{"id":251,"date":"2014-09-17T00:42:03","date_gmt":"2014-09-17T00:42:03","guid":{"rendered":"https:\/\/courses.candelalearning.com\/buslegalenv\/?post_type=chapter&p=251"},"modified":"2015-04-21T22:50:44","modified_gmt":"2015-04-21T22:50:44","slug":"30-5-cases","status":"publish","type":"chapter","link":"https:\/\/courses.lumenlearning.com\/clinton-buslegalenv\/chapter\/30-5-cases\/","title":{"raw":"Cases","rendered":"Cases"},"content":{"raw":"

Fair Use in Copyright<\/h2>\r\n
\r\n
\r\n\r\nElvis Presley Enterprises et al. v. Passport Video et al.\r\n\r\n349 F.3d 622 (9th Circuit Court of Appeals, 2003)\r\n\r\nTALLMAN, CIRCUIT JUDGE:\r\n\r\nPlaintiffs are a group of companies and individuals holding copyrights in various materials relating to Elvis Presley. For example, plaintiff SOFA Entertainment, Inc., is the registered owner of several Elvis appearances on The Ed Sullivan Show<\/em>. Plaintiff Promenade Trust owns the copyright to two television specials featuring Elvis: The Elvis 1968 Comeback Special<\/em> and Elvis Aloha from Hawaii<\/em>.\u2026Many Plaintiffs are in the business of licensing their copyrights. For example, SOFA Entertainment charges $10,000 per minute for use of Elvis\u2019 appearances on The Ed Sullivan Show<\/em>.\r\n\r\nPassport Entertainment and its related entities (collectively \u201cPassport\u201d) produced and sold The Definitive Elvis<\/em>, a 16-hour video documentary about the life of Elvis Presley. The Definitive Elvi<\/em>s sold for $99 at retail. Plaintiffs allege that thousands of copies were sent to retail outlets and other distributors. On its box, The Definitive Elvis<\/em> describes itself as an all-encompassing, in-depth look at the life and career of a man whose popularity is unrivaled in the history of show business and who continues to attract millions of new fans each year.\u2026\r\n\r\nThe Definitive Elvis<\/em> uses Plaintiffs\u2019 copyrighted materials in a variety of ways. With the video footage, the documentary often uses shots of Elvis appearing on television while a narrator or interviewee talks over the film. These clips range from only a few seconds in length to portions running as long as 30 seconds. In some instances, the clips are the subject of audio commentary, while in other instances they would more properly be characterized as video \u201cfiller\u201d because the commentator is discussing a subject different from or more general than Elvis\u2019 performance on a particular television show. But also significant is the frequency with which the copyrighted video footage is used. The Definitive Elvis<\/em> employs these clips, in many instances, repeatedly. In total, at least 5% to 10% of The Definitive Elvis<\/em> uses Plaintiffs\u2019 copyrighted materials.\r\n\r\nUse of the video footage, however, is not limited to brief clips.\u2026Thirty-five percent of his appearances on The Ed Sullivan Show<\/em> is replayed, as well as three minutes from The 1968 Comeback Special<\/em>.\r\n\r\n* * *\r\n\r\nPlaintiffs sued Passport for copyright infringement.\u2026Passport, however, asserts that its use of the copyrighted materials was \u201cfair use\u201d under 17 U.S.C. \u00a7 107. Plaintiffs moved for a preliminary injunction, which was granted by the district court after a hearing. The district court found that Passport\u2019s use of Plaintiffs\u2019 copyrighted materials was likely not fair use. The court enjoined Passport from selling or distributing The Definitive Elvis<\/em>. Passport timely appeals.\r\n\r\n* * *\r\n\r\nWe first address the purpose and character of Passport\u2019s use of Plaintiffs\u2019 copyrighted materials. Although not controlling, the fact that a new use is commercial as opposed to non-profit weighs against a finding of fair use. Harper & Row Publishers, Inc. v. Nation Enters<\/em>., 471 U.S. 539, 562, 85 L. Ed. 2d 588, 105 S.Ct. 2218 (1985). And the degree to which the new user exploits the copyright for commercial gain\u2014as opposed to incidental use as part of a commercial enterprise\u2014affects the weight we afford commercial nature as a factor. More importantly for the first fair-use factor, however, is the \u201ctransformative\u201d nature of the new work. Specifically, we ask \u201cwhether the new work\u2026merely supersedes the objects of the original creation, or instead adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message.\u2026\u201d The more transformative a new work, the less significant other inquiries, such as commercialism, become.\r\n\r\n* * *\r\n\r\nThe district court below found that the purpose and character of The Definitive Elvis<\/em> will likely weigh against a finding of fair use. We cannot say, based on this record, that the district court abused its discretion.\r\n\r\nFirst, Passport\u2019s use, while a biography, is clearly commercial in nature. But more significantly, Passport seeks to profit directly from the copyrights it uses without a license. One of the most salient selling points on the box of The Definitive Elvis<\/em> is that \u201cEvery Film and Television Appearance is represented.\u201d Passport is not advertising a scholarly critique or historical analysis, but instead seeks to profit at least in part from the inherent entertainment value of Elvis\u2019 appearances on such shows as The Steve Allen Show<\/em>, The Ed Sullivan Show<\/em>, and The 1968 Comeback Special<\/em>. Passport\u2019s claim that this is scholarly research containing biographical comments on the life of Elvis is not dispositive of the fair use inquiry.