Commercial Fan Works, Fair Use And The Economics Of Complements And Market Failure

NOTE COMMERCIAL FAN WORKS, FAIR USE, AND THE ECONOMICS OF COMPLEMENTS AND MARKET FAILURE INTRODUCTION The average American spent $2,504 on media and entertainment in 2010. 1 In addition to spending money, the average American spends about 2.7 hours per day watching television—and countless hours more reading, playing video games, and engaging in other forms of entertainment. 2 Given the significant time and money that Americans spend on entertainment, it should come as no surprise that popular culture constitutes a major component of modern American life. For many consumers, passively engaging in entertainment— watching television, reading books, listening to music—is sufficient. Other consumers feel compelled to discuss their reactions to media with other entertainment consumers, whether they do so in person with friends and family, or online through message boards and forums. 3 For many entertainment consumers, however, simply experiencing and discussing popular culture works is unsatisfactory. This particular subset of consumers known as fans—a term derived from the term “fanatic” 4 —often feels such an affinity to popular culture works that they respond to them with their own creative expression. 5 The product of this expression can manifest in a wide variety of forms, including literary works such as fan fiction, audiovisual works such as fan videos, and pictorial works such as fan art. 6 1 See B UREAU OF LABOR STATISTICS, CONSUMER EXPENDITURE SURVEY (2010) (Table 3), available at ftp://ftp.bls.gov/pub/special.requests/ce/standard/2010/age.txt. 2 According to the Bureau of Labor Statistics, the average American over the age of fifteen watched an average of 2.75 hours of television each day. BUREAU OF LABOR STATISTICS, AMERICAN TIME USE SURVEY—2011 RESULTS (2012), available at http://www.bls.gov/news.release/pdf/atus.pdf. 3 Neda Ulaby, Vidders Talk Back To Their Pop-Culture Muses, NAT’L PUB. RADIO (Feb. 25, 2009, 2:36 PM), www.npr.org/templates/story/story.php?storyId=101154811. 4 OXFORD ENGLISH DICTIONARY (11th ed. 2008) (“fan” n.2). Elizabeth Burns & Carlie Webber, When Harry Met Bella: Fanfiction is All the Rage. But is it Plagiarism? Or the Perfect Thing to Encourage Young Writers?, SCH. LIBR. J., (Aug. 1, 2009), www.schoollibraryjournal.com/article/CA6673573.html. 5 6 Rebecca Tushnet, Payment in Credit: Copyright Law and Subcultural Creativity, 70 Most of these fan works build upon elements from popular culture works, creating a final product that is a mixture of elements from the original work and the fan’s original contributions. 7 With the rise of the Internet, fans have a public forum to distribute their goods, whether they make their works available for free, or sell their works for commercial profit. 8 Although many fan works are non-commercial in nature, some enterprising fans are beginning to sell their works (“fan-created merchandise”) on websites such as Etsy or eBay. 9 While we are a society that generally encourages entrepreneurship, American copyright laws limit a fan’s ability to respond to popular culture by creating their own marketable works. 10 The Copyright Act protects popular culture works such as television shows, graphic novels, books and music as works of authorship. 11 Under the terms of the Act, fans cannot create reproductions of copyrighted material (known in copyright law as “derivative works”) without the copyright owner’s permission. 12 As many fans do not obtain authorization from copyright owners, many fan works may constitute a per se violation of the Copyright Act. 13 This Note examines how existing American copyright laws limit fan expression and ultimately argues that the fair use defense should apply to certain kinds of fan works sold for commercial profit. Part I discusses the nature of fan works and how the evolution of fan works created legal tension between the copyrighted original works and fan works. Part II explores the legal status of fan works under American copyright law and compares the rights of original work authors with those of derivative work authors. Part III focuses on copyright’s fair use exception and examines how this doctrine attempts to achieve copyright’s policy goals. Part IV uses two test cases to argue that current fair use doctrine should expand to permit fair uses where the LAW & CONTEMP. PROBS. 135, 140 (2007) [hereinafter Tushnet, Payment in Credit]. 7 Rebecca Tushnet, Legal Fictions: Copyright, Fan Fiction, and a New Common Law, 17 LOY. L.A. ENT. L.J. 651, 654 (1997) [hereinafter Tushnet, Legal Fictions]. 8 Mark Tutton, A Crafty Way to Beat the Chain Stores, CNN TECH (Sept. 18, 2008), http://www.cnn.com/2008/TECH/science/09/18/craft.revival/. 9 Abe Sauer, The Hunger Games Inspires Some Inspired (and Unofficial) Fan Merchandise, BRAND CHANNEL (Mar. 26, 2012, 7:01 PM), http://www.brandchannel.com/ home/post/2012/03/26/The-Hunger-Games-Fan-Merchandise-032612.aspx (listing a number of unofficial merchandise listed on Etsy and eBay for THE HUNGER GAMES (2008) franchise). See generally ETSY, http://www.etsy.com (last visited June 20, 2013); EBAY, http://www.ebay.com (last visited June 20, 2013). 10 See generally Copyright Act, 17 U.S.C. §§ 101–1332 (2006). 11 Id. § 102. 12 Id. § 106. 13 See id. § 106(2). use is not substitutionary or where the use responds to market failure.14 In Part V, this Note concludes that courts should find fan merchandise to be fair uses where they are complementary to the original work and where the merchandise fills a gap created by market failure. I. THE NATURE OF FAN MERCHANDISE Popular culture manifests itself in a variety of copyrightable forms: literary works, pictorial, graphical, or sculptural works, audiovisual works, musical works, or mixed forms of these kinds of media. 15 Entertainment consumers who engage with these works may react to them in a variety of ways. At one end of the spectrum is the passive consumer, who remains content with simply watching television and movies, reading books, and listening to music. 16 The other end of the spectrum hails the existence of “fandom:” communities of entertainment consumers who spend hours discussing their fandom or producing their own creative works based upon pop culture works. 