Baskin v. Seajay Society ( 1998 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
JOHN SUNDEMAN, Successor Personal
Representative of the Estate of
Marjorie Kinnan Rawlings Baskin;
FLORIDA FOUNDATION,
No. 97-1339
Plaintiffs-Appellants,
v.
THE SEAJAY SOCIETY, INC.,
Defendant-Appellee.
Appeal from the United States District Court
for the District of South Carolina, at Columbia.
Matthew J. Perry, Jr., Senior District Judge.
(CA-90-1100-3)
Argued: January 30, 1998
Decided: April 23, 1998
Before WILLIAMS and MICHAEL, Circuit Judges, and KISER,
Senior United States District Judge for the
Western District of Virginia, sitting by designation.
_________________________________________________________________
Affirmed by published opinion. Senior Judge Kiser wrote the opinion,
in which Judge Williams and Judge Michael joined.
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COUNSEL
ARGUED: J. Lester Kaney, COBB, COLE & BELL, Daytona Beach,
Florida; Herbert L. Allen, ALLEN, DYER, DOPPELT, FRANJOLA
& MILBRATH, P.A., Orlando, Florida, for Appellants. Steve A. Mat-
thews, SINKLER & BOYD, P.A., Columbia, South Carolina, for
Appellee. ON BRIEF: Robert O. Meriwether, NELSON, MULLINS,
RILEY & SCARBOROUGH, L.L.P., Columbia, South Carolina, for
Appellee.
_________________________________________________________________
OPINION
KISER, Senior District Judge:
Mr. Norton Baskin (Baskin) is the personal representative of the
estate of his late wife, Mrs. Marjorie Kinnan Rawlings Baskin (Rawl-
ings). In Count I of the Second Amended Complaint, Baskin and the
University of Florida Foundation (Foundation) (formerly known as
the University of Florida Endowment Corporation) seek to recover
from The Seajay Society, Inc. (Seajay) physical possession of certain
documents which appellants assert are assets of the Rawlings estate.
In Count II, the Foundation seeks damages and injunctive relief for
Seajay's alleged violation of, and alleged threats to continue violat-
ing, its copyright.1
Senior Judge Perry tried this case without a jury on September 5
and 6, 1991. After the trial, post-trial briefs, and closing arguments,
the lower court, on October 1, 1992, entered judgment for Seajay as
to Counts I and II, but did not render a decision on the counterclaim.2
_________________________________________________________________
1 It is important to note the distinction between the physical ownership
of documents, and the ownership of the literary rights in those docu-
ments, the later being the copyright. Under 17 U.S.C.A. § 202 (West
1996), the physical document and the copyright are subject to separate
transfer. Count I concerns the right to physical possession of the docu-
ments themselves, while Count II concerns the ownership of the literary
rights in the documents. Seajay concedes that the Foundation owns the
copyright to Ms. Rawlings' letters and papers, however, it contends that
it did not infringe upon those literary rights.
2 Seajay filed a counterclaim seeking a declaration that their uses of the
contested documents prior to February 21, 1991 did not constitute publi-
cation sufficient to warrant an extension of the Foundation's copyright
under 17 U.S.C.A. § 303. Appellants apparently do not appeal this rul-
ing.
2
The district court also did not file findings of facts or conclusions of
law at that time. Baskin and the Foundation noticed an appeal to this
Court on October 30, 1992. This Court, however, dismissed the
appeal without prejudice because of the district court's failure to
address the counterclaim or include findings of fact and conclusions
of law.
On February 5, 1997, after reopening the record, receiving addi-
tional evidence on Count II, and hearing renewed closing arguments,
the district court found for Seajay as to Counts I and II and the coun-
terclaim. The district court also filed its findings of fact and conclu-
sions of law. That decision is now before this Court on appeal.
I. FACTS
Rawlings died on December 14, 1953 in St. John's County, Flor-
ida. She was the noted author of books such as Sojourner, Cross
Creek, and The Yearling, which won the 1939 Pulitzer Prize.
In her will, Rawlings designated Baskin and the Foundation as co-
executors of her estate. She also designated one of her closest friends,
Ms. Julia Scribner Bigham (Bigham) as literary executrix of her
estate. Bigham was the daughter of publisher Charles Scribner, whose
company, Charles Scribner's Sons Publishers (Scribner Publishing),
published all of Rawlings' works.
On January 27, 1954, the County Judge's Court for St. John's
County, Florida appointed Baskin as the sole executor of Rawlings'
estate. The probate court never appointed the Foundation as an execu-
tor. Likewise, the probate court never appointed Bigham as literary
executrix, or as any other fiduciary. Bigham acted in the capacity as
literary executrix, however, under the auspices of Baskin, from 1953
until her death on October 24, 1961.3
Rawlings' will left immediate custody of "all manuscripts, all
notes, all correspondence, and all literary property of any kind" to
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3 The term "literary executrix" is somewhat misleading because
Bigham never qualified as a fiduciary in any capacity. Her legal status
seems to have been that of an advisor to the executor, Baskin.
3
Bigham, in her role as literary executrix. Bigham had the power to
destroy any of the "notes, manuscripts or correspondence" she
believed should be destroyed. She also had the power to determine
which materials would be published. Bigham could keep the literary
works as long as she wanted, then she was to turn them over to the
University of Florida Library. Any income from these literary materi-
als was to be held in trust by the Foundation, along with the remain-
der of Rawlings' property.