\r\n\r\nSecond, Passport\u2019s use of Plaintiffs\u2019 copyrights is not consistently transformative. True, Passport\u2019s use of many of the television clips is transformative because the clips play for only a few seconds and are used for reference purposes while a narrator talks over them or interviewees explain their context in Elvis\u2019 career. But voice-overs do not necessarily transform a work.\u2026\r\n\r\nIt would be impossible to produce a biography of Elvis without showing some of his most famous television appearances for reference purposes. But some of the clips are played without much interruption, if any. The purpose of showing these clips likely goes beyond merely making a reference for a biography, but instead serves the same intrinsic entertainment value that is protected by Plaintiffs\u2019 copyrights.\r\n\r\n* * *\r\n\r\nThe third factor is the amount and substantiality of the portion used in relation to the copyrighted work as a whole. This factor evaluates both the quantity of the work taken and the quality and importance of the portion taken. Regarding the quantity, copying \u201cmay not be excused merely because it is insubstantial with respect to the infringing<\/em> work.\u201d Harper & Row<\/em>, 471 U.S. at 565<\/span> (emphasis in original). But if the amount used is substantial with respect to the infringing work, it is evidence of the value of the copy-righted work.\r\n\r\nPassport\u2019s use of clips from television appearances, although in most cases of short duration, were repeated numerous times throughout the tapes. While using a small number of clips to reference an event for biographical purposes seems fair, using a clip over and over will likely no longer serve a biographical purpose. Additionally, some of the clips were not short in length. Passport\u2019s use of Elvis\u2019 appearance on The Steve Allen Show<\/em> plays for over a minute and many more clips play for more than just a few seconds.\r\n\r\nAdditionally, although the clips are relatively short when compared to the entire shows that are copyrighted, they are in many instances the heart of the work. What makes these copyrighted works valuable is Elvis\u2019 appearance on the shows, in many cases singing the most familiar passages of his most popular songs. Plaintiffs are in the business of licensing these copyrights. Taking key portions extracts the most valuable part of Plaintiffs\u2019 copyrighted works. With respect to the photographs, the entire picture is often used. The music, admittedly, is usually played only for a few seconds.\r\n\r\n* * *\r\n\r\nThe last, and \u201cundoubtedly the single most important\u201d of all the factors, is the effect the use will have on the potential market for and value of the copyrighted works. Harper & Row<\/em>, 471 U.S. at 566<\/span>. We must \u201cconsider not only the extent of market harm caused by the particular actions of the alleged infringer, but also whether unrestricted and widespread conduct of the sort engaged in by the defendant\u2026would result in a substantially adverse impact on the potential market for the original.\u201d Campbell<\/em>, 510 U.S. at 590. The more transformative the new work, the less likely the new work\u2019s use of copyrighted materials will affect the market for the materials. Finally, if the purpose of the new work is commercial in nature, \u201cthe likelihood [of market harm] may be presumed.\u201d A&M Records<\/em>, 239 F.3d at 1016 (quoting Sony<\/em>, 464 U.S. at 451).\r\n\r\nThe district court found that Passport\u2019s use of Plaintiffs\u2019 copyrighted materials likely does affect the market for those materials. This conclusion was not clearly erroneous.\r\n\r\nFirst, Passport\u2019s use is commercial in nature, and thus we can assume market harm. Second, Passport has expressly advertised that The Definitive Elvis<\/em> contains the television appearances for which Plaintiffs normally charge a licensing fee. If this type of use became wide-spread, it would likely undermine the market for selling Plaintiffs\u2019 copyrighted material. This conclusion, however, does not apply to the music and still photographs. It seems unlikely that someone in the market for these materials would purchase The Definitive Elvis<\/em> instead of a properly licensed product. Third, Passport\u2019s use of the television appearances was, in some instances, not transformative, and therefore these uses are likely to affect the market because they serve the same purpose as Plaintiffs\u2019 original works.\r\n\r\n* * *\r\n\r\nWe emphasize that our holding today is not intended to express how we would rule were we examining the case ab initio<\/em> as district judges. Instead, we confine our review to whether the district court abused its discretion when it weighed the four statutory fair-use factors together and determined that Plaintiffs would likely succeed on the merits. Although we might view this case as closer than the district court saw it, we hold there was no abuse of discretion in the court\u2019s decision to grant Plaintiffs\u2019 requested relief.\r\n\r\nAFFIRMED.\r\n
\r\n

