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NISO Webinar: Copyright Decisions: Impact of Recent Cases on Libraries and Publishers
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Transcript of NISO Webinar: Copyright Decisions: Impact of Recent Cases on Libraries and Publishers
NISO Webinar: Copyright Decisions: Impact of Recent Cases on Libraries and Publishers
August 14, 2013
Speakers:
Skott Klebe, Manager of Special Initiatives, Copyright Clearance CenterBrandon Butler, Practitioner-in-Residence, Glushko Samuelson IP Clinic,
Washington College of LawLaura Quilter, Copyright and Information Policy Librarian,
University of Massachusetts
http://www.niso.org/news/events/2013/webinars/copyright
Kirtsaeng, ReDigi and the Future of First Sale
•Skott Klebe•Copyright Clearance Center
Extrapolation
THEN
NOW
SOMEDAY
Extrapolation
•NOT all lines are straight
THEN
NOW
SOMEDAY
THEN
NOW
SOMEDAY
THEN
NOW
Wiley v. Kirtsaeng
THEN
NOW
SOMEDAY
Wiley v. Kirtsaeng
•Unexpected turns
ASIAN EDITION:$19.99
US EDITION:$110.08
9% month’s wages at US minimum wage
42% month’s wages at Shenzen minimum
wages
8% month’s wages at Shenzen minimum wage
Source: chinadaily.com.cn
Strategy
•Some choices are obvious•Some
SELL ABROAD?
AT LOCAL PRICE
AT US PRICE
NO
Regional editions & pricing benefits
Widest possible audience for contentPricing competitive with products of local originRevenue opportunity, even at much lower marginDownward pressure on piracy
However...
Competing with yourself in US & Europe on price
First Sale & Global Business
First Sale
Copyright holder’s right to control distribution of copies ends when they are first sold
Bobbs-Merrill Co. v. Straus, 1909
109 (a) “...the owner of a particular copy or phonorecord lawfully made under this title ... is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord”§ 109 . Limitations on exclusive rights: Effect of transfer of particular copy or phonorecord
Importation
602(a)(1)“Importation into the United States, without the authority of the owner of copyright under this title, of copies...of a work that have been acquired outside the United States is an infringement of the exclusive right to distribute copies...”
§ 602 . Infringing importation or exportation of copies or phonorecords
“Without the authority”
109 (a)
• “...the owner of a particular copy ... is entitled, without the authority of the copyright owner, to sell ... that copy”
602(a)(1)
• “Importation into the United States, without the authority of the owner of copyright ... is an infringement of the exclusive right to distribute copies...”
§ 602 . Infringing importation or exportation of copies or phonorecords§ 109 . Limitations on exclusive rights: Effect of transfer of particular copy or phonorecord
CBS v. Scorpio, 1983 Phonorecords
purchased abroad3rd Circuit 602
Sebastian v. Consumer Contacts,1988
Labels on hair products
3rd Circuit 109
BMG Music v. Perez, 1991Phonorecords
purchased abroad9th Circuit 602
Parfums Givenchy v. Drug Emporium, 1994
Perfumes purchased in US after unauthorized
imporation9th Circuit 602
Quality King v. L’Anza, 1998
Labels on US-manufactured hair
products
Supreme Court
109
Costco v. Omega, 2010 Logo on watchesSupreme
Court (divided)
602
602 or 109?
Columbia Broadcasting Sys. v. Scorpio Music
Parfums Givenchy, Inc. v. Drug Emporium, Inc., 38 F. 3d 477 - Court of Appeals, 9th Circuit
“Construing §109(a) as superseding the prohibition on importation set forth in ... §602 would render §602 virtually meaningless.”
“...This broad language, if taken literally, would render the first sale doctrine wholly inapplicable to foreign manufactured goods, even after the goods have been lawfully imported into the United States...”
Wiley v. Kirtsaeng•Argument prevails
PRECEDENT
LAW
EXPECTATION
OUTCOME
Kirtsaeng Decision
• “Held: The ‘first sale’ doctrine applies to
copies of a copyrighted work lawfully made
abroad”
Kirtsaeng v. John Wily & Sons, Supreme Court 11-697
“Parade of Horribles”
“A geographical interpretation of first sale would require libraries to obtain permission before circulating books ... printed overseas”“We also doubt that Congress would have intended to create the practical copyright-related harms with which a geographical interpretation would threaten ordinary scholarly, artistic, commercial, and consumer activities.”
