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Final exam Digital and social media

Terms in this set (81)

Most of us would probably say that Facebook, Twitter, LinkedIn, and YouTube are well-known social media. But marketing managers trying to reach potential customers need a system to classify the more than 400 specialized and diverse social media to select the best among them. Kaplan and Haenlein have proposed a classification system for marketers based on two factors:7
Media richness. This involves the degree of acoustic, visual, and personal contact between two communication partners—face-to-face communications, say, being higher in media richness than telephone or e-mail communications. The higher the media richness and quality of presentation, the greater the social influence that communication partners have on each other's behavior.
Self-disclosure. In any type of social interaction, individuals want to make a positive impression to achieve a favorable image with others. This favorable image is affected by the degree of self-disclosure about a person's thoughts, feelings, likes, and dislikes—where greater self-disclosure is likely to increase one's influence on those reached.
Figure 16-1 uses these two factors of media richness and self-disclosure to position a number of social media sites in two-dimensional space. For example, Wikipedia is a collaborative project that is low on both self-disclosure and media richness.8 LinkedIn, on the other hand, contains detailed career and résumé information for business networking and is high in self-disclosure but only moderate in media richness.
Marketing managers look carefully at the positioning of the social media shown in Figure 16-1 when selecting those to use in their plans. For example, LinkedIn, positioned in the Social Networking Sites segment in Figure 16-1, is a professional networking service with 400 million members in 200 countries. LinkedIn recently generated $581 million in annual advertising revenue from companies such as Citigroup, Microsoft, Chevron, HP, and Volkswagen, which promote their companies' career opportunities to people with specific job titles.9
Consumers receive information, news, and education from print (newspapers, magazines) and electronic (radio, television) media. But marketing managers know that social media are very different from traditional media such as newspapers or even radio or television. Social media and traditional media have both similarities and differences that impact marketing strategies, as described below:10
Ability to reach both large and niche audiences. Both kinds of media can be designed to reach either a mass market or specialized segments; however, good execution is critical, and audience size is not guaranteed.
Expense and access. Messages and ads in traditional media such as newspapers or television generally are expensive to produce and have restricted access by individuals. Also, traditional media are typically owned privately or by the government. In contrast, messages on social media are generally accessible everywhere to those with smartphones, computers, and tablet devices and can be produced cheaply.
Training and number of people involved. Producing traditional media typically requires specialized skills and training and often involves teams of people. In contrast, sending messages on social media requires only limited skills, so practically anyone can post a message that includes words and images.
Time to delivery. Traditional media can involve days or even months of continuing effort to deliver the communication, and time lags can be extensive. In contrast, individuals using social media can post virtually instantaneous content.
Permanence. Traditional media, once created, cannot be altered. For example, once a magazine article is printed and distributed, it cannot be changed. But social media message content can be altered almost instantaneously by comments or editing.
Credibility and social authority. Individuals and organizations can establish themselves as "experts" in their given field, thereby becoming "influencers" in that field. For example, The New York Times has immense credibility among newspaper media. But with social media, a sender often simply begins to participate in the "conversation," hoping that the quality of the message will establish credibility with the receivers, thereby enhancing the sender's influence.
In terms of privacy, with minor exceptions, recipients of traditional media such as TV or radio ads are completely anonymous. Subscribers to newspapers or magazines are somewhat less so because publishers can sell subscription lists to advertisers. Social media users have much less privacy and anonymity. When social media sites breach expectations for privacy, unethical outsiders can access users' names.
Facebook is the first choice among people seeking to create and maintain online connections with others by using photos, videos, and short text entries. Facebook has enhanced or added to its texting, photo- and video-sharing, and virtual reality capabilities with its acquisitions of WhatsApp, Instagram, and Oculus Rift. With more than 1.7 billion active users—1 in every 5 people on the planet—Facebook is truly the 900-pound gorilla among all social media.

Facebook is a website where users may create a personal profile, add other users as friends, and exchange comments, photos, videos, and "likes" with them. Facebook users today can keep friends and family updated on what they are thinking, doing, and feeling. In addition, users may chat with friends and create and join common-interest groups, and businesses can create Facebook Pages as a means of advertising and building relationships with customers. Facebook is open to anyone age 13 and older.
CEO Mark Zuckerberg and COO Sheryl Sandberg have managed Facebook through incredible growth. To understand the magnitude of the company consider that Facebook:
Has 1.1 billion people log on daily.
Processes 300 million photos, 4.5 billion likes, and 10 billion messages each day.
Has 84 percent of its users living outside the United States and Canada.
Generates revenue from more than 2 million advertisers.
Half of all Facebook users have more than 200 friends in their network, and 18- to 29-year-olds have 300!12
Facebook in a Brand Manager's Strategy
Facebook Pages were created as a method for brand managers to generate awareness for their product, service, or brand within Facebook. They allow brand managers to promote their business on Facebook, separate from their private and personal profiles. Done well, these are magnets for feedback. Additionally, Facebook Page information is generally public and cataloged by search engines so brand managers can identify influencers within their customer base.
To generate new customers and increase traffic to their Facebook Pages, brand managers can use paid ads and sponsored stories within the Facebook advertising platform. An advantage of these Facebook ads is that the content can migrate into Facebook conversations among friends—to the delight of advertisers.
The marketing challenge for an organization's Facebook Page is to post content that will generate the best response. Brand managers using Facebook seek to maintain a conversation with their fans. Research suggests the following guidelines to engage fans on Facebook:13
Be creative in using links, photos, and videos.
Make it familiar, but with a twist. Focus content strategy on imagery and messaging that is familiar to fans—punctuated with something unique. Aflac uses its Aflac Duck—the well-known "spokes-duck"—to treat fans to Aflac Duck commercials, virtual Duck gifts, and supplemental insurance offers.
Keep it fresh. Redbox uses frequent posts to keep fans informed about its latest film releases.
Learn users' passions and let them guide content. Taco Bell polls users to see which menu item they'd like featured in the following week's menu profile photo.
Gaining meaningful user loyalty enables a company to target promotional offers to its best customers. A recent study found that "Likes" or "Followers" on a brand's Facebook Page are worth an astounding $174 in terms of product spending, brand loyalty, and "propensity to recommend" the site to others.14
Launching a New Social Network Using Facebook
Want to launch your own social network? For example, StuffDOT is a place for people to post the things they like and earn rewards for their recommendations and online purchases. It differs from other social-sharing websites because users "dot" their favorite things to StuffDOT and receive financial rewards or commissions when someone purchases that item. Commissions can be redeemed for gift cards with many major retailers, such as Amazon and Target.15
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Figure 16-3 shows the Facebook Page for StuffDOT, a new start-up that targets college-aged women. The notes in the margins in Figure 16-3 show how elements on the StuffDOT Facebook Page seek to connect with fans, generate conversations, and help measure the success of the Facebook Page:
Profile and Cover Image. Show StuffDOT's attention-getting logo.
People Like This Page. Tells the number of people clicking the "Like" button.
Facebook Page Posts. Pictures items such as clothes and travel information shared with users.

Facebook offers its business customers a variety of ad templates that help measure the results of an ad, such as "Page Likes" (chosen by StuffDOT) or "Clicks to Website." StuffDOT also uses Facebook's "App Install" template to inform and encourage people to download the StuffDOT app.
StuffDOT's challenge is to break through the social media clutter and attract loyal users. So the StuffDOT marketing team works continuously to present an attention-getting, user-friendly Facebook Page.
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As a start-up, StuffDOT finds new users and website testers by recruiting college Campus Ambassadors. StuffDOT Campus Ambassadors actively promote the site nationally through workshops, social media marketing, word-of-mouth, and promotional partnerships with events and businesses on college campuses. To learn more about what StuffDOT is up to now, go to
Mobile Marketing at Facebook
Keeping 1.7 billion users happy is a tall order—even for Facebook. As the most common method of accessing Facebook shifts from computers to mobile smartphones, the company is continually making changes to its mobile capabilities. As CEO Mark Zuckerberg explains: "Moving from just being a single service to a family of world-class apps to help people share in different ways is the biggest shift in our strategy to connect people in many years."16 Some recent examples include:
Faster news publishing. A new initiative called Instant Articles provides content, rather than links, from media organizations such as The New York Times, National Geographic, and Buzzfeed directly to Newsfeed. This makes access 10 times faster, prevents the Facebook experience from being interrupted, and acknowledges that two-thirds of all American adults now own a smartphone.17
Interactive videos, photo-sharing, and facial recognition. Facebook recently introduced a new feature that lets advertisers post interactive videos that transform social viewers into active participants. Facebook also introduced an app called Moments, which uses facial recognition to identify which "friends" are in the photos and then asks if the user would like to share the photo. It's Facebook's response to the mobile situation where a user takes a photo and someone asks, "Will you send that to me?"18
E-mail marketing for Facebook app. In a program called Custom Audiences, Facebook helps advertisers target customers as they scroll through Facebook's mobile app by matching e-mail addresses provided by the advertisers with the e-mail addresses it has for many of its users. Facebook also identifies "look-alikes," people who are similar to an advertiser's customers, for targeted ads. Currently, more than half of Facebook's sales revenues come from mobile devices!19
Private sharing through Messenger app. Facebook is developing Messenger to become a hub for shopping and entertainment for users, and a platform for customer service "chatbots" for companies. The goal is to better enable e-commerce through smartphones.20
What other changes will Facebook make as part of its mobile marketing strategy? Perhaps only Mark Zuckerberg knows!
Now that "tweets" have become part of our everyday language, it's apparent that Twitter has entered the mainstream of American life. Twitter now has more than 320 million active monthly users worldwide, who post 500 million tweets per day.21
Twitter: An Overview
Twitter is a website that enables users to send and receive tweets, messages up to 140 characters long. Twitter is based on the principle of "followers." So when you choose to follow another Twitter user, that user's tweets appear in reverse chronological order on your Twitter page.

Because of its short message length, the ease of posting and receiving tweets, and its convenience on a smartphone, Twitter can be a good source of information about a brand or product. Carma Laboratories, the maker of Carmex lip balm and skin care products, uses Twitter as an important tool in its social media program to communicate brand messages to its followers. As part of Carmex's social media outreach, the Page 433brand is active on Twitter with daily messages, retweets, and replies.
The immediacy of Twitter messaging allows brands such as Carmex to operate promotions in real time. For example, Carmex partnered with to conduct a scavenger hunt on Twitter where members of TeamLeBron tweeted clues to their location. The first person to arrive at the destination won a jar of Carmex with a 14-karat-gold cap.
Beyond sending out messages, Carmex relies on Twitter as a listening device. Carmex's social media team monitors mentions of Carmex on Twitter to see what people are saying. If there are product concerns, Carmex can reach out to consumers to make sure their concerns are quickly addressed. For more on Carmex and how it uses social media to conduct marketing research, see Chapter 7.
Twitter in a Brand Manager's Strategy
With the 140-character limit on tweets, brand managers cannot expect extensive comments on their brands. But they can use social media management tools such as TweetDeck or HootSuite to see what Twitter users are saying—good and bad—about both their own brands and competitive ones. They can then respond to the negative comments and retweet the positive ones.
Brand managers have various other strategies for reaching, listening to, and interacting with current and potential consumers using Twitter. For example, they can:22
Connect in real time using Twitter's recently acquired broadcasting app, Periscope, or its live stream function. The NFL, for example, streams some of its games on Twitter to reach a young audience that is less accessible on broadcast TV and cable.
Generate brand buzz by developing an official Twitter profile, recruiting followers, and showing photos of their products.
Follow the Twitter profiles that mention their product and monitor what is being said, responding to user criticisms to develop happier customers.
As with Facebook, Twitter can actively engage customers if done creatively. To further enhance this engagement, Twitter recently introduced new features to make the site more appealing and acquired Grip to analyze tweets for businesses hungry for user insights. Twitter also added a function called Ad Groups that lets marketers reach smaller segments based on detailed targeting criteria.23
Unlike Facebook and Twitter, the LinkedIn site's main purpose is professional networking and job searching.
LinkedIn: An Overview
LinkedIn is a business-oriented website that lets users post their professional profiles to connect to a network of businesspeople. These businesspeople are also called connections. This social network has more than 410 million registered members who conduct 6 billion professionally oriented searches annually. Because of its popularity, more than 4 million companies have LinkedIn Company Pages to post news and job openings. LinkedIn's international presence, too, is staggering, as it is used in more than 200 countries and 24 languages.24
LinkedIn in a Brand Manager's Strategy
Marketing managers can use LinkedIn to promote their brand in subtle ways. This is done mainly for business-to-business Page 434(B2B) image building and networking with industry-related groups. Using LinkedIn, brand managers can demonstrate the organization's expertise and create and moderate discussion groups.

