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Judge Morrow's Tentative Order.
Re: whether Free Republic's republication of Plaintiffs' copyrighted articles constitutes fair use.
Case: Los Angeles Times v. Free Republic.
Court: U.S. District Court, C.D.Cal., Case No. 98-7840 MMM(AJWx).
Date: November 9, 1999.

Editor's Notes:
  The law firm of Greines Martin Stein & Richland kindly provided Tech Law Journal with a fax copy of the tentative order.
  Tech Law Journal created this page by scanning the fax copy, and converting to HTML. Several features were lost in the conversion process, such as line numbering, double spacing, paragraph indentations. Also, fonts have been changed.
  Footnotes have been converted to endnotes, and two way hyperlinked.
  Hypertext links have been added.
  Otherwise, this document has not been edited for content.
  Copyright Tech Law Journal. All rights reserved.

Table of Contents
I.  Factual Background
II.  DISCUSSION
  A.  Legal Standard Governing Motions For Summary Judgment
  B.  Elements Of Copyright Infringement
  C.  The Fair Use Defense
    1.  The Purpose And Character Of The Use
      a.  Extent To Which Free Republic's Work Is Transformative
      b.  Commercial Nature Of The Free Republic Website
      c.  Conclusion Regarding First Fair Use Factor
    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
    4.  The Effect Of The Use On The Potential Market For Or Value Of The Copyrighted Work
    5.  Balancing The Fair Use Factors
  D.  First Amendment Defense
II.  CONCLUSION
Footnotes

UNITED STATES DISTRICT COURT
CENTRAL DISTRICT OF CALIFORNIA

LOS ANGELES TIME, and THE
WASHINGTON POST COMPANY
and its wholly owned subsidiary,
WASHINGTONPOST.NEWSWEEK
INTERACTIVE COMPANY,

Plaintiffs,

vs.

FREE REPUBLIC, ELECTRONIC
ORCHARD, JIM ROBINSON, and
DOES 1 THROUGH 10, inclusive,

Defendants,
______________________________


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CASE NO, CV 98-7840-MMM (AJWx)

 

TENTATIVE ORDER GRANTING
PLAINTIFFS' MOTION FOR
PARTIAL SUMMARY JUDGMENT
AND DENYING DEFENDANTS'
MOTION FOR SUMMARY
JUDGMENT

Plaintiffs Los Angeles Times and The Washington Post publish newspapers in print and online versions. Defendant Free Republic is a "bulletin board" website whose members use the site to post news articles to which they add remarks or commentary. Other visitors to the site then read the articles and add their comments. For the most part, Free Republic members post the entire text of news articles; among these are verbatim copies of news articles from the Los Angeles Times and Washington Post websites.  Plaintiffs' complaint alleges that the unauthorized copying and posting of news articles on the Free Republic site constitutes copyright infringement. Defendants have now moved for summary judgment, asserting that the copying of news articles onto their website is [begin page 2] protected by the fair use doctrine.  Plaintiffs have filed a cross-motion for partial summary judgment, arguing that defendants may not invoke fair use as a defense.

The fair use doctrine, codified at 17 U.S.C. 107, permits the reproduction of copyrighted works for certain purposes.   Section 107 sets forth four nonexclusive factors to be considered in determining whether a defendant's copying is a fair use. "(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," 17 U.S.C. 107.   Based on the evidence submitted by the parties, the court concludes that the first, third and fourth factors militate against a finding of fair use in this case.   The second factor weighs in defendants' favor.   The balance, however, tips towards plaintiffs, and the court thus finds that defendants are not entitled to assert a fair use defense to the claims of copyright infringement alleged in the complaint.

Defendants also allege that the First Amendment protects the posting of plaintiffs' news articles to their website, asserting that absent wholesale copying, Free Republic visitors would be unable to express their criticisms and comments.  There are other methods in which the visitors' rights of free expression can be protected, however, and the court cannot conclude that enforcing plaintiffs' rights under the copyright law impermissibly restricts defendants' free speech rights.

I.  FACTUAL BACKGROUND[1]

Plaintiffs publish the Los Angeles Times and The Washington Past in print and online at "http://www.latimes.com" and "http://www.washingtonpost.com."[2]  Plaintiffs' websites also include [begin page 3] archived articles that users must pay to view.[3]  The Times charges $1.50 to view an archived article, while the Post charges from $1.50 to $2.95 depending on the time of the day.[4]  The websites also produce advertising and licensing revenue for the papers.[5]  Because advertising is sold "CPM" (cost per thousand), the revenue generated from this source depends on the volume of traffic the sites experience during a given period.[6]  The parties dispute the extent to which being able to access archived articles at a different site for free affects plaintiffs' ability to advertise, license, and sell the archived articles.[7]

Defendant Jim Robinson is an owner and the operator of the two remaining defendants, [begin page 4] Electronic Orchard and Free Republic.[8]  Electronic Orchard is a for-profit limited liability company that, although no longer actively engaged in business, offers "Internet programming and design services."[9]  Free Republic is a limited liability corporation that operates freerepublic.com.[10]  This website, which has been operational since 1996, allows registered visitors to "post" news articles and comments concerning them on the site."[11]  Registered members may then post additional comments.[12]  Free Republic has approximately 20,000 registered participants.  The website receives as many as 100,000 hits per day, and between 25 and 50 million page views each month.[13]

Plaintiffs contend that "perfect copies" of news articles appearing in their publications and on their websites are posted on the Free Republic website, while defendants maintain that any article posted is merely a "purported copy" of the original.  Defendants assert an interested party would have to verify that a posting is an exact copy of an article by visiting plaintiffs' websites.[14]  They appear to concede, however, that some of the postings are verbatim copies of original articles.[15]

[begin page 5]

The parties dispute whether Free Republic is a for-profit or not-for-profit entity.[16]  Despite this purported disagreement, it appears undisputed that Free Republic is presently a for-profit limited liability company. Corporate counsel for defendant Free Republic is currently preparing documents to obtain tax-exempt status for the Free Republic Institute, a company incorporated on September 27, 1999.[17]  Nothing has yet been submitted to the IRS, however, and tax-exempt status has not been granted.[18]

Defendants contend that Robinson was not paid to create the website, that he receives no salary from Free Republic, and that he receives almost no compensation for posting banners or links on the site.[19]  Plaintiffs counter that Free Republic earns revenue through commercial advertising, merchandise sales, saleable consumer data, donations, "voluntary" subscriptions, and membership dues.[20]  They also assert that Free Republic is used to advertise Electronic Orchards's services.[21]

[begin page 6]

These matters are contested by defendants, who contend that they have received no advertising revenue, commissions or donations for permitting various individuals and entities to place links on the freerepublic.com site.  They assert, in fact, that the links were in some instances posted on. the site by third-party users.[22] Defendants similarly contend that Electronic Orchard has received no business or financial benefit from any links appearing on the Free Republic website, and that Robinson has placed links for Electronic Orchard customers on the site solely as a courtesy.[23]  Defendants maintain that Free Republic does not collect consumer data, and has not sold any information regarding its registered users to any other entity.[24] Additionally, they contend they have no connection with membership organizations of Free Republic supporters, and that the dues revenue generated by these groups in no way benefits them.[25]  They concede, however, that Free Republic has facilitated links to web pages run by third-party supporters where donations to free Republic and/or Robinson are solicited.  They also acknowledge that the website carries links to third-party web pages that offer Free Republic-related souvenir items in exchange for donations.[26]

The parties also dispute whether Free Republic's use of plaintiffs' news articles causes an increase or decrease in traffic on the Times and Post websites, whether it diminishes the available market for sale of their news articles, and whether it has a negative impact on plaintiffs' ability to license the works.  Defendants assert that plaintiffs' websites actually gain viewers because people go to them after visiting the Free Republic site,[27] while plaintiffs maintain they lose traffic when [begin page 7] Internet users read an article posted on freerepublic.com rather than visiting the Times or Post websites.  They also assert that their ability to sell copies of the articles from archives and their ability to license the works is diminished by having copies made freely available on Free Republic's site.[28]

II.  DISCUSSION

A.  Legal Standard Governing Motions For Summary Judgment

A motion for summary judgment must be granted when "the pleadings, depositions, answers to interrogatories, and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter [begin page 8] of law." Fed.R.Civ.P. 56(c).  A party seeking summary judgment bears the initial burden of informing the court of the basis for its motion and of identifying those portions of the pleadings and discovery responses which demonstrate the absence of a genuine issue of material fact. See Celotex Corp. v. Catrett, 477 U.S. 317, 323 (1986).  Where the moving party will have the burden of proof on an issue at trial, the movant must affirmatively demonstrate that no reasonable trier of fact could find other than for the moving party.  On an issue as to which the nonmoving party will have the burden of proof at trial, however, the movant can prevail merely by pointing out, that there is an absence of evidence to support the nonmoving party's case.  See id.  If the moving parry meets its initial burden, the nonmoving party must then set forth, by affidavit or as otherwise provided in Rule 56, "specific facts showing that there is a genuine issue for trial."  Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 250 (1956); Fed.R.Civ.P. 56(e).

