Fair use, as I have written many times, is an unreliable defense to claims of copyright infringement.  The cases are all over the map and there is probably no one on the face of the planet that can tell you, in advance, that any given use is going to be held to be a “fair use” by the courts.  The recent case of Ty, Inc., vs. Publications International, Ltd. demonstrates that the standards are very case specific and make accurate predictions all but impossible.

        The reader is advised to read the other articles on my site dealing with “fair use” especially “The Seinfeld and Wind Done Gone Cases: A Study in Fair Use.”

The Beanie Babies Case

        In this case, the defendant published a number of Beanie Babies books including one that it denominated a “collector’s guide” to the dolls, which guide included photographs and text.   The actual dolls were copyrighted as “sculptural works.”  One of the many rights of copyright grants the proprietor the right to make derivative works based on the said dolls.  While the taking of 2 dimensional photographs of the dolls was held to be such derivative works, the issue in this case whether or not the collector’s guide, containing photographs and text, was such a derivative work or instead, was protected as a “fair use.”  If it was a derivative work, the publishing of the collector’s guide would be an infringement of the copyright of the plaintiff in the dolls since the defendant had no license from the plaintiff to do so. [For legal technical reasons, the claim of trademark infringement was not the direct subject of this appeal and thus this article is limited to the copyright issues so presented.]

        In the “Seinfeld” and “Wind Done Gone” cases, the Courts discussed issues about fair use in terms of whether a use was or was not “transformative.”  In this case, the Court discussed the same issues but with a slightly different terminology.  The Court stated:

Generalizing from this example in economic terminology that has become orthodox in fair-use case law, we may say that copying that is complementary to the copyrighted work (in the sense that nails are complements of hammers) is fair use, but copying that is a substitute for the copyrighted work (in the sense that nails are substitutes for pegs or screws), or for derivative works from the copyrighted work [citation] is not fair use.
        The Court went on to explain the above distinction in these words:
Were control of derivative works not part of a copyright owner’s bundle of rights, it would be clear that PIL’s [the defendant] books fell on the complement side of the divide and so were sheltered by the fair-use defense.  A photograph of a Beanie Baby is not a substitute for a Beanie Baby. No one who wants a Beanie Baby, whether a young child who wants to play with it or an adult (or older child) who wants to collect Beanie Babies, would be tempted to substitute a photograph. But remember that photographs of Beanie Babies are conceded to be derivative works, for which there may be a separate demand that Ty may one day seek to exploit, and so someone who without a license from Ty sold photographs of Beanie Babies would be an infringer of Ty’s sculpture copyrights.
        The Court then noted that the photographs were accompanied by text, which the defendant argued was indispensable to the creation of a collector’s guide.  The Court analyzed the definition of “derivative work” in the United States copyright law and held that that a collector’s guide is not a derivative work because it did not “recast, transform or adapt” the original.  In other words, a collector’s guide is not a recasting, transformation or adaptation of the dolls.  Thus, if is determined that something, in this case a collector’s guide, is not a derivative work, then publishing the same is not an infringement of the copyright owner’s rights and instead protected by fair use, being deemed to be “transformative” or “complementary.”  It is well to keep in mind that the determination of whether something is or is not a “collector’s guide” is a matter of fact and law and merely because a publisher calls it that does not make it so.  Thus, in this case, the decision of the Seventh Circuit actually involved a remand to the lower court to make such determinations since there were several books involved.  Indeed, as to a book that was not denominated as a “collector’s guide,” one that involved mostly photographs with very incidental text, the Court seemed to feel that that kind of book would not qualify as such a “collector’s guide” and might thus be deemed to be a derivative work and thus an infringement.

        The Court stated:

Indeed, a collectors’ guide is very much like a book review, which is a guide to a book and which no one supposes is a derivative work. Both the book review and the collectors’ guide are critical and evaluative as well as purely informational; and ownership of a copyright does not confer a legal right to control public evaluation of the copyrighted work.
        This being so, the Court stated that the issue then was whether the defendant copied more than it had to to create this new work.  It noted that in order to be successful in the marketplace, a collector’s guide had to be complete.  The Court said:
Ty goes so far as to argue that PIL not only cannot publish photos of all the Beanie Babies but cannot publish color photos of any of them, and perhaps cannot publish black and white photos of any of them or even sketches but must instead be content with the name of the Beanie Baby and a verbal description. Such a guide would sink like a stone in the marketplace no matter how clever and informative its text, since Ty licenses publishers to publish photos of all the Beanie Babies in the licensees’ collectors’ guides. It would be like trying to compete with a CD of Beethoven’s Fifth Symphony by selling the score.
        The Court then analyzed the 4 factor test for determining fair use and the reader should read the above mentioned articles for a discussion about those factors.  It phrased the issue to be decided thusly:
The question is whether it would be unreasonable to conclude, with reference to one or more of the enjoined publications, such as the Beanie Babies Collector’s Guide, that the use of the photos is a fair use because it is the only way to prepare a collectors’ guide.
        The Court distinguished 2 cases cited by the plaintiffs.
Ty relies primarily on two cases. Twin Peaks Productions, Inc. v. Publications International, Ltd., supra, involved a book published by PIL concerning a television series. The book included a detailed recounting of the plot of the first eight episodes: ‘every intricate plot twist and element of character development appear in the Book in the same sequence as in the teleplays.’ 996 F.2d at 1373. The court held that the book was basically an abridgment of the script and that abridgments (despite contrary, aged authority) are generally not fair use. Id. at 1375-76. The plot summaries were so extensive as to be substitutes for rather than complements of the copyrighted scripts.
        The other case was the “Seinfeld” case, discussed in the above-mentioned article.  The Court disagreed with the holding of the Seinfeld Court which held that that  book was an infringement.  This Court determined that that book was not.
There was evident complementarity: people who bought the book had to watch the show in order to pick up the answers to the questions in the book; no one would read the book in lieu of watching the show. When the book first appeared, the show’s producers requested free copies and distributed them as promotional material, 150 F.3d at 136; and the book’s blurb told readers to ‘open this book to satisfy your between-episode cravings.’
        In sum, the Court found that the injunction against publication should be lifted and remanded the case for the lower court to get additional testimony as to whether all or some of the books actually qualified as “collector’s guides” or whether they were unauthorized derivative works.


        ‘Tis an uncertain world in many ways but certainly in regard to “fair use.”  If you do not have a financial or legal stake in the outcome, these cases make for very interesting reading and study.  If you have such a stake, it is a risky venture.  While licensing is always the better approach, in situations where licensing is not possible, those seeking shelter from the storm of copyright infringement litigation under the umbrella of “fair use” may find it to be quite a leaky protection.

© 2002 Ivan Hoffman.  All Rights Reserved.


This article is not intended as legal advice.  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.


No portion of this article may be copied, retransmitted, reposted, duplicated or otherwise used without the express written approval of the author.



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