FAIR USE AND DERIVATIVE WORKS

IVAN HOFFMAN, B.A., J.D.


        The copyright doctrine of fair use is confusing enough standing alone (read the numerous articles on my site dealing with this topic.)   However, when a case arises in which the copyright issues turn on whether a second work is a derivative work and when the case also involves issues related to fair use, the complexity of issues can be even more daunting.

        In Mulcahy vs. Cheetah Learning, LLC et. al., the Eighth Circuit Court of Appeals summarized the facts in part as follows [emphases as to all titles and decisions and legal citations supplied by the Court]:

This is a copyright dispute between two organizations that offer competing courses to prepare students to pass the Project Management Professional (PMP) Exam given by the Project Management Institute (PMI). Rita Mulcahy filed the lawsuit, claiming copyright infringement and unfair competition by Cheetah Learning LLC and by Jeff Schurrer, an instructor who distributed allegedly infringing materials to Cheetah students.

Established in 1969, PMI is a not-for-profit association for project managementprofessionals (PMPs) that now “supports over 100,000 members in 125 countries worldwide.” As part of its continuing and seemingly successful effort to establish
project management as a true profession, PMI first offered a PMP certification exam in 1984 and first published a work entitled Project Management Body of Knowledge in 1987. In 1996, PMI published a superseding copyrighted work entitled Guide to the Project Management Body of Knowledge, which we will refer to as the PMBOK. PMI advertises that the PMBOK is approved by the American National Standards Institute and is “[t]he foundation document for project management training and/or education.” PMI’s PMP exam has been “based upon” the PMBOK during the period relevant to this dispute. However, the PMBOK’s introductory statement of purpose suggests that it serves as a desk reference work for practicing project managers as well as a “consistent structure” for PMI’s certification of PMPs. There is no testimony by a PMI representative in the summary judgment record, nor does the record reveal whether PMI has copyrighted PMP exam materials.

PMI certification has come to be viewed as an important credential, creating a market for textbooks and courses that prepare aspiring PMPs to pass the PMI exam. PMI website materials in the record suggest that PMI, colleges and universities, and numerous private vendors have entered this market. Because PMI bases the PMP exam on the PMBOK, a comprehensive reference work, it is hard to imagine that a vendor could devise a successful course teaching students to pass the PMP exam without using -- or plagiarizing -- the PMBOK….

Mulcahy is an expert in the field of project management who offers test preparation courses and materials to teach students to pass the PMP exam. To this end, Mulcahy wrote and copyrighted PMP Exam Prep.  The book begins with materials specifically focused on passing the PMP exam that have no counterparts in the PMBOK, such as sections entitled “An Overview of the Exam,” “Types of Questions on the Exam,” “How to Study for the Exam,” and “Tricks for Taking the Exam.” However, the subsequent sections, which are entitled “The Materials” and take up 150 of the work’s 165 pages, track the PMBOK’s organization of the project management “knowledge areas” and reproduce or condense the materials presented in the PMBOK. Although PMP Exam Prep states that it is “intended to work hand-in hand” with the PMBOK, and the record includes a PMI website that says, “Get Rita’s book,” whether PMI authorized Mulcahy to use excerpts from the PMBOK in her work is a disputed issue of fact. [emphasis added]

Cheetah offers a variety of exam preparation and professional training courses. Founder Michelle LaBrosse testified that she uses “a unique educational model which utilizes dietary control, yoga meditative techniques, color recognition, state
conditioning and psych-acoustics to accelerate the learning process.” In 2000, Cheetah retained Eric Nielsen to develop the substantive content for a PMP exam preparation course. Cheetah began offering the four-day course in September 2001, using the PMBOK as the “primary reference” and also distributing to students looseleaf materials called the Candidate Notetaker.   LaBrosse was soon advised of significant similarities between Cheetah’s Candidate Notetaker and Mulcahy’s PMP Exam Prep. LaBrosse compared the two works and informed Mulcahy’s attorney that she “had revised Cheetah’s course materials to remove what I believed to be the allegedly infringing content.” Unsatisfied, Mulcahy filed this lawsuit. Nielsen testified that he used PMP Exam Prep and other reference works in preparing the Cheetah course materials and sample test questions.

