The Line Between Trademark Infringement and Parody


The Second Circuit Court of Appeals affirms that a canvas tote bag with a graphic image of Louis Vuitton’s trademark is parody, not trademark infringement.

Louis Vuitton Malletier, S.A. v. My Other Bag, Inc., 16-241-cv, 2d Circuit Court of Appeals, Dec. 22, 2016.

Trademarks facilitate purchasing decisions by consumers by signaling that behind certain goods or services stands a particular source. Of course, trademarks can also be used as decoration on t-shirts and other goods; but sometimes, the decoration itself is the trademark — that is, it uniquely identifies the source. Like the red soles of Christian Louboutin, Louis Vuitton’s configuration of the interlocking letters, “LV,” surrounded by flower-like symbols (the “Toile Monogram” design) serves as both decoration and trademark.

Trademark law exists to prevent competitors from copying trademarks for two reasons: first, to protect the consumer’s decision-making process; and, second (in the words of Supreme Court Justice Breyer) to help “assure a producer that it (and not an imitating competitor) will reap the financial, reputation-related rewards associated with a desirable product. The law thereby encourages the production of quality products and simultaneously discourages those who hope to sell inferior products by capitalizing on a consumer’s inability quickly to evaluate the quality of an item offered for sale.” Qualitex Co. v. Jacobson Products Co., Inc., 514 U.S. 159, 163-4 (1995).

In May 2014, Louis Vuitton Malletier, S.A. (“LVM”) sued My Other Bag, Inc. (“MOB”), for reproducing graphics of LVM leather bags on one side of MOB’s canvas tote bag. The other side of the MOB bags read “My Other Bag…” — a reference to the long-standing joke occasionally seen on bumper stickers on unglamorous cars, e.g., “My other car is a Porsche.” MOB used graphics of two different LVM bags, shown here, one with the Toile Monogram design trademark, and the other with the checkerboard “Damier” design, but instead of an interlocking “LV,” MOB used its own initials. Picturing an LVM bag on the side of a canvas tote bag was a joke, but LVM didn’t find it funny.[1] In fact, LVM’s case against MOB is the latest in a series of failed litigation brought by LVM against parodies.

In 2006, LVM went after Haute Diggity Dog, LLC, a small business that manufactured and sold pet products, many of them parodying famous marks, including “Chewy Vuiton” dog toys, which took the form of little plush “handbags” suggesting (but not mimicking) LVM’s Toile Monogram design. (Among other differences, Haute Diggity used an interlocking “CV” instead of “LV”.) LVM claimed trademark infringement and “trademark dilution,” a cause of action granted to famous marks to punish “blurring” (i.e., misappropriating a mark for use on a dissimilar product) and “tarnishment” (misappropriating a mark for use on low quality or unsavory products). LVM also claimed copyright infringement, since the Toile Monogram, as a design existing apart from handbags, is protected by copyright. In addition to objecting to the use of the Toile Monogram mark on dog toys, LVM claimed that the toys were also likely to tarnish LVM’s marks because they “pose a choking hazard for some dogs.”

The District Court slapped down LVM’s claims, and the Fourth Circuit Court of Appeals agreed: “Chewy Vuiton” dog toys were successful parodies,[2] and the distinctiveness of LVM’s marks was not threatened by “Chewy Vuiton.” Parody, a form of fair use, is a complete statutory defense to a charge of trademark dilution, but not against trademark infringement (e.g., passing off a product under a third party’s trademark, thereby leading consumers to believe that the product came from the trademark owner).

In 2007, LVM sent a cease and desist letter to Danish artist Nadia Plesner, for selling t-shirts and posters to raise money for the charity “Divest for Darfur.” The artwork showed a malnourished child holding a chihuahua dressed in pink in one arm, and carrying on the other arm a bag that resembled Louis Vuitton’s “Audra” bag, with an altered Toile Monogram design. (Here, the interlocking “LV” was replaced by an interlocking “SL” for the name of the artist’s campaign, “Simple Living.”) Plesner was living in Holland at the time.

Unable to afford to go to fight a court case, Plesner stopped selling the t-shirts and posters. In 2010, however, she repainted the Darfur child in a painting that she titled “Darfurica,” which was exhibited for the first time in the Odd Fellow Palace in Copenhagen in January 2011. By the end of the exhibit, she received an injunction, obtained (unbeknowst to Plesner) by LVM from a court in The Hague. Plesner was ordered to stop showing the painting in the gallery and online, and to pay 5,000 Euros per day until she complied. In May, she went to The Hague and made her case. A month later the court reversed the injunction and ordered LVM to pay part of her legal costs.

Louis Vuitton’s attack on Plesner’s artwork is a real head-scratcher, given that Mattel tried a similar thing in 1999 when it sued artist Tom Forsythe, who produced a series of photographs of a nude and provocatively posed Barbie in or around various household appliances. (She ends up in a blender.) Mattel lost and was ordered to pay the artist $1.8 million in legal fees.

Unlike LVM`s case against Plesner, the case against MOB involved not a work of art, but a commercial product. MOB’s purpose was parody, but to LVM, MOB was merely trading on the strength of the Toile Monogram mark. As in LVM`s failed litigation against Haute Diggity Dog, LVM also claimed both “trademark dilution” and copyright infringement claim.

