Sundeman v. Seajay Soc'y, Inc. (4/23/1998, No. 97-1339)

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PUBLISHED

UNITED STATES COURT OF APPEALS

FOR THE FOURTH CIRCUIT

No. 97-1339

JOHN SUNDEMAN, Successor Personal

Representative of the Estate of

Marjorie Kinnan Rawlings Baskin;

FLORIDA FOUNDATION,

Plaintiffs-Appellants,

THE SEAJAY SOCIETY, INC.,

Defendant-Appellee.

Appeal from the United States District Court

for the District of South Carolina, at Columbia.

Matthew J. Perry, Jr., Senior District Judge.

(CA-90-1100-3)

Argued: January 30, 1998

Decided: April 23, 1998

Before WILLIAMS and MICHAEL, Circuit Judges, and KISER,

Senior United States District Judge for the

Western District of Virginia, sitting by designation.

_________________________________________________________________

Affirmed by published opinion. Senior Judge Kiser wrote the opinion,

in which Judge Williams and Judge Michael joined.

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COUNSEL

ARGUED: J. Lester Kaney, COBB, COLE & BELL, Daytona Beach,

Florida; Herbert L. Allen, ALLEN, DYER, DOPPELT, FRANJOLA

& MILBRATH, P.A., Orlando, Florida, for Appellants. Steve A. Mat-

thews, SINKLER & BOYD, P.A., Columbia, South Carolina, for

Appellee. ON BRIEF: Robert O. Meriwether, NELSON, MULLINS,

RILEY & SCARBOROUGH, L.L.P., Columbia, South Carolina, for

Appellee.

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OPINION

KISER, Senior District Judge:

Mr. Norton Baskin (Baskin) is the personal representative of the

estate of his late wife, Mrs. Marjorie Kinnan Rawlings Baskin (Rawl-

ings). In Count I of the Second Amended Complaint, Baskin and the

University of Florida Foundation (Foundation) (formerly known as

the University of Florida Endowment Corporation) seek to recover

from The Seajay Society, Inc. (Seajay) physical possession of certain

documents which appellants assert are assets of the Rawlings estate.

In Count II, the Foundation seeks damages and injunctive relief for

Seajay's alleged violation of, and alleged threats to continue violat-

ing, its copyright.1

Senior Judge Perry tried this case without a jury on September 5

and 6, 1991. After the trial, post-trial briefs, and closing arguments,

the lower court, on October 1, 1992, entered judgment for Seajay as

to Counts I and II, but did not render a decision on the counterclaim.2

_________________________________________________________________

1 It is important to note the distinction between the physical ownership

of documents, and the ownership of the literary rights in those docu-

ments, the later being the copyright. Under 17 U.S.C.A. § 202 (West

1996), the physical document and the copyright are subject to separate

transfer. Count I concerns the right to physical possession of the docu-

ments themselves, while Count II concerns the ownership of the literary

rights in the documents. Seajay concedes that the Foundation owns the

it did not infringe upon those literary rights.

2 Seajay filed a counterclaim seeking a declaration that their uses of the

contested documents prior to February 21, 1991 did not constitute publi-

cation sufficient to warrant an extension of the Foundation's copyright

under 17 U.S.C.A. § 303. Appellants apparently do not appeal this rul-

ing.

The district court also did not file findings of facts or conclusions of

law at that time. Baskin and the Foundation noticed an appeal to this

Court on October 30, 1992. This Court, however, dismissed the

appeal without prejudice because of the district court's failure to

address the counterclaim or include findings of fact and conclusions

of law.

On February 5, 1997, after reopening the record, receiving addi-

tional evidence on Count II, and hearing renewed closing arguments,

the district court found for Seajay as to Counts I and II and the coun-

terclaim. The district court also filed its findings of fact and conclu-

sions of law. That decision is now before this Court on appeal.

I. FACTS

Rawlings died on December 14, 1953 in St. John's County, Flor-

ida. She was the noted author of books such as Sojourner, Cross

Creek, and The Yearling, which won the 1939 Pulitzer Prize.

In her will, Rawlings designated Baskin and the Foundation as co-

executors of her estate. She also designated one of her closest friends,

Ms. Julia Scribner Bigham (Bigham) as literary executrix of her

estate. Bigham was the daughter of publisher Charles Scribner, whose

company, Charles Scribner's Sons Publishers (Scribner Publishing),

published all of Rawlings' works.

On January 27, 1954, the County Judge's Court for St. John's

County, Florida appointed Baskin as the sole executor of Rawlings'

estate. The probate court never appointed the Foundation as an execu-

tor. Likewise, the probate court never appointed Bigham as literary

executrix, or as any other fiduciary. Bigham acted in the capacity as

literary executrix, however, under the auspices of Baskin, from 1953

until her death on October 24, 1961.3

Rawlings' will left immediate custody of "all manuscripts, all

notes, all correspondence, and all literary property of any kind" to

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3 The term "literary executrix" is somewhat misleading because

Bigham never qualified as a fiduciary in any capacity. Her legal status

seems to have been that of an advisor to the executor, Baskin.

Bigham, in her role as literary executrix. Bigham had the power to

destroy any of the "notes, manuscripts or correspondence" she

believed should be destroyed. She also had the power to determine

which materials would be published. Bigham could keep the literary

works as long as she wanted, then she was to turn them over to the

University of Florida Library. Any income from these literary materi-

als was to be held in trust by the Foundation, along with the remain-

der of Rawlings' property.

