By, Sherry Shukla and Arpit Lahoti 


The scope of copyright protection has both legal and practical dimension and the combination of both produces a scope in economic terms. Various elements are associated with a Copyright as far as its scope is considered, for example, the theory of ideas and expressions (including the merger of the two), the substantial similarity between two works, liabilities incurred out of it, and many more. This article focuses on the doctrine of fair use and how it does not violate the copyright in original work. This defence is provided in Section 52 of the Indian Copyright Act, 1957,[i] and accounts for fair use not to be dealt with as infringement of copyright protection.

Fair use is the doctrine that entitles the copier to copy the copyrighted work without being called an infringer even though the copyright holder i.e. the producer has not entitled him to copy.[ii] No general theory has ever talked about the cases that have invoked this doctrine. In that light, the author intends to analyze some of the situations where this doctrine can be invoked.

  1. The high transaction cost case

Let’s take a case where the cost of voluntary exchange between the copyright owner and the user or copier of that work is so high that such an exchange is not feasible between the parties. A copier may be willing to pay the said amount to the copyright holder to use a certain part of his work and the copyright owner will be consenting to the same. But to arrive at such a negotiation might not be feasible. It may further be prohibitive because the copier only wants to use a very minute part of the work. So, here the copier will be benefitted without causing any harm to the copyright owner and will not affect the demand of the original work.

Various reasons have been given as far as the scope of fair use in High Transaction Cost Case is concerned, but none serve the best justification for fair use.[iii]

  1. Since, in our example above, the transaction cost is prohibitive, we will now substitute the rule of liability in which the user does not have to indulge in negotiating a price with the copyright holder but is ready to pay any damages arising out of the use. Nevertheless, transaction costs will be higher in this case also as compared to potential benefits i.e. extra incentives required to create a work. Also, we know that when the number of copiers is more, infringement will be more, and hence, the court has to incur a lot of compensation costs as a result of the increase in lawsuits. On the other hand, damages incurred on the copier may be too small and not feasible for the proceedings to happen.
  2. Now, fair use might not create enough incentive to develop an innovative market mechanism to reduce the cost involved in the transaction and make the economic exchanges between copier and copyright holder economically feasible.
  3. There are situations where the number of users is particularly high and it becomes too costly to negotiate to get licenses for a particular portion of work. In that scenario, some users might be willing to purchase the entire product or work.

The arguments stated above provide us with the undermined use of fair use doctrine. Except for the cases where the benefits of use exceed the cost of copyright protection, there is no liability of fair use on transaction grounds.

  1. Parody

Parody is the process that involves copying of idiosyncratic features of the original work to put in front of authors a recalled version of the work. But for this method to work, reminding is necessary i.e. consumers must know what the original work contained. Some might view parody as a derivative work and might give the producer the control over it but this is not exactly true. A derivative work is the surrogate of the original one and as a result, might take over the original work and hamper the revenue received by the producer from the original product. So, the law should provide for distinguishing between infringing and derivative works.

Now, in the case of M/s. Blackwood & Sons Ltd. v. A.N. Parasuraman,[iv] it was held that to constitute a parody, there must be no capricious intention on the part of the alleged infringer and also no thought of competing with him. In many such cases[v] Court had successfully held that reproduction, using the work for criticism does not account for copyright infringement.

  1. Reducing the cost of creative works

Now, the doctrine of fair use arises when the producer is willing to use the earlier work produced by them. So, the question arises to differentiate between the works that are alleged to be infringed work with that of substantially similar work (his earlier produced work) that is going to be infringed. To answer this question, the court needs to distinguish between the new product created by the original copyright holder and the alleged infringer. When the question of substantial similarity comes into the picture, the producer needs to use the already available products to create a new invention without negotiating with the copyright holder. The court has termed this process as “productive fair use” and not reproductive use. A productive use increases the number of works created with a lowered value of cost incurred while reproductive use involves increasing the no. of copies and not increasing the profit for the producer and neither providing enough incentives. It would, therefore, be safe to say that fair use doctrine involved in productive use is better than reproductive use.

Striking a balance between the two is the fundamental question here because as stated above, borrowing from the previous work might create a fall in the number of new works. So, the main function of the court is to protect the new ideas that are originated because the distinction between the two works is not possible to make by the court.

[i]     The Indian Copyright Act, 1957, § 52, No. 14, Acts of Parliament, 1957 (India).

[ii]    William Fisher, Reconstructing the Fair Use Doctrine, 101 Harv. L. Rev. 1661, 1744-1783 (1988).

[iii]    Landes, William M., and Richard A. Posner, “An Economic Analysis of Copyright Law.” The Journal of Legal Studies, vol. 18, no. 2, 1989, pp. 325–363.

[iv]    M/s. Blackwood & Sons Ltd. v. A.N. Parasuraman, AIR 1959 Mad 410.

[v]    Civic Chandran v. Ammini Amma, 16 PTC 329 (Kerala).

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