In order to prove trademark infringement, LVM needed to prevail on a host of factors used to analyze whether the use amounts to an infringement. In the Second Circuit, courts use the “Polaroid Factors,” a set of criteria first mentioned by Judge Friendly in the 1961 case, Polaroid Corp. v. Polarad Electronics Corp., 287 F.2d 492 (2d Cir., 1961). “The problem of determining how far a valid trademark shall be protected with respect to goods other than those to which its owner has applied it,” Judge Friendly wrote, “has long been vexing…”

Where the products are different, the prior owner’s chance of success is a function of many variables: the strength of his mark, the degree of similarity between the two marks, the proximity of the products, the likelihood that the prior owner will bridge the gap [i.e., begin selling directly competing products], actual confusion, and the reciprocal of defendant’s good faith in adopting its own mark, the quality of defendant’s product, and the sophistication of the buyers. Even this extensive catalogue does not exhaust the possibilities — the court may have to take still other variables into account.

Polaroid Corp. v. Polarad Electronics Corp., supra, 287 F.2d at 496.

LVM failed to prevail on any of the Polaroid Factors. Although LVM`s handbags and MOB’s canvas tote bags could theoretically be purchased by the same consumers, there is an enormous gulf between the quality of the products, their prices, and the venues in which they are sold. LVM was unable to come up with any convincing evidence of consumer confusion – and consumers were considered sophisticated enough to know that LVM, whose handbags run upwards of one or two thousand dollars, was not the source of an inexpensive canvas tote bag prominently marked “My Other Bag.” The court also found that there was no likelihood that MOB would be entering the luxury handbag market (i.e., “bridge the gap”).

Unsurprisingly, given the Haute Diggity Dog decision, LVM lost both in the District Court and on appeal to the Second Circuit. LVM attempted to argue that the District Court erred by finding that MOB’s use of the Toile Monogram design was parody, but the Second Circuit would have none of it. “At the same time that they mimic LV’s designs and handbags in a way that is recognizable,” the Second Circuit wrote,

they do so as a [graphic image] on a product that is such a conscious departure from LV’s image of luxury—in combination with the slogan “My other bag”—as to convey that MOB’s tote bags are not LV handbags. The fact that the joke on LV’s luxury image is gentle, and possibly even complimentary to LV, does not preclude it from being a parody.

In any event, the nature of MOB’s business—it sells quite ordinary tote bags with [graphic images] of various luxury-brand handbags, not just LVM’s, printed thereon—and the presence of “My other bag,” an undisputed designation of source, on one side of each bag,  independently support summary judgment for MOB on this designation-of-source issue.

LVM fared no better on its copyright claim: “MOB’s parodic use of LVM’s designs,” the Court held, produces a “new expression and message that constitutes transformative use.”

Parodists should probably thank LVM for losing cases involving trademark parody in two federal jurisdictions. In 1994, the Supreme Court ruled in Campbell v. Acuff-Rose Music, Inc. that rap group 2 Live Crew’s appropriation of Roy Orbison’s song, “Pretty Woman,” was not copyright infringement, but parody. (As with trademark dilution, parody is a statutory defense against claims of copyright infringement.) Since that decision, the courts have come to embrace the idea that parody should also be permitted (at least under some circumstances) as a defense to trademark infringement. Despite this trend, it has been the practice of many major trademark owners to make overbroad claims and excessive threats, sometimes commencing litigation knowing that the parodist can’t afford to fight, and will quickly give in to their demands. Hopefully, this most recent decision, which has received ample publicity, will make companies like LVM think twice before engaging in such tactics.


[1] The Toile Monogram was first registered with the United States Patent and Trademark Office in 1932. While LVM’s case against MOB was pending in New York, the General Court of the E.U. invalidated the Damier Trademark because it was “a basic and banal feature composed of very simple elements” and lacked any brand-specific features. It is also likely unprotectable in the United States.

[2] For trademark purposes, “[a] ‘parody’ is defined as a simple form of entertainment conveyed by juxtaposing the irreverent representation of the trademark with the idealized image created by the mark’s owner … A parody must convey two simultaneous — and contradictory — messages: that it is the original, but also that it is not the original and is instead a parody. People for the Ethical Treatment of Animals v. Doughney, 263 F.3d 359, 366 (4th Cir. 2001). This second message must not only differentiate the alleged parody from the original but must also communicate some articulable element of satire, ridicule, joking, or amusement. Thus, [a] parody relies upon a difference from the original mark, presumably a humorous difference, in order to produce its desired effect. Jordache Enterprises, Inc. v. Hogg Wyld, Ltd., 828 F.2d 1482, 1486 (10th Cir.1987) (finding the use of “Lardashe” jeans for larger women to be a successful and permissible parody of “Jordache” jeans).” Louis Vuitton Malletier S.A v. Haute Diggity Dog LLC, 507 F. 3d 252 (4th Cir. 2007). (Internal quotes omitted.)

Authors Guild v. Google: Understanding Transformative Use

Authors Guild et al v. Google, Inc.
United States Court of Appeals for the Second Circuit
Docket No. 13-4829-cv


On October 16, the Second Circuit Court of Appeals ruled in favor of Google, Inc.’s book scanning project (the “Library Project”) in Authors Guild v. Google, Inc. (hereinafter “Author’s Guild”), upholding the District Court’s decision which found that Google’s activities were “highly transformative” and therefore “fair use.”

