[00:00:03] Speaker 00:
And then the last case of the day is IDIG Texas versus Krieger, 235046.

[00:00:19] Speaker 04:
Good morning, Your Honors, and may it please the Court.

[00:00:22] Speaker 04:
My name is Evan Talley from the law firm Dunlap Cotting in Oklahoma City.

[00:00:25] Speaker 04:
I represent the appellants in this case, Craigor Services, LLC, and Kerry Craigor, and to the extent I have it, I'd like to reserve two minutes for rebuttal.

[00:00:35] Speaker 04:
We are here today on the District Court, which is the Northern District of Oklahoma, granted summary judgment in favor of the appellees, IDIG Texas on the appellants' claims for copyright infringement and Lanham Act violations.

[00:00:50] Speaker 04:
Specifically, we are here today because it is the appellants' position that the District Court

[00:00:55] Speaker 04:
in misapplying the fair use factors under the copyright code 17 USC 107, and by inappropriately weighing evidence and resolving inferences and issues to be taken from that evidence in favor of the movement appellees on Crager Services Land and Max claims.

[00:01:14] Speaker 04:
We'd like to focus first on the copyright issues.

[00:01:17] Speaker 04:
This does raise several new issues, one of which is a first impression for this court or for this circuit.

[00:01:25] Speaker 04:
That's going to be the issue of comparative advertising that the district court pulled from the bodies of law of the Ninth Circuit and the Fifth Circuit and adopted and applied in this case.

[00:01:36] Speaker 04:
And so in doing so, the district court applied that comparative advertising regime in analyzing the first fair use factor, which is the purpose and character of the use of the allegedly infringing use.

[00:01:50] Speaker 04:
It is our position that

[00:01:52] Speaker 04:
The comparative advertising has no place in copyright law.

[00:01:57] Speaker 04:
It is a regime that has been adopted in unfair competition, and trademark law is specifically called for by the statute under the trademark code as an example of fair use.

[00:02:10] Speaker 04:
In the trademark context, it is providing information using a source identifier of two companies, Nike and Reebok, and providing data, say,

[00:02:19] Speaker 04:
8 out of 10 customers prefer the structure and fit of Nike over Reebok, right?

[00:02:24] Speaker 04:
I'm using the trademark, I'm using the source identifier of Reebok and comparing the two, but I'm not assuming that the data is correct.

[00:02:31] Speaker 04:
I'm not making something up.

[00:02:34] Speaker 04:
In the copyright context, and that's what unfair competition is all about, is about protecting goodwill, right, and protecting those source identifiers.

[00:02:43] Speaker 04:
Copyright law is about protecting creativity for artistic works and expression.

[00:02:48] Speaker 04:
And in allowing a quote unquote fair use in order to compare products, which we have the position that there wasn't even really a comparison of products done here, we are undermining what the copyright code is all about.

[00:03:02] Speaker 04:
Copyright is about research, creativity, scholarship, comment, news reporting, none of which there's no mention in the fair use statute or in the fair use case law about allowing and infringing use to comparatively advertise.

[00:03:17] Speaker 04:
And it is the appellant's position that the district court erred in adopting that regime, specifically in its analysis of fair use factor number one.

[00:03:28] Speaker 04:
Even if this court does go along with the district court in the Ninth and Fifth Circuit's adoption of that comparative advertising regime, this appellant's position that it was wrongfully applied here, the district court took

[00:03:45] Speaker 04:
analyze two different cases, 109th Circuit case, Sony v. Blaine, which we have addressed throughout this section of our briefing, and a 5th Circuit case, Triangle Publications.

[00:03:54] Speaker 04:
And what those cases and the subsequent case law is clear is that in a comparative advertising context, the amount that may be taken for fair use is only that which is reasonably necessary to achieve the goal that is stated.

[00:04:08] Speaker 04:
Here, that goal was to provide the consuming public with information that a post driver, which is an implement that is attached to a skid steer, we're dealing with heavy machinery and equipment here.

[00:04:19] Speaker 04:
First time I've ever been involved with this machinery.

[00:04:22] Speaker 04:
And we've learned a lot about different implements, but we're dealing about post drivers.

[00:04:26] Speaker 04:
But the stated purpose from IDIG Texas in comparatively advertising these products was to put the public on notice that the post driver that is sold by appellants originates in China.

[00:04:38] Speaker 04:
not in America.