17 These fan-created works, much like the pop culture works that inspire them, can come in many forms. Fan works run the gamut from short stories, video mashups, artwork, musical tributes, costumes, and more. 18 In fandom, a strict dichotomy exists between “canon,” the source material from the original pop culture work, and original fan contribution. 19 Because of this dichotomy, fans have the liberty of pursuing endless alternate narratives for pop culture works without fear of usurping or corrupting the canon material. 20 Regardless of the form it manifests in, most fan works take elements from canon material and 14 Market failure is where desired transactions do not occur due to conditions in the market. See Wendy J. Gordon, Fair Use as Market Failure: A Structural and Economic Analysis of the Betamax Case and its Predecessors, 82 COLUM. L. REV. 1600 (1982) [hereinafter Gordon, Fair Use as Market Failure]. 15 Tushnet, Payment in Credit, supra note 6, at 140. 16 Ulaby, supra note 3. 17 Id.; see also Burns & Webber, supra note 5. 18 Fanworks, FANLORE, http://fanlore.org/wiki/Fanworks (last visited Apr. 12, 2012). 19 Merlin Missy, Canon Versus Fanon Versus Authorial Intent, FIREFOX NEWS (July 30, 2007), http://firefox.org/news/blogs/20/Canon-Versus-Fanon-Versus-Authorial-Intent.html. 20 Tushnet, Payment in Credit, supra note 6, at 160 (“Fan texts are a third type of creation, neither pure copies of another author’s work nor authorized additions to the original. Fan creations lack the authority of official texts. Because they are not canonical, fan stories can offer a thousand different ways that Mulder and Scully of the X-Files first slept together, none of which contradict the other, or one author can write ‘Five Things That Never Happened’—five alternate histories for a favorite character, all of which are, as the title states, repudiated by the author. Lack of authority, which stems from lack of authorization, allows a freedom unavailable to an official canon striving for internal consistency.”). builds upon it to create an original work. 21 Thus, the resulting fan work often mixes copyrighted elements from the canon with the fan’s original contributions. 22 While fan works are inherently dependent upon references to and use of elements from canon, the added originality from fan-authors is often significant. 23 Consider Alice Randall’s The Wind Done Gone, an example of “fan fiction” for Margaret Mitchell’s Gone with the Wind, to illustrate the relationship between copyrighted canon material and original fan contributions. 24 Like many other fan works, Randall’s work appropriated a significant amount of material from the canon work. 25 At the same time, like other fan authors, Randall significantly expanded upon these appropriated elements. 26 Randall’s The Wind Done Gone significantly develops characters that Gone with the Wind did not: “In [The Wind Done Gone], nearly every black character is given some redeeming quality—whether depth, wit, cunning, beauty, strength, or courage—that their [Gone with the Wind] analogues lacked.” 27 Like fan works that explore untold stories or alternate perspectives, The Wind Done Gone took liberties with its canon text. For example, The Wind Done Gone created novel characters to interact with canon characters, such as the relationship between Rhett Butler and Cynara, 28 and explored background stories that the canon did not, such as Ashley Wilkes’s homosexuality. 29 In addition to retelling canon narratives from a new perspective, other fan works often explore alternate realities or what-if situations. 30 One such example is Coming Through the Rye: 60 Years Later, a “fan work” which explored the question of what if we returned to J.D. Salinger’s famous protagonist Holden Caulfield as a senile septuagenarian. 31 Fan works first emerged in the form of fan fiction. 32 Although fan fiction still remains a popular medium for fans to express their creativity, 33 fan works 21 Id. Id. 23 Missy, supra note 19. 24 See Suntrust Bank v. Houghton Mifflin Co., 268 F.3d 1257 (11th Cir. 2001). 25 Id. at 1266–67 (noting that Randall used fifteen characters and locations closely resembling those of Gone with the Wind). 26 Id. at 1272. 27 Id. at 1271. 28 Id. at 1272. 29 Id. at 1270. 30 Fan Fiction, TVWIKI, http://www.tvwiki.tv/wiki/Fan_fiction (last visited Feb. 21, 2013). 31 See Salinger v. Colting, 641 F. Supp. 2d 250 (S.D.N.Y. 2009). 32 Tushnet, Payment in Credit, supra note 6, at 139. 33 Fanfiction.Net, the largest fan fiction archive on the Internet, listed well over 22 have begun to evolve beyond just literary works. 34 Where fan works were once limited to printed distribution through fanzines, the Internet now provides a new platform to distribute multimedia fan works. 35 Online fans can display more than just the written word. They can upload artwork onto websites like DeviantART, movies onto YouTube, and music onto SoundCloud. 36 More importantly, the proliferation of online marketplaces has facilitated the sale of Such fan merchandise can fan-created works (“fan merchandise”). 37 encompass a variety of forms, from artwork to durable goods such as clothing and accessories. 38 This Note focuses on the legal status of fan merchandise sold for commercial profit, regardless of the form such works take. II. THE COPYRIGHT SYSTEM AND DERIVATIVE FAN WORKS The Copyright Act of 1976 constitutes Title 17 of the United States Code and governs modern copyright law in the United States. 39 Congress enacted the Copyright Act pursuant to its constitutional authority to “promote the Progress of Science and useful Arts.” 40 Title 17 establishes copyright protection for all “original works of authorship,” including pop culture works such as television shows, graphic novels, movies, and book series. 41 Such protection prohibits the creation of derivative works of pop culture works (“canon works”) without the copyright owner’s permission. 42 As a result, many fan works may infringe copyrighted works as unauthorized derivative works. 43 This Part explores the legal status of such derivative works under current copyright law, and particularly focuses on the nature of infringement and available defenses. A. The Nature of Fan-Created Derivative Work Infringement: The Scope of 6,000,000 fan fiction titles and 3,000,000 users as of March, 2011. Fan Fiction Statistics, FFN RESEARCH (Mar. 18, 2011), http://ffnresearch.blogspot.com/2011_03_01_archive.html. 34 Tushnet, Payment in Credit, supra note 6, at 139. 