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                        TABLE OF CONTENTS


A.   Plaintiffs' Circular Premise. . . . . . . . . . . . . . .  1

B.   The Irrelevance of the Alleged "Benefit" to Texaco. . . .  3

C.   Plaintiffs' Unique View of the Appellate Process. . . . .  5

D.   Plaintiffs' Disregard of the Stipulated Scope of the

     Trial . . . . . . . . . . . . . . . . . . . . . . . . . .  6

E.   The Statutory Fair Use Factors. . . . . . . . . . . . . .  8

     1.   Purpose and Character of the Use . . . . . . . . . .  8

          a.   That Texaco Is a For-Profit User Does Not

               Deprive It of Fair Use Credit for the

               Scientific Research Purpose of

               Dr. Chickering's Use. . . . . . . . . . . . . .  9

          b.   Non-Superseding Use . . . . . . . . . . . . . . 16

          c.   Reasonable and Customary Practice . . . . . . . 19

          d.   Plaintiffs' Remaining Arguments . . . . . . . . 21

     2.   Nature of the Work . . . . . . . . . . . . . . . . . 23

     3.   Amount and Substantiality of the Portion Used. . . . 23

     4.   Effect of the Use. . . . . . . . . . . . . . . . . . 24

          a.   The Sony Presumption Dicta. . . . . . . . . . . 24

          b.   The Irrelevance of Any Harm to Other Works

               or Publishers.. . . . . . . . . . . . . . . . . 26

          c.   The Alleged Loss of Subscriptions.. . . . . . . 27

          d.   Document Delivery Services. . . . . . . . . . . 30

F.   In All Events, the CCC Licenses Do Not Provide a Fair

     or Efficient System for Collecting Photocopying

     Royalty Payments. . . . . . . . . . . . . . . . . . . . . 32

     .1.  The TRS. . . . . . . . . . . . . . . . . . . . . . . 33

     2.  The AAS.. . . . . . . . . . . . . . . . . . . . . . . 37

CONCLUSION . . . . . . . . . . . . . . . . . . . . . . . . . . 40

                        TABLE OF AUTHORITIES

Cases                                                     Page   

Allen-Myland, Inc. v. IBM Corp., 746 F. Supp. 520

  (E.D. Pa. 1990). . . . . . . . . . . . . . . . . . .    14

Argus, Inc. v. Eastman Kodak Co., 801 F.2d 38 (2d

  Cir. 1986), cert. denied, 479 U.S. 1088 (1987) . . .    32

Arica Institute, Inc. v. Palmer, 970 F.2d 1067 (2d

  Cir. 1992) . . . . . . . . . . . . . . . . . . . . .    5

Basic Books, Inc. v. Kinko's Graphics Corp., 758 

  F. Supp. 1522 (S.D.N.Y. 1991). . . . . . . . . . . .    3, 14

Berlin v. E.C. Publications, Inc., 329 F.2d 541

  (2d Cir. 1964) . . . . . . . . . . . . . . . . . . .    11, 12

Consumers Union of U.S., Inc. v. General Signal 

  Corp., 724 F.2d 1044 (2d Cir. 1983), cert. denied,

  469 U.S. 823 (1984)  . . . . . . . . . . . . . . . .    11, 21-22,


Copyright Clearance Center v. Commissioner, 

  79 T.C. 793 (1982) . . . . . . . . . . . . . . . . .    32-33

Craft v. Kobler, 667 F. Supp. 120 (S.D.N.Y. 1987). . .    3

DC Comics Inc. v. Reel Fantasy, Inc., 696 F.2d 24 

  (2d Cir. 1982) . . . . . . . . . . . . . . . . . . .    2

DC Comics, Inc. v. Unlimited Monkey Business, Inc.,

  598 F. Supp. 110 (N.D. Ga. 1984) . . . . . . . . . .    3

Elsmere Music, Inc. v. National Broadcasting Co.,

  623 F.2d 252 (2d Cir. 1980)  . . . . . . . . . . . .    11, 12

Feist Publications, Inc. v. Rural Telephone Service

  Co., 111 S. Ct. 1282 (1991). . . . . . . . . . . . .    23

Financial Information, Inc. v. Moody's Investor

  Service, Inc., 751 F.2d 501 (2d Cir. 1984), 

  cert. denied, 484 U.S. 820 (1987). . . . . . . . . .    2

Folsom v. Marsh, 9 F. Cas. 342 (C.C.D. Mass. 

  1841) . . . . . . . . . . . . . . . . . . . . . . ..    2, 23

Harper & Row Publishers, Inc. v. Nation Enterprises, 

  471 U.S. 539 (1985). . . . . . . . . . . . . . . . .    2, 10-11,

                                                          14, 19,


Hi-Tech Video Product, Inc. v. Capital Cities/ABC

  Inc., 804 F. Supp. 950 (W.D. Mich. 1992) . . . . . .    3

Maxtone-Graham v. Burtchaell, 803 F.2d 1253 

  (2d Cir. 1986), cert. denied, 481 U.S. 

  1059 (1987). . . . . . . . . . . . . . . . . . . . .    9-11, 25

Meeropol v. Nizer, 560 F.2d 1061 (2d Cir. 1977),

  cert. denied, 434 U.S. 1013 (1978) . . . . . . . . .    2-3

New Era Publications Int'l v. Carol Publishing

  Group, 904 F.2d 152 (2d Cir.), cert. denied,

  498 U.S. 921 (1990). . . . . . . . . . . . . . . . .    5, 6, 11,

                                                          12, 23

New Era Publications Int'l v. Henry Holt Co., 884

  F.2d 657 (2d Cir. 1989), cert. denied, 493 U.S.

  1094 (1990). . . . . . . . . . . . . . . . . . . . .    21-22

Richard Anderson Photography v. Brown, 1990 U.S. 

  Dist. LEXIS 19846 (W.D. Va. 1990) . . . . . . . . ..    3

Rosemont Enterprises, Inc. v. Random House, Inc., 

  366 F.2d 303 (2d Cir. 1966), cert. denied,

  385 U.S. 1009 (1967) . . . . . . . . . . . . . . . .    11, 12,


S & H Computer Systems, Inc. v. SAS Institute, Inc., 

  568 F. Supp. 416 (M.D. Tenn. 1983) . . . . . . . . .    35

Salinger v. Random House, Inc., 811 F.2d 90 (2d Cir.),

  cert. denied, 484 U.S. 890 (1987) . . . . . . . . ..    6

Schnapper v. Foley, 667 F.2d 102 (D.C. Cir. 1981),

  cert. denied, 455 U.S. 948 (1982). . . . . . . . . .    35

Sega Enterprise Ltd. v. Accolade, Inc., 977 

  F.2d 1510 (9th Cir. 1992). . . . . . . . . . . . . .    14

Sony Corp. v. Universal City Studios, Inc.,

  464 U.S. 417 (1984) . . . . . . . . . . . . . . . ..    10, 11,

                                                          22, 24,


Stewart v. Abend, 495 U.S. 207 (1990). . . . . . . . .    2

Telerate System, Inc. v. Caro, 689 F. Supp. 221

  (S.D.N.Y. 1988). . . . . . . . . . . . . . . . . . .    3

Triangle Publications, Inc. v. Knight-Ridder

  Newspapers, Inc., 626 F.2d 1171 (5th Cir. 1980). . .    20

United Telephone Co. v. Johnson Publishing Co., 

  855 F.2d 604 (8th Cir. 1988) . . . . . . . . . . . .    3

United States Lighterage & Towing Corp. v. 

  Petterson Lighterage & Towing Corp., 142 

  F.2d 197 (2d Cir. 1944). . . . . . . . . . . . . . .    27

Williams & Wilkins Co. v. United States, 487 F.2d 

  1345 (Ct. Cl. 1973), aff'd by equally divided Court,

  420 U.S. 376 (1975)  . . . . . . . . . . . . . . . .    20, 22,

                                                          24, 27

Wright v. Warner Books, Inc., 953 F.2d 731 

  (2d Cir. 1991) . . . . . . . . . . . . . . . . . . .    1


The Copyright Act:

  Section 102, 17 U.S.C.  102 . . . . . . . . . . . .    23

  Section 105, 17 U.S.C.  105 . . . . . . . . . . . .    35

  Section 107, 17 U.S.C.  107  . . . . . . . . . . .     passim

  Section 108, 17 U.S.C.  108  . . . . . . . . . . ..    21

  Section 411, 17 U.S.C.  411 . . . . . . . . . . . .    24


C. Wright & A. Miller, 5 Federal Prac. & Proc. 

  (1990) . . . . . . . . . . . . . . . . . . . . . . .    5-6


                     FOR THE SECOND CIRCUIT












                _______________  * ______________



A.   Plaintiffs' Circular Premise

          Plaintiffs' fundamental premise is that their "willing-

ness to license the copying" of articles through the CCC makes

the copying unfair when Texaco declines to pay the demanded

price.  (Plaintiffs' Brief ("Pl. Br.") 3).  This erroneous

premise was squarely rejected in Wright v. Warner Books, Inc.,

953 F.2d 731, 737 (2d Cir. 1991), where this Court held that a

claim that the defendant's "failure to get plaintiff's permission

to use" the copyrighted work rendered the use unfair is

"meritless" because, as the Wright district judge put it, the

claim "only begs the question:  if [the defendant's] paraphrased

use of the letters is fair, then permission was not necessary." 