In judging evidence at the summary judgment stage, the court does not make credibility determinations or weigh conflicting evidence.  Rather, it draws all inferences in the light most favorable to the nonmoving party.  See T. W. Electric Service, Inc, v. Pacific Electric Contractors Ass'n, 809 F.2d. 626, 630-31 (9th Cir. 1987).  The evidence presented by the parties must be admissible.  Fed.R.Civ.P. 56(e).  Conclusory, speculative testimony in affidavits and moving papers is insufficient to raise genuine issues of fact and defeat summary judgment.  See, Falls Riverway Realty, Inc. v. Niagara Falls, 754 F.2d 49, 56 (2d Cir. 1995); Thornhill Pub. Co,, Inc. v. GTE Corp., 594 F.2d 730, 738 (9th Cir.1979).

Fair use is a mixed question of law and fact.  Harper & Row, Publishers, Inc. v. Nation Enter., 471 U.S. 539, 560 (1985).  It is nonetheless appropriate to resolve the issue at the summary judgment stage where the historical facts are undisputed and the only question is the proper legal conclusion to be drawn from those facts. Los Angeles New Serv. v. Tullo, 973 F.2d 791, 796 (9th Cir. 1992) ("Where the district court has found facts sufficient to evaluate each of the statutory factors considered in determining fair use, we may determine as a matter of law whether the challenged use is a fair one"); Narell v. Freeman, 872 F.2d 907, 910 (9th Cir. 1989) ("Fair use is a mixed question of law and fact that may be resolved on summary judgment if a reasonable trier of fact could reach only one conclusion"); Hustler Magazine, Inc. v. Moral Majority Inc., 796 F.2d 1148, [begin page 9] 1151 (9th Cir. 1986) ("if there are no genuine issues of material fact, or if, even after resolving all issues in favor of the opposing party, a reasonable trier of fact can reach only one conclusion, a court may conclude as a matter of law whether the challenged use qualifies as a fair use of the copyrighted work"); Fisher v. Dees, 794 F.2d 432, 436 (9th Cir. 1986) (issue was properly resolved on summary judgment because "[n]o material historical facts [were] at issue in this case [and t]he parties dispute only the ultimate conclusions to be drawn from the admitted facts").

B.  Elements Of Copyright Infringement

"Copyright law protects an author's expression; facts and ideas within a work are not protected."  Shaw v. Lindheim, 919 F.2d 1353,1356 (9th Cir. 1990).  See also Sid & Marty Kroft Television Productions v. McDonald's Corp., 562 F.2d 1157, 1163 (9th Cir. 1977) ("It is an axiom of copyright law that the protection granted to a copyrighted work extends only to the particular expression of the idea and never to the idea itself"). Copyright infringement is established by demonstrating (1) ownership of a valid copyright and (2) copying of original elements of the protected work.  Feist Publications v. Rural Telephone Service Co., 499 U.S. 340, 361 (1991); Kouf v. Walt Disney Pictures & Television, 16 F.3d 1042, 1043, n. 2 (9th Cir. 1994).  To prove copying, plaintiffs must show that defendants had access to the copyrighted work and that there is a substantial similarity between the copyrighted work and defendants' work.  Brown Bag Software v. Symantec Corp., 960 F.2d 1465, 1472 (9th Cir.1992); Chase-Riboud v. Dreamworks, Inc., 987 F.Supp. 1222, 1224 (C.D.Cal. 1997).

Before proceeding to the substance of the parties' motions, it is important to State what issues are not before the court at this time.  Because the parties address the availability of a defense to copyright infringement, their motions assume for present purposes that such a claim can be proved.  The court expresses no opinion as to whether this is so, given that the "copying" of news articles at issue in this case is to a large extent copying by third-party users of the Free Republic site.  The court also makes no determination as to whether plaintiffs have in any manner consented to the [begin page 10] copying of their articles.[29]

C.  The Fair Use Defense

The fair use defense is a limitation on the exclusive right of a copyright owner "to reproduce the copyrighted work in copies." 17 U.S.C. 106(l).  It is codified at 17 U.S.C. 107, which provides:

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

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

(2) the nature of the copyrighted work;

(3) the amount and substantiality of the portion used in relation to the copyrighted [begin page 11] work as a whole; and

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

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

Because the fair use doctrine is an affirmative defense to a claim of infringement, defendants carry the burden of proof on the issue.  American Geophysical Union v. Texaco Inc., 60 F.3d 913, 918 (2d Cir. 1995); Columbia Pictures v. Miramax Films Corp., 11 F.Supp.2d 1179, 1187 (C.D.Cal. 1998) ("[b]ecause fair use is an affirmative defense, Defendants bear the burden of proof an all of its factors").  See also Dr. Seuss Enterprises, L.P. v. Penguin Books USA, Inc., 109 F.3d 1394,1403 (9th Cir.), cert. dismissed, 521 U.S. 1146 (1997).

1.  The Purpose And Character Of The Use

The first factor listed in 107 is "the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes."  17 U.S.C. 107.  This factor assesses 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; it asks, in other words, whether and to what extent the new work is 'transformative.'"  Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 579 (1995) (quoting Folsom v. Marsh, 9 F.Cas. 342, 348 (D. Mass. 1841)).  ". . . [T]he more transformative the new work, the less will be the significance of other factors, like commercialism, that may weigh against a finding of fair use." Campbell, surpa, 510 U.S. at 579.

Inquiry into the character and purpose of a challenged use should be guided by the examples provided in the statute -- i.e., whether the use was for purposes of "criticism, comment, news reporting, teaching . . . , scholarship, or research."  17 U.S.C. 107; Campbell, supra.  This list, however, is not intended to be exhaustive or to single out any particular use as presumptively fair, Harper & Row, supra, 471 U.S. at 561.  Indeed, the fact that a use falls within one of these categories "is simply one factor in [the] fair use analysis."  Id.  Similarly, while the statute draws a distinction between non-profit and commercial use, not every commercial use of a copyrighted [begin page 12] work is presumptively unfair.  Campbell, supra, 510 U.S. 579.

a.  Extent To Which Free Republic's Work Is Transformative

There is no dispute that at least some of the articles posted on the Free Republic website are exact copies of plaintiffs' articles.  While defendants assert there is "no evidence" before the court that the thousands of Times and Post news articles that have been posted are verbatim copies, they have presented no evidence that they are not.[30]  Defendants bear the burden of proof on the issue of fair use.  To the extent they wish to rely on the fact that something other than exact copies of news articles are posted, therefore, they must come forward with evidence demonstrating that this is so.  Since they have not, the court will assume for purposes of assessing the first fair use factor that verbatim copies of complete articles or portions of articles are used.[31]

There is nothing transformative about copying the entirety or portions of a work verbatim.  See Nihon Keizai Shimbun, 166 F.3d at 72 (where the infringing news abstracts were "for the most part direct translations of Nikkei articles," the court found that the first factor "weigh[ed] strongly against fair use"); Los Angeles News Service v. Reuters Television Int'l, 149 F.3d 987, 993 (9th Cir. 1998) (unauthorized copying of news footage "was not very transformative" because the defendant did "not explain the footage, edit the content of the footage, or include editorial comment"); Infinity [begin page 13] Broadcast Corp. v. Kirkwood, 150 F.3d 104, 108 (2d Cir. 1998) (finding that "[t]here is no transformation" where the defendant retransmitted original broadcasts over the telephone); Religious Technology Center v. Netcom On-Line Communication Services, Inc., 923 F.Supp. 1231, 1243 (N.D.Cal. 1995) ("Netcom On-Line II") (defendant's posting of some of plaintiffs' copyrighted material on the Internet was "only minimally transformative since, unlike the typical critic, [defendant] adds little new expression to the Church's works").