Depending upon your perspective, “fair use” is either a defense to a claim of copyright infringement or an affirmative right of the public to use a copyrighted work in certain ways. In either case, a “fair use” is one that may be freely engaged in without having to obtain permission from the copyright owner.

Section § 107 of the Copyright Act does not define “fair use,” but provides examples of uses that might be considered fair, and a set of criteria (the “four factors”) that were first suggested in a decision by Justice Joseph Story in Folsom v. Marsh, a case from 1841.[1] The statute mentions copying “for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research,” but this list is only suggestive, not exhaustive, and in some circumstances even these uses may not fall under “fair use.” The four factors, which may be given varying weight, are:

(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.

One might ask what the word “transformative” has to do with “fair use,” when the word isn’t mentioned in the statute. The answer, in part, goes back to an article written by Judge Pierre Leval (the same judge who wrote the Author’s Guild decision) entitled “Toward a Fair Use Standard,” published in the Harvard Law Journal in 1990.[2] In that article, Judge Leval seizes upon the words of Justice Story that a fair appropriation would be one that “superseded the objects” of the original. In other words, Leval argued, the question “turns primarily on whether, and to what extent, the challenged use is “transformative. The use must be productive and must employ the quoted matter in a different manner or for a different purpose from the original.”[3] Judge Leval then goes on to criticize the Supreme Court in Harper & Row, Publishers, Inc. v. Nation Enterprises (471 U.S. 539, 547 (1985)) for choosing the fourth factor as the “single most important” factor under the “fair use” test. “Quoting,” Judge Leval wrote,

is not necessarily stealing. Quotation can be vital to the fulfillment of the public-enriching goals of copyright law. The first fair use factor calls for a careful evaluation whether the particular quotation is of the transformative type that advances knowledge and the progress of the arts or whether it merely repackages, free riding on another’s creations. If a quotation of copyrighted matter reveals no transformative purpose, fair use should perhaps be rejected without further inquiry into the other factors. Factor One is the soul of fair use. A finding of justification under this factor seems indispensable to a fair use defense. The strength of that justification must be weighed against the remaining factors, which focus on the incentives and entitlements of the copyright owner. [Citations omitted.]

Four years later, when the Supreme Court had an opportunity to revisit the “fair use” doctrine in Campbell v. Acuff-Rose Music, 510 U.S. 569 (1994), the Supreme Court adopted Judge Leval’s reasoning:

[The first factor] asks, in other words, whether and to what extent the new work is “transformative.” Although such transformative use is not absolutely necessary for a finding of fair use, the goal of copyright, to promote science and the arts, is generally furthered by the creation of transformative works. Such works thus lie at the heart of the fair use doctrine’s guarantee of breathing space within the confines of copyright, and the 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. [Citations omitted.]

Fast forward to 2015, and Judge Leval was faced with the question of whether the Library Project’s scanning and permitting consumers to view “snippets” of books against the copyright owner’s wishes constituted fair use. Now sitting on the Second Circuit Court of Appeals, Judge Leval faced three questions: (1) was Google’s copying (digitizing) the books an infringement of copyright; (2) are snippet views showing 3-line excerpts from the books an infringement of copyright; and (3) does Google’s commercial interest override any finding of the transformative nature of the Library Project.

The first question was quickly dispatched with a reference to the Second Circuit’s decision in Authors Guild, Inc. v. HathiTrust, 755 F. 3d 87 (2d Cir. 2014), and the observation that the digital copies made by Google are not publicly accessible and therefore could not serve as a market substitute for the originals (or potentially licensed derivatives). The sole purpose of digitalization, the Second Circuit found, was to allow “searchers to identify and locate the books in which words or phrases of interest to them appeared:”

As with HathiTrust (and iParadigms), the purpose of Google’s copying of the original copyrighted books is to make available significant information about those books, permitting a searcher to identify those that contain a word or term of interest, as well as those that do not include reference to it. In addition, through the ngrams tool, Google allows readers to learn the frequency of usage of selected words in the aggregate corpus of published books in different historical periods.

The Second Circuit had “no doubts” that the copying was transformative, and “fair use,” at least when practiced by the not-for-profit HathiTrust. It was less clear about “snippet view,” but ultimately concluded that it, too, was transformative. On the one hand, Google’s snippets are “designed to show the searcher just enough context surrounding the searched term to help her evaluate whether the book falls within her scope of interest (without revealing so much as to threaten the author’s copyright interests).” On the other hand, although “snippet view” “does not give searchers access to effectively competing substitutes,” the court did recognize

that the snippet function can cause some loss of sales. There are surely instances in which a searcher’s need for access to a text will be satisfied by the snippet view, resulting in either the loss of a sale to that searcher, or reduction of demand on libraries for that title, which might have resulted in libraries purchasing additional copies. But the possibility, or even the probability or certainty, of some loss of sales does not suffice to make the copy an effectively competing substitute that would tilt the weighty fourth factor in favor of the rights holder in the original. There must be a meaningful or significant effect “upon the potential market for or value of the copyrighted work.” 17 U.S.C. § 107(4).

