Licenses, prices, fair use and GSU

When the trial of the Georgia State copyright infringement lawsuit closed last month, the Judge asked both sides to file post-trial briefs, outlining their proposals for findings of fact and conclusions of law that they think the court should make.  They are extensive documents, representing the last chance each side has to make its arguments, and they are now available on the Justia website (docket numbers 409 through 411, with responsive arguments from each side at 414 and 415).  More about these documents in just a moment.

Before these documents were filed, however, there was an interesting contrast set up by a couple of unrelated publications.  First, Tom Allen of the Association of American Publishers (one of the groups paying the plaintiff’s legal fees) published an opinion piece in Publisher’s Weekly arguing that the Annual Academic Copyright License that the publishers say is a solution to the infringement they allege would only cost GSU $114,000, or about $3.75 per student (there are replies to this assertion here and here).  Second, there was a news story and much comment about the price increase being imposed on Canadian universities for their copyright licenses from Access Copyright, which is going up from a few dollars per student to $45/FTE.  The juxtaposition of these stories prompted the question of why it was costing so much more in Canada to license copying of protected works.

I think there are two answers to the question of why the Canadian license costs so much more.  The first is that the $3.75/student number for the CCC license does not strike me as realistic; it is certainly much less than my university, with a smaller student body, was quoted.  I suspect it is a “first year” discounted rate that would rise very quickly, which is the model we were presented with.  But the more important reason for the difference is that the Canadian license is a compulsory one, created by the Copyright Board of Canada, and therefore comprehensive.  Regardless of what you think about the price, when a university buys a license from Access Copyright, it covers pretty much all of the copying of educational material done on campus.  By contrast, the Annual Academic Copyright License from the Copyright Clearance Center is very far from comprehensive; only a relatively small percentage of publishers license their works this way.  Not all the publishers that license through the CCC, and not even all the plaintiffs in the GSU case, allow their works to be used under this blanket license; Cambridge University Press was forced to admit during trial that their material would not have been covered even if GSU had purchased the AACL.  So the price difference becomes explicable – you pay less to get less.

By the way, this claim about how cheap the AACL is elicited a very telling question from Andrew Albanese of Publisher’s Weekly, who asked if these three publishers had really decided to sue 4 million dollar per year customers for only $114,000.  The answer clearly is that they expect much greater profits if they win.

Now let’s go back to the last set of filings.  Reading the plaintiffs’ brief, I was struck forcefully by the realization that they are asking the Judge to eliminate fair use virtually entirely for academia and instead substitute a compulsory license.  This is especially clear when you see in their proposed injunction a requirement that permission be obtained for 90% of the readings in any course, regardless of whether or not some or all of that 90% could be considered fair use (under the extremely restrictive definition provided in the proposal).  This is essentially asking the court to force a license even where the law – under anyone’s interpretation — does not require it.  So it begs the question, can the AACL function as a compulsory license?  I think three observations should be made.

  1. For the AACL to function as a compulsory license, it needs much broader coverage.  It cannot play the role that the GSU plaintiffs would assign to it until everyone, or nearly everyone, licenses their materials through it.  If the Judge were to agree to the plaintiffs’ injunction, she would have to order those three publishers, at least, to license their work comprehensively through the AACL.
  2. The example of Access Copyright shows us that the price for the AACL will inevitably go up if it moves towards a role as a compulsory license.  In fact, you can find a list of Canadian universities that have decided to forgo the Access Copyright license because of its huge price increase here.  So the rhetoric about what a good deal it is, already suspect, would become irrelevant.
  3. Compulsory licenses nearly always require continuing judicial oversight due to the threat of monopolistic pricing and anti-trust concerns.  Sometimes a government board plays that oversight role, as with Access Copyright in Canada or the Copyright Royalty Board and cable rebroadcast in the US, and sometimes a judge does it, as in the oversight of ASCAP.  Is Judge Evans prepared to pull the CCC before her and keep them there in order to ensure a functional licensing scheme?

Of course, all of this speculation is irrelevant if the Judge accepts the fair use argument that is advanced by the defendants.  Their brief states that argument very compellingly, in my opinion.  Two points struck me with particular force.

First, the defendants address the frequent claim made by publishers that the Supreme Court, in Campbell v. Acuff Rose Music, has limited fair use to situations that are transformative and that copies for educational purposes are not transformative.  The defendants proposed Conclusions of Law point out that Campbell itself expressly renounced this claim in two ways.  First, it explicitly noted that “transformative use is not absolutely necessary for a finding of fair use.”  Then, in a footnote (number 11), the Campbell Court stated that “The obvious statutory exception to this focus on transformative uses is the straight reproduction of multiple copies for classroom distribution.”  You seldom get such devastating language to direct against one of your opponent’s central contentions.

