NXIVM Corp. v. The Ross Institute
Encyclopedia
NXIVM Corp. v. The Ross Institute, 364 F.3d 471
(2004), was a United States Court of Appeals for the Second Circuit
decision that held that defendants’ critical commentary of material obtained in violation of a non-disclosure agreement was fair use
despite bad faith
on the part of the defendants in obtaining the material.
offered a seminar training program called Executive Success involving a methodology NXIVM claimed improved communication and decision-making. NXIVM
provided a manual as part of the seminar to its participants who signed non-disclosure agreements to not release the manual to others.
Rick Ross
was a “cult deprogrammer” who maintained two websites to provide information about controversial groups that had complaints against them of mind control. Ross received the NXIVM manual through one of its seminar participants and commissioned two reports by two authors who analyzed and critiqued the manual, quoting sections of the manual in support their analysis. The reports were published on Ross’s websites and the Executive Success program was added to Ross's list of "cults."
The United States District Court for the Northern District of New York
denied a preliminary injunction against the defendants to remove the material from Ross’s websites. Plaintiffs appealed to the United States Court of Appeals for the Second Circuit
.
defense was available where the materials used were obtained in bad faith
.
defense as set forth by the Supreme Court
in Harper & Row v. Nation Enterprises
but stated that it is only a part of the evaluation and bad faith
is not dispositive of a fair use
defense.
The Court weighed the four fair use factors to determine if Ross’s use was fair, and made the following findings:
The Court ruled in favor of the defendants’ and affirmed the denial of the preliminary injunction.
Case citation
Case citation is the system used in many countries to identify the decisions in past court cases, either in special series of books called reporters or law reports, or in a 'neutral' form which will identify a decision wherever it was reported...
(2004), was a United States Court of Appeals for the Second Circuit
United States Court of Appeals for the Second Circuit
The United States Court of Appeals for the Second Circuit is one of the thirteen United States Courts of Appeals...
decision that held that defendants’ critical commentary of material obtained in violation of a non-disclosure agreement was fair use
Fair use
Fair use is a limitation and exception to the exclusive right granted by copyright law to the author of a creative work. In United States copyright law, fair use is a doctrine that permits limited use of copyrighted material without acquiring permission from the rights holders...
despite bad faith
Bad faith
Bad faith is double mindedness or double heartedness in duplicity, fraud, or deception. It may involve intentional deceit of others, or self deception....
on the part of the defendants in obtaining the material.
Facts
NXIVMNXIVM
NXIVM is an Albany County, New York, United States-based organization founded by Keith Raniere. It offers classes and seminars that encourages clients to pursue a path of self-discovery...
offered a seminar training program called Executive Success involving a methodology NXIVM claimed improved communication and decision-making. NXIVM
NXIVM
NXIVM is an Albany County, New York, United States-based organization founded by Keith Raniere. It offers classes and seminars that encourages clients to pursue a path of self-discovery...
provided a manual as part of the seminar to its participants who signed non-disclosure agreements to not release the manual to others.
Rick Ross
Rick Ross (consultant)
Rick Alan Ross works as a consultant, lecturer, and intervention specialist, with an interest in exit counseling and deprogramming of former cult members. He runs a blog at CultNews.com, and in 2003 founded the Rick A...
was a “cult deprogrammer” who maintained two websites to provide information about controversial groups that had complaints against them of mind control. Ross received the NXIVM manual through one of its seminar participants and commissioned two reports by two authors who analyzed and critiqued the manual, quoting sections of the manual in support their analysis. The reports were published on Ross’s websites and the Executive Success program was added to Ross's list of "cults."
The United States District Court for the Northern District of New York
United States District Court for the Northern District of New York
The United States District Court for the Northern District of New York serves one of the 94 judicial districts in the United States and one of four in the state of New York. The U.S. Attorney for the district is Richard S. Hartunian...
denied a preliminary injunction against the defendants to remove the material from Ross’s websites. Plaintiffs appealed to the United States Court of Appeals for the Second Circuit
United States Court of Appeals for the Second Circuit
The United States Court of Appeals for the Second Circuit is one of the thirteen United States Courts of Appeals...
.
Issue
The issue before the Court was whether a fair useFair use
Fair use is a limitation and exception to the exclusive right granted by copyright law to the author of a creative work. In United States copyright law, fair use is a doctrine that permits limited use of copyrighted material without acquiring permission from the rights holders...
defense was available where the materials used were obtained in bad faith
Bad faith
Bad faith is double mindedness or double heartedness in duplicity, fraud, or deception. It may involve intentional deceit of others, or self deception....
.
Opinion of the Court
The Court noted that the propriety of the defendants’ conduct is relevant for a fair useFair use
Fair use is a limitation and exception to the exclusive right granted by copyright law to the author of a creative work. In United States copyright law, fair use is a doctrine that permits limited use of copyrighted material without acquiring permission from the rights holders...
defense as set forth by the Supreme Court
Supreme Court of the United States
The Supreme Court of the United States is the highest court in the United States. It has ultimate appellate jurisdiction over all state and federal courts, and original jurisdiction over a small range of cases...
in Harper & Row v. Nation Enterprises
Harper & Row v. Nation Enterprises
Harper & Row v. Nation Enterprises, 471 U.S. 539 , was a United States Supreme Court decision that determined that fair use is not a defense to the appropriation of work by a famous political figure simply because of the public interest in learning of that political figure's account of an historic...
but stated that it is only a part of the evaluation and bad faith
Bad faith
Bad faith is double mindedness or double heartedness in duplicity, fraud, or deception. It may involve intentional deceit of others, or self deception....
is not dispositive of a fair use
Fair use
Fair use is a limitation and exception to the exclusive right granted by copyright law to the author of a creative work. In United States copyright law, fair use is a doctrine that permits limited use of copyrighted material without acquiring permission from the rights holders...
defense.
The Court weighed the four fair use factors to determine if Ross’s use was fair, and made the following findings:
- The purpose and character of the use was transformative as criticism and favored the defendants even if the defendants’ bad faithBad faithBad faith is double mindedness or double heartedness in duplicity, fraud, or deception. It may involve intentional deceit of others, or self deception....
in obtaining the manual favored the plaintiffs. - The nature of the copyrighted work was unpublished and favored the plaintiffs.
- The amount and substantiality of the portion used in relation to the copyrighted work as a whole did not favor the plaintiffs as (1) it was reasonable for the defendants to quote liberally from the manual in order to critically comment on it and (2) there was no identifiable “heartHeartThe heart is a myogenic muscular organ found in all animals with a circulatory system , that is responsible for pumping blood throughout the blood vessels by repeated, rhythmic contractions...
” of the manual. - The market inquiry heavily favored the defendants because, “as a general matter, criticisms of a seminar or organization cannot substitute for the seminar or organization itself or hijack its market.”
The Court ruled in favor of the defendants’ and affirmed the denial of the preliminary injunction.