35 Id. 36 DeviantART, YouTube, and Soundcloud are all websites that provide users with the ability to upload their own creative content to disseminate to the world at large. See DEVIANTART, http://www.deviantart.com (last visited June 20, 2013); YOUTUBE, http://www.youtube.com (last visited June 20, 2013); SOUNDCLOUD, https://soundcloud.com (last visited June 20, 2013). 37 See supra note 9 and accompanying text. 38 See Sauer, supra note 9. 39 See 17 U.S.C. §§ 101–1332 (2006). 40 U.S. CONST. art. I, § 8, cl. 8. 41 17 U.S.C. § 102 (2006). 42 Id. § 106. 43 Tushnet, Legal Fictions, supra note 7, at 658–59. Rights for Authors of Original Works Section 501 of the Copyright Act establishes the necessary elements for a successful copyright infringement claim. 44 First, a plaintiff must establish that she is the “legal or beneficial owner of an exclusive right under a copyright.” 45 To accomplish this, the plaintiff must establish that the work falls within the subject matter of copyright. 46 Second, a plaintiff must prove that the defendant “violate[d] any of the exclusive rights of the copyright owner.” 47 Thus, for a fan-author to infringe upon the copyright of a canonical work, she must misappropriate material within the subject matter of copyright in a manner that violates an established exclusive right of the owner of the original work. 1. The Subject Matter of Copyright For a canon work to qualify for copyright protection, it must be a “work of authorship” within the meaning of the Act. 48 The work does not necessarily have to fall within one of the explicit categories in the statute. 49 Still, as canon works tend to be books, film, and television series, they fall well within the boundaries of at least one of these express statutory categories. 50 However, the fact that a category applies to a work does not mean that all takings constitute a per se infringement. As Section 102 asserts, copyright protection does not extend to “any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described.” 51 This dichotomy between unprotected ideas and protected expression has come to be known as the idea/expression distinction. The idea/expression distinction emerged in the 1879 Supreme Court case Baker v. Selden and predates the current Copyright Act. 52 That case involved a dispute regarding Selden’s Condensed Ledger, or Book-Keeping Simplified, which described a specific system of accounting and came with blank forms 44 17 U.S.C. § 501 (2006). Id. § 501(b). 46 Id. § 102. 47 Id. § 501(a). 48 Id. § 102. 49 Id. § 102(a)(1)–(8) (identifying specific categories that may constitute work of authorship, including: literary works, musical works, dramatic works, pantomimes and choreographic works, pictorial, graphic and sculptural works, motion pictures and other audiovisual works, sound recordings, and architectural works). 50 Id.; see also Missy, supra note 19. 51 17 U.S.C. § § 102(b) (2006). 52 See Baker v. Selden, 101 U.S. 99 (1879). 45 readers could use for personal book-keeping. 53 Selden, the owner of the copyright in the ledger, claimed Baker infringed upon his copyright by selling books that described a similar system. 54 Baker’s books did not use any of Selden’s exact language to describe the system or contain forms similar to those of Selden’s. 55 The Supreme Court held that Selden’s copyright did not extend to the accounting system Selden described, but only protected the specific expression he used to describe it. 56 Ideas and concepts, such as an accounting method, are not copyrightable. 57 Protection only extends to the unique expression of these concepts. 58 This idea/expression distinction means that fan works can infringe upon copyright in canon works only insofar as the fan work misappropriates the canon’s protected expression. Ideas, concepts, or other unprotected elements taken from the canon work will not constitute infringement. 59 Arguably, many fan works only misappropriate ideas, and not protected expression. Reconsider The Wind Done Gone as a case study for how the idea/expression distinction applies to derivative fan works. 60 The Wind Done Gone retells Margaret Mitchell’s Gone with the Wind from the perspective of Randall’s original character Cynara. 61 Like most fan works, Randall expands upon misappropriated plot elements and characters from Gone with the Wind. 62 For example, the description of Gerald Butler’s acquisition of Pork in a card game transforms into “Garlic, far from being the passive ‘chattel’ in [Gone with the Wind], is portrayed as being smarter than either white character by orchestrating the outcome of the card game and determining his own fate” in Randall’s version. 63 Although Randall misappropriates some language verbatim from the canon, 64 a majority of what Randall has appropriated (characters, locations, plot) seems more akin to an unprotected idea. However, the Eleventh Circuit ultimately determined that Randall’s misappropriation of Mitchell’s characters, settings, and plot constituted prima facie infringement. 65 53 Id. at 100. Id. 55 Id. at 101. 56 Id. at 107. 57 Id. 58 Id. 59 See 17 U.S.C. § 102 (2010). 60 See Suntrust Bank v. Houghton Mifflin Co., 268 F.3d 1257, 1263 (11th Cir. 2001). 61 See id. at 1267. 62 Id. at 1272. 63 Id. 64 For example, Rhett Butler’s famous line: “My dear, I don’t give a damn.” Id. 65 Although the court found that Randall’s work constitutes prima facie infringement, ultimately the court rules in Randall’s favor under a theory of fair use. Id. at 1277. 54 The determination that The Wind Done Gone constituted prima facie infringement demonstrates that courts will protect elements in canon works that are not “expressions” in the traditional sense. 66 As the court in Suntrust indicates, courts will protect “ideas” such as characters or general plot lines. 67 Rather than drawing the line at strict “expression,” the Eleventh Circuit determined that scènes à faire and stock characters established the limit of copyright protection. 68 Scènes à faire are basic building blocks in any fictional work, “scenes which ‘must’ be done . . . which are as a practical matter indispensible [sic], or at least standard, in the treatment of a given topic.” 69 Because scènes à faire are plot elements “that necessarily flow from a common theme or setting,” 70 granting them protection would hinder creativity. Stock characters are stereotypical characters found in numerous fictional works. 