(See Texaco's Brief ("Tex. Br.") 40). 

          Nor do plaintiffs address the 150-year old principle

established in Folsom v. Marsh that the fair use focus on the

issue of injury is whether, if the practice in question were not

enjoined, the value of the original would be diminished, not on

whether the value might be increased by licensing the use in

question.  (See Tex. Br. 37).  Otherwise, the copyright owner's

willingness to license would make every use unfair; and, by a

parity of reasoning, the making of single copies of articles

publishers refuse to license would invariably be fair use.  

          Plaintiffs' sole attempt to deal with the circularity

of their argument -- that their willingness to take Texaco's

money gives them the right to collect it -- is a string of cases

cited for the proposition that "fourth factor harm was recognized

to include the loss or potential loss of revenues from licensing

or the sale of rights that would occur if the unauthorized use

were permitted as fair use."  (Pl. Br. 66-67).  Each of these

inapposite decisions concerned a defendant that was in

competition with the plaintiff or had sold copies of portions or

excerpts of the plaintiff's work or of a work derived from the

copyrighted material -- circumstances totally absent here.

          Proclamations that plaintiffs are "subsidizing" Texaco,

that they have "marketable rights," or that Texaco is attempting

to "take a free ride" on their "valuable intellectual property

rights" (Pl. Br. 4, 46), do not create such rights, the existence

of which is the issue to be decided -- not assumed -- on this

appeal.  The CCC mechanism for collecting royalties is, thus,


B.   The Irrelevance of the Alleged "Benefit" to Texaco

          Plaintiffs assert that photocopying "produces immediate

economic benefits by saving Texaco money in a number of ways that

enhance Texaco's profitability."  (Pl. Br. 17).  But they notably

fail to cite any authority in which the benefit to the defendant

was deemed relevant to fair use analysis.  Nor did Judge Leval

rely on the alleged benefit to Texaco in finding Dr. Chickering's

copying not fair use -- and for good reason.  That Texaco obtains

some benefit from the use in question cannot be disabling, for

all fair uses provide a benefit to the user who, otherwise, would

not engage in the practice.   107(4) directs the Court to

analyze "the effect of the use upon the potential market for or

value of the copyrighted work," not the effect on the user.  

          Related to plaintiffs' ill-founded "benefit" argument

is their contention that Texaco can "afford" to "pay for permis-

sion to copy."  (Pl. Br. 43).  The issue, however, is not whether

Texaco can afford to pay but, rather, whether Dr. Chickering's

copying was fair use for which royalties need not be paid.  In

any event, the record is plain that, just as Texaco can "afford"

to pay, Academic Press, with its far higher rate of profits and

its ever increasing financial success during the very time that

photocopying, in Judge Leval's words, became "extremely

widespread" (A. 148), can equally "afford" not to be paid. 

(Compare Pl. Br. 22 n.9 with A. 1105-06, 3802, 4230, 4320-21,


C.   Plaintiffs' Unique View of the Appellate Process

          Plaintiffs devote large portions of their brief to

chastising Texaco for disagreeing with Judge Leval.  That, of

course, is why Texaco appealed.  Nor is it any answer to Texaco's

complaint with Judge Leval's departures from the record for

plaintiffs repeatedly to cite the district court's opinion

instead of the evidence that plaintiffs believe supports it.  

(See Pl. Br. 38-42).  Contrary to plaintiffs' wishful thinking,

the "truth is [not] established beyond dispute by Judge Leval's

findings" (Pl. Br. 66); the "truth" is established by the


          As for plaintiffs' assertion that Judge Leval's

"findings" are subject to the clearly erroneous standard, this

Court has held precisely to the contrary -- that "the district

court's conclusion . . . is open to full review on appeal" and

that this Court "review[s] de novo this mixed question of fact

and law."  New Era Publications Int'l v. Carol Publishing Group,

904 F.2d 152, 155 (2d Cir.), cert. denied, 498 U.S. 921 (1990);

Arica Inst., Inc. v. Palmer, 970 F.2d 1067, 1077 (2d Cir. 1992). 

Plaintiffs cite no support for their suggestion that this Court

adopt the standard of review for trademark cases, which is

contrary to this Court's rulings in New Era and Arica.

          Regardless of the standard of review, and regardless of

whether Judge Leval's statements are viewed as conclusions or as

"findings," the district court was in error.  This Court in

Salinger and New Era reversed Judge Leval's fair use conclusions

without once mentioning the clearly erroneous rule or burden of

proof; the decision below should be reversed here as well.  It is

for this Court to determine what is fair in what plaintiffs

accurately state is "a very important test case, with significant

public interest."  

D.   Plaintiffs' Disregard of the Stipulated Scope of the Trial

          Plaintiffs devote much of their brief to arguing about

matters not at issue on this appeal.  The parties stipulated, and

the district court ordered, that the sole issue at the fair use

trial was "whether the photocopying by or on behalf of Donald

Chickering, during his employment by Texaco Inc., of the follow-

ing [eight] articles, selected by plaintiffs, was a fair use." 

(A. 150).  Plaintiffs further stipulated that they "have not

attempted at this stage of the case to determine quantitatively

how much photocopying of copyrighted material, if any, has taken

place" at Texaco.  (A. 188).  Thus, there is no evidence in this

record of the volume of photocopies of copyrighted articles made

at Texaco.  Nor is there any dispute that the record contains "no

evidence that Texaco ever copied the same article more than

once."  (Tex. Br. 3 n.1).

          Having expressly limited the fair use trial to

Dr. Chickering's single copies of eight articles, and having

eschewed any attempt to establish the number of copyrighted

articles Texaco photocopied, plaintiffs cannot be heard to argue

that this record supports their claim of "systematic" photo-

copying.  Indeed, given their stipulations and Judge Leval's

failure to use the word "systematic," plaintiffs' assertion that

the district court "found" -- indeed, that it was "undisputed" --

that copying by Texaco scientists is "systematic" (Pl. Br. 12) is

simply incredible.  

          Contrary to plaintiffs' ipse dixit, the record reveals

that the copying done by Dr. Chickering was isolated and

spontaneous and was not part of any systematic effort by Texaco

to substitute copies for subscriptions.  Dr. Chickering's copying

was neither planned nor coordinated with efforts of others or the

Texaco library to reduce or avoid multiple subscriptions to

Catalysis, and did not have that effect.  Rather, it was done

spontaneously after he reviewed an article and decided he wanted

a copy for his research.  (See Tex. Br. 9-11).  As for plain-

tiffs' attempt to justify their claim that Dr. Chickering's

copying was "systematic" because there were copies of 55 other

articles in his files (Pl. Br. 16) (including 25 from Catalysis,

which amounts to far less than 1% of the articles published in

Catalysis during the relevant period) -- that is hardly evidence

that if copying were unlawful Texaco would likely purchase an

additional $900/year subscription for Dr. Chickering.  (See TEX-


          Nor does this case have anything to do with (i) photo-

copies made as a result of "literature searches" or of "seeing

references to [articles] in published abstracts" or "tables of

contents," (ii) copies that a scientist may "circulate" to other

researchers, or (iii) copies that are received from other libra-

ries.  (See Pl. Br. 13, 14, 21).  Once again, if plaintiffs, who

unilaterally selected the eight articles, wanted to prosecute a

case involving copies made as a result of these activities, they

should have done so, instead of choosing the eight articles, none

of which was copied in this manner.