Kirtsaeng v. John Wily & Sons, Supreme Court 11-697
Kirtsaeng Outcome
First sale is globalSupreme Court’s decision is finalOnly new legislation can change it
Libraries can lend and distribute their collections, regardless of where they were madeLibraries can acquire new works for their collections, regardless of where they were made
Kirtsaeng Futures
Does anything change?
109 OVER 602
LEGISLATION
PUBS RAISE INTERNATIONAL PRICES
PUBS HALT INTERNATIONAL SALES
PUBS LOWER DOMESTIC PRICES
NOTHING CHANGES AT ALL
Digital Media & First Sale
First Sale in ’76
109 (a) “...the owner of a particular copy or phonorecord lawfully made under this title ... is entitled, without the authority of the copyright owner, to sell or otherwise dispose of the possession of that copy or phonorecord”
§ 109 . Limitations on exclusive rights: Effect of transfer of particular copy or phonorecord
What’s a Copy?
“Copies” are material objects, other than phonorecords, in which a work is fixed by any method now known or later developed, and from which the work can be perceived, reproduced, or otherwise communicated, either directly or with the aid of a machine or device. The term “copies” includes the material object, other than a phonorecord, in which the work is first fixed.
USC 17 § 101 . Definitions
Material objects•From which the work can be perceived, reproduced, or communicated
The digital difference
No transfer of a material objectLicense, not a sale
Amazon MusicAmazon Kindle
“a non-exclusive, non-transferable right ... only for your personal, non-commercial, entertainment use”“Kindle Content is licensed, not sold...”
Barnes & Noble Nook
“We grant you a limited, non-exclusive, revocable licence ... personal, non-commercial use...”You may not participate in the transfer or sale”
Google Play
“You will have the non-exclusive right to view...for your personal, non-commercial use ...”“You may not sell, rent, lease...to any third party without authorization”
License, not a sale
Vernor v. Autodesk
Autocad software “sold” with click-through software license agreement
nonexclusive and nontransferable license
prohibiting sale, transfer, lease
Vernor sold used copies on eBayAutodesk won infringement case on appeal
Vernor v. Autodesk, Inc., 621 F. 3d 1102
Vernor v. Autodesk
Established conditions under which a softwaretransfer is considered a license and not a sale:Copyright owner:
Specifies that transfer is a license and not a saleRestricts user’s ability to transferImposes “notable” usage restrictions
License, not a sale:Apple?
Apple is the provider of the iTunes Service, which permits you to purchase or rent digital content ("iTunes Products") for end user use
You shall be authorized to use iTunes Products only for personal, noncommercial use.
The delivery of iTunes Products does not transfer to you any commercial or promotional use rights in the iTunes Products
N.B.: iTunes predates Vernor by 4 years
ReDigi and iTunes
Founded in 2011 to enable resale of music purchased through iTunesClaims novel technology for “migrating” music files “packet by packet” so that the data is never in two places at the same timeDesigned so that only iTunes songs could be resoldSued by Capitol Records in 2012
Capitol Records v. Redigi
Redigi
User A PC
ReDigiSoftware
iTunesSoftware
ReDigi “Cloud” Server
User B PC
ReDigiSoftware
iTunesSoftware
1.User A “migrates” file to cloud server
2.User B pays for it
3.ReDigi “migrates” file to User B
Capitol v ReDigi: Findings
“It is simply impossible that the same “material object” can be transferred over the Internet.”“the Internet transfer of a file results in [copy] being “created elsewhere at its finish.”“...It is the creation of a new material object and not an additional material object that defines the reproduction right” Capitol Records v. Redigi
Capitol v. ReDigi: Findings
ReDigi infringes the reproduction right by making new copies on the server and recipient PC
First sale defense not available, only applies to the distribution rightto “lawfully made copies”
Fair use fails on all four factors
Liable for direct, contributory, and vicarious infringement
Outcome
Judge declined to apply first sale to digital contentAt this time, first sale does not apply to digital content
just to physical media
ReDigi vows to try again with a new architecture
First sale futures
•Vendors take over?
