Info Today 2002May 14-16, 2002

New York Hilton and Towers

Track A

Public Policy Issues

Wednesday May 15, 2002

 

Licensing Problems and SolutionsUsers and Licenses – New Awareness and Demands

BY

Tomas A. Lipinski, J.D., LL.M., Ph.D.

Center for Information Policy Research

School of Information Studies

University of Wisconsin—Milwaukee

An Outline, more or less . . .

• Background and Research: Context

• Recent Developments: Perspectives

• Issues and Opportunities: the Future

Context: The Intersection of Law, Ethics (Standards) and

Practice• Law: recent cases and statutes

• Standards: institutional developments

• Practice: a Center for Information Policy Research study

Law: Recent Cases

• Individual yet “commercial” uses, in A&M Records, Inc. v. Napster, Inc., 239 F. 3d 1004 (9th Cir. 2001).

• Transformational vs. non-transformational uses, in Kelly v. Arriba Soft Corp., 2002 U.S. App. LEXIS 1786 (9th Cir. 2002).

• The educational fair use dicta, in Universal Studios, Inc. v. Corley, 2001 U.S. App. LEXIS 25330 (2d Cir. 2001).

Kelly v. Arriba Soft Corp.

• Thumb-nail web index fair use of images (reproduction) vs. inline link (importation, but not a reproduction) or frame of images is not a fair use (display)

• Different mediums (non-transformative) vs. different functions (transformative)

• Intermediate products (index) vs. end products (import of full size images)

Universal Studios, Inc. v. Corely: a fair use Faux pa?

• “Third, the Appellants have provided no support for their premise that fair use of DVD movies is constitutionally required to be made by copying the original work in its original format [“or by the fair user’s preferred technique”]. [footnote omitted] Their examples of the fair uses that they believe others will be prevented from making all involve copying in a digital format those portions of a DVD movie amenable to fair use, a copying that would enable the fair user to manipulate the digitally copied portions.

Universal Studios, Inc. v. Corely• “One example is that of a school child who

wishes to copy images from a DVD movie to insert into the student’s documentary film [or multi-media project???]. We know of [**77] no authority for the proposition that fair use, as protected by the Copyright Act, much less the Constitution, guarantees copying by the optimum method or in the identical format of the original [emphasis added].

Universal Studios, Inc. v. Corely• “Although the Appellants insisted at oral argument

that they should not be relegated to a ‘horse and buggy’ technique in making fair use of DVD movies, [footnote omitted] the DMCA does not impose even an arguable limitation on the opportunity to make a variety of traditional fair uses of DVD movies, such as commenting on their content, quoting excerpts from their screenplays, and even recording portions of the video images and sounds on film or tape by pointing a camera, a camcorder, or a microphone at a monitor as it displays the DVD movie [emphasis added]. . .

Universal Studios, Inc. v. Corely: the interrelationship between

§1201 and fair use• “Fair use has never been held to be a

guarantee of access to copyrighted material in order to copy it by the fair user’s preferred technique or in the format of the original.” [footnote omitted]

Law: Statutes“It’s a good time to be a copyright

owner, right?”• The diminishing myth of technological neutrality

and ascendancy of digital rights: three examples– Section 108(b) and (c) (digital distribution rights for

qualifying libraries and archives: on-site users only)– Section 1201(anti-circumvention, anti-trafficking rules) – S. 487 (TEACH), Section 110(2) reform (lessens, but

still retains distinctions for delivery of online (digital) course content)

Standards: Institutional developments

• K-12 environments: an example:– Wisconsin Department of Public Instruction,

Wisconsin’s Model Academic Standards for Information and Technology Literacy (1998).

• Higher Education: a compliance movement:– Section 512 and in specific 512(e)– S. 487 (TEACH), Section 110(2) reform

Wisconsin’s Model Academic Standards: Examples

• “By the end of grade 4 students will . . . explain the concept of IPR, describe how copyright protects the right of an author or producer to . . .”

• “By the end of grade 8 students will . . . explain the concept of fair use, relate examples of copyright violations, . . .”

• “By the end of grade 12 students will . . . explain why fair use is permitted for educational purposes but not in for profit situations, explain the conditions under which permission must be obtained for the use of copyrighted materials . . .”

Practice: a Center for Information Policy Research study

• Elizabeth A. Buchanan and Tomas A. Lipinski, Responsible Technologies: Student and Teacher Guidelines for Ethical and Legal Uses of Educational Technologies, funded by the University of Wisconsin System PK-12 Initiative: Professional Development in Instructional Technologies for Teachers.