Case Questions<\/h3>\r\n
\r\n
    \r\n\t
  1. How would you weigh the four factors in this case? If the trial court had found fair use, would the appeals court have overturned its ruling?<\/li>\r\n\t
  2. Why do you think that the fourth factor is especially important?<\/li>\r\n\t
  3. What is the significance of the discussion on \u201ctransformative\u201d aspects of the defendant\u2019s product?<\/li>\r\n<\/ol>\r\n<\/section><\/div>\r\n

    More Fair Use in Copyright<\/h2>\r\n<\/div>\r\nPlayboy Enterprises v. Welles\r\n\r\n279 F.3d 796 (9th Circuit Court of Appeals, 2001)\r\n\r\nT. G. NELSON, Circuit Judge:\r\n\r\nTerri Welles was on the cover of Playboy in 1981 and was chosen to be the Playboy Playmate of the Year for 1981. Her use of the title \u201cPlayboy Playmate of the Year 1981,\u201d and her use of other trademarked terms on her website are at issue in this suit. During the relevant time period, Welles\u2019 website offered information about and free photos of Welles, advertised photos for sale, advertised memberships in her photo club, and promoted her services as a spokesperson. A biographical section described Welles\u2019 selection as Playmate of the Year in 1981 and her years modeling for PEI. The site included a disclaimer that read as follows: \u201cThis site is neither endorsed, nor sponsored, nor affiliated with Playboy Enterprises, Inc. PLAYBOY tm PLAYMATE OF THE YEAR tm AND PLAYMATE OF THE MONTH tm are registered trademarks of Playboy Enterprises, Inc.\u201d\r\n\r\nWells used (1) the terms \u201cPlayboy \u201dand \u201cPlaymate\u201d in the metatags of the website; (2) the phrase \u201cPlaymate of the Year 1981\u201d on the masthead of the website; (3) the phrases \u201cPlayboy Playmate of the Year 1981\u201d and \u201cPlaymate of the Year 1981\u201d on various banner ads, which may be transferred to other websites; and (4) the repeated use of the abbreviation \u201cPMOY \u201981\u201d as the watermark on the pages of the website. PEI claimed that these uses of its marks constituted trademark infringement, dilution, false designation of origin, and unfair competition. The district court granted defendants\u2019 motion for summary judgment. PEI appeals the grant of summary judgment on its infringement and dilution claims. We affirm in part and reverse in part.\r\n

    A. Trademark Infringement<\/h3>\r\nExcept for the use of PEI\u2019s protected terms in the wallpaper of Welles\u2019 website, we conclude that Welles\u2019 uses of PEI\u2019s trademarks are permissible, nominative uses. They imply no current sponsorship or endorsement by PEI. Instead, they serve to identify Welles as a past PEI \u201cPlaymate of the Year.\u201d\r\n\r\nWe articulated the test for a permissible, nominative use in New Kids On The Block v. New America Publishing, Inc<\/em>. The band, New Kids On The Block, claimed trademark infringement arising from the use of their trademarked name by several newspapers. The newspapers had conducted polls asking which member of the band New Kids On The Block was the best and most popular. The papers\u2019 use of the trademarked term did not fall within the traditional fair use doctrine. Unlike a traditional fair use scenario, the defendant newspaper was using the trademarked term to describe not its own product, but the plaintiff\u2019s. Thus, the factors used to evaluate fair use were inapplicable. The use was nonetheless permissible, we concluded, based on its nominative nature.\r\n\r\nWe adopted the following test for nominative use.\r\n\r\nFirst, the product or service in question must be one not readily identifiable without use of the trademark; second, only so much of the mark or marks may be used as is reasonably necessary to identify the product or service; and third, the user must do nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder.\r\n\r\nWe group the uses of PEI\u2019s trademarked terms into three for the purpose of applying the test for nominative use.\r\n

