Fair Use

The perils of third-party IP policy shifts

Gammers Teach us a lesson on the perils of shifting 3rd Party IP Policies.


Before Christmas a client gave me a heads up about some new developments in Youtube’s Content ID System that was causing an uproar in the gamming community and others who monetize their YouTube videos.  The conflict stems from what appears to be overally aggressive actions on YouTube’s part to attempt to deal with copyright infringement on its service.  While YouTube’s actions may not directly affect a lot of mainstream businesses, it can serve as a good lesson for those that use 3rd party providers to host and disseminate content for their business and how a change in policies by these third parties can radically affect one’s business.


It all started in early to mid-December when content owners started receiving notices that their vlogs (video blogs) were flagged for violating copyright law.  As a result the content was either removed or all revenue created by the post through the hosting of ads was funneled to the copyright owner (often without the copyright owners request).  The main problem with the system is that it is automated and apparently isn’t triggered by a request from the copyright owner.  Therefore, there have been a lot of questionable flagging, some of which most likely constitute fair use.  One of the more humorous responses (at least in my opinion) was posted by a YouTube user here: http://www.youtube.com/watch?v=JQfHdasuWtI  (Caution NSFW).  Personally, I like the example of a video interviewing representatives from the game Tomb Raider that gets flagged because there are images of the game and sound from the game in the background.  Others that have been flagged are reviews of products that might include a brief clip or a screenshot of a user interface.


The YouTube policy once again puts the concept of fair use in the spotlight.  The fair use doctrine, allows for use of copyrighted works without the copyright owners permission in certain circumstances.  In general use for purposes such as criticism, comment, news reporting, teaching, scholarship or research are generally not considered an infringement of a third parties copyright.  The rationale is that the 3rd parties use is not merely to copy but to use limited pieces of the work in a transformative way by incorporating it into a new work.  The trick is, in an age where so much content is being generated how do you separate the truly infringing works from those that would fall under fair use.  With millions and millions of videos on YouTube, it is certainly a daunting task. Often time companies cast a very broad net with the knowledge that some legitimate use will be included.


The YouTube situation is another manifestation of the clash between content owners and those who wish to use small amounts of the pre-existing content in an on line context.  For example, an online retailer may want to show screen images of a certain video game to potential customers, or may want to create on-line reviews of the games or computer programs in order to help their customers make purchasing decisions. In the context of a product review, the use of those images or video most likely would fall under the preview of fair use.   If you are a big enough retailer, you may simply host those review on your own website and you most likely would not be affected.  However, smaller enterprises often times rely on YouTube to actually host the content, even if the company includes an embed link to the video on its home page.  Therefore these companies and individuals are at the mercy of YouTube’s intellectual property policies and user agreements, which have and continue to evolve over time.  Essentially, a business that relies on you tube i) exclusively to provide its content based product or ii) uses YouTube essentially as a hosting platform for its content based marketing materials is always subject at some level to YouTube and Google’s (YouTube’s parent company) prevailing views of intellectual property rights.  This can subject businesses to great harm, if the business has not made other preparations.  For companies that provide video product reviews for their customers, they may want to consider hosting the content on their own website as opposed to exclusively on YouTube or Facebook.  Failure to do so can put businesses behind the eight ball in the event the tech company they are relying on has a sudden change in policy.

By |2020-05-06T15:44:54-06:00January 29th, 2014|COPYRIGHTS, CYBER LAW, Fair Use, INTELLECTUAL PROPERTY|0 Comments

The murky law of fair use

Weird Al doing a Michael Jackson song parody?

In our practice, we deal not only with the enforcement of intellectual property rights, but we also do a fair amount of defense of accused infringers. One of the surest ways of getting into an intellectual property dispute (aside from illegally downloading movies using BitTorrent) is to make reference to, mention or otherwise utilize someone else’s intellectual property.