NO DIGITALFIRST SALE
LEGISLATION
MORE COURT CASES
NOTHING CHANGES
VENDORS TAKE CHARGE
Vendor-locked Resale
Amazon received a patent on a digital resale architecture
Apple applied for one
Patents are not plans
Kindle EBook Sale
Royalty
Amazon fee
KINDLE SALE
Amazon PublisherUser
Kindle EBook Resale
Royalty
KINDLE SALE
AmazonPublisher
User 1
User 2
Commission
Amazon fee
Future?
Vendors can act fastThey’re moving forward with library lending already...
Whether we like how they’re doing it or not
Congress will be hard pressed to keep up
Thank you.
The GSU Case and the Future of Fair
Use
•Brandon Butler•Practitioner-in-Residence•Glushko-Samuelson IP Clinic•American University Washington College of Law•Presented for NISO
Aug. 14, 2013
BIG PICTURE• First federal decision to apply fair use to non-
profit educational use in Internet age
• District opinion was huge defeat for publishers, who favored a draconian standard (Classroom Guidelines), but only proved 5 of 99 alleged infringements
• Not binding on other libraries or other courts, but still a useful input
• Framework generally favors libraries who make modest uses, with some important caveats
• On appeal!
Background of the Dispute
• Course reserves: administered by libraries
• Course site: administered by a professor/TAs
• Well-established practice: students visit library to read excerpts (often photocopied) from books prof doesn’t believe should be assigned in their entirety
• Years of tension b/w libraries and CCC/AAP re: licensing of this use in electronic realm
• Case against GSU as impact litigation; AAP and CCC bankrolling lawsuit (“several million”)
Outcomes, in a nutshell:
•GSU’s policy was in good faith, with only five infringements shown (versus 99 alleged)
•GSU policy fell short by failing to limit amount taken to “decidedly small” portions (10%/1 chapter).
Fair Use Overview• Four Statutory Factors
• Purpose or character of use, incl. whether “transformative”
• Nature of the copyrighted work used
• Amount and substantiality of portion used
• Effect on market for or value of copyrighted work
• Plus, purpose of copyright (“additional factors”)
First Factor: Strongly favors GSU
•Citing the preamble of §107, text of first factor, court finds educational nonprofit use is at heart of fair use
•Distinguishes coursepacks, commercial uses
•Not transformative, but that's ok
Second Factor: favors GSU
•Scholarly non-fiction is "informational" and fair use encourages use of this category
•Rejects relevance of "sweat of the brow" -difficulty of academic production
Third Factor: favors pubs if amount taken > 10%/1
chapter• Court decisively rejects use of Classroom Guidelines, both as to amount and repeated use across semesters
• “The work” = the book, not individual chapters, even when each chapter has a separate author; includes index, front matter
• Because use is non-transformative, amount must be “decidedly small” and narrowly tailored to legit purpose
• Fewer than 10 chapters -> 10%; More than 10 chapters -> 1 chapter
Factor Four: strongly favors pubs if license
available•Would widespread fair use substitute for purchase of the underlying work?
•Clearly no harm to book market
•License must be “reasonably available” at “reasonable price” for excerpts in “convenient format”
Additional Factors• Fair use of excerpts will have zero effect on
authors’ incentives to create - prestige, advancement of knowledge, tenure
• Ditto publishers’ incentive to publish
• Argument that e-reserves would put pubs out of business is “glib” - revenues from academic licensing are minuscule
• Fair use will promote dissemination of knowledge, further purposes of ©
Applying the Framework to GSU
•Ownership issues
•“De miminis non curat lex”
•Licenses for digital excerpts rarely available
•Amounts almost always under 1 chapter
And then?• Judge Evans’ Final Order
• No classroom guidelines, no continuing oversight
• Not about textbooks
• Be sure to tailor uses and limit access
• GSU wins attorneys’ fees - $3mil
The Appeal
• Publishers have radically different view of fair use from libraries; to them, classroom guidelines are a ceiling
• Are libraries the same as Kinkos?
