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Thursday, July 23, 2009

Art, Licensing Markets, and the Limits of Unauthorized Appropriation


Doug Lichtman’s IP Colloquium has already been mentioned on this site. It’s a great series of conversations about contemporary issues in intellectual property featuring guests from academia (including PrawfsBlawg’s own Dan “Dan” Markel), law practice, and the entertainment and technology industries.

The most recent edition of the IPC addresses an issue of particular interest to me. The copyright dispute involving Associated Press and graffiti artist Shepard Fairey is familiar news. Fairey’s based his iconic “Hope” poster of Obama on a photo taken for the A.P. by freelance photographer Mannie Garcia. (Garcia has now joined the lawsuit, contesting the A.P.’s original claim that they own the copyright in the photo pursuant to the work made for hire doctrine.)

It’s uncontested that Fairey did not seek or receive permission to use the photo in making his poster, so the substantive debate revolves around whether Fairey’s taking is defensible under the fair use doctrine, which permits unauthorized takings that meet a notoriously slippery four-part statutory balancing test. Doug’s latest IPC conversation features the lawyers for Fairey (Mark Lemley) and the A.P. (Dale Cendali) as well as the New York Times’ General Counsel, Ken Richieri.

The Fairey conversation ranges over a number of very engaging issues, but I’m going to limit this discussion to consideration of the fourth fair use factor. I say more about this issue, and why I’m not as convinced as Doug that it weighs in favor of the owners of the Obama photo, below the fold.

The Copyright Act requires judges to consider “the effect of the use upon the potential market for or value of the copyrighted work” in evaluating a fair use defense. Cendali argues that allowing Fairey’s fair use defense will lead to a world that will destroy licensing markets in all news photography, but this is an obviously overstated litigator’s point. No one is arguing that purely substitutive uses (such as reprinting the Obama photo verbatim) should be allowed in the absence of permission or a license. The right way to frame the question, I think, is whether an artist who creatively appropriates a news photograph needs to pay for a license to do so.

This strikes me as a hard question. Lichtman’s take is that there was a well-functioning market here, so that all Fairey would have had to do is ask for permission to use the photo (and perhaps pay a small fee) in order to avoid liability concerns. And Garcia has said that he would have given Fairey permission to use the photo if Fairey had simply asked him about it beforehand, which seems to suggest that there was such a licensing market, and that Fairey just failed to take advantage of it. If that were true, it would be a strong argument against fair use (though not necessarily a dispositive one—the Second Circuit has held that the mere existence of a well-functioning licensing market alone does not preclude a fair use defense).

I think this counterfactual characterization of a smoothly functioning licensing market suffers from hindsight bias in a couple of respects. For one thing, even if it were true that Garcia would have given Fairey permission to use the photo, his grant of permission may not have been sufficient. The A.P. claims that it is the copyright owner, so a good-faith effort by Fairey to clear the rights could still have landed him in trouble (copyright is a strict liability offense, so an innocent state of mind would not be a defense). And corporations have a track record of not extending as much generosity to potential licensees as individual owners might. (In any event, I’m not so convinced that Garcia would have been so generous. If he really was so indifferent to Fairey’s—or anyone’s—profiting off of his photo, why would he now be joining the lawsuit and seeking to claim ownership of the work?) Finally, markets in creative work don’t function as seamlessly as markets in stocks or commodities, where actors regard the goods in trade as largely fungible. Rather, copyright cases are full of instances where owners reject a lucrative licensing offer for personal or idiosyncratic reasons (e.g., Campbell v. Acuff-Rose; Fisher v. Dees).

For all these reasons, I’m not as confident that we can simply say that fair use is inapposite here because Fairey eschewed use of a well-functioning market (nor am I convinced that it would end matters even if this were the case). But I also think it’s worth pausing on Lemley’s policy argument that there’s something “corrosive” about making art such as Fairey’s subject to a permission culture. Both Lichtman and Lemley agree that in some cases, fair use is necessary because it enables the legitimacy of a form, such as movie reviews. If critics need a studio license to include film clips in their reviews, then studios can condition those licenses on favorable commentary, and critics will lose credibility.