Acting in her role as literary executrix, Bigham collected Rawl-

ings' correspondence, papers, manuscripts, and other materials from

Baskin. Bigham also obtained some of Rawlings' materials from

Scribner Publishing. At no time did Baskin, the only court appointed

fiduciary, ever request an inventory of the materials collected by

Bigham.

Bigham scrupulously performed her duties as literary executrix.

During the remainder of her life, she wrote an introduction to and

posthumously published The Secret River, and then directed the origi-

nal manuscript be sent to the University of Florida Library; she post-

humously published The Marjorie Rawlings Reader , and then

returned the typescript and original materials to Scribner Publishing;

she worked to ensure that any works retained by Scribner Publishing

were later sent to the University of Florida Library; and she trans-

ferred numerous other documents to the University of Florida Library.

After Bigham's death in 1961, Baskin did not ask any one else to

assume the role of literary executor. Instead, as executor of the estate,

he assumed that role.

Baskin was not as conscientious as Bigham in performing the

duties of literary executor. He admitted that he was aware that

Bigham had a significant number of Rawlings' documents at the time

of her death, yet he never asked Bigham's family to return any of

those documents to the Rawlings estate. He stated that he believed the

documents were under consideration for publication by Scribner Pub-

lishing, but admits that he knew the documents were at Bigham's resi-

dence. In any event, he failed to confirm whether or not the

documents were part of the Rawlings estate and whether or not they

were being considered for publication by Scribner Publishing. Four

years after Bigham's death on October 24, 1961, the Florida probate

court closed administration of Rawlings' estate with Baskin still hav-

ing failed to clarify the status of those documents.

The documents remained stored at the residence of Bigham's wid-

ower in two boxes which were labeled "MKR letters and papers." In

1987, Bigham's widower was moving from the residence, so he and

his children decided to dispose of the contents of the boxes. Ms. Ann

Hutchins, Bigham's daughter, contacted Mr. Glenn Horowitz, a

nationally known dealer of rare books and literary and historical

manuscripts, to help them sell the material. Horowitz and his staff cat-

aloged the contents of the two boxes as follows:

1. Letters written from Rawlings to Bigham from 1939 to

1953;

2. Correspondence of Bigham in connection with her

duties as literary executrix;

3. Publisher's typescript with editor's blue-penciled emen-

dations of Rawlings' The Secret River (a children's book

posthumously published by Bigham);

4. Miscellaneous original typescripts, manuscripts, and

story ideas written by Rawlings, including her first unpub-

lished novel, Blood of My Blood;

5. Letters written from Bigham to Rawlings from 1940 to

1953.4

After compiling the catalog of documents, Horowitz contacted Dr.

James Meriwether, an officer of Seajay, about the letters. Seajay is a

small, non-profit organization dedicated to enhancing public aware-

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4 Appellants allege in Count I that certain of the documents in catego-

ries 3 and 4 were owned by Rawlings at the time of her death, and passed

to Bigham solely in her role as literary executrix. They claim that upon

Bigham's death, rightful possession of those documents passed to Baskin

as the administrator of the estate. Their claim covers a total of 12 docu-

ments from those two categories, including Rawlings' first unpublished

novel Blood of My Blood.

ness of, and interest in, unduly neglected aspects of South Carolina

and southern culture. After negotiations, Seajay obtained the docu-

ments by partial purchase and partial gift from the Bigham estate.

After purchasing the documents, Seajay made one whole copy of

Blood Of My Blood for Dr. Anne Blythe (Blythe). Blood of My Blood

is Rawlings' first novel; it was written in 1928, is 183 pages long, and

has never been published. Blythe, also an officer of Seajay, used the

copy in preparing a critical review of Blood of My Blood. Seajay

made the copy so that Blythe would not damage the fragile original

during her analysis. Seajay also made a partial copy 5 of the manu-

script which it sent to the Rare Books Room at the University of Flor-

ida Library. Seajay made this copy for the dual purpose of allowing

Baskin, or his designee, to view and authenticate it, and allowing the

University of Florida Press to view it and determine if it was worthy

of publication. Access to the copy was restricted, and photocopying

it was prohibited.6 The University of Florida Library eventually

returned its copy to Seajay.

In April of 1988, Blythe orally presented her critical analysis of

Blood of My Blood to a symposium of the Marjorie Kinnan Rawlings

Society at the University of Florida. Between 150 and 200 members

of Rawlings Society attended the symposium. In the presentation,

Blythe quoted approximately 2,464 words from the text of Blood of

My Blood, or four to six percent of the total text. Blythe submitted a

hard copy of her paper for publication with the Marjorie Kinnan

Rawlings Society Journal. She also hoped to publish an edited version

of her presentation as an introduction to Blood of My Blood, which

the University of Florida Press wanted to publish in its entirety.

Blythe was aware that neither the Society's Symposium nor the Uni-

versity of Florida Press would be able to publish her article, much less

Blood of My Blood, without first obtaining the permission of the

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5 This copy included all but six pages of the original.

