THE FUTURE

While insurers, film-makers, academics, and attorneys have all expressed optimism for the future of fair use in the documentary field, especially since the insurers have become a more permissive gatekeeper, they also concur that it is too soon to foretell the degree to which documentarian’s invocations of fair use will resolve their clearance issues.⁴⁷⁵ However, the players have flagged several key areas of uncertainty, and in some instances have been comfortable with making predictions.⁴⁷⁶ These areas of uncertainty include the response of copyright holders, the thorny areas of music clearance and archival footage clearance, the receptivity of third parties, such as distributors and broadcasters, to fair use assertions already vouched for by insurers and copyright counsel, and the potential for moral hazard when copying is protected by insurance.⁴⁷⁷

A. THE RESPONSE FROM COPYRIGHT OWNERS

A year after the insurer fair use was announced, copyright holders have remained silent litigation-wise with respect to fair use and documentaries.⁴⁷⁸ Anthony Falzone suggested that the silence may owe

475 See, e.g., Telephone Interview with Michelle Tillton, supra note 294.

476 See Telephone Interview with Michael Donaldson, supra note 73.

477 See Telephone Interview with Lieb Dodell, supra note 282; Telephone Interview with Ken Goldstein, supra note 294; Telephone Interview with Anthony Falzone, supra note 313; Telephone Interview with Michelle Tillton, supra note 294.

478See Telephone Interview with Michael Donaldson, supra note 73;

Telephone Interview with Lieb Dodell, supra note 282; Telephone Interview with Ken Goldstein, supra note 294; Telephone Interview with Anthony Falzone, supra note 313; Telephone Interview with Michelle Tillton, supra note 294. Some studio executives however, vented their frustration in the press in 2006, following the Independent Film Channel’s acceptance of fair use for a clip-driven documentary about “road movies” called “Wanderlust.” The clips requested from the studios exceeded the budget by over $150,000. Representing the producers, Michael

something to publicity and momentum, specifically with respect to documentarians new-found boldness in asserting fair use, and the speed with which insurers stepped up to support them.⁴⁷⁹ As Falzone explains,

“Owners’ counsel’s attention has been attracted to this assertion of a strong positive law basis for fair use, and sense they can no longer bully a film-maker with cease and desist letters as easily.”⁴⁸⁰ Michael Donaldson believes that after twenty years of education and experience, rights holders, movie studios in particular, “get it now,” and have come to understand fair use in the documentary context knowing when they can sue for infringement.⁴⁸¹ Moreover, now that insurers are visibly on the film-makers side, in the wake of the probability of being met with a strong defense, owners are gun-shy of losing.⁴⁸²

Ken Goldstein of Chubb took the sympathetic view of copyright holders in a fair use scenario.⁴⁸³ Goldstein pointed out that they perceive the use as the loss of a valuable revenue stream, but he agreed that an owner, faced with a legitimate fair use assertion, if furnished with an authoritative explanation of why the law would favor the use, might be relieved to be spared the burden of litigation.⁴⁸⁴ Leib Dodell of Media/Professional, who like the other insurers represents owners as well Donaldson offered a deal, a token license for $1,000 a title, or else the film-makers would invoke fair use. 13 of the 18 copyright holders accepted the offer. James Velaise, right’s holder for Jean-Luc Godard’s “Breathless,” and one of the 13 who capitulated, called Donaldson’s offer “blackmail,” the deployment of fair use a

“dishonest” ploy to save money, and the use tantamount to stealing. Another un-named executive said “If someone can’t afford a Mercedes, that doesn’t mean he can’t drive,” suggesting documentarians should find cheap substitutes if they cannot pay for a license. Dutka, supra note 94, at 16 (see also Correction, N.Y.TIMES, June 4, 2006, § 2, at 8).