Defendants argue that the posting of plaintiffs' articles on the Free Republic website is transformative because registered visitors add comments and criticism following each article.  They distinguish Nihon Keizai Shimbun on this basis, concluding that the additions make the posting significantly more transformative than a translated abstract.  Adding commentary to its verbatim copy of a copyrighted work or portions thereof does not transform the work, especially where the first posting of the article by a Free Republic user often contains little or no commentary.  See Twin Peaks Productions, Inc. v. Publications International, Ltd., 996 F.2d 1366, 1375-76 (9th Cir. 1993) (the fact that defendant "detailed . . . the plots [of episodes of a television series] . . . far beyond merely identifying their basic outline for the transformative purposes of comment or criticism" weighed against a finding of fair use because "abridgments[s] of a copyrighted work [are] . . . likely to be found to be prima facie infringing," and defendant's "abridgment . . . elaborated[d] in detail far beyond what is required to serve any legitimate [transformative] purpose"); Toho Co., Ltd. v. William Morrow And Co., Inc., 33 F.Supp.2d 1206 (C.D.Cal. 1998) (relying, inter alia, on the fact that the infringing work contained detailed plot summaries of the Godzilla movies to find that the first fair use factor weighed in favor of the copyright plaintiff, despite the fact that the work also contained "numerous biographies [and] analyses of the movies, including commentary, trivia and other bits of information").

In Netcom On-Line II, supra, defendant posted verbatim copies of works copyrighted by the Church of Scientology on an Internet website "with little or no added comment or criticism." Id. at 1243.  The court found that the works were only "minimally transformative" because "unlike the typical critic, [defendant] add[ed] little new expression to the Church's works."  Id.  The court specifically rejected defendant's argument that his copying was fair use within the meaning of 17 [begin page 14] U.S.C. 107(1) because subsequent visitors added further comments, concluding that while the copying of "works that were previously posted by their authors on the basis of an implied license or fair use argument" might be justified, such a defense would not be available "where the first posting made an unauthorized copy of a copyrighted work."  Id. at 1247, n. 18.[32]

Similarly, in Religious Technology Center v. Lerma, 19076 WL 633131 (E.D.Va. 1996), defendant copied portions of works copyrighted by the Church of Scientology by downloading or scanning them into his computer and posting segments on the Internet.  Id. at * 4.  He argued that his use was transformative, because he was a "dedicated researcher delving into the theory and scholarship of Scientology," and was "providing materials which 'add new value to public knowledge and understanding, thereby advancing the goals of copyright as set forth in the Constitution.'"  Id. at *5.  The court rejected his argument, noting that it did "not justify the wholesale copying and republication of copyrighted material," and that "[t]he degree of copying by [defendant] combined with the absence of commentary on most of his Internet postings, is inconsistent with the scholarship exception."  Id.[33]

[begin page 15]

The court similarly rejected defendant's assertion that "saving . . . postings [from Internet newsgroups] for later review is indistinguishable from the temporary storage [of a television program] on a VCR tape that was upheld by the Supreme Court in Sony Corp. Of America v. Universal Studios, Inc., 464 U.S. 417 (1984)."  Id. at * 6.  Unlike the defendant in Sony, the court stated, defendant was "not licensed to view or copy the Works" copyrighted by the Church.  Id.  Given this fact, it observed, the more appropriate analogy was to a situation in which "the Sony defendant obtained an unauthorized copy of a television movie from a premium cable channel and them re-broadcast [it] on a public access channel."  This, the court noted, "Would be clearly prohibited."[33]  Id.[34]

[begin page 16]

Defendants argue that, whether or not their copying is transformative, the first factor nonetheless should weigh in their favor because their general purpose is criticism -- a purpose different than that served by posting the articles on the Times and Post websites.  Defendants contend that posting articles on the Times and Post websites permits visitors to read current news and research archived articles published in the two newspapers.  They contrast this with the purpose of posting articles to the Free Republic site, i.e.. to enable visitors to comment upon and criticize media coverage of current events.  Defendants assert that using the Free Republic site to read current articles would be impractical since there is a delay between the time information is posted to the site and the time it is indexed by third-party search engines.[35]  Additionally, they contend that the imprecision of searches would make it difficult to locate archived articles on their site.  Plaintiffs dispute these claims, noting that the Free Republic's search engine provides immediate search capability.[36]  More fundamentally, they assert, even if the general purpose of posting the articles is to foster comment and criticism, ultimately the purpose is the same as "that [for which] one would normally seek to obtain the original -- to have it available for ready reference if and when [website visitors adding comments] need[] to look at it."  American Geophysical Union v. Texaco, Inc., 60 F.3d 913, 918 (2d Cir. 1995) (court found that the first fair use factor weighed against a defendant that encouraged its employees to make unauthorized photocopies of articles in scientific and medical journals and keep them in their offices for ready reference).

It appears clear that the primary purpose of posting articles to the Free Republic site is to facilitate the discussion, criticism and comment of the registered users that follows.  The mere fact that criticism is involved, however, does not warrant an automatic finding that the first factor favors defendants.  See Harper & Row, supra, 471 U.S. at 561 (list contained in 107 is not intended to be exhaustive or to single out any particular use as presumptively fair).  Rather, this fact must be weighed together with other considerations in assessing whether the first fair use factor favors [begin page 17] defendants.  See Twin Peaks, supra, 996 F.2d at 1375-76 ("'Purpose' fair use analysis is not an all-or-nothing matter.  The issue is not simply whether a challenged work serves one of the non-exclusive purposes identified in section 107, such as comment or criticism, but whether it does so to an insignificant or a substantial extent.  The weight ascribed to the 'purpose' factor involves a more refined assessment than the initial, fairly easy decision that a work serves a purpose illustrated by the categories listed in section 107").

b.  Commercial Nature Of The Free Republic Website

The parties vigorously dispute whether defendants' operation of the Free Republic website is for commercial or non-profit purposes, as those terms are used in 107.  Their argument focuses on the for-profit or not-for-profit status of Free Republic, and on the extent to which defendants' operation of the website generates revenue, donations, and commissions.  Defendants argue that Free Republic is a non-profit organization and that they make no money from operating the website.

The undisputed evidence reveals that Free Republic is currently a for-profit company.  It also demonstrates that Free Republic solicits donations from visitors to the website who wish to support its mission and operations.[37]  In addition to these direct solicitations, defendants concede that they have facilitated links to third-party web pages where donations to Free Republic and/or Robinson are requested, and where free Republic-related souvenir items are offered to donors.[38]  Additionally, the Free Republic page advertises the website design services available through Electronic Orchard, and contains links to Electronic Orchard clients.[39]  Defendants maintain that [begin page 18] these links have been included as a courtesy to Electronic Orchard customers, and that they receive no revenue from them.  Accepting this as true, the fact that Electronic Orchard's services are advertised and that Robinson is able to provide free links for his clients' businesses demonstrates that he and Electronic Orchard derive goodwill, if nothing else, from operation of the Free Republic site.  Consequently, the court concludes that defendants stand to profit from operation of the website in a variety of ways.[40]

The relevant inquiry, however, "is not whether the sole motive of the use is monetary gain but whether the user stands to profit from exploitation of the copyrighted material without paying the customary price."  Harper & Row, supra, 471 U.S. at 562.[41]  Here, defendants and registered third-party visitors to the Free Republic site copy and post plaintiffs' news articles, which are then available to others visiting the site free of charge.  Since the general purpose of the site is to provide a forum where individuals can discuss current events and media coverage of them, posting copies of plaintiffs' articles assists in attracting viewers to the site.  This in turn enhances defendants' ability to solicit donations and generate goodwill for their operation and Robinson's other business.

