Category Archives: Copyright Issues and Legislation

What fair use is for

December 20, 2011 Kevin Smith, J.D. 1 Comment

When I considered the Authors’ Guild lawsuit against the Hathi Trust and some of its partner institutions a couple of months ago, only the complaint had been filed, so it it was natural to focus on the motivation of the plaintiffs. And those motives are not hard to discern; after tasting the possibility of monetizing orphan works through the Google Books settlement and then having it snatched away, the AG is looking for an alternate way to use litigation to carve a profit-making opportunity from the labors of others.

Now, however, answers to the suit have been filed, both by the named defendants and by a potential defendant.

The defendants’ answer, filed on Dec. 2, is a very lawyerly document, and for that reason it might disappoint some readers. There are no lofty assertions about public benefits and the purpose of fair use ( I will make those assertions on their behalf). Instead, the defendants’ answer does what it is required by the rules of federal civil procedure to do; it goes point-by-point through the complaint and, largely, admits the factual assertions while denying the conclusions of law. It also states quite baldly the defenses on which these parties intend to rely. We have a system called “notice pleading” in the U.S., and the defendants are only required to give notice to the court and the plaintiffs of the arguments they intend to make.

Nevertheless, we can see the broad outline of a response here. The plaintiff’s complaint focused nearly exclusively on section 108 of the Copyright Act, the so-called “library exceptions” which deal with preservation and copying made for patrons (the foundation of inter-library loan). The plaintiffs want the court to conclude, it seems, that this one section of the law entirely encompasses all that a library is entitled to do with copyrighted material. As they go through the points alleged in the complaint, the defendants repeatedly assert that “Section 108 of the Copyright Act is one of many limitations on copyright holders’ rights” and “that plaintiffs description of section 108 is incomplete and therefore mischaracterizes the statute.” What is left out, of course, is that section 108 states explicitly that fair use –section 107 — is still available and that nothing in 108 “affects the right of fair use” (section 108 (f)(4).

Fair use, which exists for the purpose of allowing exactly the activities that Hathi is designed for — research, teaching and scholarship — will naturally be the heart of this case, however badly the plaintiffs wish this were not so. But the defendants raise several other defenses as well, including sovereign immunity (since all but one of the defendants are public institution), the plaintiffs’ lack of standing (since they cannot show that they or their members own most of the works at issue), the statute of limitations, and the fact that many of the works that the AG wants to impound are actually in the public domain. And, of course, these defendants assert fair use. In fact, they assert a whole slew of the exceptions that Congress built in to the copyright law. One of the places we will learn most from this case will be where the defense weaves together sections 107, 108, 109, 110 and 121 into, I imagine, a thicket of justification that emphasizes how comprehensively Congress intended to permit the socially beneficial uses that Hathi will facilitate.

The reference to section 121, which allows reproduction of copyrighted materials “for blind or other people with disabilities,” took on added importance on Dec. 9, when the National Federation of the Blind filed a motion asking the court to let it intervene as a defendant in the case. Such intervention is allowed in federal procedure “as a matter of right” when a party can show that it has a substantial and legally protectable interest in the matter at hand, that they could be harmed by a decision, and that their interests will not be adequately represented by the parties already involved.

Unlike the formal defendant’s answer, this document does make a full-blown argument, and it is a compelling one. The National Federation For the Blind tells several stories of university students and teachers whose ability to do their work is hampered by the laborious, and sometimes impossible, process of obtaining copies of works that can be read by a computer text-to-voice reader. They provide a vivid picture of how the Hathi Trust project “would allow blind students and faculty to participate fully in university life,” and that this has been a major purpose of the Trust since its inception.

The spare language of the one document, and the fully developed rhetoric of the other, combine to produce a convincing picture of what fair use and the other exceptions to the copyright monopoly were intended not merely to allow but to facilitate. Research, teaching, scholarship and access for persons with visual impairments. If copyright is allowed to impede the advancement of these purposes through mass digitization, and in the name of tying these files up until a private organization figures out a way to make money from them — to reap where they did not sow, as it were — then copyright law will have proved a failure indeed. But I do not believe that a court will allow that to happen.

SOPA and the Constitution

December 12, 2011 Kevin Smith, J.D. 1 Comment

I have written before (here and here) about the bills now before Congress that go by the name of PROTECT IP in the Senate and SOPA (Stop Online Piracy Act) in the House of Representatives. There are many reasons why these are bad bills, and an alternative approach has recently been proposed. Since discussions about the flaws in these bills has entered the mainstream media, I have not felt a strong need to continue to write about them. But I do think it is worthwhile to point readers to a blog post by Professor Marvin Ammori on the legal blog Balkinization about why he and Lawrence Tribe of Harvard have both written to Congress, independently, about the unconstitutionality of the bills. This is a different, and in many ways more fundamental, objection then those that I have seen elsewhere. Let’s hope Congress is listening.

Is the Copyright Office a neutral party?

November 3, 2011 Kevin Smith, J.D. 1 Comment

Recently a friend was asking me about my job title. I was hired primarily to address copyright issues, but my title is “Director of Scholarly Communications.” I am, in fact, involved in lots of other issues encompassed by that broader title, but my friend made the valid point that universities are beginning to divide the copyright function out from digital publishing services and the like. Her question got me thinking, and I concluded that I like my title precisely because it emphasizes the context of my work. My job is not simply to know the copyright law, but to help apply it, and even work to change it, in ways that best serve the needs of scholars and teachers on my campus. I am not hired, I don’t believe, to be neutral; I have a defined constituency, and my title is a constant reminder of that fact.