Acting in her role as literary executrix, Bigham collected Rawl-
ings' correspondence, papers, manuscripts, and other materials from
Baskin. Bigham also obtained some of Rawlings' materials from
Scribner Publishing. At no time did Baskin, the only court appointed
fiduciary, ever request an inventory of the materials collected by
Bigham.
Bigham scrupulously performed her duties as literary executrix.
During the remainder of her life, she wrote an introduction to and
posthumously published The Secret River, and then directed the origi-
nal manuscript be sent to the University of Florida Library; she post-
humously published The Marjorie Rawlings Reader , and then
returned the typescript and original materials to Scribner Publishing;
she worked to ensure that any works retained by Scribner Publishing
were later sent to the University of Florida Library; and she trans-
ferred numerous other documents to the University of Florida Library.
After Bigham's death in 1961, Baskin did not ask any one else to
assume the role of literary executor. Instead, as executor of the estate,
he assumed that role.
Baskin was not as conscientious as Bigham in performing the
duties of literary executor. He admitted that he was aware that
Bigham had a significant number of Rawlings' documents at the time
of her death, yet he never asked Bigham's family to return any of
those documents to the Rawlings estate. He stated that he believed the
documents were under consideration for publication by Scribner Pub-
lishing, but admits that he knew the documents were at Bigham's resi-
dence. In any event, he failed to confirm whether or not the
documents were part of the Rawlings estate and whether or not they
were being considered for publication by Scribner Publishing. Four
years after Bigham's death on October 24, 1961, the Florida probate
4
court closed administration of Rawlings' estate with Baskin still hav-
ing failed to clarify the status of those documents.
The documents remained stored at the residence of Bigham's wid-
ower in two boxes which were labeled "MKR letters and papers." In
1987, Bigham's widower was moving from the residence, so he and
his children decided to dispose of the contents of the boxes. Ms. Ann
Hutchins, Bigham's daughter, contacted Mr. Glenn Horowitz, a
nationally known dealer of rare books and literary and historical
manuscripts, to help them sell the material. Horowitz and his staff cat-
aloged the contents of the two boxes as follows:
1. Letters written from Rawlings to Bigham from 1939 to
1953;
2. Correspondence of Bigham in connection with her
duties as literary executrix;
3. Publisher's typescript with editor's blue-penciled emen-
dations of Rawlings' The Secret River (a children's book
posthumously published by Bigham);
4. Miscellaneous original typescripts, manuscripts, and
story ideas written by Rawlings, including her first unpub-
lished novel, Blood of My Blood;
5. Letters written from Bigham to Rawlings from 1940 to
1953.4
After compiling the catalog of documents, Horowitz contacted Dr.
James Meriwether, an officer of Seajay, about the letters. Seajay is a
small, non-profit organization dedicated to enhancing public aware-
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4 Appellants allege in Count I that certain of the documents in catego-
ries 3 and 4 were owned by Rawlings at the time of her death, and passed
to Bigham solely in her role as literary executrix. They claim that upon
Bigham's death, rightful possession of those documents passed to Baskin
as the administrator of the estate. Their claim covers a total of 12 docu-
ments from those two categories, including Rawlings' first unpublished
novel Blood of My Blood.
5
ness of, and interest in, unduly neglected aspects of South Carolina
and southern culture. After negotiations, Seajay obtained the docu-
ments by partial purchase and partial gift from the Bigham estate.
After purchasing the documents, Seajay made one whole copy of
Blood Of My Blood for Dr. Anne Blythe (Blythe). Blood of My Blood
is Rawlings' first novel; it was written in 1928, is 183 pages long, and
has never been published. Blythe, also an officer of Seajay, used the
copy in preparing a critical review of Blood of My Blood. Seajay
made the copy so that Blythe would not damage the fragile original
during her analysis. Seajay also made a partial copy 5 of the manu-
script which it sent to the Rare Books Room at the University of Flor-
ida Library. Seajay made this copy for the dual purpose of allowing
Baskin, or his designee, to view and authenticate it, and allowing the
University of Florida Press to view it and determine if it was worthy
of publication. Access to the copy was restricted, and photocopying
it was prohibited.6 The University of Florida Library eventually
returned its copy to Seajay.
In April of 1988, Blythe orally presented her critical analysis of
Blood of My Blood to a symposium of the Marjorie Kinnan Rawlings
Society at the University of Florida. Between 150 and 200 members
of Rawlings Society attended the symposium. In the presentation,
Blythe quoted approximately 2,464 words from the text of Blood of
My Blood, or four to six percent of the total text. Blythe submitted a
hard copy of her paper for publication with the Marjorie Kinnan
Rawlings Society Journal. She also hoped to publish an edited version
of her presentation as an introduction to Blood of My Blood, which
the University of Florida Press wanted to publish in its entirety.
Blythe was aware that neither the Society's Symposium nor the Uni-
versity of Florida Press would be able to publish her article, much less
Blood of My Blood, without first obtaining the permission of the
copyright holder. Neither publisher was able to secure the necessary
_________________________________________________________________
5 This copy included all but six pages of the original.
6 The Foundation used a copy of Blood of My Blood obtained in viola-
tion of this restriction to register its copyright on June 13, 1990.