E.   The Statutory Fair Use Factors

     1.   Purpose and Character of the Use

          Plaintiffs repeatedly and emphatically urge that Texaco

deserves no fair use credit for the scientific research purpose

of Dr. Chickering's use because he "engage[d] in unauthorized

copying for [Texaco's] own commercial interests, and [Texaco]

stands to profit from such copying without paying the customary

price."  (Pl. Br. 46).  But when the focus is placed, as it prop-

erly should be, on the purpose and character of the use, rather

than on that of the user, it is plain that Dr. Chickering's

copying deserves fair use credit under the first factor because

it was for a scientific research purpose and did not involve

commercial exploitation of the copies. 

          a.   That Texaco Is a For-Profit User Does Not Deprive

               It of Fair Use Credit for the Scientific Research

               Purpose of Dr. Chickering's Use

          Reduced to its essentials, plaintiffs' argument is that

because Texaco does not engage in scientific research for eleemo-

synary purposes, it deserves no credit for the research purpose

of the challenged copying.  Notwithstanding this Court's express

statement that it does not "read Section 107(1) as requiring us

to make a clear-cut choice between two polar characterizations,

'commercial' and 'non-profit,'" Maxtone-Graham v. Burtchaell, 803

F.2d 1253, 1262 (2d Cir. 1986), cert. denied, 481 U.S. 1059

(1987), plaintiffs urge the Court to do just that.  They contend

that Texaco should lose all credit for the scientific research

purpose and benefit of the making of single copies of the eight

articles at issue because Texaco is a for-profit company.  That

approach has been squarely and soundly rejected by this Circuit. 

If plaintiffs' simplistic view were the law, "fair use would be

virtually obliterated, for '[a]ll publications presumably are

operated for profit . . . .'"  Maxtone, 803 F.2d at 1262

(citation omitted).  

          In Maxtone, Judge Kaufman "address[ed] the Supreme

Court's recent pronouncements [in Sony and Harper & Row] to show

why appellant's suggestion that any income-producing use is

unfair virtually by definition falls wide of the mark."  803 F.2d

at 1262.  After quoting the High Court's statement in Sony that

"every commercial use of copyrighted material is presumptively

. . . unfair," this Court stated:  "Appellant makes much of the

last sentence, but we do not read it as altering the traditional

multi-factor fair use inquiry."  Id.  Judge Kaufman went on to

note that Sony itself "relied on a House report which states that

the statutory language requiring consideration of 'whether such

use is of a commercial nature or is for nonprofit educational

purposes'" was

          not intended to be interpreted as any sort of

          not-for-profit limitation on educational uses

          of copyrighted works.  It is an express

          recognition that, as under the present law,

          the commercial or non-profit character of an

          activity, while not conclusive with respect

          to fair use, can and should be weighed along

          with other factors in fair use decisions.

Id. at 1262 (quoting 464 U.S. at 449 n.32 (quoting House Report

at 66, 5 U.S. Code Cong. & Ad. News 5679 (1976)) (emphasis


          According to this Court in Maxtone, "[t]his understand-

ing was reflected [by the Supreme Court] in Harper & Row," where

the Court noted that "'[t]he fact that a publication was commer-

cial as opposed to non-profit is a separate factor that tends to

weigh against a finding of fair use.'"  803 F.2d at 1262 (quoting

Harper & Row, 471 U.S. at 562; emphasis in original).  This Court

found that "[o]nly an unduly narrow reading of the language in

Sony Corp. and an inattention to the context could lead to the

conclusion that the Court intended to attach heightened signifi-

cance to the element of commerciality . . . .  The commercial

nature of a use is a matter of degree, not an absolute."  Id. at

1262 (emphasis added).

          Indeed, if the test for fair use were, as plaintiffs

would have it, whether "[defendant] engages in unauthorized

copying for its own commercial interests, and stands to profit

from such copying" (Pl. Br. 46), then Maxtone, New Era (904 F.2d

at 152), Consumers Union (724 F.2d at 1049), Elsmere (623 F.2d at 

253), Rosemont (366 F.2d at 307), Berlin (329 F.2d at 543-44),

and a host of other cases holding uses by for-profit entities to

be fair, were all wrongly decided.  The simple fact is that the

overwhelming majority of cases decided by this Court in which the

use was held to be fair have involved for-profit users.  

          When, as the statute requires, the focus is placed on

the "purpose and character of the use," not on that of the user,

it is plain that the scientific research purpose and character of

Dr. Chickering's use far outweighed its commercial aspects.  It

is indisputable that Dr. Chickering did not make copies of the

articles to sell or distribute them; nor can it seriously be

contended that his copies bore any direct, or even indirect,

relationship to the commercial exploitation of any product,

process or service by Texaco.  Indeed, it is undisputed that, as

is often the case given the hit or miss nature of scientific

research, Dr. Chickering's research yielded no commercially

exploitable product or services for Texaco, but rather produced

knowledge, which Texaco shared with the scientific community.  In

short, Dr. Chickering's use of the single copies of eight

articles for scientific research was far less commercial and

exploitative than the typical fair use pattern in which the

copying creates the very product being sold and is directly

exploited commercially -- such as a biographer's use of his sub-

ject's published letters in a biography (New Era, Rosemont) or a

parodist's use of the parodied work in a song (Elsmere, Berlin). 

While some of the eight copies assisted Dr. Chickering in his

research (which had the potential to contribute to the develop-

ment of a product or process which might in turn ultimately earn

Texaco a profit), Texaco plainly did not commercially exploit the

copies in any direct fashion.

          Plaintiffs' suggestion that the very same copying that

Dr. Chickering did at Texaco would be lawful had he been at a

non-profit institution (Pl. Br. 48 n.27) makes no sense.  As

noted in our opening brief (Tex. Br. 6), there is a great deal of

overlap between research done by scientists who work at for-pro-

fit entities and that done at universities and other non-profit

institutions.  Scientists from private companies and from academ-

ia share their research results and often work together on

research sponsored by for-profit companies.  Moreover, many

scientists conduct similar research while working at for-profit

companies and universities.  It is also the case that universi-

ties often profit from such research by patenting products or

processes.  Indeed, The Wall Street Journal recently reported

that "Japanese and German car companies are eagerly testing

technology" developed by Dr. Schwarz (the author of one of the

eight articles) at Syracuse University pursuant to a U.S.

government grant.  (Wall St. J., February 17, 1993, at B3). 

Articles that appear in Catalysis are written by scientists at

for-profit institutions as well as those in academia, many of

whom, like Dr. Schwarz, doubtless used unauthorized photocopies

in writing their articles -- which Academic Press sells for a

profit.  The issue of fair use cannot turn on the for-profit

status of the employer since the photocopies in neither case bear

any direct relationship to a commercial activity. 

          The very cases on which plaintiffs rely (Pl. Br. 49 &

n.28), far from supporting the contention that Dr. Chickering's

making of a single copy of eight articles was "a commercial use,"

underscore that it was not.  In each case where copying by a for-

profit user was held unfair, the use in question competed

directly with plaintiffs or otherwise unfairly deprived them of a

sale of their copyrighted works.  As for plaintiffs' contention

that an internal use can be commercial (Pl. Br. 51-52), the only

case they cite that involved actual internal use was decided in

the copier's favor; each of the others involved copying for

more than internal use.

          Apparently recognizing that their hyperbole with

respect to Texaco's for-profit status would eviscerate the fair

use doctrine for all but charities, plaintiffs are forced to

acknowledge that "a commercial use for a profit-motivated purpose

is not, ipso facto, disqualified from fair use protection."  (Pl.

Br. 46).  But despite this brief concession to reality, they

resolutely refuse to analyze the scientific purpose and character

of Dr. Chickering's use, arguing instead in wholly conclusory

terms that it was commercial.  But no matter how many times

plaintiffs mischaracterize the copying at issue as "a commercial

use for a profit-motivated purpose" (Pl. Br. 45-46), they cannot

avoid the undisputed fact that the eight single copies were made

for internal scientific research purposes and bore an extremely

remote relationship to any commercial exploitation by Texaco.

          As for plaintiff's contention that the copying itself

provides economic benefits to Texaco, that is not the test of

fair use.  (See pp.  , supra).  Nor does it advance the ball to

assert that Texaco did not pay the "customary" price (Pl. Br.

46), for that is the issue to be decided on this appeal.  In all

events, when Dr. Chickering made the single copies, the CCC

believed it was receiving royalties for less than 5% of such

copying in the nation; and with the majority of companies

indisputably still not reporting copies, there is no such thing

as a "customary" price.  (A. 336, 340, 2031). 

