US Second Circuit Decision Opens Questions Of Transformative And Fair Use

By Leslee Friedman

There is a familiar, unattributed quote that goes, “there are no new stories, only different ways of telling them.” In the world of intellectual property, this is a foundational concept, central to the ideal balance of IP rights and freedom of expression.

Experts spent last week at the World Intellectual Property Organization tackling just this issue, among others, in drafting an instrument of protection for traditional cultural expressions. Questions about the meanings of “derivative” or “adapted,” about when such derivation or adaptation makes a work an infringement, or when it adds to a living traditional cultural expression, or creates something entirely new arose repeatedly in the process.

At the same time, the United States awaits answers to similar questions in the arena of published fiction. In April of this year, the Second Circuit overturned an injunctive ruling against a piece of writing relying heavily on the text Catcher in the Rye. In Salinger v. Colting, the court vacated a decision by the lower court granting injunction and remanded it to the lower court, with an order that Colting’s fiction be considered under each of the four prongs in the US Supreme Court’s eBay Inc. v. MercExchange LLC standard, previously applied only in patent cases. The test as stated in that case is as follows:

Issuance of injunctive relief against [the defendants] is governed by traditional equitable principles, which require consideration of (i) whether the plaintiff would face irreparable injury if the injunction did not issue, (ii) whether the plaintiff has an adequate remedy at law, (iii) whether granting the injunction is in the public interest, and (iv) whether the balance of the hardships tips in the plaintiff’s favor.

The Second Circuit’s ruling signifies two things. The first is that establishing a prima facie case of copyright infringement does not automatically translate into the infringer’s action having caused irreparable harm, as legally presumed until this point. The second is that American legal dependence on parody law as a bright line for transformative or fair use may no longer be adequate. This is to say: just because a derivative or adapted work, more broadly referred to as “transformative,” is not a parody, that does not immediately qualify it for injunction or disqualify it by way of fair use. As Salinger waits for the District Court’s revised decision, writers and artists throughout America similarly await the answer as to what American copyright law means to building upon the old to create the new.

J. D. Salinger published Catcher in the Rye in 1951, introducing the world to his protagonist, Holden Caulfield. Throughout his lifetime, Salinger was careful to renew the copyright on Catcher with the US Copyright Office. In May 2009, Frederick Colting published the book 60 Years Later: Coming Through the Rye with Windupbird Publishing, Ltd., a British publishing outfit. 60 Years Later uses the character of Caulfield, as well as a fictionalised Salinger. The book has been described as a sequel to Catcher on the back cover of its UK edition. However, Colting has denied the intention to create a sequel, arguing instead that the point of the book is to critically examine Caulfield, Salinger, and what happens when an artist creates a persona of such enduring power.

On 1 July 2009, the United States District Court for the Southern District of New York handed down a preliminary injunction, barring Colting from disseminating 60 Years Later in the US through any means. Nearly a year later, on 30 April 2010, the Second Circuit Court of Appeals vacated the injunction and remanded the case to the District Court to be reconsidered under the full eBay test. The Second Circuit concluded that once Salinger established that copyright infringement had occurred, the District Court assumed the required factor of irreparable harm to be present, based on existing copyright law in the circuit.

The District Court mentioned eBay in a footnote, but pointed out that it did not apply, as it had only been used in cases dealing with patent infringement. The Second Circuit’s analysis of eBay’s import, though, lead the court to the conclusion that it was the ruling precedent, and therefore, the question of whether irreparable harm is likely to occur without an injunction was still open to judicial wisdom.

In the lead-up to this ruling, several private sector companies and NGOs filed amici briefs. Three out of the four briefs filed supported Colting, including one submitted collectively by The New York Times Company, The Associated Press, the Gannett Company and the Tribune Company. The Motion Picture Association of America (MPAA) wrote in support of Salinger.

Within these briefs, the focus of the debate narrows in on the question of what differentiates a transformative work from an infringing one. This question goes to all four of the prongs, because it asks whether the work at question is sufficiently different from the original that it might not cause irreparable harm upon release, or alternative legal remedies such as licensing or fee-sharing might arise, or whether access to the new work is a matter of public interest outweighing that of the right holder.

The MPAA argues on the basis of the first and second prongs. The group’s representative brief implies that not issuing an injunction will result in irreparable harm, but also, because that harm is unquantifiable, there is no adequate remedy at law. Moreover, while freedom of expression might be in the public interest, the MPAA feels that the incentive to create–which it worries will be lost without the issuance of an injunction–weighs the balance of that interest in the favor of the plaintiff.

The MPAA contends that if a loose standard of transformative is adopted, its own ability to create derivative works, such as sequels and other high-grossing films, will be irreparably injured. It states that a reasonable expectation of full and unlimited control over creations is one of the prime incentives for people to invest in and spur the entertainment market.

What it does not fully unpack is how such a loose standard would cause irreparable harm. The brief goes into an analogy, showing how under the definition of transformative works that the other briefs were applying, a work such as The Empire Strikes Back could be considered transformative to implicitly argue that had someone beside the right’s owner released such a work, the Star Wars franchise would have been irreparably harmed. This analogy is hard to empirically prove, however. For instance, the legally-commercial, wildly successful Wicked, by Gregory Maguire, and the empire of entertainment that has arisen from it, has not, to any indication, drawn fans away from the book, film, or live-stage version of its canon-text, Wizard of Oz. Nor is there any clear indication that should someone else pen another sequel or reactionary text to Wizard, that audience reaction to it would be any less enthusiastic.

On the other side of the argument, the American Library Association, Association of Research Libraries, Association of College and Research Libraries, Organization for Transformative Works and Right to Write joined together to build an in-depth argument for the differing types of transformative works, and why injunctions against such are the equivalent of denying freedom of speech and expression. They focus on the third prong, arguing that in assuming irreparable harm, the ruling is incompatible with the purpose and reason behind the fair use standard, which is to allow not only for authors and artists to express themselves, but for the public to have access to knowledge and information. It is essential, their argument goes, that the public be allowed to judge works on their own merits, and that the courts not become an arbiter of taste for the nation. Thereby, the plaintiff’s hardship does not tip the balance against public interest. The brief concludes that with these issues in mind, the Court needs to step cautiously when banning works of creativity, being certain of irreparable harm, as the standard requires.

The case now heads back to the District Court with these questions hanging in the balance: what makes a work transformative? If a work is transformative, can it cause irreparable harm to the holder of the copyright? If so, what does that mean for freedom of speech and creativity?

No matter what decision the District Court hands down, the Second Circuit’s now-binding eBay application has shifted American copyright jurisprudence. It only remains to be seen if larger shifts are waiting in the wings.

Leslee Friedman is a law student at the University of Illinois at Urbana-Champaign, beginning her second year with an interest in copyright law.