The second really important aspect of the defendants’ proposed Conclusions of Law is this simple (if grammatically awkward) statement, which ought to be repeated like a mantra whenever fair use is discussed, because it is so obviously right: “The fair use defense would mean nothing if it addressed only those uses that plaintiffs have not developed a mechanism by which to charge for such portions of the work.”

Fair use is frequently described as flexible and as an “equitable rule of reason.”  The value of defendants’ arguments in this case is that they aim to defend this reasoned flexibility and ask the judge to avoid both of the common, and mistaken, constrictions of fair use – to either only those cases where an original is transformed or only cases where a “market failure” has occurred.  Both of these conceptions would reduce fair use to a mechanical test that would contradict its avowed intent and application over the past 170 years.

9 thoughts on “Licenses, prices, fair use and GSU”

  1. “The fair use defense would mean nothing if it addressed only those uses that plaintiffs have not developed a mechanism by which to charge for such portions of the work.” Amen!

  2. “But the more important reason for the difference is that the Canadian license is a compulsory one, created by the Copyright Board of Canada, and therefore comprehensive.”

    It is not so comprehensive:

    “Regardless of what you think about the price, when a university buys a license from Access Copyright, it covers pretty much all of the copying of educational material done on campus.”

    The current $3 per student price only covers photocopying of multiple copies for class distribution. No scanning or any other digital use is covered for that price.

    “I suspect it is a “first year” discounted rate that would rise very quickly, which is the model we were presented with.”
    Rates around the $3 level go back to 1996ish. The price huge jump and ridiculous reporting requirements (the right to audit school servers for potential copyright violations) is why their has been strong pushback towards AC.

  3. I will not attempt to respond to the many misstatements of fact concerning CCC and the trial record in the GSU record more generally reflected in Mr. Smith’s postings. At this point, it is the findings of fact by the trial court that matter. As a product manager responsible for the development and sales of CCC’s Academic Annual Copyright License, I would, however, like to clarify several particularly inaccurate statements made by Mr. Smith concerning the cost of that license to GSU and other academic institutions.

    The evidence in the case, which can be found in the most recent court filings available at the Justia website, notes that the $3.75 per student price for a GSU license is not a “first year discounted price” or anything else of the kind. Further, the approximately $114,000 royalty for a GSU license is not less than any quote given to Duke University.

    As an organization committed to designing products that help and are of benefit to our customers, we would be happy to discuss the actual facts as to our licensing options, including the cost of an Academic Annual Copyright License, with any academic institution wishing to do so.

    Tim Bowen, CCC Product Manager

    1. I still have and can produce an e-mail sent by a sales rep from CCC several years ago quoting a price for the Annual License at Duke of $207,780, based on an FTE of 13,852. That e-mail explicitly uses a base price of $15 per student, not the $3.75 quoted by Mr. Allen, and it offers a first-year discount of $7.75 per student, plus a 20% service fee.

  4. Regardless of the cost (i.e. $208K or $114K) where do the publishers think this money is going to come from? Sure there might be a slight increase in funding from the university administration the first year to cover this type of license, but I would be suprised if many libraries would get the full amount. Even if they did any increases in this rate would then need to come from other sources, which means even less buying power. To me it is essentially a zero sum game, there will be less books or journals purchased to pay this fee.

    Actually, if you look at it from another prespective ….it might be in the library’s interest as they can move away from the subcription model to an article model. The journals are already in this mode where the article is only important part to keep from the traditional journal. Just create course packs or subject packs of articles — find out what topics are premissible from freshman speech and english and bundle the articles for them — sure the student doesn’t learn any library or information literacy skills but it would save the lib/univ tons of doallars and I am sure the students (customers) probably wouldn’t complain about being relieved of actually having to use the library…talk about service… but then again they probably won’t ever learn or see the value of information and the library so they probably won’t support any additional funding so even less will make it to the publishers….nice long term strategy…

    1. The trouble is that most of those articles that you purchase are only for personal use and the access is often described as “access for 24 hours” only. (Which is a bit confusing – you purchase access, but not the thing itself, so no first sale right? even though you can download a copy that you keep.) People are not allowed to share an article they have purchased with a class or anyone else. To buy the articles for student use you would have to pay permissions over and over … which is kind of what publishers want us to do even with the stuff we’ve subscribed to and purchased. As you say, a zero sum game.

  5. At least in the University sector, you have some options. In private libraries, we are increasingly seeing licenses with language like the one below that seems to rule out even fair use copying for personal research. Quoting directly:
    License & Copyright: Platts standard subscription fee is charged per user, based on the user contract. Pursuant to our standard subscriber agreement and applicable laws, the subscriber is prohibited from making any secondary distribution of Platts information. Your user license prohibits forwarding e-mail publications to unauthorized users without the prior written authorization of Platts. Printing and distributing copies of the e-mail to unauthorized users is prohibited. Copying and distributing data from a Platts product to unauthorized users is likewise prohibited.

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