          In sum, since Dr. Chickering's use was at most indi-

rectly commercial, under Maxtone the Sony presumption is not

entitled to any weight, and the proper focus should be on the

research purpose and character of Dr. Chickering's copying.

          b.   Non-Superseding Use

          Plaintiffs erect a straw man by asserting that "Texaco

stretches fair use doctrine out of shape in contending that it is

entitled to engage in the unauthorized in-house photocopying of

entire copyrighted journal articles simply because such copying

is done for the salutary purpose of conducting scientific

research," an argument that, according to plaintiffs, means that

"precious little copyright protection would remain for any

scientific and educational material."  (Pl. Br. 47).  That, of

course, is not Texaco's position.

          Texaco recognizes that a scientific research purpose,

standing alone, should not automatically resolve the first fair

use factor in favor of the user any more than an ultimate for-

profit purpose, standing alone, should automatically resolve it

against a for-profit user.  Rather, it is Texaco's position that

Dr. Chickering's scientific purpose in making a single copy of

eight articles outweighs any ultimate profit motive on Texaco's

part because the copies were not sold or distributed in

competition with the originals and did not supersede their use.  

          While plaintiffs attempt to make much of the fact that

the copies were non-transformative (Pl. Br. 54-56), they ignore

the square holding of Sony that uses need not be transformative

to be fair.  (See Tex. Br. 22-23).  As we also pointed out (Tex.

Br. 16), if Congress had intended to outlaw non-transformative

uses, it is curious indeed that it expressly included in  107's

definition of fair use a reference to "reproduction in copies"

for, inter alia, "research."  To be sure, the non-transformative

test may be helpful in determining whether a work sold in

competition with the copyrighted work is unfairly competing with

it and depriving it of sales.  But where the copy is not sold or

distributed in competition with the original, but (as here) is

merely used by the copier for study, notation and bringing into a

laboratory, the non-transformative use does not indicate that the

original use has been superseded.

          Here, the copies were not sold in competition with the

original and fulfilled a different function.  As Judge Leval

acknowledged (A. 112), Dr. Chickering wanted a copy, not the

original, to take to the laboratory, to mark up, to place in his

files or to time shift use.  While plaintiffs argue that origi-

nals can serve the same purpose as the photocopy, they cite no

evidence to support this assertion.  (Pl. Br. 21).  That is not

surprising, for their own witness, Dr. Elliott, admitted that in

the days before the advent of the modern photocopy machine,

scientists did not use originals in the way copies are used today

(A. 780, 794), and Judge Leval made no finding that copies serve

the same purpose as originals.  Indeed, if that were the case,

the publishers doubtless would seek to enjoin photocopying

altogether on the theory that scientists would increase their

subscriptions and use originals in the same way as they use


          Plaintiffs do not even seek to defend Judge Leval's

conclusion that, although there is "some merit" to Texaco's

contention that the copies serve a different function than the

original, that contention would be convincing only if the copying

had been done to transfer text on to a different material, such

as microfilm to preserve space.  (A. 101-02).  While plaintiffs

cite with approval Judge Leval's statement that "the three

subscriptions to Catalysis are serving the needs of hundreds of

scientists" and thus "the principal feature of the photocopying

is its capacity to give numerous scientists their own copy based

on Texaco's purchase of an original," they once again cite no

evidence to support this statement or the district court's

related -- and equally unsupported -- conclusion that Texaco's

"transformative use" is "overshadowed by the primary aspect for

the copying, which is to multiply copies."  (Pl. Br. 20, 40; see

Tex. Br. 24-25).  No such evidence exists.  

          As pointed out in our opening brief, the only record

evidence is that Dr. Chickering copied to further his scientific

research, not to multiply copies, and there is no evidence that

hundreds of Texaco scientists were using one copy of Catalysis

and making copies from it in order to avoid ordering more

subscriptions.  To the contrary, plaintiffs stipulated that they

had made no attempt to quantify the amount of photocopying at

Texaco and made no effort to do so with respect to Catalysis. 

(See pp. __, supra).  It is further undisputed that Texaco

increased its subscriptions from one to three during the time in

question, and the publisher of Catalysis could point to no other

company that had as many subscriptions as Texaco.  

          c.   Reasonable and Customary Practice

          Although the district judge, citing Harper & Row (471

U.S. at 550), acknowledged that "Texaco's strongest arguments may

be that photocopying has become 'reasonable and customary'"  (A. 

129) (emphasis added), plaintiffs contend that "none of the

courts in the American cases cited by Texaco . . . actually

considered evidence of alleged industry custom in determining

whether the use was a fair use."  (Pl. Br. 57).  Plaintiffs are

simply wrong.

          Not only was Justice O'Connor's opinion in Harper & Row

heavily influenced by the fact that it customarily had not been

an accepted practice to quote or copy from unpublished works (471

U.S. at 550-51), but in Rosemont this Court explicitly consid-

ered, in determining that the use in question was fair, the fact

that "it is both reasonable and customary for biographers to

refer to and utilize earlier works dealing with the subject of

the work and occasionally to quote directly from such works." 

366 F.2d at 307 (emphasis added).  This Court went on to note

that "[t]his practice is permitted because of the public benefit

in encouraging the development of historical and biographical

works and their public distribution."  Id. at 307 (emphasis

added).  Similarly, in Williams & Wilkins the Court of Claims was

influenced, in determining that the photocopying at issue was

fair use, by the fact that the making of single copies of

articles by scientists and others was a long-standing and

customary one.  487 F.2d at 1353, 1355-56.  See also, e.g.,

Triangle Publications, Inc. v. Knight-Ridder Newspapers, Inc.,

626 F.2d 1171, 1176 (5th Cir. 1980); Tex. Br. 26 n.11.  Given

these Supreme Court and Circuit decisions, plaintiffs' reliance

(Pl. Br. 57) on some district court opinions rejecting reliance

on industry custom is hardly persuasive, particularly in light of

the courts' expressed skepticism in some of the cited cases that

the custom, in fact, existed.

          Equally mistaken is plaintiffs' assertion (Pl. Br. 56)

that Judge Leval found there is "no such reasonable and customary

practice."  The district court found that there was such a prac-

tice and that it provided Texaco with its strongest argument, but

discounted its significance in light of the existence today of

the CCC.  (A. 129-30).  But what is reasonable and customary does

not become unreasonable simply because some publishers wish to

change it and are seeking to use this test case to effectuate

such a change. 

          d.   Plaintiffs' Remaining Arguments

          (1)  While Judge Leval rejected Texaco's  108 argu-

ments on the ground that Dr. Chickering's copying was for direct

or indirect commercial advantage and Texaco had made more than

one copy (A. 136-37), plaintiffs make no attempt to defend his

reasoning in this regard.  (See Tex. Br. 18-19).  Rather, they

acknowledge that some copying by libraries in for-profit institu-

tions would be lawful under  108 because the statute is con-

cerned with the immediate commercial motivation behind the

reproduction or distribution itself, and not the ultimate profit-

making motivation of the company in which the library is located.

Nonetheless, plaintiffs contend that  108 -- which was enacted

simultaneously with  107 -- has no bearing on the issue here

because the copying was "systematic."  As explained above, that

is demonstrably not the case.  (See pp. ___, supra).

          (2)  Plaintiffs assert that Dr. Chickering's purpose in

copying to replicate accurately the complex equations, charts,

graphics and the like in the articles, is not entitled to fair

use credit under Consumers Union because that decision is "not

good law."  (Pl. Br. 55).  But even Judge Leval agreed that

Consumers Union is still a viable precedent.  (A. 102-03). 

Plaintiffs rely merely on the opinion of four judges supporting

denial of rehearing en banc in New Era, 884 F.2d at 661, ignoring

the fact that four other judges, in a separate opinion,

reaffirmed the validity of Consumers Union on this precise point

(id. at 663).

          (3)  Plaintiffs do not explain why the copying for an

entertainment purpose in Sony, resulting in an untold number of

unlicensed copies of entire copyrighted shows for which the

producers would be willing to collect licensing fees, is more

deserving of fair use than the single copy of eight articles for

scientific research purposes here, particularly when there has

been no adverse effect on sale of the original work.  (See Tex.

Br. 35-36, 41).

          (4)  As for Williams & Wilkins, plaintiffs' argument

boils down to the assertion that the copies there were made by

non-profit governmental entities.  (Pl. Br. 53).  But the

point (which Texaco did assert below in its trial brief) is that

Texaco no more sought to gain commercially from the reproduction

of copies than did the scientists and doctors who received copies

in Williams & Wilkins, many of whom worked for drug companies or,

as practicing doctors, made a handsome living.  The focus of the

Court of Claims' opinion was, as it should have been, on the

purpose and character of the use, and not on the purpose and

character of the user.