[00:04:41] Speaker 04:
In order to accomplish that purpose, the appellees admittedly right-clicked and copied an image from a Craigslist post of my client, did not alter it, and incorporated it into its own advertisements to say that this product did not originate in the United States.

[00:04:59] Speaker 04:
Nowhere in those copyrighted works, which are two images, is there anything that says this product originates in Montana.

[00:05:05] Speaker 04:
It's called a Montana post driver.

[00:05:06] Speaker 04:
There's nothing that says this product originates in Montana.

[00:05:09] Speaker 04:
There's nothing that says this product does not originate in China.

[00:05:12] Speaker 04:
There's nothing like that.

[00:05:13] Speaker 04:
It's just a picture of this implement or stacks of implements on pallets sitting in a warehouse.

[00:05:18] Speaker 04:
That's all it is.

[00:05:19] Speaker 04:
There's nothing about using that image of itself that accomplishes the stated goal.

[00:05:24] Speaker 02:
To call the product to mind.

[00:05:27] Speaker 02:
so you can then criticize it?

[00:05:30] Speaker 04:
Sure, and I'm willing to acknowledge that, that actually taking a Montana post driver, right, some image of a Montana post driver may have accomplished the goal, that it calls it to mind and says, hey, look at this product, it's made in China.

[00:05:46] Speaker 04:
We're selling one that, you know, as a matter of fact, is substantially made in the United States, where pieces of it are made in China, whole other issue.

[00:05:54] Speaker 04:
The problem is, is that

[00:05:56] Speaker 04:
the appellees did not have to take the copyrighted works to do that.

[00:06:00] Speaker 04:
And how do we know that?

[00:06:00] Speaker 04:
We know that because the appellees on its own website, at a time that it sold the Montana Post Driver, the exact same product that we're talking about here that my client sold, I think Texas at one time sold it itself.

[00:06:12] Speaker 04:
And on the opening page of its website, the background image was a stack of its own Montana Post Drivers that it sold at one time.

[00:06:22] Speaker 04:
That's at appendix site 165.

[00:06:25] Speaker 04:
Other information, we've also taken the position that, okay, well, to the extent that they were no longer selling Montana Post drivers and didn't want to go take pictures or didn't have any more at their shop, they could have gone elsewhere.

[00:06:38] Speaker 04:
They could have purchased their own, then taken a picture of it and accomplished that goal of saying, look, we bought this product, it's from China, it's shoddy, whatever the state of objective is.

[00:06:48] Speaker 04:
And we know that that could happen because at appendix site 976, there's an example of a Craigslist post

[00:06:54] Speaker 04:
in which IDIC Texas took its own picture of a Montana post driver sold by one of our vendors at our vendor's lot, and then IDIC Texas incorporated it into its Craigslist post.

[00:07:06] Speaker 04:
It had at least two other means of accomplishing this goal, and did not need to right-click copy and not alter the copyrighted images.

[00:07:14] Speaker 04:
And as the Supreme Court resoundingly affirmed in 2021 in the Google v. Oracle case,

[00:07:24] Speaker 04:
Fair use factor number one, to the extent there is a comparative advertising problem, it is only that which is reasonably necessary to do so.

[00:07:31] Speaker 04:
It is our position that it was not necessary at all to use the Copyright Works.

[00:07:36] Speaker 04:
Factors two and three in the fair use.

[00:07:39] Speaker 01:
Sir, could you move on to factor four, the market effects?

[00:07:45] Speaker 04:
Absolutely.

[00:07:47] Speaker 04:
Factor four has been called the most important factor in the fair use analysis.

[00:07:51] Speaker 04:
Factor one is a weighty factor as well, and it seems to get quite a bit of attention.

[00:07:56] Speaker 04:
It needed attention here because we had those two doctrines going on.

[00:07:58] Speaker 04:
But factor four was really the next one I wanted to discuss.

[00:08:03] Speaker 04:
It is appellate's position that the district court fundamentally erred in misapplying the standard.

[00:08:09] Speaker 04:
There is actually a statement, I believe it's at Piddick site 1020, where the district court says that in the Campbell case, the Supreme Court expressly rejected a presumption

[00:08:21] Speaker 04:
in instances of mere duplication.

[00:08:24] Speaker 04:
Campbell actually says the exact opposite, that it recognizes that there still is a presumption in cases of mere duplication.

