AIP (aka the scientific journal publishers) sued Schwegman
for using various published articles in its patent prosecution practice. The
magistrate concluded that this was fair use as a matter of law and recommended
a grant of summary judgment in Schwegman’s favor.
Schwegman obtained and copied 18 of the publishers’ journal
articles from a USPTO database and other sources; the publishers alleged that
obtaining these copies and making internal copies infringed. Initially, the publishers alleged that
submitting copies to the USPTO in conjunction with patent applications was
infringing, but eventually amended the complaint so that they weren’t alleging
infringement from making copies required by PTO rules and regulations,
transmitting such copies to the PTO, or making an archival copy for an internal
file documenting the transmission. Instead, they limited their claims to Schwegman’s
downloading, storing, making internal copies of, and distributing the Articles
by email. The publishers didn’t concede that submitting copies to the PTO
wasn’t fair; they just didn’t challenge it.
However, the magistrate continued, the allegedly infringing
uses remained intertwined with Schwegman’s patent prosecution practice, making
US and foreign patent requirements relevant.
The PTO has to evaluate the teachings of all information material to
patentability, and therefore imposes a duty of candor and good faith in dealing
with the PTO. This includes a duty to
disclose “all information known to [an individual associated with the
prosecution of a patent application] to be material to patentability,” whether
it helps or harms the application. To comply with this duty, the PTO encourages
submission of an Information Disclosure Statement, which must include “a
legible copy of . . . [e]ach publication or that portion which caused it to be
listed [and] [a]ll other information or that portion which caused it to be
listed[.]” Generally, if an article is
merely cited instead of submitted in full, the PTO won’t consider it. Other than filing a disclosure statement, the
record didn’t show any other means by which applicants could or do comply with
the disclosure requirement. Schwegman provided the articles at issue to the PTO
to comply with the duty of disclosure; it also used one of the articles in
helping a client apply for Japanese and European patents. The rules for those jurisdictions are not
identical, but the EPO imposes a limited duty of disclosure of prior art, and
the JPO also imposes an obligation to provide references to prior art. Both offices cited the article at issue in
various proceedings; a Schwegman attorney later accessed an electronic copy of
the article in Schwegman’s electronic document management system in response to
the JPO office action and printed out a copy to review.
The magistrate turned to the expected audience for the
articles, which the publishers claimed included inventors and patent attorneys. The publishers have, through the CCC, issued
licenses to nine law firms for internal reproduction of articles. Schwegman’s
evidence was that the publishers’ journals served as a platform “through which
original research findings are submitted by authors, peer-reviewed by experts
and then transmitted to the intended reader audience of scholars and
practitioners.” Authors want to publish in reputable journals to increase their
prestige, and readers searching for high-quality research are essential to the
journal’s reputation, creating a two-sided market in which “‘authors benefit
from greater impact and citations and thus prefer a journal that has more
readers, [and] readers benefit from content and thus prefer journals with more
articles.’” The publishers attempt to capitalize on this by highlighting their
journals’ rankings within their specialties.
“According to Schwegman’s expert witness, economist Dr. Jean-Pierre Dubé,
attorneys reviewing scholarly articles to decide whether those articles must be
submitted as prior art to a patent office read the articles for a different
purpose and fall outside the target audience for such material.” However, Dubé acknowledged that if a lawyer
who was willing to pay for a copy of an article to review it didn’t pay, that
would affect the potential market for copies.
Schwegman obtained the articles in various ways, mostly by
downloading them from a PTO website, PAIR (Patent Application Information
Retrieval system). Public PAIR provides
interested people access to issued patents and published patent applications. Private
PAIR “provides secure real-time access to pending application status and
history” for registered patent attorneys, independent inventors, and
individuals with “customer number[s]” or a certificate. For some of the articles retrieved from
Private PAIR, Schwegman inherited patent application files from another law
firm that cited the relevant articles, but the inherited files did not contain
copies of the articles, so Schwegman downloaded them and stored them in its own
electronic file management system. The
other articles came from a variety of sources, including the University of
Pennsylvania website and an attachment to an email to a Schwegman lawyer from
an inventor in whose patent application the relevant was cited as prior art. One article was downloaded subject to a
license from one of the publishers. All
the articles were eventually cited in US patent applications.
