The problem is that Righthaven does not actually buy the copyright to the articles it subsequently claims infringement of. Rather, it only buys the right to sue for infringement if infringement occurs. The copyright owner retains all the other rights that go along with the copyright. Thus, in Hoehn, as Judge Philip M. Pro explains, the agreements between Stephens Media, the owner of the Las Vegas Review Journal, and Righthaven “deprive Righthaven of any of the rights normally associated with ownership of an exclusive right necessary to bring suit for copyright infringement and leave Righthaven no rights except to pursue infringement actions, a right which itself is subject to Stephens Media’s veto.”

In his treatise on copyright, William Patry states that a plaintiff in a copyright lawsuit “must plead ownership of the right sought to be vindicated.” Patry on Copyright, Section 19:7. In short, you cannot sue for violation of a right that is not yours to enforce. To allow Righthaven to do otherwise is to allow it to engage in the common law sin of “champerty,” which is the sale of a right to sue to someone with no interest in the alleged wrong being sued on for a percentage of the amount recovered. As the Second Circuit Court of Appeals has explained, champerty is “a bargain between a stranger and a party to a lawsuit by which the stranger pursues the party’s claim in consideration of receiving part in consideration of receiving part of any judgment proceeds.” Alexander v. Unification Church of America, 634 F.2d 673, 677 n.5 (2d Cir. 1980). As Patry explains it, Righthaven seems to have fallen into the trap of engaging in Champerty:

As applied to copyright, champerty may be found only when there is an assignment of the copyright and preexisting causes of action and where the assignment of the copyright was a sham designed to disguise the real intent of conveying the chose in action. For example, if the assignment required the assignee to reconvey the copyright at the conclusion of the litigation, this would be very strong evidence of champerty. If, however, the assignor continued to exploit the work in a manner inconsistent with an assignment of rights, a claim of champerty might prove out.

Patry on Copyrght, Section 5:36 (emphasis added).
Right Haven, LLC v Hoehn (D Nevada 2011)

Smolar begins his column stating, “Just because something is commonplace doesn’t always mean it’s legal.” I would counter that with this: just because the record companies made a decision back in 1991 that they each would pay for permission to use recorded samples of each other’s music doesn’t mean that payment is required.

Smolar also seems to imply that because fair use is used as a defense to copyright claims and can be characterized as an “exception” to the real rule that any use of a copyrighted work constitutes infringement it somehow has little importance. One could just as easily characterize fair use in this way: Under the First Amendment to the Constitution, we can express ourselves any way we want, even in ways that “steal” your own forms of expression, unless there’s a good reason to stop us. In short, copyright is an exception to the foundational right to free expression.

But Smolar isn’t interested in being accurate — he appears interested only in scaring anyone off of unlicensed sampling. He and his ilk haven’t been too successful in that effort. But then why would he be successful in scaring people if he misrepresents the law as egregiously as he does when he states that “[sampling fails to meet each and every one of the four prongs of the" statutory elements courts consider in determining whether the use of copyrighted material constitutes fair use. It's a whole lot more complicated than that. First, of course, the four-part test does not call for an "either-or" determination on each factor. So it's just plain wrong to write "[t]he use must be for non-commercial purposes.” It’s not true either that “[t]he nature of the copyrighted must be in the public interest.” The mere fact someone samples the identifiable part of a song does not make the sampling an infringement either. Finally, Smolar states that sampling damages the market for the song from which the excerpt was taken “because the new song may be purchased for as much as the original.” I’m not sure what that means. He can’t possibly mean that if I get Girl Talk’s “Triple Double” I therefore wouldn’t buy “Steppin’ Out” by Joe Jackson. But all he might otherwise mean is that if Girl Talk’s songs are so good that people are willing to pay a lot of money for them (though they can get them for free), that can’t be right. The more the appropriation is valued in its own right, the more “transformative” it is and, therefore, the more likely it constitutes fair use.

But Smolar isn’t interested in the law. He’ just interested in scaring people into believing they’ll be sued by the record industry if they sample anything.

Addendum: For an good discussion of fair use and its complexities (in a context entirely divorced from music), see “Fair Use Controversy: The Gift That Keeps On Giving.”

