The U.S. Supreme Court decided two significant copyright cases
in 1994 which impact multimedia and software developers. The first
case, Fogerty v. Fantasy, Inc., No. 92-1750 (U.S. March 1, 1994)
("Fogerty"), involved the proper standard for the award of
attorney's fees in copyright litigation. The second case, Campbell
v. Acuff-Rose Music, Inc., No. 92-1292 (U.S. March 7, 1994)
("Acuff-Rose"), resolved the relationship between parody and the
fair use of copyrighted works. While both cases concerned the
copying of sound recordings and involved important figures in the
musical community, these decisions will have profound affect in all
I. ATTORNEY'S FEES
In Fogerty, Creedence Clearwater Revival front man John
Fogerty wrote the song "Run Through the Jungle" and sold its
exclusive rights to a predecessor of Fantasy, which obtained
copyright by assignment. Fogerty later published and registered
the copyright to another song, "The Old Man Down the Road," on
another record label. Fantasy sued for copyright infringement,
claiming that Fogerty's later song was merely the earlier one with
At trial, a jury held for Fogerty, who applied for attorney's
fees under Section 505 of the Copyright Act, 17 U.S.C. § 505.
Section 505 provides that courts may award reasonable attorney's
fees to a winning party as part of court costs. The District Court
denied the motion because, as a defendant, Fogerty had not
demonstrated that Fantasy's suit was frivolous or brought in bad
The Court of Appeals affirmed the District Court, since the
Ninth Circuit treats successful plaintiffs and defendants
differently to encourage copyright owners to sue on close claims,
thereby broadening copyright protection.
The Supreme Court reversed the Ninth Circuit's decision, and
required that plaintiffs and defendants be treated equally. The
Court also rejected the "British Rule" advocated by Fogerty, which
automatically awards attorney's fees to the winner of a lawsuit, in
favor of leaving the award to the discretion of the trial court.
Before Fogerty, courts were split between the Ninth Circuit's
approach -- awarding fees to plaintiffs as a matter of course, but
requiring defendants to show frivolousness or bad faith -- and the
approach of other circuits that awarded fees in a more "evenhanded"
manner. Fogerty adopted the "evenhanded" approach for two reasons.
First, neither the plain language, nor the legislative history, of
the Copyright Act treats plaintiffs and defendants differently.
Second, allowing defendant copyright holders to advance defenses to
mark the boundaries of protection encourages the production of
additional works. The Supreme Court rejected application of the
British Rule because the automatic award of fees is inconsistent
with judicial discretion.
Fogerty is an extremely important legal precedent because it
levels the playing field and will alter the factors evaluated in
negotiations and in the decision to bring an infringement suit.
Formerly, if a party brought a close case and lost, that party
would not have to pay attorney's fees, unless the defendants could
show that the suit was frivolous or brought in bad faith. In the
typical copyright infringement case, attorney's fees are
substantial and some cases are extremely close calls. Plaintiffs
must now calculate the increased potential exposure of paying
defendants' legal fees, as well as their own. As a defendant,
however, Fogerty may provide more incentive to litigate, rather
than settle cases, since it will now be easier to recover
II. PARODY & FAIR USE
The parody and fair use case, Acuff-Rose, tested whether 2
Live Crew's commercial parody "Pretty Woman" was a fair use of Roy
Orbison's well-known ballad "Oh, Pretty Woman." In 1964, Roy
Orbison and William Dees wrote their song and assigned the rights
to Acuff-Rose. A quarter century later, Campbell wrote his
satirical version. In July, 1989, 2 Live Crew's manager wrote to
Acuff-Rose informing them of the parody, explaining that the group
was willing to give Acuff-Rose credit for ownership and authorship
of the original, and offering to pay a fee for use of the song.
Acuff-Rose refused permission, and a year and 250,000 copies later
sued 2 Live Crew for copyright infringement.
The District Court found 2 Live Crew's parody to be a fair
use, holding that: its commercial purpose was not a bar; it took no
more of the Orbison original than was necessary to "conjure up" the
original; and it was unlikely that the 2 Live Crew version could
adversely affect the market for the Orbison original.
Reasoning that the District Court had placed insufficient
emphasis on the commercial nature of 2 Live Crew's work, which was
presumptively unfair, the Court of Appeals for the Sixth Circuit
reversed. The Sixth Circuit also held that the parody took too
much of the "heart" of the original.
The Supreme Court reversed the Sixth Circuit's decision,
holding that the parody may be a fair use and sent the case back to
the District Court for additional fact-finding.
Whether or not particular copying is a fair use involves
intricate weighing of four factors set forth in Section 107 of the
Copyright Act: (1) the purpose and character of the use; (2) the
nature of the copyrighted work; (3) the amount and substantiality
of the part used in relation to the whole; and (4) the effect of
the use on the market for or value of the original. Acuff-Rose is
more significant for its general analysis of fair use and parody
than for its particular focus on the reproduction of the first line
and repetition of the bass riff in "Oh, Pretty Woman." The
decision also has application to a host of other types of works of
authorship, including computer programs, books, art and motion
pictures -- whether or not they are parodies.
The Acuff-Rose decision affirms that transformative uses --
copying to create a work that adds something new, rather than
substitutes for the original -- are more likely to be fair.
Furthermore, although copying for commercial use would tend to be
unfair, the Supreme Court's decision indicates that all the Section
107 factors must be considered and the commercial use would be less
significant if the resulting work was transformative. For example,
copying some protectable elements of a competitor's software
program, even to create a competitive work, might be a fair use if
the resulting program was a significant improvement over, rather
than a substitute for, the original.
Finally, because fair use is an affirmative defense, the
defendant must establish that its new work will not harm the market
for the original. Market substitution is less certain with
transformative uses. The market for potential uses would include
normally only those uses that the original creator would develop or
license; not, for example, parodies, since creators do not
typically license the right to ridicule their creations.
Computer Digest, May 1994, at 1.