     2.   Nature of the Work

          Plaintiffs cannot dispute that "the scope of fair use

is greater with respect to factual than non-factual works" (New

Era, 904 F.2d at 157) and that the eight articles are factual. 

(See Tex. Br. 28).  Instead, in criticizing Judge Leval's award

of this factor to Texaco, plaintiffs argue that Academic Press'

investment of time in the publication of Catalysis and the

alleged risk that it undertook in publishing the journal weighs

in their favor.  (Pl. Br. 57-58).  Not only is there no probative

evidence to support this contention (see Tex. Br. 3-4), but the

Supreme Court has authoritatively rejected it in holding that a

"'sweat of the brow' doctrine flouted basic copyright princi-

ples."  Feist Publications, Inc. v. Rural Tel. Serv. Co., 111 S.

Ct. 1282, 1291-92 (1991).  As for the "new theories, new

hypotheses, and new solutions to difficult problems" that plain-

tiffs identify as the "highly original, creative and imaginative"

element of scientific and technical articles (Pl. Br. 58), they

are not subject to copyright protection, any more than are the

mathematical formulas, theorems and calculations contained in

such articles.  (See, e.g., 17 U.S.C.  102 (a)-(b)).

     3.   Amount and Substantiality of the Portion Used

          Plaintiffs do not discuss -- let alone distinguish --

the decisions (including Folsom) that, by analogy, demonstrate

why the eight articles should be viewed as portions of the issue,

journal or the subscription volumes in which they appear.  (See

Tex. Br. 29 n.14).  Nor do plaintiffs dispute the minuscule

portion that the articles comprise of these larger universes,

that Academic Press does not offer the articles for sale

separately from the journal subscriptions, or that it registers

only the "collective copyrights" it owns in the journal issues in

which the articles were published.  

          In all events, even if the articles are viewed as

separate works, the record demonstrates, just as in Sony and

Williams & Wilkins, that the use of the entire works was fair. 

For where, as here, an article is not being sold or distributed

in competition with the original and does not substitute for it,

copying the entire article no more displaces the originals than

copying a page or two from it.

     4.   Effect of the Use

          a.   The Sony Presumption Dicta.  In Sony, the Supreme

Court stated that "[i]f the intended use is for commercial gain

[the] likelihood [of injury to the market for the copyrighted

work] may be presumed."  464 U.S. at 451.  In Harper & Row,

however, where the Court held that the defendant had the

"intended purpose of supplanting the copyright holder's

commercially valuable right of first publication," the Court did

not rely on any Sony "presumption."  471 U.S. at 562, 566-69

(emphasis in original).  "Instead," as explained in Maxtone, the

Court in Harper & Row "focused its inquiry on actual damages and

assessed the likelihood of future harm."  803 F.2d at 1264

(emphasis in original).  Maxtone went on to hold that this Court

did not have to decide whether, given the obvious tension between

the language in Sony and the analysis of Harper & Row, the Sony

dicta created an evidentiary presumption of injury, "for whether

we presume harm, or search for proof of it, it is abundantly

clear that [defendant's work] poses no more than an insignificant

threat of economic damage" to the plaintiff.  Id.  In asking this

Court to do what it refused to do in Maxtone, plaintiffs ignore

the Maxtone analysis.  What is more, they fail to cite any case

in which a court relied on the Sony dicta to hold that, because a

defendant's use was "commercial," it would, without any proof of

actual injury or competition with the plaintiff, be presumed that

the plaintiff was injured.  (See Pl. Br. 63).  The fact remains

that, on this record, there is no evidence that by making a

single copy of eight articles Dr. Chickering "'materially

impair[ed] the marketability of the work which is copied.'" 

Harper & Row, 471 U.S. at 567 (emphasis added).  Put another way,

any Sony presumption has, on this record, been effectively


          b.   The Irrelevance of Any Harm to Other Works or

Publishers.  A basic premise of plaintiffs' argument is that

Academic Press can aggregate the injury to all publishers from

the photocopying of all scientific and technical articles to

support its injury claim with respect to the eight articles at

issue.  (See, e.g., Pl. Br. 63-64, 68, 72).  But, as the fourth

statutory factor expressly provides, what is at issue is the

"effect of the use upon the potential market for or value of the

copyrighted work."  Whether the works of publishers other than

Academic Press are being injured by photocopying is no more

relevant in this case than would alleged harm to other authors'

letters be relevant to J.D. Salinger's infringement claim based

on Random House's publication of his letters.  (See Tex. Br. 36). 

          Similarly, whether the value of works of Academic Press

other than the eight articles is affected is irrelevant since it

is the injury or potential injury to the "copyrighted work" in

suit -- not injury to the copyright owner -- that is the sole

concern of  107(4).  Not surprisingly, given the total absence

of authority for plaintiffs' claim as to alleged injury to other

publishers or other works, they do not even attempt to support

it.  As for this Court's unequivocal rejection in Consumers Union

of the argument that the injury caused by the use of a magazine

article could be measured by alleged loss to "possible future

issues of Consumer Reports (724 F.2d at 1051; emphasis added),

plaintiffs simply assert, in classic ipse dixit, that this

Court's decision and another decision Texaco cited "do not

support [Texaco's] contention."  (Pl. Br. 68).  Why this is so

plaintiffs do not -- and cannot -- say.

          c.   The Alleged Loss of Subscriptions.  As demon-

strated in our main brief (Tex. Br. 35-36), if, as plaintiffs

argue, the "work" at issue is the article not the journal volumes

contained in a yearly subscription, it follows that any alleged

injury should be based on injury to the article, not to the

larger work in which it appears.  Plaintiffs make no effort to

reply to this point.  

          But even if the Court addresses plaintiffs' claim as to

a potential loss of subscriptions, it is apparent that Judge

Leval's speculation that, if photocopying were barred, "it seems

likely that Texaco would add at least a modest number of sub-

scriptions to Catalysis" (A. 114) is based on an "unrealistic"

"hypothesis" that is belied by the record.  Williams & Wilkins,

487 F.2d at 1357, 1358.  Indeed, it is indicative of the

dearth of supporting evidence that one must deconstruct

plaintiffs' brief just to locate the record cites they contend

support their bald assertion that "[c]ertainly" photocopying

"supplants" the originals of the articles "and in that important

sense free photocopying competes with plaintiffs' efforts to sell

subscriptions."  (Compare Pl. Br. 65, 52 with Tex. Br. 31-35 and

Pl. Br. 68 citing Pl. Br. 14-15). 

          (1)  Plaintiffs state that journals are circulated at

Beacon and that some scientists, as did Dr. Chickering, make

copies of some of the articles "before passing . . . on" the

journal.  (Pl. Br. 13).  Of course, lawyers and others in the

business and academic world -- including the plaintiff publishers

here (Tex. Br. 9 & n.3; see, e.g., A. 877-81, 898-99) -- do

exactly the same thing.  This is hardly evidence that

Dr. Chickering's copying either sped up circulation of Catalysis,

or thereby eliminated the need for subscriptions.

          (2)  Plaintiffs assert that "[r]apid circulation with a

minimum number of subscriptions is made possible by photocopy-

ing."  (Pl. Br. 14).  None of the evidence plaintiffs cite, how-

ever, relates to Catalysis, which is not surprising since it is

undisputed that the Beacon facility increased its subscriptions

from one to three.  By comparison, most subscribers have only one

subscription, and plaintiffs could not identify even one sub-

scriber who had more subscriptions than Texaco.  (See Tex. Br. 9-

10, 34).  Nor does the evidence establish that Texaco used

photocopies to speed up circulation of other journals and thereby

reduce subscriptions.  Plaintiffs compound their distortion of

the record by asserting that the Catalysis routing list "has

ranged from 15 to 38 researchers" (Pl. Br. 14), when, in fact,

two originals were circulated to the researchers on the list. 

(A. 831-33, 848-49).

          (3)  Plaintiffs allege that "[e]ven with the use and

benefits of photocopying, Texaco increased its subscriptions to

Catalysis . . ., as Judge Leval found, 'in order to speed up the

circulation process.'"  (Pl. Br. 15) (emphasis added).  This

statement supports Texaco's position that it is subscriptions,

not photocopying, that speed circulation of journals.  It still

remains undisputed on this appeal that "the record is devoid of

any evidence that Texaco took the amount of photocopying into

account in determining the number of subscriptions to order [to

Catalysis]."  (Tex. Br. 34).  