6
permission, thus neither Blood of My Blood nor Blythe's paper has
ever been published.7
On Februaury 9, 1990, the St. John's County, Florida probate court
re-opened administration of Rawlings' estate, allowing Baskin to
bring this suit on behalf of the estate. Baskin then filed the original
Complaint, in which he sought recovery of the documents from Sea-
jay, on May 18, 1990. He amended his Complaint on September 21,
1990 to include the Foundation's claim for damages and injunctive
relief under the Copyright Act. At trial, on September 6, 1991, Baskin
and the Foundation amended the Amended Complaint so that the
Foundation could also assert an action for recovery of the documents
under Count I. On February 5, 1997, the district court entered final
judgment in favor of Seajay as to Counts I and II and its counterclaim.
II. POSSESSION OF THE DOCUMENTS
As to Count I of the Second Amended Complaint, the lower court
made three alternative holdings which supported its finding for Sea-
jay. First, it held that Baskin's claim in Count I was barred by South
Carolina's six year statute of limitations, S.C. Code Ann. § 15-3-
530(4) (Law. Co-op. 1997), and that the Foundation had no indepen-
dent claim to a possessory interest in the contested documents. Sec-
ond, the lower court held that even if Baskin and the Foundation had
a possessory interest in the documents, Seajay's title in them was pro-
tected as a good faith purchaser for value from a dealer in goods of
the kind. S.C. Code Ann. § 36-2-403(2). Third, the district court
addressed the merits of the case, and held that Baskin and the Founda-
tion failed to prove that either had a right to possession of the docu-
ments. The appellants attack each one of these holdings. In affirming
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7 In Count II, the Foundation claims that the copy of Blood of My Blood
made for Blythe; the copy made for the University of Florida Library;
and the paper written and presented by Blythe, which quoted and sub-
stantially paraphrased Blood of My Blood, constitute copyright infringe-
ment. The Foundation also claims that Seajay has threatened to make
additional infringing copies of Blood of My Blood. According to the
Foundation, this alleged threat justifies the injunctive relief sought under
17 U.S.C.A. § 502.
7
the decision of the lower court, we need only address whether or not
Baskin's claim is barred by the relevant statute of limitations.8
South Carolina Code § 15-3-530(4) provides a six year limitations
period for "an action for the specific recovery of personal property."
Such an action must be commenced within six years after the claim-
ant "knew or by the exercise of reasonable diligence should have
known that he had a cause of action." S.C. Code Ann. § 15-3-535; see
also Campus Sweater and Sportswear Co. v. M.B. Kahn Constr. Co.,
515 F. Supp. 64, 79 (D.S.C. 1979) (holding that"discovery rule" in
§ 15-3-535 applies to claims under § 15-3 530(4)), aff'd, 644 F.2d
877 (4th Cir. 1981). The lower court held that Baskin, in the exercise
of reasonable diligence, should have known that he had a cause of
action to recover the contested documents on October 24, 1961, the
date of Bigham's death.
The determination that Baskin "knew or by the exercise of reason-
able diligence should have known that he had a cause of action"
almost thirty years before bringing his action is a finding of fact.
Thus, it is subject to a "clearly erroneous" standard of review. See
Fed. R. Civ. P. 52.
The lower court made its determination by relying upon fifteen
subsidiary facts drawn solely from an examination of Baskin's own
deposition testimony and interrogatory responses. 9 The most relevant
of those facts to this Court are that: (i) Bigham worked, not as a fidu-
ciary under a court order, but under the auspices of Baskin, the sole
court appointed fiduciary of the Rawlings estate; (ii) Baskin delivered
numerous documents to Bigham following Rawlings' death and knew
that Bigham collected documents from Scribner Publishing, as well;
_________________________________________________________________
8 As noted, the lower court held that the Foundation did not have a pos-
sessory interest in the contested documents. Appellants have not
appealed this decision. Indeed, their entire appeal as to Count I is
directed at Baskin's recovery of the contested documents. Accordingly,
appellants have waived any claim by the Foundation for possession of
the contested documents. Therefore, we need only discuss whether
Baskin has a viable claim under Count I.
9 Baskin was unable to testify at the trial due to his health. His deposi-
tion testimony and interrogatory responses were admitted into evidence.
8
(iii) Baskin knew that Bigham had some of Rawlings' documents at
her home when she died in October of 1961; (iv) as executor of the
estate, Baskin assumed the role of literary executor upon Bigham's
death;10 (v) despite his knowledge that Bigham had some of Rawl-
ings' documents in her possession at the time of her death and his
understanding that the documents were now his responsibility as
executor of the estate, Baskin did not request to review the documents
to determine if they were the property of the estate, nor did he ask that
the documents be returned to his possession; and (vi) Baskin never
requested the return of the documents from 1961 to 1965, while
administration of Rawlings' estate remained open. 11
The evidentiary support for the district court's factual finding is
more than sufficient to withstand review under a clearly erroneous
standard. We concur with the district court that even if the contested
documents were part of the Rawlings' estate, Baskin's cause of action
to recover the documents arose in 1961 and expired, under South Car-
olina law, in 1967. Thus, his attempt to now recover possession of the
documents is time barred. Because Baskin's claim is time barred, and
because the Foundation has waived its claim to possession of the doc-
uments, we affirm the district court's decision as to Count I of the
Second Amended Complaint.
III. COPYRIGHT INFRINGEMENT
In Count II of the Second Amended Complaint, the Foundation
seeks damages and an injunction for the past and prospective infringe-
ment of its copyright in Blood of My Blood. 12 Specifically, the Foun-
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10 Baskin not only admitted this in his interrogatory responses and
deposition testimony, but in paragraph 14 of the Second Amended Com-
plaint, Baskin alleged that, upon Bigham's failure to complete her duties
as literary executrix, the duty passed to him as personal representative of
the estate.
