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((((((((((((((((( WEBREFERENCE UPDATE NEWSLETTER ))))))))))))))))) June 28, 2001

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This week we interview copyright law expert Michael Landau on the ramifications of a pivotal copyright decision involving electronic rights, handed down by the Supreme Court Monday. The Court found in favor of freelance authors. The Court held that absent an agreement or contract to transfer the rights to the publishers, the inclusion of freelance authors articles in searchable databases constituted infringement.

New this week on WebReference.com and the Web:

1. INTERVIEW: Michael Landau on Copyright

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~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ 1. INTERVIEW: Michael Landau on Copyright

The Supreme Court Monday ruled in The New York Times v. Tasini that independent contractors' work could not be redistributed in databases and CD-ROMs. Unlike Microfilm which holds exact copies of publications, databases "disaggregate" articles out of context, thereby taking the author's work out of the original "collective work." By their very nature, databases allow individual articles to be retrieved and reaggregated, thus violating section 107 of the 1976 Copyright Act.

The Court held "[The] Databases do not perceptively reproduce articles as part of the collected work to which the author contributed or as part of any 'revision' thereof.... But unlike the conversion to microfilm, the transfer of articles to the Databases does not represent a mere conversion of intact periodicals (or revisions of periodicals) from one medium to another. The Databases offer users individual articles, not intact periodicals."

One of the issues related to the dispute, but not addressed in detail in the case, is the "Work Made for Hire" provision (section 101) of the 1976 Copyright Act which states that the work of employees and appropriately contracted freelancers is "work made for hire," therefore copyright is owned by the employer. If work is done by an independent contractor, the copyrights in the work belong to the author, unless there is either an explicit transfer of rights in the agreement or the written requirements for turning the work into a "work made for hire" are met. The problem arises when no, or a vaguely worded agreement, exist between the independent contractor and an employer. In the Tasini case, there were no agreements of transfer or "work made for hire" agreements between the authors and the publishers.

In Tasini, the authors wrote articles for publications (NYT, Sports Illustrated etc.) but retained copyright. Once the publications transferred their articles to a database (Nexis/Lexis etc.) the authors contend that their copyright was violated, and wanted renumeration. By finding for the plaintiffs in this case, the defendant's lawyers contend that the Court has opened a can of worms for publishers. During oral argument before the Supreme Court, attorneys speculated that the Times would have to delete all freelance articles from their databases, effectively wiping out parts of history. Justice Ginsburg, who authored the majority opinion, deemed this speculation to be "no basis" for their current decision.

We talked to Professor Michael Landau of Georgia State University College of Law, an expert in Copyright Law, about this landmark case as it applies to the Internet and publishing in general.

>WR: Why is the Tasini case important?

>ML: The Tasini case is important because it establishes that the "hard copy" publications and the portions of the publications that appear in electronic searchable databases are not one and the same for purposes of copyright law. If the publishers do not have the rights, either through the "works made for hire" doctrine or by contract with respect to other electronic publications, they will be liable for infringement, and will be obligated to pay damages to the authors whose work is put "on line."

>WR: Summarize what Tasini means for authors and publishers.

>ML: It is also important because it puts all parties, publishers and authors alike, on notice that the electronic rights must be specifically negotiated. If both publishers and authors know that the electronic rights are separate, the agreements and prices can be tailored accordingly. The reality, however, is that because of their superior bargaining position, publishers will probably be the long-term beneficiaries. Publishers will now, if they have not already done so, rewrite their contributing author agreements expressly stating that the authors give them the right "to publish, republish, and distribute the author's contribution(s) at any time in any medium now known or developed in the future."

There may be a few authors who can refuse and demand that all electronic rights be reserved, but those authors will probably be few and far between.

>WR: How does the Copyright Act apply in this case?

>ML: This is entirely a copyright case. The case was decided under section 201(c) of the Copyright Act. The pivotal issue was whether or not the electronic individual versions of the articles were part of "revisions" of the original work. If they were legal "revisions," then the publishers were free to have them included in searchable databases, such as LEXIS/NEXIS. If they were not, then the inclusion and delivery of the electronic versions violated the exclusive rights of reproduction and distribution under section 106 of the Act.

The Court held that the electronic versions were not "revisions."

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>WR: Revisions: Explain the importance of distinguishing between revisions and new collections in this case. What constitutes a revision?