This conversation came to mind as I read two documents released by the Copyright Office in the past couple of weeks. The constituency of the Copyright Office, presumably, is the public as a whole, and their role ought to be more neutral than mine, seeking the balance between protection and use that has always been at the core of copyright law. In these two documents, however, the tendency to think that, as the Copyright Office, advocacy for anything that increases copyright’s strength and reach is the proper role, shows through. The needs and voices of owners in the legacy content industries seem to get extra weight, while the needs of users, who are more diffuse and do not have as many dedicated lobbyists, get less attention.

In its brief report on “Priorities and Special Projects of the United States Copyright Office” the Office details the studies, legislation and administrative projects that it intends to work on for the next two years. In its legislative priorities, the first three listed are “Rogue Websites,” “Illegal Streaming,” and “Public Performance Right in Sound Recordings.” Each of these priorities is an endorsement of particular legislative action by Congress — the first clearly endorses the bill alternately called PROTECTS IP or SOPA or ePARISITES. Indeed, each of these priorities seems to be dictated by the current lobbying activities of the entertainment industry, and each is a very much non-neutral endorsement of greater scope for and stronger enforcement of copyright protections. There is little sign that the voices arguing that copyright already reaches too far and is over-enforced are being heard.

Other priorities do seem more neutral. The Copyright Office wants to “continue to provide analysis and support to Congress” on orphan works, and it repeats its intention of making legislative recommendations based on the report of the Section 108 Study Group, which addressed the specific exceptions to copyright for libraries.

This last priority created a rather humorous situation for me last week when I was contacted by a member of the library press seeking information about this “new” report on section 108. In fact, the report was issued in 2008. Nothing has come of it in three and a half years, and, even if all of its recommendations were suddenly adopted, it would do little to improve the situation for libraries because the Study Group was unable to find agreement on the most pressing issues. The Copyright Office does not mention the more comprehensive proposal on library exceptions made by IFLA to the World Intellectual Property Organization.

My real interest focused on the Copyright Office’s desire to do something about orphan works. In addition to the legislative priority listed, the report promised a study document on mass digitization, which would naturally have to address orphan works, and that document was issued a few days ago. Here we get a glimpse of how the Copyright Office plans to address the difficulties posed by orphan works.

The report makes the CO’s preferred approach very clear — “As a practical matter, the issue of orphan works cannot reasonably be divorced from the issue of licensing.” This is an interesting statement, since the last proposal to resolve the issue that the CO nearly got Congress to adopt a few years ago did not rely on licensing, but addressed the issue by reducing the potential damages for using an orphan work after a reasonably diligent attempt to find a rights holder. There clearly are other approaches, but the appetite of industry lobbyists has, since the Google Books case, been whetted by the possibility of profiting from other people’s (orphaned) works, and the CO has been swept up in the licensing fever.

The report gives a detailed and very helpful discussion of the various types of licenses that could be used, but it never addresses the question that seems most pressing if orphan works are to be licensed — who is going to get paid? If works are genuinely orphaned, there is no rights holder to pay, so orphan works licensing proposals must decide who is going to sell the licenses and where the money is to go. Other countries have adopted licensing schemes, and often the licensing is done by the government; in the U.S., however, I think we have to assume that private collective rights organizations (who are given prominent mention in the report) would collect the money and, perhaps after some period of time, keep it.

This report is about more than orphan works, of course; it addresses the broad issue of legal concerns in mass digitization. I was interested to see how fair use was treated, both in that broader context and in relation to orphan works. I was disappointed in both regards.

In the general discussion of mass digitization, fair use is pretty much summarily dismissed by the Copyright Office. It begins with the assertion that “the large scale scanning and dissemination of entire books is difficult to square with fair use,” which seems to beg the question. The rest of the section reads like a legal brief against Google’s position on fair use in the book scanning case. Nowhere does the report consider what difference it might make for a fair use claim if the project were wholly non-commercial, nor do they consider that fair use might be part of an overall project strategy that included other approaches, such as selected permission-seeking. The report treats fair use as an all-or-nothing approach and dismisses it as unworkable without the nuanced consideration it demands.

More troubling is the fact that, having dismissed fair use in the broader context of mass digitization, the Copyright Office never discusses it in the more narrow field of orphan works. With orphans, of course, fair use seems like a stronger argument, since there is no market that can be harmed by the use, especially if it is itself non-commercial. But it seems clear that the CO is committed to creating such a market by pushing a licensing scheme, and is not willing to discuss any option that might undermine its predetermined conclusion.

Silly Season

October 31, 2011 Kevin Smith, J.D. 1 Comment

It is traditional in political reporting to refer to the run-up to primary elections as the “silly season” because of all the amazing things candidates will say while trying to appeal to different constituencies and bear up under the glare of media coverage. Recently this time of year has also seen some developments in the copyright world that also justify some bewildered head shaking.