    1. Headlines and banner advertisements.<\/h4>\r\n. . .\r\n\r\nThe district court properly identified Welles\u2019 situation as one which must\u2026 be excepted. No descriptive substitute exists for PEI\u2019s trademarks in this context.\u2026Just as the newspapers in New Kids<\/em> could only identify the band clearly by using its trademarked name, so can Welles only identify herself clearly by using PEI\u2019s trademarked title.\r\n\r\nThe second part of the nominative use test requires that \u201conly so much of the mark or marks may be used as is reasonably necessary to identify the product or service[.]\u201d New Kids<\/em> provided the following examples to explain this element: \u201c[A] soft drink competitor would be entitled to compare its product to Coca-Cola or Coke, but would not be entitled to use Coca-Cola\u2019s distinctive lettering.\u201d Similarly, in a past case, an auto shop was allowed to use the trademarked term \u201cVolkswagen\u201d on a sign describing the cars it repaired, in part because the shop \u201cdid not use Volkswagen\u2019s distinctive lettering style or color scheme, nor did he display the encircled \u2018VW\u2019 emblem.\u201d Welles\u2019 banner advertisements and headlines satisfy this element because they use only the trademarked words, not the font or symbols associated with the trademarks.\r\n\r\nThe third element requires that the user do \u201cnothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder.\u201d As to this element, we conclude that aside from the wallpaper, which we address separately, Welles does nothing in conjunction with her use of the marks to suggest sponsorship or endorsement by PEI. The marks are clearly used to describe the title she received from PEI in 1981, a title that helps describe who she is. It would be unreasonable to assume that the Chicago Bulls sponsored a website of Michael Jordan\u2019s simply because his name appeared with the appellation \u201cformer Chicago Bull.\u201d Similarly, in this case, it would be unreasonable to assume that PEI currently sponsors or endorses someone who describes herself as a \u201cPlayboy Playmate of the Year in 1981.\u201d The designation of the year, in our case, serves the same function as the \u201cformer\u201d in our example. It shows that any sponsorship or endorsement occurred in the past.\r\n\r\nFor the foregoing reasons, we conclude that Welles\u2019 use of PEI\u2019s marks in her headlines and banner advertisements is a nominative use excepted from the law of trademark infringement.\r\n

    2. Metatags<\/h4>\r\nWelles includes the terms \u201cplayboy\u201d and \u201cplaymate\u201d in her metatags. Metatags describe the contents of a website using keywords. Some search engines search metatags to identify websites relevant to a search. Thus, when an internet searcher enters \u201cplayboy\u201d or \u201cplaymate\u201d into a search engine that uses metatags, the results will include Welles\u2019 site. Because Welles\u2019 metatags do not repeat the terms extensively, her site will not be at the top of the list of search results. Applying the three-factor test for nominative use, we conclude that the use of the trademarked terms in Welles\u2019 metatags is nominative.\r\n\r\nAs we discussed above with regard to the headlines and banner advertisements, Welles has no practical way of describing herself without using trademarked terms. In the context of metatags, we conclude that she has no practical way of identifying the content of her website without referring to PEI\u2019s trademarks.\r\n\r\n. . .\r\n\r\nPrecluding their use would have the unwanted effect of hindering the free flow of information on the internet, something which is certainly not a goal of trademark law. Accordingly, the use of trademarked terms in the metatags meets the first part of the test for nominative use.\u2026We conclude that the metatags satisfy the second and third elements of the test as well. The metatags use only so much of the marks as reasonably necessary and nothing is done in conjunction with them to suggest sponsorship or endorsement by the trademark holder. We note that our decision might differ if the metatags listed the trademarked term so repeatedly that Welles\u2019 site would regularly appear above PEI\u2019s in searches for one of the trademarked terms.\r\n

    3. Wallpaper\/watermark.<\/h4>\r\nThe background, or wallpaper, of Welles\u2019 site consists of the repeated abbreviation \u201cPMOY \u201981,\u201d which stands for \u201cPlaymate of the Year 1981.\u201d Welles\u2019 name or likeness does not appear before or after \u201cPMOY \u201981.\u201d The pattern created by the repeated abbreviation appears as the background of the various pages of the website. Accepting, for the purposes of this appeal, that the abbreviation \u201cPMOY\u201d is indeed entitled to protection, we conclude that the repeated, stylized use of this abbreviation fails the nominative use test.\r\n\r\nThe repeated depiction of \u201cPMOY \u201881\u201d is not necessary to describe Welles. \u201cPlayboy Playmate of the Year 1981\u201d is quite adequate. Moreover, the term does not even appear to describe Welles\u2014her name or likeness do not appear before or after each \u201cPMOY \u201981.\u201d Because the use of the abbreviation fails the first prong of the nominative use test, we need not apply the next two prongs of the test.\r\n\r\nBecause the defense of nominative use fails here, and we have already determined that the doctrine of fair use does not apply, we remand to the district court. The court must determine whether trademark law protects the abbreviation \u201cPMOY,\u201d as used in the wallpaper.\r\n

    B. Trademark Dilution [At this point, the court considers and rejects PEI\u2019s claim for trademark dilution.]<\/h4>\r\n

    Conclusion<\/h4>\r\nFor the foregoing reasons, we affirm the district court\u2019s grant of summary judgment as to PEI\u2019s claims for trademark infringement and trademark dilution, with the sole exception of the use of the abbreviation \u201cPMOY.\u201d We reverse as to the abbreviation and remand for consideration of whether it merits protection under either an infringement or a dilution theory.\r\n
    \r\n

    Case Questions<\/h3>\r\n
    \r\n
      \r\n\t
    1. Do you agree with the court\u2019s decision that there is no dilution here?<\/li>\r\n\t
    2. If PMOY is not a registered trademark, why does the court discuss it?<\/li>\r\n\t
    3. What does \u201cnominative use\u201d mean in the context of this case?<\/li>\r\n\t
    4. In business terms, why would PEI even think that it was losing money, or could lose money, based on Welles\u2019s use of its identifying marks?<\/li>\r\n<\/ol>\r\n<\/section><\/div>\r\n
      <\/div>\r\n<\/div>","rendered":"