          (4)  The reason there is no evidence to support the

allegation that if photocopying were unlawful Texaco would

increase subscriptions is that it is not true.  Simply put,

notwithstanding plaintiffs' suggestion to the contrary -- in a

paragraph which is most notable for its absence of citation to

the record (Pl. Br. 21) -- originals are not substitutes for

photocopies.  (See pp.   , supra; Tex Br. 7-8).  As

Dr. Chickering testified -- testimony plaintiffs neither

challenge nor refer to -- regardless of the number of subscrip-

tions Beacon had to Catalysis, he still would have copied the

eight articles.  (See Tex. Br. 32).

          The proof of the pudding is that plaintiffs do not

attempt to explain why, if in fact photocopying were depriving

Academic Press of significant subscription revenues to Catalysis,

it is not seeking an injunction to stop it and earn almost $900

per subscription instead of attempting to collect three dollars

for a copy of an article.  The reason plaintiffs desire only an

order of specific performance of the CCC transactional license

instead of an injunction (see A. 14) is that photocopies are not

substitutes for subscriptions and that they would not gain

additional subscriptions if copying were enjoined, but only would

"lose" the license fees they could obtain with a court order's

threat of contempt.

          d.   Document Delivery Services.  Plaintiffs' sole

response to their own witness' testimony as to the delay in

receiving copies from document delivery services is their asser-

tion that the delay is not significant.  (Compare Tex. Br. 36

with Pl. Br. 19).  Yet the premise of plaintiffs' argument and

Judge Leval's decision is that promptness matters to scientists.

(Pl. Br. 14, quoting A. 114).  There is no reason to believe that

a scientist who needs a copy to work with in the laboratory or to

take home at night is any more likely to tolerate the delay

required to wait for a copy from a document delivery service than

a lawyer or judge writing a brief or opinion would wait for

delivery of a copy of a case or law review article.

                      *         *         *

          The dearth of evidence to support plaintiffs' claim of

injury is all the more significant given the "massive" "31-volume

trial record," and plaintiffs' access to the documents and

witnesses of the eighty-four plaintiff publishers and to the

"photocopying surveys" and "two expert econometricians" of the

CCC.  (Pl. Br. 1, 9, 28).  Indeed, throughout the time photocopy-

ing was increasing, neither Academic Press nor its parent in

their securities filings or day-to-day business ever expressed

any concern about photocopying, let alone asserted that the

practice was having any adverse business effect.  (See TEX-227 to

TEX-244; A. 1187, 1219-24, 1227-28, 1237-39, 1247, 1318-18A).  In

short, this is a classic example of the dog that didn't bark.  As

this Court explained in an antitrust case in affirming summary

judgment rejecting the plaintiff's claim of injury:

          The failure of a business' management to note

          at the time what is later claimed by its

          lawyers to have been a mortal commercial

          wound weighs heavily against such a claim. 

Argus, Inc. v. Eastman Kodak Co., 801 F.2d 38, 42 (2d Cir. 1986),

cert. denied, 479 U.S. 1088 (1987). 

F.   In All Events, the CCC Licenses Do Not Provide a Fair or

     Efficient System for Collecting Photocopying Royalty


          As noted, plaintiffs' reliance on the CCC's existence

is irrelevant to this case, and the district court's analysis

premised on the CCC is circular.  In addition, Judge Leval's

factual predicate is not supported by the evidence.  The plain

fact is that the CCC is not a fair and efficient mechanism for

collecting license payments.

          Plaintiffs contend the CCC was established "in response

to a Congressional recommendation that an efficient mechanism be

established to license photocopying."  (Pl. Br. 25). In fact, at

most a committee of Congress encouraged "those affected [to] join

together in an effort to establish a continuing understanding as

to what constitutes mutually acceptable [photocopying] practices,

and to work out means by which permissions for uses beyond fair

use can be obtained easily, quickly, and at reasonable fees." 

(A. 1987).  In holding the CCC not exempt from income taxation,

the Tax Court found "[w]e are not faced here with a truly joint

undertaking of all parties -- publishers, copyright owners,

users, and governmental agency -- concerned with proper enforce-

ment of the copyright laws, in which efforts are focused on

meeting the needs and objectives of all involved."  Copyright

Clearance Center v. Commissioner, 79 T.C. 793, 805 (1982). 

Rather, the CCC "was organized by a segment of [The American

Association of Publishers] and there is little persuasive

evidence that [the CCC's] founders had interests of any substance

beyond the creation of a device to protect their copyright

ownership and collect license fees."  Id.  "[T]he potential for a

substantial private profit was the driving force behind the

organization and operation of the [CCC]."  Id. at 807 (emphasis


          Given the CCC's goal of advancing the financial

interests of publishers, the record demonstrates, not

surprisingly, that it is neither fair to users nor efficient. 

     1.   The TRS.  The CCC's own documents and the testimony of

its officials are the best evidence of whether the TRS is

reasonable and efficient, not the trial court's speculations (A.

132) which are unhinged from any record support.

          According to the CCC, as of 1983, it was receiving

reports of no more than 5% of the photocopying occurring in

corporations; and the TRS "was not effectively meeting the needs

of substantial segments of both the user and copyright owner

communities" and even by 1985 had "not yielded significant

amounts of royalties."  (A. 336, 340-41, 2031 (emphasis added),

2044; see also A. 2035-43).  Mr. Alen testified that companies

"resisted universally the administrative superstructure and

corporate-wide operational burdens required by a 100%

transaction-based record keeping and reporting system."  (A. 337,

2031).  The administrative burdens were described by the CCC as

an "enormous undertaking" requiring "expenditure of manpower

[that] results in no economic gain for either the photocopy user

or the copyright owner."  (A. 2060-61).

          Moreover, it is undisputed that the TRS did not cover

anywhere near all scientific and technical publications used by

large research corporations.  As of 1985-86, for example, the CCC

covered only 27.3% of titles copied at Exxon, 30.5% at Mobil, and

26.4% at Amoco.  (A. 4329; see also A. 311-12, 2021, 3807). 

Because the TRS provided 30% or less coverage for the type of

articles Texaco and others use, it utterly failed to eliminate

the burdensome transaction costs that Judge Leval himself

acknowledged are associated with negotiating individual licenses. 

(A. 125-26; see also A. 2001).  Not surprisingly, given these

undisputed facts, the CCC concluded that the TRS was not suited

to large corporations like Texaco.  (A. 2054-55, 2061, 3848).

          By its inherent design, the TRS also required users to

pay for all copies of articles even though, as the publishers

admit (Pl. Br. 26), they often do not own the copyright in every

piece appearing in a given journal.  (See also A. 1032-33, 1437-

41).  The CCC, however, registers journals, not articles, and

it has no information identifying those articles in which

publishers claim copyright and those in which they do not.  (A.

313-17, 330, 333-34).  Thus, the CCC cannot inform users as to

which articles should be reported to the CCC, but rather refers

its customers to the masthead statements in the CCC-registered

publication.  (A. 322-24; see, e.g., A. 3702, 3869, 3887). 

However, the masthead statements of scientific and technical

journals typically fail to advise users that the publishers do

not claim rights in all articles in the publication.  In fact,

they often state the opposite.  Thus, for example, the masthead

statement in Catalysis warns that "[n]o part of this publication

may be reproduced . . . by any means, . . . including

photocopying."  (A. 1053, 1549).  Similarly, other CCC-registered

journals claim that "[a]ll articles published in this journal are

protected by copyright."  (A. 3871; see A. 1433-36 (emphasis


          While plaintiffs contend that users can decide for

themselves whether articles need to be reported, and emphasize

that the affiliation of the author is listed in the article (Pl.

Br. 26, 27 n.11), that information hardly provides a basis for

deciding whether a report is necessary.  Many articles, for

example, are written by government employees or pursuant to

government grant, which are unlikely to be covered by copyright,

yet the publishers take the position that they own a valid

copyright in such articles and should be paid.  (A. 1437-41; see,

e.g., A. 3872, 3880, 3888, 3924, 3939, 3969).  Indeed, three of

the articles copied by Dr. Chickering were written pursuant to

NSF grants that gave the recipient organization -- not the author

who signed the transfer to Academic Press -- the right to

copyright them.  (A. 505, 510, 518, TEX-29).  It would be

difficult for a user to attempt to decide on the basis of

employer or government affiliation whether to pay, because the

issue of whether a particular article is subject to copyright is

a complex one. (A. 1437-41, 330-32; see, e.g., A. 3872, 3880,

3888, 3924, 3939, 3969).

