College Copy Shop (CCS) compiles, copies, and sells reading materials to students. The compilations are prepared on the instructions of professors, who indicate which parts of which publications should be included for their students. The copied

Question

materials include texts published by Deep Topics, Inc CCS does not obtain the permission of Deep Topics, or any of the other original publishers of the copied materials, and does not pay royalties on the sales of the compilations. Deep Topics and others file a suit against CCS, alleging infringement of their intellectual property rights. Which type of intellectual property is involved in this situation? What is CCS's likely defense? How is a court most likely to rule? Explain.

Answer 1

The intellectual property at issue in this situation is copyright—specifically, of course, the copyrights of the publishers of the materials that CCS copies and sells without permission. CCS is likely to assert the "fair use" doctrine in its defense. This doctrine allow exceptions to the general requirement that an owner's permission be obtained before copyrighted material can be copied. CCS is likely to argue that its compilations are excepted because they are dedicated to "educational" uses. A court is most likely to conclude, however, that CCS's copying and selling of the materials is not a fair use, because CCS profits from the sales, which undercut the potential market for the copyrighted publications from which the copies are made. In determining fair use, a court considers four factors: the purpose and character of the use, the nature of the copyrighted work, the amount and substantiality of the portion used in relation to the copyrighted work as a whole, and the effect of the use on the potential market for or value of the copyrighted work. In this situation, the fourth factor is most significant and supports the conclusion that CCS's use of the materials is not a fair use