11 In paragraph 15 of the Second Amended Complaint, Baskin alleges
that as personal representative of Rawlings' estate, the right to posses-
sion of all the estate's personal property belonged to him pending the
completion of administration of the estate, yet he did not attempt to
recover these documents while administration of the estate remained
open from 1961 until 1965.
12 Count II is a claim exclusively put forward by the Foundation, as the
sole owner of the copyright.
9
dation seeks damages for the entire copy of Blood of My Blood
provided by Seajay to Blythe; the partial copy provided by Seajay to
the University of Florida Library; and for Blythe's oral presentation,
which quoted and paraphrased Blood of My Blood , and her attempts
to publish that presentation. The Foundation seeks the injunction
because of alleged threats made by Seajay to disseminate copies of
Blood of My Blood to other archives which maintain collections of
Rawlings' works.
The district court held that the allegedly infringing copies were per-
missible under the fair use exception of 17 U.S.C.A.§ 107. According
to the lower court, Blythe's paper constituted a scholarly appraisal of
Blood of My Blood from a literary and biographical perspective, for
which extensive quoting from a copyrighted work is permissible. As
for her attempts to publish the scholarly criticism, the lower court
found that she understood that the paper would not be published
unless the publisher first obtained the permission of the copyright
holder, and, in fact, her paper never was published. The lower court
found that the complete copy of Blood of My Blood given to Blythe
was permissible since it was provided to prevent damage to the origi-
nal manuscript during the course of her scholarly work. Regarding the
partial copy sent to the University of Florida Library, the district court
found that it was made for the dual purposes of allowing Baskin, or
his designee, to authenticate it and to allow the University of Florida
Press to determine whether it was worthy of publication. The court
also decided that Seajay knew that no publication of the novel would
take place without first obtaining the permission of the copyright
holder.
The claim for injunctive relief is based upon a letter written by Sea-
jay's counsel on September 13, 1989, which the Foundation claims
threatened the dissemination of additional copies of Blood of My
Blood in violation of the Foundation's copyright. The lower court
decided that the alleged threat did not constitute a threat at all. Rather,
the court found that the letter constituted a request by Seajay for per-
mission to copy Blood of My Blood.
A. Claim for Damages
Seajay concedes that the copies it made of Blood of My Blood con-
stitute copyright infringement, unless they are protected by an excep-
10
tion to the Copyright Act. Seajay argues that its copies are protected
by the fair use exception to copyright infringement found at 17
U.S.C.A. § 107.
"Fair use is a mixed question of law and fact." Harper & Row,
Publishers, Inc. v. Nation Enterprises, 471 U.S. 539, 560 (1985).
Thus, we review the district court's legal conclusions de novo.
American Geophysical Union v. Texaco Inc., 60 F.3d 913, 918 (2d
Cir. 1994). The district court's subsidiary findings of fact are, of
course, subject to a clearly erroneous standard of review. Id.
"Section 106 of the Copyright Act confers a bundle of exclusive
rights to the owner of the copyright," Harper & Row, 471 U.S. at 546;
17 U.S.C.A. § 106 (West 1996 & Supp. 1997), including the "right of
first publication." Salinger v. Random House, Inc., 811 F.2d 90, 95
(2d Cir.), cert. denied, 484 U.S. 890 (1987). Section 107 of the Act
provides an exception to the copyright holder's exclusive rights: "the
fair use of a copyrighted work . . . is not an infringement of copy-
right." 17 U.S.C.A. § 107. "Any individual may reproduce a copy-
righted work for a `fair use'; the copyright owner does not possess the
exclusive right to such a use." Sony Corp. of America v. Universal
City Studios, Inc., 464 U.S. 417, 433 (1984). This fair use exception
permits photocopying of copyrighted material "for purposes such as
criticism, comment, news reporting, teaching (including multiple cop-
ies for classroom use), scholarship, or research."13 17 U.S.C.A. § 107.
Fair use is an "equitable rule of reason," for which "no generally
applicable definition is possible." H.R. Rep. No. 94-1476, at 65
(1976). The statute requires a "case-by-case analysis" to determine
whether a particular use is fair. Campbell v. Acuff-Rose Music, Inc.,
510 U.S. 569, 577 (1994). While Congress has "eschewed a rigid,
bright-line approach to fair use," Sony, 464 U.S. at 448 n.31, it has
set forth four factors to guide a court when deciding whether a partic-
ular use is fair: (1) the purpose and character of the use, including
whether such use is of a commercial nature or is for nonprofit educa-
tional purposes; (2) the nature of the copyrighted work; (3) the
_________________________________________________________________
13 This list of permissible uses is not exhaustive and is not intended to
single out any particular use as presumptively fair. Harper & Row, 471
U.S. at 561.
11
amount and substantiality of the portion used in relation to the copy-
righted work as a whole; and (4) the effect of the use upon the poten-
tial market for or value of the copyrighted work. 17 U.S.C.A. § 107.
These factors are not exclusive, but are "particularly relevant to the
fair use question." Maxtone-Graham v. Burtchaell, 803 F.2d 1253,
1260 (2d Cir. 1986), cert. denied, 481 U.S. 1059 (1987). These four
statutory factors may not be "treated in isolation, one from another.