[00:08:32] Speaker 04:
Campbell was about something else.

[00:08:33] Speaker 04:
It was about parity.

[00:08:35] Speaker 04:
And it was saying, we're not going to recognize a presumption in those cases.

[00:08:38] Speaker 02:
Even if we agree with you on that,

[00:08:41] Speaker 02:
You still have to show us that the infringement was to supplant your copyrighted image as opposed for some other reason like criticism of the product depicted in your copyrighted image, right?

[00:09:01] Speaker 04:
So are we talking about supplanting of the market for the copyrighted image?

[00:09:06] Speaker 02:
Yes.

[00:09:06] Speaker 04:
The factor is actually the market of the potential.

[00:09:09] Speaker 04:
or the supplanting of the potential.

[00:09:11] Speaker 02:
Well, either way, we're talking about the market for the picture of the post drivers.

[00:09:17] Speaker 04:
Sure.

[00:09:17] Speaker 02:
Not of the post drivers.

[00:09:20] Speaker 04:
Not of the post driver's self, but of the images of the post driver.

[00:09:23] Speaker 04:
Yes.

[00:09:24] Speaker 04:
I understand the distinction.

[00:09:25] Speaker 02:
And I don't see any, I mean, is there any evidence that the potential or actual market for

[00:09:35] Speaker 02:
The image of those post drivers was affected by the, you know, made in China stuff on the image.

[00:09:44] Speaker 04:
Appellants have not presented any evidence that the market for the pictures has actually been affected, that there is actual effect.

[00:09:51] Speaker 04:
Our position is that, too, or two points here, that it is the burden of the defendant, because this is an affirmative defense, to come forward with evidence that the market, that the potential market has not and will not be affected.

[00:10:03] Speaker 04:
That's what the case law says.

[00:10:04] Speaker 04:
Also, of course, we believe that the presumption should have been applied here in cases of mere duplication.

[00:10:09] Speaker 04:
But admittedly, my clients never sold or never licensed, never assigned the images, the copyrighted works.

[00:10:17] Speaker 04:
They only use them to incorporate into their own advertising.

[00:10:21] Speaker 04:
There is no evidence in the record that the images have actually supplanted the market for our images.

[00:10:28] Speaker 04:
What there is evidence of is declining sales.

[00:10:31] Speaker 02:
And that the replacement of... But it's declining sales of your post driver.

[00:10:35] Speaker 04:
It is of the post driver, Your Honor.

[00:10:36] Speaker 02:
So it's irrelevant.

[00:10:37] Speaker 02:
It's irrelevant to the market for the copyrighted image, which is the picture of the post drivers.

[00:10:48] Speaker 04:
Sure, Your Honor.

[00:10:49] Speaker 04:
I will admit that.

[00:10:50] Speaker 04:
I mean, there is no evidence, and I'm not going to argue against the fact that there was evidence that... And how could they... You say it's...

[00:10:59] Speaker 01:
How could the appellees prove a negative, essentially?

[00:11:04] Speaker 04:
Confused by that argument?

[00:11:06] Speaker 04:
They could do so through consumer evidence.

[00:11:08] Speaker 04:
They could go take a poll of potential purchasers of post drivers or potential folks who actually go look at these images.

[00:11:17] Speaker 01:
Do we really even need that here where it's quite clear that there's no harm to the market for the copyrighted image itself?

[00:11:25] Speaker 01:
It's a given.

[00:11:26] Speaker 01:
Nobody's arguing it.

[00:11:28] Speaker 04:
Nobody's arguing that there actually is evidence of harm.

[00:11:31] Speaker 01:
Well, right.

[00:11:32] Speaker 04:
Well, and that's conceded.

[00:11:34] Speaker 04:
I think the position is that the proper application is on the potential harm to the market.

[00:11:39] Speaker 01:
Well, address that in light of the fact that it is such an important element, and there's just nothing here on that.

[00:11:44] Speaker 01:
Address how we do the balancing then.

[00:11:46] Speaker 04:
Well, I think that's why the presumption exists is because the factor is the potential, that it is a hard thing to do to come up with actual evidence of a market where, admittedly,

[00:11:57] Speaker 04:
You're not involved in active licensing.

[00:12:00] Speaker 04:
It's not like...

[00:12:01] Speaker 04:
the photographer in the Warhol case who had took images of prints, right?

[00:12:04] Speaker 04:
And these things actually had an established market.