The decision of the court in Marobie-FL, Inc. v. National Assoc. of Fire Equipment Distributors, 983 F.Supp. 1167 (N.D.Ill. 1997), is instructive in this regard.  There, defendant was a non-profit organization that placed copyrighted clip art on its website without paying the copyright [begin page 19] owners.  Id. at 1175.  Despite defendant's non-profit status, the court found that "its conduct [could] still be considered commercial."  Id.  It reasoned that defendant had obtained copies of the clip art for free, although they would ordinarily have cost money, and then made the files available on its website to members and other Internet users without charge.  Id. This was beneficial to it, since the organization used the website "for the commercial purposes of promoting the association (whose members pay dues) and generating advertising revenue."  Id.  For this reason, the court concluded that defendant's use of the clip art "enhanced the Web Page and furthered . . . commercial purposes." Id.  See also Television Digest Inc. v. United States Telephone Assoc., 841 F.Supp. 5, 9-10 (D.D.C. 1993) (court concluded that non-profit national trade association's duplication and distribution of a copyrighted newsletter was not a non-commercial use because the trade association saved money by photocopying one subscription issue rather than ordering the number of subscriptions it required per reader).

Like the organization in Marobie-FL, defendants benefit from having copies of plaintiffs' articles available free of charge to viewers visiting their website.  The fact that the articles are posted on the web page allows visitors to review archived material without paying the fee they would be charged if they visited plaintiffs' websites.  It also enhances the Free Republic page and promotes support for the operation.  Consequently, the court concludes that the use is commercial as that term is used in 107, regardless of Free Republic's profit or non-profit status or motives.

c.  Conclusion Regarding First Fair Use Factor

Balancing all aspects of the character and purpose inquiry, the court concludes that the first fair use factor favors plaintiffs.  In Sony, the Supreme Court emphasized the need for a "sensitive balancing of interests," and eschewed a "a rigid, bright-line approach," Sony, supra, 464 U.S. at 455, n. 40.  Here, the factors to be considered are the verbatim nature of the copying, the minimally transformative nature of the use, the fact that the copying is designed to facilitate comment and criticism, the fact that defendants' web page is enhanced by use of the articles, and that fact that the copying assists in generating support, both financial and non-financial, for their operation.  Balancing all of these considerations, the court finds that the first factor weighs against a finding of fair use in this case.  See Rogers v. Koons, 960 F.2d 301, 309 (2nd Cir. 1992) ("[T]hough it is a [begin page 20] significant factor, whether the profit element of the fair use calculus affects the ultimate determination of whether there is fair use depends on the totality of the factors considered; it is not itself controlling"); Marcus v. Rowley, 695 F.2d 1171, 1176 (9th Cir. 1983) ("[W]holesale copying of copyrighted material precludes application of the fair use doctrine");[42] Netcom On-Line II, supra, 923 F.Supp. at 1243 ("despite Erlich's purported critical purpose, the actual character of his use does not weigh heavily in his favor because it has only a slight transformative nature"); Lerma, supra, 1996 WL 633131 at * 5 ("The degree of copying by Lerma, combined with the absence of commentary on most of his Internet postings, is inconsistent with the scholarship exception"); Marobie-FL, supra, 983 F.Supp. at 1175 (use of copyrighted clip art was commercial, inter alia, since it assisted the non-profit defendant's "promoti[on of its] association").

2.  The Nature Of The Copyrighted Work

The second factor set forth in 107 recognizes "that some works are closer to the core of intended copyright protection than others, with the consequence that fair use is more difficult to establish when the former works are copied."  Campbell, supra, 510 U.S. at 586.  Thus, "the more creative a work, the more protection it should be accorded from copying; correlatively, the more informational or functional the plaintiff's work, the broader should be the scope of the fair use defense."  M. Nimmer & D. Nimmer, NIMMER ON COPYRIGHT, 13.05[A][2][a] (Mathew Bender 1999).  Newspaper articles to a large extent gather and report facts. Nonetheless, a news reporter must determine which facts are significant and mount those facts in an interesting and appealing manner.  See Harper & Row, supra, 471 U.S. at 547 ("[c]reation of a nonfiction work, even a compilation of pure fact, entails originality").

A number of cases that have analyzed the second fair use factor in the context of alleged [begin page 21] copying of news stories or videotapes of news events have concluded that it weighs in defendant's favor.  See Reuters Television, supra, 149 F.3d at 994 (the court hold that the second factor weighed in favor of defendants that copied news footage); Los Angeles News Service v. KCAL-TV Channel 9, 108 F.3d 1119, 1122 (9th Cir. 1997) (second factor weighed in favor of fair use where defendants copied news footage); Tullo, supra, 973 F.2d at 792, 798 (second factor favored video news clipping service that copied portions of copyrighted videotapes of newsworthy events).  See also Texaco, supra, 60 F.3d at 925 (because of the "manifestly factual character of the . . . articles" from scientific and medical journals copied by defendant, the court held that the second factor weighed in favor of fair use); Television Digest, supra, 841 F.Supp. at 10 (the court found that the second factor weighed in favor defendants that had copied a newsletter containing original news stories).  Compare Nihon Keizai Shimbun, supra, 166 F.3d at 72-73 (in a suit by a newspaper publisher against a defendant that gathered news articles from various sources and sold "abstracts" of them to its customers, the court recognized that newspaper articles are predominantly factual in nature and that expressive elements do not dominate, but nonetheless concluded that the second "factor is at most neutral on the question of fair use").

While plaintiffs' news articles certainly contain expressive elements, they are predominantly factual. Consequently, defendants' fair use claim is stronger than it would be had the works been purely fictional.  See Sony, supra, 464 U.S. at 455, n. 40 ("Copying a news broadcast may have a stronger claim to fair use than copying a motion picture").  The court concludes that the second factor weighs in favor of a finding of fair use of the news articles by defendants in this case.

3.  The Amount And Substantiality Of The Portion Used In Relation To The Copyrighted Work As A Whole

Defendants concede that they have copied and posted entire articles published plaintiffs' newspapers, although they dispute that all postings of plaintiffs' articles to the Free Republic site are verbatim copies.  As noted earlier, defendants bear the burden of proof on the fair use defense, and they must thus come forward with evidence supporting this contention if it is to be considered by the court.  They have not done so, and the undisputed evidence presently before the court is that exact copies are used.  Indeed, in his deposition, defendant Robinson in effect conceded that this is [begin page 22] the general practice of those posting articles to the Free Republic site.[43]

The fact that exact copies of plaintiffs' article are posted to the Free Republic site weighs strongly against a finding of fair use in this case.  See Texaco, supra, 60 F.3d at 926 (defendant's copying of entire works militated against a finding of fair use and led the court to find that the third factor weighed in favor of plaintiffs); Hustler Magazine, Inc. v. Moral Majority, Inc., 796 F.2d 1148, 1155 (9th Cir. 1986) ("although wholesale copying does not preclude fair use per se," reproducing an entire parody was the type of wholesale copying that "militate[d] against a finding of fair use"); Supermarket of Homes, Inc. v. San Fernando Valley Board of Realtors, 786 F.2d 1440, 1409 (9th Cir. 1986) ("[g]enerally, no more of a work may be taken than is necessary to make the accompanying comment understandable"); Television Digest, supra, 841 F.Supp. at 10 (where an entire copyrighted work was used, the court concluded that the third factor weighed against a finding of fair use); NIMMER, supra, 13.05[A][3] ("whatever the use, generally, it may not constitute a fair use if the entire work is reproduced").

