Category Archives: Licensing

The problem with permission

Because Duke has begun teaching Massively Open Online Courses (MOOCs), my office has gotten much more involved, over the past year, in the process of seeking permission to use copyrighted content.  We began a new service to help MOOC instructors make careful fair use decisions, find freely-licensed content for their courses, and get permission for materials where we deem it necessary.  The story of the first year of that service is told in this article that has just been published by D-Lib Magazine, written by Lauren Fowler, our first permissions intern, and me.

From the perspective of one asking a rights holder for permission to use some content, the process has a lot of frustration, some of which we detail in the article.  The most common frustration, as many people have discovered, is that so many rights holders simply do not respond.  They are not obligated to, of course, but even a simple “NO” would save lots of wasted effort and time on both sides of the exchange.  Yet a significant number of rights holders do not even send that; in our article we note that 23.5% of our requests garnered no reply at all, even after several contacts.

Sometimes, however, it is even more frustrating to receive a reply, because those answers often confirm that we are not dealing with a well-managed or carefully-administered process.  Frequently when we do get a response, what we hear back clearly indicates that the staff member who contacts us is unaware of what we have actually asked.  We have a carefully written request letter that is very clear about exactly the use we intend to make of the work if permission is granted, yet over and over the rights holder’s staff replies with inapposite questions or, amusingly, a grant of permission to do something else entirely.

One example can illustrate this humorous frustration.  Shortly before she left to take up a full-time library job, Ms. Fowler sent a letter to a major motion picture studio because one of our instructors wanted to use an illustration from a movie in a way that was probably fair use but for which we decided to ask permission, since it is a well-known picture and MOOCs are receiving so much attention and such large participation.  We got back a very nice message from a permissions rep saying that “the attached letter should cover your use.”  Unfortunately, the attached letter was a painstaking, though inaccurate, description of the exception for the public display of a copyrighted work in the course of face-to-face teaching.  I reviewed our multiple requests, and it seemed impossible not to understand that we were asking about an online use.  Yet we were told that a letter about physical classroom use, for which permission is not even required, would serve our purpose.  This left us at loss about how to proceed; we didn’t really have the needed permission, but it seemed like the rep was trying to grant it.  Maybe she just attached the wrong form letter.  So what do we do, as the time to make decisions about course content grows short?

It is certainly possible to conclude from the experiences we have had, which many others have also reported — see Susan Bielstein’s wonderful book on “Permissions, A Survival Guide” — that large rights holders simply are not interested in giving permission, or even in asking for permission fees.  The experience seems to confirm what the judge in the Georgia State case held in her ruling, that permission income is simply not that vital for most rights holders, so they invest very little time and energy into processing permission requests.

But recently I have dealt with two requests from the other side — requests directed at Duke from two large textbook publishers for permission for them to use content putatively owned by us in books they were publishing.  Astonishingly, the same laissez faire attitude seems to prevail when the big content company is doing the asking as it does when we are seeking permission from them.

In the first instance, a big textbook publishers sent an e-mail asking for permission to reuse an image, and a high-res scan of the image, to the Coordinator of Academic Support in our Office of Information Technology.  That person was clearly mystified — she is not engaged in IP issues or rights in any way — so she got in touch with me.  I could see very clearly that the image in question had been published by the Duke University Press, so we were able to redirect the request.  But we had to do the research (which was easy) because the company did not bother.

When this request finally reached the correct folks at Duke Press, they were shocked at the shoddy effort that the textbook publisher had made.  Even with more limited resources, I know from experience that DUP does much better work.  But the folks at the Press were inclined to see this as isolated incompetence on the part of a company with, it seems, a less than stellar reputation.  Unfortunately, the very next day I received confirmation that the problem is not isolated at all.

Yesterday I received a similar request from a different major textbook publisher.  It was directed to me, which is perhaps a little more sensible than selecting a random person from IT; I get these types of requests quite often, and routinely try to direct them to the right office.  But this one was especially difficult, because it just attached a scan of a page from a published work, and asked for permission to use “the attached.”  The request gave us no idea of where the page had been originally published, what part of that page was the focus of the request, or why the request had been sent to Duke in the first place.  An email to the publisher rep who sent the initial message told us that they were seeking permission to use only a single sentence quotation from the page, which is absurd.  And the request apparently came to us because of a connection between the publication and one of our collection centers.  So I forwarded it to the collection curator, but shook my head as I did so at the bumbling way these and so many other requests from permission come to us from those who yell loudest about the need to base our copyright system on permission.