According to a survey of small business owners, 41 percent see LinkedIn as potentially beneficial to their company—more than twice that for Facebook, Twitter, or YouTube.25 LinkedIn recently streamlined its research process for finding qualified employees so that an employer can type its needs into the LinkedIn "search box," which results in a summary that includes people, jobs, groups, and companies. Brand managers also use LinkedIn for business development to identify sales leads and locate vendors. Sales representatives often use LinkedIn to see the profiles of purchasing personnel or managers with whom they are meeting. Marketers can also use a LinkedIn feature, called Account Targeting, to direct advertising at specific companies on the platform, and at people with specific job criteria at those companies.26
LinkedIn in a College Senior's Job Search
Of growing importance, Linked-In has more than 43 million students and recent college graduates as members. College career centers and the LinkedIn student link ( give key ideas for building an attention-getting LinkedIn profile for students looking for jobs:27
Write an informative, short, memorable profile headline.
Include an appropriate photo of you, nicely dressed, with a plain background that isn't a goofy Instagram "selfie." And smile.
Create a professional summary—concisely giving your education, qualifications, goals, relevant work experience, and extracurriculars.
Fill the Skills & Expertise section with keywords and phrases the recruiters use in their searches.
Include recommendations from people who know you well—supervisors, colleagues, instructors, advisors.
Set your LinkedIn profile to "public" and create a unique URL ( that you also include in your résumé.
Finally, in your LinkedIn profile, avoid these 10 most overused buzzwords: responsible, strategic, creative, effective, patient, expert, organizational, driven, innovative, analytical. In addition, take advantage of LinkedIn's "Learning Paths" videos available for users at its instructional video site,
The ability of YouTube to reach its audience stretches the imagination. Think about this: YouTube's 1.3 billion users (1) make four billion views per day, (2) upload 300 hours of video each minute, and (3) generate 50 percent of YouTube's traffic from mobile devices.29
YouTube: An Overview
YouTube is a video-sharing website in which users can upload, view, and comment on videos. YouTube uses streaming video technology to display user-generated video content that includes movie and TV clips, music videos, and original videos developed by amateurs. Although most of the content is uploaded by amateurs, many companies offer material on the site through a YouTube channel.
YouTube redesigns its home page periodically to provide a more organized structure to steer users to "channels," rather than simply encourage them to browse like in the past. Recently, YouTube also redesigned the format for its YouTube channels. Page 435These channels serve as home pages for organizations and individuals and allow them to upload their own videos, as well as post and share videos created by others.
What are the most watched videos on YouTube? They are Psy's "Gangnam Style," Wiz Khalifa's "See You Again," and Justin Bieber's "Sorry" with 2.6 billion, 2.1 billion, and 1.9 billion views, respectively. Each of these artists has YouTube channels that aggregate their music and other videos they have uploaded for fans and other users to view.30
YouTube in a Brand Manager's Strategy
YouTube offers great opportunity for a brand manager to produce and show a video that explains the benefits of a complex product. Because YouTube is owned by Google, it incorporates a search engine, so users interested in a specific topic can find it easily. In terms of cost advantages, although a brand manager must pay the cost of creating a video, launching a new channel on YouTube is free. YouTube also offers a program to help small businesses create video ads and buy and manage key words for their video ads on the website. For insight regarding new ways online video is becoming part of mobile marketing strategies see the Marketing Matters box.31
Mobile Marketing Discovers Video Bloggers!
Fifty percent of all YouTube views now take place on a smartphone or a tablet. This incredible shift from just a few years ago signals a new era of consumer behavior and the essential role online video must have in mobile marketing strategies.
Research suggests that when Millennials watch a video on their phones they are twice as engaged as they are when watching on a television. They are also more likely to (1) change their opinion about the brands represented in the ads or the content, (2) discuss the brands with someone else, (3) visit a store carrying the brand, and (4) make a purchase. So getting video messages online is of growing importance to marketers.

Of course placing ads or posting branded content on YouTube is the first level of a mobile marketing strategy. Some marketers, however, have observed that video bloggers, or vloggers, are becoming the online versions of traditional celebrities. Snickers, for example, created an online version of its popular "You're Not You When You're Hungry" campaign by having vloggers from F2Freestyles and Ultimate Handyman create videos for their YouTube channels. As Dan Burdett, Snickers global brand director, explains, "Between them the international vloggers in this campaign have over 7.5 million subscribers, giving the brand campaign huge global reach."
How will mobile marketing utilize online video in the future? Experts think 360-degree videos, 4K videos, virtual reality videos, and augmented reality videos are not far into the future!
Many of the measures for evaluating how a brand manager's social media promotion is doing reflect the two-way communications present in social media. These measures often tie to output results in terms of "fans," "friends," "followers," or "visitors" to a social media site, which can be a first step to estimating the sales revenue generated. From a brand manager's viewpoint, here are some of the frequently used Facebook measures, moving from the more general to the more specific:
Users/members. Individuals who have registered on a social networking site by completing the process involved, such as providing their name, user ID (usually an e-mail address), and password, as well as answering a few questions (date of birth, gender, etc.).
Fans. The number of people who have opted in to a brand's messages through a social media platform at a given time.
Share of voice. The brand's share or percentage of all the online social media chatter related to, say, its product category or a topic.
Page views. The number of times a Facebook Page is loaded in a given time period.
Visitors. The total number of visitors to a Facebook Page in a given time period; if someone visits three times in one day, she is counted three times.
Unique visitors. The total number of unique visitors to a Facebook Page in a given time period; if someone visits three times in one day, he is counted only once.
Average Page views per visitor. Page views divided by visitors in a given time period.
Interaction rate. The number of people who interact with a Post ("like," make a comment, and so on) divided by the total number of people seeing the Post.
Click-through rate (CTR). Percentage of recipients who have clicked on a link on the Page to visit a specific site.
Fan source. Where a social network following comes from—with fans coming from a friend being more valuable than those coming from an ad.

Note that while sales revenues resulting from social media do not appear in these measures, as we move down the list, the measures are often more specific than comparable ones used in traditional media. This is because it is far simpler to track the social media users who click on a website or ad than it is to track consumers who watch, listen to, or read traditional media. Facebook has recently partnered with Nielsen, Integral Ad Science, and comScore to provide third-party verification of the performance metrics related to its ads.
Instantly, the footage of Half-Court Hero winner Michael Drysch's incredible hook shot and the celebratory bear hug from LeBron James went viral online. NBATV interviewed him side-by-side with James after the game. It was the #1 Play of the Day on ESPN's SportsCenter. The Carmex brand team immediately arranged a public relations tour for Michael Drysch that included a trip to New York City for appearances on Good Morning America, Inside Edition, CNN Early Start, and dozens of local radio shows.
Meanwhile, the Carmex marketing team kept Carmex's social media accounts and website updated throughout the weekend with Twitter and Facebook Posts from the public relations tour. Within three months, Carmex's Half-Court Hero shot had been seen by more than 30 million YouTube viewers and became the most-watched video of all time on the National Basketball Association's YouTube page. In all, the promotion earned Carmex more than 500 million media impressions across TV, print, online, and social media.41
Later, Michael and "The Shot" were featured in an ESPN commercial as part of their "I was on Sports Center" campaign. In addition, The Miami Heat visited President Barack Obama to celebrate its National Basketball Association Championship. President Obama, a big basketball fan himself, even referred to Michael and the Carmex Half-Court Hero shot by saying:
Now, one of the cool things about this job is welcoming championship sports teams from across the sporting world to the White House. And usually people enjoy coming to the White House. I have to say, I've never seen folks more excited than the Heat when they came last year. (Laughter.) I mean, LeBron was so pumped up I thought he was going to give me a hug and knock me over like the guy on SportsCenter who hit the half-court shot.42
As discussed in Chapters 7 and 8, finding prospective customers often involves market segmentation that requires databases and analytical tools—the key elements of the growing interest in big data and data analytics. The owners of these databases, among them Google and Facebook, must make them as useful as possible to potential advertisers in order to succeed.
Among the analytical platforms available to managers, Google is the hands-down winner—indexing 30 trillion unique Web pages across 230 million sites. Its search engine now provides answers to research queries in photos, facts, and "direct answers," and not just the "blue links" of website addresses. Google also offers its own social networking service, Google+, to obtain data about individuals by name, personal interests, and identities of friends.44
Facebook recently entered Google's territory by announcing Facebook Search, its own search engine algorithm. Facebook users can conduct their own queries about people, places, photos, and interests. An example is "restaurants recommended by friends." This lets Facebook give advertisers real value in the "likes" found on its site. For example, a small chocolate retail shop in New York City can target young parents who buy lots of organic food products.45So it's not difficult to see how a casual "like" for a brand by a user in a database's "digital world" can converge into an actual "real-world" purchase by the user through a very targeted promotion planned by a brand manager.
The apps for smartphones are accelerating the convergence of the real and digital worlds. Apps (or mobile apps or applications) are small, downloadable software programs that run on smartphones and tablet devices. When Apple launched its iPhone, it didn't expect smartphone apps to be very important. Wrong! Apple's App Store currently offers 2.0 million apps either free or for sale, and Google Play offers 2.2 million apps for users of Android devices. With the wide array of apps to choose from, today's consumers typically spend two hours a day using about eight apps.46
Many apps are video games. Angry Birds, for example, has been downloaded more than 2 billion times since its 2009 release, which is one reason Angry Birds-themed products now range from mascara to toys and entertainment parks. The popularity of the game Page 443is declining though as it enters the decline stage of its product life cycle (PLC).47 The video games Farmville, Temple Run, QuizUp, 4Pics1Word, and Fruit Ninja also show the short PLC for these apps in today's tough competitive environment.

Enter Clash of Clans and Candy Crush Saga video games that exploit the real world-digital world convergence. Today's successful new video games (1) build on a huge personal-rewards psychology for players; (2) can be played on the small smartphone screens; (3) top the most-downloaded charts of Apple iOS, Google, Android, and Facebook; and (4) often use a "freemium strategy"—where the download is free but users pay for extra features, such as for ways to speed up the game.

Time magazine analyzes how designers of the Candy Crush video game (Figure 16-6) use its key elements to link the digital world of Candy Crush to the personal real-world satisfactions and rewards of its players:48
It's better with friends. Users can give—and get—extra lives using Facebook.
It never ends. There are more than 2700 levels, and designers add more almost every week.
It makes the player feel special. The game gives positive feedback for nearly every click and tap.
It lets a player—sort of—cheat. Players can pay for power-ups to skip past wait times.
It's challenging. Increasingly varied puzzles often take multiple attempts to complete.
The Candy Crush app has now been installed more than 500 million times across Facebook, iOS, and Android devices.
Even Angry Birds has changed its strategy from charging a download cost to a freemium strategy with its recently launched "Angry Birds Go." Sound easy to build an app? Maybe. But hundreds of creative apps die a quiet death each year!
This convergence of the real and digital worlds has also contributed to the growth of mobile marketing, or the broad set of interactive messaging options that are used to communicate through personal mobile devices.49 This continuous connection present in mobile marketing has led to important smartphone apps, such as:
Price-comparison searches. Scan product bar codes or QR codes and research 500,000 stores, synchronizing searches between your computer and your smartphone.
Location-based promotions. Use your GPS-enabled smartphone for location check-ins to receive discounts at stores such as JCPenney.
Loyalty programs. Win loyalty points for walking into stores such as Target or Macy's and receive discounts from them.
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The number of smartphone shopping searches and purchases has exploded in recent years, causing huge challenges (such as showrooming) for conventional brick-and-mortar retailers.
The clear point of difference in mobile marketing is its unique ability to empower users by connecting with them individually and continuously—learning about their likes and personal characteristics and sharing this information with online friends and (often) marketers selling products. This socially networked world will lead to connected users having more direct interactions with sellers.
The convergence of social media, smartphones, tablet devices, and new apps will lead to companies having a more dynamic interaction with their customers. But is this an unqualified success for buyers? Consider the following perspectives.
Smart systems are fine up to a point. For example, most of us are comfortable letting convergence find us a timely deal at a local restaurant using a location-based app on our smartphone. It may even be all right if Google's latest database breakthrough automatically proposes an "ideal vacation plan" for us based on our normal preferences, weather conditions, and available hotel and airline prices.
