American Geophysical Union v. Texaco, Inc., 60 F.3d 913,[1] was a 1995 U.S. copyright case holding that a private, for-profit corporate library could not rely on fair use in systematically making copies of articles in academic journals for its employees.

One such system was in place during the 1980s, but Texaco declined to use it, citing its cumbersome bureaucratic requirements and its belief that the practice was fair use, leading several academic publishers, including the American Geophysical Union (AGU), to sue for copyright infringement.

The articles were copied in their entirety and adversely affected commercial opportunities for the publishers in the form of the lost revenue they otherwise would have made from licensing the photocopying and/or the sale of additional subscriptions to their journals.

[9] Chief Judge Arnold Wilson Cowen, joined by Robert Lowe Kunzig and Philip Nichols Jr., dissented, arguing the majority had placed too much emphasis on facts favoring the defense.

[14] Under those rules, meant to account for rapid improvements in information dissemination and storage technology, the Supreme Court found in 1984's Sony Corp. of America v. Universal City Studios, Inc. that television viewers recording shows on their VCRs to watch later were making fair use of the copyrighted programming.

[15] The following year, it provided some guidance for courts to apply the four fair use factors when it did so for the first time in Harper & Row v. Nation Enterprises, holding that the publication of leaked excerpts of a forthcoming book did not meet the test.

So, in response to a recommendation from Congress when it had been considering and developing the legislation, academic journal publishers had formed the Copyright Clearance Center (CCC) in 1977 to administer a licensing and royalty system.

If, on the other hand, the secondary use adds value to the original—if the quoted matter is used as raw material, transformed in the creation of new information, new aesthetics, new insights and understanding—this is the very type of activity that fair use doctrine intends to protect for the enrichment of society.Texaco (since merged with Chevron) was a for-profit corporation that refined and sold oil products of all kinds.

[21] In 1985, six journal publishers that licensed photocopying through CCC,[22] led by the American Geophysical Union, sued Texaco in the Southern District of New York, alleging copyright infringement.

Another argument, that the photocopies were transformative as marginal notes could be written in them and they could be taken into the lab, where they might be damaged or destroyed by chemicals used in research, or to the scientists' homes, he agreed had "some merit", but only if Chickering was the only one reading Catalysis or copying from it.

"[31][30] Some precedent supported another of Texaco's first-factor arguments, that the copies were a necessary way of transmitting accurate information, in this case the "formulas, graphs and tables that set forth the results of studies and experiments".

"[31][30] Lastly, Texaco had likened its photocopying to that upheld as fair use in Williams & Wilkins, arguing that its scientists, too, were using the previously published research as building blocks for their own progress in advancing science.

Leval was uncertain whether a previous Second Circuit holding stating that facts had generally received greater fair-use protection was "descriptive or prescriptive",[32] but it was "unquestionably true that fair use is more easily found where the copyrighted material is of a factual nature rather than a fictional type.

[38][39] Leval found Texaco's next argument, that the AAS plan that many CCC users had favored was irrelevant because some of the articles Chickering copied predated its establishment, "perversely struthian".

The company had argued that the lukewarm corporate response to the TRS which was the only CCC option available at the time of the earliest articles Chickering had copied showed it was indeed too burdensome[d] to have been a realistic alternative, but "[t]his evidence does not prove as much as Texaco contends.

[38] While the authors were not financially compensated directly for their work, publication did improve their academic and professional reputations, which "translates itself into remuneration ... through growth of prestige and a consequent ability to command greater salaries or more prestigious and powerful positions", wrote Leval.

[48] When recapitulating the dispute, Newman responded to many amici briefs addressing the broader issues around fair use in bulk photocopying in academia, making clear that the court was deciding the narrow issue before it "[O]ur opinion does not decide the case that would arise if Chickering were a professor or an independent scientist engaged in copying and creating files for independent research, as opposed to being employed by an institution in the pursuit of his research on the institution's behalf".

Rather than making some contribution of new intellectual value and thereby fostering the advancement of the arts and sciences, an untransformed copy is likely to be used simply for the same intrinsic purpose as the original, thereby providing limited justification for a finding of fair use.Texaco reiterated its arguments that the photocopies allowed the articles to be used in the laboratory was sufficiently transformative.

Newman reiterated Leval's conclusions as to the latter two, noting that Williams & Wilkins had also treated the articles at issue as separate works and Sony had set a high bar to cross for that holding.

Newman allowed that case law recognized some limitations on this issue, such as a market the original author cannot enter or has shown no interest in, but they did not apply here because the publishers, since Williams & Wilkins, had created the CCC and its licensing plans.

Often, a researcher needs to know what others have thought and done in order to steer clear of repetition and dead ends, to evaluate theories and hypotheses for possible theoretical development or commercial application, to give credit to others, and much else.

[61][57] "It is hard to escape the conclusion that the existence of the CCC—or the perception that the CCC and other schemes for collecting license fees are or may become 'administratively tolerable'—is the chief support for the idea that photocopying scholarly articles is unfair in the first place", Jacobs observed.

In Princeton University Press v. Michigan Document Services, Inc., a 1996 case also involving bulk photocopying, the Sixth Circuit allowed that the Supreme Court's denial of cert in Texaco might constitute an endorsement of this holding even as it announced it still considered the fourth factor first among equals.

[72][l] In 2013 the American Institute of Physics invoked Texaco in bringing suit (again with other publishers as plaintiffs) against two law firms, one in Minneapolis and the other in Dallas, that they accused of similarly infringing unlicensed duplication of articles.

Nicole Cásarez of the University of St. Thomas found the Second Circuit's approach too focused on economic factors at the expense of the broader goal of copyright protection, leaving some questions unsatisfactorily answered or unaddressed.

The court should have, she wrote, followed the example of the Ninth Circuit in Sega v. Accolade, where copied computer code served a transitory purpose in reverse engineering that bypassed the petitioner's licensing system to create games that could be played on its platform.

"[76] Newman's response to Jacobs' invocation of §107's preamble misread the statute, Cásarez continued: "[Its] words ... explicitly pertain to activities and not to works of authorship; otherwise, Congress would have referred to 'news articles' and 'scientific treatises' rather than 'news reporting' and 'research.'"

Decisions like Texaco, Cásarez argued, resulted from the relative silence of the law on these questions, which she attributed to Congress having primarily consulted with publishers and other industry groups when drafting the 1976 Act.

[81] In the Georgia Law Review, Karen Still echoed many of Cásarez's concerns, particularly regarding the first and fourth factors, calling the court's analysis "overbroad and outcome-oriented", saying it applied the preamble to §107 more narrowly than Congress intended and misinterpreted Williams & Wilkins on the "reasonable and customary" nature of bulk photocopying.

[m][86] This ended in 2006 with Bill Graham Archives v. Dorling Kindersley, Ltd. where the plaintiff had asserted market harm over unlicensed reproductions of posters and tickets to past Grateful Dead concerts used in the defendant's history of the band.