It is hard not to conclude from these and similar experiences that the publishers sending the requests are not really interested in contacting the correct rights holder or in defining an appropriate scope for a license  They appear to simply be trying to collect paper — any message or letter that says the use is OK is sufficient to be filed away and forgotten.  From the other side, when we make a request for permission the same attitude prevails.  Little effort is made to accurately understand the request or craft an effective license.

Permission from a rights holder can solve many problems; it is an important part of a complete IP rights strategy in the digital environment.  But it is not a process for the faint of heart, nor a solution to be suggested lightly.  Even large professional publishers seem to find it overwhelming or, perhaps, not worth the investment of staff time and effort.  So when, in debates or litigation over copyright issues, rights holders groups assert that permission is the best solution and copyright exceptions should give way to a licensing process, we need to counter those claims by telling these sorts of stories.  Many of us can recount similar instances, and also catalog teaching opportunities that have been lost because permission was simply not available.  Judges and legislators need to know about these problems with permission, because they reenforce the wisdom — the necessity — of building exceptions into copyright and not relying on the whims and dubious competencies of rights holders to manage a permissions-based culture.

Is the CCC having an “Instagram” moment?

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.

Why boycott Elsevier?

The snowballing petition on which scholars pledge to boycott Elsevier is gaining a good deal of attention.  There is an article in today’s Chronicle of Higher Education, and this more general article about the future of Elsevier’s business model from Forbes.  As of today the boycott pledge has over 2100 signatures.

As the Chronicle article points out, the petition lists three “charges” against Elsevier:  their extremely high prices, the practice of “bundling” so that institutions have to buy journals they do not want in order to get the ones they do and hence have less money to buy other things, and corporate support for the Research Works Act and other legislation that would threaten the free flow of information.

While I agree that all of these things are significant problems in the current scholarly communications environment, I have to say that Elsevier is not the only “sinner” guilty of these infractions, or necessarily even the most culpable among commercial publishers.  This does not mean I am particularly sympathetic to Elsevier, and I am glad to see the petition for a couple of reasons.

First, the boycott movement is coming from scholars themselves.  It is not simply a matter of radical militant librarians (some of my favorite people, btw) who are upset about high prices.  This petition represents a growing awareness amongst scholarly authors that traditional publication models not only are no longer the only option, but in fact may be bad choices for those concerned with the overall dissemination of knowledge.  It is simply becoming clearer to many scholars that the values they hold are not the same as the ones that commercial publishers are pursuing.

Second, when framed as a divergence of values it is much easier to see that the core issue in this movement is who will control the the changing course of scholarly communications and the scholarly record.  It seems less and less acceptable to trust commercial publishers with the responsibility for scholarship now that we no longer will be dependent on the printed artifacts they created.  As scholarship becomes digital, we are quite rightly seeking new models of control that serve the needs of scholars first, regardless of the business models that may thereby be left behind.

One of the reasons I do not believe in the “abolish copyright” movement is because I think the control over how a work is disseminated and used by others will continue to remain important to scholarly authors.  Copyright desperately needs reform (or else it needs more scholarly authors who use Creative Commons licenses to leverage their economic rights to protect things like attribution, which actually matter to academics) but it is not likely to become irrelevant in the digital environment.  Instead, scholars will seek new ways to use the rights that vest in them (not their publishers) to control their works in ways that best serve their own needs and the interests of their particular discipline.  Boycotting Elsevier may not bring about that revolution by itself, but it is a step toward demanding that the rights and concerns of scholarly authors themselves actually drive decisions about how scholarship is shared in the digital environment.

When is “exclusive” really not?

In our previous post we talked about the relatively easy fair use call involved in the Brownmark Films case decided by the district court in Wisconsin.  Before the court even got to that issue, however, it had to decide a procedural issue that has potential ramifications for scholarly publishing.  Who can grant an exclusive license?