All are to be explored, and the results weighed together, in light of
the purposes of copyright." Campbell, 510 U.S. at 578.
i. Character and Purpose
The first factor to be considered is the purpose and character of the
challenged use, including whether such use is of a commercial nature
or is for non-profit educational purposes. 17 U.S.C.A. § 107(1).
a. Character
"The enquiry here may be guided by the examples given in the pre-
amble to § 107, looking to whether the use is for criticism, or com-
ment, or news reporting, and the like . . . . The central purpose of this
inquiry is to see . . . whether the new work merely`supersede[s] the
objects' of the original creation, or instead adds something new, with
a further purpose or different character, altering the first with new
expression, meaning, or message; it asks, in other words, whether and
to what extent the new work is transformative. Although such trans-
formative use is not absolutely necessary for a finding of fair use, the
goal of copyright, to promote science and the arts, is generally fur-
thered by the creation of transformative works. . . . [T]he more trans-
formative the new work, the less will be the significance of other
factors, like commercialism, that may weigh against a finding of fair
use." Campbell, 510 U.S. at 578-79 (citations omitted).
We find that the district court was correct in characterizing
Blythe's paper as "a scholarly appraisal of Blood of My Blood from
a biographical and literary perspective." Baskin v. Seajay Society,
Inc., No. 3:90-1100-0, at 30 (D.S.C. February 5, 1997). A reading of
Blythe's paper clearly indicates that she attempted to shed light on
Rawlings' development as a young author, review the quality of
Blood of My Blood, and comment on the relationship between Rawl-
12
ings and her mother. The "further purpose" and"different character"
of Blythe's work make it transformative, rather than an attempt to
merely supersede Blood of My Blood.
While it does quote from and paraphrase substantially Blood of My
Blood, its purpose is to criticize and comment on Ms. Rawlings' earli-
est work. Thus, Blythe's transformative paper fits within several of
the permissible uses enumerated in § 107; it has productive uses as
criticism, comment, scholarship, and literary research. While this
finding is not determinative, it is one factor supporting the district
court's finding of a fair use. See Harper & Row , 471 U.S. at 561;
Wright v. Warner Books, Inc., 953 F.2d 731, 736 (2d Cir. 1991)
("[T]here is a strong presumption that factor one favors the defendant
if an allegedly infringing work fits the description of uses described
in section 107.").
b. Purpose
The Foundation contends that Blythe was partially motivated by
prospective royalties from the publication of her scholarly criticism,
and that such commercial motivation negates any scholarly motiva-
tion. Under the fair use doctrine, commercial use of an allegedly
infringing work is more disfavored than noncommercial use. See
Sony, 464 U.S. at 449. Nonetheless, while there is evidence that
Blythe hoped to profit from her paper, this factor alone is not disposi-
tive of the fair use issue. "[T]hough it is a significant factor, whether
the profit element of the fair use calculus affects the ultimate determi-
nation of whether there is a fair use depends on the totality of the fac-
tors considered; it is not itself controlling." Rogers v. Koons, 960 F.2d
301, 309 (2d Cir.) (citation omitted), cert. denied, 506 U.S. 934 (1992).14
_________________________________________________________________
14 "If, indeed, commerciality carried presumptive force against a find-
ing of fairness, the presumption would swallow nearly all of the illustra-
tive uses listed in the preamble paragraph of § 107, including news
reporting, comment, criticism, teaching, scholarship and research, since
these activities are generally conducted for profit in this country.
Campbell, 510 U.S. at 584 (citation and internal quotation omitted)
(emphasis added).
13
"The crux of the profit/nonprofit distinction is not whether the sole
motive of the use is monetary gain but whether the user stands to
profit from exploitation of the copyrighted material without paying
the customary price." Harper & Row, 471 U.S. at 562. Courts should
also "consider the public benefit resulting from a particular use not-
withstanding the fact that the alleged infringer may gain commer-
cially." Sega Enters. Ltd. v. Accolade, Inc. , 977 F.2d 1510, 1523 (9th
Cir.1992). This public benefit typically involves"the development of
art, science, and industry." Rosemont Enters., Inc. v. Random House,
Inc., 366 F.2d 303, 307 (2d Cir. 1966) (citation omitted), cert. denied,
385 U.S. 1009 (1967).
First, there is no evidence of an exploitative motive in any of the
allegedly infringing uses. There was no commercial motive, much
less an exploitative motive, in the complete copy provided to Blythe.
Her copy was provided in pursuit of her scholarly objective and only
because she might harm the fragile, seventy year old original manu-
script during her analysis. There also was no exploitative motive
underlying the University of Florida Library's partial copy. One of
Seajay's motivations for delivering the copy was to authenticate it as
a work of Ms. Rawlings. Clearly, this was non-commercial and non-
exploitative. The other purpose behind the copy was to assess the
worthiness of Blood of My Blood for publication. While this was
potentially a commercial motivation, there was no risk of exploitation
since Seajay understood that such publication could not take place
without the permission of the copyright holder.
As for Dr. Blythe's paper, there was a potential commercial moti-
vation in that Dr. Blythe may have received royalties if her paper
were published, however, there was no attempt to exploit the Founda-
tion. The paper was only to be published if the necessary permission
were obtained from the copyright holder. Since such permission was
not obtained, the paper was not published and no royalties were ever
received.