The publishers alleged that Schwegman infringed by (1)
obtaining copies through emails, from the internet, and otherwise; (2) storing
copies on the firm’s electronic file management system; (3) viewing them; (4)
emailing copies to the firm’s clients; and (5) emailing one article to another
attorney in connection with a foreign patent application in Europe, and making a
physical copy of that article in connection with a foreign patent application
in Japan. The core issue, since it’s
hard for lawyers to control what gets emailed to them, surrounded the document
management system, which allows lawyers to access documents stored on the firm’s
server. Schwegman doesn’t restrict
lawyers’ ability to access such files, but the purpose of its database is to
store articles that will be disclosed to the PTO. The system doesn’t allow text searches, only
metadata searches (e.g., author and title), which aren’t very useful in a
search for prior art.
So, fair use. When
the defendant’s use isn’t for the same “intrinsic” purpose as the copyright
owner’s, that supports fair use. A
reasonable jury could only conclude that Schwegman’s purpose was to comply with
the PTO’s disclosure rules and to represent its clients’ interests in obtaining
patents in Europe and Japan. No record evidence supported any other purpose
distinct from Schwegman’s compliance with the obligations imposed by various
patent offices. This purpose was not the same as the publishers’ purpose: they
produced their articles “for a purpose that has little, if any, relationship to
Schwegman’s purpose in using them.”
Rather than acting with a purpose of providing information relevant to
patentability of specific inventions, the publishers distributed the articles “to
inform the scientific community of advancements in scientific research and new
scientific discoveries that have been made, and to allow the scientific
community to test the quality of the authors’ methods and conclusions.” The publishers’ own declaration stated that
their purpose was to “inform[] interested
readers of the state of the art,” not to “ensur[e] that a government agency is provided
with the information it needs to determine whether an invention is novel or
non-obvious.”
The magistrate also noted that no reasonable jury could find
that the copyrightable elements of the articles—their expression, as opposed to
the facts they conveyed—had any relationship to Schwegman’s use. This weighed heavily in favor of fair use.
It didn’t matter that there was no change in the content in
Schwegman’s hands. That might make the
term “transformative” “a messy fit” because that label seems most apt when a
user actually changes the content of the work (but note that Tony Reese
has long argued that change in purpose
is a much better predictor of a fair use finding than change in content, and
this decision is another datum in favor of his argument). But pure reproduction can still be fair use
when the purpose and character of the use differs from the purpose of the
original, “such as photocopying for use in a classroom.” (Citing §107, as well as the legislative
history and William Patry.) Cases in
which defendants used works in connection with judicial proceedings supported
this conclusion: evidentiary use is “indifferent to” the copyrightable elements
of the work.
This new and different purpose extends to internal copies a
law firm makes while it analyzes copyrighted material and determines whether it
would serve the client’s interests to present the material to a decision-maker. Schwegman’s use here had a similarly
evidentiary character related to effective client representation. “[I]t would
be an absurd result if an attorney seeking to advance her client’s interests
before a patent office were not permitted to copy and review the very type of
information that the attorney is required to evaluate in connection with a
patent application.” Only the facts and
ideas contained in the articles were of use to Schwegman. Thus, no reasonable jury could find that the
purpose and character of Schwegman’s use was the same as the publishers’
intrinsic purpose.
