Legal issues in “controlled digital lending” | NISO MAY 2019

by | May 10, 2019

Legal issues in “controlled digital lending”/ NISO/ May 2019

By Mark Seeley, May 2019

Section 108 and 107d (most relevant sections for library copying in US copyright law)

17 USC 107 and 108 have a curious relationship—107 is the general fair use exception and is meant to be a flexible instrument which notes that certain uses of a copyrighted work might not be an infringement for a variety of purposes including scholarship and research, and then sets out the famous four factors (purpose of use; nature of work; amount used; effect on market); but 108 contains specific provisions about library reproductions including those for preservation and archiving, but also permits copying for users at another library (interlibrary loan), which provisions have not been updated significantly since 1976 (minor update 1998).  These provisions were amplified by the CONTU Report of that same year that were supported by library, publisher and author organizations, and which sets out the famous “rule of 5” for relatively recent periodical publications (past 5 years, no more than 5 article from single journal).  Section 108(f)(4) notes however that nothing in Section 108 limits the “right of fair use” under Section 107.

Why do we have two sections that are possibly relevant to CDL?  Simplistically it can be said that 108 is more specific and provides more guidance for library copying, particularly when amplified by CONTU. Section 108 states the overriding principle that the copying should not amount to “concerted reproduction or distribution of multiple copies… [so] as to substitute for a subscription to or purchase of such work”.  Section 108 helpfully provides protection against legal liability for libraries and their staff in conducting ILL and in providing in-house copying services.  Interestingly in the statutory damages provision in Section 504, a nonprofit educational institution or library also receives protection from statutory damages if they had “reasonable grounds” for believing that the requested use was a fair use under Section 107.  The drafters of the 1976 Act no doubt understood that the more general flexible approach of fair use might be needed to supplement the more specific provisions of Section 108, given the length of time between copyright law amendments (Section 108 saw relatively minor modifications in the 1998 DMCA but otherwise is much the same as it was after the 1976 Act).

Analogy re a firm bridge over a river (108) as opposed to looking to find shallows to ford (107)?

The drafters of the CDL position and white paper (see https://controlleddigitallending.org/whitepaper)  discuss 107 and fair use, along with the question of “first sale” (codified in Section 109), understood generally to refer to physical goods like a used print book, but do not address Section 108.  I don’t believe this is because of a fear of complexity, because fair use itself is quite complex, as is made clear in the white paper discussion– which in the end amounts to a risk assessment for librarians—I believe instead it is because some advocates at the moment believe that the courts will advance fair use positions more quickly and more readily than a negotiated “new deal” or a new Section 108. 

Prior review efforts & recommendations

Publishers have participated over the past 15 years in several working groups and pilot projects, working directly with libraries and library organizations, carrying the “bipartisan” work through.  In addition, many publishers have developed “interlibrary loan” provisions in licensing arrangements. Several of those working group studies and pilot projects in fact recommended changes in law and licensing practices to permit many of the functions described in the CDL position and paper.  Indeed the core recommendation of the Section 108 study group is largely reflected in the CDL position, in linking digital reproduction & delivery to greater technical protection measures to reduce possible unplanned re-distribtuion. The 108 study group would have also added museums and online libraries if they met certain criteria (Section 108 talks about libraries being open to the public or available to affiliated and unaffiliated researchers).

Why hasn’t revision of Section 108 occurred?  Publishers and author organizations were generally supportive of the changes mentioned (with concerns over effectiveness of TPMs) in the study group recommendations and in the Copyright Office proposals (last noted in 2016). Support from the key US library organizations ARL and the ALA, however, was lukewarm (see https://www.arl.org/storage/documents/publications/section108study-libresponse9nov06.pdf) — the official view at that time appeared to be that the application of technical protection measures to scanned content or born digital content would not be consistent with library principles of “minimal restrictions consonant with access allowed for the original versions.” Of course it is true that any piece of legislation faces many challenges, and copyright law proposals in particular often suffer from the perception that they are perhaps not as urgent as other matters—so there is considerable inertia when it comes to complex intellectual property laws such as our Copyright Act.  However inertia can be overcome—we saw this last year with the Music Modernization Act which in the end received considerable support across ideological divides—and legislative proposals would stand a much better chance of passage if there was a strong consensus view that could be expressed to Congress.

 

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The CDL position & white paper

As noted, the September 2018 position statement co-authored by a number of copyright and policy advisers to organizations such as the Internet Archive and the Harvard and Duke university libraries, and the more detailed white paper co-authored by David Hansen (Duke) and Kyle Courtney (Harvard), relies on fair use, first sale and in the end risk assessment.  The documents do not discuss Section 108, or the Section 108 Study Group—no mention at all of this section of the Copyright Law.  The authors are probably correct that as currently drafted, 108 does not support digital ILL (neither the scanning nor the delivery), yet it seems odd to make no mention of it at all (even by analogy?).