Furthermore, the type of loss of sale envisioned above will generally occur in relation to interests that are not protected by the copyright. A snippet’s capacity to satisfy a searcher’s need for access to a copyrighted book will at times be because the snippet conveys a historical fact that the searcher needs to ascertain. For example, a student writing a paper on Franklin D. Roosevelt might need to learn the year Roosevelt was stricken with polio. By entering “Roosevelt polio” in a Google Books search, the student would be taken to (among numerous sites) a snippet from page 31 of Richard Thayer Goldberg’s The Making of Franklin D. Roosevelt (1981), telling that the polio attack occurred in 1921. This would satisfy the searcher’s need for the book, eliminating any need to purchase it or acquire it from a library. But what the searcher derived from the snippet was a historical fact. Author Goldberg’s copyright does not extend to the facts communicated by his book. It protects only the author’s manner of expression. [Citation omitted.] Google would be entitled, without infringement of Goldberg’s copyright, to answer the student’s query about the year Roosevelt was afflicted, taking the information from Goldberg’s book. The fact that, in the case of the student’s snippet search, the information came embedded in three lines of Goldberg’s writing, which were superfluous to the searcher’s needs, would not change the taking of an unprotected fact into a copyright infringement.

Even if the snippet reveals some authorial expression, because of the brevity of a single snippet and the cumbersome, disjointed, and incomplete nature of the aggregation of snippets made available through snippet view, we think it would be a rare case in which the searcher’s interest in the protected aspect of the author’s work would be satisfied by what is available from snippet view, and rarer still—because of the cumbersome, disjointed, and incomplete nature of the aggregation of snippets made available through snippet view—that snippet view could provide a significant substitute for the purchase of the author’s book.

The key to understanding the Court’s conclusion that “snippet view” would not have a significant impact on the copyright owner’s interest lies in understanding what “derivative rights” are granted to a copyright owner. § 106 of the Copyright Act grants to the copyright owner the exclusive right:

• making copies of the work (or if a sound recording, making “phonorecords,” a term that encompasses digital files)
• preparing derivative works.
• distributing copies or phonorecords to the public by sale or rental, lease or lending;
• for literary, musical, dramatic and choreographic works, pantomimes, motion picture and other audiovisual works, to perform the work publicly;
• for literary, musical, dramatic and choreographic works, pantomimes, and pictorial, graphic or sculptural works, including individual images of a motion picture or other audiovisual work, to display the work publicly; and
• for sound recordings, to perform the work publicly via digital audio transmission.

The phase “derivative works” is not defined in the law, but its scope is suggested by examples that include “a translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgement, [or] condensation” and “any other form in which a work may be recast, transformed or adapted.” 17 U.S.C. § 101. As the Second Circuit points out, “derivative works generally involve transformations in the nature of changes of form,” rather than changes of purpose that defines “transformative” use. Using a book’s expressive content for purposes of criticism or commentary, or to provide information about the text, are examples of transformative purposes and are not considered derivative works. Weighing this definition against the manner and method of Google’s “snippet view,” the Court concluded that “the Plaintiffs’ authorship of their works does not include an exclusive right to furnish the kind of information about the works that Google’s programs provide to the public.”

In answer to the last question – whether Google’s commercial motives disqualify its claim of “fair use,” the Court relied primarily on Campbell v. Acuff-Rose Music, as well as the Second Circuit’s own precedents. In Campbell, the Supreme Court emphasized that because most “fair use” activities were carried on for profit, the commercial or nonprofit character of a work was “not conclusive” but merely “a fact to be weighed along with others in fair use decisions.” Moreover, the Supreme Court taught, “the 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.” Based on this reading, the Second Circuit concluded:

[W]e see no reason in this case why Google’s overall profit motivation should prevail as a reason for denying fair use over its highly convincing transformative purpose [as well as] the absence of significant substitutive competition, as reasons for granting fair use.

What the Court meant by “significant substitutive competition” are opportunities for exploitation that would have been open the copyright holder’s right but for Google’s use. In fact, the Court found no such opportunities. Just as copyright owners have no right to control critical reviews of their works, and cannot own the facts that are contained in their works, so they cannot restrict others from furnishing information about their works, so long as in doing so there is no substantial taking of expressive content. Ultimately, the Second Circuit’s decision rested on the limited nature of Google’s “snippet view” which, it found,

does not provide searchers with any meaningful experience of the expressive content of the book. Its purpose is not to communicate copyrighted expression, but rather, by revealing to the searcher a tiny segment surrounding the searched term, to give some minimal contextual information to help the searcher learn whether the book’s use of that term will be of interest to her.

Any broader use of the copyright owners’ texts by Google would almost surely have required licensing. (For this reason, the key findings of the Second Circuit with respect to “snippet view” are reproduced below.)[4]


[1] Folsom v. Marsh, 9 F. Cas. 342, 348 (C.C.D. Mass. 1841)
[2] Pierre N. Leval, “Toward a Fair Use Standard,” 103 Harv. L. Rev. 1105 (1990).
[3] Id., see Leval’s analysis under Factor 1.
[4] “Google has constructed the snippet feature in a manner that substantially protects against its serving as an effectively competing substitute for Plaintiffs’ books. In the Background section of this opinion, we describe a variety of limitations Google imposes on the snippet function. These include the small size of the snippets (normally one eighth of a page), the blacklisting of one snippet per page and of one page in every ten, the fact that no more than three snippets are shown—and no more than one per page—for each term searched, and the fact that the same snippets are shown for a searched term no matter how many times, or from how many different computers, the term is searched. In addition, Google does not provide snippet view for types of books, such as dictionaries and cookbooks, for which viewing a small segment is likely to satisfy the searcher’s need. The result of these restrictions is, so far as the record demonstrates, that a searcher cannot succeed, even after long extended effort to multiply what can be revealed, in revealing through a snippet search what could usefully serve as a competing substitute for the original.