A “Responsible Technologies” Study

• Goals: Teacher Readiness – Assessment, Development of Tools – In-Service and Curricular

• The Study: Pre and Post Survey and Copyright Battery, and follow-up Focus Group Dialogues

• Pilot Study: 27 educators representing a variety of schools and grades within CESA #1 (Cooperative Educational Service Agency, District #1)

Responsible Technologies: Initial Results:

• Responsibility (knowledge of school policy) vs. Accountability (administrative enforcement)

• Copyright Battery information: existing knowledge, improved knowledge (25% increase), and “needs improvement” (less than 35%)

• School Media vs. Non-Library/Technology Educators, Years of Service, and Primary vs. Secondary

Responsible Technologies: Initial Results (Specifics)

• Over 70% understand that not every educational use is a fair use under §107, or that showing a video in class on a relevant topic is allowed under §110(1)

• Improvements: an additional 25% now realize that showing a video for reward or outside of class (e.g., science fair) is not acceptable under §110(1), or that under the fair use “classroom guidelines” making a copy for each student of an exercise from a workbook is not acceptable

Responsible Technologies: Initial Results (Specifics)

• But misunderstandings abound . . . Less than 35% still fail to realize that:– Making a copy of a chapter of a book for each

teacher in a curriculum design group or for each student in a class was not acceptable under the fair use “classroom guidelines”

– The temporal and portion limitations of the fair use “off-air taping” and “educational multi-media” guidelines may limit many current practices

Developments with Licensing Implications

• New York Times Company, Inc. v. Tasini, 121 S. Ct. 2381 (2001): short term (removal) and long term (contractual scrutiny) impact

• DMCA: Section 104 Report U.S. Copyright Office (2001)

New York Times Company, Inc. v. Tasini: What Impact?

• “Absent a settlement between freelancers and database publishers, in the short term, Tasini will result in the removal from databases of freelance contributions—a process that has already begun. Going forward, Tasini will have little impact because publishers now typically require that writers assign away electronic rights when the work is first published.”

• Lewis R. Clayton, Roundup of Major 2001 Decisions, The National Law Journal, at C1, C3, January 21, 2002.

New York Times Company, Inc. v. Tasini: the short and long of it?

• NYT pulled 100,000 from database, returned 15,000

• Knight Ridder has pulled 80,000 no intent to negotiate for return

• Source: Robert L. Oakley, Librarian, and Professor of Law, Georgetown University, Libraries of the 21st Century Understanding Electronic Contracting, PLI, New York, New York, April 19, 2002.

• “The answer being given by many publishers to the Supreme Court’s opinion in Tasini is a strict demand that all free lance authors transfer to the publishers the copyrights in any work submitted for publication.”

• Source: John W. Hazard, Jr. Copyright Law in Business and Practice, ¶ 4.02[3][c], at S4-12 (2002).

New York Times Company, Inc. v. Tasini: additional comments

• Technological distinctions: if it’s all about positioning . . . the fiche analogy vs. the “later issue” (legislative history) meaning of revision, i.e., it also appears devoid of its original context

• Technological distinctions: and if it’s all about browsing . . . an CALR example: consider the browse feature in statute files or databases

New York Times Company, Inc. v. Tasini: additional comments

• Consider another distinction: functional (user perspective instead of user impression): users do not perform retrospective searches for an entire issue (exceptions exist, i.e., costume designers or market researchers), most searchers approach the task looking for an article or a group of articles, seldom related to a particular edition but some other inter-relationship such as subject

• It would be possible to include the “extras” but one can assume that this is not done at present in part for economic reasons (low demand and high cost) not necessarily for reasons related to copyright?

DMCA: Section 104 Report U.S. Copyright Office (2001)

• Using the DMCA (17 U.S.C. §1201) and licenses to restrict uses beyond the first sale

• “We are concerned that these proposals for a digital first sale doctrine endeavor to fit the exploitation of works on line into a distribution model—the sale of copies—that was developed within the confines of pre-digital technology. If the sale model is to continue as the dominant method of distribution, it should be the choice of the market, not due to legislative fiat.”

The Impact on Licensing: the DMCA Report Commentary

• Copyright law pre-emption vs. contractual override

• “Although the general issue of contract preemption is outside the scope of this Report, we do note that this issue if complex and of increasing importance, and thus legislative action appears to be premature.”

DMCA Report Commentary: an acknowledgment and . . .

