Introduction to Fair Use

Fair use compared to other copyright limitations and exceptions

In its modern context, fair use is a flexible standard that limits the scope of copyright protection and renders certain actions relating to copyrighted works noninfringing. Activities that courts have regarded as fair use that may have otherwise been infringing include: quoting a significant portion of a work for the purpose of criticism, illustration, comment, or clarification; parodying a work; and copying part of a work in the course of classroom activities.

Fair use is necessary, in part, because licensing and other private ordering mechanisms do not provide a solution for cases involving high transaction costs, strategic holdouts, and inadvertent copying. The fair use doctrine is particularly important in situations where the costs of obtaining permission outweigh the benefits of the use. The doctrine also plays a mediating role in situations where the copyright owner withholds permission for reasons that society finds unacceptable. For example, as illustrated by Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569 (1994), a copyright owner usually can’t deny permission to copy in order to stifle parody, criticism, or social debate.

The fair use doctrine does a lot of work in the modern American copyright system. In many ways fair use functions as an inherent limitation on copyright, similar to the idea-expression dichotomy or the requirement of substantial similarity. However, in other respects the fair use doctrine produces a set of rules through case law that look more like true limitations and exceptions.

Different approaches to limitations and exceptions

Every copyright system creates space for certain limitations and exceptions. The field, scope, nature, and design of these exceptions vary widely. The processes by which limitations and exceptions are created are almost equally as varied.

In the United States, there are many specific limitations and exceptions directed at particular acts, particular actors, and particular circumstances; but there are also significant common law limitations and exceptions such as the fair use doctrine.

Copyright limitations and exceptions may be legislative in nature, the result of executive action, the outcome of delegated rule-making authority, or simply a matter of judicial determination. As the scope and duration of copyright has expanded over the years, the importance of limitations and exceptions has increased.

Copyright law contains a number of policy levers that determine the scope of the rights of copyright owners. These include:

• the threshold of substantial similarity,

• the definition of performance,

• the definition of public,

• the merger doctrine,

• the idea expression distinction, scènes à faire, the non-copyrightability of systems, processes and methods of operation;

• the volitional act requirement,

• the first sale doctrine (and copyright exhaustion more broadly),

• the scope of secondary liability,

• the scope and qualifications for notice and take-down safe harbor, and

• the doctrine of copyright misuse.

If you take the Blackstonian view of property (i.e. that property rights equate to the “sole and despotic dominion” of one’s property) and apply it to copyright, copyright is a right to the absolute control over every use of every word of a copyrighted book and every pixel of a copyrighted picture.

No sane person thinks about copyright this way. Copyright consists of a broad set of rights given to authors for a particular purpose, so the fact that singing in the shower does not amount to copyright infringement is not a loophole or an exemption, it simply reflects the fundamentally limited nature of the performance right. Giving authors a veto right over shower singing would not serve the purposes for which the public performance right was created. As an exercise in taxonomy, it makes sense to think of some features of copyright law as inherent in the definition of the rights themselves and others as true exceptions. Such inherent limitations would certainly include the idea-expression distinction and would also extend to many applications of the fair use doctrine.

This chapter and the next few chapters are mostly about fair use, but it is important to remember that fair use is not the only game in town. Consider the following before reaching straight to fair use.

Statutory licenses

The Copyright Act of 1976 contains statutory licensing provisions relating to cable and satellite retransmission of broadcast television, the public performance of sound recordings over the Internet or via other forms of digital transmission, coin-operated jukeboxes, and the use of certain works by public broadcasters. Each of these provisions is the result of a complicated legislative process, and the resulting text is often dense and impenetrable.

• §111. Limitations on exclusive rights: Secondary transmissions of broadcast programming by cable

• §112. Limitations on exclusive rights: Ephemeral recordings

• §114. Scope of exclusive rights in sound recordings

• §115. Scope of exclusive rights in nondramatic musical works: Compulsory license for making and distributing phonorecords

• §116. Negotiated licenses for public performances by means of coin-operated phonorecord players

• §118. Scope of exclusive rights: Use of certain works in connection with noncommercial broadcasting

• §119. Limitations on exclusive rights: Secondary transmissions of distant television programming by satellite

• §122. Limitations on exclusive rights: Secondary transmissions of local television programming by satellite

Codified inherent limitations other than fair use

The Copyright Act of 1976 codified several features of copyright that may be thought of as inherent limitations. Most obviously, there is Section 102(b) which limits copyright to original expression and denies protection for “any idea, procedure, process, system, method of operation, concept, principle, or discovery, regardless of the form in which it is described, explained, illustrated, or embodied” in a work of authorship. The fair use doctrine in Section 107 can also be seen as an inherent limitation on the rights of the author, although it is probably better to think of it as a combination of inherent limitations and true exceptions, depending on the particular application.

Section 105 excludes United States Government works from copyright subject matter, subject to an exception that Congress has been quietly widening. Since 2019 a series of National Defense Authorization Acts has added subsections (b) through (d), which allow civilian faculty at a growing list of federal military and intelligence institutions to hold copyright in their own scholarly work, subject to a license back to the government. The most recent addition, in the National Defense Authorization Act for Fiscal Year 2026, Pub. L. 119-60 (Dec. 18, 2025), was the United States Coast Guard Academy. Section 109 codifies the common law first sale doctrine (a topic discussed in more detail in another chapter). Both of these provisions could be regarded as codifying inherent limitations in the scope of copyright rather than as true limitations and exceptions. The same could be said of Section 113 and Section 120, which address limits on copyright with respect to pictorial, graphic, and sculptural works and architectural works respectively.

True copyright exceptions

Copyright students often reach for fair use when there are other more targeted provisions in the Copyright Act that are more obviously relevant. Some of these are fairly niche, but others can be quite broad. Five sections of the Act stand out as true exceptions (as opposed to inherent limitations) in the terms set out above. These provisions overlap with the more general application of the fair use doctrine, but they are not subject to the fair use balancing test and are permissible regardless of the harm to the interests of the copyright owner.

Section 110

Section 110 of the Copyright Act contains a number of other exceptions to the performance and display rights. These exceptions relate to church services, veterans halls, non-profit public performances, incidental performances of broadcast radio in small shops and restaurants, the performance of sound recordings in record stores, performance in the course of a transmission for the visually disabled, and more. The bulk of the Section 110 limitations are true limitations and exceptions, although the provision (sometimes referred to as the boom-box exception) could easily be seen as part of the definition of what truly constitutes a public performance.

Disney Enterprises, Inc. v. VidAngel Inc. 869 F.3d 848 (9th Cir. 2017)

Section 110(11) was introduced under the Family Movie Act of 2005. The law was intended to allow consumers to skip objectionable audio and video content in motion pictures without committing copyright infringement. The key provision reads as follows:

Notwithstanding the provisions of section 106, the following are not infringements of copyright: [...] the making imperceptible, by or at the direction of a member of a private household, of limited portions of audio or video content of a motion picture, during a performance in or transmitted to that household for private home viewing, from an authorized copy of the motion picture, or the creation or provision of a computer program or other technology that enables such making imperceptible and that is designed and marketed to be used, at the direction of a member of a private household, for such making imperceptible, if no fixed copy of the altered version of the motion picture is created by such computer program or other technology.

The FMA allows individuals to make limited alterations to the content of a lawfully made copy of a motion picture for private viewing. The Ninth Circuit considered the scope of the FMA in Disney Enterprises, Inc. v. VidAngel Inc., 869 F.3d 848 (9th Cir. 2017) and the case did not go well for VidAngel because its service involved making unauthorized copies of DVDs and Blu-rays and then streaming those altered versions to customers. The Ninth Circuit found that this went beyond what the FMA permits, as it involved creating and distributing new, unauthorized copies of the works.