The CDL documents also make a number of factual assumptions or assertions—described as the “20th century book problem”—asserting that many books published that are still in copyright (extending back into the early 20th century) are unavailable, or unavailable in digital form.  This question of availability is important in Section 108 analysis, and may be relevant to the fair use Section 107 analysis. The authors cite a number of recent papers about alleged difficulties in clearing rights or identifying copyright owners, particularly for specialized works. On the other hand, the authors do admit in a footnote that at least “some of the most popular, commercially-viable books remain in print and are available in a variety of formats.”  This is a more important point that needs to be made more forthrightly—in fact the US book publishing industry has been making available book content in electronic format for more than 20 years, and has been engaged in creating a backfile of available e-book content, particularly in the fields of science and medicine.  In addition, there are readily available sources of information about rights clearances, including through the Copyright Clearance Center (CCC) (on which I sit as a Board member).  Of course it will always be true that more esoteric and more specialized books may be viewed as having a limited market, and may not be kept up to date with respect to rights management and ownership—but the question for the library community will be the extent to which most interlibrary loan requests are actually for materials that are readily available or for which rights can be readily cleared.  Very simplistically, if consumers can find information about most books through retail outlet sources such as Amazon, then due diligence (often required in proposed “out of commerce” proposals) for the vast majority of works shouldn’t be seen as that difficult.

Book publishers initiated a series of pilot projects 5 to 6 years ago to test the viability of e-book loans under licensing provisions that would have permitted a certain number of “loans” or accesses for a particular work in e-book format, and then calibrated different licensing fees based on the use and popularity of certain works.  Publishers have options and alternatives available, including for e-book formats.  Science and medical publishers often include digital ILL activities in their institutional licenses.  The availability of these resources will have some relevance to the fair use analysis that the authors next engage in.  In the interest of time, I won’t examine the “first sale” analysis, which in my view clearly does not apply to digital works or scanning, although there is an open case on appeal that the authors noted which might be relevant.  The authors imply that first sale is somehow relevant to fair use analysis, which I think is a novel suggestion.

Fair use (107)

The authors are right, as noted above, to assert that a particular CDL delivery could be viewed by a court as a fair use under Section 107, and they do list the four factors correctly.  The fact that CDL might be for the purposes of scholarship or research is certainly an important factor that might weigh in favor of a fair use finding in a particular case.  The authors note that the factors need to be weighed together (purpose of use; nature of work copied; amount used; market effect), but do not discuss the fact that, as many courts have found, the market effect is often given greater weight than the others.  There is quite a bit of discussion here about the Authors Guild v HathiTrust case, although importantly that case involved the question of accessibility for print-disabled users.

The authors acknowledge that there re no cases directly on point, and that there is some contrary authority regarding commercial activities, and that it is important for libraries to act “within certain limits” to improve its fair use argument.  Let’s examine each of the four factors in turn, as the authors do.

Purpose and character of use—the assumption here is that CDL will be non-commercial and for educational and research purposes.  If the librarians involve have a good faith belief that the purpose of a particular CDL delivery falls into these categories, then the authors are likely right that this will weigh in favor of a finding of fair use.  The authors engage in some analysis of “transformativeness”, a concept developed by Judge Pierre Leval and which concerns, properly construed, the purpose factor.  The authors note that CDL is not “clearly transformative”, which in my view is correct (this has been stated also with respect to the Georgia State e-coursepack case), but I do agree with the authors that this may be irrelevant in this first use factor if the other elements are there.

 

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On the nature of the work—the traditional understanding is that more copying of more factual works is likely fairer than copying of more creative works.  However I agree with the authors that this factor is not much discussed in fair use cases.  Nonetheless the authors suggest that librarians might want to concentrate on more factual or scientific works as a risk mitigation factor.

On the amount used, the authors assert that “on many occasions [the] use of an entire work, when necessary to fulfill a valid purpose, does not weigh against a [fair use finding]”—that may be true, but should be viewed as part of the overall weighing of factors that courts are supposed to do.  The fact is that the use of the entirety of a work, as contemplated in CDL, will be a factor weighing against a finding of fair use.  It may be of course that the other factors weigh in favor of a fair use finding, but clearly this factor does not lend itself to that finding.

The market harm argument depends very much on the “20th century book problem” that the authors postulate at the beginning of the paper.  The authors correctly say that courts have looked not only at market effects for the particular work in the particular format used, but have also looked at much broader potential markets, at least such markets that are “likely to be developed”.  One argument advanced by the authors is that the “owned to loaned” restriction (the “original” of the book is unavailable while the “copy” is being accessed, under DRM restrictions) preserves the market factors.  I do agree that this is helpful, but this does ignore the more fundamental point that particularly for recently published and certainly for trade market materials, publishers are making content available digitally and likely have provisions when licensing such content that address (either positively or negatively) whether the content can be used for ILL purposes, and may provide alternative market fees for such uses. 

Risk analysis (and the “control” in CDL)

The proponents of CDL suggest that incorporating the “owned to loaned” measure and DRM protection generally, along with the suggested time-limits on accessibility for the “loaned” copy, will help in risk mitigation.  I think this is true and that these are factors that would be considered by a court if particular CDL instances were challenged.  There may be questions about how secure and effective such measures are (not to mention the availability of commercial alternatives), but certainly such measures would be part of the legal assessment.  The authors are also right to point out the sovereign immunity defense for public institutions, where monetary damages might not be available (although injunctive relief might still be available). Finally, the authors are right to point out the general hazards of litigation—in cost and time and reputation.  Publishers do not generally like to engage in litigation with university libraries, and it seems to be a difficult way of obtaining greater legal certainty about certain kinds of university or library conduct.

