Business Law Review

Published by Husson University Bangor, Maine For the NORTH ATLANTIC REGIONAL BUSINESS LAW ASSOCIATION EDITORS IN CHIEF William B. Read Husson University Marie E. Hansen Husson University BOARD OF EDITORS Robert C. Bird Gerald A. Madek University of Connecticut Bentley University Margaret T. Campbell Carter H. Manny Husson University University of Southern Maine Kabrina Krebel Chang Christine N. O’Brien Boston University Boston College Gerald R. Ferrera Jason H. Peterson Bentley University Suffolk University Stephanie M. Greene Lucille M. Ponte Boston College Florida Coastal School of Law William E. Greenspan Patricia Q. Robertson University of Bridgeport Arkansas State University Anne-Marie G. Hakstian David Silverstein Salem State University Suffolk University Chet Hickox David P. Twomey University of Rhode Island Boston College Stephen D. Lichtenstein Bentley University i GUIDELINES FOR 2015 Papers presented at the 2015 Annual Meeting and Conference will be considered for publication in the Business Law Review. In order to permit blind peer refereeing of manuscripts, papers must not identify the author or the author’s institutional affiliation. A removable cover page should contain the title, the author’s name, affiliation, and address. If you are presenting a paper and would like to have it considered for publication, you must submit one clean copy by email, no later than April 3, 2015 to: Professor William B. Read Husson University 1 College Circle Bangor, Maine 04401 [email protected] The Board of Editors of the Business Law Review will judge each paper on its scholarly contribution, research quality, topic interest (related to business law or the legal environment of business), writing quality, and readiness for publication. Please note that, although you are welcome to present papers relating to teaching business law, those papers will not be eligible for publication in the Business Law Review. This subject matter should be submitted to the Journal of Legal Studies Education. Also note that the Board of Editors will consider only one paper per person, including co-authored papers. Only papers presented at the Annual Meeting will be considered for publication. Any students submitting papers must do so in a co-authored format with a professor or other professional who is presenting at the meeting. FORMAT 1. Papers should be no more than 20 single-spaced pages, including footnotes. For font, use 12 point, Times New Roman. Skip lines between paragraphs and between section titles and paragraphs. Indent paragraphs 5 spaces. Right-hand justification is desirable, but not necessary. 2. Number pages on the bottom middle of each page. Do not number the front of the page. Please do not fold or staple your paper. 3. Margins: left—1-1/2 inches, right, top, bottom (except first page)—1 inch. 4. Upon acceptance, the first page must have the following format: a. The title should be centered, in CAPITAL LETTERS, on line 10. b. Following the title, center the word “by” and the author’s name, followed by an asterisk (*). c. Space down 3 lines and begin your text. d. Please add a solid line (18 spaces in length) beginning from the left margin, toward the bottom of the first page, leaving enough room under the line to type on the next line an asterisk, the author’s position or title and affiliation. This information should appear as the last line on the page. 5. Headings: FIRST LEVEL (caps, flush with left margin) Second Level (center, italics) Third Level: (flush with left margin, italics, followed by a colon [:]) Fourth Level: (flush with left margin, italics, followed by a colon [:], with text immediately following). 6. Footnotes should conform to The Bluebook: A Uniform System of Citation, 19th edition. 7. E-mail a copy of the final version of your paper in Microsoft Word to [email protected]. ii The Business Law Review is published once each year. Its purpose is to encourage scholarly research in Business Law and the Legal Environment of Business. Publication is made possible by gifts and grants from: Andover IP Law, Andover, MA. Bentley University, Waltham, MA. Husson University, Bangor, ME. North Atlantic Regional Business Law Association Suffolk University, Boston, MA. University of Bridgeport, Bridgeport, CT. West Educational Publishing THANK YOU Next Annual NARBLA Meeting University of Massachusetts, Lowell Lowell, MA 01854 April 11, 2015 Please contact: Michelle Bazin Department of Economics/Legal Studies Falmouth Hall, Room 302C University of Massachusetts Lowell One University Avenue Lowell, MA 01854 978-934-2822 [email protected] iii PUBLICATION LOCATIONS The Business Law Review is the official publication of the North Atlantic Regional Business Law Association (NARBLA) -www.narbla.org. The Journal is listed in Cabell’s (Management) Directory. The Business Law Review has entered into an electronic licensing relationship with EBSCO Publishing, the world’s most prolific aggregator of full text journals, magazines and other sources. The full text of the Business Law Review can be found on EBSCO Publishing databases. The full text of the Business Law Review can also be found at www.husson.edu/businesslawreview iv TABLE OF CONTENTS You’ll Know It When You See It: Fair Use After Cariou Liz Brown ............................................................................................. 