Section 108

Section 108 was designed to address issues related to libraries and archives. Essentially, this section allows libraries and archives to make certain uses of copyrighted materials under specific circumstances, without requiring permission from the copyright holder. The provisions govern photocopying, preservation copies, interlibrary loans, and more.

Section 117

Section 117 authorizes the owner of computer software to make a copy or an adaptation of that software as an essential step in the utilization of the computer program or for maintenance or repair. Specifically, Section 117(a)(1) stipulates that it is not an infringement of copyright for the rightful owner of a copy of a computer program to make or authorize the making of another copy or adaptation of that computer program, provided that such a new copy or adaptation is created as an essential step in the utilization of the computer program in conjunction with a machine (i.e., a computer) and that it is used in no other manner. In addition, Section 117(a)(2) allows the owner of the software to make a backup copy for archival purposes or to modify the program as necessary for maintenance or repair. However, Section 117 also specifies that if ownership of the copy of the software is transferred, any copy or adaptation of the software must either be destroyed or transferred along with the original copy. Section 117 recognizes the practical needs of software users to create backup copies or adapt software to work with their systems, while still maintaining the rights of the copyright holders. However, it does not provide exceptions for other uses of software, such as reverse engineering for interoperability purposes, those activities rely on the fair use doctrine.

Section 121

Section 121 (often referred to as the “Chafee Amendment”) allows ‘authorized entities’ to reproduce and/or distribute certain works in specialized formats exclusively for use by blind or other persons with disabilities.

An authorized entity under Section 121 is a non-profit organization or a governmental agency. The specialized formats referred to are formats exclusively for use by blind or other persons with disabilities. These formats can include Braille, audio, or digital text which is compatible with assistive technology. Note that the Chafee Amendment is limited to non-commercial use. The reproduction or distribution of the work must be done on a non-profit basis. The copies or phonorecords cannot be used for any purpose other than being a free service for people who are visually impaired or have a print disability.

The Marrakesh Treaty to Facilitate Access to Published Works for Persons Who Are Blind, Visually Impaired or Otherwise Print Disabled, commonly known as the Marrakesh Treaty, is an international agreement that was adopted by the World Intellectual Property Organization (WIPO) in June 2013. The Marrakesh Treaty seeks to create a set of mandatory limitations and exceptions for the benefit of the blind, visually impaired, and otherwise print disabled. It essentially allows for the reproduction, distribution, and making available of published works in accessible formats through limitations and exceptions to the copyright law. The U.S. expanded the scope of Section 121 in response to the Marrakesh Treaty. See The Marrakesh Treaty Implementation Act (2018).

Section 1008

Section 1008 provides that “no action may be brought under this title alleging infringement of copyright based on the manufacture, importation, or distribution of a digital audio recording device, a digital audio recording medium, an analog recording device, or an analog recording medium, or based on the noncommercial use by a consumer of such a device or medium for making digital musical recordings or analog musical recordings.” This section was added to the Act in 1992 by the Audio Home Recording Act (“AHRA”). The AHRA was a legislative response to the new technology of digital audio tape.

The Codification of Fair Use in the Copyright Act of 1976

Like several other key features of copyright law, the fair use doctrine began as judge-made law, however the doctrine was finally expressly recognized by Congress in the comprehensive revision of copyright law that led to the Copyright Act in 1976. Understanding this codification and its limits is key to understanding the modern fair use doctrine. The full text of section 107 as originally enacted is as follows:

Section 107 Limitations on exclusive rights: Fair use

Notwithstanding the provisions of section 106 [the exclusive rights of the copyright owner], the fair use of a copyrighted work, including such use by reproduction in copies or phonorecords or by any other means specified by that section, for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include—

(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;

(2) the nature of the copyrighted work;

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

(4) the effect of the use upon the potential market for or value of the copyrighted work.

Fair use did not begin in 1976. The modern law of fair use began with a series of Eighteenth-Century cases about the scope of “fair abridgment.” Making a shortened version or an abstract of a longer published text was a common practice in the English publishing world of the 1700s. Both the practice and the resulting shortened text were known as “abridgement”—verb and noun, respectively. Although abridgment was common in the early days of copyright, whether and to what extent it was legal was a hotly contested topic throughout the Eighteenth century and into the Nineteenth century.

One of the most significant of these cases was the 1741 English Court of Chancery decision in Gyles v. Wilcox (extracted in a previous chapter). In that case, Lord Chancellor Hardwicke ruled that an abridgment of a famous legal text, Sir Matthew Hale’s Historia Placitorum Coronæ (The History of the Pleas of the Crown) into a new volume to be called Modern Crown Law did not necessarily infringe the original publisher’s rights under the Statute of Anne. Hardwicke agreed that some works termed abridgments may violate the copyright owner’s rights, but he held that there was a distinction to be made between reprints with minor alterations and “true abridgments” or “real and fair abridgments” which “may with great propriety be called a new book [due to] the invention, learning, and judgment of the author is shown in them.”

No one would suggest that fair use today is the same as it was in 1741, but it is important to recognize that, in one form or another, fair use has been part of Anglo-American copyright law virtually from the beginning. The dividing line between fair and unfair abridgements was initially adjudicated case by case, but over time a recognizable doctrine of fair dealing and fair use emerged with the two terms being used interchangeably for some time. In Gyles v. Wilcox and the cases that came after it, the dividing line between infringing and noninfringing abridgements was drawn with a view to two factors. First, the degree of intellectual labor contributed by the defendant. This was not simply an assessment of the amount of work added by the defendant; usually the question was presented as whether the defendant’s work should fairly be seen as a new work. The second factor was whether the defendant’s work was likely to substitute for the plaintiff’s original work.

The same considerations were also paramount in Justice Story’s 1841 decision in Folsom v. Marsh (extracted in a previous chapter), widely regarded as the first American fair use case. As copyright law evolved, the fair use doctrine played an increasingly important role. Even as the scope of the author’s copyright expanded to include adaptations, abridgments, and translations, the fair use doctrine continued to provide courts with a framework to determine when technical acts of copying, such as quotation for the purpose of comment and review, were nonetheless non-infringing.

Although fair use and its predecessor doctrines of fair dealing and fair abridgment have been part of Anglo-American copyright law virtually from its inception, it was only in the Copyright Act of 1976 that Congress expressly recognized the fair use doctrine in statute.

The legislative history of section 107 declares Congress’ intention that judges would continue to develop the law of fair use. According to both the House Report and the Senate Report on the Copyright Act of 1976, when Congress approved Section 107, it intended “to restate the present judicial doctrine of fair use, not to change, narrow, or enlarge it in any way.” Congress intended that courts would continue their common-law tradition of fair use adjudication but it also provided a statutory framework under which this adjudication was to take place. As the House Report on the new Copyright Act explained (at 65-66):

The bill endorses the purpose and general scope of the judicial doctrine of fair use, but there is no disposition to freeze the doctrine in the statute, especially during a period of rapid technological change. Beyond a very broad statutory explanation of what fair use is and some of the criteria applicable to it, the courts must be free to adapt the doctrine to particular situations on a case-by-case basis.

The text of section 107 also signals that the courts must continue to play a significant role in the development of the fair use doctrine. The first sentence of section 107 declares that:

Notwithstanding the provisions of section 106, the fair use of a copyrighted work, … is not an infringement of copyright.