Ultimately the authors warn that universities and libraries will need to obtain their own legal advice on these matters, and be prepared for possible litigation.  However they suggest that CDL with the limits envisaged and if confined to works that might be more specialized and possibly less available through normal market means may help support fair use arguments.

Conclusion

To improve legal certainty, there is really no alternative but “bipartisan” negotiation around Section 108 and legislative amendment.  This may take time, but as the authors have rightly pointed out about the Georgia State case, litigation (and appeals) also takes time.  If the goal is certainty, legislation is the solution. The Section 108 Study Group recommendations shows that compromises can be found.  Such a bipartisan approach would help ensure that Congress takes the proposal more seriously.  The stakeholders of course need to decide whether compromise is acceptable!

Books Digitization and Demand

by | Feb 26, 2019

Books Digitization and Demand

A new paper from Nagaraj (UC Berkeley) and Reimers (Northeastern) called “Digitization and the Demand for Physical Works: Evidence from the Google Books Project” (revised April 2019) is said to demonstrate that the unauthorized scanning or “digitization” of entire book collections results in increased demand for “physical works” (particularly specialized works) and thus demonstrates a lack of harm and positive market benefits for authors and publishers. My post here notes that the motivation of authors and publishers in the 2000’s in bringing suit against the Google Books Project was not to inhibit an e-book market, given that publishers were already actively digitizing and making e-books available, but to ensure that Google was not itself allowed to create its own e-book market without authorization from publishers and authors.

It is always important to start with semantics—Nagaraj and Reimers talk of “digitization” but they mean two things—first the initial scanning of the Library book collections and the creation of digital files of the scanned books—and secondly the creation of a search engine layer or index from that corpus. Their point would be clearer if they clarified that what their research suggests is the value of increased awareness and discovery of somewhat specialized materials through a search engine index. While books have always been indexed by professional catalogers and publishers such as Bowker”s (Books in Print), the focus of these products has usually been on actively available and actively marketed books, and BiP is something of a specialized resource. There have been resources online for more than a decade or so about rare, unique and out of print books, some of which are now commercialized through Amazon, but there is no question that more information about more scholarly works is a net positive.

E-book readers began in 1998 but took off significantly in the 2000’s.  The initial players (e.g. Sony) focused almost exclusively on current popular fiction, but Amazon and the other more specialized online resources began offering a much expanded index and catalog by the mid-2000’s.  As Amazon began to combine indexes of some of the more specialized services, it became more of a rival to Google’s project at least in terms of creating visibility for books beyond current popular trade titles. It must be said however that Google did not have to engage in its unilateral scanning program to create an index of books—this concept of a search and resource identification layer was something, I believe, of an unintended consequence (I was involved in some of the negotiations for a short period of time representing specialized publishers)—what Google was intent on creating was a proprietary online market for digitized content. In contrast, Amazon achieves much of this by negotiating and licensing rights from authors and publishers.

Authors and publishers are not for or against any one model of distribution. The e-book market has become incredibly important, and for many years helped stabilize sales decreases on the print side. Ironically print sales have been increasing in recent years, although not as much as the increase in audio book sales.  In any event it is wrong to characterize the legal concerns of authors and publishers as being about propping up print book sales—the primary concern was ensuring a level playing field for e-book distribution. Clearly, Google providing substitute free e-book products (or at prices they would set) would be both a copyright violation (as the courts made clear when they mentioned, in their factual foundation, that Google was not actually providing the full-text to users) as well as a major market disruption.

The legal complaints filed against Google by authors and publishers were about Google’s intent to create a permission-free market for e-book content in a Google online marketplace, and the negotiations and draft settlement agreement which was quashed by the courts dealt with how such a market might be organized, to permit greater engagement by authors and publishers than the Google project had permitted up to that time (the “claiming” process that occupied much of the agreement), and the creation of a Books Registry that would be run by an independent entity. When the courts made this “class action” market approach impossible, then Google narrowed its approach to the 3 areas where they have been engaged in the past 10 years or so, namely: working with Hathi Trust and others on accessible files; providing some research capabilities online for scholars; and in providing a form of discovery or awareness tool for users. It is this latter function that Nagaraj and Reimers are really addressing in their paper. The death of the Google Library project has been reported elsewhere[i], but in any event it seems clear that once Google’s marketplace ambition was stymied, then Google was far less interested in or committed to its Library project.

Nagaraj and Reimers assert that “Copyright holders are concerned about the possibility that digitized versions would serve as substitute for material in print…”  As noted above, authors and publishers were at the time the suit was initiated against Google heavily engaged in e-book production and creating an e-book market. It is possible that the Google project provided more incentive in this development, but the concern was not about print—it was about unauthorized use, print or online, without compensation. The authors go on to say that “digitization might be a win-win for consumers, publishers and authors…” but again this is in the context of awareness and discovery—which no-one would dispute. More consumers becoming more aware of more book titles is indeed a positive for authors and publishers, something that authors and publishers work hard on every day.