6 The Foundation used a copy of Blood of My Blood obtained in viola-

tion of this restriction to register its copyright on June 13, 1990.

permission, thus neither Blood of My Blood nor Blythe's paper has

ever been published.7

On Februaury 9, 1990, the St. John's County, Florida probate court

re-opened administration of Rawlings' estate, allowing Baskin to

bring this suit on behalf of the estate. Baskin then filed the original

Complaint, in which he sought recovery of the documents from Sea-

jay, on May 18, 1990. He amended his Complaint on September 21,

1990 to include the Foundation's claim for damages and injunctive

relief under the Copyright Act. At trial, on September 6, 1991, Baskin

and the Foundation amended the Amended Complaint so that the

Foundation could also assert an action for recovery of the documents

under Count I. On February 5, 1997, the district court entered final

judgment in favor of Seajay as to Counts I and II and its counterclaim.

II. POSSESSION OF THE DOCUMENTS

As to Count I of the Second Amended Complaint, the lower court

made three alternative holdings which supported its finding for Sea-

jay. First, it held that Baskin's claim in Count I was barred by South

Carolina's six year statute of limitations, S.C. Code Ann. § 15-3-

530(4) (Law. Co-op. 1997), and that the Foundation had no indepen-

dent claim to a possessory interest in the contested documents. Sec-

ond, the lower court held that even if Baskin and the Foundation had

a possessory interest in the documents, Seajay's title in them was pro-

tected as a good faith purchaser for value from a dealer in goods of

the kind. S.C. Code Ann. § 36-2-403(2). Third, the district court

addressed the merits of the case, and held that Baskin and the Founda-

tion failed to prove that either had a right to possession of the docu-

ments. The appellants attack each one of these holdings. In affirming

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7 In Count II, the Foundation claims that the copy of Blood of My Blood

made for Blythe; the copy made for the University of Florida Library;

and the paper written and presented by Blythe, which quoted and sub-

stantially paraphrased Blood of My Blood, constitute copyright infringe-

ment. The Foundation also claims that Seajay has threatened to make

additional infringing copies of Blood of My Blood. According to the

Foundation, this alleged threat justifies the injunctive relief sought under

17 U.S.C.A. § 502.

the decision of the lower court, we need only address whether or not

Baskin's claim is barred by the relevant statute of limitations.8

South Carolina Code § 15-3-530(4) provides a six year limitations

period for "an action for the specific recovery of personal property."

Such an action must be commenced within six years after the claim-

ant "knew or by the exercise of reasonable diligence should have

known that he had a cause of action." S.C. Code Ann. § 15-3-535; see

also Campus Sweater and Sportswear Co. v. M.B. Kahn Constr. Co.,

515 F. Supp. 64, 79 (D.S.C. 1979) (holding that"discovery rule" in

§ 15-3-535 applies to claims under § 15-3 530(4)), aff'd, 644 F.2d

877 (4th Cir. 1981). The lower court held that Baskin, in the exercise

of reasonable diligence, should have known that he had a cause of

action to recover the contested documents on October 24, 1961, the

date of Bigham's death.

The determination that Baskin "knew or by the exercise of reason-

able diligence should have known that he had a cause of action"

almost thirty years before bringing his action is a finding of fact.

Thus, it is subject to a "clearly erroneous" standard of review. See

Fed. R. Civ. P. 52.

The lower court made its determination by relying upon fifteen

subsidiary facts drawn solely from an examination of Baskin's own

deposition testimony and interrogatory responses. 9 The most relevant

of those facts to this Court are that: (i) Bigham worked, not as a fidu-

ciary under a court order, but under the auspices of Baskin, the sole

court appointed fiduciary of the Rawlings estate; (ii) Baskin delivered

numerous documents to Bigham following Rawlings' death and knew

that Bigham collected documents from Scribner Publishing, as well;

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8 As noted, the lower court held that the Foundation did not have a pos-

sessory interest in the contested documents. Appellants have not

appealed this decision. Indeed, their entire appeal as to Count I is

directed at Baskin's recovery of the contested documents. Accordingly,

appellants have waived any claim by the Foundation for possession of

the contested documents. Therefore, we need only discuss whether

Baskin has a viable claim under Count I.

9 Baskin was unable to testify at the trial due to his health. His deposi-

tion testimony and interrogatory responses were admitted into evidence.

(iii) Baskin knew that Bigham had some of Rawlings' documents at

her home when she died in October of 1961; (iv) as executor of the

estate, Baskin assumed the role of literary executor upon Bigham's

death;10 (v) despite his knowledge that Bigham had some of Rawl-

ings' documents in her possession at the time of her death and his

understanding that the documents were now his responsibility as

executor of the estate, Baskin did not request to review the documents

to determine if they were the property of the estate, nor did he ask that

the documents be returned to his possession; and (vi) Baskin never

requested the return of the documents from 1961 to 1965, while

administration of Rawlings' estate remained open. 11

The evidentiary support for the district court's factual finding is

more than sufficient to withstand review under a clearly erroneous

standard. We concur with the district court that even if the contested

documents were part of the Rawlings' estate, Baskin's cause of action

to recover the documents arose in 1961 and expired, under South Car-

olina law, in 1967. Thus, his attempt to now recover possession of the

documents is time barred. Because Baskin's claim is time barred, and

because the Foundation has waived its claim to possession of the doc-

uments, we affirm the district court's decision as to Count I of the

Second Amended Complaint.

III. COPYRIGHT INFRINGEMENT

In Count II of the Second Amended Complaint, the Foundation

seeks damages and an injunction for the past and prospective infringe-

ment of its copyright in Blood of My Blood. 12 Specifically, the Foun-

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10 Baskin not only admitted this in his interrogatory responses and

deposition testimony, but in paragraph 14 of the Second Amended Com-

plaint, Baskin alleged that, upon Bigham's failure to complete her duties

as literary executrix, the duty passed to him as personal representative of

the estate.