• “[T]he movement at the state level toward resolving questions as to the enforceability of non-negotiated contracts coupled with legally-protected technological measures that give right holders the technological capability of imposing contractual provisions unilaterally, increases the possibility that right holders, rather than Congress, will determine the landscape of consumer privileges in the future. . .”

DMCA Report Commentary: and a possible warning?

• “Although market forces may well prevent right holders from unreasonably limiting consumer privileges, it is possible that at some point in the future a case could be made for statutory change.”

DMCA: Section 104 Report U.S. Copyright Office (2001):

blueprint for reform?• “The library community has raised concerns . . .

Interlibrary loan, off-site accessibility, archiving/preservation, availability of works, and use of donated copies . . . Most of these issues arise from terms and conditions of use, and costs of license agreements. These issues arise from existing business models and are therefore subject to market forces. . . We hope and expect that the marketplace will respond to the various concerns of customers in the library community.”

Section 109 and the Digital Age: A First Sale Misunderstanding?

• Transfer of your (purchased) digital copy vs. transfer of a copy you made of your digital (access to or version of ) the work

• The former is a first sale (distribution) issue, while the latter is at least a reproduction issue, and if also a distribution issue, first sale or other provisions (e.g., §108) might allow the distribution, but only if it is of a copy that is lawfully made

Section 109 and the Digital Age: DMCA Report: A Rebuff

• “Digital transmission of a work does not implicate the alienability of a physical object.”

• “Forward and delete” technologies and digital first sale vs. a “first access” doctrine

• “Reasoning by analogy always carries with it the risk of becoming captive to the analogy . . . This appears to be the case with . . . online transmissions of works.”

Section 109 and the Digital Age: DMCA Report: A Rebuff continued

• “A number of commentators proposed that section 109 be expanded . . . to permit the digital transmission of a work by the owner of a lawful copy of that work, so long as that copy is destroyed . . . an underlying basis for the argument in favor of a digital first sale doctrine is that the transmission and deletion of a digital file is essentially the same as the transfer of the physical copy.”

Section 109 and the Digital Age: DMCA Report: A Rebuff explained?

• This statutory expansion might be warranted and true if the work was digital, i.e., the e-book example, but technological problems (the forward and delete issue) according to the Copyright Office still make the analogy suspect (technological capability and affordability, timing, security, etc.)

• Another problem: with works in digital form, there is no lawful copy in possession of the transferor, merely, lawful access to a digital version of the work, a license issue

Section 109 and the: DMCA Report: Where does that leave us?

• “Digital transmission of a work does not implicate the alienability of a physical artifact. When a work is transmitted, the sender is not exercising common-law dominion over an item of personal property; he is exercising the central copyright of reproduction with respect to the intangible work. . . the underlying purpose of the first sale doctrine is to ensure the free circulation of tangible copies.”

Section 109 and the Digital Age: DMCA Report – a silver lining?

• “Digital communications technologies enables authors and publishers to develop new business models . . . Requiring that transmissions of digital files be treated just the same as the sale of tangible copies artificially forces authors and publishers into a distribution model based on outright sale of copies of the work.” [emphasis added]

Section 109 and the Digital Age: DMCA Report – what’s left?

• If §109 does not apply to digital transmissions and the “outright sale of copies” is not the preferred business model, then what’s left?

• How about LICENSING as an answer? • Is there such a thing as good and bad licensing?

The Climate of Online Licensing: (or how to frustrate your licensee)• Click-wrap litigation:• Hotmail Corp. v. van

Money Pie, 1998 U.S. Dist LEXIS 10729 (N.D. Cal. 1998) (when click required before proceeding, it is a valid contract).

• Privacy Litigation, 2000 U.S. Dist. LEXIS 6584 (N.D. Ill. 2000) (when click required before proceeding, it is a valid contract).

• Browse-wrap litigation:• Pollstar v. Gigmania, Ltd.,

2000 U.S. Dist. LEXIS 21035 (E.D. Cal. 2000) (small gray on gray box: “use is subject to license agreement” and located elsewhere not valid contract).

• Register.com v. Verio, 126 F. Supp. 2d 238 (S.D.N.Y. 2000) (submission of query valid contract if clear language “by submitting this request you agree to be. . .”).

 

The Climate of Licensing: Alternatives?

