Posted by Eugene Volokh:
Fair Use Victory as to Blogger's Use of Photos of the Businesspeople He
Crticizes:
http://volokh.com/archives/archive_2009_07_19-2009_07_25.shtml#1248388260
The case is [1]Sedgwick Claims Management Servs., Inc. v. Delsman
(decided July 17, 2009):
Defendant Robert A. Delsman, Jr. ... runs a "blog" in which he has
strongly criticized the business practices of Sedgwick [Claims
Management Services, Inc.] and its management. In addition,
Defendant has mailed postcards styled as "WANTED" posters bearing
the photographs of two of Sedgwick's executives, again with
critical commentary. Sedgwick ... alleges that Defendant engaged in
copyright infringement by using the two photos. In addition,
Sedgwick alleges various state law causes of action, including
defamation, based on the content expressed in the blogs....
([2]Show the statement of facts.)
Sedgwick provides insurance claim management services to its customers
and their employees. The Company is an Illinois corporation and has
its principal place of business in Memphis, Tennessee. David North is
the Company's Chief Executive Officer and Paul Posey is its Chief
Operating Officer. Sedgwick's clientele includes a number of
recognizable companies, including General Electric. GE hired Sedgwick
to manage and administer claims for its Long-Term Disability Income
Plan, which is offered through Met-Life, Inc. ("Met-Life/GE Plan").
Defendant was previously employed by GE and purchased insurance under
the Met Life/GE Plan. In or about February 2006, he submitted a claim
for disability benefits. The status of his claim is not specified in
the pleadings. However, Defendant, who claims he is disabled and has
been unable to work for the last three years, apparently is highly
dissatisfied with Sedgwick's handling of his claim. As a means of
expressing his opinions regarding Sedgwick and its management,
Defendant began (on an unspecified date) to publicly express his views
through a web blog and a postcard mailing campaign called "Operation
Going Postcard."
Defendant's blog is maintained at various URLs, i.e.,
www.Sedgwickcms.blogspot.com,www.gesupplydiscrimination.com and
http:// gesupplyrexeldiscrimination.com. In these blogs, Defendant
allegedly posted a number of "defamatory" statements in which he
accuses Sedgwick of, inter alia, wrongfully denying benefits to
claimants, violating various laws, and accusing Sedgwick and its
"minions" (whom he calls "Sedgthugs") of having committed
"Sedgcrimes." In addition, Sedgwick complains that Defendant used two
copyrighted photographs, headshots of CEO North and COO Posey, and
superimposed them on fugitive-style "WANTED" postcards. He also is
alleged to have "morphed" the same two photos into pictures of Adolph
Hitler and Heinrich Himler, respectively, and to have sent them to
unspecified Sedgwick employees. Defendant allegedly obtained North's
photo from a worker's compensation conference website, and Posey's
photo from a Company press release announcing his elevation to COO.
In February 2009, Defendant launched Operating Going Postcard, which
he described in his blogs as a campaign to "educate the consuming
public" regarding the business practices of Sedgwick. According to
Defendant, such negative publicity was a "good way to fight back
against these despicable characters...." On February 9, 2009,
Defendant sent one such postcard to CEO North. One side of the
postcard incorporates North's picture into a "WANTED" poster which is
captioned: "WANTED FOR HUMAN RIGHTS VIOLATIONS." To the right of the
photo, the text reads: "Have you been threatened by this man or his
minions? The time for change is at hand!" On the other side of the
postcard, the following copy appears .... [Details omitted, but
available in the [3]opinion. -EV] ...
Sedgwick argues that the issue of fair use cannot be decided on a
motion to dismiss, and that it should be allowed to conduct "further
discovery." However, the Ninth Circuit has held that a defendant's
"assertion of fair use may be considered on a motion to dismiss, which
requires the court to consider all allegations to be true, in a manner
substantially similar to consideration of the same issue on a motion
for summary judgment, when no material facts are in dispute."
([4]Hide the statement of facts.)
C. FAIR USE FACTORS
1. First Factor--Purpose and Character of the Use
The first fair use factor addresses "whether the new work merely
'supercedes the objects' of the original creation, or instead adds
something new, with a further purpose or different character,
altering the first with new expression, meaning or message, in
other words, whether and to what extent the new work is
'transformative.'" Among the various forms of "transformative use"
is parody, which is a "'literary or artistic work that imitates the
characteristic style of an author or a work for comic effort or
ridicule, ...'" ...