      Fair Use in Copyright<\/h2>\n
      \n
      \n

      Elvis Presley Enterprises et al. v. Passport Video et al.<\/p>\n

      349 F.3d 622 (9th Circuit Court of Appeals, 2003)<\/p>\n

      TALLMAN, CIRCUIT JUDGE:<\/p>\n

      Plaintiffs are a group of companies and individuals holding copyrights in various materials relating to Elvis Presley. For example, plaintiff SOFA Entertainment, Inc., is the registered owner of several Elvis appearances on The Ed Sullivan Show<\/em>. Plaintiff Promenade Trust owns the copyright to two television specials featuring Elvis: The Elvis 1968 Comeback Special<\/em> and Elvis Aloha from Hawaii<\/em>.\u2026Many Plaintiffs are in the business of licensing their copyrights. For example, SOFA Entertainment charges $10,000 per minute for use of Elvis\u2019 appearances on The Ed Sullivan Show<\/em>.<\/p>\n

      Passport Entertainment and its related entities (collectively \u201cPassport\u201d) produced and sold The Definitive Elvis<\/em>, a 16-hour video documentary about the life of Elvis Presley. The Definitive Elvi<\/em>s sold for $99 at retail. Plaintiffs allege that thousands of copies were sent to retail outlets and other distributors. On its box, The Definitive Elvis<\/em> describes itself as an all-encompassing, in-depth look at the life and career of a man whose popularity is unrivaled in the history of show business and who continues to attract millions of new fans each year.\u2026<\/p>\n

      The Definitive Elvis<\/em> uses Plaintiffs\u2019 copyrighted materials in a variety of ways. With the video footage, the documentary often uses shots of Elvis appearing on television while a narrator or interviewee talks over the film. These clips range from only a few seconds in length to portions running as long as 30 seconds. In some instances, the clips are the subject of audio commentary, while in other instances they would more properly be characterized as video \u201cfiller\u201d because the commentator is discussing a subject different from or more general than Elvis\u2019 performance on a particular television show. But also significant is the frequency with which the copyrighted video footage is used. The Definitive Elvis<\/em> employs these clips, in many instances, repeatedly. In total, at least 5% to 10% of The Definitive Elvis<\/em> uses Plaintiffs\u2019 copyrighted materials.<\/p>\n

      Use of the video footage, however, is not limited to brief clips.\u2026Thirty-five percent of his appearances on The Ed Sullivan Show<\/em> is replayed, as well as three minutes from The 1968 Comeback Special<\/em>.<\/p>\n

      * * *<\/p>\n

      Plaintiffs sued Passport for copyright infringement.\u2026Passport, however, asserts that its use of the copyrighted materials was \u201cfair use\u201d under 17 U.S.C. \u00a7 107. Plaintiffs moved for a preliminary injunction, which was granted by the district court after a hearing. The district court found that Passport\u2019s use of Plaintiffs\u2019 copyrighted materials was likely not fair use. The court enjoined Passport from selling or distributing The Definitive Elvis<\/em>. Passport timely appeals.<\/p>\n

      * * *<\/p>\n

      We first address the purpose and character of Passport\u2019s use of Plaintiffs\u2019 copyrighted materials. Although not controlling, the fact that a new use is commercial as opposed to non-profit weighs against a finding of fair use. Harper & Row Publishers, Inc. v. Nation Enters<\/em>., 471 U.S. 539, 562, 85 L. Ed. 2d 588, 105 S.Ct. 2218 (1985). And the degree to which the new user exploits the copyright for commercial gain\u2014as opposed to incidental use as part of a commercial enterprise\u2014affects the weight we afford commercial nature as a factor. More importantly for the first fair-use factor, however, is the \u201ctransformative\u201d nature of the new work. Specifically, we ask \u201cwhether the new work\u2026merely supersedes the objects of the original creation, or instead adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message.\u2026\u201d The more transformative a new work, the less significant other inquiries, such as commercialism, become.<\/p>\n

      * * *<\/p>\n

      The district court below found that the purpose and character of The Definitive Elvis<\/em> will likely weigh against a finding of fair use. We cannot say, based on this record, that the district court abused its discretion.<\/p>\n

      First, Passport\u2019s use, while a biography, is clearly commercial in nature. But more significantly, Passport seeks to profit directly from the copyrights it uses without a license. One of the most salient selling points on the box of The Definitive Elvis<\/em> is that \u201cEvery Film and Television Appearance is represented.\u201d Passport is not advertising a scholarly critique or historical analysis, but instead seeks to profit at least in part from the inherent entertainment value of Elvis\u2019 appearances on such shows as The Steve Allen Show<\/em>, The Ed Sullivan Show<\/em>, and The 1968 Comeback Special<\/em>. Passport\u2019s claim that this is scholarly research containing biographical comments on the life of Elvis is not dispositive of the fair use inquiry.<\/p>\n