11 In paragraph 15 of the Second Amended Complaint, Baskin alleges

that as personal representative of Rawlings' estate, the right to posses-

sion of all the estate's personal property belonged to him pending the

completion of administration of the estate, yet he did not attempt to

recover these documents while administration of the estate remained

open from 1961 until 1965.

12 Count II is a claim exclusively put forward by the Foundation, as the

sole owner of the copyright.

dation seeks damages for the entire copy of Blood of My Blood

provided by Seajay to Blythe; the partial copy provided by Seajay to

the University of Florida Library; and for Blythe's oral presentation,

which quoted and paraphrased Blood of My Blood , and her attempts

to publish that presentation. The Foundation seeks the injunction

because of alleged threats made by Seajay to disseminate copies of

Blood of My Blood to other archives which maintain collections of

Rawlings' works.

The district court held that the allegedly infringing copies were per-

missible under the fair use exception of 17 U.S.C.A.§ 107. According

to the lower court, Blythe's paper constituted a scholarly appraisal of

Blood of My Blood from a literary and biographical perspective, for

which extensive quoting from a copyrighted work is permissible. As

for her attempts to publish the scholarly criticism, the lower court

found that she understood that the paper would not be published

unless the publisher first obtained the permission of the copyright

holder, and, in fact, her paper never was published. The lower court

found that the complete copy of Blood of My Blood given to Blythe

was permissible since it was provided to prevent damage to the origi-

nal manuscript during the course of her scholarly work. Regarding the

partial copy sent to the University of Florida Library, the district court

found that it was made for the dual purposes of allowing Baskin, or

his designee, to authenticate it and to allow the University of Florida

Press to determine whether it was worthy of publication. The court

also decided that Seajay knew that no publication of the novel would

take place without first obtaining the permission of the copyright

holder.

The claim for injunctive relief is based upon a letter written by Sea-

jay's counsel on September 13, 1989, which the Foundation claims

threatened the dissemination of additional copies of Blood of My

Blood in violation of the Foundation's copyright. The lower court

decided that the alleged threat did not constitute a threat at all. Rather,

the court found that the letter constituted a request by Seajay for per-

mission to copy Blood of My Blood.

A. Claim for Damages

Seajay concedes that the copies it made of Blood of My Blood con-

stitute copyright infringement, unless they are protected by an excep-

tion to the Copyright Act. Seajay argues that its copies are protected

by the fair use exception to copyright infringement found at 17

U.S.C.A. § 107.

"Fair use is a mixed question of law and fact." Harper & Row,

Publishers, Inc. v. Nation Enterprises, 471 U.S. 539, 560 (1985).

Thus, we review the district court's legal conclusions de novo.

American Geophysical Union v. Texaco Inc., 60 F.3d 913, 918 (2d

Cir. 1994). The district court's subsidiary findings of fact are, of

course, subject to a clearly erroneous standard of review. Id.

"Section 106 of the Copyright Act confers a bundle of exclusive

rights to the owner of the copyright," Harper & Row, 471 U.S. at 546;

17 U.S.C.A. § 106 (West 1996 & Supp. 1997), including the "right of

first publication." Salinger v. Random House, Inc., 811 F.2d 90, 95

(2d Cir.), cert. denied, 484 U.S. 890 (1987). Section 107 of the Act

provides an exception to the copyright holder's exclusive rights: "the

fair use of a copyrighted work . . . is not an infringement of copy-

right." 17 U.S.C.A. § 107. "Any individual may reproduce a copy-

righted work for a `fair use'; the copyright owner does not possess the

exclusive right to such a use." Sony Corp. of America v. Universal

City Studios, Inc., 464 U.S. 417, 433 (1984). This fair use exception

permits photocopying of copyrighted material "for purposes such as

criticism, comment, news reporting, teaching (including multiple cop-

ies for classroom use), scholarship, or research."13 17 U.S.C.A. § 107.

Fair use is an "equitable rule of reason," for which "no generally

applicable definition is possible." H.R. Rep. No. 94-1476, at 65

(1976). The statute requires a "case-by-case analysis" to determine

whether a particular use is fair. Campbell v. Acuff-Rose Music, Inc.,

510 U.S. 569, 577 (1994). While Congress has "eschewed a rigid,

bright-line approach to fair use," Sony, 464 U.S. at 448 n.31, it has

set forth four factors to guide a court when deciding whether a partic-

ular use is fair: (1) the purpose and character of the use, including

whether such use is of a commercial nature or is for nonprofit educa-

tional purposes; (2) the nature of the copyrighted work; (3) the

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13 This list of permissible uses is not exhaustive and is not intended to

single out any particular use as presumptively fair. Harper & Row, 471

U.S. at 561.

amount and substantiality of the portion used in relation to the copy-

righted work as a whole; and (4) the effect of the use upon the poten-

tial market for or value of the copyrighted work. 17 U.S.C.A. § 107.

These factors are not exclusive, but are "particularly relevant to the

fair use question." Maxtone-Graham v. Burtchaell, 803 F.2d 1253,

1260 (2d Cir. 1986), cert. denied, 481 U.S. 1059 (1987). These four

statutory factors may not be "treated in isolation, one from another.