479 Telephone Interview with Anthony Falzone, supra note 313.

480 Id.

481 Telephone Interview with Michael Donaldson, supra note 73.

482 Id.

483 Telephone Interview with Ken Goldstein, supra note 294.

484 Id.

as users, stated that he has conveyed to owners that the fair use endorsement will ultimately benefit them as well, by sparing them needless litigation headaches.⁴⁸⁵ Pat Aufderheide believes that the Statement can be a litigation tool for owners in infringement suits, as they can point to a defendant’s departure from its dictates as prima facie evidence that the use was unfair.⁴⁸⁶

Michelle Tillton of First Media elaborated on this point.⁴⁸⁷ Because the four factors cut both ways, potential owner/plaintiffs now have a heightened awareness of litigation costs and the possibility of a court defeat.⁴⁸⁸ She agreed that since an adverse fair use court decision could create precedent that hurts owners in future litigation, that they will choose their legal battles carefully rather than reflexively firing off cease-and-desist letters.⁴⁸⁹ Tillton also opined that the zeitgeist and box-office success of Michael Moore’s “Fahrenheit 911" have made owners, as aware as the public at large, of the social value of documentaries.⁴⁹⁰ Finally, she believes that policing copyright violations on the internet has kept the content industry sufficiently preoccupied so as to make documentarians fair use assertions a lesser concern.⁴⁹¹

485 Telephone Interview with Lieb Dodell, supra note 282.

486 Pat Aufderheide, Remarks at the I.F.P. Fair Use Summit, supra note 399.

487 Telephone Interview with Michelle Tillton, supra note 347.

488 Id.

489 Id.

490 Id.

491 Id. All of the insurers interviewed agreed with Eric Brass, general counsel of Boston public television outlet GBH’s observation that compared to the free-for-all on the internet, documentarians look like responsible users, from a copyright owner’s point of view. See Telephone Interview with Debra Kozee, supra note 289; Telephone Interview with Paul Paray, supra note 294; Telephone Interview with Ken Goldstein, supra note 296; Telephone Interview with Michelle Tillton, supra note 294.

B. MUSIC

Music presents a more difficult fair use analysis than film clips or incidental captured material because it is harder to distinguish between transformative use and mere use as soundtrack.⁴⁹² While fair use assertion by the producers of “Hip-Hop: Beyond Beats and Rhymes” went unchallenged by music rights holders, one documentarian called music “the next [fair use] frontier (clips being a settled issue).”⁴⁹³ Michelle Tillton of First Media stated pithily, “music always sucks.”⁴⁹⁴

Donaldson and Falzone are comfortable in asserting that a film-maker who comports with the Statement’s music guidelines are exercising a legitimate use.⁴⁹⁵ Falzone, noting that there have been no challenges to documentarians’ fair use of music recently, says that since the same four-factor analysis in cases involving clips controls, then provided the film-maker is properly guided by counsel through the editing process, he would have no hesitation about defending a music-based fair use assertion.⁴⁹⁶ Michael Donaldson seconded this statement, saying “music appropriation is now settled.”⁴⁹⁷ He qualified this belief by stating that what he calls “third-party music,” or music not composed for the original film appearing in a film-clip that has been otherwise properly licensed is still unsettled, and an area where he would like to see some cases create certainty.⁴⁹⁸

492 Michael Donaldson, Remarks at I.F.P. Fair Use Summit, supra note 232.

493 See supra text accompanying notes 396-400; David Van Taylor, Film-maker, Remarks at I.F.P. Fair Use Summit (Sept. 21, 2007). (AUTHOR QUESTION)

494 Telephone Interview with Michael Donaldson, supra note 73.

495 Id.; Falzone Interview, supra note 313.

496 Falzone Interview, supra note 313.

497 Such is the authority of the Statement; this marks a reversal from Donaldson’s earlier advice to film-makers that all music must be cleared.

D^ONALDSON, supra note 145, at 118.