“The blacklisting, which permanently blocks about 22% of a book’s text from snippet view, is by no means the most important of the obstacles Google has designed. While it is true that the blacklisting of 22% leaves 78% of a book theoretically accessible to a searcher, it does not follow that any large part of that 78% is in fact accessible. The other restrictions built into the program work together to ensure that, even after protracted effort over a substantial period of time, only small and randomly scattered portions of a book will be accessible. In an effort to show what large portions of text searchers can read through persistently augmented snippet searches, Plaintiffs’ counsel employed researchers over a period of weeks to do multiple word searches on Plaintiffs’ books. In no case were they able to access as much as 16% of the text, and the snippets collected were usually not sequential but scattered randomly throughout the book.

“Because Google’s snippets are arbitrarily and uniformly divided by lines of text, and not by complete sentences, paragraphs, or any measure dictated by content, a searcher would have great difficulty constructing a search so as to provide any extensive information about the book’s use of that term. As snippet view never reveals more than one snippet per page in response to repeated searches for the same term, it is at least difficult, and often impossible, for a searcher to gain access to more than a single snippet’s worth of an extended, continuous discussion of the term.

“The fact that Plaintiffs’ searchers managed to reveal nearly 16% of the text of Plaintiffs’ books overstates the degree to which snippet view can provide a meaningful substitute. At least as important as the percentage of words of a book that are revealed is the manner and order in which they are revealed. Even if the search function revealed 100% of the words of the copyrighted book, this would be of little substitutive value if the words were revealed in alphabetical order, or any order other than the order they follow in the original book. It cannot be said that a revelation is “substantial” in the sense intended by the statute’s third factor if the revelation is in a form that communicates little of the sense of the original. The fragmentary and scattered nature of the snippets revealed, even after a determined, assiduous, time-consuming search, results in a revelation that is not “substantial,” even if it includes an aggregate 16% of the text of the book. If snippet view could be used to reveal a coherent block amounting to 16% of a book, that would raise a very different question beyond the scope of our inquiry.

“Free” online images may be expensive copyright infringements

Time and again clients come to us with a letter from a third party demanding that they cease and desist from using an image on their website and hand over an accounting of their income and profits. In many such cases, the client or their web designer found the infringing image on the Internet, liked it and decided to use it. Hey, it was on the Internet and there wasn’t a copyright notice on it, so it’s in the public domain, right? WRONG.

The use of a copyright notice is no longer required under United States law (and the laws of most foreign countries) and many people understandably don’t like using them, as it detracts from an image’s appearance. While the lack of a copyright notice might (sometimes) be an issue for works first published prior to 1989, web owners should assume that ALL images posted on other people’s websites are protected by copyright unless proven otherwise. An assessment of whether a given image is in the public domain is no simple matter and should be left to someone with sufficient knowledge both of copyright law and the circumstances of the image’s initial publication. A table showing what works are in the public domain according to their year of first publication and national origin can be viewed here, but as the reader will quickly see, the issue is somewhat of a minefield.

What’s the penalty for using a work that is under copyright? It could be high. For works first published in the United States, a copyright holder must, in order to invoke the protection of the copyright laws, register the copyright with the United States Copyright Office. This can be done before or after the infringement has commenced. If registration is done before the infringement first occurs, the owner will be entitled to statutory damages and attorney’s fees. (More on that below.) If registration is done after infringement commences, the owner will only be entitled to an award of actual (non-speculative) monetary damages and profits. For works first published outside the United States, if the owner has not also registered his or her copyright in the United States — and most owners of foreign copyrights don’t — the owner will only be entitled to the same award as the U.S. owner who files after infringement commences, i.e., actual monetary damages and profits.

Section 504 of the Copyright Act explains, in general terms, what statutory damages, damages and profits are available to the owner. “Actual damages and profits” means the actual damages suffered by the owner “as a result of the infringement, and any profits of the infringer that are attributable to the infringement and are not taken into account in computing the actual damages.” For example, if an owner lost out on a contractual opportunity due to an infringement, that would count as an actual damage. Furthermore,  an owner’s claim that he or she would have charged the infringer $1,000, had he or she asked for a license, might in some circumstances serve as a measure of damages: the owner would at least have to show that it entered into “benchmark” licenses with other persons for similar uses of the same copyrighted property.

As for profits, the copyright owner “is required to present proof only of the infringer’s gross revenue.” Then the infringer is “required to prove his or her deductible expenses and the elements of profit attributable to factors other than the copyrighted work.” For non-commercial infringements, the calculation might seem easy: if there is no sale of an infringing item, then there is no profit. But it’s not quite that simple. If an image is used to advertise a product or service, some portion of the profits earned from that product or service will likely be awarded to the copyright owner, and the onus will be on the infringer to prove exactly what percentage. (Courts have awarded higher than twenty percent of the infringer’s profits in such cases.) For commercial infringements — as in the use of an image on an article of clothing — the calculation of profits will generally be more straightforward: gross income less cost of goods sold less expenses of the business amortized against sales.

