Basically, if your use of a work is going to prevent or inhibit the author from making money off of the work or if it is going to devalue the work, then you will fail this test. The courts are very strict on this test - so don't try and weasel your way out of this one.
A few notable points:
1. Preventing or inhibiting the author from making money off of the work is very broad and the courts will look at all areas that the author can make money from the work.
For instance, say you absolutely love a book and write your own play of the book. Then, you have a local acting company perform it. You just took the author's right to turn the book into a play, and thus, there is the potential for loss of revenue. Even if the author never thought about turning the book into a play, there is always the possibility that they would have.
2. Anytime you use a work for something that is commercial, it is considered to adversely affect the value of the work.
If you set pictures of graduating high school senior in a slide show set to music, and then sell the DVDs at graduation, that is considered commercial - even if you don't turn a profit.
3. If you distribute a work so much that now no one wants or needs to buy the original work, then you are devaluing the market value of the work.
Something to think about:
If you make CDs of your favorite songs and distribute them to all your friends, can you argue that you're actually promoting the author's work?
Simpson, C. (2005). Copyright for Schools: A Practical Guide, fourth edition. Worthington, Ohio: Linworth Publishing, Inc.
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