498 Telephone Interview with Michael Donaldson, supra note 73.

C. ARCHIVE FOOTAGE

Michael Donaldson is wary of one fair use arena that is archival footage.⁴⁹⁹ This is an area where film-makers have had considerable difficulties in securing affordable licenses, and often crucial to the purpose of a historical documentary.⁵⁰⁰ He characterized the depiction of archive houses as monopolistic in “Untold Stories” as greedy as unfair, pointing out that acquisition, digitization, cataloging, preservation, and storage of this often fragile film is extremely expensive, and moreover, is often licensed by the archive owner as well.⁵⁰¹ His advice to film-makers is if they cannot afford a license for archival film, get a suitable substitute elsewhere rather than taking it under fair use, as the Statement provides.⁵⁰² On the other hand, Pat Aufderheide believes that archive houses have responded positively to the Statement on account of its clarity, and that the houses’ litigation posture has diminished since its appearance.⁵⁰³

D. THE RESPONSE OF DOWNSTREAM DISTRIBUTORS

An insurer signing off on a documentary’s fair use of copyrighted material does not guarantee that a distributor will follow.⁵⁰⁴ Because the big commercial players, studios, cable and broadcast networks will continue to unthinkingly pay top dollar for clearance, this precedent of industry custom and practice will always be available for a litigation-shy distributor to point to when it acquires a documentary.⁵⁰⁵ The president of one documentary production company, whose work is largely aired on

499 Id.

500 Id.

501 Id.

502 Id.

503 Pat Aufderheide at IFP Fair Use Summit, Panel Discussion (Sept. 21, 2007).

504 Id.

505 See Marques, supra note 124, at 353.

cable, believes that the only arena the post-Statement activity has created a fair use safe harbor for are clip-driven films about cultural artifacts.⁵⁰⁶ For anything less on point, distributors may still balk at a fair use assertion despite available coverage.⁵⁰⁷ She explained that in work-for-hire situations, especially in cable or broadcast television, while immediate supervisors may be happy with vetted fair use assertions, corporate resistance at the top still exists.⁵⁰⁸ This resistance will clearly need to be eroded on a company-by-company basis over time, as fair use assertions become more frequent and gain credibility.⁵⁰⁹

E. MORAL HAZARD

The doctrine of moral hazard posits that the presence of insurance creates disincentives on the part of the insured to avoid risk, knowing the insurer is there to pay the bill.⁵¹⁰ Insurers and attorneys all acknowledged the potential for moral hazard where fair use is covered, in that film-makers at the very least might not go the extra mile to acquire a license, or would just take copyrighted material without thinking.⁵¹¹ However, all of them qualified this concern as well.⁵¹²

Paul Paray, formerly of AIG, was conscious of a moral hazard problem and indeed his company had been hit with bad claims once on an

506 Lesli Klainberg, Orchard Films, at IFP Fair Use Summit (9/21/07)

507 Id.

508 Id.

509 Even Eric Brass of public television network GBH, the outlet responsible for producing the majority of documentaries on PBS, and a long-time champion of fair use, believed that while the Statement was valid, even “great,” GBH did not adopt it because of the fourth principle’s contention that historically important copyrighted material may be taken if a license is too expensive or denied for other reasons; he believed this posture was not doctrinally correct. Interview with Eric Brass, GBH-TV, (Sep. 21, 2007).

510 BLACK’S LAW DICTIONARY 719 (6th ed. 1990).

511 See, e.g., Telephone Interview with Michael Donaldson, supra note 73.

512 See, e.g., Telephone Interview with Michael Donaldson, supra note 73.

independent film when a film-maker/insured relied on insurance while surreptitiously not clearing some footage.⁵¹³ Paray said this case did not involve a documentarian, and that he believed non-fiction film-makers operate in good faith and only opt for fair use when they have no other choice.⁵¹⁴ Calling them consistently responsible actors, he made it understood that moral hazard and malicious usage only surfaced in commercial fiction feature films.⁵¹⁵ Michelle Tillton of First Media’s worst-case moral hazard scenario is that a documentarian will represent on her application that she received all permissions, a policy will be issued, and then it turns out no permission existed.⁵¹⁶ This scenario remains hypothetical, and given First Media’s directive to their insured on having counsel vet the film, it will likely remain unrealized.⁵¹⁷ She also expressed that the danger of loss of the film to injunction would keep film-makers honest, and only extraordinary ignorance and a complete lack of guidance by counsel and insurer could ever allow this to happen.⁵¹⁸

VIII. CONCLUSION: A NEW TYPE OF REGULATORY INSURER,