[00:12:07] Speaker 04:
And that's what that was all about, right?

[00:12:09] Speaker 04:
There wasn't an underlying product.

[00:12:10] Speaker 04:
It wasn't about selling prints.

[00:12:11] Speaker 04:
It was about selling images of prints.

[00:12:14] Speaker 04:
But there are many instances in advertising, especially, where images are used to drive consumer purchasing decisions, right?

[00:12:21] Speaker 04:
The same thing that we talked about in achieving the purpose of actually sending this message that these things aren't made in China.

[00:12:29] Speaker 04:
these images actually indirectly affect those decisions.

[00:12:32] Speaker 02:
Well, but the issue is whether these images affected the market or I guess potential market for the copyrighted item, which is the picture.

[00:12:45] Speaker 02:
And you don't get a presumption, as I understand it, and please correct me if I'm wrong, unless the allegedly infringing one is to supplant

[00:12:57] Speaker 02:
The copyrighted one, it's supposed to be, that's where the presumption comes in.

[00:13:04] Speaker 02:
If you're trying to take their place in that potential market, which I don't think that's what we have here.

[00:13:13] Speaker 04:
That's not entirely correct, Your Honor.

[00:13:15] Speaker 02:
Okay, please correct me.

[00:13:16] Speaker 04:
The presumption arises in instances of mere duplication for commercial purposes.

[00:13:21] Speaker 04:
That's when the presumption arises.

[00:13:23] Speaker 04:
The objective, and you'll see the case law analyze this, is that there is a presumption because the fair use is only good to an extent that you're not supplanting the market for something.

[00:13:35] Speaker 04:
But the standard for the presumption is mere duplication for commercial purposes.

[00:13:39] Speaker 04:
And that is what the Campbell case recognized in the Supreme Court and courts in this circuit, including in the Western District of Oklahoma last year.

[00:13:46] Speaker 02:
So if we don't think it's mere duplication,

[00:13:49] Speaker 02:
then you wouldn't get a presumption.

[00:13:52] Speaker 04:
I would agree with that.

[00:13:53] Speaker 04:
If there is a finding that this is not mere duplication, then I think that the dicta from Campbell supports that the Supreme Court was not willing to extend the presumption to cases beyond that.

[00:14:03] Speaker 04:
But here we have right-click copy, no alterations.

[00:14:06] Speaker 02:
Well, right-click copy.

[00:14:09] Speaker 02:
and then putting over it made in China in American flags, as I recall.

[00:14:16] Speaker 02:
I have it here.

[00:14:18] Speaker 04:
And agree.

[00:14:19] Speaker 04:
The images were used in an array.

[00:14:21] Speaker 04:
However they do, there are instances in which they appear individually.

[00:14:25] Speaker 04:
And factor three of the fair use factors is actually instructive here, because it is the amount and substantiality of the copyrighted work that was used.

[00:14:32] Speaker 04:
It is the entirety of the copyrighted works that was incorporated into something else.

[00:14:37] Speaker 04:
That doesn't defeat the mirror duplication.

[00:14:40] Speaker 04:
of the use.

[00:14:42] Speaker 00:
Can I answer your question?

[00:14:43] Speaker 00:
I know you only have two seconds left.

[00:14:47] Speaker 00:
Because this, I don't think, was addressed, no fault of anybody's, in the briefs.

[00:14:54] Speaker 00:
I was a little puzzled on this presumption of harm issue.

[00:15:01] Speaker 00:
You make an argument based on the fourth factor that there's a presumption of harm.

[00:15:06] Speaker 00:
And then when IDT presents an alternative argument to a firm based on the absence of an actual injury, Krieger doesn't say, well, we had harm.

[00:15:18] Speaker 00:
We didn't have direct profit.

[00:15:20] Speaker 00:
You argue indirect profit.

[00:15:23] Speaker 00:
So is it academic you have a presumption of harm?

[00:15:26] Speaker 00:
But you really, in response to IDT,

[00:15:32] Speaker 00:
You're not acknowledging, but you're not advancing a theory that you had any harm.

[00:15:38] Speaker 04:
I think what we're advancing in response to that order is the difference between harm and quantifying damages.

[00:15:44] Speaker 04:
The indirect profits generated from the cells of these things, the evidence that we do have

[00:15:49] Speaker 04:
And really, one of the things that started this whole dispute between the parties, we cite to it in our briefs, was the email that you were making me rich, right?