71 Scènes à faire and stock characters lay firmly within the realm of unprotected ideas because they constitute “hackneyed elements [that] cannot furnish the basis for finding substantial similarity.” 72 However, plot lines and characters that are “intricately detailed and [idiosyncratic] . . . cross the line into [protected] expression.” 73 For example, although the concept of a suave secret agent may be a stock character, courts have determined that the specific character of James Bond was sufficiently delineated to warrant protection. 74 66 See id. at 1267. See Walt Disney Prods. v. Air Pirates, 581 F.2d 751 (9th Cir. 1978) (protecting Mickey Mouse and other Disney characters); Metro Goldwyn-Mayer Inc. v. Am. Honda Motor Co., 900 F. Supp. 1287 (C.D. Cal. 1995) (protecting James Bond); Gaiman v. MacFarlane, 360 F.3d 644 (7th Cir. 2004) (protecting Spawn and Count Cogliostro); Salinger v. Colting, 641 F. Supp. 2d 250 (S.D.N.Y. 2009) (protecting Holden Caulfield). 68 Suntrust Bank, 268 F.3d at 1266. 69 4 MELVILLE B. NIMMER & DAVID NIMMER, NIMMER ON COPYRIGHT § 13.03[B][4] (Matthew Bender Rev. Ed. 2012). 70 Id. 71 Gaiman, 360 F.3d at 660 (“A stock character is a stock example of the operation of the doctrine, and a drunken old bum is a stock character. If a drunken old bum were a copyrightable character, so would be a drunken suburban housewife, a gesticulating Frenchman, a fire-breathing dragon, a talking cat . . . . It would be difficult to write successful works of fiction without negotiating for dozens or hundreds of copyright licenses, even though such stereotyped characters are the products not of the creative imagination but of simple observation of the human comedy.” (citations omitted)). 72 NIMMER & NIMMER, supra note 69, § 13.03[B][4]. 73 Suntrust Bank, 268 F.3d at 1266. 74 In particular, the plaintiffs alleged that James Bond was sufficiently delineated in that the classic James Bond adventure compromised of “a high-thrill chase of the ultra-cool British charmer and his beautiful and alarming sidekick by a grotesque villain in which the hero escapes through wit aided by high tech-gadgetry.” Specific traits that plaintiffs claim distinguish Bond from other secret agent characters are: “his cold-bloodedness, his overt 67 The more defined the plot or character, the stronger the copyright protection. 75 Thus, fan misappropriation of plot and characters from canon works can constitute infringement if the misappropriated elements are sufficiently delineated. 76 While most fan works misappropriate no more than the characters, situations, or props from canon works, 77 judicial protection of these characters indicates that this taking satisfies the first prong of an infringement claim. However, this alone is not fatal to fans’ abilities to use elements from canon works. As the next Part discusses, to succeed on a claim of infringement, copyright owners must also establish that fans have violated one of the exclusive rights in Section 106. 2. The Exclusive Rights of Copyright Owners In addition to showing that their work falls within the subject matter of copyright, to succeed on a claim of copyright infringement, copyright owners must establish that defendants violated one of the exclusive rights in Section 106. 78 Section 106 lists six such exclusive rights. 79 However, fan works are most likely to infringe upon the Section 106(1) reproduction right or the Section 106(2) derivative work right. 80 Section 106(1) establishes the author’s exclusive right “to reproduce the copyrighted work in copies or phonorecords.” 81 The clearest way that a fan could violate this right would be to create an exact reproduction.82 For example, in the case of a literary work, reproducing language verbatim without the permission of the author would violate this right. 83 In Warner Bros. sexuality, his love of martinis ‘shaken, not stirred,’ his marksmanship, his ‘license to kill’ and use of guns, his physical strength, [and] his sophistication.” Metro Goldwyn-Mayer v. Am. Honda Motor Co., 900 F. Supp. 1287, 1294, 1296 (C.D. Cal. 1995). 75 Id.; see also Walt Disney Prods. v. Air Pirates, 581 F.2d 751, 757–58 (9th Cir. 1978). 76 Suntrust Bank, 268 F.3d at 1266. 77 Fan Fiction, supra note 30. 78 17 U.S.C. § 106 (2006). 79 Id. 80 Frequently Asked Questions (and Answers) About Fan Fiction, CHILLING EFFECTS CLEARING HOUSE (Feb 01, 2013), http://www.chillingeffects.org/fanfic/faq.cgi. 81 17 U.S.C. § 106(1) (2006). Copies “are material objects, other than phonorecords, in which a work is fixed by any method now known or later developed, and from which the work can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device.” Phonorecords are “material objects in which sounds, other than those accompanying a motion picture or other audiovisual work, are fixed by any method now known or later developed, and from which the sounds can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device.” Id. § 101. 82 See Princeton Univ. Press v. Mich. Document Servs., 99 F.3d 1381 (6th Cir. 1996). 83 See id. Entertainment v. RDR Books, the court determined that the author of the Harry Potter Lexicon, an unauthorized encyclopedia for the Harry Potter universe, infringed upon J.K. Rowling’s reproduction right in the Harry Potter novels. 84 The Lexicon did not violate the derivative work right because portions of the Lexicon contained “verbatim copying of language from the Harry Potter works.” 85 However, infringing upon the reproduction right is not limited to verbatim copying, and can also occur when someone has reproduced work that is “substantially similar” to the copyrighted material. 86 A “substantially similar” infringement may occur, for example, if in the case of a literary work select phrases were copied verbatim but the rest of the passage was paraphrased. 87 In contrast, Section 106(2) establishes the author’s derivative work right, which is the exclusive right to “prepare derivative works based upon the copyrighted work” without the authors permission. 88 A derivative work can be any “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.” 89 The inclusion of this catchall phrase indicates that the derivative work right is a broad one, and would result in possible infringement liability for any kind of work based upon a copyrighted work, regardless of the form. Unauthorized fan works may infringe upon either the reproduction right or the derivative work right. Many fan works may even infringe upon both. 90 Given courts’ willingness to protect characters from infringement, fan works may infringe upon the reproduction right insofar as a fan work employs protected characters. 