Video Transcript
Auto-generated transcript. Timestamps are approximate.
Hey there, welcome back to Innovation Cafe. I’m Gary Schuster, your friendly neighborhood inventor. Today we’re diving into a fundamental concept that impacts creators, educators, YouTubers — pretty much anybody who uses or cares about content: the concept of fair use. It’s called different things in other countries, but we’re going to look at the US because they’re about a quarter of the global gross domestic product. So if you’re going to focus on one market, the US is a pretty good choice.
What is fair use? Fair use is a doctrine in US copyright law that allows you to make limited use of copyrighted material without getting any permission from the rights holder. It’s a legal concept, and it’s intended to encourage innovation, commentary, education, and freedom of expression. So sounds good so far, right? It is an exception to copyright, because without it, it would be really hard to make a movie review where you show a clip, really hard to teach a class where you have to use material that other people have created, and really hard to criticize or parody a particular work or art.
Fair use is not a right. It’s a defense. What does that mean? It means that if you use someone else’s copyrighted work and they sue you, you don’t get to say, “I have the right to use your stuff.” You have to say, “I did use your stuff, but I have an excuse, and that excuse is called fair use.” It’s a very important distinction because in the US legal system, a defense means you’re admitting to the underlying act — you’re just saying you had justification for it.
There’s a natural tension between the First Amendment, which guarantees free speech, and copyright, which restricts how other people’s works can be used. In a world without fair use, the First Amendment and copyright would be in direct conflict. If someone writes something newsworthy, you’re not going to have First Amendment protection for it because it’s copyrighted. Now, you could rephrase it — you could say the same concept in a different way, and that would be protected and not infringing. But if you take a work and you modify it, then critique it, that should fall within the First Amendment’s protections.
Now, if you take a look at what we’re showing right now, you can see that I’m using copyrighted images, but I’m putting them together in a new way. I am transforming them. I’m using them to teach, and that’s an acceptable use of copyrighted materials without a license. In a lot of cases, you can’t even identify the author of certain copyrighted works. Sometimes you have to use it under the fair use doctrine because a license simply can’t be obtained if you can’t identify who can give you the license.
First up in determining if it’s fair use, and therefore free for you to use: the purpose and character of the use. Ask yourself, am I using this for commercial purposes, or is it for nonprofit educational use? Commercial uses are more scrutinized. If I’m selling a product and I use your copyrighted image in my advertising, that’s going to be a lot harder to defend as fair use than if I’m using it in a classroom to teach students about art history.
The really important concept here is transformative use. Are you creating something new with a new purpose? A parody of a song is transformative. A book review that quotes passages is transformative. Taking someone’s photo and putting it on a t-shirt? Probably not transformative. Courts love transformative use. The more transformative your use is, the more likely it is to be considered fair use.
Let me give you a great case that illustrates this: Campbell v. Acuff-Rose Music, decided by the Supreme Court in 1994. The rap group 2 Live Crew made a parody of Roy Orbison’s “Oh, Pretty Woman.” Acuff-Rose Music, who held the copyright, sued. The Supreme Court held that the parody was fair use because it was transformative — 2 Live Crew wasn’t trying to replace the original song in the marketplace. They were commenting on it, making fun of it, and creating something entirely new. This is a landmark case in fair use law.
The second factor is the nature of the copyrighted work. Is the original work factual or creative? Factual works get less copyright protection. Using portions of a news article is more likely to be fair use than using portions of a novel or a song. Is the work published or unpublished? Unpublished works get more protection. If someone hasn’t chosen to share their work with the world yet, courts are less likely to allow fair use of it.
A case that illustrates this: Harper & Row v. Nation Enterprises. The Nation magazine published excerpts from Gerald Ford — former US president — from his unpublished memoirs, and included his key reasons for pardoning Richard Nixon. The Supreme Court held it was not fair use. Publishing key excerpts from an unpublished creative work was not permitted. Now, you can see this is a fairly subjective analysis. In my opinion, the reasons one president would pardon another president for crimes in which he was an unindicted co-conspirator is possibly the most newsworthy thing out there and probably, in my opinion, should have been considered fair use. So you can see how both sides of the fair use argument can be put forward, and it really does depend on who’s on the court, on how they’re feeling that day. It’s not as set in stone as we would like to think the judicial process is.