At any time before final judgment in a copyright case, the copyright owner who has registered his or her copyright prior to the commencement of the infringement may choose statutory damages instead of actual damages and profits. This option is not only less time-consuming, but it will generally result in higher awards than damages and profits. The statutory sum per infringement (not per infringing copy) is a minimum of $750 or a maximum of $30,000, as the court considers just. If the case involves only one infringing copy, statutory damages should be at the lower end of that range, while if the case involves hundreds or thousands of infringing copies, statutory damages will be at the upper end. However, in 2012 the Supreme Court upheld an award of $675,000.00 against a college student in Boston for illegally downloading 30 songs — an award of $22,500.00 per infringement. There is a lot to criticize about the Court of Appeals decision that was affirmed by the Supreme Court, but the case shows the extent of what is at stake when statutory damages are available. Even worse, where the copyright owner proves that the infringement was committed willfully, the court may increase the upper range to $150,000. A copyright owner who publishes his or her work without a copyright notice may have a more difficult time proving willful infringement than one who has stamped the work with a “c-in-a-circle” — © –” followed by the year of copyright and the name of the copyright owner. Caveat: Online copyright notices don’t need to be on the image itself for an argument of willful infringement to succeed. They may appear anywhere on a web page or website, or may be included in the metatags of an image or other download.)

On the other hand, if the court finds that the infringer wasn’t aware of the infringement and had no reason to believe that his or her acts constituted infringment, then at the court’s discretion, the award of statutory damages may be reduced to a mere $200. This is often a difficult circumstance to prove, because ignorance of the law is never an excuse — that is, “I found it on the Internet” is not a defense.

These measures of damages are in addition to the substantial legal fees, and sometimes expert fees, that the infringer will incur in defending a case. They are also in addition to the legal fees of the copyright holder who has registered his or her copyright prior to the commencement of the infringement. Legal fees are the primary reason that the parties in most copyright infringement cases want to settle quickly. The majority of infringements involve low or no profits. Even an infringement that turns a profit of $20,000 is probably not high enough to litigate over, considering that going to court will exceed that amount. Thus it is usually better to split the difference and come to a settlement that both parties can live with.

The next time you use an image you found on the Internet, however, think twice and follow this simple rule: if you are in doubt, don’t use it. Also be sure that you know the sources of all your web designers’ images. Copyright infringement could cost you serious money.

“Transformative” art does not infringe copyright, Second Circuit rules

[Patrick Cariou v. Richard Prince, et al., 11-1197-cv, April 25, 2013.]

When United States District Court Judge Deborah Batts issued her decision in Cariou v. Prince on March 18, 2011, the art world shuddered. In 30 of his larger-than-life paintings, appropriation artist Richard Prince was found to have infringed on the copyrights of a French photographer, Patrick Cariou. But that wasn’t the worst of it. Prince is an artist of some renown. He shows at Gagosian Gallery, a contemporary art gallery that also shows Richard Serra, Damien Hirst, Edward Ruscha, Jeff Koons and many other art “stars” of the last three decades. His works sell for over a million dollars each.  And here was a federal judge not only ordering the immediate delivery of 30 of Prince’s artworks to Cariou, “for impounding, destruction or other disposition, as Plaintiff determines” but also the notification by  Prince and his gallery to the purchasers of any sold works that the works “were not lawfully made” and “cannot lawfully be displayed” – ever. (For the District Court decision, see Cariou v. Prince, Case No. 08 Civ. 11327, Slip Op. at 36-37 (S.D.N.Y. Mar. 18, 2011)). It was both a shocking affront to freedom of expression and another depressing indication of copyright law run amok, with little care for the practices of contemporary art.

Artists can now breathe a partial sigh of relief. On April 25th, 2013, the Second Circuit Court of Appeals overturned Judge Batts’ decision, finding 25 of the 30 works non-infringing and sending the case back to Judge Batts to determine whether the remaining five works are infringing in accordance with the Second Circuit’s criteria. Although flawed, the Second Circuit’s decision is historic: it is the first time that a court has given a truly expansive reading to “fair use” outside the traditional confines of literary criticism, educational uses and parody.

The Patrick Cariou photographs Prince appropriated for his art depicted Jamaican Rastafarians and landscapes. They were reproduced in Cariou’s book entitled Yes Rasta, published in 2000. Cariou testified that his work was “extreme classical photography [and] portraiture” and he didn’t “want that book to look pop culture at all.” 7000 copies were printed, but most of them were sold below the suggested retail price. Cariou earned about $8,000 in royalties. But for a handful of private sales, Cariou did not sell or license the photographs – indeed he was reluctant to do so.

Cariou’s work obviously inspired Prince, but certainly not in the way Cariou would have hoped. Cariou’s artistic aims were irrelevant to Prince, who sought to “make a kind of fantastic, absolutely hip, up to date, contemporary take on the music scene.” Titled “Canal Zone,” the series also related to a “post-apocalyptic screenplay” that Prince dreamed up, which emphasized the themes of “equality of the sexes” and “the three relationships in the world, which are men and women, men and men, and women and women.” Whether Prince’s ideas seem sophomoric – how “up-to-date” could a reference to Joni Mitchell’s song, “Woodstock,” in the title of one of the works (“Back to the Garden”) be? — or whether Prince’s use of the Rastas’ images seems vaguely racist is beside the point: what mattered to the Second Circuit was whether he actually did something different with the appropriated work.

