresses or even destroys the market for the original work or its potential derivatives, but whether the secondary use usurps the market of the original work." Blanch, 467 F.3d at 258 (quotation marks omitted) (emphasis added); NXIVM Corp. v. Ross Inst., 364 F.3d 471, 481-82 (2d Cir.2004). "The market for potential derivative uses [709] includes only those that creators of original works would in general develop or license others to develop." Campbell, 510 U.S. at 592, 114 S.Ct. 1164. Our court has concluded that an accused infringer has usurped the market for copyrighted works, including the derivative market, where the infringer's target audience and the nature of the infringing content is the same as the original. For instance, a book of trivia about the television show Seinfeld usurped the show's market because the trivia book "substitute[d] for a derivative market that a television program copyright owner ... would in general develop or license others to develop." Castle Rock, 150 F.3d at 145 (quotation marks omitted). Conducting this analysis, we are mindful that "[t]he more transformative the secondary use, the less likelihood that the secondary use substitutes for the original," even though "the fair use, being transformative, might well harm, or even destroy, the market for the original." Id.

    66

    As discussed above, Celle did not decide against putting on a Yes Rasta show because it had already been done at Gagosian, but rather because she mistakenly believed that Cariou had collaborated with Prince on the Gagosian show. Although certain of Prince's artworks contain significant portions of certain of Cariou's photographs, neither Prince nor the Canal Zone show usurped the market for those photographs. Prince's audience is very different from Cariou's, and there is no evidence that Prince's work ever touched — much less usurped — either the primary or derivative market for Cariou's work. There is nothing in the record to suggest that Cariou would ever develop or license secondary uses of his work in the vein of Prince's artworks. Nor does anything in the record suggest that Prince's artworks had any impact on the marketing of the photographs. Indeed, Cariou has not aggressively marketed his work, and has earned just over $8,000 in royalties from Yes Rasta since its publication. He has sold four prints from the book, and only to personal acquaintances.

    67

    Prince's work appeals to an entirely different sort of collector than Cariou's. Certain of the Canal Zone artworks have sold for two million or more dollars. The invitation list for a dinner that Gagosian hosted in conjunction with the opening of the Canal Zone show included a number of the wealthy and famous such as the musicians Jay-Z and Beyonce Knowles, artists Damien Hirst and Jeff Koons, professional football player Tom Brady, model Gisele Bundchen, Vanity Fair editor Graydon Carter, Vogue editor Anna Wintour, authors Jonathan Franzen and Candace Bushnell, and actors Robert DeNiro, Angelina Jolie, and Brad Pitt. Prince sold eight artworks for a total of $10,480,000, and exchanged seven others for works by painter Larry Rivers and by sculptor Richard Serra. Cariou on the other hand has not actively marketed his work or sold work for significant sums, and nothing in the record suggests that anyone will not now purchase Cariou's work, or derivative non-transformative works (whether Cariou's own or licensed by him) as a result of the market space that Prince's work has taken up. This fair use factor therefore weighs in Prince's favor.

    68

    The next statutory factor that we consider, the nature of the copyrighted work, "calls for recognition that some works are closer to the core of intended copyright protection than others, with the consequence that fair use is more difficult to establish when the former works are copied." Campbell, 510 U.S. at 586, 114 S.Ct. 1164. We consider "`(1) whether the work is expressive or creative, ... with a greater leeway being allowed to a claim of fair use where the work is factual or informational, [710] and (2) whether the work is published or unpublished, with the scope for fair use involving unpublished works being considerably narrower.'" Blanch, 467 F.3d at 256 (quoting 2 Howard B. Abrams, The Law of Copyright, § 15:52 (2006)).

    69

    Here, there is no dispute that Cariou's work is creative and published. Accordingly, this factor weighs against a fair use determination. However, just as with the commercial character of Prince's work, this factor "may be of limited usefulness where," as here, "the creative work of art is being used for a transformative purpose." Bill Graham Archives v. Dorling Kindersley Ltd., 448 F.3d 605, 612 (2d Cir.2006).

    70

    The final factor that we consider in our fair use inquiry is "the amount and substantiality of the portion used in relation to the copyrighted work as a whole." 17 U.S.C. § 107(3). We ask "whether the quantity and value of the materials used[] are reasonable in relation to the purpose of the copying." Blanch, 467 F.3d at 257 (quotation marks omitted). In other words, we consider the proportion of the original work used, and not how much of the secondary work comprises the original.

    71

    Many of Prince's works use Cariou's photographs, in particular the portrait of the dreadlocked Rastafarian at page 118 of Yes Rasta, the Rastafarian on a burro at pages 83 to 84, and the dreadlocked and bearded Rastafarian at page 108, in whole or substantial part. In some works, such as Charlie Company, Prince did not alter the source photograph very much at all. In others, such as Djuana Barnes, Natalie Barney, Renee Vivien and Romaine Brooks take over the Guanahani, the entire source photograph is used but is also heavily obscured and altered to the point that Cariou's original is barely recognizable. Although "[n]either our court nor any of our sister circuits has ever ruled that the copying of an entire work favors fair use[,].... courts have concluded that such copying does not necessarily weigh against fair use because copying the entirety of a work is sometimes necessary to make a fair use of the image." Bill Graham, 448 F.3d at 613. "[T]he third-factor inquiry must take into account that the extent of permissible copying varies with the purpose and character of the use." Id. (internal quotation marks omitted).

    72

    The district court determined that Prince's "taking was substantially greater than necessary." Cariou, 784 F.Supp.2d at 352. We are not clear as to how the district court could arrive at such a conclusion. In any event, the law does not require that the secondary artist may take no more than is necessary. See Campbell, 510 U.S. at 588, 114 S.Ct. 1164; Leibovitz, 137 F.3d at 114. We consider not only the quantity of the materials taken but also "their quality and importance" to the original work. Campbell, 510 U.S. at 587, 114 S.Ct. 1164. The secondary use "must be [permitted] to `conjure up' at least enough of the original" to fulfill its transformative purpose. Id. at 588, 114 S.Ct. 1164 (emphasis added); Leibovitz, 137 F.3d at 114. Prince used key portions of certain of Cariou's photographs. In doing that, however, we determine that in twenty-five of his artworks, Prince transformed those photographs into something new and different and, as a result, this factor weighs heavily in Prince's favor.