We may have that question decided early next year in the lawsuit between Shepard Fairey and the Associated Press over Fairey’s use of a copyrighted AP photo as the source of the image in Fairey’s Obama Hope Poster. Fairey has requested a jury trial.

But no less an authority than Bill Patry believes that the question is one for a jury and thus that Fairey’s defense to AP’s claim of infringement should be determined by a jury.

And now comes Christopher E. Meatto to point us to another authority pointing the same way: Professor Ned Snow has published “Untangling Fair Use as a Matter of Law.” In his abstract to the article, Snow writes:

Fair use is an issue of fact for the jury. Or at least it should be. Recently courts have been perverting the centuries-old practice of treating fair use as a factual issue. Courts must therefore repent: they must return to construing the issue as factual. Yet even if they do, the question remains whether courts should ever decide fair use as a matter of law. To answer this question, this Article examines whether appellate courts should ever review fair use decisions under a de novo standard. It also examines whether trial courts should ever decide fair use on summary judgment. The Article concludes that the speech nature of fair use necessitates deciding the issue as a matter of law in certain circumstances: appellate courts should review constitutional findings under a de novo standard, but only where a bench trial occurs or where a jury verdict favors the copyright holder; trial courts should rule on summary judgment, but only for fair users. In short, ruling as a matter of law must serve the speech-protective function of fair use. Fair use as a matter of law must favor fair users.

Koons scanned the image of “Silk Sandals” into his computer and incorporated a version of the scanned image into [his painting entitled] “Niagara.” He included in the painting [pictured at left] only the legs and feet from the photograph, discarding the background of the airplane cabin and the man’s lap on which the legs rest. Koons inverted the orientation of the legs so that they dangle vertically downward above the other elements of “Niagara” rather than slant upward at a 45-degree angle as they appear in the photograph. He added a heel to one of the feet and modified the photograph’s coloring. The legs from “Silk Sandals” are second from the left among the four pairs of legs that form the focal images of “Niagara.” Koons did not seek permission from Blanch or anyone else before using the image

Koons was paid $126,877 for “Niagra.” Allure had paid Blanch $750 for “Silk Sandals.” In addressing whether Koons’ appropriation of “Silk Sandals” was fair use or a copyright infringement, the court highlighted the fact that answering this question requires balancing the conflicting interests in protecting the “intellectual property” rights of creators and protecting the freedom of expression, including referencing the works of others in new works of creation:

Copyright law thus must address the inevitable tension between the property rights it establishes in creative works, which must be protected up to a point, and the ability of authors, artists, and the rest of us to express them — or ourselves by reference to the works of others, which must be protected up to a point. The fair-use doctrine mediates between the two sets of interests, determining where each set of interests ceases to control.

At the heart of the fair use analysis is the nature of the allegedly infringing work. As the 2d Circuit notes, it considers with respect to this factor whether the work is “transformative” — that is, whether it adds something new to the original work so that it stands on its own as an original work of creation. The court thus quoted the Supreme Court’s decision in Campbell v. Acuff Rose Music, 510 U.S. 569 (1994):

The central purpose of this investigation is to see, in Justice Story’s words, 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 …, 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 transformative works thus lie at the heart of the fair use doctrine’s guarantee of breathing space …. Campbell, 510 U.S. at 579, 114 S.Ct. 1164(citations omitted).

The court’s conclusion that “Niagra” is genuinely transformative in its use of “Silk Stockings” is worth quoting almost in its entirety (citations omitted) because it is the very heart of the decision to find in favor of Koons:

Koons asserts — and Blanch does not deny — that his purposes in using Blanch’s image are sharply different from Blanch’s goals in creating it. Compare Koons Aff. at ¶ 4 (“I want the viewer to think about his/her personal experience with these objects, products, and images and at the same time gain new insight into how these affect our lives.”) with Blanch Dep. at 112-113 (“I wanted to show some sort of erotic sense[;] … to get … more of a sexuality to the photographs.”). The sharply different objectives that Koons had in using, and Blanch had in creating, “Silk Sandals” confirms the transformative nature of the use. 

