CINE Articles

Playing Fair: The Basics of Fair Use Doctrine

Chubb

By Jason Fahmy and Kevin Violette
Chubb & Son, a division of Federal Insurance Company
June 2009

The opinions expressed in this article are not necessarily those of CINE and do not constitute legal advice.

You may believe it's okay to use certain copyrighted elements in your film because they constitute "fair use." But what if you're wrong?

Copyright law is designed to provide the owner of a copyrighted work with certain exclusive rights, including the rights to copy and distribute it. Federal law protects copyright owners from having their work published, adapted or performed with permission, and can impose damages upon anyone who is found to have unlawfully infringed the owner's copyrights in any given work.

Fair Use, on the other hand, is a limitation on the copyright owner's exclusive rights. Under the Federal Copyright Act of 1976, the Fair Use limitation may allow the use of copyrighted material in your production as long as such use meets a balancing test of four factors.

Exactly what constitutes fair use can be less than clear cut. To illustrate, try testing yourself with these three recent examples (answers below):

  • Did a 15-second segment of the John Lennon song "Imagine" that was used in the movie EXPELLED: No Intelligence Allowed constitute fair use? (Lennon v. Premise Media Corp., 2008)
  • Leadsinger, which manufactured a karaoke device, obtained a license to reproduce the music used in its device. Did displaying the lyrics along with the music constitute fair use? (Leadsinger, Inc. v. BMG Music Publishing, 2008)
  • A character in the movie Kickin' It Old Skool utters the line "Aki, it's time to say domo arigato and find your inner roboto." Was this a copyright infringement of the line "domo arigato, Mr. Roboto" from the Styx song "Mr. Roboto" or was it fair use? (Wixen Music Publishing inc. v. 20th Century Fox Home Entertainment LLC et al., 2008)

Determining Fair Use

To determine whether the use of copyrighted work qualifies for the fair use limitation under the Federal Copyright Act, the following four factors must be balanced and considered:

1. The purpose and character of the use, including whether it is for commercial purpose.

  • Use for commentary, news reporting, criticism, teaching and research may be considered fair use.
  • The greater the economic rewards reaped by the user, to the exclusion of broader public benefits, the less likely it is to be viewed as fair use.
  • Some types of use, such as parody, are afforded greater protection under fair use doctrine.

2. The nature of the copyrighted work.

  • Generally, the more creative the work, the more protection it will be afforded.
  • Informational, factual, or newsworthy information is more likely to qualify for the fair use limitation.
  • The fact that the original copyrighted work is unpublished does not by itself assure a finding of fair use.

3. The amount and substantiality of the portion used in relation to the copyrighted work as a whole.

  • The greater the quantity of the work used, the less likely fair use will be found.
  • However, the use of even a small portion of a work relative to the whole may not necessarily qualify as fair use if it represents the "heart" of the copyrighted work.

4. The effect upon the potential market for, or value of, the copyrighted work (this factor is often considered the most important of the four factors in a fair use analysis).

  • If the use of the copyrighted work tends to interfere with the original's economic value, fair use is unlikely to be upheld.
  • This factor may turn on whether the alleged copyright infringer's use could become a substitute for the copyrighted work in the marketplace.

When You Violate Copyright Law

Remember, if you don't obtain permission to use a copyrighted work, you could be held to be in violation of federal copyright law - even if you mistakenly believed yours is a fair use of the work. Potential consequences of violating copyright law include:

  • Monetary damages (actual damages or profits of the infringer) or, alternatively, statutory damages ($750 to $30,000 for all infringements with respect to any one work; $200 to $150,000 for intentional infringement).
  • Attorney's fees and costs.
  • Damage to your reputation.

Some Things to Consider to Help Protect Yourself from Copyright Fines and Lawsuits

Be proactive. Begin by obtaining permission from the work's creator/copyright owner or determine whether the work in question is copyrighted or in the public domain before you use it:

  • Look for a symbol indicating that the work is copyrighted, such as a "©".
  • Contact the U.S. Copyright Office (www.copyright.gov) and research who owns the work.

If the work is copyrighted, but you are unable to secure permission to use it, seek confirmation that your intended use of it in your production would constitute fair use - that is, would satisfy, on balance, the four factors noted above. Excellent guides on fair use "best practices" can be found from the Center for Social Media (www.centerforsocialmedia.org).

Above all, be sure to contact an experienced clearance or copyright attorney for guidance.

Why E&O Insurance?

It may still not be completely clear whether using the work meets fair use guidelines. Furthermore, even if you do nothing wrong, nothing can prevent you from being sued foralleged copyright infringement. Legal costs to defend yourself in a copyright case are notoriously high. For these reasons, it is important to protect yourself financially by purchasing errors and omissions (E&O) liability insurance from a media liability insurer that can provide a fair use coverage rider or endorsement to its policy. E&O insurance will insure monetary and statutory damages, as well as attorney's fees and costs, resulting from a lawsuit alleging copyright infringement.

Copyright laws can be complicated and determining whether material meets fair use guidelines can be difficult to determine. The best way to protect yourself, your film, and your reputation is to play it safe and get expert legal advice. It may be much more cost effective to pay now for a review by a copyright attorney than to defend against an expensive lawsuit later.

Answers to the three test questions: 1. It did. 2. It did not. 3. It was fair use.

Jason Fahmy and Kevin Violette both underwrite E&O liability insurance for Chubb & Son, a division of Federal Insurance Company.

The views, information and content expressed herein are those of the author(s) and do not necessarily represent the veiws of any of the insurers of the Chubb Group of Insurance Companies. The information provided should not be relied upon as legal advice or a definitive statement of the law in any jurisdiction. For such advice, a reader should consult their own legal counsel.

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