    73

    As indicated above, there are five artworks that, upon our review, present closer questions. Specifically, Graduation, Meditation, Canal Zone (2008), Canal Zone (2007), and Charlie Company do not sufficiently differ from the photographs of Cariou's that they incorporate for us confidently to make a determination about their [711] transformative nature as a matter of law. Although the minimal alterations that Prince made in those instances moved the work in a different direction from Cariou's classical portraiture and landscape photos, we can not say with certainty at this point whether those artworks present a "new expression, meaning, or message." Campbell, 510 U.S. at 579, 114 S.Ct. 1164.

    74

    Certainly, there are key differences in those artworks compared to the photographs they incorporate. Graduation, for instance, is tinted blue, and the jungle background is in softer focus than in Cariou's original. Lozenges painted over the subject's eyes and mouth — an alteration that appears frequently throughout the Canal Zone artworks — make the subject appear anonymous, rather than as the strong individual who appears in the original. Along with the enlarged hands and electric guitar that Prince pasted onto his canvas, those alterations create the impression that the subject is not quite human. Cariou's photograph, on the other hand, presents a human being in his natural habitat, looking intently ahead. Where the photograph presents someone comfortably at home in nature, Graduation combines divergent elements to create a sense of discomfort. However, we cannot say for sure whether Graduation constitutes fair use or whether Prince has transformed Cariou's work enough to render it transformative.

    75

    We have the same concerns with Meditation, Canal Zone (2007), Canal Zone (2008), and Charlie Company. Each of those artworks differs from, but is still similar in key aesthetic ways, to Cariou's photographs. In Meditation, Prince again added lozenges and a guitar to the same photograph that he incorporated into Graduation, this time cutting the subject out of his background, switching the direction he is facing, and taping that image onto a blank canvas. In Canal Zone (2007), Prince created a gridded collage using 31 different photographs of Cariou's, many of them in whole or significant part, with alterations of some of those photographs limited to lozenges or cartoonish appendages painted or drawn on. Canal Zone (2008) incorporates six photographs of Cariou's in whole or in part, including the same subject as Meditation and Graduation. Prince placed the subject, with lozenges and guitar, on a background comprising components of various landscape photographs, taped together. The cumulative effect is of the subject in a habitat replete with lush greenery, not dissimilar from many of Cariou's Yes Rasta photographs. And Charlie Company prominently displays four copies of Cariou's photograph of a Rastafarian riding a donkey, substantially unaltered, as well as two copies of a seated nude woman with lozenges covering all six faces. Like the other works just discussed, Charlie Company is aesthetically similar to Cariou's original work because it maintains the pastoral background and individual focal point of the original photograph — in this case, the man on the burro. While the lozenges, repetition of the images, and addition of the nude female unarguably change the tenor of the piece, it is unclear whether these alterations amount to a sufficient transformation of the original work of art such that the new work is transformative.

    76

    We believe the district court is best situated to determine, in the first instance, whether such relatively minimal alterations render Graduation, Meditation, Canal Zone (2007), Canal Zone (2008), and Charlie Company fair uses (including whether the artworks are transformative) or whether any impermissibly infringes on Cariou's copyrights in his original photographs. We remand for that determination.

    77
    [712] III.
    78

    In addition to its conclusion that Prince is liable for infringing on Cariou's copyrights, the district court determined that the Gagosian defendants are liable as vicarious and contributory infringers. Cariou, 784 F.Supp.2d at 354. With regard to the twenty-five of Prince's artworks, which, as we have held, do not infringe on Cariou's copyrights, neither Lawrence Gagosian nor the Gallery may be liable as a vicarious or contributory infringer. See Faulkner v. Nat'l Geographic Enters., Inc., 409 F.3d 26, 40 (2d Cir.2005). If the district court concludes on remand that Prince is liable as a direct infringer with regard to any of the remaining five works, the district court should determine whether the Gagosian defendants should be held liable, directly or secondarily, as a consequence of their actions with regard to those works. See Copyright Act, 17 U.S.C. § 106(1), (2), (3), (5).

    79
    CONCLUSION
    80

    For the reasons discussed, we hold that all except five (Graduation, Meditation, Canal Zone (2007), Canal Zone (2008), and Charlie Company) of Prince's artworks make fair use of Cariou's photographs. We express no view as to whether the five are also entitled to a fair use defense. We REMAND with respect to those five so that the district court, applying the proper standard, can determine in the first instance whether any of them infringes on Cariou's copyrights or whether Prince is entitled to a fair use defense with regard to those artworks as well. The judgment of the district court is REVERSED in part and VACATED in part.[6] The case is REMANDED for further proceedings consistent with this opinion.

    81
    WALLACE, J., Senior Circuit Judge, concurring in part and dissenting in part:
    82

    I agree with the bulk of the majority decision as to the law, including the majority's determination that the district court incorrectly imposed a requirement that the allegedly infringing works comment on the original works to be entitled to a fair use defense. See Cariou v. Prince, 784 F.Supp.2d 337, 348-49 (S.D.N.Y.2011). I nevertheless part company with the majority.

    83

    While we may, as an appellate court, determine that secondary works are fair use in certain instances, see Harper & Row, Publishers, Inc. v. Nation Enters., 471 U.S. 539, 560, 105 S.Ct. 2218, 85 L.Ed.2d 588 (1985), in the usual case, after correcting an erroneous legal standard employed by the district court, we would remand for reconsideration. This standard, I suggest, should apply here where factual determinations must be reevaluated — and perhaps new evidence or expert opinions will be deemed necessary by the fact finder — after which a new decision can be made under the corrected legal analysis. But the majority short-circuits this time-tested search for a just result under the law. I would not apply the shortcut but would set aside the summary judgment, remand the entire case to the district court, and allow the district court to analyze [713] material evidence under the proper standard.