Defendants contend that plaintiffs' "work" is the entire daily newspaper because their copyright registration covers the paper as a whole rather than any particular article.  Thus, they assert, copying an individual article constitutes reproduction of only a small portion of the entire work.  This proposition is not supported by the case law.  See Texaco, supra, 60 F.3d at 925-26 (copying an entire article from a journal where the copyright registration covered the journal as a whole constituted a copying of the entire work); Hustler Magazine, supra, 796 F.2d at 1155 (finding that "[a] creative work does not deserve less copyright protection just because it is part of a composite work" and holding that the copying of a one-page parody from a 154-page magazine constituted a copying of the entire work); Netcom On-Line II, supra, 923 F.Supp. at 1247 ("although many of Hubbard's lectures, policy statements, and course packets are collected into larger volumes, and registered as a whole, they may still constitute separate works for the purposes of this factor"); Lerma, supra, 1996 WL 633131 at * 9 ("we find that the works at issue in this case are combined [begin page 23] in 'collections' and that each subpart must be considered a 'single work' for the purposes of fair use analysis").

Defendants also contend that copying entire news articles is essential to the purpose of the Free Republic website.  See Campbell, supra, 510 U.S. at 586 (the applicable test to use in assessing the third fair use factor is whether the amount copied was "reasonable in relation to the purpose of the copying"). As the Court in Campbell instructed, in assessing such an argument, the focus must be on "the persuasiveness of a [copier's] justification for the particular copying done, and the enquiry will harken back to the first of the statutory factors, for . . . the extent of the permissible copying varies with the purpose and character of the use")."  Id. at 586-87.

Here, defendants assert it would be difficult for visitors to comment upon and criticize an article without having the full text displayed above the comments.  Plaintiffs counter that defendants could post a link to the Times and Post websites so that Free Republic visitors wishing to view an article being critiqued could access it.[44]   They assert that a hypertext link would permit a viewer to access an article on the Times or Post website by "clicking" on the link and then "clicking" back to the Free Republic site to post comments.  Defendants maintain that such a solution is impractical, since the links would expire approximately two weeks after the article was initially published.  They also assert that such an approach would disadvantage unsophisticated Internet users.[45]

Another alternative to full text copying, of course, would be to have visitors post summaries of the news articles and attach commentary to them.  Robinson, in his depositions acknowledged that registered users were entitled to do this.[46]  The court, however, need not resolve the parties' dispute regarding the efficacy of hypertext links, nor evaluate other alternatives such as summaries.  Rather, it it need only weigh the persuasiveness of defendants' argument regarding the need for full-text [begin page 24] copying against the purpose and the character of the use.  See Campbell, supra, 510 U.S. at 586-87.

Here, defendants have not met their burden of demonstrating that full-text copying is essential to their use of plaintiffs' articles.  They merely assert, in conclusory fashion, that it is so.  See Netcom On-Line II, supra, 923 F.Supp. at 1247, n. 17 ("Erlich never adequately explains why it was essential for him to copy verbatim the amount of the works that he copied, merely asserting in a conclusory fashion that it was 'reasonable in relation to the purpose the copying'").[47]  Belmore, supra, 880 F.Supp. at 679 ("The Court declines . . . to further involve itself in myriad possible methods of excerpting 'Tale of Two Islands,' and the extend to which these methods affect the purported purpose of 'Hooligan's Island.'  Such an inquiry is neither necessary nor appropriate for resolution of this case").  When contrasted against the minimally transformative nature of the use and the commercial aspects of the venture (see supra at 12-20), the wholesale copying of plaintiffs' articles weighs against a finding of fair use.  See Ty, Inc. v. West Highland Publ'g, Inc., 1998 WL 698922, * 15 (N.D. Ill. 1998) (concluding that defendant's "Beanie Baby Handbook," which included color photographs of plaintiff 's copyrighted images, was not a fair use, the court reasoned that "West could have provided editorial or commentary without copying Ty's protected expressions" by referring to each plush toy's distinct name and item number.)

4.  The Effect Of The Use On The Potential Market For Or Value Of The Copyrighted Work

The fourth factor examines "the effect of the use upon the potential market for or value of the copyrighted work." 17 U.S.C. 107(4). "Fair use, when properly applied, is limited to copying by others which does not materially impair the marketability of the work which is copied."  NIMMER, supra, 1.10[D].  "If the intended use is for commercial gain, th[e] likelihood [of future harm] may be presumed."  Sony, supra, 464 U.S. at 451.  The inquiry encompasses not only the effect the alleged infringer's use will have, but also "'whether unrestricted and widespread conduct [begin page 25] of the sort engaged in by the defendant . . . would result in a substantially adverse impact on the potential market' for the original original."  Campbell, supra (quoting NIMMER, 13.05[A][4], p.13-102.61); Harper & Row, supra, 471 U.S. at 568.

In Reuters, supra, 1149 F.3d at 994, defendants copied plaintiffs' news footage without permission.  Plaintiff's could not prove that they had lost sales of the copyrighted news footage and thus could not prove that the copying had an actual adverse effect on the market for the footage.  Id.  The court nonetheless concluded that the fourth fair use factor weighed in plaintiffs' favor, reasoning that "actions [of the type in which defendants had engaged] if permitted would result in a substantially adverse impact on the potential market for the original works."  Id. Specifically, it held that allowing a customer to buy the footage from defendants rather than plaintiffs lessened the market for plaintiffs' footage.  Id.

Here, the Free Republic website allows visitors to read archived news articles from the Times and the Post without having to pay the fee they would otherwise be charged for accessing the articles at the papers' websites. This has the effect of lessening plaintiffs' market for the sale of archived articles.  Plaintiffs contend that they lose visitors to their websites because articles are available at the Free Republic site, and that this results in a loss of advertising revenue as well.  They also assert that licensing revenue is lost, because others follow Free Republic's lead in copying the works rather than securing a license for them.

Defendants dispute these contentions, arguing that the posting of plaintiffs' news articles on the Free Republic website has little, if any, negative effect on the newspapers' web traffic or revenue.  In fact, defendants assert, the Times and the Post benefit from having the articles posted at the Free Republic site because their sites receive "literally tens of thousands, if not hundreds of thousands of hits per month"[48] as a result of the Free Republic site.  This claim overstates their expert's quantification of the number of referral hits, who states that it is approximately 20,000 per month.  The expert estimates that this generates $1,000 in revenue for the [begin page 26] the papers per month.[49]  Even assuming this is true, "[t]he mere absence of measurable pecuniary damage does not require a finding of fair use."  Marcus, supra, 695 F.2d at 1177.  If the copying "fulfill[s] 'the demand for the original' works and 'diminish[es] or prejudice[s]' their potential sale," this is sufficient to justify a finding that the fourth fair use factor favors the copyright holder.  See Hustler Magazine, supra, 796 F.2d at 1155-56.  Here, regardless of its impact on the advertising revenue generated by visits to plaintiffs' websites, the availability of the papers' news articles in full text on the Free Republic site fulfills at least to some extent demand for the original works and diminishes plaintiffs' ability to sell or license them.  This is particularly true when one considers the impact that widespread copying of this type would have on plaintiffs' ability to sell and license their articles.  Thus, an adverse effect on the potential market for the articles has been demonstrated,[50] and the fourth factor weighs against a finding of fair use.  See Wainwright Securities, supra, 558 F.2d at 96 (defendant's abstracts filled the demand for plaintiff's financial reports).  See also Twin Peaks, supra, 996 F.2d 1377 ("it is a safe generalization that copyright holders, as a class, wish to continue to sell the copyrighted work . . .").

[begin page 27]

5.  Balancing The Fair Use Factors

For the reasons discussed above, the court concludes that three of the four factors weigh against a finding of fair use.  The one factor that favors defendants -- the nature of the copyrighted work -- does not strongly support their assertion of a fair use defense, however, because defendants copied both the factual and expressive elements of plaintiffs' news articles.  Additionally, the third factor -- amount and substantiality of the portion used -- militates against a fair use finding, since defendants copied entire news articles verbatim.  The court therefore concludes that defendants' fair use defense to plaintiffs' copyright infringement claim fails.

