Advanced Copyright Law on the Internet

premises of establishments referred to in paragraph 2(c) of [Article 5(2)] of works

and other subject-matter not subject to purchase or licensing terms which are

contained in their collections;

(o) use in certain other cases of minor importance where exceptions or limitations

already exist under national law, provided that they only concern analogue uses

and do not affect the free circulation of goods and services within the Community,

without prejudice to the other exceptions and limitations contained in this Article.

Note that, unlike many of the exceptions of Article 5(2), the exceptions of Article 5(3)
are not conditioned upon fair compensation to the rightholders.

6. Peer-to-Peer File Sharing

(a) BMG Music v. Gonzalez

In BMG Music v. Gonzalez,^293 defendant Cecilia Gonzalez sought to defend her
downloading of more than 1370 copyrighted songs through the Kazaa file-sharing network by
arguing that her actions should fall under the fair use doctrine on the theory that she was just
sampling the music to determine what she liked sufficiently to buy at retail.^294 The Seventh
Circuit rejected this argument out of hand. Focusing principally on the fourth fair use factor –
the effect of the use upon the potential market for or value of the copyrighted work – Judge
Easterbrook noted that as file sharing had increased over the last four years, sales of recorded
music had dropped by approximately 30%. Although other economic factors may have
contributed, he noted that the events were likely related.^295

He further noted that rights holders had economic interests beyond selling compact discs
containing collections of works – specifically, there was also a market in ways to introduce
potential consumers to music. Noting that many radio stations stream their content over the
Internet, paying a fee for the right to do so, he noted that Gonzalez could have listened to
streaming music to sample songs for purchase, and had she done so, the rights holders would
have received royalties from the broadcasters.^296 Rejecting the proffered fair use defense, Judge
Easterbrook stated, “Copyright law lets authors make their own decisions about how best to
promote their works; copiers such as Gonzalez cannot ask courts (and juries) to second-guess the
market and call wholesale copying ‘fair use’ if they think that authors err in understanding their
own economic interests or that Congress erred in granting authors the rights in the copyright
statute.”^297

(^293) 430 F.3d 999 (7th Cir. 2005).
(^294) Id. at 889-90.
(^295) Id. at 890.
(^296) Id. at 891.
(^297) Id.