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 deserves special consideration. For these 20th century books, we believe the fair use argument is strongest.

The most significant market failure for these books is with truly orphaned works—i.e., books for which the rightsholder cannot be identified or located after a diligent search. For those works, market failure is confirmed through the diligent search, which demonstrates the insurmountable transaction costs just in searching for the rightsholder. But the 20th century book market suffers from market failure even when owners are known. Failure of rightsholders to exploit the e-book market likely has many causes. Some of those are production-related transaction costs, some are due to the complex thickets of rights associated with each work, and some are likely due just to competing priorities. In all such cases, books are not commercially available in digital form. High transaction costs make it economically unviable for a willing rightsholder and a willing user to negotiate for a sale.

The Copyright Act does not require rights holders to sell their works in the marketplace; they do not face a “use it or lose it” regime of protection. Beyond the threshold question of protection, even within the fair use analysis, courts have found valid reasons why market harm analysis should weigh against the use when the copyright owner may have had creative or economic reasons for holding back the work. Yet, courts have held that failure to exploit the market can be evidence of lack of market harm under the fourth fair use factor. For example, in Cambridge University Press v. Patton, a group of publishers sued Georgia State University, claiming that university-uploaded excerpts of books to Page 30