D.  First Amendment Defense

Defendants contend the First Amendment protects their ability to post copies of the plaintiffs' new articles on the Free Republic website.  Without the ability to post entire articles, defendants allege that visitors to the site will be prevented from expressing their opinions on media coverage of current events and politics, as well as their views concerning omissions and biases evident in the articles.  Some courts have treated First Amendment concerns as part of the fair use analysis.  See, e.g., Hustler Magazine, supra, 796 F.2d at 1151-52 ("Courts balance [the fair use] factors to determine whether the public interest in the free flow of information outweighs the copyright holder's interest in exclusive control over the work").  Defendants, however, raise this issue as a separate defense.

In Harper & Row, supra, Nation magazine reprinted, without authorization, 300 words from the memoirs of President Gerald Ford.  471 U.S. at 542-45.  The Court noted that factual information concerning current events contained in news articles is not protected by copyright.  It stated, however, that "copyright assures those who write and publish factual narratives . . . that they may at least enjoy the right to market the original expression contained therein as just compensation for their investment.  Id. at 556-571 (citing Zacchini v. Scripps-Howard Broadcasting Co., 433 U.S. 562, 575 (1977)).  The Court stressed that copyright fosters free expression because "[b]y establishing a marketable right to the use of one's expression, copyright supplies the economic incentive to create and disseminate ideas."  Id. at 558.  It also promotes the countervailing First Amendment right to refrain from speech by protecting the owner of copyrighted work from being [begin page 28] forced to publish it.  Id. at 559.  For all of these reasons, the Court rejected defendant's First Amendment argument that material could be copied because it was "newsworthy," (id.) and "limited its inquiry to 'the traditional equities of fair use,' unexpanded by any free speech concerns."  NIMMER, supra, 1.10[B][2] (quoting Harper & Row, supra, 471 U.S. at 560).

Nimmer argues that if the "copying of the expression is essential effectively to convey the idea expressed," then copyrighted material may be copied under the First Amendment.  He cites the fact that the Court in Harper & Row implicitly adopted this framework by acknowledging that some of the briefer quotes from President Ford's memoirs were "arguably necessary adequately to convey the facts; for example, Mr. Ford's characterization of the White House tapes as the 'smoking gun' is perhaps so integral to the idea expressed as to be inseparable from it."  Harper & Row, supra, 471 U.S. at 563; NIMMER, supra, 1.10[D].

Assuming a standard such as this applies, defendants have failed to show that copying entire news articles is essential to convery the opinions and criticisms of visitors to their site.  As discussed above in connection with the third fair use factor, visitors' critiques could be attached to a summary of the article, or Free Republic could provide a link to the Times and Post websites where the article could be found.  While defendants and users of freerepublic.com might find these options less ideal than being able to copy entire news articles verbatim, their speech is in no way restricted by denying them the ability to infringe on plaintiffs' exclusive rights in the copyrighted news articles.

II.  CONCLUSION

For the foregoing reasons, plaintiffs' motion for summary adjudication with respect to fair use is granted and defendant's motion for summary judgment is denied.

Copyright Tech Law Journal

DATED: November 8, 1999 ______________________________
MARGARET M. MORROW
UNITED STATES DISTRICT JUDGE

Footnotes

[1]  All parties have filed evidentiary objections to the declarations submitted in support of or opposition to the cross-motions.  To the extent the court has considered evidence contained in the declarations, it has ruled on the objections to that evidence and noted those rulings in this order.  To the extent evidence contained in the declarations is not mentioned in this order, it has not been considered by the court, and there is thus no need to rule on the objections presented.

[2]  Declaration of Carol Perruso ("Perruso Decl."), 2; Declaration of Eric Koefoot ("Koefoot Decl."), 2-3.

[3]  Perruso Decl., 4; Koefoot Decl., 4.

[4]  Plaintiffs' Statement of Uncontroverted Facts and Conclusions of Law ("Pls.' Facts"), 50; Defendants' Response to Plaintiffs' Separate Statement of Uncontroverted Facts ("Defs.' Genuine Issues"), 50.  The actual price per view is established by the Perruso (Los Angeles Times) and Koefoot (Washington Post) Declarations. While defendants have objected to the specific paragraphs of the declarations where these dollar figures are set forth, it appears that their objection relates to the declarants' assertion that it is not "impractical" to view the full text of an archived article on plaintiffs' rather than Free Republic's site. (See Purruso Decl., 8; Koefoot Decl., 8, Defendants' Evidentiary Objections to Declarations of Carol Perruso, Eric Koefoot and Chappell Aldridge (''Defs.' Objections") at 2:7-10, 4:121-24.)  The statements regarding the charge for viewing articles on the Times and Post websites is not irrelevant, does not lack foundation, and is not ambiguous, speculative or conclusory.  Consequently, to the extent defendants object to this aspect of the declarations, their objections are overruled.

[5]  Perruso Decl., 10- 12; Koefoot Decl., 10- 12.  Defendants object to paragraphs 10 and 12 of the Perruso and Koefoot Declarations on the basis that they lack foundation, and are ambiguous, conclusory and speculative.  (See Defs.' Objections at 2:12-15, 17-22, 4:26-28, 5:3-8.)  Perruso and Koefoot are executive officers of their respective companies, and have personal knowledge of company operations and Internet business generally.  Each is aware of the sources of revenue generated by their company's website, and of the factors that cause such revenue to increase or decrease.  The testimony, which is general in nature and not directed specifically to the impact of the Free Republic site, is not speculative, ambiguous or conclusory. Consequently, defendants' objections to these portions of the Perruso and Koefoot declarations are overruled.

[6]  Pls.' Facts, 33, 48; Defs.' Genuine Issues, 33, 48.

[7]  See Pls.' Facts, 49, 51, 52, Defs.' Genuine Issues, 49, 51, 52.

[8]  Defendants' Exhibits, Vol. 4, Ex. 1009 [Deposition of James Curtis Robinson ("Robinson Depo.")] at 25:6-26:10, 19:16-19.  Robinson's son, John, and Amy Defendis are co-owners of the two companies.  (Id. at 25:24-26:10.)

[9]  Id. at 20-2-12; Pls.' Facts, 24; Defs.' Genuine Issues, 24.

[10]  Robinson Depo. at 26:16-20.

[11]  Pls.' Facts, 1, 24, 25; Defs.' Genuine Issues, 1, 24, 25; Declaration of James Robinson ("Robinson Decl."), 35; Memorandum of Points and Authorities in Support of Defendants' Motion Summary Judgment ("Defs.' Mot."), at 7:17-24; Declaration of Heather L. Wayland ("Wayland Decl."), Ex. B (D000441, D000445).

[12]  See, e.g., Wayland Decl., Ex. D.

[13]  Pls.' Facts, 18, 38; Defs.' Genuine Issues 18, 38.

[14]  See, e.g., Pls.' Facts, 45, 47; Defs.' Genuine Issues, 45, 47, 49, 51 52.

[15]  Defs.' Genuine Issues, 45, 47, 49, 51, 52 (". . . [W]ith the exception of a very few articles, there is no evidence in the record to establish that the articles are 'perfect copies' as Plaintiffs allege").

[16]  See Pls.' Facts, 23, Defs.' Genuine Issues, 23; Defendants' Separate Statement of Uncontroverted Facts ("Defs.' Facts"), 6; Plaintiffs' Response to Defendants' Separate Statement of Uncontroverted Facts ("Pls.' Genuine Issues"), 6.

[17]  Free Republic Institute would apparently assume responsibility for operation of the website, freerepublic.com. (See Robinson Depo. at 98:15-21.)

[18]  See Declaration of Harold Szabo ("Szabo Decl."), 3-6. Plaintiffs object to the Szabo Declaration on the basis that it is irrelevant, vague and ambiguous, without foundation, conclusory, and speculative, and that it offers improper opinion testimony to the extent it suggests tax-exempt status will be granted.  (See Plaintiffs' Evidentiary Objections to Declarations of Richard L. Stout and Howard K. Szabo ("Pls.' Objections") at 11:21-15:19.)  These objections are overruled as Szabo has personal knowledge of his retention, the work he was asked to perform, and the tasks he has completed to date.  Szabo offers no opinions concerning the ultimate outcome of the application tax-exempt status.  The statements he offers concerning the incorporation of Free Republic Institute and the status of his work on the tax-exempt application are neither vague, ambiguous, speculative or conclusory.  While plaintiffs dispute the relevance of the information set forth in Szabo's declaration, this objection is part and parcel of the legal arguments to be decided by this motion, and not a basis for striking the declaration.

