Motion Picture Clips and Fair Use Doctrine

April 27, 2001


Michael I. Rudell

Use of Motion Picture Clips Protected by Fair Use Doctrine

(Originally published in the Entertainment Law column in the New York Law Journal, April 27, 2001.)

A federal court has refused to enjoin the use by the producer of a documentary film of clips from motion pictures produced by American International Pictures (“AIP”) during that company’s existence.1 In reaching that decision, the Court focused on the issues of whether the allegedly infringing uses would cause irreparable harm and were protected by the doctrine of fair use.

Plaintiff is the widow of the late James Nicholson, one of the principals of AIP which, from 1954 through 1980, released more than 500 motion pictures. Plaintiff holds the copyrights to a number of these films, six of which were at issue in the present action.

One of the defendants, AMC Productions, Inc. (“Productions”) is the subsidiary of American Movie Classics Company (“AMCC”), a cable television programming service accessible to over 65,000,000 households in the United States.

In February of 1999, plaintiff met with the vice-president of production for AMCC to discuss the latter’s desire to produce a documentary about AIP. In March, plaintiff sent Productions a written contract proposal offering it the right to use six 59-second clips from AIP Motion Pictures in “It Conquered the World! The Story of American International Pictures” (the “Documentary”). On July 9, 1999, the parties signed that proposal with a handwritten addendum in which clips from two pictures were substituted for those originally specified (the “Licensing Agreement”). Under that document, which indicated that it would be governed by California law, plaintiff received a check for $3,600, which she deposited.

In May of 2000, defendants decided that they wanted the Documentary to be eligible for consideration for an Academy Award. For this to happen, the Documentary would have to be exhibited in theatres for at least seven consecutive days. In June of 2000 the parties began discussing the terms of an additional license which would grant defendants the right to use the clips in exhibitions of the Documentary in theatres.

In July, defendants sent plaintiff a list of film clips used in the final production of the Documentary. The list included a short clip of “The Amazing Colossal Man” which was not covered by the Licensing Agreement.

In August of 2000, the president of Tele-Cinema, Inc., a copyright and title clearance company, sent plaintiff a written contract proposal intended to modify the License Agreement by substituting “The Amazing Colossal Man” for “Apache Woman” and including the right to exhibit the Documentary in theatres for seven days. Thereafter, the company mailed plaintiff three hard copies of the modified licensing proposal and two checks totaling $8,000 representing plaintiff’s licensing and consulting fees thereunder.

On August 29, plaintiff mailed her own contract proposal to defendants. In her cover letter, she indicated that she would hold the checks “until we have full agreement on all of these matters.”

The documents prepared by plaintiff referred to the substitution of film clips referred to above and granted an option to extend the License Agreement to encompass exhibition of the Documentary in a single limited theatrical run for Academy Award consideration, not to exceed eight days in length.

On September 12, 2000, defendants accepted plaintiff’s modification, executed three copies of the documents and mailed them back to plaintiff with a request that plaintiff return one fully executed copy for defendants’ file. Plaintiff never signed any of the partially executed copies returned to her. She argues that the modification sent to defendants was not an offer that could be accepted, and that she was unwilling to enter a modification of the Licensing Agreement until she had an opportunity to view the Documentary to assure that it otherwise complied with that agreement.

From August 30 through September 12, plaintiff and the vice-president for production of AMCC had several conversations with respect to a proposed screening of the Documentary that AMCC planned to host in Los Angeles on September 18. Plaintiff was invited to the celebrity screening and requested that defendants put an additional 20 guests on the guest list.

On September 15 plaintiff viewed the Documentary which, according to her, revealed for the first time the various causes of action which she later brought. On September 18 and September 20, plaintiff’s counsel notified defendants’ counsel of plaintiff’s position that she the exhibition of the Documentary in a theatre would be considered an infringement of her copyrights.

The Documentary was exhibited from September 22 through September 27, 2000. Thirty-four persons attended the exhibition, generating total revenues of $187.00.

Plaintiff brought an action for a preliminary injunction under Rule 65 of the Federal Rules of Civil Procedure alleging that defendants infringed her copyrighted works, infringed her trademarks by falsely designating the origin of her copyrighted works in violation of the Lanham Act, breached the parties’ agreement, engaged in unfair competition and used the name, image or other likeness of her husband, in violation of the California Right of Publicity Statute.

The Court begins its discussion by noting that under Rule 65 a preliminary injunction is appropriate if the moving party demonstrates (a) irreparable harm and (b) either (1) a likelihood of success on the merits or (2) sufficiently serious questions going to the merits to make them fair grounds for litigation and a balance of hardships tipping decidedly in its favor.

The showing of irreparable harm is the most important prerequisite for the issuance of a preliminary injunction. In a copyright infringement case, once a prima facie case of such infringement is established, the allegations of irreparable injury need not be very detailed because such injury generally is presumed. To establish a prima facie case of copyright infringement, plaintiff must establish (1) ownership of a valid copyright and (2) that defendants have engaged in unauthorized copying or a violation of one of the other exclusive rights afforded copyright owners under the Copyright Act. The decision states that plaintiff fails to point to any tangible irreparable harm to meet her burden with respect to her claims of contract, unfair competition and violation of the California Right of Publicity Statute. She relies on the presumption of irreparable harm that follows when a moving party establishes a prima facie case of copyright infringement.