All are to be explored, and the results weighed together, in light of

the purposes of copyright." Campbell, 510 U.S. at 578.

i. Character and Purpose

The first factor to be considered is the purpose and character of the

challenged use, including whether such use is of a commercial nature

or is for non-profit educational purposes. 17 U.S.C.A. § 107(1).

a. Character

"The enquiry here may be guided by the examples given in the pre-

amble to § 107, looking to whether the use is for criticism, or com-

ment, or news reporting, and the like . . . . The central purpose of this

inquiry is to see . . . whether the new work merely`supersede[s] the

objects' of the original creation, or instead adds something new, with

a further purpose or different character, altering the first with new

expression, meaning, or message; it asks, in other words, whether and

to what extent the new work is transformative. Although such trans-

formative use is not absolutely necessary for a finding of fair use, the

goal of copyright, to promote science and the arts, is generally fur-

thered by the creation of transformative works. . . . [T]he more trans-

formative the new work, the less will be the significance of other

factors, like commercialism, that may weigh against a finding of fair

use." Campbell, 510 U.S. at 578-79 (citations omitted).

We find that the district court was correct in characterizing

Blythe's paper as "a scholarly appraisal of Blood of My Blood from

a biographical and literary perspective." Baskin v. Seajay Society,

Inc., No. 3:90-1100-0, at 30 (D.S.C. February 5, 1997). A reading of

Blythe's paper clearly indicates that she attempted to shed light on

Rawlings' development as a young author, review the quality of

Blood of My Blood, and comment on the relationship between Rawl-

ings and her mother. The "further purpose" and"different character"

of Blythe's work make it transformative, rather than an attempt to

merely supersede Blood of My Blood.

While it does quote from and paraphrase substantially Blood of My

Blood, its purpose is to criticize and comment on Ms. Rawlings' earli-

est work. Thus, Blythe's transformative paper fits within several of

the permissible uses enumerated in § 107; it has productive uses as

criticism, comment, scholarship, and literary research. While this

finding is not determinative, it is one factor supporting the district

court's finding of a fair use. See Harper & Row , 471 U.S. at 561;

Wright v. Warner Books, Inc., 953 F.2d 731, 736 (2d Cir. 1991)

("[T]here is a strong presumption that factor one favors the defendant

if an allegedly infringing work fits the description of uses described

in section 107.").

b. Purpose

The Foundation contends that Blythe was partially motivated by

prospective royalties from the publication of her scholarly criticism,

and that such commercial motivation negates any scholarly motiva-

tion. Under the fair use doctrine, commercial use of an allegedly

infringing work is more disfavored than noncommercial use. See

Sony, 464 U.S. at 449. Nonetheless, while there is evidence that

Blythe hoped to profit from her paper, this factor alone is not disposi-

tive of the fair use issue. "[T]hough it is a significant factor, whether

the profit element of the fair use calculus affects the ultimate determi-

nation of whether there is a fair use depends on the totality of the fac-

tors considered; it is not itself controlling." Rogers v. Koons, 960 F.2d

301, 309 (2d Cir.) (citation omitted), cert. denied, 506 U.S. 934 (1992).14

_________________________________________________________________

14 "If, indeed, commerciality carried presumptive force against a find-

ing of fairness, the presumption would swallow nearly all of the illustra-

tive uses listed in the preamble paragraph of § 107, including news

reporting, comment, criticism, teaching, scholarship and research, since

these activities are generally conducted for profit in this country.

Campbell, 510 U.S. at 584 (citation and internal quotation omitted)

(emphasis added).

"The crux of the profit/nonprofit distinction is not whether the sole

motive of the use is monetary gain but whether the user stands to

profit from exploitation of the copyrighted material without paying

the customary price." Harper & Row, 471 U.S. at 562. Courts should

also "consider the public benefit resulting from a particular use not-

withstanding the fact that the alleged infringer may gain commer-

cially." Sega Enters. Ltd. v. Accolade, Inc. , 977 F.2d 1510, 1523 (9th

Cir.1992). This public benefit typically involves"the development of

art, science, and industry." Rosemont Enters., Inc. v. Random House,

Inc., 366 F.2d 303, 307 (2d Cir. 1966) (citation omitted), cert. denied,

385 U.S. 1009 (1967).

First, there is no evidence of an exploitative motive in any of the

allegedly infringing uses. There was no commercial motive, much

less an exploitative motive, in the complete copy provided to Blythe.

Her copy was provided in pursuit of her scholarly objective and only

because she might harm the fragile, seventy year old original manu-

script during her analysis. There also was no exploitative motive

underlying the University of Florida Library's partial copy. One of

Seajay's motivations for delivering the copy was to authenticate it as

a work of Ms. Rawlings. Clearly, this was non-commercial and non-

exploitative. The other purpose behind the copy was to assess the

worthiness of Blood of My Blood for publication. While this was

potentially a commercial motivation, there was no risk of exploitation

since Seajay understood that such publication could not take place

without the permission of the copyright holder.

As for Dr. Blythe's paper, there was a potential commercial moti-

vation in that Dr. Blythe may have received royalties if her paper

were published, however, there was no attempt to exploit the Founda-

tion. The paper was only to be published if the necessary permission

were obtained from the copyright holder. Since such permission was

not obtained, the paper was not published and no royalties were ever

received.