91 Thus, fan works that take nothing but character’s names and personalities 92 may violate Section 106(1) for “reproducing” the protected character without permission. 93 At the same time, fan works using 84 Warner Bros. Entm’t v. RDR Books, 575 F. Supp. 2d 513, 552–53 (2008). Id. at 527. 86 Three Boys Music Corp. v. Bolton, 212 F.3d 477, 481 (9th Cir. 2000). 87 NIMMER & NIMMER, supra note 69, § 13.03[A][1]. 88 17 U.S.C. § 106(2) (2006). 89 Id. § 101 (emphasis added). 90 Frequently Asked Questions (and Answers) About Fan Fiction, supra note 80. 91 See Metro Goldwyn-Mayer v. Am. Honda Co.900 F. Supp. 1287, 1296–97 (C.D. Cal. 1995). 92 For example, “uber fanfiction” feature mainly canon characters but “placed in contemporary settings, with different backgrounds, names, personalities, etc.” Fan Fiction, supra note 30. 93 Consider again the fact that the characters taken from GONE WITH THE WIND in Randall’s THE WIND DONE GONE were found to be prima facie infringements. Suntrust 85 copyrighted elements from canon can infringe upon the derivative work right. 94 The broad statutory definition of derivative work indicates that nearly any fan work based upon copyrighted canon will constitute a derivative work, whether it is in the form of fiction, artwork, video, song, or a cross-media platform. Given that fan works tend to take copyrighted elements from canon works and “recast, transform, or adapt” them, most fan works would likely be considered derivative works. 95 In conclusion, without authorization from canon copyright owners, fan works likely constitute prima facie infringement. 96 Given protection for characters, plots, and settings from canon works, fan works that misappropriate these elements will encroach upon protected copyrighted subject matter. Furthermore, fan works likely infringe upon the reproduction right, the derivative work right, or both. Regardless of the exact nature of the infringement, the establishment of these two elements is sufficient for a canon copyright owner to establish a prima facie case of infringement for an unauthorized fan work. B. The Scope of Rights for Fan Authors 1. The Rights of Derivative Work Authors Under §103 Even if derivative work authors misappropriate protected elements, that alone is not fatal to protecting their own creative contributions. The Copyright Act specifically protects original contributions to derivative works in Section 103. 97 However, the protection afforded derivative works in Section 103 is relatively thin: it does not extend to “any part of the work in which material has been used unlawfully.” 98 Instead, copyright protection for derivative works “extends only to the material contributed by the author of such work . . . independent of . . . any copyright protection in the preexisting material.” 99 While the protection may be limited, Section 103 indicates that courts will protect the original contributions of fan authors in derivative works. 100 Bank v. Houghton Mifflin Co., 268 F.3d 1257, 1265–67 (11th Cir. 2001). 94 Frequently Asked Questions (and Answers) About Fan Fiction, supra note 80. 95 See 17 U.S.C. § 101 (2010) for the definition of “derivative work.” 96 Only unauthorized works will be considered infringing. See Castle Rock Entm’t v. Carol Publ’g Grp., 150 F.3d 132, 143 n.9 (2d Cir. 1998). 97 17 U.S.C. § 103 (2006). 98 Id. § 103(a). 99 Id. § 103(b) (emphasis added). 100 AARON SCHWABACH, FAN FICTION AND COPYRIGHT: OUTSIDER WORK AND INTELLECTUAL PROPERTY PROTECTION 133 (2011) (“If the first fanfic makes lawful use of the underlying work, however, it is copyrighted, as far as (but only as far as) any original contribution by the fanfic author . . . . [W]here a fanfic is a parody or makes transformative For example, the Seventh Circuit found that Neil Gaiman’s medieval interpretation of the character Spawn was protected as a derivative work. 101 Todd McFarlane created the original character Spawn, a deceased man named Al Simmons who had returned to Earth posthumously thanks to a pact he had made with the devil. 102 In order to boost the writing quality of the Spawn series, MacFarlane invited Gaiman to write a script for an issue of Spawn. 103 In the resulting product, Spawn No. 9, Gaiman created Medieval Spawn, a version of Macfarlane’s Spawn who talked “medieval” and looked like a knight. 104 In protecting Medieval Spawn as a derivative work of Spawn, Judge Richard Posner identified the two policy interests counseling against protecting derivative works: courts’ interest in “avoid[ing] the confusion that would be created if two indistinguishable works were copyrighted, and [preventing] a copyright owner from extending his copyright beyond the statutory period.” 105 Ultimately, the Seventh Circuit determined that neither of these policy concerns applied in the case at hand, and that Medieval Spawn was sufficiently distinctive from original Spawn to warrant protection. 106 The result in Gaiman v. MacFarlane indicates that a court’s willingness to protect derivative works hinges on how distinctive the works are from the original. In making this determination, the Ninth Circuit employs the Durham test. 107 For courts to protect a derivative work under Durham, the added originality to the derivative work must be more than trivial. 108 In addition, the original elements in the derivative work must not affect copyright protection for any preexisting copyrighted material. 109 Fan works would likely survive the first prong Durham test due to their originality: most fan works mainly consist of original contributions that exceed the threshold of triviality. 110 Arguably, fan works that “reinvent” characters are analogous to Gaiman’s or otherwise fair use of the underlying material, those elements of the fanfic that are the original work of the fan author are themselves protected, and, absent an assignment or transfer of copyright to a third party, that copyright is the property of the fan author.”). 101 Gaiman v. MacFarlane, 360 F.3d 644, 662 (7th Cir. 2004). 102 Id. at 649. 103 Id. 104 Id. at 650, 657. 105 Id. at 661. 106 Id. at 662 (“A Spawn who talks medieval and has a knight’s costume would infringe Medieval Spawn, and if he doesn’t talk medieval and doesn’t look like a knight then he would infringe Spawn.”). 