[19]  Robinson Depo. at 24:1-8, 27:18-28:23, 38:4-40:12.

[20]  Pls.' Facts, 27, 28, 29, 30, 31, 32, 34, 35.

[21]  Pls.' Facts, 27, 29.  Plaintiffs additionally note that the Free Republic website uses a ".com" domain name of the type generally used by commercial entities.  (Pls.' Facts, 26.)  Defendants dispute the relevance of this fact, noting that use of a ".com' domain name does not indicate whether their business is for-profit or not-for-profit. (Defs.' Genuine Issues, 26; Supplemental Declaration of Richard Stout ("Supp. Stout Decl."), 35-38.)

[22]  Defs.' Genuine Issues, 32, 34.

[23]  See Defs.' Genuine Issues, 27, 28.

[24]  Defs.' Genuine Issues, 35.

[25]  Defs.' Genuine Issues, 31.

[26]  See Defs.' Genuine Issues, 29, 30.

[27]  Defs.' Genuine issues, 49, 51, 52.  As support, defendants rely, in part, on the Declaration of Rick Stout. Plaintiffs have filed objections to portions of this declaration, only certain of which are pertinent here.  (See Pls.' Objections at 3:8-11:19.)  Specifically, plaintiffs object to paragraphs 46, 50 and 51 of Stout's declaration on the basis that they are irrelevant, conclusory, speculative, vague and ambiguous, and without foundation.  The objections to paragraph 46 are overruled, as Stout has demonstrated his qualifications to offer an opinion on the traffic from the Free Republic site to the Times' site, and explained his methodology in detail in preceding paragraphs of the declaration.  As respects paragraphs 50 and 51, it is true that the opinions set forth therein are general.  Stout's qualifications and his specific expertise in analyzing Internet traffic permits him to offer an opinion concerning the relative impact of freerepupblic.com on plaintiffs' websites, however, and the generalized nature of the conclusions found in these paragraphs goes to their weight rather than their admissibility.

[28]  Pls.' Facts, 49, 51, 52.  Plaintiffs support these contentions with citations to the Perruso, Koefoot and Aldridge Declarations.  Defendants object to the relevant portions of these declarations on the basis that they lack foundation, are speculative, conclusory, ambiguous and assume facts not in evidence.  The relevant statements are found at paragraph 21 of the Perruso and Koefoot Declarations, and paragraphs 3-6 of the Aldridge Declaration.  In his declaration, Chappell Aldridge details a search he made for an article on the Post website and his retrieval of the full text of the article on the Free Republic site.  The testimony is based on personal knowledge, and is not speculative, conclusory or ambiguous.  Consequently, the court overrules defendants' objections to the Aldridge declaration, with the exception that the court has not considered the argumentative statement that this method of accessing articles is "a dodge . . . available to anyone."  As respects the Perruso and Koefoot Declarations, each is an executive officer of his or her respective company, and each thus has personal knowledge of company operations and Internet business generally.  This knowledge provides a sufficient foundation for the expression of the opinions set forth in the declarations concerning the impact of freerepublic.com on traffic at the Times and Post sites.  The generalized nature of the opinions offered goes to their weight rather than their admissibility.  Consequently, defendants' objections to these portions of the Perruso, Koefoot and Aldridge declarations are overruled.

[29]  Defendants Robinson and Free Republic admit that they have personally posted certain of plaintiffs' articles on the Free Republic site.  (See Defs.' Genuine Issues, 9.)  Because several thousand articles have been posted to the site, however, defendants assert that much of the posting has been done by registered third-party users.  (See Pls.' Facts, 10, 41; Defs.' Genuine Issues, 10, 41).  Plaintiffs contend that defendants provide instructions and tools that permit third-party copying, and that they have the ability to control what is posted on their website and that they have removed certain postings from time to time.  (Pls.' Facts, 11, 12, 13.)  Defendants agree that they have the technical ability to remove material from the site, but argue that it is not possible for them to monitor the large quantity of daily postings that the site receives.  (Defs.' Genuine Issues, 12, 13.)  They do not respond directly to the assertion that they provide tools and instructions that permit third-party copying of plaintiffs' articles, acknowledging only that "the Free Republic web site provides a virtual 'bulletin board' forum which enables and allows registered users to post whatever content they wish," (Defs.' Genuine Issues, 11.)  Whether defendants' operation of the Free Republic website, and the posting by third parties of verbatim copies of plaintiffs' copyrighted news articles renders defendants liable for copyright infringement is not an issue decided in this order.  Similarly, the court does not address defendants' assertion that plaintiffs' posting of the articles on their websites constitutes implied consent for others to copy the works.  (See Defs.' Genuine Issues, 6, 7, 9, 10, 11.)

[30]  See Defs.' Genuine Issues, 45, 46, 47 ("with the exception of a very few articles, there is no evidence in the record to establish that the articles are 'perfect copies' as Plaintiffs allege").

[31]  Even if only excerpts were copied, this would still appear to satisfy the "copying" element of plaintiffs' copyright claim.  See Nihon Keizai Shimbun, Inc. v. Comline Business Data, Inc., 166 F.3d 65, 70-71 (2d Cir. 1999) (holding that there was substantial similarity between defendants' abstracts and plaintiffs' news stories because the "abstracts appear[ed] to be direct, if not word-for-word, translations of the Nikkei articles, edited only for clarity," to "use[] about two-thirds of the protectible material in the corresponding Nikkei article," to "track the information in the articles sentence by sentence, in sequence," occasionally "combin[ing] two Nikkei sentences, divid[ing] a sentence, or rearrang[ing] the facts among different sentences," and to "adopt[], by and large, the exact same structure and organization of the facts reported by Nikkei").  Sec also Wainwright Sec. Inc. v. Wall St. Transcript Corp., 558 F.2d 91, 93-94 and n. 1 (2d Cir. 1977) (court held that defendant infringed plaintiff's copyrights by summarizing its analytical financial reports because it "appropriated almost verbatim the most creative and original aspects of the reports, the financial analyses and predictions, which represent a substantial investment of time, money and labor"), cert. denied, 434 U.S. 1014 (1978).

[32]  While the court made this observation in analyzing the third fair use factor, it is equally relevant in evaluating the extent to which a particular work is tranformative.

[33]  The decision in Religious Technology Center v. F.A.C.T.NET, Inc., 901 F.Supp. 1519 (D.Colo. 1995) is not to the contrary.  There, because the matter before it was a motion for preliminary injunction, the court did not make final legal rulings, but merely assessed the likelihood that plaintiff would prevail on the merits.  Defendant in the case, F.A.C.T.NET, was a nonprofit corporation that maintained a library of materials concerning the Church of Scientology.  Certain of its materials were posted on an Internet bulletin board by Arnaldo Lerma (the defendant in the case cited in text).  Id. at 1521-22.  Focusing heavily on the fact that it had copied the works for inclusion in its private library, the court found that F.A.C.T.NET was likely to prevail on its fair use defense. See id. at 1524.  As respects its possible involvement in supplying materials to Lerma for Internet posting (an involvement F.A.C.T.NET denied), the court noted evidence that the postings "were made in the context of ongoing dialogue in [a] particular newsgroup," and that they "form[ed] part of the topical debate concerning whether the Works are of substance or are perpetuated as part of systemic mind control."  Id. at 1526.  Because plaintiff had adduced no evidence showing a likelihood that a follower of the Church would consider the postings by Lerma as a market substitute for the Works," or demonstrating that the postings "were of a commercial nature or had any effect on the potential market for the works," the court held they might "well be considered as having been made for the purposes of criticism, comment or research falling within the fair use doctrine."  Id.  Given the limited nature of the evidence before it, the F.A.C.T.NET court's "preliminary" finding that the Church "ha[d] not shown a substantial likelihood of success on the merits of its copyright claim" (id.) is substantially less persuasive than, and cannot be said to contradict, the Lerma court's direct and detailed analysis of his posting activities.