          Significantly, the production director of plaintiff

Springer-Verlag, Mr. Van Dyck, could not say, when shown specific

articles written by government employees and others, whether a

CCC fee need be paid.  (A. 1437-41).  In an apparent attempt to

excuse Mr. Van Dyck's failure in this regard, plaintiffs elicited

testimony that the witness was not an attorney and had never

taken any courses in copyright law!  (A. 1442).  That, of course,

is precisely the point.  It is lay people who have to decide

whether to report under the TRS, and the masthead statements in

the journals create the false impression that all copies must be

paid for.  Moreover, while the General Counsel of plaintiff John

Wiley & Sons, Inc. testified that his company does not claim

copyright in "a U.S. Government work," he acknowledged that John

Wiley nevertheless places a CCC code on such works even though it

does not expect users to pay for them.  (A. 1028-29).  How the

user is supposed to work his way through this maze, one is only

left to wonder.

     2.   The AAS.  The AAS is no more a fair or efficient

licensing system than the TRS.  When the AAS was first

established, the CCC covered only 25% to 30% of photocopying done

by large corporations.  (See pp. ___, supra).  As the CCC

acknowledged, "coverage of publications for any given user was

too low to justify their entering into agreements with the CCC,"

and the CCC's efforts to increase its rate of participation by

publishers were "disappointingly low."  (A. 3728-73, 3850; see

also A. 353-54, 2019-21, 4304-05, 4325-29, 4337).  Today, the CCC

no longer keeps track of coverage rates, but it acknowledges that

it does not provide 100% coverage.  (A. 348-49, 350-51).  Indeed,

the CCC has admitted that full coverage is not a realistic

possibility under the "current purely voluntary system" because

of, inter alia, the "lack of clarity regarding ownership of

reprographic rights" and because of the "unwillingness or indif-

ference of some publishers to provide access to their works under

a collective system."  (A. 2021).

          Thus, even under the AAS, users cannot escape the

administrative burdens associated with negotiating individual

licenses and making individual reports of copying to publishers

not registered with the CCC.  Users must either copy without

permission a significant number of titles or negotiate individual

licenses with a large number of publishers not in the CCC --

assuming such publishers are willing to license a copy to be made

-- and institute a system to keep track of and report non-CCC

covered copying.  Moreover, even if a user registers under the

AAS, it may still be necessary for it to take a TRS license as

well "to the extent that . . . photocopying [i]s not covered by

its AAS license."  (See A. 1423B).

          The AAS is fundamentally unfair since it requires users

to pay for copies of articles in which the publishers indisputa-

bly do not own rights.  As plaintiffs acknowledge (Pl. Br. 28-

29), in calculating the annual license fee, the CCC counts every

article copied from a CCC-registered publication regardless of

whether the publisher has a copyright in it.  (A. 295-96, 342-

43).  While they claim that this is a "necessary tradeoff" (Pl.

Br. 30), they nowhere explain why their econometricians could not

survey to identify articles in the public domain and in which the

publishers do not own rights, so that the AAS accurately and

fairly reflects the amounts actually due the publishers.  This is

not an insignificant issue, since the vast majority of articles

published in Catalysis between 1978 and 1988 were written in

circumstances raising work made for hire, government employee or

government grant issues of copyrightability and ownership.  (A.


          As if all of this were not enough, at the heart of

Judge Leval's decision is his belief that the CCC license is

"reasonably" priced.  (A. 129).  Whatever the merit of that view

today, one can rest assured that if this Court grants plaintiffs

the right to condition photocopying upon prices they set without

the benefits of a competitive marketplace or government regula-

tion, prices inevitably will rise and the courts likely will

become enmeshed in future fair use litigations over the "reasona-

bleness" of plaintiffs' mandated prices -- an inquiry for which

the judiciary is particularly ill-equipped.  (See Tex. Br. 42).

          Respectfully, such decisions and the evaluation of

whether particular licensing regimes and mechanisms should

convert heretofore "fair" use into "unfair" use are, in the first

instance, legislative, not judicial.  (See Tex. Br. 41-43).


          The parties agree, as did the court below, that the

making of single copies of articles by scientists for use in

their research is a widespread and extensive practice that plays

an important role in the advancement of scientific knowledge. 

For almost three decades, since the advent of the modern photo-

copy machine, scientists have made single copies to facilitate

their research and writing, from which everyone benefits.  During

this same time, Academic Press and other publishers have flour-

ished, with the number of journals and articles steadily

increasing.  Plainly, the status quo provides ample incentives

for the creation of scientific articles, and the practice of

making single copies, if not enjoined, will not diminish sales of

originals.  This reasonable and customary practice provides a

proper balance between publishers' rights to exploit their

copyrights and users' rights to utilize them fairly.  It should

not be altered simply because the publishers have banded together

and, through the mechanism of this test case, seek to be paid for

a practice that causes them no real world injury.

          For all of the foregoing reasons, the Order below

should be reversed and remanded with directions that the District

Court determine plaintiffs' proofs of claim in Texaco's favor.

Dated:  May 10, 1993

        New York, New York

                              Respectfully submitted,

                                   KAYE, SCHOLER, FIERMAN,

                                     HAYS & HANDLER

                                   425 Park Avenue

Of Counsel:                        New York, New York  10022

                                   (212) 836-8000

     Milton J. Schubin                  

     Thomas A. Smart               JOSEPH P. FOLEY     

     Michael Malina                Texaco Inc.    

     Richard A. De Sevo            2000 Westchester Avenue

     Karin Segall                  White Plains, New York  10650

                                   (914) 253-4000


                                   Attorneys for Appellant

                                     Texaco Inc.


1.   See Harper & Row Publishers, Inc. v. Nation Enters., 471

     U.S. 539, 566-67 (1985) (defendant, in competition with

     plaintiff, sold excerpts of plaintiff's work); Stewart v.

     Abend, 495 U.S. 207, 238 (1990) (sale of film derived from

     plaintiff's short story); Financial Information, Inc. v.

     Moody's Investor Serv., Inc., 751 F.2d 501 (2d Cir. 1984)

     (defendant copied and sold part of plaintiff's work), cert.

     denied, 484 U.S. 820 (1987); DC Comics Inc. v. Reel Fantasy,

     Inc., 696 F.2d 24, 28 (2d Cir. 1982) (use of copyrighted

     figures in advertising flyer); Meeropol v. Nizer, 560 F.2d

     1061, 1070 (2d Cir. 1977) (defendant copied plaintiff's

     unpublished letters and used them in book it sold), cert.

     denied, 434 U.S. 1013 (1978); United Tel. Co. v. Johnson

     Publishing Co., 855 F.2d 604 (8th Cir. 1988) (defendant

     copied plaintiff's work to update own competing work); Hi-

     Tech Video Prod., Inc. v. Capital Cities/ABC Inc., 804 F.

     Supp. 950, 955 (W.D. Mich. 1992) (ABC copied and broadcast

     plaintiff's work from which it "stood to profit"); Basic

     Books, Inc. v. Kinko's Graphics Corp., 758 F. Supp. 1522,

     1532 (S.D.N.Y. 1991) (sale of photocopies of excerpts from

     plaintiffs' works); Richard Anderson Photography v. Brown,

     1990 U.S. Dist. LEXIS 19846 at 5 (W.D. Va. 1990) (use of

     plaintiff's copyrighted work in brochure soliciting money);

     Telerate Sys., Inc. v. Caro, 689 F. Supp. 221, 229-30

     (S.D.N.Y. 1988) (defendant sold computer software in

     competition with plaintiff that permitted user to copy and

     use plaintiff's work); Craft v. Kobler, 667 F. Supp. 120,

     129 (S.D.N.Y. 1987) (use of plaintiff's work in book to be

     sold "in potential competition with plaintiff's work"); DC

     Comics, Inc. v. Unlimited Monkey Business, Inc., 598 F.

     Supp. 110 (N.D. Ga. 1984) (defendant performed, for profit,

     singing telegrams of plaintiff's copyrighted cartoon

     figures).  Equally distinguishable are the examples

     plaintiffs provide on the preceding page of their brief (Pl.

     Br. 66), which involve defendants who "sold," "publish[ed],"

     "serialize[d]," "rented," "perform[ed]" or "print[ed]" an

     infringing work.

2.   Moreover, while plaintiffs quote from internal 1983 Texaco

     memoranda in which an attempt was made to estimate the cost

     of eliminating the circulation of journals and requiring

     Beacon scientists to go to the library every time they

     wanted to read an article (Pl. Br. 18), those memoranda do

     not constitute an attempt to quantify any cost savings

     resulting from the making of single photocopies of the type

     done by Dr. Chickering.

3.   With respect to the proper placement of the burden of proof,

     plaintiffs fail to cite any case that analyzes the issue. 

