In an attempt to understand the Supreme Court nominee’s take on IP law, I have re-read her decision in Castle Rock v. Carol Publishing (written when she was a district court judge.) Hopefully Sotomayor’s analysis of this difficult case (I believe it is a close call on the fair use issue) will be informative of her stance on IP.

For those that don’t know (or remember) Castle Rock involved the publishing of the Seinfeld Aptitude Test (SAT) a trivia book published without authorization.

Originality of Seinfeld – Carol Publishing claimed they were not reproducing original expression but rather “uncopyrightable facts about the Seinfeld show.” Sotomayor held that the facts depicted in a Seinfeld episode are fiction and thus original creation.

“In other words, by copying “facts” that plaintiff invented, SAT “appropriate[s] [plaintiffs] original contributions.”

Sotomayor found support for her conclusion in NBA v. Motorola where the 2nd circuit held that basketball stats were facts and thus protected by the Copyright Act in part because “[u]nlike movies, plays, television programs, or operas, athletic events have no underlying script.”

Fair Use
Purpose and character of the use:
Sotomayor held that the purpose of the SAT fit the non-exclusive purposes that §107 identifies as fair use. (this is one of the only points the 2nd circuit disagreed with her on. Therefore I believe this analysis is particularly insightful as it demonstrates a departure from the status quo.)

She held:

Though it may be “extravagant” to characterize SAT as a work of criticism or comment, the Court “must be alert to the risk of permitting subjective judgments about quality to tilt the scales on which the fair use balance is made.” Twin Peaks, 996 F.2d at 1374. Surely a text testing one’s knowledge of Joyce’s Ulysses,or Shakespeare’s Hamlet, would qualify as “criticism, comment, scholarship, or research,” or such. The same must be said, then, of a text testing one’s knowledge of Castlerock’s Seinfeld. Id. (“A comment is as eligible for fair use protection when it concerns ‘Masterpiece Theater’ and appears in the New York Review of Books as when it concerns ‘As the World Turns’ and appears in Soap Opera Digest.”)

Sotomayor’s analysis indicates a broad view of comment/criticism.  This is in line with a broad finding of fair use and heavy first amendment protection.

Transformative:
Following the Supreme Court decision in Campbell Sotomayor holds that the SAT is itself an “original creation” and adds something new to Seinfeld. She again appears to take a wide view of fair use:

Put differently, the analysis properly focuses upon whether “the new work merely ‘supersedes the objects’ of the original creation, or instead adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message.”

Following this focus Sotomayor  holds that the SAT by posing trivia questions is an original creation. However, Sotomayor diminishes the importance of this holding by disclaiming that a transformative work can still infringe (citing derivative works infringing on originals.)  Sotomayor adds that the issue of whether a work is transformative is most important where it is not (and thus should be rejected from further fair use consideration.)

Commercial Endeavor:
Sotomayor states that SAT’s commercial nature “tempers, if only slightly” a finding of fair use.  Again citing Campbell Sotomayor recognizes that almost everything in the US is published for profit and thus a finding of a commercial endeavor is of little consideration to a finding of fair use.

Substantiality of the Portion Used:
Sotomayor analyzes both the amount and substantiality of the work used with reference to Seinfeld as well as the amount of the SAT consisting of Seinfeld material.  Furthermore Sotomayor holds that:

The Court’s determination that SAT is substantially similar to Seinfeld “so as to be prima facie infringing should suffice for a determination that the third fair use factor favors the plaintiff.”

While Sotomayor holds that Carol Publishing appropriated the most important elements of Seinfeld, she again minimizes the importance of her conclusion:

Because a finding of substantial similarity is a prerequisite to a prima facie claim of infringement, such a finding cannot negate the possibility of fair use. Otherwise, the fair use provision of the Copyright Act would amount to little more than a false promise of a viable defense; there would be no real chance that a prima facie case of infringement could ever be negated by a showing of fair use. The first three factors of the fair use analysis, then, suggest a somewhat unsatisfying result; plaintiff has an advantage, but one that is hardly compelling or dispositive.

(The Second Circuit court takes a different analysis of the 3rd fair use factor.  They hold that the question of substantiality is in relation to the purpose of the work and thus since the purpose of the work is “entertainment, not commentary” the amount and substantiality of the use must weigh against fair use.  Interestingly both analyses minimize the substantiality of the portion used factor based on an early finding essentially making the third fair use factor unnecessary.)

Affect on Potential Markets:
Sotomayor cites the Supreme Courts opinion in Harper that the “effect on the market for the copyrighted work is undoubtedly the single most important element of fair use.”  This is important in that it minimizes the courts retreat in Campbell “[a]ll [factors] are to be explored, and the results weighed together, in light of the purposes of copyright.”  Thus it appears that while minimizing the commercial nature of the work in the first factor she places more weight on the commercial effect. In a footnote Sotomayor explains her position stating that

Given the vigor with which the Supreme Court has emphasized this factor in the past, this Court hesitates in adapting the Second Circuit’s dicta. In any event, because neither party has any considerable advantage through the Court’s consideration of the first three fair use factors, the effect on the potential markets-however important it is relative to the remaining factors-will be determinative in this case.

While Sotomayor holds that the book compliments Seinfeld in that it is only valuable to a regular viewer of the program (and thus is not replacing the original), she still finds that the SAT has a deleterious effect on the potential market:

A Seinfeld trivia game is not critical of the program, nor does it parody the program; if anything, SAT pays homage to Seinfeld. The market for such works is one that should properly be left to plaintiff’s exclusive control.

Sotomayor’s analysis focuses on whether the potential market is one the creators would develop or license.  Specifically Sotomayor states:

The examples of parody and criticism should serve to clarify and illustrate this proposition. By the very nature of such endeavors, persons other than the copyright holder are undoubtedly better equipped, and more likely, to fill these particular market and intellectual niches.

Thus it appears that Sotomayor believes a finding for fair under the potential market factor would require the work to be of a critical nature to the  original work.

Finally Sotomayor considers Castle Rock’s failure to enter the market for trivia books. Sotomayor states:

The Court is persuaded that there is a meaningful difference, for purposes of the Copyright Act, between a copyright holder’s failure to occupy a particular market as a matter of choice, and a failure to occupy such a market as a matter of neglect.

Interestingly this implies that if an infringer could prove that a copyright holder failed to occupy a marker out of neglect that it would weigh in favor of a finding for fair use.

Conclusions:
Sotomayor concludes on the balance that the factors weigh against a finding of fair use. Her analysis appears to reveal a broader view of fair use with respect to categories of works and whether a work is transformative. Paradoxically she states that the commercial nature of the infringing work is of little weight, and then places a large amount of weight on the effect on potential markets.  Combined with her broad view of potential markets the commercial nature of a infringing work becomes the determinative factor (especially considering she discounts the substantiality of the portion used factor.)  Thus it appears that a finding of fair use is likely only where the use is either noncommercial or criticizes/parodies the copyrighted work.

To be continued …

Tags: Castle Rock v. Carol Publishing, Copyright, Intellectual Property, IP, Sotomayor