    84

    Unlike the majority, I would allow the district court to consider Prince's statements in reviewing fair use. While not the sine qua non of fair use, see Blanch v. Koons, 467 F.3d 244, 255 n. 5 (2d Cir. 2006), I see no reason to discount Prince's statements as the majority does. While it may seem intuitive to assume that a defendant claiming fair use would typically give self-serving ex post facto testimony to support a defense, this Court has nevertheless relied on such statements when making this inquiry — even if just to confirm its own analysis. See id. at 252-53, 255; see also Castle Rock Entm't, Inc. v. Carol Publ'g Grp., Inc., 150 F.3d 132, 142 (2d Cir.1998) (looking to statements of the allegedly infringing work's creators when analyzing the purpose and character of the secondary work). Thus, I view Prince's statements — which, as Prince acknowledges, consist of "his view of the purpose and effect of each of the individual [p]aintings" — as relevant to the transformativeness analysis.

    85

    The majority relies on the Seventh Circuit's decision in Brownmark Films, LLC v. Comedy Partners, 682 F.3d 687 (7th Cir.2012), for the proposition that all the Court needs to do here to determine transformativeness is view the original work and the secondary work and, apparently, employ its own artistic judgment. In my view, Brownmark cannot be extended so far. Brownmark arose under an unusual procedural posture: a motion to dismiss based on a non-pleaded fair use affirmative defense converted into a motion for summary judgment on appeal. See id. The court in Brownmark determined that it needed only to review the allegedly infringing video against the original to determine that the secondary work was permissible parody. Id. at 692-93. It appears to me, however, that Brownmark left open the possibility that additional evidence could be relevant to the fair use inquiry in a different procedural context. See id. at 692 n. 2 (identifying that the defendant could have put forth additional evidence to bolster its fair use defense if the case arose from a typical summary judgment motion); id. at 692 (stating that the district court was only required to consider the original and secondary videos, "especially in light of [the plaintiff's] failure to make any concrete contention" as to the secondary video's potential market impact).

    86

    Further, Brownmark apparently arose in the context of a clear case of parody — so obvious that the appeals court affirmed the district court's conclusion that fair use was evident from even a "fleeting glance" at the original and secondary works. Id. at 689-90. I do not believe that the transformativeness of Prince's works — which have not been presented as parody or satire — can be so readily determined. Because this case arises after extensive discovery and argument by the parties, I disagree that we must limit our inquiry to our own artistic perceptions of the original and secondary works.

    87

    Indeed, while I admit freely that I am not an art critic or expert, I fail to see how the majority in its appellate role can "confidently" draw a distinction between the twenty-five works that it has identified as constituting fair use and the five works that do not readily lend themselves to a fair use determination. This, mind you, is done on a summary judgment review with no understanding of what additional evidence may be presented on remand. I also fail to see a principled reason for remanding to the district court only the five works the majority identifies as close calls, although I agree that they must be sent back to the trial court. If the district [714] court is in the best position to determine fair use as to some paintings, why is the same not true as to all paintings? Certainly we are not merely to use our personal art views to make the new legal application to the facts of this case. Cf. Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 582, 114 S.Ct. 1164, 127 L.Ed.2d 500 (1994) ("`[I]t would be a dangerous undertaking for persons trained only to the law to constitute themselves final judges of the worth of [a work], outside of the narrowest and most obvious limits'"), quoting Bleistein v. Donaldson Lithographing Co., 188 U.S. 239, 251, 23 S.Ct. 298, 47 L.Ed. 460 (1903). It would be extremely uncomfortable for me to do so in my appellate capacity, let alone my limited art experience.

    88

    In my view, because the district court takes the primary role in determining the facts and applying the law to the facts in fair use cases, after which we exercise our appellate review if called upon to do so, I conclude that as to each painting, "the district court is best situated to determine, in the first instance," whether Prince is entitled to a fair use defense in light of the correct legal standard. See majority opinion at 711-12. I mean no disrespect to the majority, but I, for one, do not believe that I am in a position to make these fact- and opinion-intensive decisions on the twenty-five works that passed the majority's judicial observation. I do not know what additional facts will become relevant under the corrected rule of law, nor am I trained to make art opinions ab initio.

    89

    I would thus remand the entire case — all thirty of Prince's paintings — for further proceedings in the district court on an open record to take such additional testimony as needed and apply the correct legal standard. On this basis, therefore, I respectfully dissent.

    90

    [1] The Honorable J. Clifford Wallace, United States Circuit Judge of the United States Court of Appeals for the Ninth Circuit, sitting by designation.

    91

    [2] We refer to Gagosian Gallery and its owner Lawrence Gagosian collectively as "Gagosian" or the "Gallery."

    92

    [3] The district court's opinion indicated that there are twenty-nine artworks at issue in this case. See Cariou, 784 F.Supp.2d at 344 nn. 5, 6. There are actually thirty.

    93

    [4] Images of the Prince artworks, along with the Yes Rasta photographs incorporated therein, appear in the Appendix to this opinion. The Appendix is available at http://www.ca2.uscourts.gov/11-1197apx.htm.

    94

    [5] At oral argument, counsel for Cariou indicated that he opposes the destruction of any of the works of art that are the subject of this litigation.

    95

    [6] Because we reverse the district court with regard to the twenty-five of the artworks, and leave open the question of fair use with regard to the remaining five, we vacate the district court's injunction. In the event that Prince and Gagosian are ultimately held liable for copyright infringement, and in light of all parties' agreement at oral argument that the destruction of Prince's artwork would be improper and against the public interest, a position with which we agree, the district court should revisit what injunctive relief, if any, is appropriate. See eBay, Inc. v. MercExchange, L.L.C., 547 U.S. 388, 391, 126 S.Ct. 1837, 164 L.Ed.2d 641 (2006); Salinger v. Colting, 607 F.3d 68, 77 (2d Cir.2010).

  • 5 Authors Guild v. Google (2013)

    1
    954 F.Supp.2d 282
    THE AUTHORS GUILD, INC., and BETTY MILES, JOSEPH GOULDEN, and JIM BOUTON, on behalf of themselves and all others similarly situated, Plaintiffs,
    v.
    GOOGLE INC., Defendant.
    2
    No. 05 Civ. 8136 (DC).
    3

    United States District Court, S.D. New York.

    4
    November 14, 2013.
    5

    BONI & ZACK LLC, Michael J. Boni, Esq., Joshua D. Snyder, Esq., John E. Sindoni, Esq., Bala Cynwyd, PA, for Plaintiffs.