In the Brownmark case the original video that was allegedly infringed was, as most video and an increasing number of scholarly articles are, a work of joint authorship.  That means that each copyright holder owns an equal and undivided share of the rights, and each can exercise those rights independently and authorize others to do so.  Under long-standing precedents, each joint holder of a copyright can license the rights to third parties without the approval of the other rights holder, subject only to a duty to account to those other rights holders for any profits made.  But in Brownmark the issue arose (as it has before) of whether or not the licenses given by a single co-owner of a copyright can ever be exclusive.

To illustrate the situation we are dealing with, lets assume there are three co-owners of copyright in a particular work, whom we will call A, B, and C.  Let’s further assume that A and B are not involved in the transaction in question, or in the court case (as was the case in Brownmark).  So, acting on his own, C gives a license (which he calls exclusive) to Y, who is now our licensee.  Later on, someone comes along and allegedly infringes on the work and Y wants to sue.  A potential plaintiff only has standing to bring a lawsuit, however, if they hold an exclusive right.  So the accused infringer defends by saying that Y is not allowed to file the suit, since they could not have obtained an exclusive license from C because C did not own the entire right in the first place.  This is the situation we must examine.

In an earlier case (called Sybersound v. UAV), the Ninth Circuit Court of Appeals held that a co-owner of a copyright could never give an exclusive license.  This is the intuitive position, I think, because any license C gives to Y will still be subject to other licenses potentially granted by A and B to other parties.  What sense does it make to call Y’s license exclusive if other people — even a great many other people — may also have the right to do exactly the same thing, simply by licensing that right from a different co-owner?

In spite of this intuitive appeal, the Brownmark court choose not to follow Sybersound.  Their concern was that if there could not be an exclusive license, the licensee was left with no way whatever to enforce his right.  While the judge admitted that it was linguistically odd to call a license “exclusive” even when there could easily be multiple parties licensed to exercise the same right, he felt that the alternative was worse, since it created a situation where no one was able to enforce the particular right (unless, of course, all of the co-owners agreed).

I don’t know if this split within the Federal courts will eventually reach the Supreme Court for resolution or not.  But I do know that whichever way it goes, the situation for scholarly articles written by multiple authors is problematic.  It is often the case that A, B, C and sometimes many others are authors of an article and therefore co-owners (assuming each contributed protected expression).  Usually one author is designated a “corresponding author” and completes all the paperwork with the publisher.  The question is what the corresponding author, as a co-owner of the copyright, is legally able to convey to the publisher.  Whichever court we follow, the question proves difficult.

If  we follow the Ninth Circuit, our corresponding author is not capable of executing an exclusive license; even if her entire interest is transferred to the publisher, the rights obtained thereby are not exclusive and another author could, for example, release the article on the Web under a Creative Commons license.  And in that Circuit, the publisher would lack standing to even bring a lawsuit to defend the rights it thought it had obtained. But if we follow the Wisconsin District Court the situation is only marginally better.  The license is now called “exclusive,” and the publisher could bring a lawsuit against an wholly unauthorized third party to prevent infringement.  Nevertheless, it remains the case that other authors could grant licenses in spite of the linguistically-challenged “exclusive” license given by the corresponding author.  So it is still possible that the publisher obtains an exclusive license and yet the work could be distributed world-wide under a CC license by another of the joint authors.

Publishers usually attempt to avoid this situation by asking the corresponding author to warrant that she has permission to grant the copyright transfer or license on behalf of all co-authors.  This might be an effective technique, but unless the corresponding author actually has written permission from each co-author,  it ultimately depends on the somewhat various state laws regarding “agency.”  In other words, a federal court hearing an infringement case and faced with a challenge to the right of the publisher to bring the suit would need to look at the applicable state law and decide if the publisher was justified in relying on “apparent authority” in accepting the corresponding author as an agent for all the other authors.  In the alternative, a publisher could insist that all joint authors sign the publication agreement, but in an age when scientific articles often have dozens of authors, this seems impractical as well.