Nagaraj and Reimers characterize the Google books litigation as being about browsing information about books—and whether this was a fair use—but as noted the legal complaints against Google were about making the resulting book files available as a market function.

I did find the point about awareness leading to greater sales of more specialized books an interesting observation—although this might be related to the fact that more popular books are indexed more widely and broadly through other means—but it is a point worth celebrating if there are increased sales of presumably more scholarly works.

[1] February 21, 2019, posted on SSRN at https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3339524
[1] See https://www.theatlantic.com/technology/archive/2017/04/the-tragedy-of-google-books/523320/

Role of Publishers

by | Jan 1, 2019

Role of Publishers

At the end of 2018 there was a lot of social media discussion on the “opening” of the public domain (US works published before 1923), the fact that many NIH funded recipients had published their works in questionable perhaps fraudulent journal outlets. These comments all raise the old question of the role of publishers. On the public domain issue, I thought my former colleague Michiel Kolman said it best when he said that those works wouldn’t be known now, and wouldn’t therefore be viewed as treasures, if they hadn’t been published originally under the copyright system by publishers who cared about the works, the authors, and the market for the works. This traditional role of publisher as editor, as curator, as promoter and supporter, is still as relevant today as it was in 1922, and is still relevant for STEM publishing as well. Scientific authors today can easily post their own works themselves on the Internet or in their institutions’ repositories, and yet authors continue to value the editing and publishing process.

 

the proposed Plan S for European research funders, and related questions about the role of publishers in STEM.  On the public domain issue, I thought my former colleague Michiel Kolman said it best when he said that those works wouldn’t be known now, and wouldn’t therefore be viewed as treasures, if they hadn’t been published originally under the copyright system by publishers who cared about the works, the authors, and the market for the works, see @michielams .

This traditional role of publisher as editor, as curator, as promoter and supporter, is still as relevant today as it was in 1922, and is still relevant for STEM publishing as well, IMO.

One thing the Internet has given authors of all kinds is the ability to post their own works themselves outside of the traditional copyright and publishing system— that can be done very easily right now.  STEM researchers can likely post on their own institutional repositories. Yet authors, of all types,  continue to value the editing and publishing process.

Brendan Butler said on the NIH controversy that it was more important for the research papers to be open and available, even if in questionable publishing outlets, than for them to have been published in a traditional journal by Elsevier (or presumably any other traditional publisher). This suggests that openness is the only value, or an overriding one.  Professor Pam Samuelson said something similar in response to Paula Browning  (NZ copyright licensing organization) about copyright assignment not being in the “long term interest of science” (she did not mention whether exclusive licenses to publish fall into the same category).

Obviously for the subscription business model, a publisher must have something to sell in order to maintain that model. Of course STEM journal publishers generally support a variety of policies around the posting of pre-final versions of journal papers, including the recent scholarly collaboration networks— see the STM association’s site for policy references… (all this applies to the traditional subscription model, OA publishing will use CC licenses or something similar to indicate user rights)

So this raises the question of whether openness is the only and overriding interest in scholarly communications—in which case the solution is simply self-publishing or institutional publishing.

If society sees value in publishing, which is after all first about distributing and making content available (even if on commercial terms), and then about doing so in a way that emphasizes quality and longevity, then we are by definition living in a world of compromise. Some degree of openness which nonetheless still permits investment in quality, clarity, consistency and commitment to ethical principles (including archiving responsibility— see the classic Scholarly Kitchen post on all the things publishers do at https://howcanishareit.com/) is likely what society needs, and what researchers and authors continue to value. Of course there will be questions about how to do this most efficiently and effectively, but the proponents of openness over all must or should admit is that quality and care matter as well.  Openness in and of itself is not a value, it is an element that must be looked at in combination with other values!

 

Mark Seeley

Competition Law and Scholarly Publishing

by | Nov 7, 2018

Competition Law and Scholarly Publishing

Two academics who are critical of “traditional” scholarly publishing, Jon Tennant (https://twitter.com/Protohedgehog) and Bjorn Brembs (https://twitter.com/brembs), transmitted a complaint to the DG Competition in November 2018 about alleged competition law abuses in the EU on the part of my former employer Elsevier (part of RELX Group) and other large publishers in the sector (Springer Nature, Wiley, Taylor & Francis). This complaint seems to build on a related complaint earlier this year by Tennant over Elsevier’s participation in the EU’s Open Science Monitor, and a statement made by the UK’s Office of Fair Trading (now known as Competition & Markets Authority) in 2002 and a 2016 referral to the CMA, and is supported by the European University Association. As I describe below, these complaints are in my view unfounded given that the scholarly publishing market is by definition unconcentrated and open to significant new entrants, and due to the need by government to be neutral and professional in their bidding procedures.

