We continue with the second subtype of statutory fair use. Among the situations covered under the second subtype of statutory fair use (i.e., those situations that must additionally pass the general (or common law) fair use’ four factors test) is when the work is used (1) by or under the direction or control of the Government, by the National Library, or (2) by educational, scientific or professional institutions where such use is in the public interest and is compatible with fair use.

As to the first, under a regime of property rights, IP included, the government is not exempted from securing the copyright holder’s consent when it intends to use a copyrighted work by another. For instance, the fact that a work appears in a government work (say, an artwork that has been commissioned to grace the cover of a government agency’s year-end publication where the copyright is not otherwise assigned) does not authorize another agency to reproduce the same artwork without the commissioned artist’s consent.

On the other hand, the second, the IPO has explained that educational or scientific institutions could either be non-stock, non-profit, or proprietary (or stock), and a scientific institution can include a foundation. This reminds me of OpenAI’s ongoing legal battles in the US that essentially accused the ChatGPT creator of copyright infringement because of its unauthorized reproduction of tons of copyrighted works to train its bots and learn from them. As to the requirement of public interest, OpenAI’s Charter prominently provides that “OpenAI’s mission is to ensure that artificial general intelligence — by which we mean highly autonomous systems that outperform humans at most economically valuable work — benefits all of humanity.”

Arguably, this may be invoked as justification if a similar suit is brought before our own courts that public interest is present in OpenAI’s reproduction (or any other exercise of the copyright holder’s rights) of the works.

As to the second requirement of complying with general (common law) fair use, the four factors here are: (1) purpose and character of the use, including whether such use is commercial or is for non-profit educational purposes; (2) nature of the copyrighted work; (3) amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) effect of the use upon the potential market for or value of the copyrighted work.

Among the four, foreign jurisprudence on fair use has given significant attention to the first factor. This is because while under our own IP Code, the right to make “other transformation of the work” is one of the economic rights of the copyright holder, the first factor recognizes that when a work is not simply transformed but rather the use of such work has been “transformative,” then such finding would have a positively significant influence on a finding of fair use. Since copyright’s objective is to further the expansion and distribution of public knowledge, “transformative” use’s deviation from the purpose of the original work and/or the resulting expansion of the original work’s utility would further serve such objective.

While legislative measures exist to bolster the country’s opportunities to maximize the socio-economic benefits of emerging technologies, including artificial intelligence, only time can tell whether the current IP legal regime can sufficiently accommodate the competing interests of content creators and those who use their copyrighted works under the flexibility of IP’s fair use mechanism.

 

For more of Dean Nilo Divina’s legal tidbits, please visit www.divinalaw.com. For comments and questions, please send an email to cabdo@divinalaw.com.