[00:15:56] Speaker 04:
An email that is in response to a Craigslist post of ours that the link clearly shows that the copyrighted works appeared in it.

[00:16:03] Speaker 04:
And IDIG Texas said, you are making me rich, right?

[00:16:06] Speaker 04:
So that leads to this indirect profits theory of, OK, well, what sales did you generate from selling the post drivers that appear that were in the ads?

[00:16:14] Speaker 00:
I do understand all of that.

[00:16:17] Speaker 00:
Sure.

[00:16:18] Speaker 00:
in response to the argument that there was no actual harm, your response was not, but we have actual harm.

[00:16:26] Speaker 00:
Your argument was, well, we have indirect view, IDT have indirect profit, and we want that indirect profit to come to call back to us.

[00:16:40] Speaker 04:
Sure, and I think implicit in that is that the harm that is caused to us is the additional cells that they generated by using our images.

[00:16:47] Speaker 04:
That is the harm that is articulated that gets you to the indirect profits.

[00:16:52] Speaker 04:
There still has to be proved a link between the infringing act and those profits and saying that those were actually sales loss plans.

[00:16:59] Speaker 00:
And in your brief, you did concede that the threshold burden to show the nexus was yours, not theirs, right?

[00:17:07] Speaker 04:
That's correct, Your Honor.

[00:17:08] Speaker 00:
So what evidence was there on the alternative argument to affirm that there was some sort of nexus between these two

[00:17:17] Speaker 00:
advertisements with the copyrighted images of the Montana post drivers and that that created a nexus to show that there was some profit that IDT derived from those two particular

[00:17:33] Speaker 00:
the use of those two particular copyrighted images in those two particular advertisements.

[00:17:39] Speaker 04:
And I'll mention it again.

[00:17:40] Speaker 04:
We cited it in brief.

[00:17:41] Speaker 04:
It was the message from IDIG Texas to our client that said, you are making me rich, specifically referencing the Craigslist post of ours from which the copyrighted images were taken.

[00:17:52] Speaker 04:
We believe that is a factual predicate to establishing that nexus.

[00:17:56] Speaker 04:
OK.

[00:17:57] Speaker 04:
Thank you.

[00:17:57] Speaker 04:
Thank you, Your Honor.

[00:18:06] Speaker 03:
Good morning.

[00:18:08] Speaker 03:
May it please the court, Zakub from the law firm of McAfee and Taft on behalf of the Appellees.

[00:18:13] Speaker 03:
With me is Appellee Mary Merrick and Appellee Thomas Merrick.

[00:18:17] Speaker 03:
First, I want to address the indirect profits issue on the copyright claim first since that's where Mr. Talley ended.

[00:18:24] Speaker 03:
The email of You Are Making Me Rich that was noted in Appellant's reply brief

[00:18:29] Speaker 03:
is a heavily redacted email that doesn't reference copyright works or the use of copyright works.

[00:18:37] Speaker 03:
The court can look at that.

[00:18:38] Speaker 03:
It is at page 162 of the appendix is where it's referenced in the amended counterclaims.

[00:18:45] Speaker 03:
The image itself is at 181.

[00:18:46] Speaker 03:
But more importantly, it wasn't raised in the motion for summary judgment briefing below.

[00:18:52] Speaker 03:
You are making me rich was not an argument made with respect to indirect profits.

[00:18:56] Speaker 03:
If the court goes and looks at the appendix at 875... Was it raised in the reply brief on appeal?

[00:19:01] Speaker 03:
Well, they only filed a response brief.

[00:19:03] Speaker 03:
It was not raised by the appellants below as a basis for the causal nexus of indirect profits.

[00:19:10] Speaker 03:
That's at the appendix at 875 through 876.

[00:19:12] Speaker 03:
That's because it doesn't show that basis, Your Honor.

[00:19:15] Speaker 03:
With respect to Justice McHugh's point earlier on the... I'm just a judge.

[00:19:21] Speaker 03:
Judge, sorry.

[00:19:22] Speaker 03:
Sorry, Judge McHugh.

[00:19:24] Speaker 03:
Just a matter of time.

[00:19:25] Speaker 03:
That's right.

[00:19:27] Speaker 03:
I just foresee it.

[00:19:29] Speaker 03:
With the presumption of harm for mere duplication, Campbell teaches that that is a market replacement.

