"Wanted" Poster Allowed Over Copyright and Defamation Claims
Distribution of photographs of insurance company executives that simulated “fugitive-style” “wanted” posters, “morphed” the faces of the executives into images of Adolph Hitler and Heinrich Himler, and otherwise criticized the commercial practices of the company have been found to be both “fair use” under copyright law and protected speech under California’s “anti-SLAPP” (Strategic Lawsuit Against Public Participation) law.
In Sedgwick Claims Management Services, Inc. v. Delsman, the defendant created his “wanted” posters from photographs borrowed off of the insurance company’s website. He then used the altered photographs on postcards and an Internet blog along with assertions that the company had wrongfully denied benefits to its insureds and violated various laws. The insurance company asserted claims against the defendant on copyright infringement, defamation and related commercial disparagement grounds.
The federal court in the Northern District of California dismissed all of the claims in the action. On the copyright infringement counts, the court found that use of the insurance company’s photographs was clearly within the bounds of the “fair use” exception. The “fair use” defense is assessed by courts through application of a four-part test.
The first element of the “fair use” test looks to the purpose and character of the defendant’s use of the copyright owner’s work. If the purpose of the use is for comment or criticism, it is more likely to be found “fair.” In addition, if the defendant significantly recasts the work, such a change in the character of the work is more likely to come within the “fair use” exception. In determining whether a defendant has sufficiently recast the work to qualify for “fair use,” the courts often look to see whether the defendant’s creation “transforms” the original in some significant manner that alters the context of the original use by the copyright owner – such as by creating a parody using the original work for purposes of social criticism.
If the purpose of the use is non-commercial, the first element of the “fair use” test is also more likely to weigh in favor of the accused. All three of these subsets of the “purpose and character” portion of the fair use test were found to be in the defendant’s favor in the Delsman case.
In relation to the “transformative” nature of the defendant’s use of the photographs, the court noted language from a prior case that had held that even use of an exact copy of a work “may be transformative so long as the copy serves a different function than the original work” and went on to note that “the fair use doctrine is particularly apropos where the use of the work disparages the original.” Here, the use of exact reproductions of the insurance company’s photographs in the context of “wanted” posters was found to be just such a “different function” so that the purpose and character of the usage by the defendant was within the boundaries of “fair use.”
The second and third elements of the “fair use” test look to the nature of the copyrighted work and the amount of that work (quantitatively and qualitatively) that the defendant has appropriated. Although the defendant in Delsman used the entire photographs found on the insurance company’s website to create his “wanted” posters, the court found the second and third factors of the “fair use” test to be “neutral.” The court reached this conclusion by holding that it was reasonable for the defendant to use the entire photograph of each insurance executive in order to recast them into wanted posters, an effect that could not have been attained by significantly cropping or otherwise altering the images.
The fourth “fair use” factor is the effect of the defendant’s use of the work on the value of the original. In this case the court found that the photographs at issue would not lose their commercial value (their re-sale value, licensing value or other commercial demand) due to their use in the defendant’s “wanted” posters. The court went on to find that the defendant’s “wanted” posters were similar to critical theater reviews and other types of criticism that might decrease the market value of a copyrighted work but are “fair” and expected uses of the work.
The court then applied California’s anti-SLAPP law to dismiss the insurance company’s other claims. The anti-SLAPP law gives courts the power to dismiss defamation and similar types of suits if they constitute “non-meritorious litigation meant to chill the valid exercise of the constitutional rights of freedom of speech ... in connection with a public issue.” Since the defendant’s conduct was meant to criticize the insurance company in relation to matters of public concern (such as alleged unlawful and harmful business practices which adversely affected a significant number of people), the court concluded that the insurance company’s defamation claim was unlikely to be successful.
The dismissal of the lawsuit in Delsman is particularly impressive since the defendant represented himself in filing the successful motion and the court did not find it necessary to hold a hearing before rendering its decision. The case is likely to send a strong message to plaintiffs in the California courts that fair use and the anti-SLAPP statute will be liberally applied where a defendant’s purpose is to offer public criticism of commercial enterprises.