Sedgwick Claims Management Services, Inc. v. Delsman, No. C 09-1468 SBA, July 17, 2009
The United States District Court for the Northern District of California granted the defendant blogger's motion to dismiss a copyright infringement lawsuit following its determination that the blogger's use of unaltered copyrighted photos is fair use and therefore not violative of copyright laws. The court held that Delsman's use of two photographs of Sedgwick's upper management, although unaltered, was fair use because Delsman's use of the photographs was transformative insomuch as the images were used for a critical purpose, rather than Sedgwick's original promotional purpose. Also important to the court's fair use analysis was the fact that Delsman's use of the images did not affect the commercial market for the original images in a legally important manner, since no market existed for the images anyway.
Eric Goldman has posted a summary of the order on his Technology and Marketing blog. Loeb & Loeb provides a thorough description and analysis of the order. Eugene Volokh notes that the court's "fair use analysis strikes [him] as quite right" on his blog, "The Volokh Conspiracy."
The controversy began when Delsman posted blog entries that criticized Sedgwick's management. The alleged copyright violations occurred when Delsman mailed postcards featuring two copyrighted images of Sedgwick's upper management personnel, taken from Sedgwick's promotional materials, stylized as an old-fashioned "Wanted" poster, which included more comments critical of Sedgwick. In holding that the use of these images in the mailings constituted fair use, the court analyzed four fair-use factors that allow for the use of copyrighted materials as established by the Copyright Act. The four factors are: "(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." 17 U.S.C. § 107. The court found that the first factor weighed strongly in Delsman's favor because his use of the pictures was transformative, as the pictures served an entirely new purpose in the context that he gave them. The court found the second factor to be neutral because neither party made an argument based on the nature of the copyrighted work. The court also found the third factor to be neutral because although Delsman used the copyrighted works in their entirety, it was reasonable to do so because it served Delsman's intended purpose. The court found that the fourth factor weighed in Delsman's favor because there was no market value for the photographs, since they had merely been used in promotional materials. The court also pointed out any loss in market value caused by the alleged infringement and its critical depiction of Sedgwick would have been irrelevant because Delsman's use was transformative.
This case is significant because it provides a framework for fair use analysis that is especially relevant for photographs and for use of copyrighted materials that is critical of the copyright holder. This case is also significant because it demonstrates that courts may be sympathetic to individual defendants such as Delsman, who represented himself pro se in his motion to dismiss, in the face of aggressively litigious copyright holders. The judge hearing the case was willing to liberally construe Delsman's filings in order to avoid chilling his right to fair use of copyrighted works.