• “Forest vs. trees”
• Alleged past infringements
• Ownership issues
• “Razor thin margins”
Publishers’ Amici
• AAUP (we need every penny we can get)• Authors’ Guild & Textbook Authors (we do
it for the $$$)• Copyright Alliance (copyright über alles)• Former Copyright Registers (education is
not special)
GSU Amici
• Library Copyright Alliance (best practices + economics)
• The Other AAUP - Professors (teaching is transformative)
• Academic Authors (we don’t do it for the $$$)
• ACE, AAU, APLU (education is special)
Some Interesting Numbers from the
Case•The Court told us a lot about the “harm” publishers suffer from unlicensed course reserves
Final score: 94-5Universe of posted excerpts
99 Original excerpts chosen by pubs(average amount 9.6%)
75 excerpts submitted to court(average amount 10.1%)5 works found to infringe
Publisher Revenue from Academic Licensing of
Excerpts
Publishers’ Lost Sales Due to Proven GSU
Infringements?Publishers’ 2009 Aggregate Revenue: $507,804,000.00
Publishers’ Proven Lost Revenue: $750.00
(.00015%)
If you make $60,000/year, that’s like losing 8¢.
The #librarianscode•Different reasoning, but many
commonalities
•Purpose is core fair use
•Tailoring to audience and purpose
•More modest use of works whose core audience is classroom use
•Code applies to ALL MEDIA; GSU framework is all about scholarly books
Google, HathiTrust, & the Future of Mass Digitization“Copyright Decisions” NISO Webinar, Aug. 14, 2013
Laura Quilter, MLS, JDCopyright & Information Policy LibrarianUniversity of Massachusetts, Amherst Libraries
Google BookSearch
Google BookSearch digitization project
Authors Guild v. Google (*Am Soc of Media Photographers)
Filed 2005 by Authors Guild; publishers joined
Settlement proposed 2008, criticized by civil libertarians, librarians, authors, and the Dept. of Justice; settlement rejected (770 F.Supp.2d 666, March 22, 2011)
Publishers settled (2012/10/04)
Class certification granted (2012/05/31, J.Denny Chin; order 2012/06/11) appealed, overturned (2013/07/01, 2d Cir.)
Fair use is queued up, possibly for this fall or winter
Authors Guild v. Google: Class Certification
“Class certification” including commonality of injury, typicality of claims, predominance of common questions of law or fact.
2012 - Class certification granted (SDNY, May 31 2012, J.Denny Chin)
Appealed “because many members of the class, perhaps even a majority, benefit from the Library Project and oppose plaintiffs’ efforts”
Overturned as “premature” on appeal (2d Cir., July 1, 2013, Leval, Cabranes, B.D. Parker)
2d Cir. thought the anti-certification argument “may carry some force”But fair use may “moot” the class certification issues: “we believe that the resolution of Google’s fair use defense in the first instance will necessarily inform and perhaps moot our analysis of many class certification issues, including those regarding the commonality of plaintiffs’ injuries, the typicality of their claims, and the predominance of common questions of law or fact”Remanded “for consideration of the fair use issues”“In the interest of judicial economy, any further appeal from the decisions of the District Court shall be assigned to this panel.”
Fair Use (17 USC 107)
[T]he fair use of a copyrighted work, including … copies … for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright. [F]actors to be considered shall include
(1) purpose and character of the use – commerciality or nonprofit educational purposes? transformativeness? (2) nature of the copyrighted work – factual or creative? published or unpublished? in or out of print? (3) amount and substantiality of the portion used in relation to the copyrighted work as a whole; and(4) effect of the use upon the potential market for or value of the copyrighted work.
Google BookSearch : Fair Use?
Fair Use ? Authors Guild (Not Fair Use!)
Google (Fair Use)
Factor 1: Purpose & Character. Transformative?
No – no new work created.
Transformative search index; incidental use. Amici libraries & EFF: Consider public interest – research tool, new forms of research, helps authors
Factor 2: Nature of Work
Highly creative works; entire expression taken.
Irrelevant, because transformative (but mostly scholarly)
Factor 3: Amount & Substantiality
They copied the whole thing!
Irrelevant, because search & index requires entire work for indexing
Factor 4: Effect on the Market
Digital risk! Might even help, but market effects not relevant where transformative. Amici libraries & EFF: Can’t develop a market to license millions of books for index.