107 Entm’t Research Grp. v. Genesis Creative Grp., 122 F.3d 1211, 1220 (9th Cir. 1997). 108 Id. 109 Id. 110 Tushnet, Legal Fictions, supra note 7, at 654 (“[F]an fiction involves the productive addition of creative labor to a copyright holder’s characters.”). “olden times” interpretation of Medieval Spawn: fans’ interpretations of copyrighted characters and subjects are often distinct from canon versions. 111 In Entertainment Research Group v. Genesis Creative Group, the Ninth Circuit found that the creation of costumes based on popular copyrighted characters (such as Barney) was not sufficiently original to warrant protection. 112 That case turned on application of the second prong of the Durham test, as the court found that granting copyright protection to the costumes as derivative works would affect the copyright owner’s rights by granting the derivative work holder a “de facto monopoly on all inflatable costumes depicting the copyrighted characters.” 113 Unlike Entertainment Research Group, however, it is unlikely that protecting fan works under Section 103 would result in de facto monopolies due to the nature of the canon/fan contribution distinction. 114 Fan works can result in unlimited, coexisting parallel universes, which do not infringe upon one another and do not affect the integrity of the canon work. 115 As a result, it is unlikely that granting copyrights to fan works sufficiently distinct from the originals would affect the scope of rights for the canon copyright owners. Much like how Gaiman’s Spawn variation is distinct from the original Spawn character, a fan could assert rights in their derivative variations of canon characters without affecting the scope of rights for the canon copyright owner. The Durham test is not the sole test by which courts test the protection of derivative works. 116 The result in Gracen v. Bradford Exchange seems to indicate that the Seventh Circuit employs a more stringent standard than the Ninth Circuit. 117 In that case, the court held that an original painting of Dorothy from The Wizard of Oz, inspired from (but not directly copying) a photo still from the movie, did not possess sufficient originality to warrant protection. 118 In that case, The Wizard of Oz’s copyright owner solicited art submissions for an art contest. 119 The plaintiff, Gracen, created the winning submission, but refused to agree to the terms of the contract. 120 Her painting used an image of Dorothy from the movie as inspiration, but she created the 111 For example, uber fiction does such reinvention. Fan Fiction, supra note 30. Entm’t Research Grp., 122 F.3d at 1224. 113 Id. 114 Tushnet, Payment in Credit, supra note 6, at 144. 115 See id. 116 See Gracen v. Bradford Exchange, 698 F.2d 300 (7th Cir. 1983) (finding that an original painting of Dorothy from the Wizard of Oz was not sufficiently original to warrant protection). 117 See id. 118 Id. at 305. 119 Id. at 301. 120 Id. 112 backdrop of the painting from her imagination. 121 As a result, the final product did not imitate any exact image from the movie, but was a derivative work of The Wizard of Oz. 122 Despite the fact that Gracen’s rendering of Dorothy had significant creative contributions, the court ultimately held that Gracen’s work did not satisfy the standard that “a derivative work must be substantially different from the underlying work to be copyrightable.” 123 This refusal to grant copyright protection indicates a high threshold of creativity to trigger protection for derivative works. 124 Like Gracen’s painting, fan works generally do not take exact reproductions from copyrighted works, but rather reinterpret new works with added original contributions. 125 Given that Gracen’s painting was insufficient to warrant protection, courts may similarly deny fan works protection. Ultimately, the results in Entertainment Research Group, Gracen, and Gaiman indicate an unresolved tension regarding the scope of Section 103. Although the Seventh Circuit decided both Gracen and Gaiman, their results are almost at odds with one another. 126 Given the level of originality that accompanied the plaintiff’s work in Gracen, it seem as though derivative fan works that “reimagine” and add a significant amount of creativity are still denied protection. 127 As a result, fan authors creating derivative works may instead have to rely upon the fair use defenses to justify their use of copyrighted elements. 128 2. The Fair Use Doctrine Although Section 103 may not provide very rigorous protection for derivative works, the fair use doctrine may provide a way for fans to use copyrighted materials. 129 Even if a fan “misappropriates” copyrighted elements of canon works, if such uses are fair, they will not be considered an infringement: under Section 107, “the fair use of a copyrighted work . . . is not an infringement of copyright.” 130 Section 107 sets forth four non-exhaustive statutory factors to help courts determine when a particular use is fair: the 121 Id. Id. 123 Id. at 305. 124 See id. 125 Tushnet, Payment in Credit, supra note 6, at 144. 126 Compare Gracen, 698 F.2d 300, 300 (not protecting an entirely invented artwork of Dorothy), with Gaiman v. McFarlane, 360 F.3d 644, 645 (7th Cir. 2004) (protecting a “medieval” version of Spawn). 127 See Tushnet, Payment in Credit, supra note 6, at 138. 128 17 U.S.C. § 107 (2010). 129 See Tushnet, Legal Fictions, supra note 7, at 658–59. 130 17 U.S.C. § 107 (2006). 122 purpose and character of the use, the nature of the copyrighted work, the amount and substantiality of the copyrighted work used, and the effect on potential markets. 131 No one factor is dispositive in determining the outcome of a fair use case, and courts are also free to consider other factors they deem important. 132 This Part examines the application of each of these factors with respect to fan merchandise. i. The Purpose and Character of the Use The first factor of the statute is “the purpose and character of use, including whether such use is of a commercial nature or is for nonprofit educational purposes.” 133 In applying this factor, courts have found whether the use was commercial a particularly salient issue. 134 In the Sony case, the Supreme Court went so far as to assert that “every commercial use of copyrighted material is presumptively unfair.” 