Third factor: the amount and substantiality of the portion used. Put simply, how much are you using? Are you taking a tiny snippet or reproducing the entire work? Generally, the less you use, the more likely it is to be fair use. But it’s not just about quantity — it’s about quality too. If you use a small portion but it’s the “heart” of the work, that can weigh against fair use. Even a few seconds of a famous speech or a few bars of a hit song could be considered too much if it captures the essence of the original.
Fourth factor, and this one tends to carry a lot of weight: the effect on the market. Does your use compete with or substitute for the original? If people can get the content from you instead of buying the original, that’s a big problem. The Google Books case is an interesting one. Google scanned millions of books and made them searchable. The Authors Guild sued, but the court found it was fair use. Why? Because Google only showed small snippets, not full text. It was transformative — it turned books into a searchable database, which is a completely different purpose. And importantly, it actually helped readers find the books and was likely to boost sales. Which does raise the question: why would the Authors Guild sue Google to stop them from helping drive book sales? But that’s a strategic question for the lawyers and the principals behind the Authors Guild.
Consider an analogous but quite different case in terms of result: the Napster case in 2001. Napster allowed users to share music files of copyrighted music for free. Now, what doesn’t make it into the public discussion very often is that there are all kinds of messages between Napster executives where they acknowledge the important role that piracy was playing in driving their platform. In light of that, the court said, “Nah, that’s not fair use.” It directly impacts music sales, harms the market for the original works.
So I’m exhausted even just thinking about it. How can you apply these principles in real life? If you’re a YouTuber or a teacher or an artist, you’re going to need some practical tips. But take them with a grain of salt, because as a lawyer I’ll tell you, I hesitate to give you specific guidance here because the penalties for getting it wrong are so severe.
Always add your own commentary, analysis, or creativity when using someone else’s work. The more you transform it, the better. Use only what’s necessary. Don’t include more of the original work than you need to make your point. You can’t copyright facts. The fact that the sky is blue on a sunny day can’t be copyrighted, but I can copyright my impressionistic drawing of the sky with clouds. It’s a fundamental difference — one is fact and one is expression.
Another way to think about this, and it rides right into the next thing: market impact. If you reveal the core pieces of an unpublished work, you’re likely to wreck the market for that work when it does get published.
When in doubt — this is the big one — seek permission. It’s easy for me to say “just call up, get a license,” but that is often really hard. For one, there is no requirement that people register their copyrights. So for a lot of things, even if you searched every single registered copyright, you may still be infringing a copyright that wasn’t registered. And often you can’t find the owner of the copyright, so there are sometimes where you just can’t get permission to do it.
Now, it is particularly important not to violate copyright, not just because it’s not the right thing to do, but because the statutory damages are devastating. Statutory damages means the damages that the legislature says you must pay, regardless of how much actual damage you caused. In the US, statutory damages for copyright infringement can be up to $150,000 per work infringed — and that’s for willful infringement. Even for innocent infringement, it can be $750 per work. Now imagine you’ve used 10 copyrighted images in a video. That’s potentially $1.5 million in damages, even if you made zero dollars from the video.
Here’s the thing that scares most people: you don’t need a big Hollywood lawyer to sue you. Anybody can file a copyright infringement suit in federal court. And because of statutory damages, even small cases can result in enormous judgments. This is why I’m very cautious giving advice about fair use. I’m a lawyer, and I don’t want to be on the hook if a court disagrees with me.
So what is fair use? To recap, it’s a nuanced and complex area of law — not just nuanced and complex, though, but highly subjective. It’s not clear-cut. It’s a balancing act of multiple factors. Understanding these can empower you to create responsibly and innovate without infringing on the copyrights of others. Is it safe to do? I don’t know, man. The problem is, if you’re not sure if it’s legal to cross the street, but the penalty for crossing the street when it’s not legal is the death penalty, you’re never going to test that — even if you’re 99% sure it’s legal to cross the street and it’s not jaywalking, you’re not going to test it. And it’s the same thing with these ridiculously high statutory penalties. Very few people are going to push the boundaries of fair use because it’s just terrifying to be stuck with millions of dollars in damages because you thought that four seconds of “I Have a Dream” was fair use, but it turns out that Dr. King’s estate disagrees. And they would be right, by the way.
I hope this was helpful. Stay creative, stay curious, and as always, thanks for watching Innovation Cafe!