      Second, Passport\u2019s use of Plaintiffs\u2019 copyrights is not consistently transformative. True, Passport\u2019s use of many of the television clips is transformative because the clips play for only a few seconds and are used for reference purposes while a narrator talks over them or interviewees explain their context in Elvis\u2019 career. But voice-overs do not necessarily transform a work.\u2026<\/p>\n

      It would be impossible to produce a biography of Elvis without showing some of his most famous television appearances for reference purposes. But some of the clips are played without much interruption, if any. The purpose of showing these clips likely goes beyond merely making a reference for a biography, but instead serves the same intrinsic entertainment value that is protected by Plaintiffs\u2019 copyrights.<\/p>\n

      * * *<\/p>\n

      The third factor is the amount and substantiality of the portion used in relation to the copyrighted work as a whole. This factor evaluates both the quantity of the work taken and the quality and importance of the portion taken. Regarding the quantity, copying \u201cmay not be excused merely because it is insubstantial with respect to the infringing<\/em> work.\u201d Harper & Row<\/em>, 471 U.S. at 565<\/span> (emphasis in original). But if the amount used is substantial with respect to the infringing work, it is evidence of the value of the copy-righted work.<\/p>\n

      Passport\u2019s use of clips from television appearances, although in most cases of short duration, were repeated numerous times throughout the tapes. While using a small number of clips to reference an event for biographical purposes seems fair, using a clip over and over will likely no longer serve a biographical purpose. Additionally, some of the clips were not short in length. Passport\u2019s use of Elvis\u2019 appearance on The Steve Allen Show<\/em> plays for over a minute and many more clips play for more than just a few seconds.<\/p>\n

      Additionally, although the clips are relatively short when compared to the entire shows that are copyrighted, they are in many instances the heart of the work. What makes these copyrighted works valuable is Elvis\u2019 appearance on the shows, in many cases singing the most familiar passages of his most popular songs. Plaintiffs are in the business of licensing these copyrights. Taking key portions extracts the most valuable part of Plaintiffs\u2019 copyrighted works. With respect to the photographs, the entire picture is often used. The music, admittedly, is usually played only for a few seconds.<\/p>\n

      * * *<\/p>\n

      The last, and \u201cundoubtedly the single most important\u201d of all the factors, is the effect the use will have on the potential market for and value of the copyrighted works. Harper & Row<\/em>, 471 U.S. at 566<\/span>. We must \u201cconsider not only the extent of market harm caused by the particular actions of the alleged infringer, but also whether unrestricted and widespread conduct of the sort engaged in by the defendant\u2026would result in a substantially adverse impact on the potential market for the original.\u201d Campbell<\/em>, 510 U.S. at 590. The more transformative the new work, the less likely the new work\u2019s use of copyrighted materials will affect the market for the materials. Finally, if the purpose of the new work is commercial in nature, \u201cthe likelihood [of market harm] may be presumed.\u201d A&M Records<\/em>, 239 F.3d at 1016 (quoting Sony<\/em>, 464 U.S. at 451).<\/p>\n

      The district court found that Passport\u2019s use of Plaintiffs\u2019 copyrighted materials likely does affect the market for those materials. This conclusion was not clearly erroneous.<\/p>\n

      First, Passport\u2019s use is commercial in nature, and thus we can assume market harm. Second, Passport has expressly advertised that The Definitive Elvis<\/em> contains the television appearances for which Plaintiffs normally charge a licensing fee. If this type of use became wide-spread, it would likely undermine the market for selling Plaintiffs\u2019 copyrighted material. This conclusion, however, does not apply to the music and still photographs. It seems unlikely that someone in the market for these materials would purchase The Definitive Elvis<\/em> instead of a properly licensed product. Third, Passport\u2019s use of the television appearances was, in some instances, not transformative, and therefore these uses are likely to affect the market because they serve the same purpose as Plaintiffs\u2019 original works.<\/p>\n

      * * *<\/p>\n

      We emphasize that our holding today is not intended to express how we would rule were we examining the case ab initio<\/em> as district judges. Instead, we confine our review to whether the district court abused its discretion when it weighed the four statutory fair-use factors together and determined that Plaintiffs would likely succeed on the merits. Although we might view this case as closer than the district court saw it, we hold there was no abuse of discretion in the court\u2019s decision to grant Plaintiffs\u2019 requested relief.<\/p>\n

      AFFIRMED.<\/p>\n

      \n

      Case Questions<\/h3>\n
      \n
        \n
      1. How would you weigh the four factors in this case? If the trial court had found fair use, would the appeals court have overturned its ruling?<\/li>\n
      2. Why do you think that the fourth factor is especially important?<\/li>\n
      3. What is the significance of the discussion on \u201ctransformative\u201d aspects of the defendant\u2019s product?<\/li>\n<\/ol>\n<\/section>\n<\/div>\n