On the legislative front, the PROTECT IP act has been introduced in the Senate for a while now. It is problematic even in its Senate form, since it would allow private actions to attack web domains based only on accusations of IP piracy, without the usual due process that is necessary to sue an alleged infringer. But the act got worse, and stranger, when it was introduced into the House of Representative. A provision was added that would role back the “safe harbor” provision for ISPs from the Digital Millennium Copyright Act and impose an affirmative obligation for web hosting services to police content uploaded by users. This is in keeping, I am afraid, with the overall effort to force others — the ISPs and the government — to foot the bill for enforcing copyrights owned by the legacy content industries. Discussions of this bill are all over the Internet; a representative one can be found here.

The argument that we should change the DMCA is becoming very common. The content industries do not like the bargain they made a decade ago, and seem increasingly to want to shut down the most productive aspects of the internet in order to preserve their traditional business models. An excellent argument for why we should not let this happen can be found in this discussion of copyright, the Internet and the First Amendment from Thomas Jefferson scholar David Post.

The real silliness, however, comes in the decision to rename the bill in the House, from PROTECT IP to ePARASITES. I sometimes believe there is a congressional office for acronyms, staffed by some very silly people. When I first heard this new acronym, I thought it was a parody. Although I now know that the “parasites” referred to are websites that facilitate unauthorized sharing, I initial concluded that it was a joke referring precisely to those industries supporting PROTECT IP who want the taxpaying public to bear all the costs for their failures to innovate.

Another round of silliness was created this week by the filing of a Second Amended Complaint in the lawsuit between the trade group AIME and UCLA over digital streamed video. The judge dismissed the First Amended Complaint about a month ago but gave the plaintiffs (AIME and AVP Video) permission to refile. This they have now done, but going through the (long) complaint, I fail to see how they have really addressed many of the judge’s reasons behind the dismissal.

A major reason behind the dismissal was lack of standing for AIME and sovereign immunity protections for the defendants. I noted at the time that the lawsuit would really need different plaintiffs and different defendants to go forward. Clearly AIME did not agree, since the new complaint names exactly the same defendants, simply with “and individual” added each time the previous document said they were sued in their official capacities. This new document does not remove the claims against them in their official capacities, even though the judge already dismissed those claims, and it does not add any facts that I could see that would justify a suit against the individuals. So the refiling really just seems to double down on the failings of the first complaint.

Also, AIME tried to rescue its “associational standing” but pointing to “injury in fact” to the association itself. Such injury, incredibly, seems to be primarily the damage done to AIME by its relentless pursuit of this lawsuit, which it brought in the first place. Staff time has been consumed, they say, and the reputation of the association harmed. New members are reluctant to join. Why any of this confers standing on AIME against UCLA is beyond me; members may not be joining because they do not want association dues spent tilting at windmills. Also, the judge already rejected the argument that “diversion of resource” for the lawsuit was enough to establish the required showing of injury. It is not clear to me that simply adding more detail can rescue this argument.

The new complaint again asserts that sovereign immunity was waived by UCLA when it signed license agreements with a jurisdictional clause, and by its own policy of obeying federal copyright law. Both of these arguments were already rejected by the judge, so reasserting them seems more like a criticism of the previous decision than a new argument.

On the substantive arguments, I also can see very little that has been added that should change the outcome here. The license between AVP and UCLA is reasserted, with the same language that caused the judge to read it in a way that undermined the first set of copyright claims. One addition is the claim that the UCLA system is “open” (which the license does not allow) because it has a guest feature that can be turned on, but there is no assertion that it ever has been turned on in fact. Another addition are the state law claims for tortious interference with a contract and prospective interference with a business advantage. Like the previous state law claims, this seems entirely founded on the copyright infringement claim, so I see no reason these would not be preempted by the resolution of the copyright issue, as the previous claims were.

In both these instances, I think we see the emotion of righteous indignation overcoming reason. The very thing, it seems, that makes this the silly season.

The ironies of risk avoidance

October 21, 2011 Kevin Smith, J.D. 3 Comments

Start with a basic empirical premise: most librarians (and often the lawyers that advise them) are extremely averse to risk when it comes to copyright matters. Years of experience convince me that this is true. Many activities in a library create risk — letting the public in the door, hiring employees, signing licenses and other contracts — and we usually have policies and procedures in place to reduce and manage those risks. But with copyright we tend to take an all or nothing approach; either we must be 100% confident that there is no risk of infringement or we will not undertake the project. Copyright seems so big and scary that we decline to manage risk and try — we are never actually successful — to avoid it altogether.

The first irony about this approach is that the attempt to avoid risk actually creates risk. Every time we make a choice we both select one option and reject others. If I stay at work until 5 pm today, I will miss the chance to frolic in a gorgeous fall afternoon. Economists refer to the “lost opportunity” costs that are part of every decision. Perhaps the risk of these types of losses is most famously summed up by John Greenleaf Whittier, who wrote, “Of all sad words of tongue or pen, the saddest are these, “it might have been.”

When we consider any decision, we need to balance the risk that something bad will happen if we act with the risk that something good will be lost if we choose not to act. For projects in libraries, which usually involve digitizing material in order to improve access, the loss of a real benefit is also a risk, and should be weighed against the risk of infringement. If we make a serious attempt to balance the risk, recognizing that there is indeed risk in both choices, we will be compelled to make, I believe, a more careful and nuanced assessment of the copyright situation involved in any such undertaking.