        The issues on appeal from the district court’s ruling in favor of Mulcahy were whether Mulcahy had a valid copyright in the PMP Exam Prep Book and whether the defendants’ work, Candidate Notetaker, infringed on the same.   The Court had only to consider the first of such issues since if Mulcahy did not have a valid copyright, then Mulcahy did not have any right to claim that the Candidate’s Notetaker was an infringement.

Derivative Works

        One of the wide variety of rights provided to a copyright proprietor is the right to make derivative works based upon the underlying work.   The United States Copyright law, section 101, defines a derivative work as:

a work based upon one or more preexisting works, such as a translation, musical arrangement, dramatization, fictionalization, motion picture version, sound recording, art reproduction, abridgment, condensation,
or any other form in which a work may be recast, transformed, or adapted.
        A derivative work may be itself copyrightable but any copyright is limited to the features that the derivative work adds to the original.  (see how this factor enters into the discussion about fair use below) However, if a work is a derivative work, the creator must have the permission of the copyright proprietor of the rights to the original work since, as indicated above, the said copyright proprietor in the original work has the sole and exclusive right to create derivative works based on that original work.

        Thus, the issues were whether Mulcahy’s PMP Exam Prep Book was:

1. A derivative work based on the PMBOK; and if so,
2. Whether it was authorized by PMI, the creator of PMBOK.
        The Court stated:
Thus, if the PMP Exam Prep is an unauthorized derivative work of the PMBOK, Mulcahy’s copyrights are invalid.
        The Court reviewed the ruling of the district court, which ruled that as a matter of law (it was a ruling based on a motion for summary judgment) that there was not sufficient substantial similarity between the PMP Exam Prep Book and the PMBOK and therefore, the PMP Exam Prep Book did not infringe on the PMBOK.  The Court stated:
While substantial similarity is the test we use in determining copyright infringement, here the issue is whether Mulcahy’s book is a derivative work. In general, the two tests are similar. In the words of a leading copyright treatise, “Unless sufficient of the pre-existing work is contained in the later work so as to constitute the latter an infringement of the former, the latter by definition is not a derivative work.” 2 Nimmer on Copyright § 8.09[A], p. 8-138 (2004); see Litchfield v. Spielberg, 736 F.2d 1352, 1357 (9th Cir. 1984) (“a work is not derivative unless it has been substantially copied from the prior work”), cert. denied, 470 U.S. 1052 (1985). But as this case illustrates, a determination of what is substantial or sufficient must take into account the nature of the derivative work inquiry.
        The Court then reviewed the 2 works and concluded that there were triable issues of fact about whether or not the PMP Exam Prep Book was or was not an infringement of the PMBOK and thus the granting of the motion for summary judgment by the trial court was incorrect.

        The Court stated, in part:

Large portions of her PMP Exam Prep appear to copy, condense, and adapt those portions of the PMBOK that are relevant to passing the exam. She admits that these portions of her work are derived from and based upon the PMBOK. The question is whether this copying, condensing, and adapting of the PMBOK encroaches upon, i.e., infringes, PMI’s exclusive right “to prepare derivative works based upon the copyrighted work.” 17 U.S.C. § 106(2). This issue cannot be answered by looking at the percentage of the PMBOK that has been condensed or copied in PMP Exam Prep. Rather, a reasonable factfinder could find that PMP Exam Prep is an infringing derivative work if it copied or condensed the qualitative core of one marketable portion of the multi-purpose PMBOK. See Castle Rock Ent., Inc. v. Carol Pub. Group, Inc., 150 F.3d 132, 138-39 (2d Cir. 1998). It is true that, in most infringement cases, “[i]nfringement of expression occurs only when the total concept and feel of the works in question are substantially similar,” Hartman, 833 F.2d at 120-21. But the derivative work issue, like the fair use issue, should turn on “the qualitative nature of the taking.” [emphasis added] Harper & Row Publishers, Inc. v. Nation Enters., 471 U.S. 539, 565 (1985). Thus, a work may be found to be derivative even if it has “a different total concept and feel from the original work.” Castle Rock, 150 F.3d at 140.
        In other words, as with fair use issues, it is not simply a matter of counting words.  There are a wide variety of fact based issues that go into a determination of whether a work is or is not a derivative work of a prior work.  And if it is a derivative work, then it has to be an authorized derivative work.  In a footnote, the Court stated:
Mulcahy also argues that, if PMP Exam Prep is a derivative work, PMI ratified her use of the PMBOK by not responding when she sent PMI a pre-publication of the first PMP Exam Prep and by selling PMP Exam Prep in PMI’s online bookstore. See Eden Toys, Inc. v. Florelee Undergarment Co., Inc., 697 F.2d 27, 34 n.6 (2d Cir. 1982). This, too, is an issue requiring a trial that explores the extent of PMI’s right to prepare derivative works and, if the right extends to PMP exam teaching materials based on the PMBOK, the manner in which PMI has exploited that right.
Fair Use