In the middle of that sentence, i.e., in the ellipsis in the above quotation, Congress listed six examples of fair use preceded by the words “for purposes such as”. The exemplar purposes are: criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, and research. The words “for purposes such as” make it clear that this is by no means a closed or definitive list. In addition to the six examples, the second sentence of section 107 outlines four factors for courts to consider in determining whether a challenged use is fair use. While the language “the factors to be considered shall include” suggests that the four fair use factors are mandatory, it also leaves open the possibility that they are not exclusive of other considerations in appropriate cases.

The statutory examples and the four fair use factors obviously did change the law of fair use, it is almost impossible for a codification not to change the way judges apply the law, but the legislative history and the text of Section 107 still left a lot of work for judges to do. The examples and factors give judges an outline of how to apply fair use, but the generality of the factors in particular demands that judges engage in common law reasoned elaboration within that framework.

The Origins of Transformative Use

Codification is supposed to make things clearer, but following the codification of fair use in the 1976 Act, courts struggled with the four-factor structure of Section 107 and some particular phrases within those factors. Partly, the problem was one of forests and trees. Some courts found it hard to resist treating the four enumerated statutory factors as a scorecard or a self-executing checklist. As a result, they missed the interrelated nature of the factors and the underlying nature of fair use. Compounding this problem, more than a few courts had gravitated to the question of whether the use was “of a commercial nature” in factor one as a bright-line rule that would provide an analytical shortcut to resolving claims of fair use. This latter problem was particularly acute in two U.S. Supreme Court cases addressing questions of fair use in the mid-1980s, Sony v. Universal City Studios 464 U.S. 417 (1984) and Harper & Row, Publishers, Inc. v. Nation Enterprises, 471 U.S. 539 (1985). The fair use doctrine was in a state of confusion when the Supreme Court granted cert in Campbell v. Acuff-Rose Music. For an extended discussion of the background to this case, click here.

Campbell v. Acuff-Rose Music, Inc., 510 US 569 (1994)

Justice Souter delivered the opinion of the Court.

We are called upon to decide whether 2 Live Crew’s commercial parody of Roy Orbison’s song, “Oh, Pretty Woman,” may be a fair use within the meaning of the Copyright Act of 1976, 17 U.S. C. § 107. Although the District Court granted summary judgment for 2 Live Crew, the Court of Appeals reversed, holding the defense of fair use barred by the song’s commercial character and excessive borrowing. Because we hold that a parody’s commercial character is only one element to be weighed in a fair use enquiry, and that insufficient consideration was given to the nature of parody in weighing the degree of copying, we reverse and remand.

In 1964, Roy Orbison and William Dees wrote a rock ballad called “Oh, Pretty Woman” and assigned their rights in it to respondent Acuff-Rose Music, Inc. See Appendix A, infra. Acuff-Rose registered the song for copyright protection.

Petitioners Luther R. Campbell, Christopher Wongwon, Mark Ross, and David Hobbs are collectively known as 2 Live Crew, a popular rap music group. In 1989, Campbell wrote a song entitled “Pretty Woman,” which he later described in an affidavit as intended, “through comical lyrics, to satirize the original work. . . .” On July 5, 1989, 2 Live Crew’s manager informed Acuff-Rose that 2 Live Crew had written a parody of “Oh, Pretty Woman,” that they would afford all credit for ownership and authorship of the original song to Acuff-Rose, Dees, and Orbison, and that they were willing to pay a fee for the use they wished to make of it. Enclosed with the letter were a copy of the lyrics and a recording of 2 Live Crew’s song. Acuff-Rose’s agent refused permission, stating that “I am aware of the success enjoyed by ‘The 2 Live Crews’, but I must inform you that we cannot permit the use of a parody of ‘Oh, Pretty Woman.’” Nonetheless, in June or July 1989, 2 Live Crew released records, cassette tapes, and compact discs of “Pretty Woman” in a collection of songs entitled “As Clean As They Wanna Be.” The albums and compact discs identify the authors of “Pretty Woman” as Orbison and Dees and its publisher as Acuff-Rose.

Almost a year later, after nearly a quarter of a million copies of the recording had been sold, Acuff-Rose sued 2 Live Crew and its record company, Luke Skyywalker Records, for copyright infringement. The District Court granted summary judgment for 2 Live Crew, reasoning that the commercial purpose of 2 Live Crew’s song was no bar to fair use; that 2 Live Crew’s version was a parody, which “quickly degenerates into a play on words, substituting predictable lyrics with shocking ones” to show “how bland and banal the Orbison song” is; that 2 Live Crew had taken no more than was necessary to “conjure up” the original in order to parody it; and that it was “extremely unlikely that 2 Live Crew’s song could adversely affect the market for the original.” The District Court weighed these factors and held that 2 Live Crew’s song made fair use of Orbison’s original.

The Court of Appeals for the Sixth Circuit reversed and remanded. 972 F. 2d 1429, 1439 (1992). Although it assumed for the purpose of its opinion that 2 Live Crew’s song was a parody of the Orbison original, the Court of Appeals thought the District Court had put too little emphasis on the fact that “every commercial use . . . is presumptively . . . unfair,” Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417, 451 (1984), and it held that “the admittedly commercial nature” of the parody “requires the conclusion” that the first of four factors relevant under the statute weighs against a finding of fair use. Next, the Court of Appeals determined that, by “taking the heart of the original and making it the heart of a new work,” 2 Live Crew had, qualitatively, taken too much. Finally, after noting that the effect on the potential market for the original (and the market for derivative works) is “undoubtedly the single most important element of fair use,” Harper & Row, Publishers, Inc. v. Nation Enterprises, 471 U.S. 539, 566 (1985), the Court of Appeals faulted the District Court for “refusing to indulge the presumption” that “harm for purposes of the fair use analysis has been established by the presumption attaching to commercial uses.” In sum, the court concluded that its “blatantly commercial purpose . . . prevents this parody from being a fair use.”

We granted certiorari to determine whether 2 Live Crew’s commercial parody could be a fair use.

It is uncontested here that 2 Live Crew’s song would be an infringement of Acuff-Rose’s rights in “Oh, Pretty Woman,” under the Copyright Act of 1976, 17 U.S. C. § 106, but for a finding of fair use through parody. From the infancy of copyright protection, some opportunity for fair use of copyrighted materials has been thought necessary to fulfill copyright’s very purpose, “[t]o promote the Progress of Science and useful Arts. . . .” U.S. Const., Art. I, § 8, cl. 8.⁵

For as Justice Story explained, “[i]n truth, in literature, in science and in art, there are, and can be, few, if any, things, which in an abstract sense, are strictly new and original throughout. Every book in literature, science and art, borrows, and must necessarily borrow, and use much which was well known and used before.” Emerson v. Davies, 8 F. Cas. 615, 619 (No. 4,436) (CCD Mass. 1845). Similarly, Lord Ellenborough expressed the inherent tension in the need simultaneously to protect copyrighted material and to allow others to build upon it when he wrote, “while I shall think myself bound to secure every man in the enjoyment of his copy-right, one must not put manacles upon science.” Carey v. Kearsley 170 Eng. Rep. 679, 681 (K. B. 1803). In copyright cases brought under the Statute of Anne of 1710, English courts held that in some instances “fair abridgements” would not infringe an author’s rights, and although the First Congress enacted our initial copyright statute, Act of May 31, 1790, 1 Stat. 124, without any explicit reference to “fair use,” as it later came to be known, the doctrine was recognized by the American courts nonetheless.

