U.S. law provides for a specific list of factors for a court to consider in deciding whether the fair use defense applies. Because the U.S. relies on a common law system, usually one can make an educated guess as to how a court will interpret and apply a statute based on controlling or persuasive precedent.
In contrast, because the People’s Republic of China (“PRC”) relies on a civil law system there have been unpredictable outcomes under the fair use standard. Additionally, the specific listing of twelve exemptions is vague. Some Chinese courts strictly apply the listed exemptions while some have relied on a multi-factor analysis similar to the U.S. standard.
U.S. Fair Use
Through the Copyright Act of 1976 Congress expressly recognized the fair use defense. U.S. courts consider the following four factors in deciding whether the fair use defense applies: (1) the purpose and character of the use; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used; and (4) the effect upon the plaintiff’s potential market. However, Congress has not stated how much weight to afford to each factor.
The purpose and character of the use: If the work is “transformed,” meaning that the defendant adds something or uses the work in a different manner, then this factor sways towards fair use. Also, this factor considers whether the work is used for a commercial nature or for nonprofit educational purposes.
The nature of the copyrighted work: The second factor can refer to either the form or the content of the original work. Newscasts will likely weigh towards fair use while an original novel will not.
The amount and substantiality of the portion used: The third factor requires a court to analyze not only quantitatively but also qualitatively how much of the original work is used and whether it is reasonable.
The effect upon the plaintiff’s potential market: For the fourth factor, the court considers whether a party’s use of another’s work could cause a substantial adverse impact on the market for the original work.
Fair use has been a subject of debate in the area of linking with respect to search engines. In Kelly v. Arriba Soft Corp., 336 F.3d 811 (9th Cir. 2003), the defendant’s search engine created small, “thumbnail” versions of plaintiff’s photographs on its database. The 9th Circuit held that defendant’s use of plaintiff’s images was transformative given that they were small, lower-resolution images used to index images. Further, they were not highly exploitative given that when a user clicked on an image it transported the user to the original webpage with the image. The 9th Circuit reached a similar ruling in Perfect 10 v. Amazon.com, Inc., 508 F.3d 1146 (9th Cir. 2007).
U.S. courts have mostly denied fair use as a defense in piracy cases. In A&M Records v. Napster, 239 F.3d 1004 (9th Cir. 2001), the defendant claimed that users did not engage in direct infringement of works but rather they engaged in personal use like sampling or space shifting. In that case, the 9th Circuit found that the four factors swayed against a finding of fair use. Most notably, the existence of free copies of a plaintiff’s work could cause a substantial impact on the market for that work. In BMG Music v. Gonzalez, 450 F.3d 888 (7th Cir. 2005), the 7th Circuit likewise found that “sampling” of copyrighted music was not eligible for fair use because it served as a direct substitute for a purchased copy and caused a substantial impact on the market for the original work.
PRC Fair Use
Article 21 of the Implementing Regulation of Copyright Law, which went into force on September 15, 2002, states that “according to relevant provisions of the Copyright Law, use of published works without authorization of the copyright holder shall not impair the normal exploitation of such work or unreasonably prejudice the legitimate interests of the copyright holder.” In effect this provision is an implementation of the three steps examination under Article 13 of TRIPs.
Fair use is limited to the exemptions under Article 22 of the P.R.C. Copyright Law.
"Article 22: In the following cases, a work may be exploited without the permission from, and without payment of remuneration to, the copyright owner, provided that the name of the author and the title of the work are mentioned and the other rights enjoyed by the copyright owner by virtue of this Law are not infringed upon." Article 22 provides the following list of exceptions.
1) Private use: Allows for an individual to use a published work for one's own private study, research, or personal entertainment.
2) Quotation: Allows for an "appropriate" quotation from a published work for use in one's own work.
3) Education and research: Allows for the translation or reproduction of a work for use in classrooms or to aid in scientific research.
4) Official state use: Allows for a state entity to utilize a work provided such use is for actual official use and does not interfere with the normal exploitation of the work.
5) Institute Display or Preservation: Allows for libraries, archives, or museums to reproduce a work for display or preservation.
