Business Law 12th Edition by Roger LeRoy Miller ,Frank Cross

Exercise 8

A QUESTION OF ETHICS: Copyright Infringement.
Custom Copies, Inc., in Gainesville, Florida, is a copy shop that, on request, reproduces and distributes, for profit, material published and owned by others. One of the copy shop's primary activities is the preparation and sale of coursepacks, which contain compilations of readings for college courses. For a particular coursepack, a teacher selects the readings and delivers a syllabus to the copy shop, which obtains the materials from a library, copies them, and then binds and sells the copies. Blackwell Publishing, Inc., in Malden, Massachusetts, publishes books and journals in medicine and other fields and owns the copyrights to these publications. Blackwell and others filed a suit in a federal district court against Custom Copies, alleging copyright infringement for its "routine and systematic reproduction of materials from plaintiffs' publications, without seeking permission," to compile coursepacks for classes at the University of Florida. The plaintiffs asked the court to issue an injunction and award them damages, as well the profit from the infringement. The defendant filed a motion to dismiss the complaint. [ Blackwell Publishing, Inc. v. Custom Copies, Inc., __ F.Supp.2d __ (N.D.Fla. 2007)]
(a) Custom Copies argued, in part, that creating and selling did not "distribute" the coursepacks. Does a copy shop violate copyright law if it only copies materials for coursepacks? Does the copying fall under the "fair use" exception? Should the court grant the defendant's motion? Why or why not?
(b) What is the potential impact if copies of a book or journal are created and sold without the permission of, and the payment of royalties or a fee to, the copyright owner? Explain.