But we may be concerned if retailers now place sensors in several hundred locations to track us following the signals emitted from our Wi-Fi-enabled smartphone. Here are some other numbers that may frighten you:
2,000-plus. The estimated number of times the online activity of an average Internet user is tracked every day.
3,000-plus. The number of "shopping tendencies" Acxiom says it can measure for nearly every U.S. household.
700 million. The approximate number of adult consumers in the global database of Acxiom Corp., a leading data broker.
About 68 percent of Internet users today feel that privacy laws don't protect them adequately. So 86 percent of them have used privacy technologies to remove, protect, or mask their digital data. In response, Facebook has strengthened the encryption offered by its WhatsApp texting service to provide greater privacy and security for its users. At the same time, however, the Justice Department and the FBI have approached Apple and other technology companies with requests for access to their customers' data.51
The future? Concerned about Internet privacy, the White House recently announced it would seek legislation to define the rights of consumers in the use of data involving their personal characteristics and activities.
Copyright law, along with trademark law, patent law and trade secret law, constitutes one aspect of a larger body of law known as intellectual property—intangible property that a person cannot touch, hold, or physically lock away for safekeeping. This concept is sometimes confusing to people; how can the law protect something you can't hold or touch? Consider that new paperback novel you just purchased at the bookstore. You own that book; you can do with it what you wish. After you read it you can sell it, donate it to Goodwill, give it to a friend to read or tear out the pages and use them to start a campfire. But you don't own the arrangement of the words in that book; whoever holds the copyright, the book publisher or author, owns that part of the book. Hence, you can't reprint the book or copy long sections of it without permission. The book thus consists of two pieces of property: the physical or material book, and the words and artwork printed on the pages. At first glance, intellectual property seems both esoteric and, well, a bit dull when compared with the law regulating students' rights of free speech, the distribution of adult material or using celebrities names or images without their permission in advertising. But as mass-mediated entertainment has grown as a part of our culture and our commerce, issues relating to intellectual property rights have become somewhat more complicated and a lot more interesting to those outside the legal system.
For example, who owns sports coverage? Do newspapers and magazines and television and radio stations and bloggers and others who publish (in the broadest sense) anything and everything about professional athletes and their teams own the rights to this coverage? Do the athletes own the rights to their images and accomplishments? Or do professional team owners control the rights to the pictures and stories about their businesses and their employees? This is complicated. Take, for example, a mythical major league baseball team, the Nashville Knights. The Knights have certainly assigned the rights to broadcast their games to a radio, a television station or a cable channel. So these broadcasters own some rights, and the Knights don't want to jeopardize these lucrative contracts by giving free coverage rights to others. Then the Knights have their own Web site, and Major League Baseball has its own Internet arm, which generates hundreds of millions of dollars in revenues each year. Those are revenue sources that might be diminished if the team and baseball generally cannot limit to some extent Page 511the content in the mainstream mass media.* Reporters who cover the team expect to have access to players; when the Knights limit interviews or photo coverage so they can have exclusive reports on their own Web site, the members of the press raise freedom of the press issues. The Knights are willing to work with the reporters from established newspapers or magazines or broadcast stations, but the teams expect these journalists to be disciplined and follow rules established for their behavior, both in the clubhouse and elsewhere (whom the reporters can talk to and what they can talk about). Recently, however, a large influx of bloggers have emerged, individuals who also want access to players and the clubhouse, cybernet journalists who may or may not be willing to play by the established rules. So what is the team to do? Who owns the rights to the players and the games? Questions like this are emerging rapidly, and involve elements of intellectual property law.1
This chapter concentrates on two aspects of intellectual property law, namely, trademark law and copyright law. A third facet of intellectual property law is called patent law, which focuses on the invention of useful goods and processes, and is described very briefly below. A fourth aspect of intellectual property law deals with trade secrets and is not covered in this textbook.
A trademark is any word, name, symbol, device or any combination thereof that is used by a company (or an individual) to distinguish its goods and services from those produced by other companies. We thus commonly think of marks as brand names (Nike and McDonald's), brand logos (the Nike swoosh and McDonald's golden arches) and brand slogans (Nike's "Just Do It" and McDonald's "I'm Lovin' It").
But marks can also be: (1) colors that are distinctively associated with a brand (Tiffany's blue for its jewelry boxes and bags or Owens Corning's pink color on its insulation products); (2) sounds distinctively associated with a company (television network NBC's chimes or movie company MGM's roaring lion); and (3) the distinctive design and appearance or look of a product (the appearance of the front of an iPhone), a product's packaging (Tiffany's blue boxes tied with white ribbons or the red dripping wax on the top of Maker's Mark bourbon bottles), a store (Apple has a registered trademark for the appearance of its retail stores), or a restaurant (Chipotle has a registered trademark for the appearance of its restaurants). Marks relating to such distinctive looks and appearances are known as trade dress or dress marks, while marks used to identify the source of services (rather than products) are called service marks.
The key functions of all marks (trade, service or dress) are to clearly identify the source or origin of a product and service with a specific company and, in doing so, to prevent consumer confusion about whose goods and services one is buying. In other words, when you see Nike's swoosh logo—one of the most well recognized marks today—on a pair of running shorts, you know you are buying a genuine Nike product without even needing to see the word Nike on the shorts. If, in contrast, you saw three parallel stripes on a pair of running shorts or running shoes, you would know the product is from Adidas. Such famous marks thus serve other functions by allowing companies to tout the quality of their goods and to advertise with their marks, with the marks standing in for the goodwill and quality of the product or service.
Some marks are stronger than others. The strength of a trademark is based on its distinctiveness. The more distinctive a mark is, the easier it is to register with the U.S. Patent and Trademark Office (USPTO) (addressed later in this chapter) and the stronger it will stand up as protectable in a lawsuit for trademark infringement. (When a company believes that another company is using a mark—be it a name, logo or any other type of mark—that is too similar to its own mark and is likely to cause confusion among consumers about the origins of a product, it can sue the other company for trademark infringement). When it comes to a mark's distinctiveness, attorneys refer to a "spectrum of the distinctiveness." Proceeding from strongest to weakest categories of marks that can be registered with the USPTO, the spectrum of distinctiveness involves the following categories:
Fanciful. These are the strongest types of marks. They consist of made-up or invented ("coined") words. Lexus is a made-up word for a car company. Exxon Page 513is a made-up word for a gasoline and oil company. Xerox is a fanciful name for a company known for copying machines. Most drug companies make up words for their products. Viagra, for example, is a made-up word.
Arbitrary. This is the next strongest type of mark, second only to fanciful ones. In this category, an existing word (rather than a made-up one) is used as a mark for a good or service that is unrelated to the common or ordinary meaning of the existing word. Apple is an arbitrary mark for a computer company, as the fruit known as an apple has nothing to do with computers or iPhones. The connection, in other words, is arbitrary or random. Camel is an arbitrary mark for a cigarette company, and Pledge is an arbitrary name for a brand of furniture polish.
Suggestive. Weaker than fanciful and arbitrary marks, suggestive marks suggest to consumers some attributes or qualities about the product in question, but do not clearly describe the product. In other words, consumers must do a little bit of thinking and use their imagination to understand what the product is. Coppertone is a suggestive mark for a suntan lotion, implying the shade of skin one achieves from using it. Microsoft is a suggestive mark for a company that makes computer software. Chicken of the Sea is a suggestive mark for the name of a brand of canned and packaged tuna products. (You may remember that Jessica Simpson famously had to think hard about this connection in her reality show "Newlyweds: Nick and Jessica.")
Descriptive. This is the weakest type of mark. A descriptive mark directly describes features or qualities of the product in question without a consumer having to do any additional thinking. The company Arm & Hammer, for instance, makes a daily shower spray to prevent mildew and mold called "Clean Shower." That's about as descriptive as it can get. Unlike fanciful, arbitrary and suggestive marks, each of which is considered inherently distinctive, descriptive marks can only be registered with the U.S. Patent and Trademark Office after an extended period of continuous use (typically five years or more) in which they acquire a "secondary meaning" (also known as "acquired distinctiveness") such that they become associated exclusively with a particular company among members of the public that consume the product or use the service in question. In other words, consumers must come to directly associate the mark "Clean Shower" with Arm & Hammer as the source of those goods. The name "Holiday Inn" is an example of a descriptive mark that has, indeed, acquired distinctiveness and a secondary meaning over time in the eyes of hotel users such that the name is associated with a specific brand of hotel.
It is not always easy to determine whether a mark is suggestive or descriptive. The difference, however, is critical. Why? Because it is much easier to successfully register with the USPTO a suggestive mark, as there is no need to prove that a suggestive mark (or a fanciful or arbitrary mark, for that matter) has acquired a secondary meaning. Descriptive marks, in contrast, require a company to demonstrate the mark has obtained a secondary meaning in the minds of the consuming public. Attorneys thus sometimes think Page 514of this as the difference between marks that are inherently distinctive (fanciful, arbitrary and suggestive) and those that must acquire distinctiveness before they can be registered with the USPTO (descriptive).
Acquired distinctiveness also is necessary for a surname, such as Hilton or Hyatt, to be trademarked. The last name of the late hotel mogul Conrad Hilton (fans of "Mad Men" may recall him) has acquired a distinctive meaning among hotel customers such that they associate Hilton with a particular brand of hotel.
Finally, there is a fifth category of words or names that are considered generic. Generic words and terms describe broad categories or classes of products or services (rather than a specific company's product) and cannot be trademarked. In 2012, for instance, the 6th U.S. Circuit Court of Appeals held that "Texas Toast" could not be trademarked because it is a generic term for a type of oversized bread product. Similarly, the 1st Circuit Court of Appeals in 2008 held that "Duck Tours" was a generic term and could not be trademarked because it described a class of sightseeing tours that use amphibious vehicles that can function as both trucks and boats. Phrases like "pizza parlor" and "shoe store" are other examples of generics that cannot be trademarked. Apple is a generic word for a type of fruit and cannot be trademarked, unless it is used in an arbitrary way as described earlier as a brand of computer company.
the ownership of a trademark or trade name can also be lost. The Ford Motor Company in 2003 wanted to name one of its automobiles "Futura," a name it had used from 1959 to 1962 and in the late 1970s and early 1980s. But when it stopped using the name, Pep Boys, an auto parts retail chain, registered the name as a trademark. When the automaker tried to use "Futura" again, Pep Boys went to court to block Ford, and a federal court ruled in 2004 that the company had abandoned the trademark when it stopped using the name some 20 years earlier. Failure to use a name for as little as three years can constitute abandonment.
While ownership of a trademark may exist perpetually, the ownership of a trademark or trade name can also be lost.
It is also possible that trademark protection can be lost if the owner of the mark allows others to use the mark in a generic way. For example, if the makers of Super Glue (a trade name) adhesive failed to try to stop other adhesive makers from referring to their products as super glues, the trademark protection could be lost. These generic Page 515words—nylon, dry ice, escalator, toasted corn flakes, raisin bran, aspirin, lanolin, mimeograph, cellophane, linoleum, shredded wheat, zipper, yo-yo and brassiere—were all at one time registered trademarks that slipped away from owners who failed to protect these names. This process of a once-trademarked term losing its trademark-protected status is known as "genericide." In brief, the trademark comes to represent an entire class of goods and no longer a specific brand within that class. And as trade names become more commonly used, there is a tendency for them to slip into a generic term. In July 2006 the owners of the search engine Google were thrilled to note that the word "google" was included in the new edition of Merriam-Webster's Collegiate Dictionary, the term going from a nonentity to common usage in less than eight years. But they were less thrilled to note that a great many people were using the term as a verb, without the capital letter G. ("John googled 'downtown car dealers' to find a used Honda.") What they want people to write or broadcast is that "John used the Google search engine to find a Honda at a downtown car dealer." Stern letters, threats of lawsuits, even legal action must be initiated to stop others from illegally using the name or phrase or mark. This responsibility falls on the owner of the mark; no government agency polices such misbehavior.