Koons is, by his own undisputed description, using Blanch’s image as fodder for his commentary on the social and aesthetic consequences of mass media. His stated objective is thus not to repackage Blanch’s “Silk Sandals,” but to employ it “`in the creation of new information, new aesthetics, new insights and understandings.’” When, as here, the copyrighted work is used as “raw material,” in the furtherance of distinct creative or communicative objectives, the use is transformative. 

The test for whether “Niagara’s” use of “Silk Sandals” 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 “Silk Sandals”: 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, the objects details 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.

The court also noted that in Campbell the Supreme Court had rejected the notion that a”the commercial nature of [a] use could by itself be a dispositive consideration. The Campbell opinion observes that ‘nearly all of the illustrative uses listed in the preamble paragraph of § 107 [setting forth the fair use test], including news reporting, comment, criticism, teaching, scholarship, and research … “are generally conducted for profit.”‘” Thus, 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.’” (Quoting NXIVM Corp. v. Ross Inst., 364 F.3d 471 (2d Cir.2004)). Moreover, since “Niagra” is “‘substantially transformative, the significance of other factors, [including] commercialism, are of [less significance],’ [w]e therefore ‘discount[] the secondary commercial nature of the use.’” (citations omitted.)

I by no means would suggest that Blanch is so obviously on point in all respects that it requires the court hearing the Fairey v. AP case to find in favor of Fairey. But it certainly is quite meaningful in that respect. If only because of the tremendous resonance the Obama Hope poster had in the course of the 2008 presidential, a resonance that would have been inconceivable had the poster substituted Garcia’s photo for Fairey’s reworking of that source material, it seems at the very least quite arguable that Fairey’s reworking of the photo meets the 2d Circuit’s test of a transformative work — one that “adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message.”

Blanch also makes clear that it is of no moment that, Dan Heller’s assertions notwithstanding, Fairey’s work (1) was intended to convey a message, (2) was intended to “make a buck.”

It also makes plain that Heller is just plain misunderstanding the law when he states that “you cannot misappropriate someone’s likeness or their property without their consent.” (Emphasis in Heller’s original.) Koons neither sought nor received Blanch’s consent to use her photograph. Koons plainly made more than a buck in the transaction. And the fact that Koons’ message might have been a commentary on the world of “mass communication” does not seem any more worthy of fair use analysis even if we do assume, as does Heller, that Fairey’s poster was “merely” a piece of political advocacy. Finally, there is no applicable “right of publicity” that Fairey violated in appropriating Obama’s image (nor does the Associated Press or its photographer, Manny Garcia, have any right to assert any right of publicity Obama hypothetically could enjoy on his behalf).

ADDENDUM: J O’Shea on Shepard Fairey and the Art of Appropriation.

I don’t think so, and the discussion of the issue of an infringer’s bad faith in NXVIM Corp. v. The Ross Institute, 364 F.3d 471 (2d Cir. 2004) helps illuminate why. The Second Circuit Court of Appeals (whose decisions are binding on the court deciding Fairey v. AP) in NXVIM affirmed the lower court’s denial of a preliminary injunction on the grounds that NXVIM, the producer of a “business training seminar,” had been unable to show it would likely prevail on its claim that the defendants had infringed NXVIM’s copyright in a training manual for one of their online courses. The defendants had posted to the internet quotations from the manual in support of their analyses and criticisms of NXVIM’s activities. NXVIM argued to the Second Circuit that the lower court had inadequately considered the defendants’ “bad faith” in obtaining the manual from a former participant in the seminar rather than by purchasing it, as anyone could do.

The majority did in fact state that “it was error for the district court not to have fully and explicitly considered” the defendant’s bad faith, which presumably included inducing the former course participant to breach a confidentiality agreement by disclosing the course materials to them. The court did not reverse the district court’s decision, however, because the bad faith did not alter the conclusions that the use was a non-infringing one. In short, according to the majority, a defendant’s bad faith is not “dispositive” on the fair use question and consideration of all of the factors — and in particular the first, the “purpose and character” of the defendants’ use of the copyrighted material — was so great: “the first factor still favors defendants in light of the transformative nature of the secondary use.”

