Vondran Legal® Copyright Law Essentials: Fair Use It is not typically decided on a motion to dismiss.  For legal representation, call us at (877) 276-5084.

Introduction

One question I typically get is "who decides if this is fair use."  Well, this can depend.  If you are doing a "bench trial" in Federal court, then a judge would naturally decide.  If you are involved in a jury trial, the jury should decide if this defense to copyright infringement applies.  However, there has been some controversy thrown into the mix given the Oracle vs. Google case.  The United States Supreme Court set forth the standard of review in Oracle America, Inc. v. Google LLC, which ruled that Google's fair use of portions of Oracle's computer software was unconstitutional.

In this case, the Supreme Court noted:

On remand the District Court, sitting with a jury, heard evidence for a week. The court instructed the jury to answer one question: Has Google “shown by a preponderance of the evidence that its use in Android” of the declaring code Cite as: 593 U. S. (2021) Opinion of the Court and organizational structure contained in the 37 Sun Java API packages that it copied “constitutes a ‘fair use' under the Copyright Act?” App. 294. After three days of deliberation the jury answered the question in the affirmative. Id., at 295. Google had shown fair use. Oracle again appealed to the Federal Circuit. And the Circuit again reversed the District Court. The Federal Circuit assumed all factual questions in Google's favor. But, it said, the question whether those facts constitute a “fair use” is a question of law. 886 F. 3d, at 1193. Deciding that question of law, the court held that Google's use of the Sun Java API was not a fair use. It wrote that “[t]here is nothing fair about taking a copyrighted work verbatim and using it for the same purpose and function as the original in a competing platform.”

At the outset, Google argues that “fair use” is a question for a jury to decide; here the jury decided the question in Google's favor; and we should limit our review to determining whether “substantial evidence” justified the jury's decision. The Federal Circuit disagreed. It thought that the “fair use” question was a mixed question of fact and law; that reviewing courts should appropriately defer to the jury's findings of underlying facts; but that the ultimate Cite as: 593 U. S. (2021) Opinion of the Court question whether those facts showed a “fair use” is a legal question for judges to decide de novo. We agree with the Federal Circuit's answer to this question. We have said, “[f]air use is a mixed question of law and fact.” Harper & Row, 471 U. S., at 560.

We have explained that a reviewing court should try to break such a question into its separate factual and legal parts, reviewing each according to the appropriate legal standard. But when a question can be reduced no further, we have added that “the standard of review for a mixed question all depends— on whether answering it entails primarily legal or factual work.” U. S. Bank N. A. v. Village at Lakeridge, LLC, 583 U. S. (2018) (slip op., at 9). 

In this case, the ultimate “fair use” question primarily involves legal work. “Fair use” was originally a concept fashioned by judges. Folsom, 9 F. Cas., at 348. Our cases still provide legal interpretations of the fair use provision. And those interpretations provide general guidance for future cases. See, e.g., Campbell, 510 U. S., at 592–593 (describing kinds of market harms that are not the concern of copyright); Harper & Row, 471 U. S., at 564 (“scope of fair use is narrower with respect to unpublished works”); Sony, 464 U. S., at 451 (wholesale copying aimed at creating a market substitute is presumptively unfair). This type of work is legal work. U. S. Bank, 583 U. S., at (slip op., at 8) (“When applying the law involves developing auxiliary legal principles for use in other cases[,] appellate courts should typically review a decision de novo”). 

Applying a legal “fair use” conclusion may, of course, involve determination of subsidiary factual questions, such as “whether there was harm to the actual or potential markets for the copyrighted work” or “how much of the copyrighted work was copied.” 886 F. 3d, at 1196; see, e.g., Peter F. Gaito Architecture, LLC v. Simone Development Corp., 602 F. 3d 57, 63 (CA2 2010) (noting that in an infringement suit “the question of substantial similarity typically presents an GOOGLE LLC v. ORACLE AMERICA, INC. Opinion of the Court extremely close question of fact”).

In this case the Federal Circuit carefully applied the fact/law principles we set forth in U. S. Bank, leaving factual determinations to the jury and reviewing the ultimate question, a legal question, de novo.

Next, Google argues that the Federal Circuit's approach violates the Seventh Amendment. The Amendment both requires that “the right of trial by jury . . . be preserved” and forbids courts to “re-examin[e]” any “fact tried by a jury.” U. S. Const., Amdt. 7; see also Gasperini v. Center for Humanities, Inc., 518 U. S. 415, 432–433 (1996). The Reexamination Clause is no bar here, however, for, as we have said, the ultimate question here is one of law, not fact. It does not violate the Reexamination Clause for a court to determine the controlling law in resolving a challenge to a jury verdict, as happens any time a court resolves a motion for judgment as a matter of law. See, e.g., Neely v. Martin K. Eby Constr. Co., 386 U. S. 317, 322 (1967).

Nor is Google correct that “the right of trial by jury” includes the right to have a jury resolve a fair use defense. That Clause is concerned with “the particular trial decision” at issue. Markman v. Westview Instruments, Inc., 517 U. S. 370, 376 (1996). Even though it is possible to find pre-Revolutionary English cases in which a judge sent related questions like fair abridgment to a jury, those questions were significantly different from the “fair use” doctrine as courts apply it today. See, e.g., Gyles v. Wilcox, 2 Atk. 141, 142– 144, 26 Eng. Rep. 489, 490–491 (Ch. 1740) (asking the Court to resolve the narrow question whether a shortened work could be considered a new work); Sayre v. Moore, 1 East 361, n., 102 Eng. Rep. 138, 139, n. (K. B. 1785) (discussing the jury's role in resolving whether copying constituted infringement).