        More Fair Use in Copyright<\/h2>\n<\/div>\n

        Playboy Enterprises v. Welles<\/p>\n

        279 F.3d 796 (9th Circuit Court of Appeals, 2001)<\/p>\n

        T. G. NELSON, Circuit Judge:<\/p>\n

        Terri Welles was on the cover of Playboy in 1981 and was chosen to be the Playboy Playmate of the Year for 1981. Her use of the title \u201cPlayboy Playmate of the Year 1981,\u201d and her use of other trademarked terms on her website are at issue in this suit. During the relevant time period, Welles\u2019 website offered information about and free photos of Welles, advertised photos for sale, advertised memberships in her photo club, and promoted her services as a spokesperson. A biographical section described Welles\u2019 selection as Playmate of the Year in 1981 and her years modeling for PEI. The site included a disclaimer that read as follows: \u201cThis site is neither endorsed, nor sponsored, nor affiliated with Playboy Enterprises, Inc. PLAYBOY tm PLAYMATE OF THE YEAR tm AND PLAYMATE OF THE MONTH tm are registered trademarks of Playboy Enterprises, Inc.\u201d<\/p>\n

        Wells used (1) the terms \u201cPlayboy \u201dand \u201cPlaymate\u201d in the metatags of the website; (2) the phrase \u201cPlaymate of the Year 1981\u201d on the masthead of the website; (3) the phrases \u201cPlayboy Playmate of the Year 1981\u201d and \u201cPlaymate of the Year 1981\u201d on various banner ads, which may be transferred to other websites; and (4) the repeated use of the abbreviation \u201cPMOY \u201981\u201d as the watermark on the pages of the website. PEI claimed that these uses of its marks constituted trademark infringement, dilution, false designation of origin, and unfair competition. The district court granted defendants\u2019 motion for summary judgment. PEI appeals the grant of summary judgment on its infringement and dilution claims. We affirm in part and reverse in part.<\/p>\n

        A. Trademark Infringement<\/h3>\n

        Except for the use of PEI\u2019s protected terms in the wallpaper of Welles\u2019 website, we conclude that Welles\u2019 uses of PEI\u2019s trademarks are permissible, nominative uses. They imply no current sponsorship or endorsement by PEI. Instead, they serve to identify Welles as a past PEI \u201cPlaymate of the Year.\u201d<\/p>\n

        We articulated the test for a permissible, nominative use in New Kids On The Block v. New America Publishing, Inc<\/em>. The band, New Kids On The Block, claimed trademark infringement arising from the use of their trademarked name by several newspapers. The newspapers had conducted polls asking which member of the band New Kids On The Block was the best and most popular. The papers\u2019 use of the trademarked term did not fall within the traditional fair use doctrine. Unlike a traditional fair use scenario, the defendant newspaper was using the trademarked term to describe not its own product, but the plaintiff\u2019s. Thus, the factors used to evaluate fair use were inapplicable. The use was nonetheless permissible, we concluded, based on its nominative nature.<\/p>\n

        We adopted the following test for nominative use.<\/p>\n

        First, the product or service in question must be one not readily identifiable without use of the trademark; second, only so much of the mark or marks may be used as is reasonably necessary to identify the product or service; and third, the user must do nothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder.<\/p>\n

        We group the uses of PEI\u2019s trademarked terms into three for the purpose of applying the test for nominative use.<\/p>\n

        1. Headlines and banner advertisements.<\/h4>\n

        . . .<\/p>\n

        The district court properly identified Welles\u2019 situation as one which must\u2026 be excepted. No descriptive substitute exists for PEI\u2019s trademarks in this context.\u2026Just as the newspapers in New Kids<\/em> could only identify the band clearly by using its trademarked name, so can Welles only identify herself clearly by using PEI\u2019s trademarked title.<\/p>\n

        The second part of the nominative use test requires that \u201conly so much of the mark or marks may be used as is reasonably necessary to identify the product or service[.]\u201d New Kids<\/em> provided the following examples to explain this element: \u201c[A] soft drink competitor would be entitled to compare its product to Coca-Cola or Coke, but would not be entitled to use Coca-Cola\u2019s distinctive lettering.\u201d Similarly, in a past case, an auto shop was allowed to use the trademarked term \u201cVolkswagen\u201d on a sign describing the cars it repaired, in part because the shop \u201cdid not use Volkswagen\u2019s distinctive lettering style or color scheme, nor did he display the encircled \u2018VW\u2019 emblem.\u201d Welles\u2019 banner advertisements and headlines satisfy this element because they use only the trademarked words, not the font or symbols associated with the trademarks.<\/p>\n