HathiTrust
Library copies of digitization projects (Google Books, Internet Archive, others; but mostly Google Books)
HathiTrust: Organization of libraries pooling their digitized copies for various purposes
Preservation copies under Section 108
Search & Data Mining
Disability Access
Orphan Works – Proposed on-campus access to so-called “orphan works”; List posted to solicit authors to contact; Authors did contact HathiTrust; Authors Guild sued
Authors Guild v. HathiTrust
Filed Sept. 12, 2011 – Authors Guild & related author organizations filed suit against HathiTrust and 5 universities
Oct. 10, 2012, SDNY - summary judgment for HathiTrust
On appeal to Second Circuit: June, 2013, amicus briefs filed by universities, libraries, etc.
Authors Guild v. HathiTrust
902 F.Sup.2d 445 (SDNY, Oct. 10, 2012) (J. Harold Baer)
1. Orphan works question not ripe (no program active)
2. Section 108 does not preclude Section 107
3. all major HathiTrust initiatives were fair use: “I cannot imagine a definition of fair use that would not encompass the transformative uses made by defendants [] and would require that I terminate this invaluable contribute to the progress of science and cultivation of the arts that at the same time effectuates the ideals espoused by the [Americans with Disabilities Act].”
4. Chafee Amendment (17 USC 121) means academic libraries can be “authorized entities” to provide equal access to copyrighted materials for people by disabilities, as required by ADA
Authors Guild v. HathiTrust (SDNY 2012)
Fair Use Preservation copies
Search / Text Mining
Disability Access
Factor 1: Purpose & Character. Transformative?
Preservation furthers scholarship & research. Prob. not transformative, but strong public interest.
Scholarship and research uses. Search is a highly transformative and different use.
Scholarship and research uses. Highly transformative because not the intended original audience.
Factor 2: Nature of Work
Irrelevant for the use.
Irrelevant for transformative use.
Irrelevant for disability access.
Factor 3: Amount & Substantiality
Entirety required for preservation.
Entirety required for text mining.
Entirety & copy required for disability access.
Factor 4: Effect on the Market
* AG alleges security risk; not supported.
Prohibitive cost to develop a market. Does not substitute for sale.
Market abandoned by rightsholders. Does not substitute for sale.
Authors Guild v. HathiTrust
On appeal to the 2d Circuit, this fall
Handicapping HathiTrust:Preservation: Is it a fair use, or can Section 108’s preservation provisions prevent reliance on 107? 108(f)(4) “Nothing in this section … in any way affects right of fair use as provided by section 107”
Search indexing: Can you digitize without permission for a different purpose?
Search indexes as transformative uses (Kelly v. Arriba (2003), Perfect 10 v. Amazon (2007); see also AV v. iParadigm (4th Cir 2009) and White v. West (SDNY 2013))
2d Circuit transformative use cases: Bill Graham Archives v. Dorling Kindersley (1996); Cariou v. Prince (2013) appropriation art; hints in Authors Guild v. Google (2013)
Digital humanities scholars’ amicus brief
Disability access: Interactions of ADA and 17 USC 121
Interactions of 17 USC 121 and 17 USC 107
Marrakesh Treaty (WIPO)
Mass Digitization US
Copyright Office orphan works studyIdentified “orphan works” as a problem:
Works presumptively or apparently under copyright,
whose rightsholders cannot be identified or located.
Legislation proposed in 2006, 2008
Notice of Inquiry (2012)
“Next Great Copyright Act”: 20 years off?
See: Copyright Office, http://www.copyright.gov/orphan/
Mass Digitization Abroad
State licensing approachCanada: Copyright Board may offer a non-exclusive license after “reasonable efforts” to locate copyright owner (Copyright Act, Section 77)
Japan (Japanese Copyright Act, Article 67)
South Korea (South Korean Copyright Act, Article 47)
Selected categories of orphan worksIndia: Unpublished orphan works (Indian Copyright Act, Article 31a)
France, Feb. 2012: Out-of-commerce, books only
EU implementations of Directive on Orphan Works 2012/28/EU (Oct. 2012)
Directive excludes photographs unless embedded
Restricts exception to libraries, educational, museums, cultural heritage, public broadcasting
More info
Authors Guild, http://www.authorsguild.org
Google BookSearch
HathiTrust, http://www.hathitrust.org/
US Copyright Office, http://www.copyright.gov/orphan/
NISO Webinar:Copyright Decisions: Impact of Recent Cases on Libraries and Publishers
NISO Webinar • August 14, 2013
Questions?All questions will be posted with presenter answers on the NISO website following the webinar:
http://www.niso.org/news/events/2013/webinars/copyright
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