[34]  The court believes that the cases cited in text are more pertinent to analysis of defendants' fair use defense in this case than other decisions, such as Religious Technology Center v. Netcom On-Line Communication Services, Inc., 907 F.Supp. 1361 (N.D.Cal. 1995) ("Netcom On-Line I").  In Netcom On-Line I, the court considered the fair use defense of Internet access provider Netcom On-Line and in so doing, specifically distinguished Netcom's invocation of the defense from that of the individual who had actually posted copies of the copyrighted works to a Usenet newsgroup.  This individual gained access to the web through a bulletin board service that was not directly linked to the Internet, but that connected through the facilities of Netcom On-Line. See id. at 1365-66.  The court stated: "The proper focus here is on whether Netcom's actions qualify as fair use, not on whether Erlich himself engaged in fair use; the court has already found that Erlich was not likely entitled to his own fair use defense, as his postings contained large portions of plaintiffs' published and unpublished works quoted verbatim with little added commentary."  Id. at 1378.  Despite the commercial nature of Netcom's function as an Internet access provider, the court found that the first fair use factor weighed in its favor, inter alia, because (1) "its financial incentive [was] unrelated to the infringing activity and [it] receive[d] no direct financial benefit from the acts of infringement"; (2) "there [was] no easy way for a defendant like Netcom to secure a license for carrying every possible type of copyrighted work onto the Internet," and thus it "should not be seen as 'profit[ing] from the exploitation of the copyrighted work without paying the customary prices'"; (3) Netcom did not "directly gain anything from the content of the information available to its subscribers on the Internet"; and (4) it did not "provide the files or solicit infringing works,"  Id. at 1379.  Here, defendants admit that they themselves post copies of plaintiffs' news articles to the Free Republic site.  Additionally, their relationship to the site, and to the material posted, is significantly more direct than that of Netcom, a company that maintains a software system that automatically forwards messages received from subscribers onto the Usenet, and temporarily stores copies of the messages on its system in the process.  See id. at 1368.

[35]  See Defs.' Mot. at 11:14-12:3.

[36]  See Plaintiffs' Opposition to Defendants' Cross-Motion for Summary Judgment on Fair Use ("Pls.' Opp.") at 5:28, 6:22-28; Aldridge Decl., 5; Defendants' Exhibits - Vol. 1, Exs. 1002, 1003.

[37]  See Wayland Decl., Ex. M (TM092) ("FreeRepublic is supported by donations.  We are a NON commercial and NOT for profit public forum and discussion group.  If you would like to sponsor FreeRepublic and/or place a[n] ad or banner linking, your website, contact Jim.  If you would like to support FreeRepublic, donations may be sent to: [] Jim Robinson[,] c/o Electronic Orchard[,] P.O. Box 9771[,] Fresno, CA 93794-9771.  []  Or click here to donate by secure credit card transaction").  See also id., Ex. P (TM001, TM084).

[38]  See Defs.' Genuine Issues, 29, 30.

[39]  Wayland Decl., Ex. M (TM092) ("Jim also operates Electronic Orchard[,] an Internet web design and software development company located in Fresno, California.  Please visit www.e-orchard.com and our clients' websites.  We can also create and/or host your website.  For effective Internet software that gets results, contact Jim Robinson").  See also id., Ex, P (TM001, TM084).

[40]  Even were this not the case, it would not mandate a finding that the first fair use factor favors defendants. In Marcus v. Rowley, 695 F.2d 1171 (9th Cir, 1983), defendant used a substantial part of plaintiff's copyrighted material in a booklet she used to teach cake decorating.  Id. at 1173.  The court noted that the teacher's use of the material was for a nonprofit educational purpose.  Id. at 1175.  It reasoned, however, that "a finding of a nonprofit educational purpose does not automatically compel a finding of fair use."  Id.  Rather, because both plaintiff and defendant used their publications to teach cake decorating, and because defendant had never sought plaintiffs permission to copy the material, it held that the first factor weighed against a finding of fair use.  Id. at 1175-76.

[41]  Were this not true, "the presumption would swallow nearly all of the illustrative uses listed in the preamble paragraph of 107, including news reporting. . . ." See Campbell, supra, 510 U.S. at 584.  See also Maxtone-Graham v. Burichaell, 803 F.2d 1253, 1262 (2d Cir. 1986) (the statute does not "requir[e] . . . a clear-cut choice between two polar characterizations, 'commercial' and 'non-profit'[; w]ere that the case, fair use would be virtually obliterated, for '[a]ll publications presumably are operated for profit . . . '").

[42]  While more recent Ninth Circuit cases have stated that the Supreme Court's decision in Sony Corp. v. Universal Studios, Inc., 464 U.S. 417 (1984), "casts doubt on [the circuit's] previous pronouncements concerning wholesale copying as an absolute preclusion to fair use," (see, e.g., Hustler Magazine, Inc. v. Moral Majority, Inc., 796 F.2d 1148, 1155 (9th Cir. 1986)), the court does not find that defendants' use of exact copies of the articles absolutely precludes their invocation of the fair use defense.  Rather, it concludes that the wholesale nature of the copying is a factor in evaluating the character and purpose of the use.

[43]  Robinson Depo. at 55:14-18 ("Q. Does Free Republic have any policy that people should summarize rather than post full-text? A. They can summarize if they'd like to. Q. But they almost never do? A. Most people do not summarize.")

[44]  See Plaintiffs' Motion for Partial Summary Judgment ("Pls.' Mot.") at 7:21-25.  Plaintiffs note that Free Republic has provided links to articles in another publication, Jewish World Review, as an alternative to having visitors post them in their entirety. (Id., Robinson Depo. at 94:7-25, 95:12-18, 96:4-18; Wayland Decl., Ex. Q; Pls.' Facts, 43; Defs.' Genuine Issues, 43.)

[45]  See Defs.' Genuine Issues, 44.

[46]  See Robinson Depo. at 55:14-18.

[47]  Defendants cite Belmore v. City Pages, Inc., 850 F.Supp. 673, 679 (D.Minn. 1995) in support of their contention that full-text copying is essential to their use of plaintiffs' articles.  In Belmore, however, the court determined that the third factor favored plaintiff.  See id. at 680 ("The second and third factors weigh in favor of Belmore").

[48]  Defs.' Mot. at 14:16.

[49]  See Stout Decl., 46.  Stout's figures concern the Los Angeles Times site only.

[50]  In D.C. Comics Inc. v. Reel Fantasy, Inc., 698 F.2d 24 (2d Cir. 1982), defendants argued, and the district court found, that the fourth fair use factor favored defendants because their use of plaintiff's copyrighted comic strip characters actually increased the market for plaintiff's goods.  The Court of Appeals, however, disagreed, stating: "Since one of the benefits of ownership of copyrighted material is the right to license its use for a fee, even a speculated increase in DC's comic book sales as a consequence of RFI's infringement would not call the fair use defense into play as a matter of law.  The owner of the copyright is in the best position to balance the prospect of increased sales against revenue from a license."  Id. at 28.  See also Harper & Row, supra, 471 U.S. at 569 ("Any copyright infringer may claim to benefit the public by increasing public access to the copyrighted work. . . . But Congress has not designed, and we see no warrant for judicially imposing, a 'compulsory license' permitting unfettered access to the unpublished copyrighted expression of public figures"); Ringgold v. Black Entertainment Television, Inc., 126 F.3d 70, 81, n. 16 (2d Cir. 1997) ("Even if the unauthorized use of plaintiff's work in the televised program might increase poster sales, that would not preclude her entitlement to a licensing fee"); Storm Impact, Inc. v. Software of the Month Club, 13 F.Supp.2d 782, 790 (N.D.Ill. 1998) ("This argument that increased distribution of the author's work is a benefit to the author has been rejected by the Supreme Court," citing Harper & Row, supra, 471 U.S. at 569)).

 

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