    6

    FRANKFURT KURNIT KLEIN & SELZ P.C., Edward H. Rosenthal, Esq., Jeremy S. Goldman, Esq., New York, NY,

    7

    MILBERG LLP, Sanford P. Dumain, Esq., New York, NY,

    8

    DURIE TANGRI LLP, Daralyn J. Durie, Esq., Joseph C. Gratz, Esq., David McGowan, Esq., Genevieve P. Rosloff, Esq., San Francisco, CA, for Defendant Google, Inc.

    9

    SAMUELSON LAW, TECHNOLOGY & PUBLIC POLICY CLINIC, Jennifer M. Urban, Esq., Babak Siavoshy, Esq., Jason Schultz, Esq., University of California, Berkeley, School of Law, Berkeley, CA, -and- Matthew Sag, Esq., Loyola University of Chicago School of Law, Chicago, IL, for Amicus Curiae Digital Humanities and Law Scholars.

    10

    JONATHAN BAND PLLC, Jonathan Band, Esq., Washington, DC, for Amicus Curiae American Library Association, Association of College and Research Libraries, Association of Research Libraries, and Electronic Frontier Foundation.

    11
    OPINION
    12
    DENNY CHIN, Circuit District Judge.
    13

    Since 2004, when it announced agreements with several major research libraries to digitally copy books in their collections, defendant Google Inc. ("Google") has scanned more than twenty million books. It has delivered digital copies to participating libraries, created an electronic database of books, and made text available for online searching through the use of "snippets." Many of the books scanned by Google, however, were under copyright, and Google did not obtain permission from the copyright holders for these usages of their copyrighted works. As a consequence, in 2005, plaintiffs brought this class action charging Google with copyright infringement.

    14

    Before the Court are the parties' cross-motions for summary judgment with respect to Google's defense of fair use under § 107 of the Copyright Act, 17 U.S.C. § 107. For the reasons set forth below, Google's motion for summary judgment is granted and plaintiffs' motion for partial summary judgment is denied. Accordingly, judgment will be entered in favor of Google dismissing the case.

    15
    BACKGROUND
    16
    A. The Facts
    17

    For purposes of this motion, the facts are not in dispute. (See 9/23/13 Tr. 10-11, 15, 25-28 (Doc. No. 1086)).[1] They are summarized as follows:

    18
    1. The Parties
    19

    Plaintiff Jim Bouton, the former pitcher for the New York Yankees, is the legal or beneficial owner of the U.S. copyright in the book Ball Four. Plaintiff Betty Miles is the legal or beneficial owner of the U.S. copyright in the book The Trouble with Thirteen. Plaintiff Joseph Goulden is the legal or beneficial owner of the U.S. copyright in the book The Superlawyers: The Small and Powerful World of the Great Washington Law Firms. (Google Resp. ¶¶ 1-3).[2] All three books have been scanned by Google and are available for search on Google's website, without plaintiffs' permission. (Google Resp. ¶ 4). Plaintiff The Authors Guild, Inc., is the nation's largest organization of published authors and it advocates for and supports the copyright and contractual interests of published writers. (Google Resp. ¶¶ 7-8).

    20

    Google owns and operates the largest Internet search engine in the world. (Google Resp. ¶ 9). Each day, millions of people use Google's search engine free of charge; commercial and other entities pay to display ads on Google's websites and on other websites that contain Google ads. (Google Resp. ¶ 10). Google is a for-profit entity, and for the year ended December 31, 2011, it reported over $36.5 billion in advertising revenues. (Google Resp. ¶ 11).

    21
    2. The Google Books Project
    22

    In 2004, Google announced two digital books programs. The first, initially called "Google Print" and later renamed the "Partner Program," involved the "hosting" and display of material provided by book publishers or other rights holders. (Google Resp. ¶¶ 13, 14). The second became known as the "Library Project," and over time it involved the digital scanning of books in the collections of the New York Public Library, the Library of Congress, and a number of university libraries. (Clancy Decl. ¶ 5 (Doc. No. 1035); Google Resp. ¶¶ 25, 26, 27; Pl. Resp. ¶ 14).

    23

    The Partner Program and the Library Project together comprise the Google Books program ("Google Books"). (Google Resp. ¶ 15). All types of books are encompassed, including novels, biographies, children's books, reference works, textbooks, instruction manuals, treatises, dictionaries, cookbooks, poetry books, and memoirs. (Pl. Resp. ¶ 6; Jaskiewicz Decl. ¶ 4 (Doc. No. 1041)). Some 93% of the books are non-fiction while approximately 7% are fiction.[3] Both in-print and out-of-print books are included, although the great majority are out-of-print. (Jaskiewicz Decl. ¶ 4).

    24

    In the Partner Program, works are displayed with permission of the rights holders. (Google Resp. ¶ 16). The Partner Program is aimed at helping publishers sell books and helping books become discovered. (Google Resp. ¶ 18). Initially, Google shared revenues from ads with publishers or other rights holders in certain circumstances. In 2011, however, Google stopped displaying ads in connection with all books. (Google Resp. ¶¶ 17, 21; Dougall Decl. ¶¶ 5-8 (Doc. No. 1076)). Partners provide Google with a printed copy of their books for scanning, or a digital copy if one already exists. (Google Resp. ¶ 19). Partners decide how much of their books — from a few sample pages to the entire book — are browsable. (Google Resp. ¶ 20). As of early 2012, the Partner Program included approximately 2.5 million books, with the consent of some 45,000 rights holders. (Google Resp. ¶ 24).

    25

    As for the Library Project, Google has scanned more than twenty million books, in their entirety, using newly-developed scanning technology. (Google Resp. ¶¶ 28, 29). Pursuant to their agreement with Google, participating libraries can download a digital copy of each book scanned from their collections. (Google Resp. ¶ 30). Google has provided digital copies of millions of these books to the libraries, in accordance with these agreements. (Google Resp. ¶ 85). Some libraries agreed to allow Google to scan only public domain works, while others allowed Google to scan in-copyright works as well. (Google Resp. ¶ 36).

    26

    Google creates more than one copy of each book it scans from the library collections, and it maintains digital copies of each book on its servers and back-up tapes. (Google Resp. ¶¶ 40, 41). Participating libraries have downloaded digital copies of in-copyright books scanned from their collections. (Google Resp. ¶¶ 53, 54). They may not obtain a digital copy created from another library's book. (Jaskiewicz Decl. ¶¶ 6, 8). The libraries agree to abide by the copyright laws with respect to the copies they make. (Clancy Decl. ¶ 5).