Trademark law is designed to reduce the likelihood of confusion in the marketplace. But courts have ruled that a parody of a trademarked item is not necessarily an infringement because it would not generate such confusion. Hence, when Haute Diggity Dog's toys marketed its "Chewy Vuiton" dog toys, it did not infringe on the trademark of luggage and fashion designer Louis Vuitton. "The furry little 'Chewy Vuiton' imitation, as something to be chewed by a dog, pokes fun at the elegance and expensiveness of a LOUIS VUITTON handbag, which must not be chewed by a dog," the 4th U.S. Court of Appeals ruled in 2007.3
For many years U.S. trademark law forbade only the use of a registered trademark or trade name on a product that was similar to the product produced by the owner of the trademark or trade name. A competitor to Apple could not call its tablet an iPad, but the manufacturer of exercise equipments could call its treadmill an iPad. In 1996 Congress, following the lead of the legislatures in 27 states, added more muscle to trademark protection when it adopted the Federal Trademark Dilution Act. This 1996 statute was later amended by the Trademark Dilution Revision Act of 2006. Viewed collectively, these federal trademark dilution statutes only apply to and protect "famous" trademarks, including names, slogans and logos. Specifically, famous marks are protected by dilution statutes from having their value weakened (i.e., diluted) by other marks regardless of whether or not the other marks are for similar products and regardless of whether consumers are actually confused as to who is producing the products. While proving a likelihood of confusion among consumers between similar or rival products generally is required in a trademark infringement lawsuit, it is not required in a trademark dilution lawsuit. Owners of famous marks thus are lucky in that they can sue the owners of offending marks not only for trademark infringement, but also for trademark dilution.
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Two basic questions arise: (1) What is a famous mark? and (2) How is a famous mark diluted?
A famous mark, according to the relevant federal statute (15 U.S.C. §1125), is a mark "widely recognized by the general consuming public of the United States as a designation of source of the goods or services of the mark's owner." Among the factors considered in this determination of famousness are the "duration, extent, and geographic reach of advertising and publicity of the mark" in question, as well as the "amount, volume, and geographic extent of sales of goods or services offered under the mark."
In 2009, a federal court in Texas found the phrase "America's Team" was a famous mark controlled by the owners of the Dallas Cowboys football team. In 2011, the Trademark Trial and Appeal Board (TTAB), which is the branch of the U.S. Patent and Trademark Office that hears and decides certain kinds of trademark cases, concluded that "ROLEX" was a famous mark for a watchmaker and was protected from dilution against a company that wanted to use the mark "ROLL-X" for X-ray tables for medical and dental use. The TTAB also has found that "Just Do It" is a famous mark for Nike. More recently, luxury-clothing company Burberry in 2016 sued J.C. Penney for trademark dilution, with Burberry claiming that its ubiquitous check pattern found on coats, purses, scarves and umbrellas constitutes a famous mark. Burberry accused J.C. Penney of producing clothes that used this check pattern. Ultimately, determining whether a mark is famous is a rather subjective determination and not always easy to make.
As for the second question, a famous mark may be diluted in one of two ways under the federal statutes. In the first, known as dilution by blurring, the diluting mark "impairs the distinctiveness of the famous mark" primarily by the degree of similarity between the diluting mark and the famous mark and by whether the user of the diluting mark intended to create an association with the famous mark. This is rather hard to understand, but as one noted commentator put it, dilution by blurring is "the gradual whittling away or dispersion of the identity and hold upon the public mind of the [famous] mark or name." In brief, the famous mark's power is slowly weakened by other's use of it, even though the other's use is not on competing or similar goods.
In the second form of dilution, known as dilution by tarnishment, the diluting mark harms (i.e., tarnishes) the reputation of the famous mark by connecting the famous mark with something distasteful, negative or objectionable (think here about connecting a famous mark with illegal drugs or something sexually sordid). This category is much easier to understand than blurring.
For instance, the makers of Ben & Jerry's ice cream in 2012 sued Rodax Distributors and Caballero Videos for dilution by tarnishment based on a series of sexually explicit adult videos called "Ben & Cherry's" that featured titles such as "Peanut Butter D-Cups," "Boston Cream Thigh" and "Chocolate Fudge Babes." The parties settled the case in 2013, with Rodax and Caballero agreeing to discontinue the "Ben & Cherry's" series and the use of movie titles that play off of real Ben & Jerry's flavors.
The remedies for the owner of a famous mark that proves its case for trademark dilution are an injunction (a type of equitable remedy discussed in Chapter 1) prohibiting the use of the diluting mark, as well as monetary damages. Importantly, as the "Chewy Vuiton" example noted earlier illustrates, the federal trademark dilution laws provide a defense for "parodying, criticizing, or commenting upon the famous mark Page 517owner or the goods or services of the famous mark owner" and for "all forms of news reporting and news commentary." The "Ben & Cherry's" adult video example above likely would not count under the parody exception because the adult movies in question were not commenting on or criticizing Ben & Jerry's ice cream products, but rather were simply using names similar to those of Ben & Jerry's products to garner attention for the movies.
In 1998 Victor Moseley of Elizabethtown, Ky., opened Victor's Little Secret, a small shop in a strip mall that sells sex toys, lingerie and novelty items. Subsequently the owners of Victoria's Secret, the catalog and retail seller of lingerie and women's clothing, sued under the new law, claiming the store's name was causing dilution of the distinctive quality of their famous brand. The Supreme Court ruled in the spring of 2003 that Victoria's Secret did not have to prove actual economic harm from the appropriation of its name in its lawsuit against Moseley, but the company must show some kind of current harm (as opposed to future harm), such as a loss of its distinctive identity or a blurring of its image. But the court did not specifically outline what factors might be considered in proving such a case. The court said it would not be enough to show a mental association between the two trademarks, that consumers think of one when they see the other. It would have to be shown that consumers had a different impression of the Victoria's Secret trademark because of the competitor's branding.4 The case was sent back to the lower court for resolution of the matter. In 2010 the 6th U.S. Court of Appeals ruled that Victor and Cathy Moseley could not use the names "Victor's Secret" or "Victor's Little Secret" on their adult novelty and lingerie shop. The court said that the use of those names cast an unflattering shadow on the Victoria's Secret chain and could potentially hurt its business.5
To register a trademark the applicant must submit a registration application to the Patent and Trademark Office in Washington, D.C. Before submitting the application a search should first be undertaken to determine whether someone else has already registered the trademark. This search can be done at the Patent and Trademark Office Library in Arlington, Va., or at about 60 regional sites (libraries) around the nation, or through the U.S. Trademark Electronic Search Systems via the Internet. It is also wise to hire an intellectual property attorney to help with this process. A registration fee of $275 to $375 must accompany the application. Although it is not mandatory to precede the application with a search, it is advisable. If the examiner discovers in his or her search that the mark or a very similar mark has been previously registered, the application fee is forfeited. Anyone who claims the right to a trademark can use the ™ designation with the mark to alert the public to the claim. It is not necessary to have a registration or even a pending application to use this designation. Under the law, it is the person who first uses the mark, not the person who first registers the mark, who holds the rights to the symbol or word or phrase.*
Trademark protection can promote expression, but it can also chill speech. Judges have long been skeptical about allowing private businesses to assert exclusive rights to words or phrases. More recently, courts have considered how the First Amendment is impacted by bans on disparaging trademarks. In 2017, an Asian-American rock band called "The Slants" took its legal fight over its name all the way to the U.S. Supreme Court in Lee v. Tam.
In 2011, Simon Tam tried to register "The Slants" as a trademark for his rock band. According to Tam, by choosing THE SLANTS as its name, the band was following the tradition of reappropriation, whereby members of minority groups reclaim slurs and epithets and turn the insults into badges of pride. The U.S. Patent and Trademark Office (USPTO) denied The Slants registration, however, under a section of trademark law that denies registration to "disparaging" marks. The U.S. Court of Appeals for the Federal Circuit, sitting en banc, struck down both the USPTO's decision about The Slants and ruled the entire section of the Lanham Act that bars "disparaging" trademarks as unconstitutional. The case garnered widespread attention because it was sure to have repercussions for other owners of controversial trademarks—most notably, the Washington Redskins, the NFL football team that was stripped of its trademark rights.
Section 2(a) of the Lanham Act bars registration of a mark that "[c]onsists of or comprises immoral, deceptive, or scandalous matter; or matter which may disparage or falsely suggest a connection with persons, living or dead, institutions, beliefs, or national symbols, or bring them into contempt or disrepute." In Lee v. Tam, the Federal Circuit ruled § 2(a) was a content-based and viewpoint-discriminatory regulation of speech, "created and applied in order to stifle the use of certain disfavored messages." Under USPTO rules, trademark examiners consider the "likely meaning" of the mark, and then determine if that meaning "may be disparaging to a substantial composite of the referenced group." Those rules led to puzzling and differing results, "rife with inconsistency," the court noted.
For instance, the USPTO denied the mark HAVE YOU HEARD SATAN IS A REPUBLICAN because it disparaged the Republican Party, but didn't find the mark THE DEVIL IS A DEMOCRAT disparaging. The office rejected registration for FAG FOREVER A GENIUS! and MARRIAGE IS FOR FAGS, but accepted the mark FAG FABULOUS AND GAY.
The appeal of the decision to cancel the Redskins trademark to the 4th Circuit is particularly interesting in that it contained an extensive list of terms that are potentially offensive, yet have received trademark registration. In their brief, lawyers for the team pointed out that the USPTO has registered "hundreds if not thousands" of racist, misogynistic, vulgar or otherwise offensive marks, including: Take Yo Panties Off clothing, Dangerous Negro shirts, SlutsSeeker dating services, Dago Swagg clothing, Dumb Blonde beer, Twatty Girl cartoons, Baked By a Negro bakery goods, Big Titty Blend coffee, Retardipedia Web site, Midget-Man condoms and inflatable sex dolls and **** underwear.
In defending the decision to not grant trademark protection in Lee v. Tam, the government argued denying trademark registration isn't equivalent to denying Page 519someone the right to speak. There is nothing that can stop Tam from calling his band "The Slants," the government argued. The government is simply refusing to register it as a trademark, which would give Tam the right to stop others from using the term "The Slants" for commercial purposes. The same can be said for the Redskins. The team is not barred from using the term. The government simply cancelled the team's registration. The team has argued, however, that a cancellation of its trademarks could taint its brand and remove legal benefits that would protect it against copycat entrepreneurs. The team, after all, sells everything from T-shirts to thong underwear emblazoned with its logo.
In 2017, the Supreme Court agreed to weigh in and heard oral argument in Lee v. Tam, now called Matal v. Tam. In an 8-0 decision, the Court held that section 1052(a) was a viewpoint based restriction on freedom of expression. The Court unanimously held the government could not deny registration that disparages persons, institutions, beliefs or symbols, while allowing registration for positive or benign words. The justices were not unanimous in their reasoning, however. Justices Samuel Alito, Jr., joined by Chief Justice John G. Roberts and Justices Clarence Thomas and Stephen G. Breyer wrote the law should be struck down using intermediate scrutiny, the level of scrutiny that is typically applied to commercial speech. Justices Anthony M. Kennedy, Sonia Sotomayor, Ruth Bader Ginsburg and Elena Kagan argued that the law should be struck down the using strict scrutiny because it was a viewpoint discrimination. Justice Neil M. Gorsuch did not participate in the decision because it was argued before he joined the Court.
Copyright protection was unneeded until the development of mechanical printing. The time and effort it took to hand-copy a manuscript made the theft of such work both tedious and unprofitable. But the printing press gave thieves the ability to reproduce multiple copies of a work relatively quickly and cheaply, and this capability changed things dramatically. Each subsequent technological development has put new stress and strain on copyright law. The development of motion pictures and the broadcast media, recorded music, audio- and then videotape, photocopying and most recently interactive computer-mediated communication have all required modifications or new interpretations in the law as the government has sought to protect the right to literary property.
The British were the first to attempt such protection. Copyright law developed in England in the 16th century as the government sanctioned and supported the grant of printing privileges to certain master printers in exchange for their loyalty and assistance in ferreting out anti-government writers and publishers. But the rights of authors, as opposed to printers, were not protected until the early 18th century when the British Parliament passed the nation's first copyright law. The law gave the legal claim of ownership of a piece of literary property to the person who created the work or to a person who acquired the rights to the work from the author. The statute was a recognition by Page 520the Crown that in order to encourage the creation of books, plays and art, the creators of these works had to be assured that they would be rewarded for their labor. That is the real logic behind copyright law, the fostering of the creative spirit. If a dramatist knew, for example, that as soon as her play was published she would lose control of the work because others could freely copy it, there would be little incentive for the creation of plays. The muses of creativity are strong, but there must be some reward to pay the piper. Thus, copyright has been called the "engine of freedom of expression."
That is the real logic behind copyright law, the fostering of the creative spirit.
British copyright law was applied in the colonies until American independence. American copyright law derives directly from the U.S. Constitution. In Article I, Section 8, Clause 8, of that document lies the basic authority for modern United States copyright law:
The Congress shall have Power ... To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.