Which brings me to another irony, a small but recent example of exactly the risk avoidance (as opposed to risk management) that I am complaining about. Back in the late spring, I wrote a short paper about risk management for large-scale digital projects. In it I advocated an approach that looks at multiple aspects of copyright law when evaluating a potential project and balances the risk involved, after careful analysis, with the pedagogical reward to be gained by going forward (or lost, if a negative decision is reached).

Several colleagues who read the paper suggested that I should publish it, and so earlier this week I submitted it to D-Lib Magazine. I was pleased to get a very quick acceptance, but less pleased to be told that the article would be published as an “opinion piece” and carry a disclaimer distancing the editors of D-Lib from my “opinions.” Why, I asked, was my article different from other academic writings, which almost always make a case for some position or action over against alternatives? The reason, I was told, was the subject matter. The editors did not know enough about copyright, they said, to be assured that my position was a sound one. They went on to say that their lawyers discouraged publishing anything about copyright, since readers might “take this as legal advice to their detriment” and create liability for the magazine.

This struck me as odd. Surely they do not believe that they, or any other journal editorial board, actually warrant the accuracy and soundness of every article they publish? I seriously doubt that the D-Lib editors personally guarantee that technical articles they publish, which sometimes recommend software or hardware solutions, will never lead to unanticipated bugs or security breaches. And I have never once heard of an actual case in which a journal, whether peer-reviewed or not, was held liable for bad information in an article they published (as opposed to where the article is itself infringing or defamatory).

The logic here is flawed because what is really behind this approach is fear, and the irony is that that fear prevents D-Lib from addressing a topic that is of great importance to the world of digital librarianship. Fear could be dispelled by robust discussions and plentiful information about copyright issues, but instead a leading journal elects to remain silent, and therefore reinforces the perception that this is an area that librarians cannot address, must flee from.

In the age of digital libraries, nearly all of our decisions implicate copyright in some way. As a profession, we cannot afford to hide our heads in the sand; we need to seek ways forward, and the search for workable options will require information, debate and discussion. Copyright cannot remain a forbidden topic.

The decision not to publish my paper (I elected not to have it appear marked off as an opinion piece) probably is not any real loss to D-Lib or to the profession as a whole. The paper will appear later this year in another journal, and I will post it here as soon as I am able. Others must decide if it is any good or not. But regardless of the quality of my argument in that paper, the topic, and the sensitive analysis of risk that it demands, is not something we can avoid.

By the way, this blog post is an opinion piece. It, like everything else I write here, represents my own opinion and not the official position of Duke University. But you knew that without my saying so, didn’t you?

Is it all about the Orphans?

September 15, 2011 Kevin Smith, J.D. 5 Comments

In my post about the Author Guild’s lawsuit against HathiTrust and some of its university partners, I promise to consider further the question of why the complaint was so focused on orphan works. Why the plaintiffs put so much emphasis there, since presumably they cannot show that they or the members they represent actually hold any copyrights in those specific works? In a story for Inside Higher ed., a spokesperson for the Authors Guild maintains that the suit really isn’t about orphan works; nevertheless, I continue to think that that is exactly what it is about. Jennifer Howard from the Chronicle of Higher Education gets it right, I think, when she writes that “The plaintiffs seek to take control of those files out of the hands of libraries until Congress establishes guidelines for the use of digital libraries and orphan works.” The lawsuit seems most understandable, I maintain, as part of a strategy to dictate the terms by which the orphan works problem is “solved,” and we need to look closely at what that strategy might involve.

In his excellent post about the lawsuit, Professor James Grimmelmann makes two comments about the Authors Guild’s “grand strategy” with which I respectfully disagree. He says that the AG has switched positions and now opposes action on orphan works, and he suggests that the effect of the lawsuit will be to discourage Congress from getting into the orphan works arena at all. On the contrary, I believe that this is part of a campaign to get Congress to address orphan works by setting up a licensing scheme, similar to the one Canada uses, in which each use of an orphan work must be licensed and a royalty paid. I think the hope is to collect royalties on using orphans that will ultimately be distributed to authors (or publishers?) of similar “categories” of work. With the failure of the Google Books Settlement, I think this is the next attempt by the content industries to sell what they do not own on behalf of parties they cannot identify, and then keep the money.

One of the first bits of evidence I cite for this opinion is this short report about comments sent to the European Union, as it considers its own orphan works directive, from the International Federation of Reproduction Rights Organizations. IFFRO is the trade group for collective rights management groups, including US groups like ASCAP and the Copyright Clearance Center. In their comments, they tell the EU that “Orphan works should be administered through collective management and licensing,” the rules and conditions of which should be left in the hands of those who publish similar “categories” of works. IFRRO does not address where the money would go, but the Canadian model for orphan works gives us a clue; when royalties are paid to collecting societies in Canada, they are normally held for five years (in case a rights holder surfaces) and then become part of the regular funds of the rights organization, presumably for distribution.