135 This presumption would impose a very high burden on defendants whose uses are commercial to establish a fair use. Furthermore, this presumption would likely apply to all fan merchandise, which is by definition sold for commercial profit. However, in cases after Sony, the Supreme Court seems to have retreated from this bold assertion. 136 In Campbell v. Acuff-Rose, for instance, the Court specifically noted that when derivative works are particularly transformative, commerciality will not bar a finding of fair use. 137 Given that this language indicates that a work’s transformative nature can mitigate the effect of commerciality, the finding of fair use in Campbell indicates that the presumption of unfairness no longer exists. 138 To sufficiently override a work’s commerciality, transformation requires more than merely “supersed[ing] the objects of the original work.”139 The new work must have “add[ed] something new, with a further purpose or different 131 Id. As used in the statute, the term “including” is illustrative and not limitative. See 17 U.S.C. § 101 (2010). 133 Id. § 107(1). 134 See Sony Corp. of Am. v. Universal City Studios, 464 U.S. 417, 448 (1984). 135 Id. at 449. 136 See Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569 (1994) (finding that a commercial parody of “Pretty Woman,” was not presumptively not a fair use); Suntrust Bank v. Houghton Mifflin Co., 268 F.3d 1257 (11th Cir. 2001) (finding THE WIND DONE GONE, a retelling of GONE WITH THE WIND, was a fair use). 137 Campbell, 510 U.S.at 569 (“The more transformative the new work, the less will be the significance of other factors, like commercialism, that may weigh against a finding of fair use.”). 138 The song at issue in Campbell was sold for commercial profit. Id. at 572. 139 Id. at 576. 132 character, altering the first [original work] with the new expression, meaning or message.” 140 Under the Campbell balancing test between commerciality and transformation, it would appear as though the transformative nature of fan merchandise should support a finding of fair use. 141 While fan merchandise is commercial, the fan authors’ added creativity supports a finding of significant transformation. 142 Professor Rebecca Tushnet has written that fan creators add enough originality to warrant protection and thus distinguish themselves from infringers “by identifying themselves as authors who have expanded the meanings present in the original.” 143 Returning to the example of The Wind Done Gone, the Eleventh Circuit found that Randall’s use of Mitchell’s copyrighted characters was sufficiently transformative to warrant a finding of fair use. 144 Like many stereotypical fan works, Randall’s The Wind Done Gone depends upon reference to the canon work yet still expands upon copyrighted elements from Randall’s creative contribution. 145 Randall needed to take numerous copyrighted elements from Gone with the Wind to achieve her intended effect of criticizing and commenting upon the original story. 146 Ultimately, Randall’s significant original contributions supported a finding that the use was “transformative” and thus fair. 147 For many fan authors, the addition of original contributions in fan works creates a work which “[w]hile told from a different perspective . . . transformed [the story] into a very different tale.” 148 Although fan works employ copyrighted characters and plot elements from the canon work, fan authors contribute a significant amount of originality by placing “familiar characters and situations in new contexts.” 149 Thus, just as the courts found The Wind Done Gone was a fair use despite its commerciality, courts should also find transformative fan works fair uses.150 The level of transformation in fan merchandise should be considered significant enough to outweigh their commercial nature. As a result, in 140 Id. at 579. See Tushnet, Legal Fictions, supra note 7, at 665. 142 Campbell, 510 U.S. at 579. 143 See Tushnet, Payment in Credit, supra note 6, at 137. 144 See Suntrust Bank v. Houghton Mifflin Co., 268 F.3d 1257 (11th Cir. 2001). 145 Id. 146 Id. at 1267. The court noted that The Wind Done Gone took fifteen fictional characters from Mitchell’s original and incorporated those character’s original physical attributes, mannerisms, distinct features, and their relationships with each other, and also noted that the fictional locales, settings, characters, themes, and plot generally closely mirrored those in Gone with the Wind. Id. at 1266. 147 Id. at 1271. 148 Id. at 1270. 149 See Tushnet, Payment in Credit, supra note 6, at 138. 150 See Suntrust Bank, 268 F.3d at 1270. 141 applying the Campbell balancing test, this factor should weigh in favor of finding fan merchandise fair use. ii. The Nature of the Copyrighted Work The second statutory factor is “the nature of the copyrighted work.” 151 In applying this factor, courts have held that copyright should more rigorously protect works that are “closer to the core of intended copyright protection.” 152 The stronger the copyright protection for the original work, the more heavily this factor weighs in favor of the author of the original work. 153 As a result, courts tend to protect fictional works more strongly than factual works or works that draw heavily from the public domain. 154 Most works that inspire fan works are fictional works at the core of copyright protection. 155 Additionally, most canon works that inspire fan fiction tend to fall within one of several categories: anime or manga, books, television series, video games, movies, cartoons, comic books, or plays. 156 Of these, pop culture works such as television shows, movies, and books are the most popular type of fandom. 157 These works, in particular, are truly at the “core of copyright protection,” as they generally involve fictional works. 158 Due to the nature of most canon works, this factor will likely weigh against finding fair use for fan works. iii. The Amount and Substantiality Taken The third statutory factor is “the amount and substantiality of the portion 151 17 U.S.C. § 107(2) (2010). Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 586 (1994). 153 Id. 154 Castle Rock Entm’t v. Carol Publ’g Grp., 150 F.3d 132, 143–44 (1998). 