[00:19:38] Speaker 03:
And that's not what IDT's use was here.

[00:19:40] Speaker 03:
That presumption does apply in the instance of a market replacement.

[00:19:44] Speaker 03:
And as you noted, Judge, there was not a replacement.

[00:19:48] Speaker 03:
IDT's use was not a replacement for any market

[00:19:51] Speaker 03:
of the Krieger images at issue.

[00:19:54] Speaker 03:
As Judge Moritz noted, proving a negative is difficult.

[00:19:57] Speaker 03:
You asked Mr. Talley how we would do that.

[00:20:00] Speaker 03:
We did.

[00:20:02] Speaker 03:
In his deposition, Mr. Kreger admitted that he never licensed or sought to license, that he never got a valuation for any of these images.

[00:20:10] Speaker 03:
And that is at the appendix 231 is where that statement of fact is raised.

[00:20:15] Speaker 03:
It was admitted at 854.

[00:20:18] Speaker 03:
Also, at 231 we raised the statement of fact admitted at 854 that there was no evidence that use of Mr. Craigor's images caused Mr. Craigor or Craigor's services any harm.

[00:20:29] Speaker 03:
The use at issue did not cause any harm.

[00:20:33] Speaker 03:
The fourth factor, the most important

[00:20:35] Speaker 03:
the most important factor was proven by EDT on its affirmative defense, there was no evidence to create a genuine factual dispute as to that.

[00:20:46] Speaker 03:
The lack of market harm shows that that use was a transformative one.

[00:20:52] Speaker 03:
Mr. Talley starts off his argument with respect to the concept that

[00:20:58] Speaker 03:
Comparative advertising cannot be a fair use.

[00:21:02] Speaker 03:
We proposed to the court that argument had been raised or had been waived because it was not raised below.

[00:21:08] Speaker 03:
If the court goes and looks at the appellant's summary judgment response, they even noted at page 874 in the appendix that policies around fair use for parity

[00:21:24] Speaker 03:
and comparative advertising are arguably similar.

[00:21:27] Speaker 03:
Not only did they waive this argument that this is not a copyright issue, it's a trademark issue, they acknowledged that parody and comparative advertising fulfilled the same policy purposes under the Copyright Act.

[00:21:39] Speaker 02:
Well, whether they raised it or not, if we were to go down that road, we have to adopt it as the law of this circuit.

[00:21:45] Speaker 02:
So I mean, we would have to wrestle with it, whether they raised it or not, if you're going to rely on it.

[00:21:54] Speaker 03:
Sure.

[00:21:54] Speaker 03:
So ultimately, as the appellants recognized in their brief and as the Warhol decision recognizes, a purpose of the Copyright Act is to encourage learning.

[00:22:05] Speaker 03:
That's what this comparative advertising did.

[00:22:07] Speaker 03:
That's what the BLEEM advertising did.

[00:22:09] Speaker 03:
That's what the Triangle publication advertising did.

[00:22:12] Speaker 03:
You're encouraging learning by informing the public about the products at issue to help them make a rational purchasing decision.

[00:22:22] Speaker 02:
Well, I'm on a different topic so why don't you follow through.

[00:22:26] Speaker 02:
I'm still focused on the presumption and the argument that was made is if you have a mere duplication then you get the presumption and that we here have a complete duplication, you know, copy paste.

[00:22:45] Speaker 02:
I mean, are they wrong in stating that if you have a mere duplication, you get the presumption?

[00:22:51] Speaker 03:
It is a mere duplication if it's used for commercial purposes as a market replacement.

[00:22:58] Speaker 03:
And that's not what happened here.

[00:22:59] Speaker 03:
And it wasn't simply a copy-paste.

[00:23:02] Speaker 03:
Go compare the Craigers' use of these images on pages 6 and 7 of the appellant's opening brief with IDT's use of these images on

[00:23:15] Speaker 03:
pages 9 and 10 of that same opening proof.

[00:23:18] Speaker 03:
The differences in the use are evident from themselves.

[00:23:21] Speaker 00:
In the use, and so you're assuming that it's transformative if you use it for a different purpose.

[00:23:27] Speaker 00:
If I hire a personal photographer to take glossy photos of myself

[00:23:32] Speaker 00:
And I copyright those, and let's say you use it for some sort of other purpose.