6) Translation into minority languages: Allows for an original Han Chinese language work to be translated into the languages of minority nationalities for publication and dissemination.
7) Braille Transliteration: Allows for the transliterations of published works into Braille.
8) News Reporting: Allows for the reproduction of published works by newspapers, television shows, or other mass media for reporting on current events.
9) Re-disseminating News Articles and Speeches: This exemption is related to the above exemption on news reporting in that it allows mass media to reproduce articles on economic, political, or religious topics already made publicly available.
10) Free Public Performance: Allows for one to publicly perform a published work provided that nothing is charged and no payment is made to the performers.
11) Artistic Works in Public Places: Allows for one to reproduce, draw, photograph, or make a video recording of an artistic work on public display e.g. sculptures, paintings, and calligraphy.
12) Broadcasting of a Speech at a Public Gathering: Provided that the author does preclude this type of publishing, article 22 allows for the mass media to publish or broadcast a speech made at a public gathering.
As shown above, the listed exemptions do not provide much background. For instance, what constitutes an “appropriate” quotation is unclear. Because the PRC utilizes a civil law system, each court can come to its own understanding of the fair use standard. This has led to unpredictable outcomes.
In some cases, whether or not the defense applies is clear. For instance, in the New Modern Chinese Dictionary v. Modern Chinese Dictionary, the defendant lifted thousands of sample sentences and numerous pages of text from the plaintiff's copyrighted dictionary for use in its own published dictionary. The Beijing Higher People's Court held that the whole-scale copying of text constituted infringement and did not qualify for the education and quotation exemptions. Obviously such use was neither in the aid of research nor was it a "limited quotation."
However, some courts have tweaked the standard. In Beijing Sanmian v. Hefei Bang Lue, the plaintiff sued for copyright infringement when the defendant published plaintiff’s article on mobile telephone trends in China. The defendant argued for the news reporting exemption on current events. The court held that in order to utilize the news reporting exception the event needed to be “timely sensitive” and “significant.” The court ruled that although the article was timely, it was not significant to fall under the exemption.
Although deference is given to the listed exceptions, some courts have utilized a more open-ended, multi-factor analysis. In SARFT Movie Channel Production Center v. China Education TV Station, defendant CETV broadcasted plaintiff’s copyrighted film “Out to Amazon River.” Defendant argued for fair use as a state owned television TV station which broadcast the film for educational purposes. The court first tackled the fair use exemption and held that the exception was only limited to in person classroom teaching and did not include remote broadcasting.
Despite the exemption, the court noted that fair use should “evolve to accommodate new development[s] and demand[s].” The court conducted further analysis and considered: 1) the purpose of the use, and 2) the effect of the use on the market for the film, which is similar to the first and fourth factors considered by U.S. courts. Defendant inserted numerous advertisements during the broadcasting of plaintiff’s film, which the court found swayed in the plaintiff’s favor. Because both the plaintiff and defendant were television stations with broadcasting rights the court found that the defendant’s broadcasting of plaintiff’s movie would negatively impact plaintiff’s ability to engage in normal exploitation of its work. Like U.S. courts in online piracy cases, this particular Chinese court perceived the potential adverse impact in allowing defendant to broadcast plaintiff’s work. As a result, the court found for copyright infringement against the defendant.
Closing Thoughts
With regard to fair use, U.S. law is more open-ended with its multi-factor analysis compared to Chinese courts’ strict deference to Article 22. However, as shown above, some Chinese courts have undertaken a multifactor analysis similar to U.S. courts. Overall, with the rising rate of Internet connectivity and technological advances, it seems that both Chinese and U.S. courts will continue to face the challenge of adapting their factors and exemptions to the digital age.
With regard to fair use, U.S. law is more open-ended with its multi-factor analysis compared to Chinese courts’ strict deference to Article 22. However, as shown above, some Chinese courts have undertaken a multifactor analysis similar to U.S. courts. Overall, with the rising rate of Internet connectivity and technological advances, it seems that both Chinese and U.S. courts will continue to face the challenge of adapting their factors and exemptions to the digital age.
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