In Folsom v. Marsh, 9 F. Cas. 342 (No. 4,901) (CCD Mass. 1841), Justice Story distilled the essence of law and methodology from the earlier cases: “look to the nature and objects of the selections made, the quantity and value of the materials used, and the degree in which the use may prejudice the sale, or diminish the profits, or supersede the objects, of the original work.” Id., at 348. Thus expressed, fair use remained exclusively judge-made doctrine until the passage of the 1976 Copyright Act, in which Justice Story’s summary is discernible:

§ 107. Limitations on exclusive rights: Fair use

Notwithstanding the provisions of sections 106 and 106A, the fair use of a copyrighted work, including such use by reproduction in copies or phonorecords or by any other means specified by that section, for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include—

(1) the purpose and character of the use, including whether such use is of a commercial nature or is for non-profit educational purposes;

(2) the nature of the copyrighted work;

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

(4) the effect of the use upon the potential market for or value of the copyrighted work.

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.

Congress meant § 107 “to restate the present judicial doctrine of fair use, not to change, narrow, or enlarge it in any way” and intended that courts continue the common-law tradition of fair use adjudication. H.R. Rep. No. 94-1476, p. 66 (1976) (hereinafter House Report); S. Rep. No. 94-473, p. 62 (1975) (hereinafter Senate Report). The fair use doctrine thus “permits [and requires] courts to avoid rigid application of the copyright statute when, on occasion, it would stifle the very creativity which that law is designed to foster.” Stewart v. Abend, 495 U.S. 207, 236 (1990) (internal quotation marks and citation omitted).

The task is not to be simplified with bright-line rules, for the statute, like the doctrine it recognizes, calls for case-by-case analysis. Harper & Row, 471 U. S., at 560; Sony, 464 U.S., at 448, and n. 31; House Report, pp. 65-66; Senate Report, p. 62. The text employs the terms “including” and “such as” in the preamble paragraph to indicate the “illustrative and not limitative” function of the examples given, § 101; see Harper & Row, supra, at 561, which thus provide only general guidance about the sorts of copying that courts and Congress most commonly had found to be fair uses. Nor may the four statutory factors be treated in isolation, one from another. All are to be explored, and the results weighed together, in light of the purposes of copyright.¹⁰

The first factor in a fair use enquiry is “the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes.” § 107(1). This factor draws on Justice Story’s formulation, “the nature and objects of the selections made.” Folsom v. Marsh, supra, at 348. The enquiry here may be guided by the examples given in the preamble to § 107, looking to whether the use is for criticism, or comment, or news reporting, and the like, see § 107. The central purpose of this investigation is to see, in Justice Story’s words, whether the new work merely “supersede[s] the objects” of the original creation, Folsom v. Marsh, supra, at 348; accord, Harper & Row, supra, at 562 (“supplanting” the original), 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.” Leval 1111. Although such transformative use is not absolutely necessary for a finding of fair use, Sony, supra, at 455, n. 40,¹¹ the goal of copyright, to promote science and the arts, is generally furthered by the creation of transformative works. Such works thus lie at the heart of the fair use doctrine’s guarantee of breathing space within the confines of copyright, see, e.g., Sony, supra, at 478-480 (Blackmun, J., dissenting), and the more transformative the new work, the less will be the significance of other factors, like commercialism, that may weigh against a finding of fair use.

This Court has only once before even considered whether parody may be fair use, and that time issued no opinion because of the Court’s equal division. Benny v. Loew’s Inc., 239 F. 2d 532 (CA9 1956), aff’d sub nom. Columbia Broadcasting System, Inc. v. Loew’s Inc., 356 U.S. 43 (1958). Suffice it to say now that parody has an obvious claim to transformative value, as Acuff-Rose itself does not deny. Like less ostensibly humorous forms of criticism, it can provide social benefit, by shedding light on an earlier work, and, in the process, creating a new one. We thus line up with the courts that have held that parody, like other comment or criticism, may claim fair use under § 107. See, e.g., Fisher v. Dees, 794 F. 2d 432 (CA9 1986) (“When Sonny Sniffs Glue,” a parody of “When Sunny Gets Blue,” is fair use); Elsmere Music, Inc. v. National Broadcasting Co., 482 F. Supp. 741 (SDNY) (“I Love Sodom,” a “Saturday Night Live” television parody of “I Love New York,” is fair use); see also House Report, p. 65; Senate Report, p. 61 (“Use in a parody of some of the content of the work parodied” may be fair use).

The germ of parody lies in the definition of the Greek parodeia, quoted in Judge Nelson’s Court of Appeals dissent, as “a song sung alongside another.” 972 F. 2d, at 1440, quoting 7 Encyclopedia Britannica 768 (15th ed. 1975). Modern dictionaries accordingly describe a parody as a “literary or artistic work that imitates the characteristic style of an author or a work for comic effect or ridicule,” or as a “composition in prose or verse in which the characteristic turns of thought and phrase in an author or class of authors are imitated in such a way as to make them appear ridiculous.” For the purposes of copyright law, the nub of the definitions, and the heart of any parodist’s claim to quote from existing material, is the use of some elements of a prior author’s composition to create a new one that, at least in part, comments on that author’s works. See, e.g., Fisher v. Dees, supra, at 437; MCA, Inc. v. Wilson, 677 F. 2d 180, 185 (CA2 1981). If, on the contrary, the commentary has no critical bearing on the substance or style of the original composition, which the alleged infringer merely uses to get attention or to avoid the drudgery in working up something fresh, the claim to fairness in borrowing from another’s work diminishes accordingly (if it does not vanish), and other factors, like the extent of its commerciality, loom larger.¹⁴

Here, the District Court held, and the Court of Appeals assumed, that 2 Live Crew’s “Pretty Woman” contains parody, commenting on and criticizing the original work, whatever it may have to say about society at large. As the District Court remarked, the words of 2 Live Crew’s song copy the original’s first line, but then “quickly degenerate into a play on words, substituting predictable lyrics with shocking ones that derisively demonstrate how bland and banal the Orbison song seems to them.” Judge Nelson, dissenting below, came to the same conclusion, that the 2 Live Crew song “was clearly intended to ridicule the white-bread original” and “reminds us that sexual congress with nameless streetwalkers is not necessarily the stuff of romance and is not necessarily without its consequences. The singers (there are several) have the same thing on their minds as did the lonely man with the nasal voice, but here there is no hint of wine and roses.” Although the majority below had difficulty discerning any criticism of the original in 2 Live Crew’s song, it assumed for purposes of its opinion that there was some.

We have less difficulty in finding that critical element in 2 Live Crew’s song than the Court of Appeals did, although having found it we will not take the further step of evaluating its quality. The threshold question when fair use is raised in defense of parody is whether a parodic character may reasonably be perceived.¹⁶

Whether, going beyond that, parody is in good taste or bad does not and should not matter to fair use. As Justice Holmes explained, “it would be a dangerous undertaking for persons trained only to the law to constitute themselves final judges of the worth of [a work], outside of the narrowest and most obvious limits. At the one extreme some works of genius would be sure to miss appreciation. Their very novelty would make them repulsive until the public had learned the new language in which their author spoke.” Bleistein v. Donaldson Lithographing Co., 188 U.S. 239, 251 (1903) (circus posters have copyright protection); cf. Yankee Publishing Inc. v. News America Publishing, Inc., 809 F. Supp. 267, 280 (SDNY 1992) (Leval, J.) (“First Amendment protections do not apply only to those who speak clearly, whose jokes are funny, and whose parodies succeed”) (trademark case).