This provision gives Congress the power to legislate on both copyright and patent. The Congress did just that in 1790 by adopting a statute similar to British law. The law gave authors who were U.S. citizens the right to protect their books, maps and charts for a total of 28 years—a 14-year original grant plus a 14-year renewal if the author was still alive and wished to extend the copyright. In practical use, however, because little work was still economically profitable after 14 years, few authors renewed their copyright. In 1802 the law was amended to include prints as well as books, maps and charts. In 1831 the period of protection was expanded by 14 years. The original grant became 28 years with a 14-year renewal. Also, musical compositions were granted protection. Protection for photography, works of fine art and translations were added later in the 19th century.
A major revision of the law was enacted in 1909, and our current law was adopted in 1976. The 1976 federal law pre-empted virtually all state laws regarding the protection of writing, music and works of art. Hence, copyright law is essentially federal law and is governed by the federal statute and by court decisions interpreting this statute. In 1988 Congress finally approved U.S. participation in the 102-year-old Berne Convention, the world's pre-eminent international copyright treaty. The United States had been hesitant in the past to join the treaty because of significant differences between United States and international law, but after the 1976 revision of U.S. copyright law, the differences were minimal. American media companies, eager to expand their international business, sought to improve trade relations and strengthen U.S. influence on matters relating to international copyright law and therefore put pressure on the government to join the convention.
If Bogus Publishing prints 1,000 copies of a copyrighted Stephen King novel and distributes them to bookstores, this is a violation of King's exclusive distribution rights under the law. But the rights are less clear when it comes to computers and the Internet. Is storing a copyrighted document on a hard disk or a diskette or even in the computer's RAM a violation of the exclusive right to reproduce a copyrighted item? Probably, the courts seem to indicate. Does transmitting a copyrighted work via the Internet constitute a public performance of the work? Most likely. The courts are still sorting out these questions. Several lower courts have ruled that it can be an infringement of copyright to download material off the Internet for unauthorized use or upload copyrighted material onto a Web site without the permission of the copyright holder.6 A federal court in Texas ruled in December 1997 that an online service provider that provided subscribers unauthorized copies of copyrighted images infringed on the copyright holder's rights of reproduction, distribution and display and was liable for direct copyright infringement. The provider argued that it was merely a conduit between the subscription service that scanned the photos into the system and the subscribers who downloaded them. The defendant said that all it sold was access to the subscription service, not images. The court disagreed, ruling that "Webbworld didn't sell access—it sold images."7 However, under a federal statute adopted in 1998 an online service provider that acts as merely a conduit during the infringement of copyrighted works will not be held liable for the illegal act in most instances (see page 555). A U.S. District Court in Nevada ruled in 1999 that scanning a copyrighted photo into a computer for graphic manipulation and insertion into a new work constitutes a copyright infringement. The court said that digitizing any copyrighted material may support an infringement finding—even if it has only the briefest existence in a computer's memory.
Before a copyrighted work may be printed, broadcast, dramatized or translated, the consent of the copyright owner must first be obtained. The law grants this individual exclusive monopoly over the use of that material. To quote the statute specifically, copyright extends to "original works of authorship fixed in any tangible medium of expression." Congress has defined fixed in a tangible medium as that work that is "sufficiently permanent or stable to permit it to be perceived, reproduced, or otherwise communicated for a period of more than a transitory duration." Under these standards such items as newspaper stories or entire newspapers, magazine articles, advertisements and almost anything else created for the mass media can be copyrighted. Material that is created in digital form and stored or transmitted electronically can also be protected by copyright. Page 522Extemporaneous performances and speeches, and improvised sketches are examples of materials that are not fixed in a tangible medium and are not protected by the federal copyright statute. But this lack of protection does not mean that someone can film or record a performer's act, for example, without the performer's permission. This action would also be forbidden by other laws, such as the right to publicity (see Chapter 7) and common-law copyright.*
Trivial materials cannot be copyrighted. Such things as titles, slogans and minor variations on works in the public domain are not protected by the law of literary property. A slogan such as Nike's "Just Do It" cannot be copyrighted, but it can be trademarked.
Ideas are not copyrightable. The law protects the literary or dramatic expression of an idea, such as a script, but does not protect the idea itself. "This long established principle is easier to state than to apply," notes law professor David E. Shipley. It is often difficult to separate expression from the ideas being expressed. That is because there is often only a subtle difference between an idea and the expression of that idea. A musician named Michael John Blake wrote and recorded a song based on the number Pi, 3.14, with Page 523additional digits that seem to go on indefinitely. The number Pi is the ratio of the circumference to the diameter of a circle. Many musicians have used these numbers to create songs, with each number representing a different note. Blake launched a music video—"What Pi Sounds Like"—that became popular on YouTube. He was soon faced with a copyright infringement suit brought by Lars Erickson, who had done something similar to this more than a decade earlier—and copyrighted the music. In 2012 U.S. District Judge Michael Simon ruled that Pi is not a copyrightable fact, and the transcription of Pi to music is a non-copyrightable idea. "The resulting pattern of notes is an expression that merges with the non-copyrightable idea of putting Pi to music: assigning digits to musical notes and playing these notes in the sequence of Pi is an idea that can only be expressed," Simon said. Erickson's copyright was valid, but he could not use his copyright to stop others from employing the same pattern of musical notes.8
Facts cannot be copyrighted. "The world is round" is a fact. An author cannot claim that statement as his or her own and protect it through copyright.
Utilitarian goods—things that exist to produce other things—are not protected by copyright law. Thus, useful articles, such as a lamp, a chair, a dress or a uniform, cannot be copyrighted. In addition, the articles' component features or elements cannot be copyrighted either, unless they are capable of being "identified separately from, and ... existing independently of, the utilitarian aspects of the article." Thus, a design for a Tiffany lamp could be copyrighted because the unique aspects of that specific lamp have nothing to do with the utilitarian purpose of producing light. The design elements are purely decorative. What is the appropriate test to use to determine when a feature of a useful article is protectable under Section 101 of the Copyright Act? In 2016, the U.S. Supreme Court granted cert in Star Athletica v. Varsity Brands9 to address the question. Since useful articles cannot be copyrighted, but the "design elements" on them can, the Court was asked to determine what test to use to determine when clothing designs can be copyrighted. Varsity received copyright protection for designs on its cheerleader uniforms for graphical elements such as stripes, chevrons, zigzags and colorblocks. Star Athletica advertised cheerleading uniforms that were strikingly similar in appearance to Varsity's designs. Varsity sued Star for copyright violation. The Court ruled that designs could achieve copyright protection if (1) the design can be perceived as a two- or three-dimensional work of art separate from the useful article and (2) the design would qualify as a protectable pictorial, graphic, or sculptural work on its own.
Methods, systems and mathematical principles, formulas and equations cannot be copyrighted. But a description, an explanation or an illustration of an idea or system can be copyrighted. In such an instance the law is Page 524protecting the particular literary or pictorial form in which an author chooses to express herself or himself, not the idea or plan or method itself. For example, an individual writes and publishes a book in which she outlines a new mathematical formula. Although the book itself may be protected by copyright, the formula cannot be, and others may use it freely. In other words, the copyright on an article or a book does not preclude the public from making use of what the book teaches.
tried to block Chicago television station WGN from televising a Christmas parade on Thanksgiving Sunday. PCI, which put on the parade, sold the exclusive right to televise it to another station, WLS. The plaintiff claimed the parade was copyrighted, and WGN would be in violation of the law by televising it. A federal district court disagreed and ruled that a Christmas parade is not something that can be copyrighted; it is a common idea, not an event of original authorship.10
The work must be original. It does not have to be novel (new), unique or even good. Even common and mundane works are copyrightable. Courts have consistently ruled that it is not the function of the legal system to act as literary or art critic when applying copyright law. In 1903 Justice Oliver Wendell Holmes wrote in Bleistein v. Donaldson Lithographing Co., "It would be a dangerous undertaking for persons trained only to the law to constitute themselves final judges of the worth of pictorial illustrations, outside of the narrowest and most obvious limits."11 Even the least pretentious picture can be an original, Holmes noted in reference to the posters involved in this case. Even basic (or ugly) selfies you take are copyrightable.
The 9th U.S. Circuit Court of Appeals echoed this statement in 1992 when it ruled that raw, unedited video footage of news events was sufficiently original to be protected by copyright.12 The case involved the Los Angeles News Service and Audio Video Reporting Service. LANS records live news events on video and then sells the unedited but copyrighted footage to television stations. The TV stations take the raw footage, edit it any way they want and use it in newscasts. Audio Video Reporting Services videotapes newscasts and then sells clips of the newscasts to interested parties. A businesswoman who has been interviewed for a news story, for example, may want to buy a copy of the story from Audio Video. Or the parents of children featured in a news story on a school project might want to have a copy of that story.
LANS sued Audio Video, claiming that in selling these video clips, which were taken from the copyrighted raw footage LANS had provided to local television stations, Page 525Audio Video was infringing on the copyright LANS held on the videotape. Audio Video attempted to defend the suits on several bases, including the argument that raw, unedited videotape was not sufficiently original to be protected by copyright; all the photographer did was switch on the camera and point it at the news event. No creativity or intellectual input was required. The Court of Appeals disagreed, noting that there were several creative decisions involved in producing a photograph. The photographer must select the subject, the background, the perspective, consider the lighting and the action and so on. The "requisite level of creativity [to qualify as an original work] is extremely low; even a slight amount will suffice," the court said. Likewise, novelty is not important to copyright: The author does not have to be the first person to say something in order to copyright it. "All that is needed to satisfy both the Constitution and the statute is that the 'author' contributed something more than a merely trivial variation, something recognizably his own," one court ruled.13
Long before the birth of the computer, most homes contained relatively sophisticated databases. These are called telephone directories—a listing of phone company customers' names, addresses and telephone numbers. In 1991 the Supreme Court decided a seemingly innocuous case involving copyright protection for a white-pages telephone book—by any measure a collection of thousands of facts. But the ruling would have a profound impact on other kinds of databases and generate problems that have not yet been completely resolved.
The case involved a small, rural telephone company (Rural Telephone Service) that issued a standard white-pages directory of its customers' names, addresses and phone numbers, and a company (Feist Publications) that publishes regional telephone directories, which include the names, addresses and phone numbers of the customers of numerous small telephone companies. Feist asked Rural for permission to include the names of its customers in a directory, but Rural said no. Feist used the information anyway, and Rural sued for copyright infringement. Feist argued that a telephone directory contains only facts, which can't be copyrighted. Rural disagreed and argued that the phone book was a collection of facts, and that a collection of facts can be copyrighted. Rural also raised a second argument, what some call "the sweat of the brow" doctrine. This is a legal proposition previously recognized by some courts that asserts that even though facts are Page 526not copyrightable, someone who invests substantial time and energy in amassing these facts deserves a reward for the hard work. Collecting the information that goes into a telephone directory takes time and energy, and copyright law should protect the results of this effort, Rural argued.
In a unanimous decision the Supreme Court rejected both arguments. With regard to the latter, Justice Sandra Day O'Connor said the sweat-of-the-brow doctrine was a bogus argument. Quoting former justice William Brennan, she said, "The primary objective of copyright law is not to reward the labor of authors, but to promote the progress of science and the arts." O'Connor said that some compilations of facts can be protected by copyright. The key to determining whether protection is merited is whether there is some novelty or originality in the manner in which the facts are organized or selected or coordinated. An alphabetical listing of names—the organization of the Rural directory and indeed all white pages—is not novel enough to generate copyright protection for the directory.14
"The primary objective of copyright law is not to reward the labor of authors, but to promote the progress of science and the arts."
In a pre-digital era, this ruling would have little impact. But in the computer age, the creation of alphabetically ordered lists of facts, which are also called databases, is one of the fastest and most profitable uses for computer software and interactive Web sites. Because of the Feist ruling, only those databases in which factual items are selected or arranged in some novel or artful manner will be protected by copyright law. Even a massive alphabetical listing of all the certified public accountants in New York state or the names of all the massage parlors in California fails to meet the test laid down by the high court.15
Many states have misappropriation laws (see pages 528-530) that may be used to bar database piracy. Congress, under pressure from the owners of large, commercial databases, has tried several times to pass legislation to protect these collections of facts. But in every case the legislators have run into roadblocks. Organizations outside the database industry, notably libraries and some technology companies, have opposed such legislation, claiming that such laws would allow some companies to monopolize facts, and this would hamper research projects. And there of course is the constitutional issue. The Supreme Court ruled that the so-called sweat-of-the-brow doctrine was constitutionally invalid in 1991, and this doctrine is at the heart of such legislation. There was no resolution of this issue as of late 2017.
