Transformative use

In United States copyright law, transformative use or transformation is a type of fair use that builds on a copyrighted work in a different manner or for a different purpose from the original, and thus does not infringe its holder's copyright. Transformation is an important issue in deciding whether a use meets the first factor of the fair use test, and is generally critical for determining whether a use is in fact fair, although no one factor is dispositive.
Transformativeness is a characteristic of such derivative works that makes them transcend, or place in a new light, the underlying works on which they are based. In computer- and Internet-related works, the transformative characteristic of the later work is often that it provides the public with a benefit not previously available to it, which would otherwise remain unavailable. Such transformativeness weighs heavily in a fair use analysis and may excuse what seems a clear copyright infringement from liability.
In United States patent law, the term also refers to a completely unrelated test, that deals with patent eligibility rather than with patent infringement. In re Bilski established that a patent-eligible invention must "transform a particular article into a different state or thing" from what has been discovered in Nature.

Basis

Like most of the modern fair use doctrine, the doctrine of transformation was heavily influenced by the 1841 circuit court case Folsom v. Marsh. In that case, Justice Story ruled that

if thus cites the most important parts of the work, with a view, not to criticize, but to supersede the use of the original work, and substitute the review for it, such a use will be deemed in law a piracy.

The standard of "supersed the use of the original work" would be widely cited as a standard for the degree to which a work was transformative when fair use had become more clearly fixed as a legal principle.
In the Copyright Act of 1976, Congress defined fair use explicitly for the first time, giving as one factor "the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes". This factor was later determined to hinge in substantial part on transformation. See, e.g., Campbell v. Acuff-Rose Music, a case in the United States Supreme Court:

Under the first of the four 107 factors, "the purpose and character of the use, including whether such use is of a commercial nature...," the inquiry focuses on whether the new work merely supersedes the objects of the original creation, or whether and to what extent it is controversially "transformative," altering the original with new expression, meaning, or message. The more transformative the new work, the less will be the significance of other factors, like commercialism, that may weigh against a finding of fair use.

Campbell is important in large part because of this statement, ordering that commerciality should be given less weight in fair-use determinations and transformation great weight.

Application

There is no "bright line test" to determine whether one work supersedes the purpose of another; like the determination of fair use generally, it involves significant judgment calls. However, there is substantial precedent that clarifies the nature of transformation in law.
Generally, use of a work to comment on the work itself somehow will qualify as transformative. Quoting portions of a work to criticize it, as in a book review, is transformative. Likewise, parody is transformative – repurposing a work to mock the work itself or the principles the work represents serves a very different purpose from that of the original work.
Repurposing a work to aid identification of the base work is also generally transformative. In Kelly v. Arriba Soft Corp. and Perfect 10 v. Google, the respective courts held that the creation and use of thumbnails to allow users of a search engine to easily browse through images returned by their search was transformative.
Of course, as noted above, no one factor of fair use is dispositive; all must be considered. Even transformative uses can be infringing, if other factors weigh against the defendant. For example, in Rogers v. Koons transformation was not even cited as the court found the use failed to meet any of the purposes in the preamble of 17 USC § 107. However, in Blanch v. Koons it was ruled that a collage painting including a close representation of a photograph was sufficiently transformative because "compared to Blanch’s original photograph, Koons completely inverted the legs’ orientation, painting them to surreally dangle or float over the other elements of the painting. Koons also changed the coloring and added a heel to one of the feet, which had been completely obscured in Blanch's photograph."

Examples

''Campbell''

Transformativeness is a crucial factor in current legal analysis of derivative works largely as a result of the Supreme Court's 1994 decision in Campbell v. Acuff-Rose Music, Inc. The Court's opinion emphasized the importance of transformativeness in its fair use analysis of the accused infringers' parody of "Oh, Pretty Woman," which the case involved. In parody, as the Court explained, the transformativeness is the new insight that readers, listeners, or viewers gain from the parodic treatment of the original work. As the Court pointed out, the words of the parody "derisively demonstrat how bland and banal the Orbison song" is.

