Often a copyright owner (or the owner of any other kind of right) does not want to give her rights away, but does want to allow some people to use the subject of the rights in some way. This permission to use the subject of an exclusive right without liability is called a license. If I own land, for example, I can allow my neighbor to cross that land every morning to get to his bus stop. This is a simple license; I promise not to prosecute my neighbor for trespass, but I retain all the other rights in the land, include the right to exclude others and even to prosecute my neighbor if he trespasses outside the scope of the license. Since licenses are private contracts, they can be very flexible, allowing all sorts of terms and conditions to be built in.

Lots of intellectual property is now licensed for specific uses rather than sold, and no copyright is transferred or assigned. In these cases, the money paid is not a purchase price but is “consideration” for the license contract, the use is governed by the terms of that contract, and the parties are bound by the scope of the agreement. Licenses can restrict uses that would be permitted under copyright law if the copyrighted material had been sold. For example, a license can explicitly forbid uses that would be considered fair use if the user had bought the work; things like short quotes from the subject material may be forbidden by contract. Also, purchasing a copyrighted work usually gives the buyer the right (called a “first sale” right) to further distribute that copy – resell it, lend it or give it away – while licenses often forbid this subsequent distribution.

But licenses also can help an author share her work in appropriate ways. Some publishers, in fact, will now accept an “exclusive right of first publication” – a licensed right that does not involve transfer of the copyright – as sufficient to publish a journal article (note that exclusive licenses, like copyright transfers, must be in writing). And many academic authors, as well as millions of other creators, are starting to use Creative Commons licenses to permit many uses of their work while still retaining the right to explicitly authorize or forbid those other uses that fall outside the terms of the license. As we shall discuss next, the Creative Commons is often a better way to protect the values important in the academy than reliance on traditional copyright law is.

Copyright, like most other “property” rights, can be sold, inherited through a will, given away or otherwise passed to other people (or corporate bodies). Since copyright is really a bundle of rights – reproduction, distribution, public performance, etc. – it can also be divided up and the different pieces transferred to different people under all kinds of different terms. Thus I can sell my right to reproduce and distribute a song I write to a music publishers, give my right to authorize public performances of that song to my sister (a singer), and will my right to allow translations of the song into other languages to my children.

When I transfer an entire right or my whole copyright (i.e., I keep nothing for myself), that is called an assignment or transfer of the right. Most transfers of copyright must be in writing. In the past, most publication agreements required that an author assign his or her copyright to the publisher; authors rarely retained any of their rights. Today many publication contracts still require a copyright transfer, but they allow authors to retain certain rights like the right to post an article on a personal web page or use it for a conference presentation. Essentially, the publisher who receives the assignment grants these rights back to the author. But increasingly we are seeing another method for sharing the rights in intellectual property being used – the license. As we shall see, a license can be used to make it either much easier or much harder to use a work of intellectual property.

Congress recognized that fair use is hard to apply, since one is only certain that a use was fair after a judge decides that it was. So Congress added a provision to encourage teachers and librarians to use fair use where it reasonably can apply. Section 504(c)(2) of the copyright law, part of the section about remedies for infringement, says that “statutory damages,” which are the largest liability in most infringement cases, must be remitted to $0 if the person found to be infringing is BOTH an employee of a non-profit educational institution acting within the scope of his or her employment AND had a good faith belief that the use they made of the copyrighted material was fair use.

This provision greatly reduces the risk when academics think about fair use, since it eliminates most of the money that can be awarded if it is found that the user was mistaken in their fair use analysis. But it is important to note that the belief that a use is fair must be in good faith, which means it has to be both subjectively honest (I really did believe it was fair use) and objectively reasonable (a reasonable person could have come to the same conclusion). In those circumstances, Congress has created an incentive (by reducing what one has to lose) to make reasonable fair uses of protected material. If after carefully considering the fair use factors (this checklist can help), one reasonably believes the use is fair, it is often possible that the educational value of going forward will outweigh this reduced risk of getting it wrong.

Fair Use is the only exception to the copyright law that applies to all of the rights in the copyright “bundle” — reproduction, distribution, public display, public performance and derivative works. If it applies, fair use can allow otherwise unauthorized uses that involve any or all of these rights. The problem is that it is very hard to predict when fair use will apply.

Fair use was an exception to copyright created by judges in order to maintain an equitable balance between copyright holders rights and the legitimate needs of users. It was incorporated into the new copyright law in 1976 with no intention to change the flexible, factor-based analysis that judges had been using all along. So instead of a set of requirements that have to be met for all the other exceptions to apply, fair use has a set of four non-exclusive factors that judges are to balance. It is not a checklist nor a mathematical equation, but rather considerations to be balanced in order to help judges decide what is fair.

The four fair use factors listed in section 107 are 1) the purpose and character of the use, 2) the nature of the copyrighted work, 3) the amount and substantiality of the portion used, and 4) the effect of the use on the potential market for or value of the original. In addition to these factors, section 107 lists some illustrative examples of activities that might be fair use — “criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship or research.”

Because it is “an equitable rule of reason” applied by judges, and therefore quite uncertain, some people are afraid to apply fair use. Nevertheless, it is an essential tool for higher education and the only copyright exception that is flexible enough to accommodate new uses and new technologies. It is very important, for this reason, that academics continue to consider the four factors and make good faith decisions about fair use whenever appropriate.