As many readers will know, the past few weeks have seen a couple of controversies over end user license agreements (EULAs) and Internet services.  In the library world, Yankee Book Peddler, an order fulfillment service, announced that they would introduce such an end user license whenever someone logged in to their ordering database.  The license terms included indemnifications and submission to the law of New Hampshire.  Both of these terms are impossible for most public institutions, and there was a lot of outcry.  Eventually, YBP withdrew its plan to introduce the EULA.  Then, earlier this week, there was a lot of controversy when Instagram announced that its new license would gave it the right to sell photos uploaded by subscribers, even for commercial purposes like advertising.  Again there was much consternation and an eventual repudiation of its earlier position from Instagram.

The use of EULAs for academic services instead of negotiating terms with each customer is especially problematic.  For one thing, those licenses often contain terms that are unacceptable and, for public institutions, may be invalidated by state laws and regulations over purchasing by state entities.  Worse, the EULAs are by definition required as a condition of use, meaning that the staff members who actually accept them are seldom the employees who actually have the authority to bind a university to a contract.

These considerations were in my mind when our e-reserves specialist informed this week about “new” licensing terms he had encountered when placing a request for a permission license with the Copyright Clearance Center.  A two and a half page set of terms was suddenly appearing with each order confirmation, and they contained a lot of the same troubling assertions that we saw with the proposed, but never implemented, YBP license.  Institutions indemnify CCC and agree to defend them against claims arising from any use outside the scope of the license.  Institutions agree to the application of New York law and the jurisdiction of New York courts.  Most distressing, each institution that uses the CCC agrees that that organization, which has been active in financing the legal case against Georgia State University, has the right to access and audit university records, which is not only a possible violation of our obligations under FERPA, but also seems like giving a potential adversary free pre-litigation discovery rights.

As with the proposed YBP license, several of the terms in this EULA are impossible for most public institutions, which usually cannot agree to indemnifications — because they could create an uncontrolled drain on taxpayer dollars — or submission to the laws and jurisdiction of another state.  Even for private institutions, which are not forbidden by law from agreeing to such terms, the license contains things we would try to negotiate around if the CCC had engaged us at the enterprise level rather than simply imposing these terms for acceptance by employees not actually empowered to do so.

Since I first learned about these terms on Tuesday, it has become less clear to me that they are actually new.  It turns out that our e-reserve employees have been clicking through an “accept the terms and conditions” box when they place orders with CCC for some time.  It is likely that other campus employees, including administrative assistants for departments, have done the same thing.  I simply do not know if these terms that suddenly appeared on the order confirmation are new, or just a more assertive way of making the older terms known.  In asking around, I discovered that at least one state university encountered and objected to similar terms several years ago, and negotiated separately with the CCC to arrive at a different agreement that supersedes any terms agreed to at end-user level.

My immediate reaction to these terms is that many of us will want to have similar negotiations to supersede this EULA, and that all of the CCC’s public customers will have to do so.  These terms might simply be invalid as a matter of state law for some public institutions, and they could be objected to by many other CCC customers on the basis that the end-users who must click through the license simply lack the authority to commit their employers to those terms.

For the record, I do not yet know what my own institution’s reaction will be; I have scheduled a conversation about the CCC terms with our Office of University Counsel.  But it still seems important to share the information about this new manifestation, at least, of terms that may well be unfamiliar to those folks who are actually responsible for contracting and purchasing decisions at their institutions.

I would be interested to hear from institutions that have already attempted to negotiate directly with CCC to supersede these terms.  I hope the comments to this post fill up with the news that others are way ahead of me and have acted to prevent the problems this license seems to cause.

Finally, I wonder what impact these licensing terms could have on a fair use argument, especially in light of the ruling by Judge Evans in the Georgia State case.  In that ruling, the Judge held that the fourth fair use factor, impact on the market for the original, favored the publisher (and so weighed against fair use) IF a license for the digital excerpt (not simply a license for another format) was “readily available at a reasonable price” (pp. 72 – 81 of the opinion).  My question is, could the licensing terms imposed by the CCC have an effect on whether or not the license is “readily available.”  If a public institution, including, possibly, Georgia State, is prevented by state law from accepting terms like the ones included in each permission transaction from the CCC, can that permission really be said to be readily available?  How can something be readily available if it is conditioned upon acceptance of an agreement that the institution is not allowed to accept?  And if such a license cannot really be considered readily available, how dramatically does that impact the fair use analysis, especially in those cases where a publisher will not accept permission requests except through the CCC?