While we might not assign a high rank to the parodic element here, we think it fair to say that 2 Live Crew’s song reasonably could be perceived as commenting on the original or criticizing it, to some degree. 2 Live Crew juxtaposes the romantic musings of a man whose fantasy comes true, with degrading taunts, a bawdy demand for sex, and a sigh of relief from paternal responsibility. The later words can be taken as a comment on the naivete of the original of an earlier day, as a rejection of its sentiment that ignores the ugliness of street life and the debasement that it signifies. It is this joinder of reference and ridicule that marks off the author’s choice of parody from the other types of comment and criticism that traditionally have had a claim to fair use protection as transformative works.¹⁷

The Court of Appeals, however, immediately cut short the enquiry into 2 Live Crew’s fair use claim by confining its treatment of the first factor essentially to one relevant fact, the commercial nature of the use. The court then inflated the significance of this fact by applying a presumption ostensibly culled from Sony, that “every commercial use of copy-righted material is presumptively unfair. . . .” Sony, 464 U.S., at 451. In giving virtually dispositive weight to the commercial nature of the parody, the Court of Appeals erred.

The language of the statute makes clear that the commercial or nonprofit educational purpose of a work is only one element of the first factor enquiry into its purpose and character. Section 107(1) uses the term “including” to begin the dependent clause referring to commercial use, and the main clause speaks of a broader investigation into “purpose and character.” As we explained in Harper & Row, Congress resisted attempts to narrow the ambit of this traditional enquiry by adopting categories of presumptively fair use, and it urged courts to preserve the breadth of their traditionally ample view of the universe of relevant evidence. 471 U. S., at 561; House Report, p. 66. Accordingly, the mere fact that a use is educational and not for profit does not insulate it from a finding of infringement, any more than the commercial character of a use bars a finding of fairness. If, indeed, commerciality carried presumptive force against a finding of fairness, the presumption would swallow nearly all of the illustrative 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.” Harper & Row, supra, at 592 (Brennan, J., dissenting). Congress could not have intended such a rule, which certainly is not inferable from the common-law cases, arising as they did from the world of letters in which Samuel Johnson could pronounce that “[n]o man but a blockhead ever wrote, except for money.” 3 Boswell’s Life of Johnson 19 (G. Hill ed. 1934).

Sony itself called for no hard evidentiary presumption. There, we emphasized the need for a “sensitive balancing of interests,” 464 U.S., at 455, n. 40, noted that Congress had “eschewed a rigid, bright-line approach to fair use,” id., at 449, n. 31, and stated that the commercial or nonprofit educational character of a work is “not conclusive,” id., at 448-449, but rather a fact to be “weighed along with other[s] in fair use decisions,” id., at 449, n. 32 (quoting House Report, p. 66). The Court of Appeals’ elevation of one sentence from Sony to a per se rule thus runs as much counter to Sony itself as to the long common-law tradition of fair use adjudication. Rather, as we explained in Harper & Row, Sony stands for the proposition that the “fact that a publication was commercial as opposed to nonprofit is a separate factor that tends to weigh against a finding of fair use.” 471 U.S., at 562. But that is all, and the fact that even the force of that tendency will vary with the context is a further reason against elevating commerciality to hard presumptive significance. The use, for example, of a copyrighted work to advertise a product, even in a parody, will be entitled to less indulgence under the first factor of the fair use enquiry than the sale of a parody for its own sake, let alone one performed a single time by students in school.¹⁸

The second statutory factor, “the nature of the copy-righted work,” § 107(2), draws on Justice Story’s expression, the “value of the materials used.” Folsom v. Marsh, 9 F. Cas., at 348. This factor calls for recognition that some works are closer to the core of intended copyright protection than others, with the consequence that fair use is more difficult to establish when the former works are copied. We agree with both the District Court and the Court of Appeals that the Orbison original’s creative expression for public dissemination falls within the core of the copyright’s protective purposes. This fact, however, is not much help in this case, or ever likely to help much in separating the fair use sheep from the infringing goats in a parody case, since parodies almost invariably copy publicly known, expressive works.

The third factor asks whether “the amount and substantiality of the portion used in relation to the copyrighted work as a whole,” § 107(3) (or, in Justice Story’s words, “the quantity and value of the materials used,” Folsom v. Marsh, supra, at 348) are reasonable in relation to the purpose of the copying. Here, attention turns to the persuasiveness of a parodist’s justification for the particular copying done, and the enquiry will harken back to the first of the statutory factors, for, as in prior cases, we recognize that the extent of permissible copying varies with the purpose and character of the use. See Sony, supra, at 449-450 (reproduction of entire work “does not have its ordinary effect of militating against a finding of fair use” as to home videotaping of television programs); Harper & Row, supra, at 564 (“[E]ven substantial quotations might qualify as fair use in a review of a published work or a news account of a speech” but not in a scoop of a soon-to-be-published memoir). The facts bearing on this factor will also tend to address the fourth, by revealing the degree to which the parody may serve as a market substitute for the original or potentially licensed derivatives. See Leval 1123.

The District Court considered the song’s parodic purpose in finding that 2 Live Crew had not helped themselves overmuch. The Court of Appeals disagreed, stating that “while it may not be inappropriate to find that no more was taken than necessary, the copying was qualitatively substantial. . . . We conclude that taking the heart of the original and making it the heart of a new work was to purloin a substantial portion of the essence of the original.”

The Court of Appeals is of course correct that this factor calls for thought not only about the quantity of the materials used, but about their quality and importance, too. In Harper & Row, for example, the Nation had taken only some 300 words out of President Ford’s memoirs, but we signaled the significance of the quotations in finding them to amount to “the heart of the book,” the part most likely to be newsworthy and important in licensing serialization. 471 U.S., at 564-566, 568 (internal quotation marks omitted). We also agree with the Court of Appeals that whether “a substantial portion of the infringing work was copied verbatim” from the copyrighted work is a relevant question, for it may reveal a dearth of transformative character or purpose under the first factor, or a greater likelihood of market harm under the fourth; a work composed primarily of an original, particularly its heart, with little added or changed, is more likely to be a merely superseding use, fulfilling demand for the original.

Where we part company with the court below is in applying these guides to parody, and in particular to parody in the song before us. Parody presents a difficult case. Parody’s humor, or in any event its comment, necessarily springs from recognizable allusion to its object through distorted imitation. Its art lies in the tension between a known original and its parodic twin. When parody takes aim at a particular original work, the parody must be able to “conjure up” at least enough of that original to make the object of its critical wit recognizable. See, e.g., Elsmere Music, 623 F. 2d, at 253, n. 1; Fisher v. Dees, 794 F. 2d, at 438-439. What makes for this recognition is quotation of the original’s most distinctive or memorable features, which the parodist can be sure the audience will know. Once enough has been taken to assure identification, how much more is reasonable will depend, say, on the extent to which the song’s overriding purpose and character is to parody the original or, in contrast, the likelihood that the parody may serve as a market substitute for the original. But using some characteristic features cannot be avoided.

We think the Court of Appeals was insufficiently appreciative of parody’s need for the recognizable sight or sound when it ruled 2 Live Crew’s use unreasonable as a matter of law. It is true, of course, that 2 Live Crew copied the characteristic opening bass riff (or musical phrase) of the original, and true that the words of the first line copy the Orbison lyrics. But if quotation of the opening riff and the first line may be said to go to the “heart” of the original, the heart is also what most readily conjures up the song for parody, and it is the heart at which parody takes aim. Copying does not become excessive in relation to parodic purpose merely because the portion taken was the original’s heart. If 2 Live Crew had copied a significantly less memorable part of the original, it is difficult to see how its parodic character would have come through. See Fisher v. Dees, supra, at 439.