1 Copyright Implications of Importing and Reselling Foreign Edition Textbooks in the United States: Supreme Court Update on Five Little Words in the First Sale Doctrine William E. Greenspan ........................................................................ 19 Recent Controversy Surrounding the EU – US Safe Harbor Data Protection Regime Carter Manny ..................................................................................... 33 From the Corvair to the Cobalt: Corporate Social Responsibility Lessons Unlearned David Missirian and Mystica Alexander .......................................... 55 Class Arbitrations, a Drafting Dilemma John F. Robertson .............................................................................. 77 Retirement Funds in Bankruptcy: Clark v. Rameker Patricia Quinn Robertson and Philip Tew ....................................... 97 A Defense of Eminent Domain for Sports Facilities Jon Simansky and Richard J. Hunter, Jr. ..................................... 115 Effects of Stakeholder Pressures on International Business: Apple and Foxconn Christine M. Westphal and Susan C. Wheeler................................ 127 Copyright 2014 North Atlantic Regional Business Law Association v YOU’LL KNOW IT WHEN YOU SEE IT: FAIR USE AFTER CARIOU by Liz Brown* I. INTRODUCTION In the wake of a 2012 ruling broadening the scope of copyright law’s fair use defense, lawyers, artists and dealers face more uncertainty as to what kind of copying is legal. The Second Circuit’s decision in Cariou v. Prince1 has led to a new sense of unease, the exposure of a growing generation gap in the art business, and a dramatic reversal of the roles of artists and judges in evaluating works of art. This article examines the origin of the transformative use defense to copyright, its recent reformation, and its impact on both subsequent copyright rulings and the business of art. Art, at the level involved in this case, is big business. Worldwide, the global art market was valued at approximately $64 billion in 2012.2 Institutional investors are also turning to art as an investment vehicle.3 As Forbes reported, the assets in art investment * Assistant Professor of Law, Bentley University, Waltham, Massachusetts. 1 714 F.3d 694 (2d Cir. 2013) cert. denied, 134 S. Ct. 618 (2013). 2 See, e.g., Kyle Chayka, The Art Market was Worth $64 Billion in 2012, HYPERALLERGIC (Jan. 2, 2013), http://hyperallergic.com/62911/the-art-market-was- worth-64-billion-in-2012/; see also Press Release, TEFAF Maastricht, TEFAF Art Market Report 2013 (Mar. 13, 2013), http://www.tefaf.com/DesktopDefault.aspx?tabid= 15&tabindex=14&pressrelease=14879&presslanguage=. 3 See Kathryn Tully, Are Investors Bullish on the Art Market?, FORBES (Apr. 30, 2013, 7:13 PM), http://www.forbes.com/sites/kathryntully/2013/04/30/are-investors- bullish-on-the-art-market/. 2 / Vol. 47 / Business Law Review funds worldwide rose 69% to $1.62 billion in 2012.4 At the center of the modern art world is the rise of appropriation artists, such as Richard Prince, whose work is built on the works of other artists.5 In Cariou, the Prince artworks at issue were marketed to A-list celebrities like Beyoncé, Tom Brady and Anna Wintour.6 One series of these works sold at the Gagosian gallery for more than $10 million.7 The Cariou decision held that Prince’s unlicensed use of Patrick Cariou’s photographs, with what many consider to be only minor modifications, was fair use rather than copyright infringement. The Cariou v. Prince decision resolved issues that are critical to appropriation art, but the Second Circuit’s ruling in that case—final now that the Supreme Court has denied certiorari—has troubling implications for the entire art market. By broadening the definition of “transformative,” the Second Circuit’s decision in Cariou may encourage other appropriation artists to use original images in ways that have never before been considered fair use. Without the revival or reaffirmation of limitations on how one artist can use another’s work, many creative artists—and the businesses that rely on their work—are likely to suffer severe economic loss. The Supreme Court has noted that the fair use doctrine

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