When the news is reported correctly, it is basically an account of facts. Can a news account be copyrighted? Can one journalist claim the exclusive right to report on a story? Suppose a TV reporter gets an exclusive interview with a reclusive public figure and then broadcasts the copyrighted interview on the evening news. Does the law of copyright Page 527prevent other journalists from relating the substance of what was revealed in that interview? The answer is no. Other stations cannot replay the same interview. Newspapers cannot publish a transcript of the interview. But both broadcast and print journalists can tell their viewers and readers what the public figure said in the interview. Copyright law doesn't even require the competitors to credit the TV journalist for the interview. Failing to give proper credit to the TV journalist who got the interview is grossly unethical but happens all too often.
Copyright law protects the expression of the story—the way it is told, the style and manner in which the facts are presented—but not the facts in the story. For many writers this concept is a difficult one to understand and to accept. After all, if one reporter works hard to uncover a story, shouldn't he or she have the exclusive right to tell that story? This argument again reflects the sweat-of-the-brow doctrine that has been rejected by the Supreme Court. Shouldn't hard work be rewarded? In this case the law is clear: Hard work must be its own reward. Copyright protects only the way a story is told, not the facts in the story.
Gene Miller, a Pulitzer Prize-winning reporter for the Miami Herald, wrote a book titled 83 Hours Till Dawn, an account of the widely publicized kidnapping of Barbara Mackle. Miller said he had spent more than 2,500 hours on the book, and many aspects of the kidnapping case were uncovered by the journalist and reported only in his book. Universal Studios wanted to film a dramatization of the 1971 incident but was unable to come to terms with Miller on payment for the rights. The studio produced the so-called docudrama anyway, and Miller sued for infringement of copyright. The similarities between Miller's book and the Universal script were striking—even some of the errors Miller had made in preparing the book were found in the film. But Universal argued that it was simply telling a story of a news event, and as such the research that Miller had done in digging out the facts regarding the story was not protected by copyright law. A U.S. District Court agreed with Miller's contention. "The court views the labor and expense of the research involved in the obtaining of those uncopyrightable facts to be intellectually distinct from those facts, and more similar to the expression of the facts than the facts themselves," the court said. The judge ruled that it was necessary to reward the effort and ingenuity involved in giving expression to a fact.16 But the U.S. Court of Appeals for the 5th Circuit reversed the lower-court ruling. "The valuable distinction in copyright law between facts and the expression of facts cannot be maintained if research is held to be copyrightable. There is no rational basis for distinguishing between facts and the research involved in obtaining the facts," the court said. To hold research copyrightable, the court said, is no more or less than to hold that the facts discovered as a result of research are entitled to copyright protection.17 The court added: "A fact does not originate with the author of a book describing the fact. Neither does it originate with the one who 'discovers' the fact. The discoverer merely finds and records. He may not claim that the Page 528facts are 'original' with him, although there may be originality and hence authorship in the manner of reporting, i.e., the 'expression' of the facts."
The dichotomy between historical fact and fiction that is fundamental to American copyright law likely would have doomed any lawsuit filed in the United States by the authors of the book Holy Blood, Holy Grail against Dan Brown and Random House, the author and publisher of The Da Vinci Code. Michael Baigent and Richard Leigh said they spent 10 years doing research before they published their book that argues, essentially, that Jesus was married, Mary Magdalene was his wife, they had children and the descendants of the children are still around. Baigent and Leigh also asserted that factions within the Roman Catholic Church have, for centuries, attempted to cover up these historical facts. Along came Dan Brown, who in 2003 wrote a fictional thriller (which just happened to sell 40 million hardback copies) that suggests the same story. Brown admitted he owed a debt to the Baigent/Leigh book, which was published in 1982, but he denied he infringed upon its copyright. The plaintiffs filed their infringement lawsuit in the United Kingdom, where the fact/fiction distinction is not as widely accepted. "What makes this case so interesting is that there is little clarity [in Great Britain] over the extent to which an author can use another person's research for either background or a direct influence on a book," noted British copyright attorney Antony Gold. Baigent and Leigh argued that Brown had stolen the central theme of their historical account, but lost the case when a London court ruled that they had failed to prove this point because they could not accurately state what that central theme was.18
Although this chapter focuses on copyright, an ancillary area of the law needs to be briefly mentioned, as it too guards against the theft of intangible property. Misappropriation, or unfair competition, is sometimes invoked as an additional legal remedy in suits for copyright infringement. Unlike copyright, which springs largely from federal statute today, misappropriation remains largely a creature of common law. One of the most important media-oriented misappropriation cases was decided by the Supreme Court more than 80 years ago and stemmed from a dispute between the Associated Press (AP) and the International News Service (INS), a rival press association owned by William Randolph Hearst.
AP charged that INS pirated its news, saying that INS officials bribed AP employees to gain access to news before it was sent to AP member newspapers. The press agency also charged that the Hearst wire service copied news from bulletin boards and early editions of newspapers that carried AP dispatches. Sometimes INS editors rewrote the news, and other times they sent the news out on the wire just as it had been written by AP reporters. Copyright was not the question, because AP did not copyright its material. The agency said it could not copyright all its dispatches because there were too many and Page 529they had to be transmitted too fast. INS argued that because the material was not copyrighted, it was in the public domain and could be used by anyone.
Justice Mahlon Pitney wrote the opinion in the 7-1 decision. He said there can be no property right in the news itself, the events, the happenings, which are publici juris, the common property of all, the history of the day. However, the jurist went on to say:
Although we may and do assume that neither party [AP or INS] has any remaining property interest as against the public in uncopyrighted matter after the moment of its first publication, it by no means follows that there is no remaining property interest in it as between themselves.19
misappropriation cases involving the media were relatively rare. But with the coming of the Internet and the easy access to so much material, litigation in this area has increased. For example, in 2009 the Associated Press brought suit for misappropriation against All Headline News Corp. The defendant employed people to search the Internet for news stories it could republish, sometimes after rewriting the text, more often using the entire story without editing. AP stories were a prime target for All Headline. The lawsuit was settled after the defendant admitted to many instances of improperly using AP's content and agreed to pay damages.20 Individuals and companies that do this are called "aggregators" because they aggregate or bring together the work of others for their own use. And these third-party repackagers, especially of news, are becoming more common.
Some of this repackaging is defensible under the fair use doctrine in copyright law. For example, a federal court in Nevada ruled in 2010 that when a real estate company posted material on its blog that it had taken from an article in the Las Vegas Review-Journal, it was a fair use. (see pages 539-540.) But more and more lawsuits are founded on claims of misappropriation and something called the "hot news doctrine," which was inherent in the 1919 AP v. INS ruling. This doctrine provides for a legal claim that can be used by news gatherers to prevent competitors from free riding on their efforts by redistributing their breaking news. But while the law clearly protects a news gatherer like the AP when someone else republishes a substantial portion of an article, the courts are Page 530still trying to determine how far the redistribution can legally go in merely reporting the basic substance of a report. For example, a group of banks sued a small Web site operator called that was posting reports online about the banks equity research recommendations; in other words, advice on the future performance of stocks. The banks argued thefly was publishing these recommendations even before their own customers have a chance to consider them—a violation of the hot news doctrine. A U.S. district court agreed with the banks in 2010 that theflyonthewall was free riding on the work the banks had done. But in 2011 the 2nd U.S. Court of Appeals reversed this ruling. It is said that while traditional copyright law still protects the work done by the banks—theflyonthewall could not legally reprint the banks' analysts reports—the redistributors could legally report on the analysts' findings, such as Morgan Stanley's analysts upgrade shares of Ford or Microsoft. That's news, Judge Robert D. Sack wrote. "A firm's ability to make news—by issuing a recommendation that is likely to affect the market price of a security—does not give rise to a right for it to control who breaks that news and how," he added. The court said the viability of the hot news doctrine remained intact, but that the banks' case did not fall within this law.
What thefly did was akin to Google or CNN publishing online that The New York Times was reporting that the U.S. Attorney General was going to resign. While the ruling only directly affects cases in the Second Circuit—New York, Connecticut and Vermont—decisions by this court are regarded as very influential nationally and Judge Sack is considered a leading expert on copyright law.21 As many newspapers, magazines and others in the mass media face growing economic pressure because of the growth of the Internet, these issues will undoubtedly be litigated more often. Established news organizations fear that emerging online services who ride free can decrease the demand for their often expensive newsgathering efforts. An incredible amount of time and money goes into creating news stories, they argue. The hot-news misappropriation doctrine is a creature of state law, but efforts were made to encourage the enactment of federal legislation. However, the call by news organizations for a federal hot news legislation has been unsuccessful. In addition, any such legislation would have to be limited to avoid a First Amendment challenge.
Owners of a copyright are granted almost exclusive monopoly over the use of their creations. The word "almost" must be used, for there are really four limitations on this monopoly. Three of the limitations have been discussed already. First, the work must be something that can be copyrighted. There can be no legal monopoly on the use of something that cannot be protected by the law. Second, the monopoly protects only original authorship or creation. If the creation is not original, it cannot be protected. Third, copyright protection does not last forever. At some point the protection ceases and the work falls into the public domain.

The fourth limitation on exclusive monopoly is broader than the other three, is certainly more controversial and is concerned with limited copying of copyrighted material. This is the doctrine of fair use, which has been defined by one court as follows:
A rule of reason ... to balance the author's right to compensation for his work, on the one hand, against the public's interest in the widest possible dissemination of ideas and information on the other.22
This doctrine, then, permits limited copying of an original creation that is copyrighted and has not yet fallen into the public domain. But in many instances describing the fair use doctrine is easier than applying it to a particular case. As copyright attorney Michael D. Kuznetsky noted, the courts and many legal scholars have commented that fair use is the most difficult issue in copyright law. It is mixed inquiry of fact and law, which oftentimes can lead to differing opinions on how the factors weigh out. A court decision in 2012 bears this out.

Pop singer Noelia Lorenzo Monge and her producer Jorge Reynoso were married in a secret ceremony in Las Vegas in 2007. The couple hid their marriage to ostensibly preserve Monge's image as a young, single celebrity. Not even Reynoso's mother knew of the marriage. But a paparazzo who sometimes worked as a bodyguard for the pair found a memory chip from their personal camera used at the wedding. After being unsuccessful in trying to get the couple to pay him to return the photos, he sold them to a magazine called TVNotas in 2009. The couple had copyrighted most of the photos to protect themselves, including five of the six the magazine published. They sued for copyright infringement. The magazine raised the fair use doctrine in its defense, arguing correctly that copyrighted material may be published for the purpose of news reporting, among other things. The question, then, was, "Was the publication of the pictures a news report, informing fans that the couple were in fact married, proving that the speculation about their relationship was correct?"
A lower court dismissed the copyright challenge, but in 2012 the 9th U.S. Court of Appeals reversed this ruling, saying the fair use defense would not work and that this commercial use of previously unpublished works was not permitted under the law. "Waving the news reporting flag is not a get out of jail free card in the copyright arena," wrote Judge M. Margaret McKeown. If the magazine wanted to report that it had evidence that the couple was in fact married, it could have done so in other ways (e.g., publishing Page 533a copy of their marriage certificate) rather than publishing the copyrighted photos. In many fair use cases, the issues are as obtuse as these issues.23
The Sandra Kane Blew Comedy Show," to introduce a segment called Public Excess. The segment features examples of public access television. Sandra Kane, a comedienne and former stripper, sings, dances and tells jokes on her show while wearing little or no clothing. She sued for copyright infringement, but the federal court said the use of the clip by Jon Stewart on "The Daily Show" was a fair use because it was used for critical purposes. "In presenting plaintiff's clip, defendant sought to critically examine the quality of plaintiff's public access television show," the court ruled.26
But a federal court in California rejected a fair use argument made by the operator of an Internet bulletin board who posted complete copyrighted articles from the Los Angeles Times and the Washington Post on the site so people could comment on the news and criticize the manner in which the news stories were reported. The court noted that adding commentary to a verbatim copy of a copyrighted work does not automatically protect it as a fair use. The court issued an injunction barring future postings and assessed $1 million in damages against the defendant.27 How do you explain the seemingly opposite rulings? Surely the concepts "comment" and "criticism" are elusive and subject to interpretation. But a more obvious explanation involves the amount of copyrighted material used in these three instances. In the California case, the defendants used a great many copyrighted articles from the two newspapers. Significantly smaller amounts of copyrighted material were used in the other two cases. The comment and criticism element is more aptly applied to republishing small segments of a work.