>ML: Under section 201 (c) of the Copyright Act, the publishers have a privilege to republish "revisions" of the work without obligation to the authors. I will give a few examples of "revisions." Assume, for example, that one is a newspaper publisher with several editions of the newspaper. (Early edition, late edition). The later edition with some different stories and/or articles would be a revision of the first. It would not be reasonable for publishers to have to obtain permission from each and every author in order to print the same story later in the day because technically there was a slightly different arrangement and slightly different content in the evening paper.

Transferring the newspaper to microfilm or microfiche would be a revision. Most likely, transferring the paper or magazine to Braille would be a revision. An important factor regarding whether the later publication is a "revision" is whether the contents of the publication are basically reproduced intact without substantial change.

The Court found that the inclusion of the individual articles in a database of essentially all articles was not a revision. The Court was also bothered by the fact that most of the articles are retrieved and/or reproduced and distributed as individual articles and not as a part of the entire collection in which it originally appeared.

>WR: Work made for hire. What's the difference between an employee and an independent contractor?

>ML: In 1989, the Supreme Court decided a case involving the standard for "works made for hire." Prior to 1989, there had been much disagreement among the federal appeals courts. Section 101 of the Copyright Act provides that a "work made for hire" is either 1) a work that is created by an employee within the scope of employment, or 2) in the case of a commissioned work, a work that belongs to one of nine specific enumerated categories, and the parties have signed an agreement specifically stating that the work is a "work made for hire." It should be noted that one of the categories included in the nine is a "contribution to a collective work." Therefore, had the publishers in the Tasini cases included such language in agreements, the works could have been "works made for hire." The problem, as stated above, was that there was no agreement in writing.

Most of the litigation in the past regarding "works made for hire" arose because there had been no written agreement between the parties. The disputes centered upon the definitions of "employer" and "employee." In Community for Creative Non-Violence v. Reid, the Supreme Court rejected two polar standards and chose a middle position. The court rejected the proposition that an "employee" was only a "formal salaried employee," one who gets a regular paycheck with taxes withheld, etc. The court also rejected the notion that an "employee" is anyone who is supervised by the paying party.

The court held that for "works made for hire" purposes, an employee was one who had a sufficient relationship with the paying party under the law of agency. In doing so, the Supreme Court articulated a multi-factor test, now referred to as the Reid test, that looked at, among other things, whether the artist or author was usually in business for himself, who provided the tools, where the work was done, whether the paying party had the power or right to assign additional projects, how the artist or author was paid, the tax treatment, etc.

>WR: Do you think that the Copyright Act of 1976 is outdated in terms of electronic publication (Internet)?

>ML: Actually, I do not. The issues in this case are similar to issues that have been litigated for years. For example, in the 1970s and 1980s, there were cases dealing with whether "motion picture rights" included the rights to distribute the films on videocassettes, or even to show them on television for that matter. Consider this hypothetical: In the 1940s or 1950s, composer is asked to write music for a film, or an author is asked to write the screenplay. People did not have VCRs and there was no market whatsoever for other modes of distribution. The author/composer assumed that he or she was being paid only for the movie's theatrical exhibition. Then, fast-forward twenty or thirty years. Should the studios or distribution companies be liable for royalties related to the uses in new media.

Those cases hinged upon the language in the contracts. In those cases in which the transfer was for "theatrical exhibition" only, the plaintiff authors or composers won. In the cases in which the transfer was for "exhibition, display, transmission, or distribution in any media, now known or developed in the future" the studios won.

There have been copyright disputes related to almost every new technology, such as photographs, player pianos, television, video, photocopy machines, etc. The electronic publishing dispute is merely the most recent in a long line of disputes.

>WR: I read the transcript from the trial. Why is it so important that the articles are sent over separately and not as a whole paper?

>ML: Again, this relates to the "revision" issue. If the entire paper was sent or was retrieved and distributed, it would be more like a "revision." The publishers had the right to do this. The Court believed that if only individual pieces of the work are retrieved or sent, the rights of the authors were infringed.

This is related again to technical provisions of the Copyright Act. Copyright in the collection extends only to the collection, not to the individual pieces contained therein. Those still belong to the author. According to the Court's logic, the paper may reprint entire editions intact or include entire editions intact, but may not get into the business of single articles. This part of the opinion is troubling, for taken to its logical extreme, it would appear that the majority of the court would find the publications liable for copyright infringement for selling individual reprints of individual articles, even in the off-line hard copy world.

