Below is a summary of the Court's analysis of the four fair use factors aluded to in Part I, the previous blog post. As Sherwin Siy notes on Public Knowledge, it should be noted these four factors are what the court is required to consider:

"There's an infinitude of facts that a court can consider in making a fair use determination, and lots of things they should consider."

As this summary hopefully shows, the Court used this flexibility to analyse fair use in a holistic way, taking into account the public value of the HDL. 

Factor 1: Purpose and character of use

Transformative Use: While the court reinforced the proposition that a use is more likely to be considered a fair use if it is made for the purposes of research and study, the crucial finding under this factor was that the use of digital copies for search and indexing purposes and for the purpose of granting access to persons with a print disability are transformative. The Court found that HathiTrust’s activities were transformative because their purposes were completely different from the purposes for producing the original works;

“a transformative use can also be one that serves an entirely different purpose… The use to which the works in the HDL are put it transformative because the copies serve an entirely different purpose than the original works: the purpose is superior search capabilities rather than actual access to copyrighted material. The search capabilities of the HDL have already given rise to new methods of academic inquiry such as text mining.” (16) (Text and data mining are also specifically addressed in the Issues Paper, and were highlighted in the UK Hargreaves Review of IP.)

The court also found that the university libraries’ partnership with Google did not prevent the use being a non-commercial use.

2. Nature of the work – This factor directs the Court to consider that “some works are closer to the core of intended copyright protection than other” (18 citing Campbell v Acuff-Rose Music). In the US, there is an emphasis on copyright law being especially important to promote the creation of creative works. Works that are purely factual are generally more easily copied under fair use. However, even though the majority of the works in the HDL were creative (fiction) this factor was not determinative because of the transformative purpose of the uses.

3. Amount copied – This factor asks “whether the amount of copying was reasonable in relation to the purpose.”(18) The court noted that, “sometimes it is necessary to copy entire works.” And that, “Here, entire copies were necessary to fulfil Defendants’ purposes of facilitation of searches and access for print-disabled individuals.”(19) In relation to retaining the copies to facilitate searches, on top of recognising the need to maintain a copy of the work in the HDL for access by print disabled persons, the court emphasised that it would be a “tremendous waste of resources to destroy the electronic copies once they had been made for search purposes”. (19)

4. Impact on the market for the original– This factor is often cited as the most important of the four fair use factors. The court noted that, for transformative uses, this factor is often more likely to aid in a finding of fair use. Judge Baer then addressed a number of the plaintiff’s arguments that the HDL adversely affected the market for the original works finding that

• Each digitised copy of a book did not represent a lost sale; the Count found that this argument ignored “the fact that purchase of an additional copy would not have allowed either full-text searches or access for the print-disabled individuals, two transformative uses that are central to the [mass digitisation project].”
• The defendants’ did not offer compelling evidence that the HDL would lead to a rise in piracy of the Plaintiffs’ works, and the case seemed to be rather the opposite, with the HathiTrust libraries providing evidence of security measures put in place to protect against piracy of the digital works.
• There was currently no viable market for licensing the uses to which HDL was putting the digital copies and that the Plaintiffs’ argument about a potential market was only conjecture; “a copyright holder cannot pre-empt a transformative market… A use that ‘falls within a transformative market’ does not cause the copyright holder to ‘suffer market harm due to the loss of license fees’”(20). As the cost of licensing the vast number of works in the HDL would be in the realm of $569 million, these transaction costs would prohibit the formation of viable market in the first place, and the fact that there were only a small number of print-disabled persons currently making use of the HDL only further demonstrated the lack of a viable market.

Balancing factors and looking to the goal of copyright – In balancing the four mandated factors in its fair use analysis, the Court ultimately found that the “underlying rationale of copyright law is enhanced by the HDL” (21). As James Grimmelman wrote for Publishers Weekly, “The opinion is chock-full of quotable lines recognizing the social value of digitized texts,” including Judge Baer’s concluding statement of his fair use analysis: “I cannot imagine a definition of fair use that would not encompass the transformative uses made by Defendants’ MPD and would require that I terminate this invaluable contribution to the progress of science and cultivation of the arts that at the same time effectuates the ideals espoused by the ADA.”(22)

Disability discrimination legislation and copyright law - finally the court considered the HDL’s provision of access to print-disabled persons in the context of the Americans with Disabilities Act, and corresponding amendments to the US Copyright Act permitting entities to make copies for individuals with disabilities. HDL’s provision of access to print disabled persons through the University of Michigan easily fell within the scope of these amendments, Judge Baer again emphasised that the other HathiTrust universities could still rely on fair use to provide access outside the confines of the amendments. This reasoning could very easily be transposed to Australian setting. We have disability discrimination legislation, and we have provisions in our Copyright Act which are designed to allow for greater access to works by people with a disability; the stand out example being s200AB. Fair Use in this case provided that extra safety net that enabled other institutions that did not fit neatly into the specific exceptions to continue to fill in the gaps in the law and achieve the goals set out in the discrimination legislation.

As James Grimmelman pointed out in his article,

“The last year has been a very good one for universities putting copyrighted materials online for their students. Last October, UCLA won a case challenging its practice of copying DVDs to make them available via streaming. In May, Georgia state won a case challenging its e-reserves system. And now the HathiTrust universities have won a case challenging their book digitization…  Courts seem highly sympathetic to the idea that universities ought to be allowed to translate their traditional research and teaching models to use digital delivery technologies.”

The work of the HDL is clearly an important public mission, and far from disrespecting the rights of authors and publishers, the librarians who devote their time to the project work diligently to ensure that these rights are respected by only allowing very limited access to digitised texts and ensuring they have adequate security measures to protect the works. The fair use defence has allowed this forward thinking group to embark on a project that is of vital importance to the common good by “collecting, organizing, preserving, communicating, and sharing the record of human knowledge” in the digital environment. And this is only the beginning; we are now only beginning to see the new ways that digital repositories can provide access to and understanding of the past. Flexible copyright law is crucial to ensuring that both judicial and policy decisions can adequately recognise the public value of access and understanding for all.