If I follow the thread of the Tennant/Brembs and EUA arguments correctly, they assert that:

  • The scholarly publishing market sector is dysfunctional
  • University and library customers (and perhaps corporate & SME customers) have few market alternatives to the major publishers
  • Each journal article is a monopolistic market in and of itself (with limited substitutability)
  • Thus high barriers to entry
  • Publishers contribute little to the journal publishing process and literature
  • Major publishers own the high-prestige journals and use this as leverage in “big deal” negotiations
  • Library customers are forced to purchase the “big deal” because of this reputational element
  • Profits and margins are too high for the established publishers & costs should have been reduced by the transition from print to electronic
  • Transformation to OA is too slow (and slowed down by existing players)
  • Non-disclosure provisions in customer agreements work to prevent price transparency and stifle negotiation
  • The “read and publish” negotiating stances of DEAL (Germany) and Bibsam (Sweden) are intended to counteract the “double-dipping” issue in hybrid OA journals (journals that have two potential revenue streams, OA plus subscriptions)
  • New adjacent researcher-oriented service businesses, or publisher-infrastructure services, are being used by established publishers to extend monopolistic behavior to these adjacent markets (the “lock-in” idea)

Why haven’t the authorities reacted?

One can reasonably ask– if there is this much smoke, why is there not a little more fire? Apparently, the authorities at the CMA and European Commission have not accepted the view that this is a market with anti-competitive or dominant player behaviors. Perhaps that is because this market sector has seen remarkable developments over the past 10-16 years, including:

  1. Substantial increase in new entrants, both at the journal and publisher level, generally entrants with a “Gold OA” or author-funder-institution pays model (Hindawi, PLoS)
  2. General understanding that this is a far from concentrated market—even the complainants note that collectively 4 or 5 major publishers do not add up to more than 50% of the market
  3. Understanding that library customers are free to subscribe to individual journals or take bundles of journals
  4. Sense that library customers are in fact exercising significant negotiating leverage through consortia and national-level negotiations
  5. Finally, perhaps a sense that the sector is showing significant innovation in new services and increased online availability.

What scholarly publishing as a sector really looks like

Scholarly publishing is a large sector with more than 10,000 journals, depending very much on market definitions (inclusion of arts and humanities, etc). There are many publishers with large portfolios of journals including Elsevier, Springer Nature, Wiley and Taylor & Francis, but it is equally true that many of the most important journals across science and in individual scientific disciplines are owned and managed by scientific or medical societies who do not have large portfolios of journals (Science, BMJ, NEJM). Journals are available through a variety of means, including through distributors such as subscription agents, on an individual title basis, or as collections or bundles of journals (not all of which represent the all-in “big deal”) from publishers, and journal articles are available through a variety of means including document delivery services, authorized interlibrary loan activities, and as pre-formal documents such as author manuscripts and preprints (often made available in institutional repositories or preprint repositories).

 

Each journal article is a unique artifact—the article identifies the research or scholarly issue at hand, the experiment or argument around that issue, and the results or conclusions. However, journals are discipline-specific and each discipline will have a few top journals in the field that compete with each other—in that sense competition is at the discipline and journal level, and that competition is quite intense. Journal articles are not the only artifacts from scholarly research or discourse—there are pre-formal versions of papers as noted, but in addition and of increasing importance is the actual research data from experiments and projects. Formally published journal articles, the version of which is managed by the scholarly publisher, is not the only method to obtain understanding of the underlying research or scholarship—it is however a particularly convenient method to gain a thorough understanding of the issues and background and to see at least some of the data involved, and provides some comfort with respect to general soundness of the article through the peer review process.

 

Publishers are still producing legacy journals in print as well as in the new electronic formats—because some customers still prefer print. The management of electronic services and databases has substantial costs as well. Costs are managed by publishers through a variety of means, including automation and offshoring, but costs are certainly not substantially reducing in the electronic age. The famous Scholarly Kitchen article by Kent Anderson on “things publishers do” is relevant here in its discussion on managing databases and online platforms.

 

Publishers organize the refereeing and publishing system, have done so for perhaps centuries, and appear to do reasonably well in providing value and services. If publishers contributed so little to the system, then preprint services would be perfectly fine substitutes (they are not of course—readers prefer to rely on the editorial processes identified above, not to mention annotation and reference linking and the other “things publishers do”). Academics provide many services to journals as editors and peer reviewers. The tradition has been that editors are paid by publishers but not peer reviewers, and similarly, that journal article authors are not paid “royalties”—that could change of course but likely would create other and new problems. My view is that editor payments make sense in that editors provide more continuous and extensive service to their journals than do authors and reviewers—although I completely agree that the important work of reviewers should receive more recognition, and that reviewer burdens should be shared more equitably.

 

Library customers and publishers have been struggling with pricing in the new electronic environment since at least the early 2000’s, and non-disclosure provisions have helped in ensuring that negotiations around pricing and discounts can remain confidential as between the parties. List prices for print journals are of course completely transparent and are highly relevant as those prices are or have been part of the calculation of online subscription packages. Print journal price increases have been more stable over the past 20 years than they were in the 20 years prior (compare with reports from the early 2000’s re increases of over 10% per year). Further, as Gantz noted in her 2013 article in Learned Publishing, actual serials spend at ARL libraries may be increasing at a lower clip than print journal list price increases, suggesting that libraries are benefiting substantially from aggregate discounts through a variety of means along with the “big deal” licenses.