Copyright law has traditionally regarded the limited use of copyrighted material for educational purposes as a fair use. The teacher who makes copies of a short article from Newsweek and distributes them to class members is normally considered an innocent infringer. But more substantial copying may not receive the same protection, especially when commercial interests are involved. This issue came up in the 1990s when Page 535photocopy businesses worked with college and university faculty members to prepare so-called coursepaks. A faculty member would provide the copy center with a list of articles and book chapters for use in a class. The centers would then make photocopies of the material, loosely bind them and then sell these ad hoc anthologies to the students enrolled in the course for use as a text. Publishers and others who held the copyright on the material that was copied brought suit for infringement. The copy centers, like Kinko's, argued that these materials were being copied for educational purposes, an acceptable use under the law. The federal courts agreed that while the materials were ultimately being used for educational purposes, the copy centers were making the coursepaks for commercial reasons—something that did not qualify as a fair use.
Use of small amounts of copyrighted material in a news article or broadcast is usually regarded as a fair use. But this kind of use has become more problematic in recent years with the growth of content on the Internet. In 2009 the Associated Press—a news cooperative owned by 1,500 daily newspapers that provides written articles and broadcast materials to thousands of news organizations—announced that it would consider seeking legal remedies to stop Web sites, bloggers and search engines like Google and Yahoo! from using its work without first getting permission, and then sharing revenues earned by using the AP material. The news aggregators and search companies argued that such a use was a fair use. AP spokespeople said it was becoming all too common for bloggers to use direct quotations from AP stories, a use that sometimes went beyond a fair use. AP officials said it is more appropriate for the bloggers to use short summaries of the articles rather than the direct quotations from the stories. In July 2009 the AP announced it would henceforth attach software called metatags to its articles. The tags would explain what copyright rules apply to the reuse of the material, and alert the AP if and how the article is being revised.28 (See pages 552-553 for more on this problem.)
On at least two occasions federal courts have ruled that a use that serves the public interest could qualify as a fair use. One case involved the use of copyrighted material in a biography of the reclusive multimillionaire Howard Hughes. A company owned by Hughes bought the rights to the copyrighted material when it discovered it was to be used in the biography, and then attempted to stop the publisher from using the material in the book. The 2nd U.S. Court of Appeals ruled that it would be contrary to the public interest to permit individuals to buy the rights of anything published about them to stop authors from using the material.29 In another case a federal court ruled that it was in the public interest to permit the author of a book on the assassination of John F. Kennedy to use copyrighted frames of 8 mm motion picture film to illustrate his theory on the murder of the president. The film was shot by a spectator at the scene and was purchased by Time, Inc., which owned the copyright.30 Please note, these are singularly uncommon rulings.
Today, many judges talk about "transformative uses" when they consider claims of fair use. What does this mean? Under the purpose and character factor, if an individual takes a portion of a copyrighted work and uses it for another purpose, in other words Page 536transforms it, it is much more likely to be regarded as a fair use. For example, when ABC broadcast a television news report about how the advocates of the legalization of marijuana have changed the image of the typical user from the long-haired pothead to a seriously ill medical patient, it used both the cover from a recent issue of Newsweek and a photo from a story in the issue to illustrate its video story. The magazine story had focused on the medical use of marijuana. The federal court said the use of the cover and the photo was a fair use because it was a transformative use.31 The network had taken the original copyrighted art and transformed it into a story about the news coverage of a current issue.
A transformative use is also impacted by the fourth factor. If a work is truly transformed, there is most likely little chance it will steal the audience of the original work. For example, a court ruled that the re-creation of three scenes from the famous pornographic film "Deep Throat" was a fair use when used for a biographical film about actress Linda Lovelace. The biography, called Lovelace, was released in 2013 and documented Lovelace's marriage to her husband Chuck Traynor. The film presented a critical behind-the-scenes look at Traynor's abuse of Lovelace and the way he coerced her to participate in "Deep Throat." Lovelace contains no pornographic scenes or nudity. The court said the use illustrated a strong transformative purpose and the copyright owner of "Deep Throat" would be unlikely to lose revenue from this nonpornographic use.32
Questions regarding so-called transformative use were an issue in a copyright lawsuit between the Associated Press and controversial street artist Shepard Fairey. In April 2006, freelance photographer Mannie Garcia (working for the AP) took a picture of then Sen. Barack Obama at the National Press Club; a pensive Barack Obama looking upward, as if to the future, as one reporter described it. Using the photo as a starting point, Fairey created the now famous red, white and blue HOPE poster that became so popular during the presidential campaign. Hundreds of thousands of posters and stickers containing the poster image were sold; signed copies of the poster have been bought on eBay for thousands of dollars; and a stenciled collage version of the work has been added to the permanent collection of the National Portrait Gallery in Washington, D.C. In 2009 the AP claimed copyright infringement and said the use of the photo by Fairey required its permission. The news cooperative said it wanted credit and compensation. Attorneys for Fairey admitted that the artist used the photo as a reference, but argued the artist transformed it into a "stunning, abstracted and idealized visual image that created a powerful new meaning that conveys a radically different message" from the photo taken by Garcia.33 The transformative issues were never played out in court because the parties settled the case in early 2011. The A said that Fairey agreed he will not use another A photo in his work without obtaining a license from the wire service, and that the two sides would "work together going forward with the 'Hope' image and share the rights to make the posters and merchandise bearing the 'Hope' image and to collaborate on a series of images that Fairey will create based on A.P. photographs."
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In an interesting case decided in 2015, the 2nd Circuit considered whether a parody of a pre-existing work could itself qualify for copyright protection. An individual created a parody of the classic Keanu Reeves surfer-thriller flick, "Point Break." The court found the work to be sufficiently transformative to justify fair use of the movie materials. At focus in this case, however, was the more novel issue of whether the resulting parody could itself be protected under copyright. The 2nd Circuit held that if an author of an unauthorized work provides enough original material and the resulting new work is protected under fair use rules, then the resulting new work is also eligible for copyright protection.34
Adding something to a copyrighted work can be considered a transformative use. But at least one court has ruled that removing something from such a work is not transformative. A company called Clean Flicks of Colorado was in the business of buying copies of films released on DVDs, and then editing them, taking out what the firm regarded as offensive content. These would then be sold to buyers who wanted a sanitized version of the film. A coalition of motion picture studios and film directors sued for copyright infringement. The company called its editing merely a transformative use; the court disagreed, ruling that transformative means adding something. Here the infringers added nothing, but merely deleted material from the original. Clean Flicks also argued it was not harming the filmmakers; it was simply exploiting a new market, a market not being served by Hollywood. After all, the company bought each DVD it altered before resale. But the court said the film studios have the right not to enter a market. "Whether these films should be edited in a manner that could make them acceptable to more of the public playing them on DVD in a home environment is more than merely a matter of marketing; it is a question of what audience the copyright owner wants to reach," wrote U.S. District Judge Richard Matsch.35
Courts look at several considerations when applying this criterion of fair use.

Is the copyrighted work still available? Using part of a work that is out of print is more likely to be considered a fair use than using a segment of a book that can be readily purchased at the local bookstore.
Is the copyrighted work what is called a consumable work? A consumable work is something that is intended to be used just once: a workbook that accompanies a text, or a book of crossword puzzles. Consumables are usually cheaply priced and are intended to be used and then discarded. It would not be a fair use for a teacher to purchase a single copy of a biology workbook, make 30 photocopies of each page, and then pass out the photocopies for use by the students. But it would very likely be a fair use for the same teacher to make 30 copies of an article in Science magazine for class distribution.
Is the work an informational work or a creative work? It is more likely to be a fair use if the copying involves a work like a newspaper or newsmagazine Page 538article or an item in an encyclopedia rather than a novel or play or poem. This doesn't mean that copying an informational work is always a fair use; just that it is more likely to be.
Is the work published or unpublished? Materials like manuscripts, letters and other works that have not yet been published are sometimes accessible by the public when they are stored in libraries or other places. The author's right to be the first to publish these works is regarded as a valuable right.
The question of the right of first publication came to the forefront more than 25 years ago when The Nation magazine pre-empted the publication of the late President Gerald Ford's memoirs by publishing a 2,250-word article that contained paraphrases and quotes from the unpublished manuscript. Only about 300 words in the article were legitimately protected by copyright, but these focused on the heart of the long memoir—Ford's discussion of why he chose to pardon former President Richard Nixon, who resigned in the face of impeachment proceedings. (Nixon was impeached, but resigned before he was tried by the Senate.) When Ford's publisher sued for copyright infringement, The Nation claimed its use of the 300 words was a fair use. The U.S. Supreme Court disagreed. The U.S. Supreme Court rejected the fair use claim and reversed the lower appellate court ruling. "In using generous verbatim excerpts of Mr. Ford's unpublished manuscript to lend authenticity to its account of the forthcoming memoirs, The Nation effectively arrogated to itself the right of first publication, an important marketable subsidiary right," Justice Sandra Day O'Connor wrote. The 1976 Copyright Act clearly recognizes the right of first publication for an author, O'Connor said. The scope of fair use is narrowed where unpublished works are concerned. Justice O'Connor concluded that "the unpublished nature of a work is a key, though not necessarily determinative, factor, tending to negate a defense of fair use."36
Justice O'Connor concluded that "the unpublished nature of a work is a key, though not necessarily determinative, factor, tending to negate a defense of fair use."
Mark Twain once noted that it is possible to get more out of a lesson than the teacher intended. A cat that sits on a hot stove will likely never sit on another hot stove, he noted. It is just as likely, he added, the cat won't sit on a cold stove either. Such was the case when some lower courts interpreted Justice O'Connor's opinion in the Nation decision. When judges read the sentence, "We conclude that the unpublished nature of a work is a key, though not necessarily determinative [emphasis added] factor, tending to negate a defense of fair use," they ignored the italicized phrase. In a series of increasingly restrictive rulings, judges on the 2nd U.S. Circuit Court of Appeals, a court with considerable national authority, ruled that the copying of an unpublished work can never be a fair use.
Congress resolved the issue in the autumn of 1992 when it amended the federal copyright statute. The law now states that "the fact that a work is unpublished shall not itself bar a finding of fair use," if such a finding is justified based on the application of all Page 539four fair use criteria. This change puts the law back to where it was immediately after the ruling in Harper & Row Publishers v. Nation Enterprises, before appellate courts began to misinterpret it. It remains exceedingly dangerous, though not necessarily fatal, to publish or broadcast material that has never before been published. Such a use will likely be sustained only if the user can make a strong case under the other three fair use criteria.
The amount of a work used is not as important as the relative proportion of a work used. Word counts, for example, really don't mean as much as percentages. The use of 500 words from a 450-page book is far less damaging than the use of 20 words from a 40-word poem. How much of the work, in relation to the whole, was used? Courts will consider exact copying when looking at this question; but they will also often consider paraphrasing. Pirates will find little refuge in a dictionary of synonyms. For example, in the mid-1980s respected writer Ian Hamilton sought to publish a biography of reclusive novelist J.D. Salinger, the author of Catcher in the Rye. Lacking Salinger's cooperation in the endeavor, Hamilton sought to prepare the biography by using portions of numerous letters the novelist had written to friends and acquaintances. The letters had never been published. Salinger sued for copyright infringement, claiming the contents of the letters were his literary property. To avoid the lawsuit Hamilton reworked the manuscript, deleting most phrases and sentences copied directly from the letters. But he extensively paraphrased the contents of the correspondence in place of using Salinger's actual words. The 2nd U.S. Circuit Court of Appeals ruled that this use was an infringement of copyright, not a fair use. Paraphrasing Salinger's words did not protect Hamilton. "What is protected is the manner of expression, the author's analysis or interpretation of events—the way he structures his material and marshalls facts, his choice of words and the emphasis he gives to particular developments," wrote Judge Jon O. Newman.38 The paraphrasing was too close to Salinger's own choice of words, to his creativity. The biographer had taken the "heart of the material" from the letters. Hamilton abandoned his initial effort and instead wrote In Search of J.D. Salinger, a book about Salinger's literary life (without the material from the letters) and his unsuccessful efforts to publish a biography of the reclusive author.