What IFRRO is essentially asking the EU for is the same kind of license to exploit orphan works that Google was hoping to get in its book project settlement. That settlement seems to be completely dead, but the prospect of monetizing orphan works put dollar signs in the eyes of the Authors Guild. Now I think the AG is hoping to clear the way for Congress to establish a scheme for collecting money from users of orphan works, probably using the Copyright Clearance Center, and distributing it eventually to their members. They want to make sure that no plausible mode of using orphan works, especially a non-commercial one, gets any traction, so that their lobbyists can go to Congress and say “only you can address this problem, and we have a plan all ready for you.”

It’s really worth looking at the Canadian model, which is described in this excellent article by De Beers and Bouchard on “Canada’s ‘Orphan Works’ Regime: Unlocatable copyright owners and the Copyright Board,” The Canadian law, we should note, authorizes an administrative board, not a collective rights organization, to grant licenses upon application for particular uses. But the royalties it orders are often determined by and paid to the collective rights groups, and I strongly suspect that it is a variation on this broad scheme that the Authors Guild would like to push.

In addition to its contextualized discussion of how the Canadian scheme works, the article’s authors raise quite a few really important and challenging considerations about the specifics of any orphan works legislation. For example, how do orphan works schema address the special problems posed by “moral rights,” which are often held by a party different than the copyright (economic rights) holder? Also, exactly when can an orphan works license be issued? For exactly which works is licensing permitted, and what kinds of uses will be licensed?

The Canadian Copyright Board always requires the payment of royalties for orphan works licenses. As we look at their system, it is important to ask how these payments fit in to the incentive scheme for new creation that copyright is intended to create. Are these payments, at least quite often, simply a tax on users that do not serve any role in encouraging new works? If a similar model is proposed in the US by industry groups, especially involving the collective rights groups, we would have an even greater problem of “rent seeking.”

The most significant issue raised by the article is the relationship between licensed uses and those that benefit from a statutory exemption. In the US, that raises the issue of how a licensing scheme for orphans would fit in with fair use, which is exactly the issue the Authors Guild tries to duck by not addressing fair use in its complaint against Hathi. If we approached orphan works by creating a licensing regime, would a license be available even if a use was arguably fair use? Who would decide? And would the license thereby provide a protection against liability for a negative judgment on the fair use case, thus usurping the role of the federal courts?

As I read about the standards by which the Canadian licensing board makes it decisions about which uses to license and how to set royalties, I realized they were using criteria very similar to the fair use analysis. The good faith of the user, the commercial or non-commercial nature of the use and the character of the original work all come into play. This suggests to me that fair use — which is found in US law but not in Canada, of course — already accomplishes a lot of the work that a licensing scheme for orphan works might be expected to do, and that fair use is really the best model for dealing with orphans in the U.S.

Really the choice between a license model and fair use is an instance of the proverbial choice between security and liberty. By suing over a fair use claim about orphan works, the Authors Guild, I think, is hoping to force libraries to opt for security, and therefore pay for licenses.

The details, problems, and dangers of Canada’s solution to orphan works led me to conclude, even before this new lawsuit made me suspect that a similar, but privately administered, system was going to be pushed in the US, that a better solution under US law would lie in the remission of potential damages (which Congress considered several years ago). In short, we should treat orphan works as simply a species of fair use and define a protection against liability for good faith users of orphan works that is similar to that which we already grant to employees of educational institutions (under 17 U.S. Code section 504(c)(2)) who make good faith determinations about fair use. That is precisely the solution Hathi makes plausible, and that the Authors Guild wants desperately to suppress lest Congress figure out that a fair use solution could really works.

Stop the Internet, we want to get off!

September 13, 2011 Kevin Smith, J.D. 7 Comments

It seems I spoke too soon. Only hours after I posted on this site a comment about why the HathiTrust orphan works project should not be controversial came news that the US Authors Guild, joined by similar associations in two other countries and eight individual authors, has filed suit to enjoin Hathi from proceeding with the project and seeking to impound all seven million digital volumes held by Hathi that may still be protected by copyright. Professor James Grimmelmann of New York Law School declares that “the Orphan Wars are upon us.”

Let’s start by being very clear about what these plaintiffs are asking. In their complaint they list 62 works to which named plaintiffs hold copyright and also assert “associational standing” based on their representation of other unnamed copyright holders in unnamed works. To protect those few works from distribution by Hathi, which as I far as I can tell is not actually imminent, the plaintiffs ask to impound and remove from Hathi 7 million files. AG President Scott Turow calls Hathi “an intolerable digital risk.” To me the real risk is that the foolish actions of Turow and his handful of followers (all but one of the plaintiffs are officers of one of the associations) will threaten the tremendous cultural potential of Hathi and similar projects simply because they are frightened of the Internet and have not yet figured out how to make money off of it.

Professor Grimmelmann has an excellent analysis of the complaint at the link above, and Kenny Crews of Columbia offers his comments here.

My own reading of the initial complaint — I doubt it is the final version — suggests a notable absence of logical argument. The press release the plaintiffs issued yesterday was full of protests and anguish, but did little to state a real case against Hathi. As it turns out, the complaint itself is not much clearer.

