Appeals Court Upholds Fair Use Determination in Wilder v. Hoiland
On March 18, 2024, we published a post on the case Wilder v. Hoiland, reporting on the decision made by the U.S. District Court for the Southern District of New York, which ruled in favor of Defendant Sarah Hoiland (“Hoiland”) on a claim of copyright infringement. Disagreeing with the district court’s decision issued on February 1, 2024, Plaintiff Esther Wilder (“Wilder”) appealed the ruling to the U.S. Court of Appeals for the Second Circuit. Wilder argued that the district court erred in granting summary judgment in favor of Hoiland based on her affirmative defense of fair use regarding Wilder’s copyrighted slides. Wilder also disputed the district court's denial of Wilder's motion for summary judgment on the issue of ownership. Hoiland cross-appealed on the lower court's denial of attorney's' fees. After briefing by both parties, the Second Circuit issued an Order affirming the district court's decision.
The central question before the Second Circuit was whether the district court had erred in its analysis of the four factors of fair use. Although Wilder's briefing and arguments and the analysis of the lower court had devoted considerable discussion to the issue of whether Wilder actually owned a copyright in the materials at issue, the Second Circuit seems to have readily accepted for purposes of the appeal that Wilder does own a valid copyright in the materials, stating that "Hoiland's presentation reproduced portions of Wilder's copyrighted work essentially verbatim without giving written credit." (8). The Second Circuit also considered Hoiland’s request for attorney’s fees, concluding that the district court did not err in its interpretation and finding that Hoiland was not entitled to attorney’s fees.
In analyzing the purpose element of the fair use doctrine, the appellate court found that Hoiland’s use of the slides served a different purpose than that of the original work created by Wilder. Wilder had developed the slides to provide instruction on how to create assessment plans that help teachers evaluate their own teaching methods. In contrast, Hoiland used portions of the slides to illustrate best practices and highlight challenges teachers may encounter when assessing students. For this reason, the Second Circuit agreed that the interpretation made by the District Court concerning the first factor of fair use indeed favors Defendant.
Regarding the second factor of fair use, not much needed to be said mainly because Wilder did not dispute that her work was factual in nature—an aspect that weighs in favor of the Defendant.
In analyzing the amount of the copyrighted work used by Hoiland, the court stated that it agreed with the district court but viewed the amount used as likely even smaller than the district court had determined. The Second Circuit advocated that the amount taken should be considered in the context of Wilder’s entire course curriculum, not just the portion that was registered for copyright. The court s that Wilder’s decision to register only the specific module used by Hoiland appeared to be a strategic attempt to strengthen her copyright claim by "narrow[ing] the denominator." (6). The court warned that allowing such a practice could encourage litigants to register only select portions of their work in order to limit fair use, which would undermine the purpose of the doctrine.
Regarding market effect, the Second Circuit agreed with the District Court that any potential harm to Wilder was limited. The court emphasized that, since the slides were presented to a small audience (approximately 20 people), Wilder still had a viable opportunity to benefit from any potential market for the material, including academic benefits such as promotion and tenure. Thus, the Second Circuit found that the District Court’s interpretation of the fourth factor—favoring Hoiland—was also appropriate.
When ruling on Hoiland’s request for attorney’s fees, the Second Circuit agreed with the District Court’s decision to deny the request. The court noted that, under 17 U.S.C. § 505, the awarding of attorney’s fees is discretionary and typically reserved for cases where the losing party has engaged in frivolous or objectively unreasonable litigation. The Second Circuit, aligning with the District Court, found that Wilder’s claims were neither frivolous nor objectively unreasonable. Instead, the court concluded that her claims were brought in good faith and that there was no evidence that such were driven by any improper motive to recover unwarranted statutory damages.
By affirming the District Court’s decision, the Second Circuit brought an end to over three years of litigation between the parties. The case now stands as an important reference point for educators and institutions relying on fair use when distributing copyrighted materials to a limited audience, such as students in a classroom or similar setting. Whether this defense will succeed in future cases, however, will continue to depend on the specific facts and context of each dispute.