WRITERS VERSUS
PUBLISHERS, PART II
FEBRUARY 2000
In September 1999, the U.S. Court of Appeals for Second Circuit overruled the Tasini decision discussed in the September, 1999 column. In a major upset for publishers such as the New York Times, Newsday and Time Inc., the 2d Circuit held that when an article from a journal issue is incorporated into an electronic database or CD-ROM product, the publisher of the original journal does not own the copyright in the individual article.[1] When freelance writers signed agreements with publishers to include their articles in journal or newspaper issues, republication in an electronic database was not mentioned in the agreements.
The district court had held that publishers did have the right to contract for republication of articles from their journal issues without further compensation to the freelance writer. [2] As discussed in the earlier column, the decision turned on a technical interpretation of § 201(c) of the of the Copyright Act. The district court held that although individual authors own the copyright in their contributions, the owner of the copyright in a collective work, such as a journal issue, could include the articles from that journal issue in a third party electronic database (specifically Lexis/Nexis and UMI's New York Times OnDisk). When an author agrees to have the work published as a part of journal issue, he or she still retains other rights not specifically transferred. The statute further states that absent a transfer of copyright, the publisher has the privilege only to "reproduce and distribute the contribution as part of that collective work, any revision of that collective work, and any later collective work in the same series.” The district court found that including these articles in a third-party collective work such as a database constituted a permissible revision.
The Second Circuit disagreed and stated that the district court erred in its interpretation of the law. While certainly the transfer of copyright to the publisher can include the electronic rights, and certainly will in the future, the transfers governing the articles at issue were silent as to the electronic rights. Typical negotiations included due dates, word counts, subject matter and price. Because the 1976 Copyright Act gives all rights not specifically transferred to the author, in this instance, publishers of the collective works did not have the rights to grant to Lexis/Nexis and UMI to include the articles in their databases without permission of the author. Thus, when publishers negotiated with the database owners, it attempted to license rights it did not own.
Even if the court had held that publishers did have the rights and could agree to incorporation of their works in to the database, it disagreed that it could have done so as a permissible revision of the copyrighted work. In no way is inclusion in a database a revision of the original collective work. Incorporation of the article into an electronic database completely changes the character of the work. For example, even if all the articles in a journal issue go into the database, the formatting, advertising, order of the articles, etc., is completely changed. A new collective work, the database, may be created, but it is not a revision of the original work.
Publishers argued that electronic databases are the modern equivalent of microfilming journal issues, but the court disagreed. Unlike the microfilming situation, the publishers of the database do nothing to retain the copyrightable characteristics of the journal issues such as selection, coordination and arrangement. If the databases at issue had been simply a compilation of journal issues so that they appeared as scanned images that reproduce the pages of the journal and continue to look like the journal issue, the result may have been different. But this was not the situation in either of the databases at issue.
In retrospect this is not a surprising decision. The Copyright Act of 1976 is often touted as an “author friendly” statute, and one of the many examples of its author-centricity is found in the reservation of all rights to the author not specifically transferred. Permitting publishers to license journal issues to database publisher without further compensation to authors certainly would be contrary to the author friendliness of the Act.
Now, publishers routinely include the grant of electronic rights in their agreements with authors, so prospectively, this is not likely to be a problem. What remains problematic are articles produced by freelancers from 1978 to 1999. This decision certainly will benefit freelance writers if publishers now go back to each author whose articles are included in the databases and negotiate for the rights to digitize the article and incorporate it into the database. On the other hand, it may prove too costly for publishers to take this step and they could simply decide to delete from the database articles by freelance writers. Then it would appears that no one wins, not the author, not the publisher, not the public. In fact, there is speculation that rather than solving problems, this decision will actually fuel the fire for further disagreement between publishers and writers in light of the new opportunities for publication presented by the Internet.
What are the likely effects on libraries? Will this change the royalty payment practices of document delivery services? Coupled with the CarlUncover decision (also discussed in the September “Copyright Corner,” perhaps it will. The only effect on users of these services could be higher prices to compensate for the increased efforts to pay royalties directly to authors.
In 1996 the National Writers Union established the Publication Rights Clearinghouse so that those who reproduce and distribute articles in which the copyright is held by the individual author have an easy mechanism to identify the owner and pay royalties due. Writers give PRC permission to act as their agents in licensing secondary rights in previously published articles.[3] The PRC collects license fees and redistributes the royalties to individual writers. The PRC works in a similar fashion to the Copyright Clearance Center, but it is not yet so well established.
The publishers have filed for a rehearing en banc before the Second Circuit which is required before appealing to the U.S. Supreme Court.