The techniques of scholarly publishing have worked well for many years; I know of very few (legal) disputes that have arisen amongst co-authors over publishing an article.  But as articles are credited to longer and longer lists of authors, and the Internet offers an opportunity for each of those authors to decide on a more direct form of distribution, the uncertainty reflected by the Sybersound and Brownmark cases threatens to become increasingly problematic.

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.

Contract preemption: an issue to watch

Back in December I wrote about the lawsuit that has finally been filed against UCLA claiming that the policy of streaming digitized view for course-related viewing is copyright infringement.  Late in January UCLA responded with a motion asking the court to dismiss the lawsuit for lack of subject matter jurisdiction and failure to state a claim.

The alleged lack of jurisdiction is based on a claim of sovereign immunity, the idea that the federal courts cannot hear most cases against a state entity as part of the Constitutional scheme called, confusingly, “federalism.”  That argument is the bulk of the motion.  But there is another issue, one of several involving the alleged vacuity of the claims against UCLA, that caught my attention.

As I noted in my earlier post, the complaint by AIME and Ambrose Video asserts that at least some of the videos at issue are under license and that digitizing and streaming those videos is a breach of that contractual agreement.  I questioned earlier whether the license being claimed was, or should be, cognizable.  But UCLA is making a different claim in its motion to dismiss, that the state breach of contract claim based on a license is preempted by federal law.

Section 301 of the Copyright Act says that state laws that create ” legal or equitable rights that are equivalent” to the exclusive rights in copyright are preempted.  Thus state or common law copyrights are mostly superseded by the 1976 federal Act.  But two questions have long remained: whether or not this meant that state enforcement of contracts governing intellectual property could be preempted, and what rights are “equivalent” to copyrights.

We routinely assume that “contracts trump copyright;” libraries are told that all the time regarding the databases they license, and they often pass the message on to users.  It is generally correct. In one of the most cited cases on this point, ProCD v. Zeidenberg, Judge Easterbrook of the 6th Circuit held that a contract creates rights only between the specific parties and thus those rights are not “exclusive” and so not preempted.  But the question remains somewhat unsettled, and UCLA is exploiting an apparent loophole in the general rule that we have mostly taken for granted.

In an 8th Circuit case that the Supreme Court left standing, National Car Rental Systems v. Computer Associates, preemption was denied, but the denial was based on interesting reasoning — that the contract covered the use of the intellectual property, and that use was simply not one of the exclusive copyrights.  Professor Nimmer, perhaps the foremost authority on U.S. copyright, picks up this reasoning and suggests that a contract that attempts  to “serve as a subterfuge to control nothing other than the reproduction, adaptation, public distribution, etc.” of copyrighted works should be preempted.  So a contract controlling how licensed property could be used — who could access it, for example — would be enforceable under state contract law, but one that dealt with reproduction, distribution and the other exclusive rights would not be.

UCLA applies this reasoning to say that the alleged video licenses should be preempted insofar as they would govern whether or not making a copy for digital distribution is allowed, since this would be equivalent to the rights under copyright.  The upshot of this argument would be that schools could not license away their right to make fair use of content they license, since fair use is a limitation on the exclusive rights and thus part of what would be preempted in any contract action.  Fair use would have to be decided on its own terms, spelled out in section 107 of the Copyright Act, and could not be “ruled out of court” by a contract.

I have long maintained that non-negotiable contracts (like shrink wrap licenses) should be preempted by federal copyright law, so that one does not give up rights like fair use without a chance to discuss and defend them.  If UCLA argument is successful, it would suggest a broader rule, that contracts that abrogate fair use and other aspects of copyrights exclusive rights scheme would always be preempted.  I have no idea if this will fly in the District Court; the case might get dismissed on sovereign immunity grounds so that the issue would not even be addressed.  And even if UCLA prevailed on this point, an appeal would be likely.  So I am not suggesting that we change our long-standing belief that contracts trump copyright in most case, just that we watch this issue carefully and consider its full ramifications.

Actions speak louder

The recent news that the Canadian Recording Industry Association has reached a settlement agreement with artists is not, strictly speaking, about scholarly communications.  But it does give rise, I think, to several reflections about the way copyright works for all of us, including scholars.