This is not, of course, to say that anyone who calls himself a parodist can skim the cream and get away scot free. In parody, as in news reporting, see Harper & Row, supra, context is everything, and the question of fairness asks what else the parodist did besides go to the heart of the original. It is significant that 2 Live Crew not only copied the first line of the original, but thereafter departed markedly from the Orbison lyrics for its own ends. 2 Live Crew not only copied the bass riff and repeated it, but also produced otherwise distinctive sounds, interposing “scraper” noise, over-laying the music with solos in different keys, and altering the drum beat. This is not a case, then, where “a substantial portion” of the parody itself is composed of a “verbatim” copying of the original. It is not, that is, a case where the parody is so insubstantial, as compared to the copying, that the third factor must be resolved as a matter of law against the parodists.

Suffice it to say here that, as to the lyrics, we think the Court of Appeals correctly suggested that “no more was taken than necessary,” but just for that reason, we fail to see how the copying can be excessive in relation to its parodic purpose, even if the portion taken is the original’s “heart.” As to the music, we express no opinion whether repetition of the bass riff is excessive copying, and we remand to permit evaluation of the amount taken, in light of the song’s parodic purpose and character, its transformative elements, and considerations of the potential for market substitution sketched more fully below.

The fourth fair use factor is “the effect of the use upon the potential market for or value of the copyrighted work.” § 107(4). It requires courts to consider not only the extent of market harm caused by the particular actions of the alleged infringer, but also “whether unrestricted and widespread conduct of the sort engaged in by the defendant . . . would result in a substantially adverse impact on the potential market” for the original. Harper & Row, 471 U. S., at 569; Senate Report, p. 65; Folsom v. Marsh, 9 F. Cas., at 349. The enquiry “must take account not only of harm to the original but also of harm to the market for derivative works.” Harper & Row, supra, at 568.

Since fair use is an affirmative defense, its proponent would have difficulty carrying the burden of demonstrating fair use without favorable evidence about relevant markets.²¹

In moving for summary judgment, 2 Live Crew left themselves at just such a disadvantage when they failed to address the effect on the market for rap derivatives, and confined themselves to uncontroverted submissions that there was no likely effect on the market for the original. They did not, however, thereby subject themselves to the evidentiary presumption applied by the Court of Appeals. In assessing the likelihood of significant market harm, the Court of Appeals quoted from language in Sony that “‘[i]f the intended use is for commercial gain, that likelihood may be presumed. But if it is for a noncommercial purpose, the likelihood must be demonstrated.’” The court reasoned that because “the use of the copyrighted work is wholly commercial, . . . we presume that a likelihood of future harm to Acuff-Rose exists.” In so doing, the court resolved the fourth factor against 2 Live Crew, just as it had the first, by applying a presumption about the effect of commercial use, a presumption which as applied here we hold to be error.

No “presumption” or inference of market harm that might find support in Sony is applicable to a case involving something beyond mere duplication for commercial purposes. Sony’s discussion of a presumption contrasts a context of verbatim copying of the original in its entirety for commercial purposes, with the noncommercial context of Sony itself (home copying of television programming). In the former circumstances, what Sony said simply makes common sense: when a commercial use amounts to mere duplication of the entirety of an original, it clearly “supersede[s] the objects,” Folsom v. Marsh, supra, at 348, of the original and serves as a market replacement for it, making it likely that cognizable market harm to the original will occur. Sony, supra, at 451. But when, on the contrary, the second use is transformative, market substitution is at least less certain, and market harm may not be so readily inferred. Indeed, as to parody pure and simple, it is more likely that the new work will not affect the market for the original in a way cognizable under this factor, that is, by acting as a substitute for it (“superseding its objects”). This is so because the parody and the original usually serve different market functions.

We do not, of course, suggest that a parody may not harm the market at all, but when a lethal parody, like a scathing theater review, kills demand for the original, it does not produce a harm cognizable under the Copyright Act. Because “parody may quite legitimately aim at garroting the original, destroying it commercially as well as artistically,” B. Kaplan, An Unhurried View of Copyright 69 (1967), the role of the courts is to distinguish between “biting criticism that merely suppresses demand and copyright infringement, which usurps it.” Fisher v. Dees, 794 F. 2d, at 438.

This distinction between potentially remediable displacement and unremediable disparagement is reflected in the rule that there is no protectible derivative market for criticism. The market for potential derivative uses includes only those that creators of original works would in general develop or license others to develop. Yet the unlikelihood that creators of imaginative works will license critical reviews or lampoons of their own productions removes such uses from the very notion of a potential licensing market. “People ask . . . for criticism, but they only want praise.” S. Maugham, Of Human Bondage 241 (Penguin ed. 1992). Thus, to the extent that the opinion below may be read to have considered harm to the market for parodies of “Oh, Pretty Woman,” the court erred.²²

In explaining why the law recognizes no derivative market for critical works, including parody, we have, of course, been speaking of the later work as if it had nothing but a critical aspect (i. e., “parody pure and simple”). But the later work may have a more complex character, with effects not only in the arena of criticism but also in protectible markets for derivative works, too. In that sort of case, the law looks beyond the criticism to the other elements of the work, as it does here. 2 Live Crew’s song comprises not only parody but also rap music, and the derivative market for rap music is a proper focus of enquiry, see Harper & Row, supra, at 568. Evidence of substantial harm to it would weigh against a finding of fair use, because the licensing of derivatives is an important economic incentive to the creation of originals. Of course, the only harm to derivatives that need concern us, as discussed above, is the harm of market substitution. The fact that a parody may impair the market for derivative uses by the very effectiveness of its critical commentary is no more relevant under copyright than the like threat to the original market.²⁴

Although 2 Live Crew submitted uncontroverted affidavits on the question of market harm to the original, neither they, nor Acuff-Rose, introduced evidence or affidavits addressing the likely effect of 2 Live Crew’s parodic rap song on the market for a nonparody, rap version of “Oh, Pretty Woman.” And while Acuff-Rose would have us find evidence of a rap market in the very facts that 2 Live Crew recorded a rap parody of “Oh, Pretty Woman” and another rap group sought a license to record a rap derivative, there was no evidence that a potential rap market was harmed in any way by 2 Live Crew’s parody, rap version. The fact that 2 Live Crew’s parody sold as part of a collection of rap songs says very little about the parody’s effect on a market for a rap version of the original, either of the music alone or of the music with its lyrics. The District Court essentially passed on this issue, observing that Acuff-Rose is free to record “whatever version of the original it desires,” the Court of Appeals went the other way by erroneous presumption. Contrary to each treatment, it is impossible to deal with the fourth factor except by recognizing that a silent record on an important factor bearing on fair use disentitled the proponent of the defense, 2 Live Crew, to summary judgment. The evidentiary hole will doubtless be plugged on remand.

It was error for the Court of Appeals to conclude that the commercial nature of 2 Live Crew’s parody of “Oh, Pretty Woman” rendered it presumptively unfair. No such evidentiary presumption is available to address either the first factor, the character and purpose of the use, or the fourth, market harm, in determining whether a transformative use, such as parody, is a fair one. The court also erred in holding that 2 Live Crew had necessarily copied excessively from the Orbison original, considering the parodic purpose of the use. We therefore reverse the judgment of the Court of Appeals and remand the case for further proceedings consistent with this opinion.