[00:23:39] Speaker 00:
You're saying, well, it's transformative because I used it for a different purpose.

[00:23:42] Speaker 00:
But it's the exact same photo.

[00:23:45] Speaker 01:
Think dartboard.

[00:23:50] Speaker 00:
You see?

[00:23:56] Speaker 03:
No, and that is why fair use is a fact intensive, you know, and it matters based on context.

[00:24:05] Speaker 03:
The context here is that this isn't a mere substitution.

[00:24:10] Speaker 03:
And that's the important thing.

[00:24:12] Speaker 03:
I mean, as Warhol recognized that was discussed in Campbell, the issue of whether or not something is transformative is whether or not it's a substitute.

[00:24:20] Speaker 03:
This was not a substitute.

[00:24:23] Speaker 03:
And that's why the first factor and the fourth factor simply converge.

[00:24:29] Speaker 03:
And where you have no market effect, it only goes to show that it's not a substitution.

[00:24:34] Speaker 03:
And where you have and where you might have a market effect or some evidence of some market effect, then perhaps the mere duplication argument would have weighed.

[00:24:42] Speaker 03:
But that is not the case here, Your Honors.

[00:24:44] Speaker 02:
And the market effect has to be in the market for the copyrighted item.

[00:24:51] Speaker 03:
It has to be a copyright harm, i.e.

[00:24:53] Speaker 03:
the market for the copyrighted issue, not the problems.

[00:24:55] Speaker 02:
So if they have lost sales and Texas has increased sales of the actual diggers, then

[00:25:07] Speaker 02:
What needs to happen?

[00:25:08] Speaker 02:
What type of nexus do they have to show to connect up those damages with the infringement claim?

[00:25:16] Speaker 03:
Had there been an attempt to license to resellers perhaps, but that didn't take place.

[00:25:21] Speaker 03:
I mean, most of the appellant's briefing focuses around Maui Gym with this idea of

[00:25:28] Speaker 03:
a market being affected.

[00:25:30] Speaker 03:
But those facts are completely different from these.

[00:25:32] Speaker 03:
There were authorized resellers and there were unauthorized resellers and knockoff products.

[00:25:37] Speaker 03:
This wasn't a knockoff product, but more importantly, Mr. Kreger admitted that he never sought to license.

[00:25:42] Speaker 03:
There was literally no market.

[00:25:44] Speaker 03:
And although the appellants argue for the potential market, they also cite to Harper and Row on page 17 of their reply, which notes, one need only show widespread challenge to use would adversely affect a potential market.

[00:25:58] Speaker 03:
No such showing occurred here.

[00:26:04] Speaker 03:
And I will turn to the Lanham Act claims unless your honors have any questions about the copyright claims.

[00:26:09] Speaker 03:
And I would posit that with respect to the second and third factors, they are at best neutral for Mr. Craigert.

[00:26:16] Speaker 03:
But because the first and fourth factors lay in favor of IDT here, then the district court was correct on the facts of this case that this was a fair use.

[00:26:32] Speaker 03:
With respect to the Lanham Act claims, the appellants failed to show falsity, materiality, injury, and deception.

[00:26:44] Speaker 03:
They asked the district court below and they asked this court to speculate or presume as to each of those requisite elements or to fill an evidentiary hole to show the same.

[00:27:00] Speaker 03:
Briefing to this court, the appellants focused very heavily on exhibits 8, 9, 10, and 11 of their response brief, which are at appendix 969 through 976.

[00:27:19] Speaker 03:
And a large portion of that briefing concerns the keywords and this issue that

[00:27:30] Speaker 03:
Even though the exhibits are on their face incomplete, if you go look at exhibit 10, you'll see keywords, and that means that's the end of the ad, and the district court shouldn't have foreclosed the possibility that there was some inaccurate advertising there.

[00:27:50] Speaker 03:
But if your honors go and look at exhibit 10, one of the

[00:27:58] Speaker 03:
documents given to the district court.

[00:28:01] Speaker 03:
It is facially impartial and it doesn't actually reference any IDT product.

[00:28:08] Speaker 03:
It focuses wholly on Montana post writers.

[00:28:11] Speaker 03:
It doesn't have any false or misleading statement of fact about an IDT product.

[00:28:14] Speaker 03:
It doesn't even talk about them.

[00:28:16] Speaker 03:
So the appellant's argument about keywords and trying to suggest there are some false and misleading statements somewhere or otherwise in there just doesn't hold weight.