As I say, we are still deciding what these licensing terms, whether they are brand new or of long-standing, mean for our business with the CCC.  But it seems likely that for some institutions, at least, these terms make the use of that permission service an impossibility unless they negotiate a superseding agreement.  And for many of the rest of us, this added roadblock will cause us to rethink where and when we can purchase licenses, and when we must rely on fair use simply because we have no other feasible alternative.

 

3 Responses to Is the CCC having an “Instagram” moment?

  1. Dave Hansen says:

    As usual, I learned something new from you (but I can’t say I’m surprised on this one)! Thanks, Kevin.

    I appreciate your point about the Ga. State court’s fourth fair use factor analysis (the part about the “readily available” license) and its incompatibility with institutional policies and, for many public institutions, their state law. The impact on the fair use argument for publics could be a silver lining, for sure, but I am skeptical. Here’s my argument for why not:

    When you sue a public institution or its administrators (and notwithstanding the mystical logic of Ex Parte Young), you are in effect suing the state itself. If a state can pass a law that makes licensing with itself difficult (e.g., no indemnification clauses, no forum selection clauses) and that law is factored into the fair use analysis, an extension of the same logic would mean that the state could pass a law that makes licensing impossible (e.g., no arm of the state shall license or purchase of copyrighted material) and then build the impossibility of purchase or license into the fourth factor analysis (meaning, no market harm at all, since, after all, state law forbids purchasing (c) content). It’s like voluntarily tying your own hand behind your back and then claiming a handicap.

    Anyway, if there is a silver lining, maybe this is it. But overall, I think the license terms are just bad, bad, bad. I would be interested to see the license terms of the blanket academic license.

  2. Kevin Smith says:

    Thanks, Dave, for your thoughtful comment. Let me explain why I do not think the possibility you suggest would undermine the idea that CCC’s licensing terms could strengthen a fair use analysis. Basically, I think a court could easily distinguish the two situations and find that the actual CCC terms support reliance on fair use for a public institution while not allowing the kind of more extreme law you suggest to make the fair use argument a slam dunk.

    From the licensee side, the restrictions actually imposed by many state laws have a rational relationship to the purpose of the Eleventh Amendment (as it has been interpreted). That is, they exist to protect the state, and especially its fisc, from control by an entity not subject to the political process in that state. A law that simply forbade IP licensing would have no such purpose consistent with the 11th Amendment, and courts could more easily refuse to take account of it in a fair use analysis.

    From the licensor side, I think it is important that the CCCs terms have been imposed by the rights holder (really by their agent) through a contract of adhesion. In the situation you imagine, there is nothing the rights holder could do to avoid the impact on fair use of the fictional law you envision. But in the actual situation, these terms have no necessary relationship to the licensing of the IP in question; they are imposed merely to protect and benefit the agent — the CCC. The license could be offered without them, and the hypothetical impact on fair use could thus be avoided. This seems to me to be a very different situation from the one in which a state would merely pass a law restricting licenses because it was alleged to improve the situation for fair use. In the actual case, it is the rights holder, through its agent, that has made the change that makes the license impossible for many state entities, so it is fair for the fair use argument against them to be impacted by that unnecessary and reversible change.

  3. Hey Kevin,

    I knew nothing about the changes until you posted them and I’ve been in ILL for 6+ years now. I don’t recall ever seeing these terms and conditions before now, so I’m betting that CCC set it up based upon what happened at GSU. MPOW is looking into this now and I’ve been charged with investigating what folks are doing differently over this. So I was wondering if y’all have changed anything or if you knew of other libraries that have changed their approach to paying for copyright based upon these changes. Thanks!