• Mass Market Licenses:– Softman Products

Company, Inc. v. Adobe Systems Inc., 171 F. Supp. 2d 1075 (C.D. Calif. 2001): a licensing case law study and analysis

• UCITA licenses: – UCITA Bomb-shelter

legislation: “UCITA is contrary to the interests of this state’s consumers . . . Render voidable as against public policy any contractual provision that would lead to enforcement of UCITA . . .” 2001 N.Y. A.B. 7902

– UCITA reactionaries?: American Bar Association UCITA Working Group Report, January 30, 2002

Softman Products Company, Inc. v. Adobe Systems Inc.,

• A license is a license except when it’s not a license: first sale doctrine trumps ability of software license to bind third party

• “This license provision conflicts with the first sale doctrine in copyright law, which gives the owner of a particular copy of a copyrighted work the right to dispose of that copy without the permission of the copyright owner.”

Softman Producrts Company, Inc. v. Adobe Systems Inc.: a Solution?

• License terms cannot bind intermediate “seller” third party

• Recast “license” of mass market software as “sale” for purposes of first sale doctrine when economic realities/business environment indicate it is a sale: – single copy, – single price, – indefinite term without renewal, – no return requirement at conclusion, subsequent chain of

transfers of “title”

Softman Products Company, Inc. v. Adobe Systems Inc.: Applications

(or who needs § 109 Reform?)• “In light of these indicia, many courts and

commentators conclude that a ‘shrinkwrap’ transaction is a sale of goods rather a license.”

• In general: an anti-license tirade? • In specific: application to other products, i.e., re-

characterizing other mass-market licenses as sales?

• “If a transaction involves a single payment giving the buyer an unlimited period in which it has a right to possession, the transaction is a sale.”

American Bar Association UCITA Working Group Report:

Continued Concern • “The second concern is UCITA §104’s statement

that the parties to a transaction not governed by UCITA may elect to have their contract formation rules governed by UCITA. The Working Group does not understand how parties may agree to be bound by UCITA’s contract formation rules without first forming an agreement under the contract formation rules otherwise governing the transaction.”

Report of UCITA Standby Committee, December 17, 2001:

UCITA, New and Improved• What’s Out:

– Self-help as remedy (#4)

– Comment restrictions (#5)

– Open source software (#9), and warranties relating to (#10)

– §109 software dispositions (#11)

– “Perpetual” duration rule (#15)

– Reverse engineering restrictions (#19)

• What’s Still In: – Modified choice of forum rule

(#3)

– Expedited relief (#4)

– Clarification of known defects rule (#6)

– Clarification of later terms (#7), re mass market (#8)

– Clarification of warranties (#12, #13, #14)

– Clarification of automatic restraint, includes access (#17)

Report of UCITA Standby Committee: answer or a rebuff?

• “Libraries are significant transferees (licensees) and libraries and universities are significant licensors of information. . . [but] UCITA did not create the digital world or its effect on libraries, but the library community seems to insist at times that the states through UCITA must solve their market and technological problems.” [emphasis original]

Report of UCITA Standby Committee: Digital is Different!

• “Transactions in online information are clearly different from transactions for acquiring tangible copies of information and the same rules cannot apply. A contract with Westlaw for access to its database is simply not the same as a contract for purchase of a copy of the West reporter service in print form.” [emphasis added]

Is Compulsory Licensing an Answer?• Problems with compulsory licenses:

– Cost concerns: administration– Compensation formulas (too low for viability)– A lesson from Continental Models: unequal payment

issues (i.e., to domestic authors or publishers only)– Purpose or function: Are we back to solving problems

of reproduction with distribution and performance models?

– Question of fit?: Secondary cable transmissions (§111), mechanical licenses (§115), jukebox performances (§116), noncommercial broadcasting (§118), and secondary transmissions of super-stations (§119)

How to “Sell” what isn’t a sale:Convincing the Licensee a License is a Good Thing

• Overcoming the rhetoric• The persistent “fair use” issue• A license IS better

– Efficiency?: e.g., reporting requirements: course pack or ILL reporting or §512 (registered agent)?

– Resolves uncertainties: e.g., §109 or §110(2)

– Knowledgeable Licensees

Users and Licenses – New Awareness and Demands: the

Goal of Transparency

• The Concept of User or Patron: “Virtuality” and the Virtual Library (e.g., remote patrons and ILL)

• Distance Education (distributed and access issues)

• Extended Access (archiving and preservation and continued availability)

Users and Licenses – New Awareness and Demands:

A Two-Way Street• Knowledgeable Licensees

• Compliance Issues and Licensee Outreach: awareness and education

• Access versus a copy: technological protection requirements or the regulation of access

Thank You!

Tomas A. Lipinski, J.D., LL.M., Ph.D.Center for Information Policy Research

School of Information Studies

University of Wisconsin—Milwaukee

(414)-229-4908(w), (414)-384-6937(h)

tlipinsk@csd.uwm.edu