As Grimmelmann points out, one issue for the association will be standing to sue. Assuming that plaintiffs hold valid copyrights in some works that were digitized by Google and are held in the HathiTrust, they claim to have standing to object to the digitization of their works — but Google is not named as a defendant — and to the distribution of digital files back to the universities and into the HathiTrust. By itself, this would not, in my opinion, support an injunction; there is no sense of imminent harm. So then the complaint makes a dramatic turn and addresses the orphan works project, claiming that it is an illegal distribution. But they provide no evidence that any of the plaintiffs actually hold any rights in those works identified as orphans or that they represent anyone who does. So if the whole argument is needed to justify the injunction being sought, there may be a question of whether any of these plaintiffs have standing to seek it. They need to show an immediate prospect of particularized harm, and I don’t think they can do it.

Another place where logic fails in the complaint is when the plaintiffs try to explain why the digitization and preservation is illegal. Early on in the document they note that “The Universities have publicly defended their unauthorized digitization activities by claiming their conduct benefits society and is permissible under the fair use doctrine set forth in section 107 of the United States Copyright Act.” They then declare that “[t]his position is without legal support” and immediately turn to a discussion of section 108 of the copyright act. They never again mention fair use or address it as a potential defense, although they dedicate three pages later on to an elaborate, and irrelevant, discussion of section 108, which is the section that lays out specific exceptions for library preservation and for interlibrary loan.

The argument here seems to be that section 108 fully defines what libraries can do with copyrighted work and, if it is not permitted under 108 or authorized by the rights holder it is therefore infringing. But this is wrong; the argument is defeated by a single short phrase found in section 108 itself, at subsection (f)(4), where the law states that “Nothing in this section… in any way affects the right of fair use as provided by section 107.” Libraries still can rely on fair use, and it is interesting that the text of the law itself calls fair use a “right,” not merely a defense. Like it or not, the plaintiffs’ claim will have to withstand an assertion of fair use, and if they cannot address that fair use claim they are doomed, one hopes, to failure.

The fact is that the Authors Guild has not been doing very well on the litigation front recently. Their attempt to sue Google and then settle with it in a way that would allow the monetization of orphan works has failed, and the case is currently in limbo. It is interesting to speculate on whether or not this filing is intended in any way to influence the outcome of that case; perhaps they hope to persuade Judge Chin in that case that Google and its partners are not reliable actors to deal with the orphan works problem. The Authors Guild was also recently dealt a setback in its long-standing Tasini litigation when another judge refused to certify a class for class action status. Instead of becoming litigation-shy, it appears that the Authors Guild wants to raise the stakes. At least they have not tried to bring this case as a class action as well.

The reference to how we might solve the orphan works problem in this country and elsewhere gives us a clue, I think, to what is behind this lawsuit and why it takes such an odd and twisted form. I think what is really going on here is an attempt to forestall ANY exploitation of orphan works until and unless the industry lobbyists can convince Congress to pass legislation that allows them to make money from those works. The plaintiffs never address the defendants’ claim, to which they refer, that Hathi provides a social benefit, and I think that the point of the lawsuit is to make sure that they get paid before anyone is able to take advantage of that benefit. I will have more to say about this possibility in my next post.

Reform is in the air

September 7, 2011 Kevin Smith, J.D. 1 Comment

Suddenly lots of people seem to be talking about copyright reform proposals. One way to look at this is as an indication that the flaws in our current system are becoming increasingly obvious. Several commentators have noticed that the passage of patent reform bills in both houses of Congress (whatever you think of the merits of those bills) seems to coincide with a more general public recognition (including in an hour-long episode of This American Life) that our patent system is so broken as to stifle the innovation it is supposed to encourage.

There is a sense of the same phenomenon occurring in Britain as it moves along toward copyright reform legislation.The British government’s response to the Hargreaves Report indicated a desire to get copyright reform moving, and this report from IP Watch suggests that the reform effort is gaining momentum. Again, not all of the details are clear, and what we do know is mixed. The addition of a private copying right, which would decriminalize ripping a CD to listen on an iPod or scanning a journal article to read later, is a good start. If it is combined with a flexible exception similar to fair use in the US, the reform effort might really make an economic difference for Britain.

But most of the time, reform proposals are not as sweeping as what may be taking place in Britain; they tend to be responses to particular problems and are shaped to solve the perceived difficulty. I want to look at three such proposals in the United States.

First, Rep. John Conyers got some press when he called for reform that would clarify the situation for musicians and other artists who would like to exercise their “termination right” and recover rights to works they created. The termination right kicks in after 35 years to allow the artists to void copyright transfers and exclusive licenses, so some big-selling hits from the late 70s, which are still quite profitable, are at issue. Artists would like to reclaim the rights and get a larger share of the profit, which, after all, is how copyright is supposed to work. The recording industry has responded by saying that these works are “work made for hire” and not subject to termination. If one reads the work for hire definition in the copyright law with any awareness of how the music industry works, this claim is ludicrous. But to prevent endless litigation, Rep. Conyers would like to clarify those provisions so it is clear that artists are able to reclaim their rights.

Another problem in need of a legislative solution is the recent decision about the first sale doctrine that threatens the ability of libraries to lend works manufactured overseas and of students to resell their textbooks if they were printed in foreign lands. Here again a relatively simple change might be proposed. Instead of the phrase “lawfully made under this title” in section 109 of the copyright law, the wording should be changed to “lawfully protected under this title.” That would make it clear that if a copyright holder wants to have the protection of US law in the United States, consumers and users of their works will also have the normal protections of that law — nothing more, but nothing less.