The story, which is explained here and here, is basically about how difficult it can be to clear rights to reuse creative and scholarly works.  The record companies represented by CRIA found an easy way around this problem.  When they could not easily locate a rights holder to pay royalties to, they simply put the work/artist on a “pending list” and went ahead with the planned use.  The stated intent was to pursue contact and payment later on, but not to let the delay in locating a rights holder prevent the new compilation CD or whatever.  Of course, there was little incentive to continue to try and find someone to pay; hence the lawsuit and the settlement.  There are several interesting lessons here.

First, as several commentators note, the content industries that often bellow loudest about respect for copyrights have no interest in showing such respect for other peoples’ rights.  The rhetoric of “someone has to pay or no one will create” is usually false and always self-serving.  Many people create because they love to do so, and the claims, especially from the recording industry, that big content defends little artists is often contradicted by the former’s actions.

Second, this case is another reminder that copyright has never really been an author’s right; it was created and enforced by intermediaries.   The history in England shows that when they could no longer get exclusive royal grants in particular works, the stationers (early publishers) lobbied Parliament for  statutory exclusive rights, and used authors as their justification.  But content industries have always sought to shortchange creators; their business model depends on doing so, and that is true more in the academic realm than anywhere else.

I have recently been reading a superb law review article by Christopher Sprigman from 2004 called “Reformalizing Copyright” that makes these arguments very forcefully.  Sprigman argues that our “new” unconditional system of exclusive rights has badly exacerbated the problems.  It is well worth a read for those who are not already familiar with it.

Finally, it is worth noting that these “pending lists” were really just a solution to what we all recognize as the orphan works problem.  When we cannot find a rights holder, can we please just make a list and proceed with our use?  We promise to keep trying to contact that rights holder.  Of course, libraries that confront the difficulties of using orphan works would always take a much more conservative and careful approach.  The pending lists were an excuse, not a solution, but they grew out of that same orphan works dilemma that has grown so intense, especially since we extended copyright protection to everything, regardless of its economic value or the intent of its creator(s).  The solutions to the problem will be complex, but only because others will be unwilling to take the slipshod approach taken by the CRIA, those so-called defenders of copyright.

Is the sky falling on library lending?

“The sky is falling,” Chicken Little cried.  I don’t want to emulate that panicky poultry too closely, but recent events have raised some concern in my mind over the continued viability of copyright’s “first sale” doctrine, upon which so much library practice depends.

First sale is the rule that once a lawful copy of a work is sold, the exclusive right to control distribution of that copy is “exhausted.”  Therefore libraries can lend books, consumers can resell CDs and NetFlix can rent DVDs through the mail.  First sale is not a necessary or automatic part of a copyright law; many countries have different provisions on what is sometimes called “exhaustion,” such as a statutory fee for each library loan of an item.  Most importantly, first sale does not apply when a work is licensed rather than sold.  Many of the current threats to first sale are controversies over where the boundary between a sale and a licensing transaction really is.

Here is a catalog, quite long I’m afraid, of some of these controversies and, I think, threats to library lending.

First there is the new lawsuit against UCLA over streamed digital video.  Part of that suit argues that what seemed like purchases of DVD by UCLA were really licensing situations because terms of use were printed on the purchase orders.  The plaintiffs use this claim to argue that UCLA cannot make a fair use argument in defense of their practice, but it is easy to see how such a claim could also restrict practices under first sale.  There have been many attempts to use one-sided terms of use to prevent or control resale; the Supreme Court rejected an early attempt to prevent second-hand resale at a lower price in Bobbs-Merrill v Straus back in 1908.  If a claim based on terms of use in a purchase order is successful in limiting fair use rights under copyright, it is easy to see how such terms will multiply to restrict library lending under first sale.

By the way, it will be interesting to see if these terms can survive analysis under the Uniform Commercial Code.  Article 2 of the UCC governs sales of goods, and its provision about conflicting terms of sale (the “battle of the forms”) might seem to support these terms of use.  But two questions occur.  First, if the PO terms turn a sale into a licensing transaction, does Article 2 even still apply, since it governs sales?  Second, do the terms so materially alter the transaction that they cannot simply be presented on a purchase order and enforced against the purchaser based solely on payment of that invoice?