While this may seem obvious, it can creep up in the business context in unexpected ways. Generally speaking, business will cite that they are allowed to do their activities under the doctrine of “Fair Use.” Additionally, it is important to note that there is a difference in running afoul of the law and being embroiled in a conflict with another business. While a company’s actions may be justified legally, it may still find itself in a dispute which can cost a lot of money, time and resources.

These issues come up in two different areas of intellectual property – copyright and trademark. While each area of law adopts a concept that allows certain usage by parties other than the owner, the concepts are quite different in what they allow third parties to do.

In general, trademark law can be seen as more lenient when it comes to the commercial use than copyright law, which is somewhat understandable given the objectives of each type of protection. The goals of trademark law are to: 1) prevent consumer confusion in the marketplace between the source, sponsorship or affiliation of different goods, and 2) to protect the goodwill built with respect to trademarks by their owners.

Copyright has a slightly different focus of protecting the benefits to society derived from the labors of those who create creative works. The underscoring notion is that unimpeded copying of creative works will lessen the incentive for authors to create such works, which will yield an overall undesirable outcome. To that end, copyrights have a definite term (in theory) and then become part of the public domain, free for all to use. Trademarks, on the other hand, can be indefinite as long as the owner continues to use the mark to identify its goods or services.

Fair Use in copyright law generally favors noncommercial use whose benefits are mainly felt by society as a whole. It covers limited usage for things such as criticism, comment, new reporting, teaching, scholarship or research. The use will be treated more favorably if the use is “transformative” as opposed to mere copying, meaning that the user has added something of their own to the work. In determining whether a use constitutes a fair use under copyright law, a four-factor test is applied:

1) Whether the use is commercial in 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.

As a rule of thumb, the more artistic the use, the more likely it could qualify as a fair use. On the other hand, the more commercial the use, the less likely it will be considered fair use. Simply put: Weird Al doing a parody of a Michael Jackson song – okay. But using a photo or music in an advertisement without the copyright holder’s permission – not okay.

While these broad generalizations might be pretty easy to determine what is OK and what is not, in reality these determinations are often highly complex and are always very fact determinative.

Because of the explicitly commercial nature of trademarks, the law is more allowing of use of someone else’s mark in a commercial environment. However, there are still restrictions and business owners still need to be extremely careful to not run afoul of the law.

Classical Fair Use is when a business uses a term not as a mark but in a descriptive sense. Therefore, the owners of the Aspen trademark for ski resorts cannot preclude someone from using the term Aspen to refer to the Colorado town or the tree.  Additionally, you can generally use a third party’s trademarks to refer to their own goods. This usually comes up when your product or service is complementary to another, or you are engaged in comparative advertising. Some jurisdictions call this use Nominative Fair Use.

In Colorado, the  U.S. 10th Circuit Court of Appeals has not officially adopted the defense of Nominative Fair Use, but various district court decisions have stated that such a use does not cause a likelihood of confusion. Therefore, in general companies can state that their accessory is designed to be used with an iPhone or an Xbox, or that more people prefer Coke over Pepsi (or vice versa). However, there are important restrictions placed on the use. For example, you only should use the trademark as much as necessary to identify the other person’s mark. Excessive use of their third party mark could be interpreted as an attempt to leverage the other party’s mark for your own benefit. As with copyrights, what constitutes proper use of a third party mark is a complex analysis and utilization of qualified intellectual property counsel is essential.

The last consideration when using third party copyrights or trademarks in your business is more of a practical consideration rather than a legal one. A lot of business owners (and business lawyers) do not understand the laws regarding use of others’ intellectual property. Often clients will get threats of lawsuits even though we believe that their use is permitted by the law. People often get emotionally attached to these sorts of things and do not appreciate someone else using them.

While your position may be vindicated, in the end these disputes, do take time and money to sort out. Therefore, if a company is highly risk adverse and would rather stay away from any potential problems (regardless whether they are in the right), then the best course of action would be not to engage in any use of another company or individual’s intellectual property.