Both of these proposals would require actions by Congress, and many feel that the current political climate makes such actions improbable, to say the least. A really creative take on reform, directed not at Congress but at state legislatures, comes in this paper on “A State Law Approach to Preserving Fair Use in Academic Libraries” by David Hansen of the Samuelson Law, Technology and Public Policy Clinic at UC Berkeley. David’s paper, which gets favorable notice from the Law Librarian Blog, does an excellent job of explaining why it is problematic that library licenses so often limit fair use rights and of how federal courts — where copyright claims are heard and licensing matters usually decided based on “supplemental or ancillary jurisdiction” — have no incentive to investigate the propriety of those provisions. So David proposes state-by-state reform of contract rules to make such restrictions void as a matter of contract law, at least in regard to public colleges and universities. David correctly points out that state legislatures, concerned as they are about how public education funds are spent, have a real incentive to look at this and to realize that this simple provision would increases the efficiency of money spent on licenses.

Hansen’s proposal is very modest, and one hopes it is possible to get more sweeping reform than he suggests. He makes a good case for starting with state governments, however, and has a depressing analysis of the likelihood of Congressional action. In any case, a reform of contract rules that govern state institutions of higher education is a great place to start, and perhaps — just maybe — we are beginning to see a groundswell that can move reform up the ladder.

Getting first sale wrong

August 24, 2011 Kevin Smith, J.D. 13 Comments

Last week the Second Circuit Court of Appeals handed down a decision with potentially disastrous consequences for higher education. I admit that I have been reluctant to write about it because I cannot think of a good remedy for the situation and I dislike the role of Chicken Little, always crying that the sky is falling. But with this decision two judges on the 2d Circuit really did open some cracks in the firmament above higher ed., and there is no way to ignore them.

In the case of John Wiley & Sons, Inc. v. Supap Kirtsaeng, the court has held that the “First Sale” doctrine in copyright law – which allows libraries to lend books and consumers to resell the books they buy – applies only to works that were manufactured in the United States. In an earlier case (Costco v. Omega, which was affirmed by an evenly divided Supreme Court) the Ninth Circuit had ruled that first sale did not apply if a work was manufactured and sold abroad, but the Second Circuit went much further. In last week’s ruling they decided that first sale did not apply even when the work manufactured abroad was sold in the U.S. with the authorization of the copyright holder. Thus they have created the anomalous situation where a rights holder enjoys the full protection of U.S. law, but consumers who buy the work do not have the advantage of a basic rule for their protection.

The Second Circuit panel seems to know this is a bad decision, and yet they make it anyway. In a footnote they acknowledge that they are creating an incentive for content companies to move their operations, and the jobs that go with them, off-shore. And the very well-reasoned dissent also makes it clear that the state of the law did not require this sweeping limitation on first sale. After several readings I am still not sure why these two judges felt compelled to so dramatically change first sale after over a century of its successful application.

The irony of this decision is that in creating an incentive for publishers to publish their books overseas, the “manufacturing clause” in the Copyright Act (section 602) was used by the Second Circuit panel to accomplish the exact opposite of what it was originally intended to do, which was to defend U.S. businesses. (Note, as a sidebar, this article from Forbes on the “chain reaction of decline” in U.S. manufacturing and imagine it getting worse as both law and economic conditions create negative incentives for U.S. manufacturing).

One of the problems that the Wiley decision creates is uncertainty about library lending. Libraries do not even know, I am afraid, how much of their collections are manufactured abroad. In the Second Circuit, however, lending anything that was manufactured outside the U.S. is now in question, regardless of where it was purchased (even directly from the publisher). The manufacturing clause that is at the root of this decision does contain an exception for the importation of books “for library lending purposes,” but it does not say is that libraries can actually lend these books. There was no reason to say that, of course, since Congress clearly assumed that first sale would apply. But Congress didn’t anticipate the short-sightedness of these two judges. And the situation is even worse for video, since the exception for audio-visual works in the manufacturing clause only mentions “archival purposes,” not lending. So potentially very large, and probably indeterminate, portions of a library’s collection in the Second Circuit (NY, VT and CT) may now be in a grey area – they can certainly be used in the library but may not be available for legal lending.

I hate to imagine it, but this decision raises some frightening possibilities and requires greater vigilance on the part of librarians. At the very least, libraries must demand information from publishers about where every item has been manufactured. Obtaining such information is no longer an option, since our legal uses of the things we buy now depends on knowing this, and the place where the publisher is located or where the sale took place is simply not sufficient. But what I really fear is that publishers will begin to manufacture more of their works overseas and then try to demand a higher price – one that includes “public lending rights” – from libraries.

If libraries are in a difficult position, students may be even worse off under the Second Circuit’s ruling. Again, publishers now have an incentive to manufacture their textbooks abroad and sell them to U.S. students. Such students would no longer have the right to re-sell their textbooks or to purchase used texts. The defendant in the case, Supap Kirtsaeng, had made a lucrative business out of reselling textbooks purchased in Asia. He was perhaps an unsympathetic party, but what he was doing was not different in kind from the resale of texts that is common on all college campuses. This activity makes higher education a little more possible for many. Now publishers have an easy way for to close down this secondary market for textbooks, about which they have complained for years. In the process, the cost of education for college students would be pushed up even further.