My second concern comes from the news that a law firm has been sending cease and desist letters to academic libraries demanding that they stop filling ILL requests for scholars and institutions outside of the US.  I have not seen a copy of this letter, but the reports suggest that its legal arguments are quite confused.  For lending of articles these days, most ILL is governed by the contractual terms under which a database of journals is licensed.  If the license permits ILL without territorial restriction, there is no reason to stop following those terms.  If the license does not permit such lending, the demand is superfluous.  For the lending of physical items, first sale would seem to permit the purchasing library to lend to whomever it wants. But since the lawyer is representing a large group of STM publishers, this letter does remind us that there is a strong desire in the content community to place new and radical limits on long-accepted library practice.

Other threats to first sale do not directly involve libraries, but clearly have potential impact on them.  In Vernor v. Autodesk the Ninth Circuit Court of Appeals upheld the claim that a piece of software was not really sold but only licensed, such that the purchaser could not resell the physical discs he had bought in reliance on first sale.  Here again, there are obvious implications for library practice if much of what we think we are buying turns out to have only been licensed.

Finally, there is the non-decision reached this week by the Supreme Court in the case of Costco v. Omega.  That case involved not libraries, by a discount retailer and the claim by Omega Watches that first sale did not apply to copyrighted items (the symbol embossed on the back of watches) that are neither manufactured nor sold in the US.  The 9th Circuit (again) held that first sale did not apply and the watches could not be resold in the US without authorization.  The Supreme Court agreed to hear the case, and the Library Copyright Alliance filed a superb brief encouraging reversal.  But the Court split evenly, with Justice Kagan recusing herself.  That result leaves the troubling decision from the 9th Circuit in place, at least in Western quarter of the US.

The problem with the status quo in Costco is that it poses a threat both to some library lending and to the secondary market for used textbooks that is so important for students.  The LCA brief makes clear that affirming the lower court in Costco would leave academic libraries especially in great uncertainty, since they obtain quite a bit of material from overseas.  The case involves a technical issue about the so-called manufacturing clauses in the Copyright Act (sections 601-603) because that clause influences what is considered a copy “lawfully made under this title” for purposes of first sale (section 109).  Section 602 contains an exception to its restrictions on imports that allows libraries to purchase both books and videos from abroad for their collections, but the language about audiovisual works, which is different from that regarding books, seems to deliberately exclude lending of foreign-made videos.  So at the very least, academic libraries in the 9th Circuit must have doubts about whether they can lend foreign films purchased overseas.

Another potential problem created by Costco is for the used textbook market.  As this news story indicates, textbook publishers urged the Supreme Court to affirm the 9th Circuit decision in Costco precisely because it opens the possibility of moving textbook publishing offshore and then relying on the decision to close down resale of used books.

Perhaps the sky is not falling, at least not yet, on the first sale doctrine.  Kenneth Crews of Columbia suggests in this blog post that the Costco case, at least, does not give us cause to panic yet.  But I think it is pretty clear that the doctrine is besieged from several different angles.  Uncertainty about its scope and contours may translate, unfortunately, into less robust library services.  The unfortunate scenario is that, just as libraries are being really creative in rethinking our traditional role as “book warehouses,” content providers, sometimes intentionally and sometimes not, seem to be pushing us back into that limited space.  The reason, of course, is that the more first sale is restricted, for libraries and for consumers in general, the easier it will be to define the digital realm as a “pay-per-use” environment.

A glimpse into our future?

Access Copyright is the Canadian equivalent of the U.S Copyright Clearance Center.  Like the CCC, which is helping to finance litigation against Georgia State University designed to force US universities to pay more and higher licensing fees for course materials, Access Copyright is also on a quest for ever greater income.

I and others have predicted for some time that a victory in this copyright infringement lawsuit would result in fewer educational options for our students, not more money flowing from university budgets into the coffers of the CCC. Now we have a Canadian parallel that seems to confirm those fears.

