After a defendant won summary judgment in a copyright infringement case on the argument that it's use of the original material was a fair use, the plaintiff filed an appeal. The basis of the appeal was that the infringing work was not transformative enough of the original work to qualify for the fair use defense. The Court of Appeals reversed the lower court and reinstated the case.
Fair use requires adequate transformation of the original work. The factors that determine fair use are (1) the purpose and character of the use, including whether the use is of a commercial nature or is for nonprofit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work.
Although a commercial use is not considered presumptively unfair, the commercial nature of the work remains an element. Since the use was commercial, winning on the second and third factors requires having a new expression, meaning, or message. The court found that since a significant portion of the original work was copied, there was no significant transformation.
Why This is Important . . . A better practice here would have been to get a license. A commercial use requires a significant transformation from the original. If that cannot happen, publishing without licensing can be a real problem.