On May 17, Magistrate Judge Sallie Kim of the Northern District of California ruled in a copyright infringement case by the Jehovah's Witnesses ("Watch Tower") against an anonymous reddit poster using the pseudonym "darkspilver".

Darkspilver posted two documents: a copy of an advertisement from the back page of the Watch Tower magazine, and an internal spreadsheet.

One theory is that what Watch Tower, Inc is most interested in is who leaked the spreadsheet. However, they sued, claiming copyright infringement, and listed both items.

Darkspilver's argument was that the advertisement shows how Watch Tower, Inc is now focused primarily on fundraising, and that the spreadsheet demonstrates the funding categories of interest to the organization.

Darkspilver's motion to quash rested, in large part, on the idea that if his identity were to be revealed, Watch Tower Inc would simply have him excommunicated, without further legal todo.

Judge Kim reached a compromise: Darkspilver would be required to testify, but his identity would be released only to Watch Tower Inc's attorneys, and not to the organization. While she considered darkspilver's Fair Use justification, and while she came to the conclusion that darkspilver "likely" had a Fair Use defense, she ended up allowing the subpoena -- with protections -- to proceed.

Here is the text of the Fair Use section of the opinion.

a. Purpose and Character of Use.

The first factor considers the purpose for using the work. “Section 107 provides that use of copyrighted materials for “purposes such as criticism, . . . scholarship, or research, is not an infringement of copyright.” New Era Publications Int’l, ApS v. Carol Pub. Grp., 904 F.2d 152, 156 (2d Cir. 1990) (finding factor one favored the accused infringer who declared his reasons for including the copyrighted material were to “mak[e] his point that Hubbard was a charlatan and the Church was a dangerous cult”); see also Mattel, Inc. v. Walking Mountain Prods., 353 F.3d 792, 799 (9th Cir. 2003) (“The fair use exception excludes from copyright restrictions certain works, such as those that criticize and comment on another work.”) (citing 17 U.S.C. § 107). This factor considers whether the use was transformative, that is, whether it “adds something new, with a further purpose or different character, altering the first with new expression, meaning, or message.” Campbell v. Acuff-Rose Music, Inc., 510 U.S. 569, 579 (1994); see also SOFA Entm’t, Inc. v. Dodger Prods., Inc., 709 F.3d 1273, 1278 (9th Cir. 2013) (“The central inquiry under the first factor is whether the new work is ‘transformative.’”).		 New Era Publications is the Scientology publishing arm. This was another case of leaked church documents.
Although not conclusive, the first factor also requires that “the commercial or nonprofit character of an activity” be weighed in any fair use decision. Sony Corp. of America v. Universal City Studios, Inc., 464 U.S. 417, 448-49 (1984). Noncommercial, nonprofit activity is presumptively fair. Id. at 449.

Here, Darkspilver’s use was not commercial. Therefore, his use was presumptively fair. Moreover, his stated purpose was to evoke conversation about the Jehovah’s Witnesses fundraising methods. He wanted “to show openly the organization was petitioning for financial donations from members, to illustrate the organization’s use of commercial advertising design, and to point out the organization’s encouragement of online donations.” (Dkt. 8-1, ¶ 9.) According to Darkspilver, these fundraising methods were a major change from the teachings and practices the Jehovah’s Witnesses had espoused in the past. (Id.) He posted the advertisement to
9 “inform others and spark discussion about the organization’s tone, message, and fundraising practices.” (Id.) Watch Tower does not challenge this motivation. Posting copyrighted material for criticism or to spark conversation about it are purposes that the fair use statute authorizes. 		"not commercial" meaning that the use was "presumptively fair" is an overreach, though maybe in context it's ok. But note the discussion of his "stated purpose".
On the other hand, Darkspilver did not alter or strongly “transform” the advertisement. He posted it in full with the caption: ““WHAT GIFT CAN WE GIVE TO JEHOVAH?”... guess what? ... WT Magazine NOVEMEBER 2018, Full Backpage ‘Advert’” (Dkt. 8-1, ¶ 8; Dkt. 8-3 (Ex. B).) There is no factual dispute about the posting. However, because of the nonprofit nature of Darkspilver’s posting and his stated purpose to evoke conversation, the Court finds that this factor weighs in favor of Darkspilver. Just what is "transformative"? While the Authors Guild v Google case found that Google "transformed" the scanned books in order to enable search, this is not the universal interpretation of "transformative". Another analytical approach is that it is the use, for a different purpose, that is "transformative". In Online Policy Group v Diebold, the judge wrote "finally, Plaintiffs' and  IndyMedia's use was transformative: they used the email archive to support criticism that is in the public interest, not to develop electronic voting technology". Overall, this seems to be a better fit with the present case than Google's.

Still, Judge Kim reaches the same conclusion in the last sentence, so maybe it doesn't matter.
b. Nature of the Copyrighted Work.

