Court Rules Against Georgia State University in E-Reserves Case

October 20, 2014

The United States Court of Appeals for the Eleventh Circuit issued a long-awaited decision in the Georgia State e-reserves copyright case on October 17, 2014. The Court of Appeals reversed and remanded to the District Court for reconsideration in light of its opinion rejecting that court’s formulaic fair use analysis. In 2008, three publishers (Cambridge University Press, Oxford University Press, and Sage Publications) filed suit in the Northern District of Georgia, alleging that Georgia State University’s e-reserves system – through which students could access electronic content posted by faculty – infringed copyrights held by the publishers. In 2012, the District Court issued an order finding that the university had infringed the publisher’s copyrights in several instances, but that the fair use defense applied to the majority of the alleged infringements. The court applied the four factors of a fair use defense: (1) the purpose and character of the use; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion taken; and (4) the effect of the use upon the potential market. The court granted declaratory and injunctive relief to the publishers, but ultimately found that the University was the prevailing party and awarded costs and attorneys’ fees.  On appeal, the Court of Appeals reviewed the District Court’s application of the four factors, as well as the District Court’s balancing of the outcome of the four factors, noting that because of the circumstances of this case some of the factors weigh more heavily on the fair use determination than others. Regarding the first (the purpose and character of the use) and fourth (the effect of the use upon the potential market for or value of the copyrighted work) fair use factors, the Court of Appeals affirmed the District Court’s holdings that these weighed in favor of a fair use defense. On the second factor, the nature of the copyrighted work, the Court of Appeals reversed, holding that the District Court should have evaluated each work copied to determine whether it contained “evaluative, analytical, or subjectively descriptive material that surpasses the bare facts necessary to communicate information.” If the work contained more than was necessary, then it should have weighed in favor of the publishers or been neutral, although the Court noted that this factor is largely unimportant since the works at issue are not fictional works. On the third factor, the District Court had utilized a quantitative test with respect to the “amount and substantiality taken” in relation to the copyrighted work as a whole, relying on the 10% or one chapter approach set forth in the “Classroom Guidelines” which form part of the legislative history of the Copyright Act. In rejecting that type of blanket approach, Court of Appeals found that the lower court should have applied a more individualized fair use analysis, “considering the quantity and quality of the material taken, including whether the material taken constituted the heart of the work.” The Court of Appeals emphasized that the Classroom Guidelines have never been codified and are too formulaic for a balanced fair use analysis. The Court of Appeals vacated the injunction, declaratory relief, and award of attorney's fees and costs, and remanded to the lower court for further proceedings. The Way Forward for Universities Even though this case will continue, the Court of Appeal’s ruling provides useful guidance to institutions of higher education. Specifically, a formulaic approach to fair use rather than a case-by-case inquiry opens a fair use analysis to criticism and attack. As a result, copyright policies or guidelines should require an individualized analysis of the amount taken of a copyrighted work in relation to the work as a whole, rather than simply relying on the 10% or one chapter rubric set forth in the “Classroom Guidelines.” Both the quantity and the quality of the material taken must be considered under the third factor, including whether the material taken constitutes “the heart of the work,” and whether the material used is excessive in light of the purpose of the use and the threat of market substitution.