In what the plaintiff publishers’ attorney Bruce Rich called a “seemingly never-ending case,” an appeals court last week heard oral arguments in the long-running Georgia State University (GSU) e-reserves case for a second time. And judging by the court’s questions, the case could still be far from a conclusion.

In the hearing, which went for just over an hour, a three-judge panel of the 11th Circuit in Atlanta, once again pressed attorneys for the fault lines in the decade-old copyright case case, with much of the hearing focusing on whether Judge Orinda Evans correctly evaluated the fourth factor of the four factor fair use test (the effect on the market), and then properly weighted that factor in making her fair use determinations.

First filed in April of 2008 by three academic publishers (Oxford University Press, Cambridge University Press and Sage Publications, with support from the Copyright Clearance Center and the AAP) the suit alleges that GSU administrators systematically encourage faculty to offer students unlicensed digital copies of course readings (known as e-reserves) as a no-cost alternative to traditionally licensed course-packs.

In 2012, Evans first ruled against the publishers, finding that GSU's copying was fair use in all but five of 48 instances presented at trial.

In October, 2014, however, the 11th Circuit reversed and sent the case back to Evans with instructions to re-balance her four-factor fair use analysis in a less “mechanistic” and more “holistic” manner. And because GSU's copies constituted a “severe threat” of market substitution, she was instructed to give the fourth factor (market effect) “additional” weight.

In her March, 2016, remand decision Evans did give the fourth factor more weight, as instructed by the appeals court—but she also went back and re-did her fair use analysis for each claim in the suit, including a close look at the actual permissions revenue at stake for each work in prior years.

The result: she once again found for GSU. But this time, she found even fewer infringements than in her original verdict—and that could now be a problem for GSU.

Affirmed?

At last week’s hearing, one member of the appeals panel, Judge William H. Pryor (who earlier this year was reportedly shortlisted by President Trump for the Supreme Court) was clearly skeptical of Evans’ new calculus. He repeatedly questioned how Evans in her original decision could find that the fourth factor tilted strongly toward infringement in 31 of the claims presented at trial—an analysis, he stressed, that the first appeals panel affirmed was correct—but in her remand decision, find most of those claims were now fair use.

“I don't see where the District Court was ever told anywhere in [The first appeals decision] to revisit on a work-by-work basis the determinations that it had made on the fourth factor,” Pryor stated at one point. “I look at what the District Court did, and we have a string of [infringement] findings on the fourth factor...we say ‘no error, but give it more weight,’ and on remand, the district court instead revisits every one of those and now almost overwhelmingly says fair use?”

Notably, despite Judge Pryor’s inference that the district court improperly re-did a fair use analysis that the first appeals panel had said was correct, the publishers have actually argued the first panel erred in affirming that analysis.

In an unusual twist following its unanimous 2014 appeal victory, the publishers petitioned for an en banc hearing in front of the full 11th Circuit (which was rejected), in hopes of getting a full appeals court decision more in line with the views of Judge Roger Vinson, who served on the first appeals panel and wrote an extraordinary concurrence that eviscerated parts of the panel’s majority opinion.

Arguing for the publishers, attorney Bruce Rich stressed that the disctrict court had now twice botched its fair use test.

In a fiery opinion, Vinson, a district court judge who was at the time sitting by designation on the 11th Circuit (he is no longer serving on the appeals court) held that GSU had “not even come close” to establishing a fair use defense.

The publishers went on to contend that the first panel (Vinson's minority concurrence aside) "erred by endorsing the district court’s inference of no market harm where licenses for posting digital excerpts were not readily available,” noting that the test is whether the use "might significantly harm the potential market for the rights holder’s work, whether or not the copyright holder is currently exploiting that market.”

But another judge on last week's panel, Judge Robin S. Rosenbaum, appeared skeptical of the publishers’ "circular" contention that the presence of a market and the mere availability of digital licenses for the works in question should necessarily tip the balance for publishers on market harm.

“If that is the be-all and end-all of the market test, then, just by making licenses available, that factor will always necessarily strongly favor a finding of infringement,” she observed. “That can't possibly be the be-all and end-all of the test.”

A third judge on the panel, Beverly B. Martin asked few questions, and was harder to read—although she questioned why, in light of the recent decision in Kirtsaeng, the court should uphold Evans’ award of attorneys fees to GSU.

Botched?

Arguing for the publishers, Bruce Rich stressed that Evans had now twice botched the fair use test, and that her latest attempt ran counter to all settled jurisprudence.

“There is no copyright precedent of which we are aware,” Rich said, “that has said you engage in this kind of microscopic examination, taking a present-day snapshot of actual market harm, and hypothesize from that experience alone…what future harm may be.”

Pressed by Judge Rosenbaum, Rich allowed that Evans was required to look at each individual claim on a case-by-case basis. "But that doesn't mean you have to do it with blinders on,” he argued, based on a record "frozen" in 2009. “You can still take into account the setting in which these works were taken.”

That setting, he told the court: GSU was systematically taking the publishers’ works, semester after semester, and outsourcing complex fair use determinations to faculty with no training, or oversight, via a "flawed" checklist, and with no budget available to pay for permissions.

In sparring with Judge Pryor over why Evans recalculated her fair use analyses, GSU attorney Stephen Schaetzel claimed that once the appeals court ordered her to give more weight to the fourth factor and re-balance her four factor test in a more "holistic" fashion, Evans was compelled to revisit the evidence to determine exactly how much weight to give each factor.

Schaetzel insisted that Evans correctly addressed the central question in the case: whether GSU’s educational uses, if they were widespread, would cause “substantial economic harm such that it would impair the publishers’ incentive to publish the works.” And he claimed the case was not about harm to the publishers bottom lines, but rather the publishers’ desire “to expand the scope of their copyrights…to generate a windfall.”

There is no timetable on when the 11th Circuit might rule. The first panel took nearly a year to issue it’s reversal in 2014. AAP officials have called the contentious suit a “test case” that will “inform the application of fair use” in the academic setting.