The second factor “recognizes that creative works are ‘closer to the core of intended copyright protection’ than informational and functional works.” Dr. Seuss Enterprises, L.P. v. Penguin Books USA, Inc., 109 F.3d 1394, 1402 (9th Cir. 1997) (quoting Campbell, 510 U.S. at 22 586).

“Whether or not a work is published is critical to its nature under factor two, the scope of fair use is broader for published works.” New Era Publications, 904 F.2d at 157 (citing Harper & Row Publishers, Inc. v. Nation Enterprises, 471 U.S. 539, 564 (1985)). Thus, “even substantial quotations might qualify as fair use in a review of a published work.” Harper & Row, 471 U.S. at 27 564.

Here, the advertisement was published in November 2018. Moreover, the advertisement was largely informational and functional, directing readers how to make donations online. Therefore, this factor also weighs in favor of Darkspilver.		 Factual gets less protection.
c. Amount and Substantiality of Portion Used.

The third factor “asks whether the amount and substantiality of the portion used in relation to the copyrighted work as a whole, are reasonable in relation to the purpose of copying.” Mattel, 353 F.3d at 803 (internal citations and quotation marks omitted). “This factor has both a quantitative and a qualitative component, so that courts have found that use was not fair where the quoted material formed a substantial percentage of the copyrighted work . . . or where the quoted material was ‘essentially the heart of the copyrighted work.’” New Era Publications, 904 F.2d at 158 (citing Harper & Row, 471 U.S. at 565).

Here, even though Darkspilver copied the entire advertisement, it was only a small portion of the copyrighted work as a whole – the thirty-two page November 2018 Watch Tower magazine. The advertisement was on the last page of the magazine. Again, there is no factual dispute about this issue. Nor was the advertisement qualitatively the heart of the published magazine, which was full of articles discussing matters of faith for Jehovah’s Witnesses. In contrast, the advertisement described how to make online donations to the organization.
 Judge Kim's determination that the advertisement was a "small portion" of the magazine is interesting. What constitutes the "entire work" is often a tricky issue for copyright.
d. Effect of Use on Potential Market for or Value of Copyrighted Work.

The fourth factor “asks whether actual market harm resulted from the defendant’s use of plaintiff’s protected material and whether ‘unrestricted and widespread conduct of the sort engaged in by the defendant . . . would result in a substantially adverse impact on the potential market’ for the original or its derivatives.” Mattel, 353 F.3d at 804 (quoting Campbell, 510 U.S. at 590). A use that has no demonstrable effect upon the potential market for, or the value of, the copyrighted work need not be prohibited in order to protect the author’s incentive to create. Id. at 450. Therefore, “[w]hat is necessary is a showing by a preponderance of the evidence that some meaningful likelihood of future harm exists. If the intended use is for commercial gain, that likelihood may be presumed. But if it is for a noncommercial purpose, the likelihood must be demonstrated.” Id. at 451 (emphasis in original).
Watch Tower has not demonstrated any actual harm or likelihood of future harm. It argued generally at the hearing that the harm it suffered from people infringing on its copyrights was directing others away from its website. However, the advertisement that Darkspilver posted directs people to visit the website to make a donation. Nevertheless, Watch Tower has not yet had a chance to conduct discovery on its copyright claim or to engage an expert to conduct a market analysis. Perhaps Watch Tower, if provided the opportunity, could demonstrate that fewer people visited its website after Darkspilver’s posting. The Court is hesitant to deprive Watch Tower of the opportunity to develop its claim and supporting evidence before it has even filed suit.
 On the one hand, Judge Kim is giving Watch Tower the benefit of the doubt in its "effect on the market" claim; we've seen other cases (Sony v Universal City, Perfect 10 v Google) where the court did not take marketplace claims seriously.

On the other hand, this is a bit of a reach: the law refers to the " effect of the use upon the potential market for or value of the copyrighted work." This is usually interpreted to mean that only reduced sales of the original can count, and even then, the reduced sales must result from people buying the copy instead. From Campbell: "The cognizable
harm is market substitution". Reduced traffic? Not so much. The magazine is free, and, more to the point, it would be reasonable to assume that nobody obtained the magazine specifically for the advertising.

Another observation is that maybe WT should have been given an opportunity to prove its "reduced-traffic" claim before ruling partially on the motion to quash.
In balancing the harms, while considering the fair use defense, the Court finds that they tip sharply in Darkspilver’s favor. However, the Court notes that Darkspilver’s concerns stem largely out of his fear that those in his congregation will discover his identity and shun him. If Reddit reveals Darkspilver’s identity to Watch Tower’s counsel, under an “attorney’s eyes only” restriction, then any harm to Darkspilver would be alleviated. This restriction would enable Watch Tower to pursue its copyright claim without causing harm to Darkspilver.
 Maybe this should not be done until after the Fair Use claim had been investigated a little more?