    27

    Google did not seek or obtain permission from the copyright holders to digitally copy or display verbatim expressions from in-copyright books. (Google Resp. ¶¶ 53, 54). Google has not compensated copyright holders for its copying of or displaying of verbatim expression from in-copyright books or its making available to libraries for downloading of digital copies of in-copyright books scanned from their collections. (Google Resp. ¶ 55).

    28
    3. Google Books
    29

    In scanning books for its Library Project, including in-copyright books, Google uses optical character recognition technology to generate machine-readable text, compiling a digital copy of each book. (Google Resp. ¶ 62; Pl. Resp. ¶ 18; Jaskiewicz Decl. ¶ 3). Google analyzes each scan and creates an overall index of all scanned books. The index links each word or phrase appearing in each book with all of the locations in all of the books in which that word or phrase is found. The index allows a search for a particular word or phrase to return a result that includes the most relevant books in which the word or phrase is found. (Clancy Decl. ¶ 6; Pl. Resp. ¶ 22-26). Because the full texts of books are digitized, a user can search the full text of all the books in the Google Books corpus. (Clancy Decl. ¶ 7; Google Resp. ¶ 42).

    30

    Users of Google's search engine may conduct searches, using queries of their own design. (Pl. Resp. ¶ 10). In response to inquiries, Google returns a list of books in which the search term appears. (Clancy Decl. ¶ 8). A user can click on a particular result to be directed to an "About the Book" page, which will provide the user with information about the book in question. The page includes links to sellers of the books and/or libraries that list the book as part of their collections. No advertisements have ever appeared on any About the Book page that is part of the Library Project. (Clancy Decl. ¶ 9).

    31

    For books in "snippet view" (in contrast to "full view" books), Google divides each page into eighths — each of which is a "snippet," a verbatim excerpt. (Google Resp. ¶¶ 43, 44). Each search generates three snippets, but by performing multiple searches using different search terms, a single user may view far more than three snippets, as different searches can return different snippets. (Google Resp. ¶ 45). For example, by making a series of consecutive, slightly different searches of the book Ball Four, a single user can view many different snippets from the book. (Google Resp. ¶¶ 46, 47).

    32

    Google takes security measures to prevent users from viewing a complete copy of a snippet-view book. For example, a user cannot cause the system to return different sets of snippets for the same search query; the position of each snippet is fixed within the page and does not "slide" around the search term; only the first responsive snippet available on any given page will be returned in response to a query; one of the snippets on each page is "black-listed," meaning it will not be shown; and at least one out of ten entire pages in each book is black-listed. (Google Resp. ¶¶ 48-50; Pl. Resp. ¶¶ 35, 37-40). An "attacker" who tries to obtain an entire book by using a physical copy of the book to string together words appearing in successive passages would be able to obtain at best a patchwork of snippets that would be missing at least one snippet from every page and 10% of all pages. (Pl. Resp. ¶ 41). In addition, works with text organized in short "chunks," such as dictionaries, cookbooks, and books of haiku, are excluded from snippet view. (Pl. Resp. ¶ 42).

    33
    4. The Benefits of the Library Project and Google Books
    34

    The benefits of the Library Project are many. First, Google Books provides a new and efficient way for readers and researchers to find books. (See, e.g., Clancy Decl. Ex. G). It makes tens of millions of books searchable by words and phrases. It provides a searchable index linking each word in any book to all books in which that word appears. (Clancy Decl. ¶ 7). Google Books has become an essential research tool, as it helps librarians identify and find research sources, it makes the process of interlibrary lending more efficient, and it facilitates finding and checking citations. (Br. of Amici Curiae American Library Ass'n et al. at 4-7 (Doc. No. 1048)). Indeed, Google Books has become such an important tool for researchers and librarians that it has been integrated into the educational system — it is taught as part of the information literacy curriculum to students at all levels. (Id. at 7).

    35

    Second, in addition to being an important reference tool, Google Books greatly promotes a type of research referred to as "data mining" or "text mining." (Br. of Digital Humanities and Law Scholars as Amici Curiae at 1 (Doc. No. 1052)). Google Books permits humanities scholars to analyze massive amounts of data — the literary record created by a collection of tens of millions of books. Researchers can examine word frequencies, syntactic patterns, and thematic markers to consider how literary style has changed over time. (Id. at 8-9; Clancy Decl. ¶ 15). Using Google Books, for example, researchers can track the frequency of references to the United States as a single entity ("the United States is") versus references to the United States in the plural ("the United States are") and how that usage has changed over time. (Id. at 7). The ability to determine how often different words or phrases appear in books at different times "can provide insights about fields as diverse as lexicography, the evolution of grammar, collective memory, the adoption of technology, the pursuit of fame, censorship, and historical epidemiology." Jean-Baptiste Michel et al., Quantitative Analysis of Culture Using Millions of Digitized Books, 331 Science 176, 176 (2011) (Clancy Decl. Ex. H). Third, Google Books expands access to books. In particular, traditionally underserved populations will benefit as they gain knowledge of and access to far more books. Google Books provides print-disabled individuals with the potential to search for books and read them in a format that is compatible with text enlargement software, text-to-speech screen access software, and Braille devices. Digitization facilitates the conversion of books to audio and tactile formats, increasing access for individuals with disabilities. (Letter from Marc Maurer, President of the National Federation for the Blind, to J. Michael McMahon, Office of the Clerk (Jan. 19, 2010) (Doc. No. 858)). Google Books facilitates the identification and access of materials for remote and underfunded libraries that need to make efficient decisions as to which resources to procure for their own collections or through interlibrary loans. (Br. of Amici Curiae American Library Ass'n at 5-6).

    36

    Fourth, Google Books helps to preserve books and give them new life. Older books, many of which are out-of-print books that are falling apart buried in library stacks, are being scanned and saved. See Authors Guild v. Google Inc., 770 F. Supp. 2d 666, 670 (S.D.N.Y. 2011). These books will now be available, at least for search, and potential readers will be alerted to their existence.