        The trial court also ruled that even if there was substantial similarity between the Exam Prep Book and the PMBOK, that any such substantial similarity was protected by fair use as a matter of law (again, the district court was ruling on a motion for summary judgment).

        The Court stated:

Though all four must be considered together, the fourth factor -- “the effect of the use upon the potential market for or value of the copyrighted work” -- “is undoubtedly the single most important element of fair use.” Harper & Row, 471 U.S. at 566. The district court concluded that Mulcahy’s use was fair because the introduction to PMP Exam Prep tells students, “You need both the PMBOK and this book to prepare for the exam,” and thus “the effect of Mulcahy’s work would likely improve the potential market for and enhance the value of the PMBOK.”

In our view, the effect of Mulcahy’s use is not so clear. In the first place,students may find that PMP Exam Prep is such an effective condensation and adaptation that they need not obtain and study the PMBOK. But more importantly, PMI has created a for-profit education market by offering a valued certification exam. PMI offers courses on passing its exam, demonstrating an intent to exploit that market. By basing its exam on the copyrighted PMBOK, PMI has also created a market for selling or licensing this work to educators and students; “the potential for destruction of this market by widespread circumvention of the plaintiffs’ permission fee system is enough, under the Harper & Row test, ‘to negate fair use.’” Princeton Univ. Press v. Mich. Document Servs., Inc., 99 F.3d 1381, 1388 (6th Cir. 1996) (en banc), cert. denied, 520 U.S. 1156 (1997). Moreover, by publishing a comprehensive condensation of the portions of the PMBOK relevant to passing the exam, Mulcahy may have deprived PMI of “the capacity arbitrarily to refuse to license one who seeks to exploit the work.” Stewart, 495 U.S. at 229. Fair use is a mixed question of law and fact. Here, the issue of fair use, like the issue of derivative work, raises genuine issues of material fact.

In addition, a finding that Mulcahy’s copyrights are valid only because PMP Exam Prep is a fair use of the PMBOK would likely affect other issues.  Mulcahy emphasizes the extent to which Cheetah’s materials copy PMP Exam Prep. But “[a]n author’s right to protection of the derivative work only extends to the [original] elements that [she] has added to the work; [she] cannot receive protection for the underlying work.” Dam Things, 290 F.3d at 563; see Feist, 499 U.S. at 363 (“copyright protects only those constituent elements of a work that possess more than a de minimis quantum of creativity”). Thus, the factfinder “must filter out and disregard” the copying of non-protected elements -- such as elements of PMP Exam Prep that are a fair use of the PMBOK -- in determining whether defendants are guilty of copyright infringement. Cavalier v. Random House, Inc., 297 F.3d 815, 822-23 (9th Cir. 2002).

        The Court then reversed the granting of the summary judgment and remanded the case for a further determination of the facts as discussed above.

Conclusion

        Both issues, fair use and derivative works, are not given to neat, bright red-lined boxes, as is the nature of law in general.  (It’s what makes law exciting!)  The facts vary from case to case and anyone seeking to use another party’s work, no matter how much or how little or for whatever purposes, should seek a license and permission to do so.  Read “Respect For The Law.”

        Often, the need to seek a license is time consuming and sometimes costly.

        But compared to the extensive time spent litigating and the expense in regard to the same, seeking a license makes legal and economic sense.

Copyright © 2004 Ivan Hoffman.  All Rights Reserved.

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This article is not legal advice and is not intended as legal advice.  This article is intended to provide only general, non-specific legal information.  This article is not intended to cover all the issues related to the topic discussed.  The specific facts that apply to your matter may make the outcome different than would be anticipated by you.  This article is based on United States law.  You should consult with an attorney familiar with the issues and the laws of your country.  This article does not create any attorney client relationship and is not a solicitation.

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