Section 107 of the U.S. Copyright Act provides that

the fair use of a copyrighted work … for purposes such as criticism, comment, news reporting, teaching …, 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 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.

In Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 577-78, a 1994 decision upholding the right of rap group 2 Live Crew to create a parody of Roy Orbison’s Pretty Woman, the Supreme Court warned that interpreting Section 107

is not to be simplified with bright-line rules, for the statute, like the doctrine it recognizes, calls for case-by-case analysis. The text employs the terms “including” and “such as” in the preamble paragraph to indicate the illustrative and not limitative function of the examples given, which thus provide only general guidance about the sorts of copying that courts and Congress most commonly had found to be fair uses. Nor may the four statutory factors be treated in isolation, one from another. All are to be explored, and the results weighed together, in light of the purposes of copyright.

Although the holding in the Campbell decision was confined to the question of whether 2 Live Crew’s song was “parody” of the original, the Supreme Court suggested, for the first time, that the appropriation of a pre-existing work was “fair use” if it was “transformative,” citing more than a dozen times to an article by Pierre Leval, then a judge in the United States District Court, Southern District of New York. The article, entitled “Toward a Fair Use Standard,” 103 Harvard Law Review 1105 (1990), boldly set forth the “transformative” standard, cogently arguing that when a work is appropriated, “fair use” required nothing more (or less) than that the new work create “new information, new aesthetics, new insights and understanding” or “employ the quoted matter in a different manner or for a different purpose from the original.” This is so, Judge Leval argued, because “[m]onopoly protection of intellectual property that impeded referential analysis … would strangle the creative process.”

Campbell came two years after the Second Circuit’s decision in Rogers v. Koons, 960 F.2d 301 (1992), where the Second Circuit ordered impounded and destroyed a Koons’ sculpture (reproduced in multiple), entitled “String of Puppies” for copyright infringement of a photograph with the same tableau. In its decision, the court considered first whether the appropriating work was a “parody” of the original (although the court also confused “satire” and “parody”) and rejected Koons’ claim to be “acting within an artistic tradition of commenting upon the commonplace” and making a “satirical critique” of materialistic society:

It is the rule in this Circuit that though the satire need not be only of the copied work and may, as appellants urge of “String of Puppies,” also be a parody of modern society, the copied work must be, at least in part, an object of the parody, otherwise there would be no need to conjure up the original work. [Citations omitted.]

We think this is a necessary rule, as were it otherwise there would be no real limitation on the copier’s use of another’s copyrighted work to make a statement on some aspect of society at large. If an infringement of copyrightable expression could be justified as fair use solely on the basis of the infringer’s claim to a higher or different artistic use–without insuring public awareness of the original work–there would be no practicable boundary to the fair use defense. Koons’ claim that his infringement of Rogers’ work is fair use solely because he is acting within an artistic tradition of commenting upon the commonplace thus cannot be accepted. The rule’s function is to insure that credit is given where credit is due. By requiring that the copied work be an object of the parody, we merely insist that the audience be aware that underlying the parody there is an original and separate expression, attributable to a different artist. This awareness may come from the fact that the copied work is publicly known or because its existence is in some manner acknowledged by the parodist in connection with the parody.

Finding no parody, the court concluded that “String of Puppies” was “substantially similar” to the original work – with the same “expressions,” content and meaning – and thus an infringement.

It was this decision to which Judge Batts seemed to adhere in her opinion in Cariou, thereby missing the change that occurred in the Second Circuit’s thinking following Judge Leval’s appointment to the Second Circuit in 1993. (Judge Leval assumed senior status in 2002.) By 2006, when the Second Circuit decided Blanch v. Koons, 467 F.3d 244, it had more or less embraced Judge Leval’s doctrine which, after all, had been heavily cited by the Supreme Court. This time around, Koons’ work was found to be non-infringing. Where Rogers v. Koons never even mentioned the word “transformative,” Blanch v. Koons was based on it:

The test for whether [Koons’ use] is “transformative,” then, is whether it “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.” … The test almost perfectly describes Koons’s adaptation of [the original work]: the use of a fashion photograph created for publication in a glossy American “lifestyles” magazine — with changes of its colors, the background against which it is portrayed, the medium, the size of the objects pictured, and, crucially, their entirely different purpose and meaning — as part of a massive painting commissioned for exhibition in a German art-gallery space. We therefore conclude that the use in question was transformative.

Although Judge Batts cited Blanch, she didn’t understand its implications and focused instead on the fact that Koons’ work, by commenting “on the ways in which some of our most basic appetites — for food, play and sex — are mediated by popular images,” could also be understood as commenting on the original photograph as an example of such popular images. Adding her reading of Rogers to her narrow understanding of Blanch and Campbell, she concluded:

The Court is aware of no precedent holding that such use is fair absent transformative comment on the original. To the contrary, the illustrative fair uses listed in the preamble to § 107 “criticism, comment, news reporting, teaching [ …], scholarship, [and] research” — all have at their core a focus on the original works or their historical context, and all of the precedent this Court can identify imposes a requirement that the new work in some way comment on, relate to the historical context of, or critically refer back to the original works.
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“If an infringement of copyrightable expression could be justified as fair use solely on the basis of the infringer’s claim to a higher or different artistic use . . . there would be no practicable boundary to the fair use defense.” Rogers v. Koons, 960 F.2d at 310. The Court therefore declines Defendants’ invitation to find that appropriation art is per se fair use, regardless of whether or not the new artwork in any way comments on the original works appropriated. Accordingly, Prince’s Paintings are transformative only to the extent that they comment on the Photos; to the extent they merely recast, transform, or adapt the Photos, Prince’s Paintings are instead infringing derivative works.