155 “Major genres of fan fiction include those based on: Japanese anime/manga series; the book series Animorphs by K. A. Applegate, J.K. Rowling’s Harry Potter series; J.R.R. Tolkien’s The Lord of the Rings; science fiction serials (both on television and in film); other serial television (dramatic and even comedic); American cartoon series, such as Daria, and both DC Comics and Marvel Comics. Popular television series which have inspired fanfic include Star Trek, Starsky and Hutch, The X-Files, Buffy the Vampire Slayer, and “CSI”. Even video games, such as the Final Fantasy and Street Fighter series, have become sources. It is also relevant to consider the formalised shared universe where the originating author actively encourages others to contribute to the development of the whole.” Fan Fiction, supra note 30. All of these listed fandoms are fictional television and book series, which remain within the core of copyright protection. 156 Fan Fiction Statistics, supra note 33. 157 Id. 158 Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 586 (1994). 152 used in relation to the copyrighted work as a whole.” 159 One way to streamline this factor’s inquiry is to consider whether the appropriated elements were “consistent with or more than necessary to further ‘the purpose and character of the use.’” 160 However, in determining whether the misappropriated amount was necessary to achieve the intended effect, courts should be cautious not to substitute the artistic judgment of “what was necessary” for legal judgment of whether what was taken was “too much.” 161 Using parody as an example, courts should not determine whether the amount of misappropriated elements was superfluous for achieving the parodic effect. 162 To do so would substitute artistic judgment for legal judgment. 163 Similarly, when determining whether fair use extends to fan works, courts should not consider whether the amount of misappropriated copyrighted material was superfluous to achieving the fan author’s goal. 164 Like parodies, fan works depend upon reference to the canon work. 165 As the court in Suntrust noted regarding Randall’s appropriation of elements from Gone with the Wind, courts should not judge whether the author took “too much.” 166 Such inquiries would be questions of artistic judgment about what is necessary to achieve the required allusions, not legal judgments. Similarly, in applying this factor to derivative fan works, courts should be careful not to substitute their artistic judgment for legal judgment. Given the variety of types of fan works that exist, the weight of the third statutory factor may vary significantly. On one end of the spectrum is fan fiction, which often appropriates characters, worlds, or histories from a copyrighted canonical work. 167 On the other end are fan videos, where the only added originality is a unique compilation of protected images and 159 17 U.S.C. § 107(3) (2010). Castle Rock Entm’t v. Carol Publ’g Grp., 150 F.3d 132, 144 (1998). 161 See Suntrust Bank v. Houghton Mifflin Co., 268 F.3d 1257, 1273 (11th Cir. 2001) (“In doing so, we are reminded that literary relevance is a highly subjective analysis illsuited for judicial inquiry.”). 162 Id. 163 The Holmsian non-discrimination principle was set forth in Bleistein. There, Justice Holmes noted that “[i]t would be a dangerous undertaking for persons trained only to the law to constitute themselves final judges of the worth of pictorial illustrations.” Bleisten v. Donaldson Lithographing Co., 188 U.S. 239, 251 (1903). In other words, judges should not substitute their artistic judgment for their legal judgments. 164 Suntrust Bank, 268 F.3d at 1273 (“[W]e are reminded that literary relevance is a highly subjective analysis ill-suited for judicial inquiry.”). 165 See Tushnet, Payment in Credit, supra note 6, at 137. 166 Suntrust Bank, 268 F.3d at 1273. 167 Frequently Asked Questions (and Answers) About Fan Fiction, supra note 80. 160 videos. 168 Because the only originality in such fan video compilations is the compilation, ,rather than an original story or character (such as in fan fiction), the third factor may cut against protection for fan video compilations. As a result, the level of protection fan works receive may vary depending on the underlying nature of the fan work. iv. The Effect on the Market for the Canonical Work The final factor asks courts to consider “the effect of the use upon the potential market for or value of the copyrighted work.” 169 Courts have expanded the fourth factor inquiry beyond the market for the copyrighted work and have included the effect upon derivative work markets in their inquiry. 170 As a result, unauthorized works that negatively affect the potential market for derivative works may not be fair uses. Even though authors may not always intend to develop derivative work markets, almost any fan work could conceivably compete with any potential derivative works the author eventually chooses to develop. 171 The Campbell Court has somewhat restrained this by noting that “[t]he market for potential derivative uses includes only those that creators of original works would in general develop or license others to develop.” 172 Therefore, the relevant inquiry isn’t any potential derivative markets, but only those that the copyright owner is likely to develop. As a result, the weight of this factor would depend upon the copyright owner’s plans for developing derivative markets. ***** In conclusion, the application of current fair use doctrine is uncertain with respect to fan works. Although the first factor may weigh in favor of finding fair use, the commercial nature of fan merchandise may counsel against fair use. Furthermore, the second factor weighs quite firmly against finding fair use given that most canon material is within the core of copyright protection. It is difficult to determine the third and fourth factors across the board, as the application of each of these factors may vary from case to case. As a result, it would seem as though the application of current fair use doctrine to fan merchandise is uncertain. The remainder of this Note argues that in order to best serve copyright’s overall goals of promoting “Progress,” courts should tailor their fair use analysis such that the creation of fan merchandise is considered a fair use. 168 Logan Hill, The Vidder: Luminosity Upgrades Fan Video, NEW YORK MAGAZINE (Nov. 12, 2007), http://nymag.com/movies/features/videos/40622/. 169 17 U.S.C. § 107(4) (2010). 170 Harper & Row, Publishers v. Nation Enters., 471 U.S. 539, 568 (1985). 171 Id. 172 Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 592 (1994) (emphasis added).