    37

    Finally, by helping readers and researchers identify books, Google Books benefits authors and publishers. When a user clicks on a search result and is directed to an "About the Book" page, the page will offer links to sellers of the book and/or libraries listing the book as part of their collections. (Clancy Decl. ¶ 9). The About the Book page for Ball Four, for example, provides links to Amazon.com, Barnes&Noble.com;, Books-A-Million, and IndieBound. (See Def. Mem. at 9). A user could simply click on any of these links to be directed to a website where she could purchase the book. Hence, Google Books will generate new audiences and create new sources of income.

    38

    As amici observe: "Thanks to . . . [Google Books], librarians can identify and efficiently sift through possible research sources, amateur historians have access to a wealth of previously obscure material, and everyday readers and researchers can find books that were once buried in research library archives." (Br. of Amici Curiae American Library Ass'n at 3).

    39
    B. Procedural History
    40

    Plaintiffs commenced this action on September 20, 2005, alleging, inter alia, that Google committed copyright infringement by scanning copyrighted books and making them available for search without permission of the copyright holders. From the outset, Google's principal defense was fair use under § 107 of the Copyright Act, 17 U.S.C. § 107.

    41

    After extensive negotiations, the parties entered into a proposed settlement resolving plaintiffs' claims on a class-wide basis. On March 22, 2011, I issued an opinion rejecting the proposed settlement on the grounds that it was not fair, adequate, and reasonable. Authors Guild v. Gooqle Inc., 770 F. Supp. 2d 666 (S.D.N.Y. 2011).

    42

    Thereafter, the parties engaged in further settlement discussions, but they were unable to reach agreement. The parties proposed and I accepted a schedule that called for the filing of plaintiffs' class certification motion, the completion of discovery, and then the filing of summary judgment motions. (See 9/16/11 Order (Doc. No. 982)). Plaintiffs filed a fourth amended class action complaint (the "Complaint") on October 14, 2011. (Doc. No. 985). While the dates in the schedule were subsequently extended, the sequence of events was retained, with the class certification motion to precede the summary judgment motions, and adding dates for Google's filing of a motion to dismiss the Authors Guild's claims. (See, e.g., 1/17/12 Order (Doc. No. 996); 3/28/12 Order (Doc. No. 1007)).

    43

    Plaintiffs filed their class certification motion and Google filed its motion to dismiss the Authors Guild's claims. On May 31, 2012, I issued an opinion denying Google's motion to dismiss and granting the individual plaintiffs' motion for class certification. Authors Guild v. Google Inc., 282 F.R.D. 384 (S.D.N.Y. 2012).

    44

    On June 9, 2012, I issued an order re-setting the briefing schedule for the summary judgment motions. (6/19/12 Order (Doc. No. 1028)). The parties thereafter filed the instant cross-motions for summary judgment. Before the motions were fully submitted, however, the Second Circuit issued an order on September 17, 2012, staying these proceedings pending an interlocutory appeal by Google from my decision granting class certification. (9/17/12 Order (Doc. No. 1063)).

    45

    On July 1, 2013, without deciding the merits of the appeal, the Second Circuit vacated my class certification decision, concluding that "resolution of Google's fair use defense in the first instance will necessarily inform and perhaps moot our analysis of many class certification issues." Authors Guild, Inc. v. Gooqle Inc., 721 F.3d 132, 134 (2d Cir. 2013). The Second Circuit remanded the case "for consideration of the fair use issues." Id. at 135.

    46

    On remand, the parties completed the briefing of the summary judgment motions. I heard oral argument on September 23, 2013. I now rule on the motions.

    47
    DISCUSSION
    48

    For purposes of these motions, I assume that plaintiffs have established a prima facie case of copyright infringement against Google under 17 U.S.C. § 106. See Feist Publ'ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 361 (1991). Google has digitally reproduced millions of copyrighted books, including the individual plaintiffs' books, maintaining copies for itself on its servers and backup tapes. See 17 U.S.C. § 106(1) (prohibiting unauthorized reproduction). Google has made digital copies available for its Library Project partners to download. See 17 U.S.C. § 106(3) (prohibiting unauthorized distribution). Google has displayed snippets from the books to the public. See 17 U.S.C. § 106(5) (prohibiting unauthorized display). Google has done all of this, with respect to in-copyright books in the Library Project, without license or permission from the copyright owners. The sole issue now before the Court is whether Google's use of the copyrighted works is "fair use" under the copyright laws. For the reasons set forth below, I conclude that it is.

    49
    A. Applicable Law
    50

    Fair use is a defense to a claim of copyright infringement. The doctrine permits the fair use of copyrighted works "to fulfill copyright's very purpose, t[t]o promote the Progress of Science and useful Arts.'" Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 575 (1994) (quoting U.S. Const., Art. I, § 8, cl. 8)); accord Cariou v. Prince, 714 F.3d 694, 705 (2d Cir. 2013). Copyright law seeks to achieve that purpose by providing sufficient protection to authors and inventors to stimulate creative activity, while at the same time permitting others to utilize protected works to advance the progress of the arts and sciences. See Eldred v. Ashcroft, 537 U.S. 186, 212 (2003); Blanch v. Koons, 467 F.3d 244, 250 (2d Cir. 2006); Hon. Pierre N. Leval, Toward a Fair Use Standard, 103 Harv. L. Rev. 1105, 1107-08 (1990). As the Supreme Court has held, "[f]rom the infancy of copyright protection, some opportunity for fair use of copyrighted materials has been thought necessary to fulfill copyright's very purpose." Campbell, 510 U.S. at 575; see also Harper & Row Publishers, Inc. v. Nation Enters., 471 U.S. 539, 560 (1985) (recognizing "the latitude for scholarship and comment traditionally afforded by fair use").