It is so ordered.

APPENDIX A TO OPINION OF THE COURT

“Oh, Pretty Woman” by Roy Orbison and William Dees

Pretty Woman, walking down the street,

Pretty Woman, the kind I like to meet,

Pretty Woman, I don’t believe you, you’re not the truth,

No one could look as good as you Mercy

Pretty Woman, won’t you pardon me,

Pretty Woman, I couldn’t help but see,

Pretty Woman, that you look lovely as can be Are you lonely just like me?

Pretty Woman, stop a while,

Pretty Woman, talk a while,

Pretty Woman give your smile to me

Pretty Woman, yeah, yeah, yeah

Pretty Woman, look my way,

Pretty Woman, say you’ll stay with me

‘Cause I need you, I’ll treat you right

Come to me baby, Be mine tonight

Pretty Woman, don’t walk on by,

Pretty Woman, don’t make me cry,

Pretty Woman, don’t walk away,

Hey, O. K.

If that’s the way it must be, O. K.

I guess I’ll go on home, it’s late

There’ll be tomorrow night, but wait!

What do I see

Is she walking back to me?

Yeah, she’s walking back to me!

Oh, Pretty Woman.

APPENDIX B TO OPINION OF THE COURT

“Pretty Woman” as Recorded by 2 Live Crew

Pretty woman walkin’ down the street

Pretty woman girl you look so sweet

Pretty woman you bring me down to that knee

Pretty woman you make me wanna beg please

Oh, pretty woman

Big hairy woman you need to shave that stuff

Big hairy woman you know I bet it’s tough

Big hairy woman all that hair it ain’t legit

‘Cause you look like ‘Cousin It’

Big hairy woman

Bald headed woman girl your hair won’t grow

Bald headed woman you got a teeny weeny afro

Bald headed woman you know your hair could look nice

Bald headed woman first you got to roll it with rice

Bald headed woman here, let me get this hunk of biz for ya

Ya know what I’m saying you look better than rice a roni

Oh bald headed woman

Big hairy woman come on in

And don’t forget your bald headed friend

Hey pretty woman let the boys Jump in

Two timin’ woman girl you know you ain’t right

Two timin’ woman you’s out with my boy last night

Two timin’ woman that takes a load off my mind

Two timin’ woman now I know the baby ain’t mine

Oh, two timin’ woman

Oh pretty woman

Notes and questions

(1) What is transformative use? Can you explain the concept in your own words? Why might a book review that quotes specific language from a novel be transformative, but a screenplay based on the same novel may well not be?

(2) Where does the concept of transformative use come from? How does it relate to the text of Section 107?

(3) Does the Supreme Court in Campbell support the suggestion that the fourth fair use factor is the most important one?

(4) Where does Campbell leave the presumption against commercial uses as stated in Sony and reiterated in Harper & Row?

The enduring significance of Campbell v. Acuff-Rose

In Campbell v. Acuff-Rose, the Supreme Court granted certiorari to review the Sixth Circuit’s rather extreme conclusion that fair use afforded virtually no protection for commercial parody. The Court could have ruled narrowly by simply walking back some of its ill-considered comments in Sony and Harper & Row and explaining how and why the Sixth Circuit had gone too far. Instead, the Court seized the opportunity to set a major course correction in the doctrine of fair use that came just in time for copyright to meet some of the challenges of the Internet age.

Campbell v. Acuff-Rose is not the Supreme Court’s most recent fair use opinion, but it is arguably still the most important the Court has decided. In Campbell v. Acuff-Rose, a unanimous Supreme Court abandoned much of the language in Sony and Harper & Row and adopted a new vocabulary centered on the concept of transformative use. This new language of transformative use crystallized a positive theory of fair use that the Court derived from the purpose of copyright law and the structure of the modern copyright act.

Justice Souter’s opinion for the Court in Campbell made several critical interventions in the law of fair use which set the foundation for the modern law of fair use in the United States just in time for the new questions of the Internet era that began in the mid-1990s. One of the obvious highlights of the decision was the elevation of “transformative use” from law review theory to Supreme Court precedent. However, Campbell left important questions about the meaning and application of transformative use open to interpretation. Over the years, lower courts filled these gaps, but in some cases were accused of stretching the concept of transformative use beyond its proper role.

A Note on the Death of the Market Failure Theory of Fair Use

In Fair Use as Market Failure, an influential 1982 Columbia Law Review article, Professor Wendy Gordon argued that under ordinary circumstances, copyright owners and would-be users of their works should coordinate through voluntary market transactions. However, Gordon explained, this voluntary coordination was unlikely in a number of contexts where transaction costs were high in relation to the value of the proposed use. Suppose an author values the right to quote a few sentences from a particular source at $1, but it will cost her $2 to seek out the source, request permission, and haggle over the price. Even if the ultimate price was $0.01 or zero dollars, the transaction costs attendant in the exchange would make the whole endeavor a waste of time. In this scenario, the fact that transaction costs exceed any potential gains from trade leads to a market failure. Gordon argued that fair use should only be awarded when market conditions prevent socially beneficial access to copyrighted works. To that end, she proposed a three-part test for determining fair use:

Fair use should be awarded to the defendant in a copyright infringement action when (1) market failure is present; (2) transfer of the use to defendant is socially desirable; and (3) an award of fair use would not cause substantial injury to the incentives of the plaintiff copyright owner.

Market failure is a negative account of fair use in the sense that it focuses on case-by-case exceptions to the copyright owner’s presumed entitlement. Market failure captures part of the fair use doctrine and it helps explain some of the caselaw. Some of the photocopying cases (discussed later in this book) finding for and against fair use are readily explicable in terms of market failure. Likewise, one could see the decision in Sony in terms of market failure, although that is a better fit for the result than for Justice Stevens’ reasoning.

Nonetheless, market failure is at best an incomplete theory. The problem with the market failure theory is that it struggles to explain some of the most basic applications of the doctrine. For example, quotation in service of criticism has long been recognized as fair use, and criticism is the very first of the examples of fair use referred to in the statute. Market exchanges for permission to criticize are rare, but not because transaction costs prevent buyers and sellers from coming together. They are rare because the seller’s valuation in not being criticized generally exceeds the price the critic is willing to pay. Gordon gets around this problem by including the copyright owner’s interest in suppressing unfavorable views as a potential source of market failure. She treats such “anti-dissemination” motives as intently non-market considerations, but this concession undermines the aura of objectivity that gives the market failure approach its surface allure. The market failure framework gives us no basis to know which sources of copyright owner utility should be so discounted. When courts disregard an author’s utility in thwarting criticism they are not identifying a market failure, they are defining the scope of the legitimate copyright interest and thus the parameters of the market in the first place. There are some cases where the prospect of market failure should lead to a finding of fair use, but most of the fair use issues that courts are actually called upon to decide require a deeper analysis of which uses should be part of the copyright owner’s exclusive domain and which should not. These more fundamental questions are a precursor to market failure analysis, they are not an outcome of it.