The situation for reserve materials in Canadian universities is already far worse than it is in the US.  A Canadian judge has ruled that putting required course materials on physical reserve in a library abets copyright infringement (when students make personal copies, presumably).  Based on this insane ruling, Canadian schools have been paying  $3.38 per student per year for physical reserves, along with .10 per page for course packs, to Access Copyright.  Now Access Copyright wants to change the fee structure and simply collect $45 per student per year for both physical reserves and course packs.

The upshot of this change, of course, would be a huge cost increase for universities and much higher revenues for Access Copyright.  And just as predicted, universities have started to opt for reduced student access in order to avoid a drastic drain on their budgets.  The University of Alberta has announced that it will no longer purchased the vastly more expensive license from Access Copyright and will, instead, simply stop providing reserve readings and course packs for students.  Students who cannot afford to purchase all the required readings will, it seems, be out of luck.

Who are the winners in this situation, I wonder?  Certainly not the students, who will have less access to course materials and higher costs for their education.  The university is obviously a loser too, since its basic mission is impeded.  And while Access Copyright will get richer, it is not at all clear that authors will benefit from the increased fees either.  Most academic authors – who are usually the ones who write textbooks – do not depend on that small additional income they receive from licensing fees after the large cut is taken by the rights organization.  In any case, often the author never sees any of that money; I have documented several times the situations in which the CCC collects fees for works whose authors it cannot identify. Those are cases where no incentive at all is created, only income for a bloated bureaucracy that feeds on fees that seem to have no rational justification.

When we compare the Canadian situation to the US it is clear that, in spite of some major differences in the law, we may be looking at our own future.  Physical reserves are not the problem in the US, since they are clearly covered by our first sale doctrine.  But fees for course packs and electronic reserves are climbing all the time, to unsustainable levels.  The Canadian system at least has the advantage of a predictable fee structure.  As US librarians know, we have no such predictability in our licensing budgets; the fees are inconsistent and capricious.  If we are to avoid a similar situation, in which professors are forced to adopt a more cramped and costly pedagogy, we need our courts to recognize that the current system is leading to a system that serves no public interest at all and is injurious to the educational system we have long been so proud of.

Let the user beware

If the box that says “I Accept” (regarding a website’s terms of use)  really is the most dangerous place on the web, as I wrote several weeks ago, it is getting even riskier out there.  For a long time, a relatively safe rule-of-thumb has been that EULAs (end user license agreements) that forced you to see their terms were enforceable, while those that merely offered you a chance to see them by clicking on a link you did not have to follow were not.  That has never been a hard-and-fast rule, and its utility has been seriously eroded by several court cases in recent years.

The most recent case involved a challenge to a “choice of forum” clause contained in the EULA for a site called ServiceMagic.  A lawsuit by Victoria Major was dismissed because it was filed in Missouri while the EULA says that all lawsuits must be filed in Colorado.  The Missouri Court of Appeals upheld the dismissal, even though Ms. Major never read the EULA nor was forced to see it and click “I Accept.”  The court held, as have several others in recent years, that the link was placed prominently enough for the terms to be enforced, even though there was no technological requirement to actually click through the license.  Some details about the case can be found here, on ArsTechnica.

The was an uproar several years ago about a proposed change in the Uniform Commercial Code called UCITA (the Uniform Computer Information Transactions Act) that would have made it too easy, its opponents felt, for consumers to commit themselves to licensing terms about which they had no knowledge and no chance to negotiate.  UCITA was adopted only in Maryland and Virginia, and it has since been withdrawn by its sponsors.  But the goal of UCITA to speed up Internet commerce by simplifying licensing, even at the cost of consumer protection, is being accomplished by courts around the country anyway.  This latest case is one in a line of similar cases that make it even more imperative that users look for and read licensing agreements, even if the site itself does not force them to do so.

There are a couple of caveats to this trend.  First, it is not universal.  A similar case against online retailer Overstock, reported here, went the other way, apparently because the link to the terms was not sufficiently prominent.  And in the ServiceMagic case one judge on the appeals court wrote that she would only uphold reasonable and expected terms like choice of forum, not terms that were “unconscionable.”  So perhaps we can expect a more active review of licensing terms when the licenses is merely a “clickwrap” or “browsewrap.”  Nevertheless, the most important caveat raised by these cases may also be the oldest — “caveat emptor.”