Second, all of Seajay's uses unquestionably served the "public ben-

efit" and "the development of art." The Blythe copy was provided by

Seajay to protect the fragile original from damage during a scholarly

literary criticism of the work. The Library copy was provided for

authentication and determination of worthiness for publication, publi-

cation which would not take place without the permission of the

poses of scholarship, criticism, comment, and literary research. All of

these purposes serve the public benefit and aid in the development of

the arts.

Thus, in general, the challenged uses of Blood of My Blood were

for noncommercial, educational purposes. To the extent there was any

commercial motivation behind the uses, there was no attempt to

exploit Blood of My Blood to the detriment of the Foundation.

A subsidiary enquiry to the commercial/non-commercial distinc-

tion is whether the allegedly infringing uses "supplant[ed] the copy-

right holder's commercially valuable right of first publication."

Harper & Row, 471 U.S. at 562. In this case, Seajay's uses of Blood

of My Blood had neither the "intended purpose," nor the "incidental

effect," of usurping the Foundation's right of first publication. See id.

First, there is no evidence that Seajay intended to publish Blood of My

Blood before the Foundation. In fact, all of the evidence indicates that

Seajay sought the Foundation's approval to publish the work, and that

when such approval was not forthcoming, it did not publish Blood of

My Blood.15 Second, Seajay's uses did not have the effect of supplant-

ing a potential publication of Blood of My Blood by the Foundation.

Blythe's copy was seen only by Dr. Blythe as she performed her

scholarly review. The Library's copy was seen only by a representa-

tive of Baskin and representatives of the University of Florida Press.

Blythe's paper was presented only to between 150 and 200 members

of the Rawlings Society, the editor of the Society's Symposium, and

an editor for University of Florida Press. None of these dissemina-

tions of Blood of My Blood was sufficient to support a finding that

Seajay supplanted the Foundations's right of first publication.

For the aforementioned reasons, the purpose and character of Sea-

jay's allegedly infringing uses weigh heavily in favor of finding the

uses fair under 17 U.S.C.A. § 107.

_________________________________________________________________

15 In this case, there was no attempt by the defendant to market the

copyrighted work ahead of an imminent publication by the copyright

holder, as there was in Harper & Row.

ii. Nature of Copyrighted Work

The second statutory consideration is the nature of the copyrighted

work. 17 U.S.C.A. § 107(2). "This factor calls for recognition that

some works are closer to the core of intended protection than others,

with the consequence that fair use is more difficult to establish when

the former works are copied." Campbell, 510 U.S. at 586.

Creative works and unpublished works are closer to the core of

works protected by the Copyright Act. "The law generally recognizes

a greater need to disseminate factual works than works of fiction or

fantasy. . . . [and] [t]he scope of fair use is also narrower with respect

to unpublished works." Harper & Row, 471 U.S. at 563, 564. Because

Blood of My Blood is a creative, unpublished work, the second

enquiry weighs in favor of finding Seajay's use unfair.16

Appellant argues that the unpublished nature of the Blood of My

Blood requires us to reverse the district court. Indeed the Supreme

Court stated that "[u]nder ordinary circumstances, the author's right

to control the first public appearance of his undisseminated expres-

sion will outweigh a claim of fair use." Harper & Row, 471 U.S. at

555. In 1992, however, Congress amended § 107 to state that: "The

fact that a work is unpublished shall not itself bar a finding of fair use

if such finding is made upon consideration of all the above factors."

17 U.S.C.A. § 107.17 Thus, while the fact that Blood of My Blood was

_________________________________________________________________

16 Even though Blood of My Blood can be characterized as autobio-

graphical, it is still a work of creative expression rather than a presenta-

tion of information.

17 Appellants contend that the 1992 amendment to § 107 does not apply

in this case because the action commenced in 1990 and the district court

reached its initial decision in 1991. We disagree. The district court

reopened the case for argument in 1996, received additional evidence as

to Count II at that time, and entered its findings of fact and conclusions

of law in 1997. Thus, the law at the time of the district court's decision

included the 1992 amendment. In any event, prior to the 1992 amend-

ment, the Supreme Court's statement in Harper & Row did not require

a finding of unfair use; it merely militated against a finding of fair use.

We are of the opinion that the district court's decision should be upheld

whether or not the 1992 amendments apply to this case.

unpublished militates against a finding of "fair use," it does not fore-

close a finding that Seajay's use was fair.

Appellant also urges reversal because the dissemination by Seajay

denies the Foundation its power to decide not to publish Blood of My

Blood at all. Harper & Row clearly recognizes that "[t]he right of first

publication encompasses . . . the choice whether to publish at all . . . ."

471 U.S. at 564. The Foundation is correct in its statement that usurp-

ing the copyright holder's privilege to determine whether or not to

publish Blood of My Blood would favor a finding of unfair use. This

argument presupposes, however, that the purpose or effect of the

allegedly infringing uses was to supplant the Foundation's right to

publish Blood of My Blood. As discussed above, we have found that

neither the purpose nor the effect of any of the challenged copies

amounted to a first publication of Blood of My Blood. Thus, we hold

that while the unpublished nature of Blood of My Blood weighs

against a finding of fair use, the allegedly infringing copies have not

stripped from the Foundation its right to determine whether or not to

publish Rawlings' first work at all.

