Commercial use and third parties

13.40 A use is less likely to be fair if it is commercial. The fact that the material will ultimately be used for educational purposes does not necessarily mean the use will be fair, particularly if the use was made by a commercial entity.

13.41 For example, in Basic Books v Kinko’s Graphics Corp,[34]the copying of copyright material to form course packs was found by a US District Court not to be fair use. The use was found to have undermined the market for the full texts from which excerpts had been taken. The Court placed particular weight on the profit-making motive of the defendant, a commercial photocopying business.[35]

13.42 There was a similar outcome in Princeton University Press v Michigan Document Services Inc.[36] Michigan Document Services was a commercial copy shop that, without a licence, reproduced substantial segments of copyrighted works and bound and sold them as course packs to students. Professors Ginsburg and Gorman explain that the majority of the Court held, among other things, that there was not a blanket exemption in s 107 for ‘multiple copies for classroom use’; that the ‘verbatim duplication of whole chapters and other large portions of the plaintiff-publishers’ books weighed heavily against fair use’; and that ‘the photocopying adversely affected not only the publishers’ book sales but also the photocopying royalties that they would otherwise be paid by a by-then thriving licensing and collecting agency’.[37]

13.43 These cases concerned commercial copying. Copying and other uses by a nonprofit educational institution are more likely to be fair, though the fairness factors would need to be considered.

[34] Basic Books v Kinko’s Graphics Corp 758 F.Supp. 1522 (S.D.N.Y 1991).

[35] J Ginsburg and R Gorman, Copyright Law (2012), 194.

[36] Princeton University Press v Michigan Document Services Inc 99 F.3d 1381 (6th Cir. 1996).

[37] J Ginsburg and R Gorman, Copyright Law (2012), 194.