    51

    The fair use doctrine is codified in § 107 of the Copyright Act, which provides in relevant part as follows:

    52
    [T]he fair use of a copyrighted work, . . . for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include —
    53
    (1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
    54
    (2) the nature of the copyrighted work;
    55
    (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
    56
    (4) the effect of the use upon the potential market for or value of the copyrighted work.
    57

    17 U.S.C. § 107.

    58

    The determination of fair use is "an open-ended and context-sensitive inquiry," Blanch v. Koons, 467 F.3d at 251, and thus the fair use doctrine calls for "case-by-case analysis," Campbell, 510 U.S. at 577; see also Harper & Row, 471 U.S. at 553. The four factors enumerated in the statute are non-exclusive and provide only "general guidance"; they are to be explored and weighed together, "in light of the purposes of copyright." Campbell, 510 U.S. at 578-79; Harper & Row, 471 U.S. at 560-61. As fair use is an affirmative defense to a claim of copyright infringement, the proponent carries the burden of proof as to all issues in dispute. Am. Geophysical Union v. Texaco Inc., 60 F.3d 913, 918 (2d Cir. 1994); see also Campbell, 510 U.S. at 590.

    59

    A key consideration is whether, as part of the inquiry into the first factor, the use of the copyrighted work is "transformative," that is, whether the new work merely "supersedes" or "supplants" the original creation, or whether it:

    60
    instead adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message; it asks, in other words, whether and to what extent the new work is "transformative."
    61

    Campbell, 510 U.S. at 579 (quoting Leval, Toward a Fair Use Standard, 103 Harv. L. Rev. at 1111); accord Bill Graham Archives v. Darling Kindersley Ltd., 448 F.3d 605, 608 (2d Cir. 2006) ("Most important to the court's analysis of the first factor is 'transformative' nature of the work."); Am. Geophysical Union, 60 F.3d at 923. Although transformative use is not "absolutely necessary" to a finding of fair use, "the goal of copyright, to promote science and the arts, is generally furthered by the creation of transformative works." Campbell, 510 U.S. at 579.

    62
    B. Application
    63

    I discuss each of the four factors separately, and I then weigh them together.

    64
    1. Purpose and Character of Use
    65

    The first factor is "the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes." 17 U.S.C. § 107(1).

    66

    Google's use of the copyrighted works is highly transformative. Google Books digitizes books and transforms expressive text into a comprehensive word index that helps readers, scholars, researchers, and others find books. Google Books has become an important tool for libraries and librarians and cite-checkers as it helps to identify and find books. The use of book text to facilitate search through the display of snippets is transformative. See Perfect 10, Inc. v. Amazon.com, Inc., 508 F.3d 1146, 1168 (9th Cir. 2007) (holding that use of works — "thumbnail images," including copyrighted photographs — to facilitate search was "transformative"); Kelly v. Arriba Soft Corp., 336 F.3d 811 (9th Cir. 2003) (same); see also Bill Graham Archives, 448 F.3d at 609-11 (holding that display of images of posters in 480-page cultural history of the Grateful Dead was transformative, explaining that "[w]hile the small size [of the images of the posters] is sufficient to permit readers to recognize the historial significance of the posters, it is inadequate to offer more than a glimpse of their expressive value"). The display of snippets of text for search is similar to the display of thumbnail images of photographs for search or small images of concert posters for reference to past events, as the snippets help users locate books and determine whether they may be of interest. Google Books thus uses words for a different purpose — it uses snippets of text to act as pointers directing users to a broad selection of books.

    67

    Similarly, Google Books is also transformative in the sense that it has transformed book text into data for purposes of substantive research, including data mining and text mining in new areas, thereby opening up new fields of research. Words in books are being used in a way they have not been used before. Google Books has created something new in the use of book text — the frequency of words and trends in their usage provide substantive information.

    68

    Google Books does not supersede or supplant books because it is not a tool to be used to read books. Instead, it "adds value to the original" and allows for "the creation of new information, new aesthetics, new insights and understandings." Leval, Toward a Fair Use Standard, 103 Harv. L. Rev. at 1111. Hence, the use is transformative.

    69

    It is true, of course, as plaintiffs argue, that Google is a for-profit entity and Google Books is largely a commercial enterprise. The fact that a use is commercial "tends to weigh against a finding of fair use." Harper & Row, 471 U.S. at 562; accord Campbell, 510 U.S. at 585. On the other hand, fair use has been found even where a defendant benefitted commercially from the unlicensed use of copyrighted works. See, e.g., Blanch, 467 F.3d at 253; Bill Graham Archives, 448 F.3d at 612. See also Castle Rock Entm't, Inc. v. Carol Publ'q Grp., Inc., 150 F.3d 132, 142 (2d Cir. 1998) (observing that Second Circuit does "not give much weight to the fact that the secondary use was for commercial gain"). Here, Google does not sell the scans it has made of books for Google Books; it does not sell the snippets that it displays; and it does not run ads on the About the Book pages that contain snippets. It does not engage in the direct commercialization of copyrighted works. See 17 U.S.C. § 107(1). Google does, of course, benefit commercially in the sense that users are drawn to the Google websites by the ability to search Google Books. While this is a consideration to be acknowledged in weighing all the factors, even assuming Google's principal motivation is profit, the fact is that Google Books serves several important educational purposes.

    70

    Accordingly, I conclude that the first factor strongly favors a finding of fair use.

    71
    2. Nature of Copyrighted Works
    72

    The second factor is "the nature of the copyrighted work." 17 U.S.C. § 107(2).[4] Here, the works are books — all types of published books, fiction and non-fiction, in-print and out-of-print. While works of fiction are entitled to greater copyright protection, Stewart v. Abend, 495 U.S. 207, 237 (1990), here the vast majority of the books in Google Books are non-fiction. Further, the books at issue are published and available to the public. These considerations favor a finding of fair use. See Arica Inst., Inc. v. Palmer, 970 F.2d 1067, 1078 (2d Cir. 1992) ("Whether or not a work is published is critical to its nature under factor two because the scope of fair use is narrower with respect to unpublished works.") (quoting New Era Publ'ns Intern., ApS v. Carol Publ'q Grp., 904 F.2d 152, 157 (2d Cir. 1990) (internal quotation marks ommitted)).

    73
    3. Amount and Substantiality of Portion Used
    74

    The third factor is "the amount and substantiality of the portion used in relation to the copyrighted work as a whole." 17 U.S.C. § 107(3). Google scans the full text of books — the entire books — and it copies verbatim expression. On the other hand, courts have held that copying the entirety of a work may still be fair use. See, e.g., Sony Corp. of Am. v. Universal City Studios, Inc., 464 U.S. 417, 449-50 (1984); Bill Graham Archives, 448 F.3d at 613 ("copying the entirety of a work is sometimes necessary to make a fair use of the image"). Here, as one of the keys to Google Books is its offering of full-text search of books, full-work reproduction is critical to the functioning of Google Books. Significantly, Google limits the amount of text it displays in response to a search.