How much of the original work can be used can sometimes depend on what material is taken. A law firm representing the Las Vegas Review-Journal sued a realty company for using eight sentences from a 30-sentence article published in the paper. The defendant argued it was a fair use. The federal court agreed, noting that the part of the article republished on a blog was simply factual news about a new federal housing program. The court said that the use of even eight sentences, about a quarter of the article, was not enough in this case to negate the defense of fair use.39 The same can be said of Web sites that take only a few factual statements from copyrighted news stories. For example, a court ruled it was fair use when a real estate blog copied the first eight sentences of Page 540a newspaper article. Because the blogger had copied only eight sentences and not the "valuable" section of the original article, the commentary of the original author, the court ruled it was a fair use. The court also noted that the copying would not affect the market for the original article (the fourth fair use factor, discussed below).40 As noted earlier, however, a Web site that takes an entire story is unlikely to be protected by fair use.
One of the toughest tasks facing a judge is measuring fair use when someone presents a parody of a copyrighted work. A parody is a critical and usually humorous effort to lampoon a creation. But in order to be a successful parody, the work must reflect the content of the original book or movie or song, not simply the style and presentation of the original creation. The question of parody was at the heart of one of the silliest legal actions in recent years when the Fox News Network tried to stop author Al Franken from calling his book, a critical evaluation of the conservative press in America, Lies and the Lying Liars Who Tell Them: A Fair and Balanced Look at the Right. Fox claimed that it owned the rights to the phrase "fair and balanced," a slogan it uses to identify its newscasts. Franken said the book was a social commentary on the network and others, and that the use of the phrase was a parody. A federal court agreed, saying the lawsuit was wholly without merit, both factually and legally. "Parody is a form of artistic expression protected by the First Amendment. The keystone to parody is imitation. Here, whether you agree with him or not in using the mark [fair and balanced], Mr. Franken is clearly mocking Fox," wrote judge Denny Chin.41
In 1992 the 6th U.S. Court of Appeals ruled that a commercial parody, whether a book or a movie or a song, could never be a fair use. Such a work was commercial and could not be regarded as artistic comment or criticism, something usually protected under the fair use doctrine.42 The ruling, if widely accepted, would have had a devastating impact on an entire range of creative work. But the Supreme Court rejected this notion two years later in one of the most colorful and significant cases ever decided. The case focused on a rap music parody of the song "Oh, Pretty Woman," a 1964 rock/country hit written by Roy Orbison (who performed the song) and William Dees. Rapper Luther Campbell, leader and founder of the group 2 Live Crew, was rebuffed when he sought permission from the publisher of the song, Acuff-Rose Music, to record his version of "Oh, Pretty Woman." Campbell was sued by Acuff-Rose when he made the recording anyway with lyrics wildly divergent from the original. (A quick search on Youtube should lead students to both versions of the song.) A trial court called the 2 Live Crew version a parody and rejected the suit, but the Court of Appeals reversed, ruling that a commercial parody could never be a fair use. The Supreme Court sided with the trial court and sent the case back for trial, ruling that a jury trial was needed to determine whether the parody was a fair use. "The language of the statute," wrote Justice David Souter, "makes it clear that the commercial or nonprofit educational purpose of a work is only one element of the first factor enquiry into its purpose and character. ... Accordingly, the mere fact that a use is educational and not for profit does not insulate it from a finding Page 541of infringement, any more than the commercial character of a use bars a finding of fairness. If indeed, commerciality carried presumptive force against a finding of fairness, the presumption would swallow nearly all of the illustrative uses listed [in the statute] ... including news reporting, comment, criticism, teaching, scholarship and research since these activities are generally conducted for profit in this country."43
Parody, Justice Souter said, springs from its allusion to the original. "Its art lies in the tension between a known original and its parodic twin." It is true the parody here took the opening lines and the musical signature. "But if quotation of the opening riff and the first line may be said to go to the 'heart' of the original, the heart is also what most readily conjures up the song for parody, and it is the heart at which parody takes aim. Copying does not become excessive in relation to parodic purpose merely because the portion taken was the original's heart." It was significant, Souter said, that after taking the first line, 2 Live Crew added its own lyrics. And while the bass riff was copied, other original sounds were added as well. The case is also noteworthy for giving rise to the transformative use consideration under the first fair use criterion, purpose and character of the use.
The ruling in the Campbell case failed to provide precise guidelines for parodists regarding how much original material can be used in a parody that can be defined as a fair use. Maybe such precise guidelines are impossible to fashion. But without them the matter of fair use and parody continues to bedevil the judiciary. Protection for parody was further complicated when some courts made the distinction between parody and satires. Parodies can be considered "transformative" works and are thus protected by fair use. The Court explained, however, that while a parody must mimic the original work to make its point, a satire uses the work to criticize something else, and therefore requires other justification for the very act of borrowing. As a result, lower courts interpreted this as the Court favoring parody under the fair use doctrine, while devaluing satire. Based on this distinction, lower courts focused on the dichotomy between a parody and satire, finding that if a new work comments or criticizes the original work, it is a parody and thus protected. If it instead focuses on commenting and criticizing something else, it is not a satire and therefore less likely to be protected.
Recently, however, at least one court has questioned this distinction. In Cariou v. Prince, the 2nd Circuit examined whether 30 works by "appropriation artist" Richard Prince that altered and incorporated various copyrighted photographs by Patrick Cariou qualified as fair use. Although the 2nd Circuit analyzed each of the Copyright Act's fair use factors, it particularly emphasized the purpose and character of Prince's use. Because Prince testified that he did not intend to transform or comment on Cariou's work, typically, this would have weighed against a finding of fair use. The 2nd Circuit, however, held that "[t]he law imposes no requirement that a work comment on the original or its author in order to be considered transformative." In addition, the court held it was not important whether the author of the new work intended to comment on or criticize the original work. Instead, the court held, the correct standard is whether the new work would be "reasonably perceived" by a "reasonable observer" to alter the original Page 542with "new expression, meaning, or message." Applying this standard, the court found 25 of the 30 works in the case were transformative because they "manifest an entirely different aesthetic from Cariou's 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."44 How this ruling affects future cases remains to be seen. For now, courts continue to struggle with the ambiguous nature of fair use, especially as the doctrine applies to new and emerging art forms.
The effect of the use on the potential market for, or value of, the copyrighted work is the fourth criterion. While a cautionary note should be sounded against assigning relative weight to the four criteria, this final one—harm to the plaintiff—is given greater weight by most courts than any of the other three. In a congressional committee report on the 1976 law, the legislators noted that "with certain special exceptions ... a use that supplants any part of the normal market for a copyrighted work would ordinarily be considered an infringement." In the action by Harper & Row against The Nation, Justice Sandra Day O'Connor noted that "this last factor is undoubtedly the single most important element of fair use."45 "More important," Justice O'Connor wrote, "to negate fair use one need only show that if the challenged use should become widespread, it would adversely affect the potential market for the copyright work."
The inability of the plaintiff to demonstrate an adverse economic impact from the copying can frequently in and of itself sustain a fair use ruling. In 1997 Warner Books published a book by Gerald Celente titled Trends 2000: How to Prepare for and Profit from the Changes of the 21st Century. In a chapter on power generation the author criticized the nuclear power industry and used a photo that was previously included in an advertisement published by the United States Council for Energy Awareness. The photo was a picture of a dairy farmer, Louise Ihlenfeldt, and a cow standing in a field of clover framed against a blue sky. A print message accompanying the photo in the ad described the harmonious relationship between the Ihlenfeldt family and a nuclear power plant located only a mile away. The book author belittled the message in the ad and criticized the industry. When a copyright action was brought against Warner Books for using the photo without permission, the publisher argued fair use. The use was for profit, and the entire picture was used, the court noted, but ruled that the black-and-white reprint of the color photo was unlikely to have a negative impact on the market for the original. "The idea that a thriving market for photographs of Louise Ihlenfeldt and the cow (however dramatically portrayed) actually exists is dubious to say the least," the court ruled.46 In 1998 a federal judge in Washington state threw out a nearly $700,000 jury award to author Wade Cook after a trial where Cook asserted that motivational writer and speaker Tony Robbins had copied two phrases originated by Cook. The jury decided that Robbins had used the two phrases, "meter drop" and "rolling stocks," as many as 12 times in a Page 543workbook he (Robbins) distributed at financial seminars. But Judge Jack Tanner said there was not a scintilla of evidence that the use of these phrases caused any harm at all to plaintiff Cook.47 In 2002 a federal court in New York ruled that when Web site operator Susan Pitt created a "Dungeon Doll" based on an altered head of a Barbie doll for a story about sexual slavery and torture, the use of Barbie was a fair use chiefly because the erotic dolls were unlikely to affect the market for the original Barbies.48 And the 2nd U.S. Court of Appeals rejected the claim of negative economic impact made by a company that argued that when the defendant used some of the plaintiff's copyrighted materials to support his criticism of the company, which conducted executive training seminars, this would seriously reduce the demand for the company's service. "If criticisms on the defendants' web sites kill the demand for plaintiff's services, that is the price that, under the First Amendment, must be paid in the open marketplace of ideas," the court said.49 Of course, if the defendant had used the plaintiff's materials to operate competing training seminars, the case would likely have ended differently.
In evaluating economic impact the court considers not only direct impact, but also the impact that using the copyrighted material might have on some derivative creation. For example, when a company published a book of trivia questions about the events and characters of the popular Seinfeld television series, a court ruled this was not protected by fair use. The book included questions based upon events and characters in 84 Seinfeld episodes and used actual dialogue from the show in 41 of the book's questions. The court ruled the book affected the ability of the copyright owner to make future derivative Seinfeld trivia books.50
When a court is faced with a defendant who claims a fair use, it must apply the four criteria to the facts in the case. Here are two cases that demonstrate how these criteria might be applied. Conservative talk-show host Michael Savage brought a copyright Page 544infringement suit against the Council on American-Islamic Relations for its use of a four-minute excerpt from a two-hour copyrighted Savage broadcast in which he made statements attacking both the council and the Islamic religion. The short segment was included in a critique of Savage comments that was posted on the council's Web site. The council argued that its use was a fair use.
Purpose and character of the use: The clips were used for criticism and comment of Savage's views. It was not unusual to use the audio clips to authenticate Savage's critical statements. This factor favors the defendant.
Nature of the copyrighted work: While the works appear to be more informational than creative, because the hearing was held on the defendant's motion for a summary judgment based on the pleadings, the plaintiff's allegations that the material was in fact a "creative performance" must be assumed at this point, the court said. This factor therefore favors the plaintiff.
Amount and substantiality of the material used: Four minutes from a two-hour broadcast was a reasonable amount for the purposes of criticizing the plaintiff's views on the topics. This factor favors the defendant.
Effect on the market value of the original work: If the use of the four-minute segment from the original show by the council led some potential listeners to reject Savage's subsequent programs, this might have an impact on Savage's future overall revenues. But the use of the clip in the council's critique would have no impact on the market for the original program that contained the four minutes of commentary. The plaintiff never even implied that there was any market for the copyrighted work outside its original airing. This factor favors the defendant. The use of the four minutes by the council was a fair use.51
In a second case, Gawker Media posted 21 pages of Sarah Palin's book, America by Heart, online, days before the book's release. Media outlets often publish reports about the contents of unreleased books, but usually paraphrase the contents and use direct quotations sparingly. Publisher HarperCollins brought suit and asked for a court order to force Gawker to remove the excerpts. Before it could issue the order, the court had to evaluate whether HarperCollins was likely to prevail in an infringement action, or whether the posting was a fair use.
While the copyright statute gives the author or owner of a copyrighted work an exclusive monopoly over the use of that work, the law recognizes that in some instances other people ought to be able to copy portions of a protected work. No liability will attach to such copying if the use is what the law calls a fair use.
A court will consider four factors when determining whether a specific use is fair use:
What is the purpose and character of the use? Why was the material copied? Was it a commercial use or for nonprofit educational purpose? Was the use intended to further the public interest in some way? Is the original purpose and character transformed with a new meaning or a new purpose by the new use? Did the new use add to the value of the old use?Page 546
What is the nature of the copyrighted work? Is it a consumable item such as a workbook, or is it a work more likely to be borrowed from, such as a newspaper or magazine article? Is the copyrighted work in print and available for sale? Has the work been previously published or is it unpublished?
How much of the copyrighted work was used in relation to the entire copyrighted work? Was it a small amount of a large work? Or was it a large portion of a small work?
What impact does the use have on the potential market or value of the copyrighted work? Has the use of the material diminished the chances for sale of the original work? Or is the use unrelated to the value or sale of the copyrighted material?
Although a court considers each of these items closely, most courts tend to give extra weight to item 4. In a close ruling the impact on the market or value of the copyrighted work often becomes the most crucial question.