On July 3, 2014, the District Court for the Southern District of New York issued its memorandum and order in White v. West Publishing following its grant of summary judgment for the defendants in February 2013 finding in favor of fair use. The case involved a claim by attorneys Edward White and Kenneth Elan who claimed copyright infringement after West Publishing and Reed Elsevier placed legal briefs written by White and Elan into their Westlaw and Lexis databases.
In creating the databases, West Publishing and Reed Elsevier converts the filed legal documents into a text-searchable electronic file and is tagged with metadata to allow users to find and retrieve documents more easily. The editors also link the document to decisions and other filings in related cases and create links to authorities cited.
In finding in favor of fair use, Judge Rakoff evaluated the four statutory fair use factors:
- the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
- the nature of the copyrighted work;
- the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
- the effect of the use upon the potential market for or value of the copyrighted work.
In examining each of these factors, the district court found that three of the four weighed in favor of fair use, while one factor was neutral.
On the first factor, the district court found that the use of the briefs was transformative because the use of the briefs in the database was to create an interactive legal research tool, a “sharply different objective” than the original purpose of the briefs. Additionally, the district court noted that the converting, coding and linking of the documents “add something new, with a further purpose or different character” than the original. The district court pointed out that while the use was commercial, the highly transformative nature of the use diminished the importance of the character of the use.
With respect to the second factor, the district court noted that the briefs represented presentations of fact and law and therefore this factor weighed in favor of fair use.
The district court noted that with regard to the third factor, West and Lexis copied the entire work. However, the “defendants only copied what was reasonably necessary for their transformative use, and … the third factor is therefore neutral.”
Finally, on the fourth factor, the district court found no market harm because the databases do not provide a substitute for the original market. The court stated, “West’s and Lexis’s usage of the briefs is in no way economically a substitute for the use of the briefs in their original market: the provision of legal advice for an attorney’s clients … Furthermore, no secondary market exists in which White could license or sell the briefs to other attorneys, as no one has offered to license any of White’s motions, nor has White sought to license or sell them.” The district court also rejected the idea that a potential market exists to license briefs.
Although the district court does briefly reference potential markets, it focuses on the market effect on the original market thereby following the recent Second Circuit opinion in Authors Guild v. Hathitrust which stated that the analysis of the fourth factor “is concerned with only one type of economic injury to a copyright holder: the harm that results because the secondary use serves as a substitute for the original work.” A limited focus on the harm to the market for the original work suggests that lost licensing revenue is not relevant in the fair use analysis when the use is transformative and does not impact the original market.