Fair winds for use of copyrighted material

By Shiela Marie Rabaya, ACCRALAW
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Fair use is a privilege to use copyrighted material reasonably without the consent of the copyright owner, or copying a theme or idea rather than their expression. Fair use is considered as breathing space for creators so that they can build on and improve upon existing works. This privilege is supposed to benefit both the creator and society as a whole.

The concept of fair use seems to be straightforward. But in the application, finding the balance between the original creator’s rights and fair use by the subsequent user has proven to be difficult. However, tides in the past year have shifted towards an equitable interpretation.

Four-factor test

Fair winds for use of copyrighted material Shiela Marie Rabaya
Shiela Marie Rabaya
Underbar Associate
ACCRALAW

In 2021, the Supreme Court of the United States (SCOTUS) issued a binding precedent for “fair use” for the first time in more than 25 years. In Google v Oracle America, Oracle accused Google of stealing copyrighted pieces of its source code in Android smartphones. On the other hand, Google argued that the Java source code was too functional to be protected by copyright law and should therefore be subject to copyright’s fair use doctrine.

On 15 April 2021, SCOTUS resolved the 10-year dispute when it ruled that Google’s use of the Java source code was within the bounds of fair use. The decision assumed that the Java software language was copyrightable, yet applied the four-factor test in determining Google’s fair use, which considers the following:

(1) The purpose and character of the use;

(2) The nature of the work;

(3) The amount of substantiality of the portion used in relation to the work as a whole; and

(4) The effect of the use on the market or potential market for the original work.

The SCOTUS decision is seen as a move that can spur innovation and creativity by giving breathing space to creators who wish to build on existing works.

In the Philippine context, it is noteworthy that the same four-factor test is listed in section 185 of the IP Code, which also specifies the allowed “purpose and character of use”, namely: (1) criticism and comment; (2) news reporting; (3) teaching; and (4) scholarship, research and similar purposes. In ABS-CBN Corporation v Gozon et al, the Supreme Court of the Philippines also affirmed the use of the four-factor test.

While the SCOTUS decision is not binding precedent in the Philippines, it indicates a shift towards an equitable interpretation of the four-factor test for fair use. Since fair use cases are few and far between, the influence of the decision for future cases may be significant. However, it is too early to tell if the SCOTUS decision will influence a broader interpretation of fair use law generally, or if it will remain an isolated case.

Monetisation of YouTube

YouTube is known as a source of entertainment, but is also increasingly an important tool for businesses. The dramatic increase in users has magnified potential for monetising YouTube channels through subscriptions and marketing partnerships.

YouTube is home to a colossal amount of such content, accelerating by the day, and fair use issues continue to be a challenge to its content creators. A channel called Totally Not Mark (TNM) recently influenced a change in YouTube’s copyright and fair use rules for content creators.

TNM’s channel includes criticisms and analysis of anime samples from several companies, including Toei Animation, which filed around 150 copyright strikes resulting in the takedown of hundreds of TNM’s videos. For TNM and other small to medium content creators, takedowns of videos could be a severe blow to their profitability and marketability.

But with the increase of users who rely on monetisation, YouTube must be extremely careful in its copyright takedown measures. In 2022, YouTube subsequently ruled in favour of TNM, and 150 copyright strikes against the channel were removed.

The issue also influenced a broader change of YouTube’s copyright and fair use rules, which now allow for flexibility among international copyright laws. A video may be taken down in one country but left up in another. The new rule therefore heavily depends on specific national copyright laws, and videos are most likely to be allowed in countries like the Philippines and the US, which apply the four-factor test.

Filipino content creators may then be able to rely on fair use in having their videos accessible in the Philippines. Conversely, videos are most likely to be taken down in countries like Japan, which has stricter copyright rules.

The SCOTUS decision and YouTube ruling signal that fair use is sailing towards an equitable interpretation by both courts and platforms that host content – a win for content creators.

Shiela Marie Rabaya is an underbar associate at the IP department of ACCRALAW

MoU

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