[00:28:26] Speaker 00:
Well, the district court was clearly incorrect, wasn't it, to rely on IDT's depiction of the photographs rather than Krieger's.

[00:28:38] Speaker 03:
Are you referring to the Lanham Act claims on the Craigslist ads?

[00:28:42] Speaker 03:
Right.

[00:28:42] Speaker 03:
So what the district court noted was that the appellants failed to, with the evidence they submitted, provide any, you know,

[00:28:54] Speaker 03:
question of fact as to a false and misleading statement.

[00:28:58] Speaker 03:
Exhibit 11, which was one of the exhibits given, it is clearly incomplete.

[00:29:06] Speaker 03:
And it has the same statements, but not the disclosures, that were in IDT's exhibits 16 and 17.

[00:29:13] Speaker 00:
But they were clearly different ads.

[00:29:15] Speaker 00:
I mean, there was all caps in one and regular lettering in the other.

[00:29:23] Speaker 00:
So sure, it didn't have the cutouts that IDT said, but that's Krieger's whole point.

[00:29:30] Speaker 00:
But you're cherry picking your ends.

[00:29:34] Speaker 03:
I would suggest to the court that it was appellants who Cherry picked with just a one page when it was clear that there was other text there.

[00:29:41] Speaker 03:
I mean, in Zoller, this court noted that literal falsity or falsity is an examination of the full context of the ad.

[00:29:49] Speaker 03:
By giving the district court only one piece, the piece that it wanted the district court to focus on, and without other text clearly otherwise in the ad, it required speculation and an unreasonable inference by the district court

[00:30:02] Speaker 03:
to jump to the conclusion those disclosures were missing.

[00:30:05] Speaker 03:
In the other exhibit, exhibit 10, at 974, like I just noted, the pellets make this long argument about keywords, but there's not even a reference to IDD products in exhibit 10 that could be false or misleading.

[00:30:21] Speaker 03:
And in exhibits eight and nine are just montages and also one-page excerpts of ads that do state, we provide 100% American-made skid steer

[00:30:33] Speaker 03:
attachments, but the evidence of record shows that that is the case.

[00:30:38] Speaker 00:
Well, what about the Canadian bolts?

[00:30:40] Speaker 00:
What about the Chinese devices that make the things work?

[00:30:46] Speaker 00:
Right.

[00:30:47] Speaker 03:
Those aren't American.

[00:30:49] Speaker 03:
The district court noted on appendix page 1020 that that can be a clear and unambiguous message that at least one product offered by ITT is wholly manufactured in the United States.

[00:31:04] Speaker 00:
The appellants did not show that they lack such a product.

[00:31:10] Speaker 00:
But why not?

[00:31:11] Speaker 00:
I mean, that's my question.

[00:31:13] Speaker 00:
Even the premium model does rely on components that come from Canada or China.

[00:31:21] Speaker 03:
So the Texas post drivers that are really relied upon in the appellants briefing is only one

[00:31:29] Speaker 03:
type of skid steer attachment.

[00:31:31] Speaker 03:
There are thousands of these things, different types of SKUs.

[00:31:34] Speaker 03:
So by trying to make the inferential leap that the reference to skid steer attachments necessarily means this particular product.

[00:31:42] Speaker 00:
So if we sell a thousand devices, one of which, you know, sells for a dollar and a quarter is completely made in the United States and all of the rest of them are made in China, it's still literally correct.

[00:31:58] Speaker 03:
Yes.

[00:31:59] Speaker 03:
Yes, and that in the appendix at 595 is the notation about products being manufactured in the United States wholly, which is supported in the record at 605 and 606.

[00:32:10] Speaker 03:
It was noted in our reply.

[00:32:12] Speaker 03:
And just to note,

[00:32:17] Speaker 03:
Your Honor, the Canadian nuts and bolts were used because primarily IDT gets them from a Tulsen supplier and only having to use it sporadically.

[00:32:28] Speaker 03:
Alternatively, another basis would be materiality, but I do see I am out of time.

[00:32:36] Speaker 03:
And so unless Your Honors have any questions for me, I thank you for your time.

[00:32:42] Speaker 03:
Thank you.

[00:32:45] Speaker 03:
Ellie, is the fellow out of time?

[00:32:47] Speaker 00:
Okay, thank you, Council.