     (Compare Pl. Br. 38 with Tex. Br. 15 n.7).  The cited two

     cases that refer to fair use as an affirmative defense

     reflect nothing more than a defendant's proper concern to

     insure that plaintiffs are not surprised.  See C. Wright &

     A. Miller, 5 Federal Prac. & Proc.  1271, at 315-16 (1990).

4.   Notice of Motion of Appellees for Permission to File Brief

     Exceeding 50 Pages, at p. 2.

5.   Plaintiffs' stress in this Court on Texaco's for-profit

     status is in marked contrast to their counsel's out-of-court

     pronouncement construing the district court's subsequently

     added footnote to its decision (A. 140-41) to mean "that

     'research' (and, by implication, 'teaching') activities

     (even if not for profit, but market-impairing) are not

     entitled to special claims to free use of copyrighted

     material'" and asserting that the ruling has "much broader

     application."  (Exhibit J p. 1 to Notice of Motion of

     Association of Research Libraries, et al. for Leave to File

     an Amicus Curiae Brief in Support of Appellant Texaco Inc.

     (emphasis added)).  (See also A. 182-83).  It is thus not

     surprising that plaintiffs fail to contest the extensive

     showing in the three briefs of the eighteen amici curiae of

     the grave consequences to research generally, and to

     universities and research libraries in particular, that

     affirmance by this Court would cause.

6.   Thus, plaintiffs' citation (Pl. Br. 47-48) to the views of

     their former counsel in this case, William Patry, and the

     former Register of Copyright, for the proposition that for-

     profit research deserves no credit under the first use

     factor, is contrary to the law of this Circuit.

7.   For example, in Harper & Row, the defendant's infringing use

     destroyed the market for the first-serial publication rights

     of President Ford's memoirs, and in Basic Books (758 F.

     Supp. at 1532), the court found that defendant had copied

     plaintiffs' copyrighted works and sold them in direct compe-

     tition with the plaintiff publishers.

8.   Sega Enters. Ltd. v. Accolade, Inc., 977 F.2d 1510, 1522-23

     (9th Cir. 1992), far from deciding that copying for internal

     use was a commercial use not deserving of fair use credit

     (see Pl. Br. 52), held that, because the copy was not sold

     or distributed but merely used indirectly or derivatively to

     develop a non-infringing competing copy, and because the

     public would benefit from such use, "the presumption of

     unfairness has been overcome and the first statutory factor

     weighs in favor of Accolade."

9.   For example, in Allen-Myland, Inc. v. IBM Corp., 746 F.

     Supp. 520, 529, 530, 534-35 (E.D. Pa. 1990), the defendant

     had not merely copied IBM's microcode for internal purposes,

     but also to reconfigure IBM systems in direct competition

     with IBM; and IBM presented evidence that it had lost sales

     to the defendant as a result.

10.  Indeed, for-profit publishers themselves do not pay any

     "customary" price.  The vast majority of plaintiffs are not

     registered as users with the CCC, and of the twelve non-

     plaintiff parents or affiliated companies plaintiffs

     identified in their brief (Pl. Br. i), only two are

     registered.  (See A. 2326, TEX-190).  Moreover, that only

     19% of Fortune 500 companies are CCC licensees is not

     explained by plaintiffs' supposition that the unsigned "do

     not engage in significant scientific and technical

     research."  (Pl. Br. 7 n.2).  The unregistered as late as

     1989 included such research-oriented companies as General

     Dynamics, Lockheed, Textron, B.F. Goodrich, General Signal

     and Becton-Dickenson.  (Compare A. 2326 with TEX-39).

11.  While plaintiffs cite a number of cases that have relied on

     the copy's failure to transform the original in rejecting a

     claim of fair use (Pl. Br. 55), in each case the unfairness

     lay in the fact that the non-transformative copy was sold in

     competition with the original, or directly substituted for a

     sale, and thus superseded its use.

12.  Plaintiffs' argument is particularly inappropriate in light

     of the fact that the Association of American Publishers

     ("AAP"), which has actively supported this suit against

     Texaco, submitted an amicus curiae brief to this Court in

     Wright in which it relied upon the "tradition[]" of writers

     not negotiating payments for fair use.  (Amicus Curiae Brief

     of AAP, p. 10).

13.  In fact, there is no evidence that Texaco ever copied the

     same article twice.

14.  This approach is inconsistent with plaintiffs' view that it

     is the purpose and character of the ultimate user that

     determines fair use.  Would plaintiffs agree that

     Dr. Chickering's copying would be a fair use if he had

     received the copies from the government, which made them at

     his request?

15.  Unable to challenge the facts or the law, plaintiffs contend

     that Academic Press' failure to register the individual

     articles is excusable because it would be inconvenient and

     too expensive for it to obey the law and pay the $10

     registration fee (recently increased to $20).  (Pl. Br. 61). 

     The law, however, is to the contrary.  Section 411(a) is

     unequivocal:  "no action for infringement of the copyright

     in any work shall be instituted until registration of the

     copyright claim has been made."  17 U.S.C.  411(a)

     (emphasis added).  There is no exception for articles

     published in collective works or compilations.

16.  Labeling the potential loss of subscription revenue as an

     inference (Pl. Br. 68 n.35) does not fill the evidentiary

     void for, as one of the decisions that plaintiffs rely upon

     states, an inference must be "reasonably derived from the

     evidence."  United States Lighterage & Towing Corp. v.

     Petterson Lighterage & Towing Corp., 142 F.2d 197, 199 (2d

     Cir. 1944) (emphasis added).

17.  Plaintiffs' remaining record references are to other Texaco

     researchers' statements with respect to journals other than

     Catalysis, or to their so-called "expert's" belief as to

     what researchers at other companies do.  (Compare Pl. Br. 14

     with A. 754-55).  (In fact, there were no expert witnesses

     at trial.)  They also cite to the off-hand comments of two

     researchers (other than Dr. Chickering and not with respect

     to Catalysis) that they "may" or "might" copy an article to

     move it along.  (See Tex. Br. 34 n.16).

18.  The record cites to which plaintiffs refer merely reflect

     the number of subscriptions that Beacon had to Catalysis (A.

     803); a document recommending increased subscriptions, which

     makes no reference to photocopying (A. 1516-28); documents

     that make no reference to photocopying, relate to journals

     other than Catalysis, and relate to a year in which sub-

     scriptions to Catalysis were unchanged (A. 2222-28); and

     Dr. Chickering's testimony that circulation "sped . . . up"

     when the Beacon library instituted a computerized chart for

     routing journals (A. 569-70), none of which has anything to

     do with photocopying.

19.  As for the other evidence cited in Texaco's brief (Tex.

     Br. 36), plaintiffs, once again, do not contest it --

     including the fact that there is no evidence that any

     photocopy of any of the eight articles was ever provided to

     any person by any such service and that Academic Press has

     never earned any significant revenues from such services.

20.  Significantly, the district court relied on law review

     articles about the CCC, including one by Joseph Alen, the

     CCC's Vice President, but ignored Mr. Alen's testimony and

     the CCC's documents, which belie Judge Leval's conclusions. 

     (A. 84, 86 & n.6).

21.  The district court relied on the practice of law firms in

     routinely keeping a log of all photocopying done and billing

     clients on a per page basis as evidence that the TRS is not

     burdensome.  (A. 132 n.23).  But a law firm need only match

     total number of copies to client for each reporting period. 

     Under the TRS, a user must (1) determine whether the article

     is contained in a journal registered with the CCC, (2)

     decide whether the publisher is claiming a right to be paid,

     (3) if so, whether the publisher has such right (e.g., that

     the article is not in the public domain), and (4) then must

     record and report to the CCC the journal, the year of

     publication, the fee, the number of pages copied and the

     number of copies made.  (A. 329).  Given human nature, it is

     unrealistic to believe that users will take the time to

     record these detailed minutiae, and none of plaintiffs'

     record citations supports their contention that users can

     report with "relative ease."  (Pl. Br. 27-28).

22.  For example, it is black letter law that there is no copy-

     right in a work written by a government employee as part of

     his or her duties.  17 U.S.C.  105.  (See also A. 1032-33). 

     Similarly, whether articles written pursuant to government

     grants are subject to copyright, and who has a right to

     claim the copyright, often requires a review of the terms of

     the grant.  Compare Schnapper v. Foley, 667 F.2d 102, 108-09

     (D.C. Cir. 1981), cert. denied, 455 U.S. 948 (1982), with S

     & H Computer Sys., Inc. v. SAS Inst., Inc., 568 F. Supp.

     416, 418-19 (M.D. Tenn. 1983).


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