Justice O’Connor’s assertion in Harper & Row that the effect of the use upon the potential market for or value of the copyrighted work “is undoubtedly the single most important element of fair use” has been seen by some as embracing the market failure theory of fair use. This inference is bolstered by the fact that the relevant sentence in the judgment cites directly to Gordon’s 1982 article. Certainly, the idea that the fourth factor is the most important factor in fair use analysis is consistent with the notion that the copyright owner’s rights should only be limited when the cost of obtaining permission exceeds the value of the permission. But it is also possible that scholars have read too much into Justice O’Connor’s observation about the primacy of the fourth factor. The Court certainly did not expressly adopt a market failure rationale for fair use. Moreover, Harper & Row was a very unusual case. In most fair use cases, market effect or its absence is established indirectly, by inference, or by presumption. But in Harper & Row, the defendant’s news article clearly scooped a similar piece by Time magazine and constituted clear and tangible market interference. Given her view of the facts, it is little wonder that O’Connor considered market effect to be the most important factor, in that particular case.

Whatever the majority in Harper & Row intended by its proclamation that market effect was the single most important factor, the unanimous Supreme Court in Campbell rejected that premise—although not as clearly as it could have. The Campbell Court did not expressly disavow the comment, but it certainly contradicted it. Justice Souter cautioned that “Nor may the four statutory factors be treated in isolation, one from another. All are to be explored, and the results weighed together, in light of the purposes of copyright.”

To say that the factors cannot be treated in isolation and that they must be considered together in light of the purposes of copyright is the antithesis of the notion that the fourth factor, or indeed any factor, is “undoubtedly the single most important element of fair use.”

In addition to demoting the fourth factor, Campbell’s positive vision of fair use as centered on transformative use is entirely inconsistent with the market failure paradigm. Just as reasonableness defines the parameters of the duty of care in the law of negligence, fair use plays a significant role in defining the limits of the exclusive rights under the Copyright Act. Whereas a market failure approach to fair use takes no account of the scope defining function of the doctrine, the Court’s decision in Campbell was almost entirely concerned with this question. The Campbell Court did not accept that the rights of the copyright owner are limitless by presumption; quite the contrary, it was careful to expressly state significant limits on the scope of the copyright owner’s cognizable market interests.

In Campbell the Supreme Court explained that for harm to the copyright owner to be recognized under the fourth factor, it must relate to usurpation of the author’s original expression. Criticism that merely subdues demand by hitting its target obviously causes harm of a certain sort, but not the sort of harm that copyright law prevents. Elaborating on this point, Justice Souter wrote:

We do not, of course, suggest that a parody may not harm the market at all, but when a lethal parody, like a scathing theater review, kills demand for the original, it does not produce a harm cognizable under the Copyright Act. Because parody may quite legitimately aim at garroting the original, destroying it commercially as well as artistically, the role of the courts is to distinguish between biting criticism that merely suppresses demand and copyright infringement, which usurps it.

Put simply, copyright law recognizes the author’s interest not to have her own expression used in competition with her, but not her interest in preventing critical and non-substitutive uses of that same expression. Although the Court referred to the improbability of potential licensing markets for parody and review, it did not condition “the rule that there is no protectible derivative market for criticism” upon market failure in the transactional sense. Instead, the Court said that these uses were simply not part of the cognizable market in the first place.

This distinction between potentially remediable displacement and unremediable disparagement is reflected in the rule that there is no protectible derivative market for criticism. The market for potential derivative uses includes only those that creators of original works would in general develop or license others to develop. Yet the unlikelihood that creators of imaginative works will license critical reviews or lampoons of their own productions removes such uses from the very notion of a potential licensing market. “People ask . . . for criticism, but they only want praise.” Thus, to the extent that the opinion below may be read to have considered harm to the market for parodies of “Oh, Pretty Woman,” the court erred.

This idea of cognizable markets is very important. Under a narrow market failure theory of fair use, the copyright owner has an interest in preventing any non-trivial use of her work that involves copying, unless there is no money to be made in exercising that right. That in turn suggests that the market effect inquiry under the fourth factor could be entirely circular. In most cases, if there is a defendant, there is a market—even if it is only a market of one. Indeed, in Campbell the defendants had offered to pay a license for their parody and had successfully negotiated a very modest license with Bruce Springsteen to parody Born in the USA. The decision in Campbell means that no license is required where a work is copied for the purpose of parody, the amount copied is reasonable in light of that purpose and there is no likely substitution for non-parody adaptations of the work. Transformative uses such as parody are simply not part of the copyright owner’s “cognizable market.” If the potential market for a work was defined purely in terms of that which might be licensed if the law says that it must be licensed, then copyright owners could expand the scope of their rights by offering to license them. For example, the major film studios could establish a rights-clearing center for reviews, parodies, and references to their movies, thus converting these non-infringing activities into infringing ones.

None of this suggests that market failure is irrelevant to fair use, but it is neither necessary nor sufficient. Market failure becomes relevant where the defendant’s use falls within the presumptive scope of the copyright owner’s entitlement but the use is so inconsequential or the transaction costs are so high that no actual harm is likely to result. Market failures arising from insurmountable exchange costs, information costs, strategic behavior or externalities, might require a finding of fair use in particular situations, but this only captures part of the doctrine. Even beyond these exculpatory market failures, fair use plays an important role in defining the scope of the copyright owner’s rights against the world. In other words, fair use is constitutive, not merely exculpatory. Transformative uses that are unlikely to result in a cognizable copyright harm will be afforded fair use status regardless of whether one could imagine a market mechanism for negotiating permissions. Such transformative uses are not part of the copyright owner’s market, and thus no suggestion of market failure is required.

The Role of the Judge and the Jury in Fair Use Cases

Before turning to the cases, it is worth settling who decides. In Google v. Oracle, extracted in the next chapter, the Supreme Court held that fair use is a “mixed question of fact and law,” vesting ultimate interpretive authority in judges. While juries may resolve underlying factual disputes—such as the extent of copying or the nature of market substitution—the Court emphasized that the final determination of whether those facts satisfy the fair use standard is a legal question subject to de novo review. Thus, the right of trial by jury under the Seventh Amendment “does not include the right to have a jury resolve a fair use defense.” Tracing fair use’s doctrinal lineage to equitable adjudication, the Court in Google v. Oracle invoked Folsom v. Marsh (1841) and its progeny, emphasizing that equitable matters were historically resolved by judges, not juries. Accordingly, the Court held that neither the Seventh Amendment nor the Reexamination Clause prohibits judicial determination of fair use, so long as factual findings by the jury remain intact.

This holding signaled a shift in fair use practice. In lower courts judges frequently denied summary judgment on fair use grounds, deferring resolution to juries. Appellate courts had typically been reluctant to disturb jury verdicts on fair use. Indeed, the Federal Circuit’s 2018 reversal of a jury’s pro-Google verdict—on de novo review—was a doctrinal anomaly and provoked the Court’s reassessment of the appropriate decision-maker. In the wake of Google v. Oracle the jury’s role in copyright fair use cases is now confined to discrete factual assessments; the normative judgment of fair use—its coherence, scope, and application—is reserved to courts. Even where a jury’s view of the evidence supports a finding of fair use, a judge may disregard that conclusion if, in her view, the legal standard is unmet. This structural shift elevates judicial consistency over jury pluralism and reasserts the judiciary’s control over copyright’s most malleable doctrine. For more, see Justin Hughes, The Respective Roles of Judges and Juries in Copyright Fair Use, 58 Houston Law Review 281 (2021). A related question is how far a court may go in raising fair use on its own initiative: in Romanova v. Amilus Inc., 138 F.4th 104 (2d Cir. 2025), extracted elsewhere in this book, the district court raised the defense sua sponte on behalf of a defendant who never appeared, and although the Second Circuit reversed on the merits it held that there is “no categorical rule barring a court from considering an affirmative defense available to a defaulting defendant,” over a concurrence by Judge Sullivan arguing that the court should not have reached the question at all.