Fair use is a long-established legal defense against copyright infringement. In Taiwan, its applicability is determined by a two-step test. Firstly, the law specifies several types of permissible use (unless reasonableness is an additionally required element) within the limits of copyright enforcement.[1] If an activity precisely matches one of the stipulated uses, it is exempt. Secondly, for a use either not specifically identified in the statute or additionally requiring reasonableness assessment, the Copyright Act provides a catch-all clause, modeled on the corresponding U.S. legislation, to determine whether fair use qualifies by integratively evaluating all facts involved and specifically considering the factors set forth as follows.[2]

  1. The purpose and nature of use – including any commercial, non-profit or educational purposes;

  2. The nature of the work – whether it is a factual or fictional work or whether it was published;

  3. The quantity and quality of the portion used in relation to the entire work; and

  4. Any impact on the market value or potential economic harm caused by the use.

  In a recent first-instance judgment involving the unauthorized use of religious works, the IP and Commercial Court reviewed the four key factors to determine whether the use qualified as fair.

  Mr. Chen, a composer of several religious songs and associated lyrics, discovered that from 2012 onwards his works (the “disputed songs” or “disputed works”) were being widely used without authorization by various Buddhist organizations, including temples, foundations, academies, and the associated employees and individuals (collectively referred to as the “defendants”). The alleged unauthorized uses included public performances of his songs, recordings of these performances, and the creation and sale of a music album featuring the recorded performances. Additionally, Mr. Chen found his songs being reproduced as MP3 files and made available on the temple’s website without him being credited as the composer. The defendants also licensed the album containing his songs to gaming companies, making them accessible on multiple music portals and streaming services, where users could download them and convert them into ringtones—again, without identifying him as the composer. Mr. Chen complained that these unauthorized activities infringed upon his rights of reproduction, public transmission, public performance, rental, distribution, and paternity over the disputed songs.

  In response to Mr. Chen's assertions, one defendant primarily argued that they lacked the willfulness to use the disputed work, as they immediately removed the video products after being notified. Furthermore, by promoting the songs and sharing their meaningful lyrics, they only wished to disseminate Buddhist teachings, without any intention of profiting from the sale of said works. The use of the disputed song's lyrics constitutes less than 4% of the entire album, a minimal amount, thus having little impact on the current and potential market value of the disputed work. Therefore, the fair use clause should apply.

  The court first reasoned and determined that the defendants’ activities constituted unauthorized reproduction, public transmission, distribution, etc., respectively. The defendant made the music and literary works available for others to listen to, read and download. These reproductions and public transmissions were carried out without the copyright owner’s authorization.

  Regarding the infringement intent, the court specified that because the songs on the album were not originally created by the Buddhist organizations, they had a duty of care—comparable to that of a prudent manager—to mitigate any potential infringement risks before using the songs. This included seeking permission, licenses or other appropriate authorizations. By failing to exercise this duty of care, the Buddhist organizations committed negligent infringement. Similarly, even if some individual defendants involved in the supervision or execution of the music and lyrics projects were unaware of the works' legitimacy, their collaborative activities with the Buddhist organizations constituted joint infringement.

  Lastly, the defendant argued that their activities amounted to fair use. The court disagreed, finding that the accused activities did not qualify. First of all, while the album and song lyrics ostensibly aimed to spread religious messages, the subsequent production of music files available for download upon payment of a fee was not entirely non-profit, as it compromised the copyright owner's prospective royalty interests. Secondly, the disputed songs, expressing as they did the creator's understanding and artistic conception of a particular religion, genuinely exhibited a high level of creativity. Thirdly, the defendants' album included the entire song and lyrics without any transformative characteristics. Fourthly, offering free downloads of the songs on the defendants' webpage demonstrably harmed the copyright owner's ability to explore potential markets. The court thus concluded that the accused activities were not exempt under the fair use clause.

  Regarding the plaintiff's claims for publication of the judgment in a newspaper, the court denied. While the legislative intent behind the publication of a judgment is to restore reputation, the effect of this may be to force the infringer to speak out. Granting such a claim requires the court to balance the harm to the copyright owner's moral rights against the infringer's freedom of speech. In this case, the plaintiff failed to demonstrate the specific nature and extent of the damage to their reputation. Given that the judgment is accessible online, the court did not consider it necessary to also publish it in the newspaper.

  In conclusion, the court found the fair use defense inapplicable. The defendants were held jointly liable for damages to the plaintiff. The judgment is appealable.

  In Taiwan, fair use serves as justification for certain uses of copyrighted works, preventing them from being deemed illegal. An event that qualifies as fair use does not incur criminal or civil liability. While parties can agree not to exercise the fair use privilege, breaching such an agreement does not constitute copyright infringement. Instead, the aggrieved party is only entitled to damages for breach of contract, rather than having recourse to criminal authorities. Notably, the four factors in the above-mentioned test are of equal importance and consequently must be examined one after another. If a use fails to meet any one of the criteria, the fair use clause will not apply.