Second, all of Seajay's uses unquestionably served the "public ben-
efit" and "the development of art." The Blythe copy was provided by
Seajay to protect the fragile original from damage during a scholarly
literary criticism of the work. The Library copy was provided for
authentication and determination of worthiness for publication, publi-
14
cation which would not take place without the permission of the
copyright holder. As noted above, the Blythe paper was for the pur-
poses of scholarship, criticism, comment, and literary research. All of
these purposes serve the public benefit and aid in the development of
the arts.
Thus, in general, the challenged uses of Blood of My Blood were
for noncommercial, educational purposes. To the extent there was any
commercial motivation behind the uses, there was no attempt to
exploit Blood of My Blood to the detriment of the Foundation.
A subsidiary enquiry to the commercial/non-commercial distinc-
tion is whether the allegedly infringing uses "supplant[ed] the copy-
right holder's commercially valuable right of first publication."
Harper & Row, 471 U.S. at 562. In this case, Seajay's uses of Blood
of My Blood had neither the "intended purpose," nor the "incidental
effect," of usurping the Foundation's right of first publication. See id.
First, there is no evidence that Seajay intended to publish Blood of My
Blood before the Foundation. In fact, all of the evidence indicates that
Seajay sought the Foundation's approval to publish the work, and that
when such approval was not forthcoming, it did not publish Blood of
My Blood.15 Second, Seajay's uses did not have the effect of supplant-
ing a potential publication of Blood of My Blood by the Foundation.
Blythe's copy was seen only by Dr. Blythe as she performed her
scholarly review. The Library's copy was seen only by a representa-
tive of Baskin and representatives of the University of Florida Press.
Blythe's paper was presented only to between 150 and 200 members
of the Rawlings Society, the editor of the Society's Symposium, and
an editor for University of Florida Press. None of these dissemina-
tions of Blood of My Blood was sufficient to support a finding that
Seajay supplanted the Foundations's right of first publication.
For the aforementioned reasons, the purpose and character of Sea-
jay's allegedly infringing uses weigh heavily in favor of finding the
uses fair under 17 U.S.C.A. § 107.
_________________________________________________________________
15 In this case, there was no attempt by the defendant to market the
copyrighted work ahead of an imminent publication by the copyright
holder, as there was in Harper & Row.
15
ii. Nature of Copyrighted Work
The second statutory consideration is the nature of the copyrighted
work. 17 U.S.C.A. § 107(2). "This factor calls for recognition that
some works are closer to the core of intended protection than others,
with the consequence that fair use is more difficult to establish when
the former works are copied." Campbell, 510 U.S. at 586.
Creative works and unpublished works are closer to the core of
works protected by the Copyright Act. "The law generally recognizes
a greater need to disseminate factual works than works of fiction or
fantasy. . . . [and] [t]he scope of fair use is also narrower with respect
to unpublished works." Harper & Row, 471 U.S. at 563, 564. Because
Blood of My Blood is a creative, unpublished work, the second
enquiry weighs in favor of finding Seajay's use unfair.16
Appellant argues that the unpublished nature of the Blood of My
Blood requires us to reverse the district court. Indeed the Supreme
Court stated that "[u]nder ordinary circumstances, the author's right
to control the first public appearance of his undisseminated expres-
sion will outweigh a claim of fair use." Harper & Row, 471 U.S. at
555. In 1992, however, Congress amended § 107 to state that: "The
fact that a work is unpublished shall not itself bar a finding of fair use
if such finding is made upon consideration of all the above factors."
17 U.S.C.A. § 107.17 Thus, while the fact that Blood of My Blood was
_________________________________________________________________
16 Even though Blood of My Blood can be characterized as autobio-
graphical, it is still a work of creative expression rather than a presenta-
tion of information.
17 Appellants contend that the 1992 amendment to § 107 does not apply
in this case because the action commenced in 1990 and the district court
reached its initial decision in 1991. We disagree. The district court
reopened the case for argument in 1996, received additional evidence as
to Count II at that time, and entered its findings of fact and conclusions
of law in 1997. Thus, the law at the time of the district court's decision
included the 1992 amendment. In any event, prior to the 1992 amend-
ment, the Supreme Court's statement in Harper & Row did not require
a finding of unfair use; it merely militated against a finding of fair use.
We are of the opinion that the district court's decision should be upheld
whether or not the 1992 amendments apply to this case.
16
unpublished militates against a finding of "fair use," it does not fore-
close a finding that Seajay's use was fair.
Appellant also urges reversal because the dissemination by Seajay
denies the Foundation its power to decide not to publish Blood of My
Blood at all. Harper & Row clearly recognizes that "[t]he right of first
publication encompasses . . . the choice whether to publish at all . . . ."
471 U.S. at 564. The Foundation is correct in its statement that usurp-
ing the copyright holder's privilege to determine whether or not to
publish Blood of My Blood would favor a finding of unfair use. This
argument presupposes, however, that the purpose or effect of the
allegedly infringing uses was to supplant the Foundation's right to
publish Blood of My Blood. As discussed above, we have found that
neither the purpose nor the effect of any of the challenged copies
amounted to a first publication of Blood of My Blood. Thus, we hold
that while the unpublished nature of Blood of My Blood weighs
against a finding of fair use, the allegedly infringing copies have not
stripped from the Foundation its right to determine whether or not to
publish Rawlings' first work at all.