Sedgwick argues that there can be no fair use [as to the unaltered
photos on the postcards] where, as here, Defendant did not alter
the photographs of North and Posey.... [But] the salient inquiry is
whether the use of the photos, in the specific context used, was
transformative.... "[M]aking an exact copy of a work may be
transformative so long as the copy serves a different function than
the original work[.]"
Here, there can be no legitimate dispute that Defendant's use of
North and Posey's photographs was transformative. Both images
originally were used by Defendant for promotional reasons.
Defendant, however, used the photographs as a vehicle for
criticizing the Company. Specifically, both photographs are
superimposed on postcards that mimic "WANTED" posters. Above each
picture is the heading, in a large font, which states: "WANTED FOR
HUMAN RIGHTS VIOLATIONS." The copy accompanying the photographs
criticizes Sedgwick and its management's alleged mistreatment of
claimants and questionable practices, and urges the public to
report any misdeeds to the U.S. Department of Justice and state
Attorney Generals. When viewed in context, it is clear that
Defendant used North and Posey's photographs for a fundamentally
different purpose than they were originally intended by
transforming them into a vehicle for publicizing and criticizing
Sedgwick's alleged business practices. In view of the above, the
Court finds that the first fair use factor weighs strongly in favor
of fair use.
[Footnote: Given the transformative nature of Defendant's use of
the photographs, the matter of whether the use was commercial is
less significant. Nevertheless, the Court notes that there is no
claim that Defendant used the photographs for commercial gain.
Rather, all of the facts presented indicate that the photographs
were used as part of Defendant's overall endeavor to educate,
publicize and warn the public about Sedgwick. The lack of
commercialism also weighs in favor of fair use.]
2. Second Factor--Nature of Plaintiff's Work ... Neither party
makes any argument regarding this factor. The Court therefore
considers the second factor to be neutral.
3. Third Factor--Amount of the Work Used.... [T]he reuse of an
entire image may be reasonable if it serves the defendant's
intended purpose.... [T]he Court concludes that this factor is
neutral.
4. Fourth Factor--Effect of the Use on the Potential Market
The fourth and final statutory factor is "the effect of the use
upon the potential market for or value of the copyrighted work."
... [Sedgwick] argues that "the fourth factor weighs in [its] favor
because Delsman's alteration, public display of altered photographs
and public distribution of the same have injured Sedgwick's
potential ability to continue to use the photos of its CEO and CFO
(sic) for future marketing purposes." However, the relevant
question is not whether the work itself has lost value, but rather,
whether the secondary use has usurped the commercial demand for the
original. Here, there is no such demand, since there is no
commercial market for them. And even if there were, Defendant's use
of the photographs is sufficiently transformative that it would not
be a "substitute" for the original.
Moreover, the possibility that Defendant's use of the photographs
has undermined Sedgwick's ability to use them in the future is not
remediable under the Copyright Act. As the Supreme Court explained
..., "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." The Court finds that the fourth fair use
factor favors Defendant.
5. Summary
Taking all of Sedgwick's allegations as true, the Court finds that
two of the fair use factors weigh strongly in favor of Defendant
and two are neutral. Defendant's uses of the photographs of North
and Posey are highly transformative and serve an entirely different
function than originally intended. It was reasonable for Defendant
to use the entire photograph in order to evoke the image of a
"WANTED" poster. His use could not have had impacted the market for
the photographs because no such market is alleged to have existed.
But even if it did, Defendant's use was sufficiently transformative
that it could not be deemed to be a substitute for the original.
Allowing Defendant to use the photographs in the context of
publicly criticizing and warning the public regarding Sedgwick's
business practices is precisely the type of activity the fair use
doctrine is intended to protect.
The fair use analysis strikes me as quite right. As to the state law
claims, the court concluded that "Sedgwick fails to adduce any
evidence to meet its burden of showing a probability of prevailing on
any of its claims. Rather, Sedgwick simply recites the elements of
each of its state law causes of action and cites to various
allegations of the Amended Complaint." It therefore ruled for Delsman
on those as well.
By the way, Delsman, who is apparently not a lawyer, represented
himself -- something that rarely leads to victory, but did so this
time.
References
1. http://volokh.com/files/sedgwick.pdf
2. file://localhost/var/www/powerblogs/volokh/posts/1248388260.html
3. http://volokh.com/files/sedgwick.pdf
4. file://localhost/var/www/powerblogs/volokh/posts/1248388260.html
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