Supreme Court Rules on Fair Use of Copyrighted Works

Facts

The publishers of a Portuguese television magazine included in their issue of March 13 2002 a short article about a book that was on the market and had been adapted as a prime-time television series with an audience of over 1 million people. The article contained an excerpt consisting of the last 26 lines of the 222-page book. The Portuguese Authors' Society sued on behalf of the author on the grounds of copyright infringement. It also claimed damages for loss of sales, alleging that many people, having read the ending in the magazine, lost interest in the book and chose not to buy it.

The court of first instance and the Lisbon Court of Appeals found that the publisher had breached the author's copyright and ordered it to pay €4,340 in compensation. In addition, the courts established that the article was read by over 100,000 people and that many potential readers lost interest in the book as a consequence of the publication of the ending, which in turn led to around 3,000 copies of the book not being sold.

The defendant appealed to the Supreme Court. It claimed that it had complied with Article 75(c) of the Copyright Code in establishing a right of fair use for information purposes, and that the decisions of the lower courts had violated Articles 37 and 38 of the Constitution (on freedom of expression and freedom of the press).

Decision

The Supreme Court limited itself to considering whether the defendant was entitled to exercise the fair use defence under Article 75(c) of the code, which covers the reproduction and distribution - by any means - of short extracts of copyrighted works, and permits the inclusion of such extracts in reports of current events if it can be shown that such inclusion has an informative purpose.

The court decided that the 26-line quotation represented a short extract of the 222-page book and that its inclusion in a section of the magazine dedicated to short news stories constituted a report of a current event. The court also considered that, in view of the wide exposure of the television adaptation which was being broadcast at the time and the fact that the magazine was dedicated to issues relating to television, the publication of the piece had an informative purpose. Therefore, it found that the reproduction of the extract was allowed under the fair use defence invoked by the defendant. It dismissed the claim for damages, reversing the decisions of the lower courts.

Comment

The Supreme Court decision dismissed all economic arguments - that is, all claims relating to the adverse economic impact on the exploitation of the copyrighted work - against fair use for information purposes under Article 75(c) of the code. Other forms of fair use, such as reproduction for educational purposes, are subject to the proviso that the reproduction may not be so extensive as to damage the rights holder's interest in the work, but there was no such limitation on the form of fair use in question at the time of publication. However, Articles 75 and 76 of the code have since been amended by Law 50/2004. Although the requirements for this form of fair use remain unaltered and are set out in Article 75(2)(d), Article 76(2) widens the limitation on extensive reproduction to include reproduction for information purposes. Nonetheless, there is a strong argument that the term 'extensive' should be construed narrowly; therefore, the reproduction of 26 lines - whether from the beginning, middle or end of a work - would probably still be deemed admissible under the new rules.

However, the broad limitation which was added to Article 75(4) states that the forms of fair use regulated by the article may not "affect the normal exploitation of the work" or "cause unjustified harm to the author's legitimate interests". In light of this new wording and the fact that the lower courts established that around 3,000 copies of the book remained unsold as a result of the publication of its ending, it appears that, had the extract been published after the amendment to the code, the author would have had a much stronger case against the publisher.

For further information on this topic please contact Armando Martins Ferreira or Guilherme Mata da Silva at Abreu Advogados by telephone (+351 21 7231800) or by fax (+ 351 21 7231899) or by email (armando.m. ferreira@abreucardigos.com or guilherme.m. silva@abreucardigos.com).