As far as contemporary fair use is concerned, we have described the doctrine as an “equitable,” not a “legal,” doctrine. We have found no case suggesting that application of U. S. Bank here would fail “to preserve Cite as: 593 U. S. (2021) Opinion of the Court the substance of the common-law [jury trial] right as it existed in 1791.” Markman, 517 U. S., at 376.

We reach the conclusion that in this case, where Google reimplemented a user interface, taking only what was needed to allow users to put their accrued talents to work in a new and transformative program, Google's copying of the Sun Java API was a fair use of that material as a matter of law. The Federal Circuit's contrary judgment is reversed.

The next question is, can this issue be decided on a Rule 12(b) motion to dismiss?

Case on point: fair use is NOT typically suited for motion to dismiss

Here is another case discussing fair use, and when is the best time to challenge the assertion of this affirmative defense:

Fair Use Beginning with fair use, the Court agrees that this issue should not be decided at this stage. “In determining whether use made of a work is a fair use,” the Court must consider among other things: 

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

(2) the nature of the copyrighted work;

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

and

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

See 17 U.S.C. § 107. 

Fair use is thus a “mixed question of law and fact” and normally calls for an extensive review of the factual record generated by discovery. Harper & Row Publishers, Inc. v. Nat'l Enters., 471 U.S. 539, 560 (1985); see also Nichols v. Club for Growth Action, 235 F. Supp. 3d 289, 295 (D.D.C. 2017) (“Fair use is not traditionally decided on a motion to dismiss.”). Given the “limited access to all potentially relevant and material facts needed to undertake the” fair-use analysis at the pleading stage — there is no record to speak of other than the factual allegations in the complaint, after all—it is unsurprising that “courts rarely analyze fair use” at this stage. Browne v. McCain, 612 F. Supp. 2d 1125, 1130 (C.D. Cal. 2009).

Absent a reason to depart from this practice, then, courts ordinarily consider a fair-use defense “premature” at the motion-to-dismiss mark. See Roe v. Bernabei & Wachtel PLLC, 85 F. Supp. 3d 89, 99 n.8 (D.D.C. 2015); cf. Brownmark Films, LLC v. Comedy Partners, 682 F.3d 687, 691–92 (7th Cir. 2012) (deciding fair use on motion to dismiss because allegedly protected use was parody, so “the district court required only the [original and subsequent] videos to adjudicate this issue”).

Here, Defendants have provided no reason for thinking that this is the exceptional case where fair use should be decided before discovery. To the extent that they even acknowledge this potential roadblock, they puzzlingly cite a single case that states that it is proper to decide fair use “at the summary judgment stage if the historical facts are undisputed and the only question is the proper legal conclusion to be drawn from those facts.” MTD at 8 (quoting L.A. 7 Times v. Free Republic, 2000 WL 565200, at *4 (C.D. Cal. Apr. 4, 2000)) (emphasis added). Needless to say, simply quoting an unhelpful standard does not show why the Court should undertake this fact-intensive inquiry in the absence of a record.

Even if this standard extended to motions to dismiss, moreover, Defendants have not shown why the fair-use defense would succeed on the current record. For one, some of the key facts here are, contra Defendants, in fact disputed. Compare MTD at 8 (stating that copying of April 2022 report was for purpose of “educat[ing] . . . the Court”) with Pl. Opp. at 12 (arguing that purpose of Defendants' use of report was commercial and not educational).

For another, Defendants — who bear the burden of establishing fair use, see Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 590 (1994) (“fair use is an affirmative defense”) — have yet to explain why the “proper legal conclusion” to draw from the available facts is that their actions were fair use. Instead, Defendants' briefing strategy seems to be as follows: blitz this Court with so many pages of case citations that, in its exhaustion, it will simply relent and agree with their conclusory statement that their docketing of the April 2022 report “for the convenience and education of the Court” was fair use. See MTD at 8–12 (citing over a dozen cases without explaining how they apply to the case at hand).

Last, and despite the copious citations Defendants have served up, they never address the cases that hold that the use of copyrighted material created for the purpose of litigation or arbitration in a separate litigation, for the same purpose for which the work was created — is not fair use. See, e.g., Images Audio Visuals Prods., Inc. v. Perini Bldg. Co., 91 F. Supp. 2d 1075, 1077–81 (E.D. Mich. 2000); Newegg Inc. v. Ezra Sutton, P.A., 2016 WL 674629, at *2 (C.D. Cal. Sept. 13, 2016); Ross v. Miller's Rexall Drugs, Inc., 1990 WL 314290, at *1 (Ga. Super. Oct. 10, 1990); see also William F. Patry, Patry on Fair Use § 3:72 (2017) (noting that 8 “[c]ourts have taken an appropriately dim view of efforts by litigants to avoid paying third parties' licensing fees for materials to be used in litigation”). Unwilling to reward such briefing deficiencies, the Court thus concludes that it is too early to decide fair use.

This suggests you may need to wait until discovery is concluded, and potentially seek to dismiss the fair use claim then.  If the judge feels it can be determined as a matter of law, based on the factual record before it, then this might be appropriate.  If not, the factual disputes would be sent to the jury to decide, and the judge may ultimately decide the equitable defense of fair use.  This is not legal advice.

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