In a similar vein, though, much art—especially appropriation and graffiti art, like Fairey’s—depends on its transgressive character. Because part of the appeal (and social message) of this art is its edgy lawlessness, if these kinds of artists had to politely ask lawyers for permission beforehand, much of the power of their work would be lost. Now one could certainly argue that the social value of transgressive art is not worth the costs imposed on owners by unauthorized takings, and this empirical point may be right (though I’m skeptical that something like this can be measured). But this is the same basic argument for fair use that is generally accepted in the film criticism instance: forcing a permission culture on the users would compromise the value of the work itself.

Finally, Lemley suggests that part of the factor-four calculus should include the enormous positive impact that Fairey’s taking has had on Garcia’s career (his photography is much more in demand now that he is associated with the iconic Obama poster). As Cendali tartly puts it, this is the claim that “I did you a favor by ripping off your work”, and few courts have put much store in this argument when evaluating the final fair use factor.

By contrast, I think it’s a convincing point, for a couple reasons. First, the fourth fair use factor is commonly referred to as the market-effect factor, but tells only part of the textual story. The statute actually requires consideration of “the effect of the use upon the potential market for or value of the copyrighted work” (emphasis added). The plain language seems to not only permit, but demand, consideration of how the defendant’s use impacted the value of the owner’s work, not just the effect the use had on potential markets. Second, as a policy matter, if it’s true that Garcia is much better off thanks to Fairey’s unauthorized use than he would have been in a world where that use never happened, I can’t understand the argument that Fairey owes Garcia money; if anything, it seems like just the opposite should be true. At the very least, it seems to me that this argument should be part of the factor-four discussion rather than dismissed as readily as it is by most courts and commentators.

For all of these reasons, I’m more skeptical of the claim that the fourth factor weighs strongly in favor of the owner of the Obama photo, and I think the fair use issue is a truly difficult one. Regardless of your take on the issue, though, the conversation at IPC is an enjoyable one and well worth checking out.

Posted by Dave_Fagundes on July 23, 2009 at 05:31 PM in Intellectual Property | Permalink


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Hi, Doug. I understand a windfall to be an entirely unexpected financial boon--like walking down the street and happening across a hundred-dollar bill lying on the sidewalk. That's what distinguishes the Fairey poster from your movie/novel example. Any novelist is conscious of the possibility that their work will be made into a film at some point; indeed, some writers produce novels specifically in order to market them for repackaging into films. By contrast, no news photographer taking a descriptive photo of an event to include with media coverage does so with the expectation that the photo will possibly be appropriated by an artist and turned into a spectacularly popular political icon. Indeed, what happened with Fairey's "Hope" poster was sui generis, so there's no way Garcia could have expected that outcome.

So I'm not simply arguing that any time an unauthorized use makes an owner better off, that use should be permitted; but I think that where (as here) an unauthorized use makes an author better off in an entirely unexpected and unforeseeable way, that should weigh in favor of (though not be entirely dispositive of) fair use.

This is why, I think, the court in Texaco attempted to incorporate the idea of foreseeability into the factor-four analysis. As that court pointed out, we can always look at a scenario ex post and say that the user could have sought a license. That's why the court limited the relevant markets to those that were (paraphrasing from memory) extant, customary, or likely to emerge. (And of course, this inquiry can be massaged by invoking definitions of "market" at differing levels of generality.)

There's also a good policy reason for this limit. In the IPC podcast, Dale Cendali expresses concern that if we allow a broad fair use defense, it will eviscerate authorial incentives to create. This would certainly be true if fair use were broad enough to permit purely substitutive or reasonably foreseeable uses; but unforeseeable uses can't have been part of an author's original decisionmaking calculus, so my interpretation of fair use can't have a negative impact on authorial incentives.

Posted by: Dave | Jul 24, 2009 3:29:27 PM

Dave -

I don't think it's fair to describe this as a windfall for Garcia. Imagine, for instance, that you made a movie based on my book. Would your movie likely increase sales of my book, and its sequel? Sure. Is that a windfall that indicates I should just pipe down and be grateful for your appropriation of my work? Hardly.