    75

    On balance, I conclude that the third factor weighs slightly against a finding of fair use.

    76
    4. Effect of Use Upon Potential Market or Value
    77

    The fourth factor is "the effect of the use upon the potential market for or value of the copyrighted work." 17 U.S.C. § 107(4). Here, plaintiffs argue that Google Books will negatively impact the market for books and that Google's scans will serve as a "market replacement" for books. (Pl. Mem. at 41). It also argues that users could put in multiple searches, varying slightly the search terms, to access an entire book. (9/23/13 Tr. at 6).

    78

    Neither suggestion makes sense. Google does not sell its scans, and the scans do not replace the books. While partner libraries have the ability to download a scan of a book from their collections, they owned the books already — they provided the original book to Google to scan. Nor is it likely that someone would take the time and energy to input countless searches to try and get enough snippets to comprise an entire book. Not only is that not possible as certain pages and snippets are blacklisted, the individual would have to have a copy of the book in his possession already to be able to piece the different snippets together in coherent fashion.

    79

    To the contrary, a reasonable factfinder could only find that Google Books enhances the sales of books to the benefit of copyright holders. An important factor in the success of an individual title is whether it is discovered — whether potential readers learn of its existence. (Harris Decl. ¶ 17 (Doc. No. 1039)). Google Books provides a way for authors' works to become noticed, much like traditional in-store book displays. (Id. at ¶¶ 14-15). Indeed, both librarians and their patrons use Google Books to identify books to purchase. (Br. of Amici Curiae American Library Ass'n at 8). Many authors have noted that online browsing in general and Google Books in particular helps readers find their work, thus increasing their audiences. Further, Google provides convenient links to booksellers to make it easy for a reader to order a book. In this day and age of on-line shopping, there can be no doubt but that Google Books improves books sales.

    80

    Hence, I conclude that the fourth factor weighs strongly in favor of a finding of fair use.

    81
    5. Overall Assessment
    82

    Finally, the various non-exclusive statutory factors are to be weighed together, along with any other relevant considerations, in light of the purposes of the copyright laws.

    83

    In my view, Google Books provides significant public benefits. It advances the progress of the arts and sciences, while maintaining respectful consideration for the rights of authors and other creative individuals, and without adversely impacting the rights of copyright holders. It has become an invaluable research tool that permits students, teachers, librarians, and others to more efficiently identify and locate books. It has given scholars the ability, for the first time, to conduct full-text searches of tens of millions of books. It preserves books, in particular out-of-print and old books that have been forgotten in the bowels of libraries, and it gives them new life. It facilitates access to books for print-disabled and remote or underserved populations. It generates new audiences and creates new sources of income for authors and publishers. Indeed, all society benefits.

    84

    Similarly, Google is entitled to summary judgment with respect to plaintiffs' claims based on the copies of scanned books made available to libraries. Even assuming plaintiffs have demonstrated a prima facie case of copyright infringement, Google's actions constitute fair use here as well. Google provides the libraries with the technological means to make digital copies of books that they already own. The purpose of the library copies is to advance the libraries' lawful uses of the digitized books consistent with the copyright law. The libraries then use these digital copies in transformative ways. They create their own full-text searchable indices of books, maintain copies for purposes of preservation, and make copies available to print-disabled individuals, expanding access for them in unprecedented ways. Google's actions in providing the libraries with the ability to engage in activities that advance the arts and sciences constitute fair use.

    85

    To the extent plaintiffs are asserting a theory of secondary liability against Google, the theory fails because the libraries' actions are protected by the fair use doctrine. Indeed, in the HathiTrust case, Judge Baer held that the libraries' conduct was fair use. See Authors Guild, Inc. v. HathiTrust, 902 F. Supp. 2d 445, 460-61, 464 (S.D.N.Y. 2012) ("I cannot imagine a definition of fair use that would not encompass the transformative uses made by Defendants' [Mass Digitization Project] and would require that I terminate this invaluable contribution to the progress of science and cultivation of the arts that at the same time effectuates the ideals espoused by the [Americans with Disabilities Act]."). The fair use analysis set forth above with respect to Google Books applies here as well to the libraries' use of their scans, and if there is no liability for copyright infringement on the libraries' part, there can be no liability on Google's part.

    86
    CONCLUSION
    87

    For the reasons set forth above, plaintiffs' motion for partial summary judgment is denied and Google's motion for summary judgment is granted. Judgment will be entered in favor of Google dismissing the Complaint. Google shall submit a proposed judgment, on notice, within five business days hereof.

    88

    SO ORDERED.

    89

    [1] When pressed at oral argument to identify any factual issues that would preclude the award of summary judgment, plaintiffs' counsel was unable to do so. (Id. at 25-26).

    90

    [2] "Google Resp." refers to Google's Responses and Objections to plaintiffs' Statement of Undisputed Facts in Support of Their Motion for Partial Summary Judgment (Doc. No. 1077). "Pl. Resp." refers to plaintiffs' Response to Google's Local Rule 56.1 Statement (Doc. No. 1071). I have relied on the parties' responses to the statements of undisputed facts only to the extent that factual statements were not controverted.

    91

    [3] These estimates are based on studies of the contents of the libraries involved. (Def. Mem. at 7 (Doc. No. 1032) (citing Brian Lavoie and Lorcan Dempsey, Beyond 1923: Characteristics of Potentially In-Copyright Print Books in Library Collections, 15-D-Lib 11/12 (2009), available at http://www.dlib.org/dlib/ november09/1avoie/111avoie.html (last visited November 12, 2013)). The numbers are not disputed. (See 9/23/2013 Tr. at 26).

    92

    [4] The parties agree that the second factor plays little role in the ultimate fair use determination. (Pl. Mem. at 36 n.18 (Doc. No. 1050); Def. Mem. at 25). See On Davis v. Gap, Inc., 246 F.3d 152, 175 (2d Cir. 2001) ("The second statutory factor, the nature of the copyrighted work, is rarely found to be determinative.") (internal citation omitted).

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