 

Institutional and library budgets, however, have not been stable and have failed to keep pace with the growing number of researchers and amount of research to be published. This is well understood and has been reported frequently in the STM association’s “STM Report” (see p.28). These problems, and the issue of over-reliance on journal impact factors in tenure decisions or rankings that Tennant/Brembs criticize, are not caused or exacerbated by publishers.

 

The DEAL negotiations demonstrate the strength of library consortia in negotiations—the push for the “read and publish” model is in my view quixotic and irrational—in that it requires that non-German (non-OA) author articles are also made available openly with no payment model—but it nonetheless shows the negotiating model is real and equitable– neither side has all the market power. A good summary of recent discussions (August) can be found here. Double-dipping is not, to my knowledge, an issue in the negotiations and in any event is a non-issue at least with respect to Elsevier journal pricing, where print journal price increases (and occasionally decreases) are based around increases or decreases in the number of subscription-model articles (thus OA articles are not counted for this purpose)—see https://www.elsevier.com/about/policies/pricing#Dipping.

 

Elsevier and other major publishers are contributing mightily towards a migration to an OA business model and other forms of OA activity. Elsevier and Springer Nature along with PLoS are now the largest publishers of OA content. These changes however require that there be some underpinning business model—it appears that Tennant/Brembs criticize the Gold OA model chosen by the UK coming out of the Finch Report—but the only replacement for this would be a model that demands that journals and publishers continue to provide services while the journal content is made available without charge—how can this possibly work? Whether the EU succeeds in its ambitious 2020 Plan or the new Plan S is probably more dependent on the behavior of researchers, funders and research institutions than on publishers. It is unlikely, in my view, to succeed if publishers are the only stakeholders subject to persuasion or coercion.

 

Finally, from a competition law perspective, in theory dominant market players can exercise control in adjacent markets (such as academic infrastructure) by essentially tying the purchase of one product or service with the purchase of another product or service. That is simply not the case in scholarly publishing or research infrastructure. First, to my knowledge, there are no requirements to purchase one type of service as a condition to purchase of another. Second, this sector is rich in alternatives including cross-industry initiatives such as CrossRef. There is no evidence of any dominant tying behavior in any of these new services, rather the evidence, I would argue, is that this shows competition working as it should to support innovation in new services.

Criticism of Elsevier

You might say that of course, I would say, as former General Counsel to the Elsevier division, that many of the critical comments and observations by the EUA and Tennant/Brembs are inaccurate. For example, critics sometimes equate the whole of RELX’s profits or all of Elsevier’s revenues to scholarly journal publishing.  RELX obviously operates 4 business divisions and has healthy operating margins across those divisions. Elsevier produces publications and analytics services in several sectors including its health services business (almost entirely unrelated to the library journals market and with a very different customer base in mind), and publishes books and databases in addition to journals. It is a complex business that in my view is well managed and provides good value to its respective customers. The people that I know at Elsevier are committed to providing those services and value, and they work hard at offering solutions and alternatives for customers at many levels and in many sectors. Journal article authors are not forced to publish in any journal, let alone Elsevier journals, but in 2017 scholars submitted more than 1.6m papers to Elsevier journals for consideration, of which more than 400,000 were eventually published. Elsevier works extensively with journal editors on quality issues, and while not every Elsevier journal is a star in its field (several are, but not all), the precepts of service and quality are emphasized at all levels in the organization and with editors. A large and complex business, of course, does not always run optimally and will occasionally make mistakes— human error does occur. The hallmark of a well-run business is that it identifies and corrects those mistakes.

Mark Seeley

USMCA and Copyright

by | Oct 3, 2018

USMCA and Copyright

I heard Richard Haas (US Council on Foreign Relations) on MSNBC in October 2018 about the “new NAFTA” (USMCA) and Haas said something that especially piqued my interest in the new treaty text, when he said that the new treaty reminded him more of the Trans-Pacific Partnership language (that Trump famously dumped, although has recently indicated he might want to re-review) than the old NAFTA language. I think what Haas meant by that is that the USMCA is intended to establish more detailed and consistent laws, regulations and treaty mechanisms, that would be certainly consistent with US laws and regulations (indeed some critics of the TPP described it as an attempt to impose US-style laws on others). With that in mind I reviewed the text of the IP provisions (chapter 20) available on the USTR site, and wrote about the details and the complications here.

With that in mind, I wanted to review the text of the IP provisions (chapter 20) available on the USTR site, and compare with existing US copyright law, and to think a bit about what I understand about relevant laws in Canada and Mexico. I’ve been reviewing social media (mostly Twitter) comments, and folks that tend to be pro-user rights have decried the term extension/harmonization (to life of the author plus 70 years) that would particularly affect Canada (which had a shorter term), and I’ve heard from pro-creator folks who are concerned about the imposition of US-style “safe harbors” (section 512) for Internet Service Providers (which many view as outdated and too encouraging of platform irresponsibility).