Bruce's point is the point I would also make: the question under factor four is a question about what kind of gains the original author might enjoy if he could say no to this use and/or license it under negotiated terms. Here, if Garcia and Fairey had negotiated, they would have had to decide how to divide the value up, and Garcia would not have been stuck with the default outcome of "you get any gains that accrue to your original print" and "I get untold fortunes on the t-shirts, keychains, posters, buttons, and the like."

All that is only one piece of factor four; and factor four in turn is only one piece of the analysis; but, on this one narrow slice, I guess you are right in your original post: I don't agree with you. There was some positive spillover that benefited Mannie Garcie already, true, but that does not really move the analsyis much (if at all) in my view.

That said, having read your post and Bruce's comments, I wish we had made more of this point in the audio. It's a good converation to have, and it would have been interesting to see what Mark Lemley would have said about it point-blank. (This is also an issue that comes up frequently in fair use cases. See, e.g., Google's argument that the Book Search project benefits authors.)

Thanks so much for the post, by the way. I'm really proud of these audios we're doing, and it means a lot to know that you (and others) are out there listening.

Posted by: Doug Lichtman | Jul 24, 2009 1:32:39 AM

Thanks for the comments, Bruce. I think it's right that in this case the poster wasn't meant to be particularly transgressive, but what I'm getting at with that point is that there's a narrow law and economics defense of fair use suggesting that where permission will taint the user's work, it's justified (Posner first made this point with respect to movie reviews in his L&E of IP book). I want to suggest that this rationale is broader than is typically thought, and that it might add bite to Lemley's (and other's) general intimations that there's something problematic about a culture of permission.

It's also right that the world I describe is a second-best; certainly Garcia's best world is one in which he gets both a licensing fee and the positive spillovers generated by Fairey's poster. But I'm not sure this changes much in the factor-four analysis. Part of the reason I'm not sure is that the "value" language hasn't been much explored by courts, who have focused almost exclusively on the exploitation of particular markets when evaluating this factor. Given that fair use is a codification of what was previously an equitable defense, one could read this language as a possible way for a court to say that where a use has made the owner better off than they would have been otherwise (even if not as well off as they could be), that use can't be actionable. After all, this is all basically a windfall for Garcia. The reason that his career is taking off is that Fairey's creative interpretation of his photo created a groundswell of demand for Garcia's work.

At the very least, I've never understood why this argument doesn't more traction in factor-four analyses.

Posted by: Dave | Jul 23, 2009 11:31:20 PM

Interesting; there might be hay to be made comparing appropriation art to movie reviews. As Mark and Doug agreed in the podcast, if reviewers had to pay for movie clips, that taints the review, even if there is a functional market for clips. Perhaps you could say the same for at least some forms of art. The weak part of this argument in my view is that I'm not sure there was "appropriation" going on here in the art sense--more here: http://law.marquette.edu/facultyblog/2009/03/12/the-obama-hope-poster-case-whats-a-visual-reference/

"if it’s true that Garcia is much better off thanks to Fairey’s unauthorized use than he would have been in a world where that use never happened..."

That's one possible world; but here's another one: The world in which everything is the same as it is now, except that Fairey paid Garcia a license fee before making the poster. Garcia is clearly *worse* off in the actual world than he is in that possible world, to the tune of X hundred dollars (whatever the license fee would have been), and his right to make the decision. (Or AP's, if they own the copyright.)

You could argue that if Garcia had sought a fee, Fairey would have gone elsewhere; but that runs into the point that Doug was making in the podcast, which is if any old photo of Obama would have done, Fairey could have gotten one for free from the campaign. There's reason to believe here that not just any old photo would have sufficed.

Posted by: Bruce Boyden | Jul 23, 2009 9:22:25 PM

I used to serve as vice chair of the ABA Committee on Visual and Dramatic Works, and we conducted a CLE on this topic in June. See http://www.abanet.org/cle/programs/t09pfa1.html. This teleconference attracted about 150 listeners from around the country.

Posted by: Kelly Anders | Jul 23, 2009 5:38:08 PM

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