For the aforementioned reasons, the nature of the copyrighted work

weighs in favor of finding Seajay's use to have been unfair under 17

U.S.C.A. § 107.

iii. Amount and Substantiality of Copied Portion

The third statutory factor addresses the amount and substantiality

of the portion copied by the alleged infringer in relation to the copy-

righted work as a whole. 17 U.S.C.A. §107(3)."[T]his factor calls for

thought not only about the quantity of the materials used, but about

their quality and importance, too." Campbell , 510 U.S. at 587. Thus,

this factor has favored copyright holders where a significant percent-

age of the copyrighted work was copied, or where the percentage was

not great, but the copied portion essentially was the "heart" of the

copyrighted work. Wright, 953 F.2d at 738 (citations and internal

quotations omitted).

a. Quality

No evidence was admitted as to the value of the copied material in

relation to the copyrighted work as a whole. We could presume that

because Blythe chose to quote it, the material copied necessarily must

be the "heart of the work," however, we decline to do so. Obviously,

the quoted material is of significant value, or it would not have been

quoted. All quoted material is of significant value, but it cannot be

said to be the "heart of the work" or the fair use doctrine would be

destroyed. See Religious Technology Center v. Lerma, 908 F. Supp.

1362, 1367 (E.D. Va. 1997). If all quoted material were deemed sig-

nificant enough to preclude a fair use just because it was significant

enough to be quoted, no one could ever quote copyrighted material

without fear of being sued for infringement. Thus, we find that the

quoted portions are undoubtedly significant, but fall short of being the

"heart of the work," and thus weighing in favor of a finding of unfair

use.

b. Quantity

"There are no absolute rules as to how much of a copyrighted work

may be copied and still be considered a fair use." Maxtone-Graham,

803 F.2d at 1263. In analyzing this factor, we must consider material

copied from the copyrighted work, whether it has been quoted verba-

tim or paraphrased. Salinger v. Random House, 811 F.2d 90, 97 (2d

Cir. 1987). Copying an entire work weighs against finding a fair use,

Advanced Computer Servs. v. Mai Sys. Corp., 845 F. Supp. 356, 365

(E.D. Va. 1994), however, it does not preclude a finding of fair use.

Id. at 366 (citations omitted). "[T]he extent of permissible copying

varies with the purpose and character of the use." Campbell, 510 U.S.

at 586-87.18

Obviously, the copies of Blood of My Blood provided to Blythe and

the University of Florida Library were qualitatively and quantitatively

substantial. Nonetheless, when the extent of the copying is considered

with the purpose and character of the uses, the amount and substance

of the copies are justified. See Campbell, 510 U.S. at 586-87. In order

for Blythe to perform her scholarly criticism of the novel, she obvi-

ously needed access to either the original or an entire copy. Similarly,

_________________________________________________________________

18 The more material copied directly from a copyrighted work tends to

show a lack of transformative character under the first factor and a

greater likelihood of market harm under the fourth factor. See Campbell,

510 U.S. at 587-88.

in order for the Library to authenticate Blood of My Blood as being

Rawlings' work, to determine whether the work was worthy for publi-

cation, and to obtain the necessary permission from the copyright

holder, it too needed either the original or a nearly complete copy. It

would severely restrict scholarly pursuit, and inhibit the purposes of

the Copyright Act, if a fragile original could not be copied to facilitate

literary criticism. Thus, we find that the amount and substantiality of

the portion of Blood of My Blood copied for Blythe and the Library

did not exceed the amount necessary to accomplish these legitimate

purposes. See Supermarket of Homes, Inc. v. San Fernando Valley

Bd. of Realtors, 786 F.2d 1400, 1409 (9th Cir. 1986).

As to Blythe's paper, she quoted between four and six percent of

Blood of My Blood. In addition, she paraphrased substantially from

the work. As with the copies provided to Blythe and the Library, the

propriety of the amount quoted and paraphrased by Blythe must be

analyzed in consideration of the purpose and character of the alleg-

edly infringing use. Here, Blythe was performing a scholarly criticism

of Rawlings' initial work. It seems apparent that a scholarly criticism

of a book will require the critic to quote and paraphrase from the

work it is analyzing. See Supermarket of Homes , 786 F.2d at 1408

("A common type of `fair use' is quotation of a passage in a book

review."); Robert Stigwood Group Ltd. v. O'Reilly, 346 F. Supp. 376,

385 (D. Conn. 1972) (recognizing that critical review of another's

work can be a fair use and that critics may quote extensively from the

copyrighted work "in order to comment effectively"). Additionally, as

the district court held, the amount quoted by Blythe is well within

allowable limits as found by other courts. See New Era Publications

Int'l, ApS v. Carol Publ'g Group, 904 F.2d 152, 158 (2d Cir.) (fair

use defense available where defendant quoted minuscule amount from

25 works, between 5 and 6 percent of 12 works and 8 percent or more

of 11 short works), cert. denied, 498 U.S. 921 (1990); Maxtone-

Graham, 803 F.2d at 1263 (quoting 4.3 percent of copyrighted work

not incompatible with finding of fair use). Thus, we find that no more

of the text was quoted or paraphrased than was necessary for Blythe

to adequately criticize and comment upon Blood of My Blood.

