Potter Case: IP Lawyer Calls It a Toss-Up

[WSJ_law_blog]

We were entirely intrigued by the judge in the Harry Potter case’s comment yesterday that “there are strong issues in this case and it could come out one way or the other. The fair use doctrine is not clear.” We checked in with an IP expert, Ethan Horwitz (pictured), an IP partner at King & Spalding here in New York, who’s been following the case closely. He agrees with Judge Robert Patterson’s take — this case is indeed a close one, on the law and facts.

Thanks for taking the time, Ethan. So you think it’s running neck and neck between Warner Bros. and J.K. Rowling on the one side, and RDR Books on the other?

It’s really pretty remarkable, in my opinion. The fair-use test has four factors and each side can find precedent to support it. The case law is really all over the map. And on the facts, too, I think it’s a really close case. It really smacks down right in the middle.

Can you give us an example of how the law is muddied?

Sure. Well, under the copyright law, 17 U.S.C. Sec. 107, the fair use test has four parts. It’s a “totality of the circumstances” test that a judge is supposed to apply, basically meaning that no one prong of the test is meant to carry the day. Anyway, one of the parts examines the nature of the copyrighted work. The more creative the copyrighted work is, the less likely a fair-use argument is going to apply. The less creative a work is — like if the work is a news article or something that relies on a lot of facts — the more likely a fair-use argument is supposed to apply.

But the law is all over the map. For instance, there’s a case involving a trivia game based on the TV show “Seinfeld.” A judge shot down the fair-use argument that the game-makers were making. At the same time, a coffee-table book that used copyrighted pictures of the Grateful Dead was held to be permissible under fair use.

Here’s another example: Another part of the test examines how much of a work was actually used. In a famous case involving the memoirs of President Ford, the Supreme Court found that fair use did not apply when a magazine excerpted 300 of the memoir’s some 200,000 words. But in the Sony/Betamax case, the Court held that copying 100% of a movie or TV show did fall under fair use. So it’s very confusing.

And what about the facts here?

They’re also very split. Each side has some strengths and some weaknesses. Another part of the fair-use test involves the effect on the published work’s market, essentially just how clearly the copyright holder has shown that the work will have a damaging economic effect on her publications. That’s a tough argument for Rowling to make here because she, in the past, has been so encouraging of fan Web sites and lexicons and the like. This is where she has her major problem.

Vander Ark’s biggest issue, I think, is that his site looks so similar to the design of the Potter books. Technically speaking, it’s a trademark issue, but it is going to affect another factor, which is the extent and value of the taking from the original work.

So your prediction?

I wouldn’t make one in this case.