## Facts

- Multiple book publishers sued a commercial copy-shop chain that assembled and sold bound course packets to college students.
- The defendant obtained professors’ reading lists, photocopied excerpts from plaintiffs’ copyrighted books, compiled the excerpts into packets, and sold the packets for profit.
- The copying and distribution were done without permission and without paying license fees for the excerpts used.
- The case was tried to the court, which issued findings of fact and conclusions of law on infringement, fair use, defenses, and remedies.

## Issues

1. Whether photocopying and selling excerpts from copyrighted books in course packets for students constitutes fair use under 17 U.S.C. § 107.
2. Whether the publishers’ enforcement of licensing rights for excerpts amounted to copyright misuse.
3. Whether the publishers were estopped from suing due to alleged knowledge of course-packet practices and prior inaction.
4. Whether alleged copyright registration defects barred infringement claims as to certain excerpts.

## Decision

- The court held the defendant liable for copyright infringement and rejected the fair-use defense.
- Applying the four § 107 factors, the court found:
  - the use was commercial and profit-driven, not nonprofit educational use;
  - the works were largely academic and informational, but this did not overcome the commercial character and market harm;
  - the excerpts taken were often substantial and qualitatively important;
  - the copying substituted for sales of books and harmed existing and potential licensing markets.
- The court rejected defenses of copyright misuse and estoppel.
- The court did not accept the registration/jurisdiction objections as a bar to the action as litigated.
- The court awarded statutory damages, attorney’s fees and costs, and injunctive relief against further unauthorized course-packet copying.

## Legal Principles

- Fair use under § 107 requires case-specific balancing of the statutory factors; commercial exploitation weighs strongly against fair use even when the end users are students.
- Copying substantial or “heart of the work” excerpts for course packets tends to weigh against fair use when the packet functions as a substitute for purchasing the original books or for licensed permissions.
- Market effect includes harm to both sales of the copyrighted works and to established or reasonably expected licensing markets for excerpts.
- Copyright misuse is not established merely because a copyright owner seeks to enforce statutory rights through licensing; a defendant must show improper extension of the copyright beyond its lawful scope.
- Estoppel requires conduct reasonably inducing reliance; alleged industry-wide awareness and prior nonenforcement, without more, is insufficient.

## Conclusion

The court concluded that a commercial copy shop’s unlicensed copying and sale of substantial book excerpts in course packets was not fair use and constituted infringement, warranting statutory damages, fees, and an injunction.


Basic Books, Inc. v. Kinko’s Graphics Corp., 758 F. Supp. 1522 (S.D.N.Y. 1991)