        The third element requires that the user do \u201cnothing that would, in conjunction with the mark, suggest sponsorship or endorsement by the trademark holder.\u201d As to this element, we conclude that aside from the wallpaper, which we address separately, Welles does nothing in conjunction with her use of the marks to suggest sponsorship or endorsement by PEI. The marks are clearly used to describe the title she received from PEI in 1981, a title that helps describe who she is. It would be unreasonable to assume that the Chicago Bulls sponsored a website of Michael Jordan\u2019s simply because his name appeared with the appellation \u201cformer Chicago Bull.\u201d Similarly, in this case, it would be unreasonable to assume that PEI currently sponsors or endorses someone who describes herself as a \u201cPlayboy Playmate of the Year in 1981.\u201d The designation of the year, in our case, serves the same function as the \u201cformer\u201d in our example. It shows that any sponsorship or endorsement occurred in the past.<\/p>\n

        For the foregoing reasons, we conclude that Welles\u2019 use of PEI\u2019s marks in her headlines and banner advertisements is a nominative use excepted from the law of trademark infringement.<\/p>\n

        2. Metatags<\/h4>\n

        Welles includes the terms \u201cplayboy\u201d and \u201cplaymate\u201d in her metatags. Metatags describe the contents of a website using keywords. Some search engines search metatags to identify websites relevant to a search. Thus, when an internet searcher enters \u201cplayboy\u201d or \u201cplaymate\u201d into a search engine that uses metatags, the results will include Welles\u2019 site. Because Welles\u2019 metatags do not repeat the terms extensively, her site will not be at the top of the list of search results. Applying the three-factor test for nominative use, we conclude that the use of the trademarked terms in Welles\u2019 metatags is nominative.<\/p>\n

        As we discussed above with regard to the headlines and banner advertisements, Welles has no practical way of describing herself without using trademarked terms. In the context of metatags, we conclude that she has no practical way of identifying the content of her website without referring to PEI\u2019s trademarks.<\/p>\n

        . . .<\/p>\n

        Precluding their use would have the unwanted effect of hindering the free flow of information on the internet, something which is certainly not a goal of trademark law. Accordingly, the use of trademarked terms in the metatags meets the first part of the test for nominative use.\u2026We conclude that the metatags satisfy the second and third elements of the test as well. The metatags use only so much of the marks as reasonably necessary and nothing is done in conjunction with them to suggest sponsorship or endorsement by the trademark holder. We note that our decision might differ if the metatags listed the trademarked term so repeatedly that Welles\u2019 site would regularly appear above PEI\u2019s in searches for one of the trademarked terms.<\/p>\n

        3. Wallpaper\/watermark.<\/h4>\n

        The background, or wallpaper, of Welles\u2019 site consists of the repeated abbreviation \u201cPMOY \u201981,\u201d which stands for \u201cPlaymate of the Year 1981.\u201d Welles\u2019 name or likeness does not appear before or after \u201cPMOY \u201981.\u201d The pattern created by the repeated abbreviation appears as the background of the various pages of the website. Accepting, for the purposes of this appeal, that the abbreviation \u201cPMOY\u201d is indeed entitled to protection, we conclude that the repeated, stylized use of this abbreviation fails the nominative use test.<\/p>\n

        The repeated depiction of \u201cPMOY \u201881\u201d is not necessary to describe Welles. \u201cPlayboy Playmate of the Year 1981\u201d is quite adequate. Moreover, the term does not even appear to describe Welles\u2014her name or likeness do not appear before or after each \u201cPMOY \u201981.\u201d Because the use of the abbreviation fails the first prong of the nominative use test, we need not apply the next two prongs of the test.<\/p>\n

        Because the defense of nominative use fails here, and we have already determined that the doctrine of fair use does not apply, we remand to the district court. The court must determine whether trademark law protects the abbreviation \u201cPMOY,\u201d as used in the wallpaper.<\/p>\n

        B. Trademark Dilution [At this point, the court considers and rejects PEI\u2019s claim for trademark dilution.]<\/h4>\n

        Conclusion<\/h4>\n

        For the foregoing reasons, we affirm the district court\u2019s grant of summary judgment as to PEI\u2019s claims for trademark infringement and trademark dilution, with the sole exception of the use of the abbreviation \u201cPMOY.\u201d We reverse as to the abbreviation and remand for consideration of whether it merits protection under either an infringement or a dilution theory.<\/p>\n

        \n

        Case Questions<\/h3>\n
        \n
          \n
        1. Do you agree with the court\u2019s decision that there is no dilution here?<\/li>\n
        2. If PMOY is not a registered trademark, why does the court discuss it?<\/li>\n
        3. What does \u201cnominative use\u201d mean in the context of this case?<\/li>\n
        4. In business terms, why would PEI even think that it was losing money, or could lose money, based on Welles\u2019s use of its identifying marks?<\/li>\n<\/ol>\n<\/section>\n<\/div>\n
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