Earlier this month, the U.S. Court of Appeals for the Second Circuit issued a consequential opinion on the meaning and scope of what has become the "transformative use" factor of the fair use defense to copyright infringement. TCA Television Corp. v. McCollum, No. 16-134-cv-, __ F.3d __, 2016 WL 5899174 (2d Cir. Oct. 11, 2016). While transformative use is one consideration within the first of four factors applied to determine whether a use of a copyrighted work is "fair" and thus not an act of infringement, it has become the predominant consideration in the Second Circuit. And while it is fair to say that the Second Circuit in recent decisions has stretched the scope of what had previously been considered a transformative use, McCollum appears to pull back on that expansion.
In a unanimous 3-0 ruling, the Second Circuit ruled that a Broadway play's verbatim performance of a full minute from the iconic Abbott and Costello routine, "Who's on First," in a scene between an introverted, small-town boy and his demonic sock puppet, was not transformative or otherwise fair use as a matter of law. In doing so, the court rejected Southern District of New York Judge George B. Daniels' dismissal (at the pleading stage) of the plaintiff ("TCA")'s copyright infringement action on the basis of fair use. (The Circuit affirmed on the separate ground that plaintiffs failed to plausibly allege a valid copyright interest.)[1]
The Parties and Play
In the late 1930s, the famous Vaudeville comedic duo comprised of William "Bud" Abbott and Lou Costello first performed their now-world famous routine known as "Who's on First."[2] The purported successors to rights in Who's on First (the "Routine") filed a lawsuit against the producers and author ("Producers") of a successful Broadway play, Hand to God (sometimes referred to below as the "Play"). As described in TCA's complaint, the Play is a "dark comedy about an introverted student in a religious, small-town Texas who finds a creative outlet and a means of communication through a hand puppet, wh[ich] turns into his evil or devilish persona."
In Hand to God's first act, the lead character (Jason) tries to impress a girl (Jessica) by using his sock puppet (Tyrone) to perform just over a minute of the Routine. When Jessica asks Jason if he wrote the Routine, Jason says "yes," to which his sock-puppet alter ego "Tyrone" immediately, and seemingly of his own volition, calls Jason a liar. Tyrone then calls Jessica "stupid" for not recognizing the plagiarism, whereupon the dialogue shifts away from the Routine to various lurid subject matters expressed by Tyrone.
The District Court's Opinion
The Producers moved to dismiss TCA's copyright claim on three grounds: (1) lack of a valid copyright; (2) the Routine allegedly being in the public domain; and (3) fair use. The district court granted the motion on grounds of fair use, declining to rule on either of the other grounds.
With respect to fair use, the district court found the Play's use of the Routine was so "highly transformative" it constituted fair use as a matter of law. Id. at *1. In the court's view, "by having a single character perform the Routine, the Play's authors were able to contrast 'Jason's seemingly soft-spoken personality and the actual outrageousness of his inner nature,'" which acted as "a darkly comedic critique of the social norms governing a small town in the Bible Belt." Id. at *7 (quoting TCA Television Corp. v. McCollum, 151 F. Supp. 3d 419, 436 (S.D.N.Y. 2015)).
TCA appealed to the Second Circuit.
The Second Circuit Affirms the Dismissal on Different Grounds (Copyright Validity) but Rejects the Finding of "Transformative Use" as a Matter of Law
While ultimately dismissing plaintiffs' copyright claim on grounds of copyright validity, the Second Circuit found that the district court erred in dismissing the complaint based on fair use. In doing so, the court provided a detailed analysis of what is and is not likely to constitute a "transformative use."
The court considered the Play's potential "transformative use" under its analysis of the first fair use factor—i.e., "the purpose and character of the secondary use," which considers "whether the new work merely supersedes the objects of the original creation, or instead adds...