For the aforementioned reasons, the nature of the copyrighted work
weighs in favor of finding Seajay's use to have been unfair under 17
U.S.C.A. § 107.
iii. Amount and Substantiality of Copied Portion
The third statutory factor addresses the amount and substantiality
of the portion copied by the alleged infringer in relation to the copy-
righted work as a whole. 17 U.S.C.A. §107(3)."[T]his factor calls for
thought not only about the quantity of the materials used, but about
their quality and importance, too." Campbell , 510 U.S. at 587. Thus,
this factor has favored copyright holders where a significant percent-
age of the copyrighted work was copied, or where the percentage was
not great, but the copied portion essentially was the "heart" of the
copyrighted work. Wright, 953 F.2d at 738 (citations and internal
quotations omitted).
a. Quality
No evidence was admitted as to the value of the copied material in
relation to the copyrighted work as a whole. We could presume that
17
because Blythe chose to quote it, the material copied necessarily must
be the "heart of the work," however, we decline to do so. Obviously,
the quoted material is of significant value, or it would not have been
quoted. All quoted material is of significant value, but it cannot be
said to be the "heart of the work" or the fair use doctrine would be
destroyed. See Religious Technology Center v. Lerma, 908 F. Supp.
1362, 1367 (E.D. Va. 1997). If all quoted material were deemed sig-
nificant enough to preclude a fair use just because it was significant
enough to be quoted, no one could ever quote copyrighted material
without fear of being sued for infringement. Thus, we find that the
quoted portions are undoubtedly significant, but fall short of being the
"heart of the work," and thus weighing in favor of a finding of unfair
use.
b. Quantity
"There are no absolute rules as to how much of a copyrighted work
may be copied and still be considered a fair use." Maxtone-Graham,
803 F.2d at 1263. In analyzing this factor, we must consider material
copied from the copyrighted work, whether it has been quoted verba-
tim or paraphrased. Salinger v. Random House, 811 F.2d 90, 97 (2d
Cir. 1987). Copying an entire work weighs against finding a fair use,
Advanced Computer Servs. v. Mai Sys. Corp., 845 F. Supp. 356, 365
(E.D. Va. 1994), however, it does not preclude a finding of fair use.
Id. at 366 (citations omitted). "[T]he extent of permissible copying
varies with the purpose and character of the use." Campbell, 510 U.S.
at 586-87.18
Obviously, the copies of Blood of My Blood provided to Blythe and
the University of Florida Library were qualitatively and quantitatively
substantial. Nonetheless, when the extent of the copying is considered
with the purpose and character of the uses, the amount and substance
of the copies are justified. See Campbell, 510 U.S. at 586-87. In order
for Blythe to perform her scholarly criticism of the novel, she obvi-
ously needed access to either the original or an entire copy. Similarly,
_________________________________________________________________
18 The more material copied directly from a copyrighted work tends to
show a lack of transformative character under the first factor and a
greater likelihood of market harm under the fourth factor. See Campbell,
510 U.S. at 587-88.
18
in order for the Library to authenticate Blood of My Blood as being
Rawlings' work, to determine whether the work was worthy for publi-
cation, and to obtain the necessary permission from the copyright
holder, it too needed either the original or a nearly complete copy. It
would severely restrict scholarly pursuit, and inhibit the purposes of
the Copyright Act, if a fragile original could not be copied to facilitate
literary criticism. Thus, we find that the amount and substantiality of
the portion of Blood of My Blood copied for Blythe and the Library
did not exceed the amount necessary to accomplish these legitimate
purposes. See Supermarket of Homes, Inc. v. San Fernando Valley
Bd. of Realtors, 786 F.2d 1400, 1409 (9th Cir. 1986).
As to Blythe's paper, she quoted between four and six percent of
Blood of My Blood. In addition, she paraphrased substantially from
the work. As with the copies provided to Blythe and the Library, the
propriety of the amount quoted and paraphrased by Blythe must be
analyzed in consideration of the purpose and character of the alleg-
edly infringing use. Here, Blythe was performing a scholarly criticism
of Rawlings' initial work. It seems apparent that a scholarly criticism
of a book will require the critic to quote and paraphrase from the
work it is analyzing. See Supermarket of Homes , 786 F.2d at 1408
("A common type of `fair use' is quotation of a passage in a book
review."); Robert Stigwood Group Ltd. v. O'Reilly, 346 F. Supp. 376,
385 (D. Conn. 1972) (recognizing that critical review of another's
work can be a fair use and that critics may quote extensively from the
copyrighted work "in order to comment effectively"). Additionally, as
the district court held, the amount quoted by Blythe is well within
allowable limits as found by other courts. See New Era Publications
Int'l, ApS v. Carol Publ'g Group, 904 F.2d 152, 158 (2d Cir.) (fair
use defense available where defendant quoted minuscule amount from
25 works, between 5 and 6 percent of 12 works and 8 percent or more
of 11 short works), cert. denied, 498 U.S. 921 (1990); Maxtone-
Graham, 803 F.2d at 1263 (quoting 4.3 percent of copyrighted work
not incompatible with finding of fair use). Thus, we find that no more
of the text was quoted or paraphrased than was necessary for Blythe
to adequately criticize and comment upon Blood of My Blood.
For the aforementioned reasons, the amount and substantiality of
the portion copied by Seajay weigh in favor of finding the uses fair
under 17 U.S.C.A. § 107.