Leval article

The modern emphasis of transformativeness in fair use analysis stems from a 1990 article by Judge Pierre N. Leval in the Harvard Law Review, Toward a Fair Use Standard, which the Supreme Court quoted and cited extensively in its Campbell opinion. In his article, Judge Leval explained the social importance of transformative use of another's work and what justifies such a taking:

''Arriba Soft'', ''Perfect 10'', and ''Authors Guild''

The concept of transformativeness initially developed in relation to fair use of traditional works: translations of literary works, adaptations of musical works, and changes of medium for pictorial works. But in the 21st century, courts have also applied the "in a different manner or for a different purpose" rationale in Internet and computer-related works. In such cases, as illustrated by Kelly v. Arriba Soft Corporation ''Perfect 10, Inc. v. Amazon.com, Inc., and Authors Guild, Inc. v. Google, Inc.'', the courts find a derivative-work use or a copy of text transformative because it provides an added benefit to the public, which was not previously available and might remain unavailable without the derivative or secondary use.

Ninth Circuit decisions

The Ninth Circuit explained this in the Perfect 10 case:

Google's use of thumbnails is highly transformative. In Kelly we concluded that Arriba's use of thumbnails was transformative because "Arriba's use of the images served a different function than Kelly's use—improving access to information on the Internet versus artistic expression." Although an image may have been created originally to serve an entertainment, aesthetic, or informative function, a search engine transforms the image into a pointer directing a user to a source of information. Just as a "parody has an obvious claim to transformative value" because "it can provide social benefit, by shedding light on an earlier work, and, in the process, creating a new one," a search engine provides social benefit by incorporating an original work into a new work, namely, an electronic reference tool. Indeed, a search engine may be more transformative than a parody because a search engine provides an entirely new use for the original work, while a parody typically has the same entertainment purpose as the original work.

Given the fact that the use was highly transformative, the court turned to the issue of striking a balance between the value to the public of the transformative use and the degree to which Google's use was commercial and superseded that of the author. It concluded that it was obliged to strike a balance:

In conducting our case-specific analysis of fair use in light of the purposes of copyright, we must weigh Google's superseding and commercial uses of thumbnail images against Google's significant transformative use, as well as the extent to which Google's search engine promotes the purposes of copyright and serves the interests of the public. Although the district court acknowledged the "truism that search engines such as Google Image Search provide great value to the public," the district court did not expressly consider whether this value outweighed the significance of Google's superseding use or the commercial nature of Google's use. The Supreme Court, however, has directed us to be mindful of the extent to which a use promotes the purposes of copyright and serves the interests of the public.

It then concluded that the public benefit had the greater weight here:

We conclude that the significantly transformative nature of Google's search engine, particularly in light of its public benefit, outweighs Google's superseding and commercial uses of the thumbnails in this case.. . . We are also mindful of the Supreme Court's direction that "the more transformative the new work, the less will be the significance of other factors, like commercialism, that may weigh against a finding of fair use.

The Ninth Circuit's treatment of transformativeness and fair use in the Arriba Soft and Perfect 10 cases illustrates different data points on the copyright infringement spectrum, at least with respect to transformativeness and fair use. Arriba Soft was a relatively polar case. The harm to Kelly, the copyright owner, was negligible; it was hardly more than his hurt feelings. Thus, the Ninth Circuit said in its opinion that "Arriba's creation and use of the thumbnails does not harm the market for or value of Kelly's images." On the other hand, the court found that Arriba's use benefited the public: "Arriba's use of the images serves a different function than Kelly' s use—improving access to information on the internet versus artistic expression." The balance thus tilted strongly in Arriba's favor. This led the Ninth Circuit to be the first court to make the equation highly beneficial to public = transformative, and as the Supreme Court explained in Campbell, the more transformative a derivative use the more likely the use is to be a fair use.
The Campbell Court recognized that the balance may not always be one-sided, as it was in Campbell itself and in Arriba Soft. In the Perfect 10 case the interests were more evenly balanced, for the first time in a derivative work case involving new information technology. Both Google and Perfect 10 seemed to have legitimate interests at stake and support for their respective positions. Thus, there was a finding that "Google's wide-ranging use of thumbnails is highly transformative: their creation and display is designed to, and does, display visual search results quickly and efficiently to users of Google Image Search." But Google's use had some commercial aspects and was claimed to impair P10's commercial interests. Yet, on balance the Ninth Circuit found that the transformativeness outweighed the other fair use factors because "Google has provided a significant benefit to the public" in facilitating image searches by means of thumbnail images.