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>WR: Disaggregation - What about search engines or Meerkat, that index numerous articles? How does fair use play with RSS descriptions? Reusing these in newsletters or Web sites (Meerkat) etc? Hasn't the author implicitly given permission to use the work (meta title/url/desc) by publishing a public RSS file? (see http://webref.com/authoring/languages/xml/rss/ for RSS info)

>ML: You raise an interesting issue, that of an "implied license." This is fairly uncharted territory, and courts need to address this more. One thing, though, is for certain, the mere inclusion of material on a Web site does not give an implied license to anyone to do anything with it. The extent would probably be only to view it and download it yourself.

With respect to search engines, inclusion of little bits of text would probably be a fair use. It is also doubtful that the authors of original material would object (sue over it). Inclusion of small amounts of text in search results is not a substitute for the original text; it merely aids in directing users to the original material. There was actually a case involving search engines that included thumbnail photographs in the results called Kelly v Arriba. The court held that such a use was a fair use.

>WR: "It should be noted that a mere change of medium does not necessarily mean that there cannot be a revision. Including each and every page of a newspaper on microfilm, in which the original arrangement of the stories is preserved for archival purposes, probably would qualify as a 'revision.'" Would an exact PDF replica qualify as a revision?

>ML: I would argue that a PDF replica is similar to microfilm or microfiche. A publisher should be allowed to reproduce the entire work in PDF format as a revision. There is an exception. If the author expressly states, as above, that all electronic and other non-paper media are excluded from the transfer, a strong argument can be made that under those terms even a PDF would infringe.

>WR: Written agreement: Does submitting an online form qualify as a written agreement?

>ML: That depends. Section 204 of the Copyright Act provides that all "transfers" must be in writing and "signed by the owner of the rights conveyed or such owner's duly authorized agent." Section 101 relating to "works made for hire" also requires a "signature." I would argue that an online form is a "writing." The open issue is what constitutes a "signature." While a complete transfer meaning an assignment or an exclusive license must be in writing, a non-exclusive license need not be in writing. Therefore for non-exclusive licenses the signature issue disappears.

>WR: How important is it to have a contract before publication?

>ML: After Tasini, for publishers it is extremely important. If there is no written agreement or if the work is not a "work made for hire" under the Reid agency law principles, the rights belong to the authors. If the publishers publish without permission, they can be liable after publication for damages. All publishers should be using written agreements to acquire rights, or face financial exposure for infringement.

This case may change the relationship between publishers and freelancers by requiring written agreements for almost every assignment.

# # #

Michael Landau is Professor of Law and Head of the Intellectual Property, Technology, and Media Studies Group at Georgia State University College of Law, where he teaches courses in copyrights, trademarks, unfair competition, entertainment law, computer law, torts, and antitrust. Professor Landau received his law degree from the University of Pennsylvania Law School, where he was a recipient of the Nathan Burkan Memorial Copyright Award. Professor Landau serves on the Board of Directors of the Georgia Volunteer Lawyers for the Arts and the Atlanta Contemporary Art Center and the Editorial Board of http://www.GigaLaw.com. He is also a blues and jazz guitarist. He can be reached at mlandau@gsu.edu.

Further Reading:

U.S. Copyright Office http://lcweb.loc.gov/copyright/

Supreme Court opinion - NYT v. Tasini http://www.supremecourtus.gov/opinions/00pdf/00-201.pdf

Electronic Publishing Rights and New Legal Challenges http://gigalaw.com/articles/2001/isenberg-2001-06-p1.html

The Importance of Electronic Publishing Rights http://www.gigalaw.com/articles/landau-2000-01-p1.html

Freelancers Win in Case of Work Kept in Databases http://www.nytimes.com/2001/06/26/technology/26BIZC.html?searchpv=day02

The Reaction: Publishers Set to Remove Older Articles From Files http://www.nytimes.com/2001/06/26/technology/26COPY.html?searchpv=day02

Writers Aren't Cashing Checks Yet http://www.wired.com/news/politics/0,1283,44860,00.html

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That's it for this week, see you next time.

Scott Clark Managing Editor, WebReference.com sclark@internet.com

Dan Ragle Assistant Editor, WebReference.com dragle@internet.com

Andrew King Newsletter Editor, WebReference.com aking@internet.com

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