It is difficult to get a handle on how much weight, if any, the majority would therefore give to bad faith in the fair use analysis. It would have some weight, the majority seems to indicate, but not that much. Judge Dennis Jacobs‘ concurring decision is even more illuminating, however, and gives good reason to believe that the true weight to be given bad faith as a factor independent of the rest of the fair use analysis should be zero. After reviewing the rather recent history of the role of a defendant’s bad faith in fair use analysis, Judge Jacobs states rather bluntly:

I think that the secondary user’s good or bad faith in gaining access to the original copyrighted material ought to have no bearing on the availability of a fair use defense. Fair use defines the outer boundary of copyright protection, and that perimeter should be drawn by reference to the central objectives of copyright. Copyright itself would be distorted if its contours were made to depend on the morality and good behavior of secondary users.

To support his reasoning, Judge Jacobs pointed out first that the use of bad faith in fair use analysis had its origins in the Supreme Court’s 1985 decision in Harper & Row v. Nation Enterprises, in which the Court held that the Nation magazine had infringed Harper & Row’s copyright in the memoirs of former President Gerald Ford when it published a chapter from the memoir in the magazine in advance of the publication of the memoir. As Judge Jacobs makes clear in NXVIM, the fact the Nation obtained the manuscript illicitly tipped what was generally considered a close case in favor of the publisher.

One might question in retrospect precisely how close a case Harper & Row really was. The chapter the Nation published was the chapter Ford wrote about his pardon of the disgraced Richard Nixon. It seems quite likely that many people who would have purchased the book for that chapter alone (it was clearly the most noteworthy event of Ford’s political career) would have purchased the magazine and therefore not bothered with the book. In other words, the infringement very directly robbed the copyright holder of a significant amount of value that the copyright holder had every reasonable expectation it would derive from the sale of the book.

But Judge Jacobs points out too that in its post-Harper & Row decision in Campbell v. Acuff Rose Music, Inc., 510 U.S. 569 (1994), the Supreme Court backed off the suggestion that bad faith was part of the fair use analysis, stating that the core of the fair use analysis must remain on (1) the transformative purpose of the appropriating work and (2) whether the appropriating market “usurps a market” that belongs to the copyright holder:

Campbell’s footnoted discussion questioning the pertinence of good faith reinforces the entire thrust of the decision, which requires that fair use be assessed primarily in light of whether the secondary work quotes the original with a transformative purpose and whether it usurps a market that properly belongs to the original author — issues as to which the defendant’s good faith in accessing the plaintiff’s original work does not matter.

In other words, according to Judge Dennis, “the fair use defense exists to encourage the creation of original works that do not ‘supersede the objects’ — and thus the market value — of the original. Nor is fair use a doctrine a privilege we confer on people we like. It is not ‘earned by good works and clean morals; it is a right — codified in § 107 and recognized since shortly after the Statute of Anne — that is ‘necessary to fulfill copyright’s very purpose, “[t]o promote the Progress of science and the useful arts….”‘ Campbell, 510 U.S. at 575, 114 S.Ct. 1164 (quoting U.S. Const., art. I, § 8, cl. 8).”

Thus, while someone’s bad acts may subject him to criminal or civil prosecution on a number of grounds, they should not bear on the fair use analysis:

A person who acquires the original work by crooked or unsavory means may expose himself to all sorts of civil claims and criminal charges; but the question of fair use itself should be decided on the basis of the transformative character and commercial effects of the secondary use. If the use satisfies the criteria of § 107 [of the Copyright Act], it is fair because it advances the utilitarian goals of copyright.

Shepard Fairey’s deceit in the course of discovery in the lawsuit has been uncovered, and it can be punished through civil sanctions or even criminal prosecution. But it should not affect the court’s determination of the artistic legitimacy of the Obama Hope poster. “[C]opyright is not about virtue; it is about the encouragement of creative output, including the output of transformative quotation. Its goals are not advanced if bad faith can defeat a fair use defense.” Nor is “good faith” a factor in fair use determinations. Willing as you may be to pay a license fee, if the copyright holder refuses to sell you a license and your subsequent unauthorized use is infringing, your willingness to pay is of no credit to you in the fair use analysis.

In short, as Judge Dennis so cogently puts it, fair use is central to the copyright regime; it is not a tolerated exception to the copyright holder’s domain:

Fair use is not a permitted infringement; it lies wholly outside the domain protected by the author’s copyright.