Commerciality therefore played a limited role. The key profit/nonprofit distinction was “whether
the user stands to profit from exploitation of the copyrighted material without
paying the customary price.” Citing Harper
& Row, the publishers argued that Schwegman’s profit-seeking status
should weigh against it, especially since Schwegman charged clients a flat rate
for downloading documents from Private PAIR and billed for attorney and
paralegal time spent locating and reviewing relevant prior art. But this wasn’t a case of unfairly profiting
without paying the customary price, because of the new and different
evidentiary character of the use. The publishers argued that this was just Texaco redux. American Geophysical Union v. Texaco Inc., 60
F.3d 913 (2d Cir. 1994). But in Texaco,
the evidence showed a systematic process of encouraging employees to copy
articles to make more copies available without paying. Here, there was no evidence that would allow
a reasonable jury to conclude that Schwegman was maintaining a mini-research
library to avoid paying per-lawyer licenses.
It would be different if the law firm was making copies of “a
copyrighted legal treatise on patent prosecution or a practitioner’s manual on
effective methods for filing patent applications with the USPTO or other patent
offices,” in which case the purpose of its use would likely be identical to the
original purpose of teaching lawyers to prosecute patents.
Then the magistrate jumped straight to factor four. There was no evidence of an effect on the
traditional target market: “academics, physical scientists and researchers,
engineers, educators, students, and members of the general public who want to
read peer-reviewed scholarly, highly specialized articles about the physical
sciences and other scientific disciplines.”
The only evidence the publishers submitted was the fact that they’d lose
revenues compared to a world in which patent lawyers did pay license fees. Licenses are available, and some patent law
firms did pay for licenses, though the record didn’t show whether those
licenses were for uses made to comply with PTO and foreign patent office requirements. But the missing license fee can’t be the sort
of negative effect that weighs heavily against a finding of fair use, or it
would always weigh against fair use and make this factor meaningless. As Bill
Graham Archives held, the copyright owner isn’t entitled to preempt a
defendant from exploiting markets that that weren’t “‘traditional, reasonable,
or likely to be developed[.]’” And the
first factor is heavily interrelated to the fourth; the fact that Schwegman’s
use was different than, and not superseding, the original purpose meant that
this market wasn’t traditional, reasonable, or likely to be developed. That some law firms took licenses didn’t make
patent firms into such a market. (It’s
not hard to see that “likely to be developed” here is not an empirical claim
nearly as much as it is a normative claim founded on the first two concepts in
this triad.) Texaco was not to the contrary, even though that case relied on the
fact that the publishers made a license available; that case didn’t involve a
new purpose.
Clean-up: the nature of the copyrighted work weighed
slightly in Schwegman’s favor, given the highly factual content of the
articles. The amount used was the whole work, but this factor has to be considered
in context of factor one: whether the amount used is reasonable in relation to
the copying’s purpose. Copying an entire work doesn’t preclude a finding of
fair use if that’s not more than necessary to further the purpose. “The evidence permits no reasonable inference
other than that Schwegman’s copying was essential to allow the law firm to
evaluate whether the information in the Articles was prior art that needed to
be disclosed in connection with patent applications.” Thus, factor three also favored a finding of
fair use.
Other factors: the publishers argued that fair use was
inappropriate because Schwegman never had an authorized/licensed copy. But there was no authority requiring this
when the use is fair. This seemed to be
a bad faith argument. But there was no
indication that “Schwegman simply stole the Articles the way a person might
when he ‘pirates’ a song on the internet.”
Schwegman paid for a copy of one article, and obtained others from
Private PAIR when they inherited client files.
Other sources were undetermined; one came from a university website (did
the publisher send a takedown notice?), and one from a client. These were not the acts of a “chiseler.” No
reasonable jury could find bad faith.
Schwegman’s use didn’t create any reasonable disincentive
for the publishers to keep on publishing, and its copying promoted the progress
of science and useful arts, the very purpose of the Copyright Act, by assisting
patent examiners.
The magistrate recommended denying PTO’s motion for summary
judgment on its counterclaim for a declaratory judgment of fair use as
moot. The PTO was basically an amicus,
not a party with a cognizable Article III case or controversy.
Posts
No comments:
Post a Comment