With the Haas TPP comments in mind, I was expecting that the USMCA copyright provisions would reflect exclusively a US statutory/regulatory construction— I think it’s fair to say that this is largely the case, but not exclusively. Interestingly in the definition of rights in Article 20.H.2-4, copyright is enumerated as a reproduction right, a communication to the public right, and a distribution right—this language sounds more like the EU Information Society directive of 2001 than what I can glean from the “exhaustive” research I’ve just done on existing Canadian and Mexican copyright law. These sections in the USMCA differ from existing construction in any of the three countries—I think it’s fair to say that the EU formulation is not inconsistent with existing copyright laws in the region, but it isn’t exactly the same (although Canadian law does talk about communicating to the public). It would be interesting to know how these provisions were included and why, and of course if there are any significant implications!

The duration of 70 years plus life is in Article 20.H.7—which has the interesting footnote that this is a minimum and that treaty members may provide for a longer duration (in which event, under national treatment doctrine, they would have to extend that longer duration to other treaty member nationals who might seek to enforce rights in that country). On the criticism of 70 years, I would simply note that Berne and TRIPS require at least life plus 50 years (and contemplate 70 years), and the EU is set at 70 years. Duration in Canada has been 50 years, and duration in Mexico had been as much as 90 years (I believe the economic rights are now set at life plus 75 years).

On limitations and exceptions, which had been a big issue on the part of pro-use advocates re TPP (where the argument was that US-style “fair use” should be applied), Article 20.H.9 is easy to overlook— it simply notes that exceptions must comply with Berne/TRIPS on the “3-step” test (this, of course, is always easy to say and not always easy to determine). Nothing on fair use per se, although Canadian copyright law has expanded the scope of fair dealing in the educational context significantly over the past several years, much litigated in Canadian courts. Interestingly the 2018 Special 301 Report commented on the ambiguities in the Canadian educational exceptions, while noting that recent court decisions (likely thinking of the York University case, 2017, which has similarities to the US Georgia State case) are helping to improve those ambiguities—but there was no specific reference to this in the USMCA text. To be fair, most of the Special 301 Report criticism of Canada focused on pharmaceutical products and related patents, and lax customs enforcement and the draft USMCA seems to have many provisions dealing with both areas (not reviewed by me in any detail).

On the ISP safe harbor, this is, of course, a contentious issue now in the 5-year review in Canada of Canada’s most recent copyright law revisions.  I think ISP liability is currently dealt with in the discussion on secondary infringements and on network services, where exceptions for hosting (without knowledge) and caching are discussed. There is no exception for services that knew or should have known that infringing acts are occurring on the ISP platform—and particularly not when the purpose of the service is primarily to enable infringement. I could not find any provisions on responding to notices, or otherwise the notion of a “safe harbor”.  Similarly, there were no relevant provisions that I could (easily) find in the law in Mexico.

The provisions under Articles 20.J.10-11 and the Annex to Section J of the USMCA deal with safe harbors for ISPs and do generally follow the provisions of Section 512 of the US law, although there is some interesting prefatory language in the USMCA that encourages cooperation between ISP providers and rightsholders (this is echoed in later discussion about standard industry technical protection measures). Otherwise, the 512 concept is included in the USMCA of an exemption from liability where the ISP had no direct knowledge of infringements, or upon being notified by a rightsholder, acts to remove or disable access to infringing content. The USMCA also incorporates the “counter-notice” concept. The Annex notes that treaty members can further distinguish other circumstances by which an ISP might be disqualified from safe harbor protection, or provide additional secondary liability in circumstances where the ISP has a primary purpose for enabling infringement acts (this looks to me to be a nod to the Canadian construction).

Three interesting but unrelated side notes on music, collective management, and presumptions in infringement. First, the “related rights” section in 20.H.6 which would deal in part with music recordings seems consistent to me with the US’s recently enacted “Music Modernization Act” which closed a pre-1972 sound recordings loophole. Without that new legislation, there could have been issues for USG in accepting the USMCA text. Second is the inclusion of a section on “Collective Management” (20.H.13) which simply notes the important role of CMOs (which in the US are either voluntary, such as the Copyright Clearance Center—personal note I sit on the Board of the CCC— or very specific and narrowly drawn for music licensing). Finally, I also found the “presumptions” section in the infringement provisions (20.J.2) interesting in elucidating a rebuttable presumption that the indicated author or producer of a particular work does, in fact, own and exercise copyright in the work (this could be a nod to “anti-formalities” under Berne).

My conclusion is that rightsholders did moderately well in the proposed USMCA but that technology interests and ISP platforms did better. I think it is useful to have a harmonized term of protection (life plus 70), and I think that the clearer digital rights (communication to the public) should be helpful in Mexico (reviewing the existing law today, I didn’t find much dealing with digital rights). It’s disappointing that the USG did not advocate concerning Canadian education exceptions. The creation of an ISP safe harbor in Mexico and a far more robust set of ISP protections in Canada are certainly very significant, and disappointing considering the success recently in Brussels in convincing legislators that technology platforms need to be incented to act more responsibly towards rightsholders. Perhaps the prefatory language re cooperation can be picked up and expanded as the language gets further review in the respective legislatures.