So what can be done about this appalling decision? There are very few real options, but here are some suggestions:

In the short term, libraries can demand manufacturing information and, for works manufactured outside the U.S., insist on a “right to lend” being including in purchase agreements. If publishers try to charge extra for this, libraries must walk away from the purchase.
The Second Circuit could be petitioned to re-hear the case en banc. The decision as it came out last Tuesday seems almost careless, and it certainly went beyond what was necessary to uphold the District Court ruling against Kirtsaeng. The Ninth Circuit rule from Costco would have been sufficient grounds for an affirmation, so there was no cause in either the facts or the law for this strange holding. Perhaps the whole Second Circuit could reexamine the situation and set it right. But is the defendant willing to take this path?
Congress could amend the law to make clear that first sale applies in the U.S. whenever a work is sold with the authority of the rights holder. Much in the Copyright Act indicates that this was the intent of the law in the first place, and either section 109 or 602 (or both) could be easily amended to reverse the harmful effects of the Wiley court’s misunderstanding. But is Congress really interested in technical amendments to the Copyright Act right now, however badly they are needed? The two Judges in Wiley themselves suggested that Congress could correct them if they were getting it wrong (they were!), but as the ARL Policy blog noted last week, this seems more like a taunt, in the current political climate, than a real option.

An easy fair use ruling, but with a message

August 16, 2011 Kevin Smith, J.D. 5 Comments

The case of Brownmark Films v. Comedy Partners, which was decided last month in the Eastern District of Wisconsin, raises two really interesting issues for this blog. I plan to address one of them — fair use — now and save the other for a subsequent post.

I do not want to rehearse the facts in detail here. Suffice it to say that the case involves a claim that an episode of South Park infringed the copyright in plaintiff’s music video, which the judge calls “cryptic” and I call simply crude. The much more difficult half of the case involves the issue of a transfer of exclusive rights, and I will discuss that later. But for academics, I think, the most important aspect of the decision is how it deals with fair use.

The fair use call is really pretty easy in this case; inclusion in South Park is virtually prima facie evidence that a work is being parodied. Indeed, the judge has little difficulty deciding that the use of less than one-third of the original music in a video featuring a different character and intended to mock the viral video phenomenon is fair use.

What is significant here is that the judge made the fair use decision before there had been a trial. He examined the pleadings and found that everything he needed to make this easy call was already before him. Then he ruled favorably on a motion to dismiss the case on the basis of those pleadings (technically a “motion to dismiss for failure to state a claim”) and dismissed the case with prejudice (which means plaintiff cannot re-file it).

Librarians and other academics are often afraid to rely on fair use, even when there arguments would be strong, because of the expense of defending a lawsuit even when you win. Content companies often encourage that fear, reminding academics that fair use is a defense that can only be decided with certainty at a trial. While this case is a little bit unusual, it invites us, I think, to look at this “chilling effect” and perhaps lend it less credence.

In his ruling to dismiss, Judge Stadtmueller explicitly notes that “evaluating an affirmative defense, and indeed the ‘fair use’ defense, at the pleadings stage is ‘irregular’.” But he thinks it is justified precisely because when the case for fair use is “obvious,” “the court can conclude that this dispute does not warrant ‘putting the defendant[s] through the expense of discovery’.” In other words, in straightforward cases, a fair use claim can be evaluated before there is a trial, explicitly to prevent the cost of litigation from itself becoming an obstacle to proper exercise of fair use.

The phrase “affirmative defense” is itself a little bit misleading in this context, I think. By definition, an affirmative defense is one in which you admit the truth of the facts alleged but then prove new facts that nevertheless defeat the charge of claim. Self-defense is a classic example of an affirmative defense — the defendant admits the killing but proves facts that justify it.

Fair use is slightly different than the typical affirmative defense. It has to be raised after a claim has been made, of course, but it does not actually involve admitting the truth of the allegation. Fair use is not a justification for an infringement; by the language of section 107 fair use is “not an infringement of copyright.” So rather than showing a reason for infringing on someone else’s right, the fair use defendant is proving a limitation of the plaintiff’s right that means that no infringement took place.

Because it functions as a limitation on the right in question, fair use is actually a perfect example of a place where a copyright infringement claim should be dismissed because of a “failure to state a claim.” That describes perfectly what is going on — because fair use has been established, the plaintiff did not have a right that was infringed in the first place. Because fair use is “a mixed question of fact and law,” there will always be specific circumstances that must be adduced, but if those facts are plain on the face of the complaint, as they were in Brownmark Films, a judgement at that stage is entirely appropriate. And that possibility reduces the sense that even a strong fair use claim is not worth litigating.

I like to think of fair use as a boundary on the rights in copyright, just like physical property has a boundary. One way I could defend a claim against me for physical trespass would be to prove to the court that I never actually stepped on the plaintiff’s property. I would raise that evidence in a defense, but what it would show was that no violation of the property right ever took place — that the plaintiff had not stated any claim. That is exactly how fair use functioned in this case, and that possibility offers an important perspective on fair use.

Next post we will discuss the issue of transferring an exclusive right by a joint copyright holder and what impact that has on publication agreements

Discussions about the changing world of scholarly communications and copyright