In the instant case, there is no dispute as to the validity of plaintiff’s copyrights. For the purposes of plaintiff’s application, the Court assumes that she has established a prima facie case of copyright infringement entitling her to a presumption of irreparable harm with respect to her copyright infringement claims (but not with respect to any other claims in her complaint.)

However, the Court states that plaintiff is not likely to prevail on the merits of an infringement action because the use by defendants of the copyrighted works are likely to be considered fair and because it is probable that plaintiff gave defendants an express and implied license that authorized the conduct that plaintiff now characterizes as infringing.

The decision analyzes the “fair use” doctrine set forth in section 107 of the Copyright Act. The factors to be considered include (1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work. Defendants carry the burden of showing that their infringing use was fair.

The focus of the first factor is whether the new work merely supersedes the objects of the original creation or adds something new, with a further purpose or different character, altering the first with new expression, meaning or message. In effect, the issue is whether and to what extent the new work is “transformative.” The more transformative the new work, the less will be the significance of other factors such as commercialism that may weigh against a finding of fair use.

Here it is likely that the Documentary will be found to be “transformative” at the trial because it does not merely purport to supersede the original works in issue, but to create a new copyrightable documentary. The Documentary appears intended to add something of value rather than simply copying the copyrighted expression that it documents. In fact, it seems likely that it will stimulate a market for the original rather than replace it. The fact that the alleged infringing work appears to fall within the list in section 107 of uses such as “criticism, comment, … or research” creates a presumption that favors a finding of fair use as well.

Plaintiff notes that the defendants will profit from the exhibition of the Documentary to millions of paying cable subscribers. Although this commercial nature of the Documentary is significant, it is not dispositive in light of the Documentary’s transformative nature. Accordingly, the purpose and character of the Documentary favors a finding of fair use.

The second factor calls for a recognition that some works are closer to the core of intended copyright protection than others. Here, the nature of the copyrighted material at issue is a combination of both creative expression, such as the film clips, and less creative expression such as still photographs of Mr. Nicholson that were used. Also, the same works previously had been published through the release of films and posters to the public. Not having usurped the first publication rights of the author for those works, defendants have a slightly wider degree of latitude in making a fair use claim. On balance, the nature of the material at issue slightly favors a finding against fair use.

The third factor looks to the amount and substantiality of the portion used in relation to the copyrighted work as a whole. This factor has both a quantitative and qualitative element to it.

Here, the films clips used do not amount to a substantial portion of the overall copyrighted works. Defendants state, without contradiction, that an average of 26 seconds from each of the films in question appears in the Documentary, ranging from as little as 10 seconds to as much as 54 seconds.

It cannot be said persuasively that the infringing material gets to the heart of the copyrighted works. No more seems to have been taken than was necessary for defendants to produce the Documentary. In order to effectively depict the character and nature of the evolution of AIP, some exhibition of actual movie clips, props used to create AIP’s low budget special effects, misleading posters used to promote AIP’s films by promising more in advertisements than the films actually delivered and momentary shots of the late Nicholson, all were necessary. Accordingly, the amount and substantiality of copyrighted material in the Documentary favors a finding of fair use as well.

Analyzing the fourth factor, effect of use upon the potential market, requires the Court to balance the benefit the public will derive if the use is permitted against the personal gain the copyright owner will receive if the use is denied.

Here, plaintiff has not articulated any tangible way in which the Documentary will reduce the potential market for her copyrighted works. The alleged infringing clips are too few, too short and too small in relation to the whole to undercut the market for those works. In fact, the Court indicates that the Documentary may increase market demand for plaintiff’s works and make more people aware of the influence that AIP had in developing the “B” movie genre.

The Court describes as flawed plaintiff’s claim that she will lose the licensing value of her copyrighted works if defendants’ use is deemed “fair.” First, the question is what effect will the exhibition of the Documentary have on the demand for plaintiff’s infringed works themselves, not the effect that it will have on her ability to license those works in the future. Second, if carried to its logical conclusion, plaintiff’s argument would eviscerate the affirmative defense of fair use because every copyright infringer seeking the protection of that doctrine could potentially have sought a license from the owner of the infringed work. The very point of fair use is that in certain circumstances the law will not require an infringer of a copyrighted work to obtain such a license if it advances the overall goal of copyright — to create more works.

The Court also notes that defendants have gone to considerable length to create a film that documents the origins of AIP and its significant impact on the American movie industry. It contains information that, if the general public does not find interesting, at the least movie aficionados across the country will find informative and entertaining. Accordingly, the fourth factor also favors a finding of fair use.

Thus, the balance of factors here lead to a finding of fair use for the purposes of plaintiff’s preliminary injunction application. Because plaintiff at this stage of the litigation seems unlikely to prevail on the merits, even assuming that she has protectible rights in the works in question, and because defendants are likely to establish that their use was a fair one within the meaning of the Copyright Act, the Court denies plaintiff’s motion for a preliminary injunction.


1 Hofheinz v. AMC Productions, Inc., CV-00-5827 (CPS,) U.S. District Court, Eastern District of New York (January 2, 2001).