For the aforementioned reasons, the amount and substantiality of

the portion copied by Seajay weigh in favor of finding the uses fair

under 17 U.S.C.A. § 107.

iv. Market Effect

The final statutory enquiry considers the effect the allegedly

infringing use has upon the market for, or value of, the copyrighted

work. 17 U.S.C.A. § 107(4). This fourth factor"is undoubtedly the

single most important element of fair use." Harper & Row, 471 U.S.

at 566.

a. Impair Marketability

A use that does not materially impair the marketability of the copy-

righted work generally will be deemed fair. Advanced Computer

Services, 845 F. Supp. at 366 (citing Sony , 464 U.S. at 450-51;

Harper & Row, 471 U.S. at 566-67; N.A.D.A. Servs. Corp. v. Business

Data of Virginia, Inc., 651 F. Supp. 44, 48 (E.D. Va. 1986)). The only

evidence presented at trial as to the market effect of the allegedly

infringing uses was that, despite the Blythe presentation and the cop-

ies to Blythe and the Library, the University of Florida Press still

wanted to publish Blood of My Blood. Based on this evidence, the dis-

trict court held that the uses made by Seajay did not diminish the

potential market for, or value of, Blood of My Blood.

This finding of fact was not clearly erroneous. The copy provided

to Blythe was seen only by Blythe; the copy provided to the Univer-

sity of Florida was seen only by Mr. Roger Tarr, an associate of

Baskin, and representatives of University of Florida Press; the presen-

tation by Blythe was seen by between 150 and 200 members of the

Marjorie Kinnan Rawlings Society, the editor of the Society's Sym-

posium, and an editor for the University Press. Thus, it is reasonable

for the district court to have concluded that the allegedly infringing

activities did not have a negative impact on the market for, or value

of, Blood of My Blood. In fact, it is likely that Blythe's presentation

stimulated interest in Blood of My Blood among the Society's mem-

bers and may actually have increased demand for it. See Maxtone-

Graham, 803 F.2d at 1264.

b. Market Substitute

Another key element of the fourth enquiry is whether the allegedly

infringing work is a market substitute for the copyrighted work. As

the Supreme Court stated, "the role of the courts in determining fair

use is to distinguish between `[b]iting criticism [that merely] sup-

presses demand [and] copyright infringement[, which] usurps it.'"

Campbell, 510 U.S. at 592 (quoting Fisher v. Dees, 794 F.2d 432, 438

(9th Cir. 1986)). The fair use doctrine protects against a republication

which offers the copyrighted work "in a secondary packaging," where

"potential customers, having read the secondary work, will no longer

be inclined to purchase again something they have already read." New

Era Publications Int'l, ApS v. Henry Holt & Co., Inc., 695 F. Supp.

1493 (S.D.N.Y. 1988), aff'd, 873 F.2d 576 (2d Cir. 1989), cert.

denied, 493 U.S. 1094 (1990). The doctrine does not protect against

criticism which may have an adverse market effect. Id.

This analysis harkens back to our discussion of§ 107(1). As we

held then, Blythe's paper was transformative; it did not amount to

mere duplication of the original, and did not have the purpose or

effect of supplanting the copyrighted work. It did not serve as a mar-

ket replacement for Blood of My Blood, rather it served as a criticism

of and comment about Blood of My Blood. This holding is reinforced

by the University of Florida Press' willingness to publish Blood of My

Blood despite Blythe's presentation. Accordingly, we hold that since

Blood of My Blood and Blythe's criticism of Blood of My Blood serve

different market functions, Blythe's paper is not a market substitute

for the original work.19

c. Derivative Markets

A final element of the fourth factor is the impact the allegedly

infringing uses may have on the market for derivatives of the copy-

righted work. Harper & Row, 471 U.S. at 568. The market for poten-

tial derivatives includes those uses that the copyright holder of the

original work would develop or license others to develop. Campbell,

510 U.S. at 592. As the Supreme Court declared, however, "there is

_________________________________________________________________

19 We find that, even if widespread, Harper & Row, 471 U.S. at 568,

Blythe's presentation would not have superseded Blood of My Blood's

place in the market. As a scholarly criticism, Blythe's paper is of a dif-

ferent character and delivers a different message than Blood of My Blood.

Thus, it could not be a market substitute for or a competitor with Blood

of My Blood.

no protectible derivative market for criticism." Id. If there were a pro-

tectible derivative market for critical works, copyright holders would

only license to those who would render favorable comment. The

New Era, 695 F. Supp. at 1523 (fair use protection is not "accorded

only to favorable critics"). Thus, Seajay's allegedly infringing uses

could not impact the market for derivatives of Blood of My Blood.

For the aforementioned reasons, the effect Seajay's uses have on

the market for, or value of, Blood of My Blood weighs in favor of

finding the uses fair under 17 U.S.C.A. § 107.

v. Aggregation of Four Factors

An analysis of the four statutory factors leads us to agree with the

district court that Seajay's uses of the original manuscript of Blood of

My Blood were permissible under the "fair use" exception to copy-

right infringement.

B. Claim for Injunctive Relief

The district court held that the alleged threats of illegal duplication

contained in the letter of September 13, 1989 did not constitute threats

at all. Instead, the lower court held that the letter merely requested

permission to publish Blood of My Blood. The court noted that letters

dated January 29, 1990; July 3, 1990; and August 16, 1990 supported

its factual determination. A review of those letters shows ample sup-

port for the district court's factual finding. Accordingly, there was no

threat of future dissemination of Blood of My Blood, and the district

court properly denied the Foundation's request for an injunction.

IV. CONCLUSION

For the reasons contained herein, we affirm the judgment of the

district court.

AFFIRMED

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