Wishful thinking at bar

There has been a discussion recently on the excellent e-mail list that has developed around Cornell University’s Institute for Computer Law and Policy about the Georgia State University lawsuit, in which GSU is being sued for alleged copyright infringement.  One of the points made is that the infringement allegations involve both electronic reserves administered by the GSU libraries and readings provided to students directly by faculty using the campus course management system.  So this is really a thoroughgoing assault on universities’ provision of course content for students under a fair use claim.

The discussion has led me to consider what outcome the publishers are seeking here and whether a ruling against fair use, which would clearly be disastrous for educational institutions, would actually be good for academic publishers.

The answer to the first question – what do the publishers want – is pretty easy.  They are seeking a massive increase in the revenue they get from permission fees.  If every e-reserve or course management use of even small excerpts from copyrighted works actually generated a royalty payment, publishers would get a windfall.  But that is a very big “If.”

First, it is important to understand that the current permissions market does not work well, especially when the reality is compared to the glowing descriptions of it found in the publishers’ filings with the court in the GSU lawsuit.  I have written before (here, for example) about the problems regarding whether or not the Copyright Clearance Center actually has the rights it is selling.  But I also believe that the pricing of permission fees indicates a huge market failure.

Today I asked our e-reserves staff to give me some random examples of permission fees that we have recently paid, from which I will select two.  For the 2007 book “No Caption Needed,” we paid $150 for permission to make just 17% of the work available to 12 students.  This amounts to over $12 per student to gain access to less than 1/5 of a work which sells for $35 retail.  For an older work – “Dealing with Terrorism – Stick or Carrot?” from 2003 – we paid about $10 per student to make 21% of this $30 book available.  These are not extreme examples; in fact, one of the samples fees exceeded $1,000 — over $25 per student.  Such costs are particularly egregious when one realizes that, by percentage, permission costs are higher than retail prices, that there is no marginal cost for the publisher involved and that these fees only authorize access for a single semester.   So, as we are asked to pay ever-increasing costs for decreasing value, it seems that an unsustainable system is being created.

If the publishers were to get a favorable (for them) ruling in this case, I think we can anticipate one of three responses from colleges and universities, none of them actually in the long-term interests of publishers.

First, some schools might elect to shut down their e-reserves systems, curtail what faculty can do in course management systems, and simply live with the reduced availability of teaching materials.  This would be a strong option, I am afraid, for many smaller institutions, and it would be very bad for education.  Indeed, that is precisely the specter raised by Gustavus Adolphus Librarian Barbara Fister in this recent article from Library Journal. This course would cause whatever income publishers are now deriving from those schools to dry up.  Worse, it might foster the development of peer-to-peer sharing of “home-made” scans of readings amongst students, which would exacerbate the present situation by removing the element of “adult supervision” that makes fair use decisions (even when they are ones with which publishers disagree) and pays for permission when fair use is not applicable.

Second, schools could decide to impose a student fee to pay for the sudden increase in permission fees. Some of the plaintiff’s court filings suggest this as an appropriate alternative.  Leaving aside the loud objections from students, this would likely also get the attention of Congress, which is already concerned about the cost of higher education.  Recent laws have required us to report on the cost of textbooks; see Fister’s article, as well as this story about students opting for cheaper alternatives or, frighteningly, just foregoing textbooks entirely. A new fee for access to digital teaching materials would seem to make Congress’ worst fears come true.  Indeed, in the long run, this could be a good outcome for higher education, if Congress were moved to create a provision for compulsory licensing for educational uses and place the task of setting prices in the hands of the Copyright Royalty Board.  Then, at least, we would get controlled and predictable permission fees.

Finally, some institutions would probably use money from their collections budgets, where there is still money in collection budgets, to pay for permissions.  This, of course, is robbing Peter to pay Paul; the net gain for publishers is minimal, but the cost to society is great.  Increased permission fees for material that is already published and available will inevitably decrease the monetary incentives for new authorship, since it will further constrict the market for such new works.  It is cheaper, of course, for publishers to collect fees on older works than it is for them to actually bring new works to market, but the entire copyright incentive is undercut by that logic.

Without a outcome in sight that would genuinely benefit the publishing industry, one has to conclude that the primary force driving this lawsuit is either emotionalism based on an unfocused sense of ownership violated – “It’s mine, its mine,” as children sometimes lament – or, at best, on purely wishful thinking.