19
iv. Market Effect
The final statutory enquiry considers the effect the allegedly
infringing use has upon the market for, or value of, the copyrighted
work. 17 U.S.C.A. § 107(4). This fourth factor"is undoubtedly the
single most important element of fair use." Harper & Row, 471 U.S.
at 566.
a. Impair Marketability
A use that does not materially impair the marketability of the copy-
righted work generally will be deemed fair. Advanced Computer
Services, 845 F. Supp. at 366 (citing Sony , 464 U.S. at 450-51;
Harper & Row, 471 U.S. at 566-67; N.A.D.A. Servs. Corp. v. Business
Data of Virginia, Inc., 651 F. Supp. 44, 48 (E.D. Va. 1986)). The only
evidence presented at trial as to the market effect of the allegedly
infringing uses was that, despite the Blythe presentation and the cop-
ies to Blythe and the Library, the University of Florida Press still
wanted to publish Blood of My Blood. Based on this evidence, the dis-
trict court held that the uses made by Seajay did not diminish the
potential market for, or value of, Blood of My Blood.
This finding of fact was not clearly erroneous. The copy provided
to Blythe was seen only by Blythe; the copy provided to the Univer-
sity of Florida was seen only by Mr. Roger Tarr, an associate of
Baskin, and representatives of University of Florida Press; the presen-
tation by Blythe was seen by between 150 and 200 members of the
Marjorie Kinnan Rawlings Society, the editor of the Society's Sym-
posium, and an editor for the University Press. Thus, it is reasonable
for the district court to have concluded that the allegedly infringing
activities did not have a negative impact on the market for, or value
of, Blood of My Blood. In fact, it is likely that Blythe's presentation
stimulated interest in Blood of My Blood among the Society's mem-
bers and may actually have increased demand for it. See Maxtone-
Graham, 803 F.2d at 1264.
b. Market Substitute
Another key element of the fourth enquiry is whether the allegedly
infringing work is a market substitute for the copyrighted work. As
20
the Supreme Court stated, "the role of the courts in determining fair
use is to distinguish between `[b]iting criticism [that merely] sup-
presses demand [and] copyright infringement[, which] usurps it.'"
Campbell, 510 U.S. at 592 (quoting Fisher v. Dees, 794 F.2d 432, 438
(9th Cir. 1986)). The fair use doctrine protects against a republication
which offers the copyrighted work "in a secondary packaging," where
"potential customers, having read the secondary work, will no longer
be inclined to purchase again something they have already read." New
Era Publications Int'l, ApS v. Henry Holt & Co., Inc., 695 F. Supp.
1493 (S.D.N.Y. 1988), aff'd, 873 F.2d 576 (2d Cir. 1989), cert.
denied, 493 U.S. 1094 (1990). The doctrine does not protect against
criticism which may have an adverse market effect. Id.
This analysis harkens back to our discussion of§ 107(1). As we
held then, Blythe's paper was transformative; it did not amount to
mere duplication of the original, and did not have the purpose or
effect of supplanting the copyrighted work. It did not serve as a mar-
ket replacement for Blood of My Blood, rather it served as a criticism
of and comment about Blood of My Blood. This holding is reinforced
by the University of Florida Press' willingness to publish Blood of My
Blood despite Blythe's presentation. Accordingly, we hold that since
Blood of My Blood and Blythe's criticism of Blood of My Blood serve
different market functions, Blythe's paper is not a market substitute
for the original work.19
c. Derivative Markets
A final element of the fourth factor is the impact the allegedly
infringing uses may have on the market for derivatives of the copy-
righted work. Harper & Row, 471 U.S. at 568. The market for poten-
tial derivatives includes those uses that the copyright holder of the
original work would develop or license others to develop. Campbell,
510 U.S. at 592. As the Supreme Court declared, however, "there is
_________________________________________________________________
19 We find that, even if widespread, Harper & Row, 471 U.S. at 568,
Blythe's presentation would not have superseded Blood of My Blood's
place in the market. As a scholarly criticism, Blythe's paper is of a dif-
ferent character and delivers a different message than Blood of My Blood.
Thus, it could not be a market substitute for or a competitor with Blood
of My Blood.
21
no protectible derivative market for criticism." Id. If there were a pro-
tectible derivative market for critical works, copyright holders would
only license to those who would render favorable comment. The
copyright holder cannot control the dissemination of criticism. See
New Era, 695 F. Supp. at 1523 (fair use protection is not "accorded
only to favorable critics"). Thus, Seajay's allegedly infringing uses
could not impact the market for derivatives of Blood of My Blood.
For the aforementioned reasons, the effect Seajay's uses have on
the market for, or value of, Blood of My Blood weighs in favor of
finding the uses fair under 17 U.S.C.A. § 107.
v. Aggregation of Four Factors
An analysis of the four statutory factors leads us to agree with the
district court that Seajay's uses of the original manuscript of Blood of
My Blood were permissible under the "fair use" exception to copy-
right infringement.
B. Claim for Injunctive Relief
The district court held that the alleged threats of illegal duplication
contained in the letter of September 13, 1989 did not constitute threats
at all. Instead, the lower court held that the letter merely requested
permission to publish Blood of My Blood. The court noted that letters
dated January 29, 1990; July 3, 1990; and August 16, 1990 supported
its factual determination. A review of those letters shows ample sup-
port for the district court's factual finding. Accordingly, there was no
threat of future dissemination of Blood of My Blood, and the district
court properly denied the Foundation's request for an injunction.
IV. CONCLUSION
For the reasons contained herein, we affirm the judgment of the
district court.
AFFIRMED
22