The Second Circuit rejected every aspect of Judge Batts’ decision. In doing so, it expanded the meaning of “transformative” by clarifying that the allegedly infringing work need not refer to or comment in any way upon the appropriated work. “We agree with Appellants,” the court wrote, “that the law does not require that a secondary use comment on the original artist or work, or popular culture.” The decision continued:

Certainly, many types of fair use, such as satire and parody, invariably comment on an original work and/or on popular culture. For example, the rap group 2 Live Crew’s parody of Roy Orbison’s “Oh, Pretty Woman” “was clearly intended to ridicule the white-bread original.” [citing Campbell). Much of Andy Warhol’s work, including work incorporating appropriated images of Campbell’s soup cans or of Marilyn Monroe, comments on consumer culture and explores the relationship between celebrity culture and advertising. As even Cariou concedes, however, the district court’s legal premise was not correct. The law imposes no requirement that a work comment on the original or its author in order to be considered transformative, and a secondary work may constitute a fair use even if it serves some purpose other than those (criticism, comment, news reporting, teaching, scholarship, and research) identified in the preamble to the statute. … Instead, as the Supreme Court as well as decisions from our court have emphasized, to qualify as a fair use, a new work generally must alter the original with “new expression, meaning, or message.” [Here, the Second Circuit cited Campbell and Blanch, both of which were citing Judge Leval.]

Furthermore, the court held, “Prince’s work could be transformative even without … Prince’s stated intention to do so. Rather than confining our inquiry to Prince’s explanations of his artworks, we instead examine how the artworks may “reasonably be perceived” in order to assess their transformative nature.”

The court meant two things by this. First, in appropriating a work of art, the artist need not intend to address any aspect of the appropriated work, the artist who created it or culture in general. In fact, he or she need not intend to create any particular meaning at all. It is enough to use the appropriated work in a new way to create different ideas and expressions. Second, the law doesn’t require the artist to explain the meaning of his or her work, in part because any explanation is likely to be self-serving, and also because the meaning of an artwork is completed by the viewer.

The Second Circuit’s finding that Prince’s work sufficiently transformed Cariou’s photographs so as to qualify it as “fair use” turned mainly on a side-by-side comparison. The crucial (indeed, transformative) nature of the Second Circuit’s decision is its complete (and refreshing) lack of concern with meanings and messages and its focus instead on visual and physical transformation resulting from the artistic process:

Here, our observation of Prince’s artworks themselves convinces us of the transformative nature of all but five, which we discuss separately below. These twenty-five of Prince’s artworks manifest an entirely different aesthetic from Cariou’s photographs. Where Cariou’s serene and deliberately composed portraits and landscape photographs depict the natural beauty of Rastafarians and their surrounding environs, Prince’s crude and jarring works, on the other hand, are hectic and provocative. Cariou’s black-and-white photographs were printed in a 9 1/2″ x 12″ book. Prince has created collages on canvas that incorporate color, feature distorted human and other forms and settings, and measure between ten and nearly a hundred times the size of the photographs. Prince’s composition, presentation, scale, color palette, and media are fundamentally different and new compared to the photographs, as is the expressive nature of Prince’s work.

Unfortunately, the court refused to decide whether five remaining works by Prince (GraduationMeditationCanal Zone (2007), Canal Zone (2008) and Charlie Company) were sufficiently different as to be transformative. “Certainly”, the Court said, “there are key differences in those artworks compared to the photographs they incorporate.” The court went on to describe some of those differences, but thought that the five works were either “substantially unaltered” or “aesthetically similar to Cariou’s original work because it maintains the pastoral background and individual focal point of the original photograph” or “the cumulative effect is of the subject in a habitat replete with lush greenery, not dissimilar from many of Cariou’s Yes Rasta photographs.” This waffling reveals a weakness in the court’s test. The fate of the five works now lies in the hands of Judge Batts who, if she doesn’t order the matter put before a jury, will almost certainly condemn the work, given her obvious dislike of Prince’s work the first time around and the fact that the Second Circuit has essentially presented her with a roadmap for doing so.

Two major questions remain open following this decision. The first is whether the  Cariou decision will reach into other media, such as music, and other federal jurisdictions. Until now, federal courts have been largely deaf to the issue of sampling (the appropriation of a master recording) and interpolation (the appropriation of a musical composition). In the Sixth Circuit, for instance, the appropriation of a single chord or a brief, insubstantial passage has been enough to justify the impoundment and destruction of millions of record albums by major recording artists, regardless of the vastly transformative nature of the new works. In fact, the Sixth Circuit is apparently completely unaware of the “transformative” test.

The second question is whether the Second Circuit (or any other court) can give the “transformative” test a brighter line. This may be impossible, given that “fair use” is inherently, and no doubt intentionally, a fuzzy concept. Even the Supreme Court mandated a “case-by-case analysis,” which invariably requires an intellectual dance. That said, no other test has even come close to tolerating a significant degree of appropriation, which is crucial to contemporary art, and hence the progress of art.