Mark Seeley

Copyright Law Revision Efforts: Principles & Realities and the EU Digital Single Market proposals

by | Sep 10, 2018

Copyright Law Revision Efforts: Principles & Realities and the EU Digital Single Market proposals

September 2018

There are current proposals to significantly amend copyright laws in a number of countries and regions around the world, but probably the most active and most likely to proceed is the Digital Single Market (“DSM”) initiative in the EU. In 2016 The Commission identified the key objectives of the initiative, first to establish a broader and consistent approach to copyright rules across the EU, second for clearer digital exceptions for education, research, archiving and accessibility (visually impaired accessibility as contemplated under the Marrakesh Treaty), and third ‘fairer rules’ for the online marketplace to support creators and creativity.

This summer had/has two important DSM bookends to it. First, the European Parliament on 5 July rejected the position recommended by the Committee on Legal Affairs (“JURI”). This was deemed a good result by some interest groups, many of which had strong ties to US technology interests and pro-usage organizations such as Creative Commons. Now in September we wait for the open discussion and possible redrafting or amendments of the draft in the European Parliament, with an important vote possible on Wednesday, 12 September.

Advocacy in June against the JURI proposal generated more expressions of concern about the text, allegations that ‘link-taxing’ were being included and that there were not not enough exceptions (particularly for commercial text & data mining), than the creative and rightsholder organizations appeared to generate in support (notwithstanding a well-coordinated campaign with presentations by authors and musicians). The Financial Times carried an interesting report in June 2018 about Google’s objectives and methods in its attempt to encourage its news partners to lobby against the JURI draft, which seems ironic given that the text would have given those news publishers greater negotiating strength by providing a new ‘publisher’s right’ (in Article 11). Creator and rightsholder organizations and advocates have raised questions about the validity of tech-organized “spamming” programs which they say generated hundreds of thousands of spurious email communications to MEPs just prior to the vote, as  chronicled by Volker Rieck, a German copyright enforcement executive, in the Frankfurter Allgemeine on 18 August (“Anatomy of a Hack”). Over the summer additional “activist” activities and sparsely-attended rallies aimed at stopping the directive took place, much of which seemed similarly dubious, as described by Stefan Herwig in The Trichordist.  Some of these hyperbolic activities and communications are continuing in the days before the September vote, witness the comments below from Anne Bergman-Tahon (Director of the Federation of European Publishers) who felt she needed to clarify comments from Communia about the education exceptions.

It should not be a surprise that major copyright revision proposals excite controversy and debate, or that this debate plays out on social media as orchestrated by various stakeholder groups (including some rather new ones!), on Wikipedia, and the like.  As former US Register of Copyrights Maria Pallante (and now President of the Association of American Publishers) noted in her 2013 article “The Next Great Copyright Act”:

“…[the P]rimary challenge [for the legislature] will be keeping the public interest in the forefront… including how to define the public interest and who may speak for it… Not since the industrial revolution has there been a force like the Internet, and it has changed both the creation and dissemination of authorship. The copyright world, which once had predictable and even pristine demaracations, has morphed dramatically.”

In 2017, MEP Axel Voss, then member of JURI (now the chief reporter for the Committee) said of the 2017 DSM report and proposal, describing the ambition and scope for DSM:

“The report states key aspects fully in line with our opinion about the way Europe should deal with platforms: clarify platforms’ responsibility so that no regulatory frameworks are bypassed because of the digital nature of their activities, and further enforce and protect copyright and intellectual property rights online. This should be translated in encouraging the transfer of value towards rights holders for the exploitation of the works online, and in proceeding to a revision of the Intellectual Property Rights Enforcement (IPRE) Directive to strengthen the fight against counterfeiting online, ensure fair competition and practices in the platform economy, both for B2B and B2C, and promote the emergence of European players in the field.”

Big and sweeping revisions of such important laws will necessitate debate, discussion and likely compromise. After all, these laws govern the creation and use of content that consumers, educators and researchers value highly and consider critical to their learning, enjoyment and work, as well as the operation, functioning and responsibility of Internet actors. This Saturday’s edition of The Economist, in talking about tech platforms taking greater responsibility for the parsing of “fake” news and the question of neutrality, suggested that on one hand platforms do not need current safe harbor protections, while noting that the platforms are taking greater responsibility directly and suggesting that further requirements might disfavor small potential Internet disruptors, who might not be able to afford some of the costs of greater responsibility and engagement. One can argue that the article should have noted the DSM proposals around the publisher’s right for news media, which would be one way of supporting more neutral and fact-based reporting (especially considering that the platforms often feature and copy from EU media sources), but the article does show that reasonably informed discussions about benefits and concerns are possible when thinking about Internet regulation. Compromises will come out of informed trade-offs between such benefits and concerns, provided the discussion is properly informed and respectful of legitimate stakeholder input.

Going back to Maria Pallante’s 2013 article, she notes that major copyright revision efforts require “clear and forward-thinking set of goals, and a sustained commitment from [the legislature…since] amending the law eventually comes down to the negotiation of complex and sometimes arcane provisions…”  On 12 September, the European Parliament will need to consider how all the proposals and recent suggested amendments fit into the key goals outlined in 2016—which were an attempt to trade-off greater platform responsibility on one hand with specific new exceptions and limitations.

Mark Seeley
September 2018