Outstanding material questions regarding fair use prevented an award of summary judgment in favor of a magazine publisher that had laid claims of copyright infringement against a company that took the covers of certain issues of the magazine and mounted them on plaques to sell to individuals featured in the issues, the U.S. District Court for the District of Maryland ruled July 24 (Rosebud Entm’t, LLC v. Prof’l Laminating, LLC, D. Md., No. 1:12-cv-00425-WDQ, 7/24/13).
Denying a motion for partial summary judgment, the court did, however, determine that the plaque maker could not assert a defense under the first-sale doctrine because it had significantly altered the works in question–the magazine issues–by taking off the covers and mounting them on plaques.
Plaques Made From Magazine Covers
Rosebud Entertainment L.L.C. of Baltimore is the publisher of Baltimoremagazine, a periodical publication focusing on news, events, and features of the Baltimore, Maryland area. Rosebud also sells plaques that display covers or pages from issues of the magazine, primarily to people or businesses who have been the subject of articles.
Professional Laminating L.L.C. of Cary, N.C., operated by William and Barbara Oertel, produces a range of commemorative items, including plaques featuring pages of magazines.
Professional Laminating produced advertisements for its services featuring the covers of the November 2010 and November 2011 issues of Baltimore, which had cover stories on the Baltimore area’s “top doctors.” Professional Laminating mailed those ads to Baltimore-area doctors who had been featured in the relevant articles and these generated about 20 sales of plaques and displays.
Rosebud sued Professional Laminating, alleging copyright infringement and other claims. Rosebud moved for partial summary judgment on the copyright claim. Professional Laminating asserted a defense of fair use.
Fair Use Issue Not Resolved
Judge William D. Quarles Jr. first determined that the fair use issue could not be resolved at the summary judgment stage.
Applying a four-part test set forth in the Copyright Act of 1976, 17 U.S.C. §107, Quarles first determined that Professional Laminating’s use of the magazine covers was only “minimally transformative.” The court said:
[A]s [the Oertels] admit, they created the products by laminating magazine covers onto pieces of wood and, with respect to the [display] crystals, by shrinking and inserting copies of the covers into the material. … Indeed, the [Oertels] concede that the “nature” of their products is “to showcase the original copyrighted material.”
The court also said that because Professional Laminating profited from these sales, this constituted a commercial use that, under the Betamaxdecision–Sony Corporation of America v. Universal City Studios Inc., 464 U.S. 417, 220 U.S.P.Q. 665 (1984)–it was “presumptively an unfair exploitation of the monopoly privilege that belongs to the owner of the copyright.”
Thus, the first Section 107 factor weighed against a finding of fair use, the court said.
The second factor–the nature of the magazine issues–weighed in favor of a finding of fair use, on the basis that the content that was copied was a mixture of factual and creative information. The third factor also weighed on this side, given that the proportion of the works used on the face of the plaques was “insubstantial” compared to the works as a whole.
Under the final factor–the impact of the Oertels’ use on the market for the copyrighted works–the court was unable to conclude on the facts before it that the Oertels had materially impaired the marketability of the magazine issues.
Taking the factors together, the court concluded that, at best, there was a genuine outstanding question of material fact regarding whether the Oertels’ use constituted fair use. Thus, the court denied Rosebud’s motion for summary judgment.
No First-Sale Protection
The court, however, went on to determine that Professional Laminating could not assert a defense under the first-sale doctrine. According to the court, the fact that Professional Laminating had made copies of the original works and had substantially altered them by removing the covers of the issues and mounting them, meant that it was not merely disposing of legitimate copies of copyrighted works that it had acquired.
Rosebud was represented by Christopher J. Lyon and James B. Astrachan of Astrachan Gunst Thomas & Rubin, Baltimore. Professional Laminating was represented by Allan Ames Noble of Budow & Noble, Bethesda, Md.