Re: Harvard Business Review

[John Mitchell <john@xxxxxxxxxxxxxxxxxx>]

I think there are two entirely different issues. It is one thing to
contract away a right, and quite another to contract to acquire the
removal of a limitation to which a right is subject. Take, for
example, section 109(a), a much more straightforward and clear section
than fair use. As the owner of a lawfully made book (a lawfully made
copy of a literary work), I am "entitled" by law to sell it, lend it
or give it away without the consent of the copyright owner. If a
someone -- not the copyright owner -- offers me the book only on
condition that I not transfer possession to anyone else, then I see no
problem agreeing not to transfer possession if the terms of the offer
make sense to me.

But if the copyright owner exercises the copyright owner's exclusive
right to reproduce or distribute a copy of the work on condition that
I not exercise my section 109(a) entitlement, it is an entirely
different matter. Congress explicitly stated that the exclusive rights
are subject to section 109 -- you don't get the exclusive rights
without submitting to the superior 109 right. Second, the section 109
right protects a huge public benefit that reaches far beyond my own
personal economic interests. If I give up my statutory right because
it makes economic sense to me, then I and the copyright owner have
just (1) agreed to nullify a limitation placed upon the copyright
owner's exercise of exclusive rights, (2) agreed to suppress the
secondary market for used books (antitrust), (3) impaired access to
more affordable or free copies to those who cannot afford the
copyright owner's price, directly contrary to a purpose of copyright
to widen dissemination, and (4) entered into an agreement impairing
freedom of speech, which the courts should refuse to enforce (in the
nature of Shelley v. Kramer) since the agreement does not fall within
the copyright exception to the First Amendment.

Practically speaking, a bookstore could make a calculation that if
only one buyer could read each book, it might be able to sell more
books, and therefore it could offer a discount to all buyers who agree
not to let anyone else read the book (assuming the increased sales
revenue exceeds the loss due t the discount). Buyers would be free to
take it or leave it. Some, who had no plans to let anyone else read
it, might take the offer. Others, who saw greater value in selling the
book, lending it or giving it away, could reject it. If the bookseller
offered this as the only option, people could buy the book elsewhere.
But when a copyright owner conditions the exercise of its exclusive
right on the buyer agreeing to assist in preventing the operation of
the limitation on that right, it's like being given one, but only one,
wish come true, and your one wish is to have unlimited wishes come true.

Sure, I realize copyright owners have pulled some of these stunts
(like the self-destructing DVD that costs more to make but is sold
cheaper on the theory that more people will have to buy them because
the secondary market -- and all of section 109's entitlement --
disappears), but getting away with it doesn't make it legal.

John


On Dec 8, 2008, at 8:58 AM, Harper, Georgia K wrote:

> Copyright is at its heart an economic statute. Its all about the
> incentive (a limited monopoly) society feels we need to provide to
> authors and distributors to get them to produce stuff to ultimately
> create and sustain the public domain. As an economic statute, it is
> fundamentally open to contractual modification. The only things that
> act as stops to this basic relationship (of modifiability by
> contract) are the kinds of things Kat mentions (non-negotiated
> contracts are questionable in some jurisdictions (i.e., shrink-
> wraps, click-wraps); unilateral statements of rights like all
> rights reserved are not enforceable; unconscionable contracts;
> fraud, etc.). When a large institution and a publisher, or even a
> small institution and a publisher sit down across from each other
> and negotiate an economic deal (you give me this and Ill pay you
> that), they can agree to whatever economic terms they want. Fair use
> is not sacred. It can be bought and sold (How much to take away
> your fair use rights? Well, how about $200,000? No, I dont want
> them for that. How about $20? No, not enough... Well you see
> where this is going.)
>
> I provided a Google search that would yield plenty of writing on
> this subject for anyone who is interested, in my first response to
> the inquiry a couple of days ago.
>
> G
>
>
>
>
> On 12/7/08 11:25 PM, "Kathrine Henderson"
> <kathrinehenderson@xxxxxxxxx> wrote:
>
> hmmm, I think that contracts can trump copyright law unless the
> contract
> itself is fraudulent, deceptive or unconscionable. If I have time
> later in the
> week, I'll see if I can come up with some citations on this issue.
>
> I can see
> where you are going with your employment example.  But, I think that
> employees
> contractually agreeing to the kinds of things that you are
> suggesting would
> fall under an unconscionable contract. Taking this to an extreme, we
> cannot
> enslave people even if they agree to it contractually.
>
> In any case, this
> situation certainly begs some questions.  If contract law doesn't
> trump
> copyright, then why is EBSCO including this caveat? How is it that
> HBR can
> make such a demand?  Why aren't other publishers doing the same
> thing--or are
> they doing so in a less visible way?  Why aren't we all posting
> links to HBR?
> My $.02,
>
> Kat
>
>
>
> ----- Original Message ----
> From: John Mitchell
> <john@xxxxxxxxxxxxxxxxxx>
> To: Kathrine Henderson <kathrinehenderson@xxxxxxxxx>
> Cc: digital-copyright@xxxxxxxxxxxxxx
> Sent: Sunday, December 7, 2008 9:29:35 PM
> Subject: Re: Havard Business Review
>
> Kat, I've never gone so far as to believe
> contract trumps copyright. Sure, contracts within the scope of
> copyright are
> fine, but contracts that leverage copyrights into control over uses
> specifically excluded from copyright should, at best, be void and
> unenforceable as a matter of public policy (and at worst, copyright
> misuse and
> a Sherman Act violation). A good parallel might be employment law.
> Employers
> have certain rights and employees have certain rights, but we would
> not
> tolerate an employer obtaining contractual agreements from
> employees, as a
> condition of employment, to waive all rights enjoyed by the employee
> as a
> matter of law. Sure, some prospective employees might find it "a
> better deal"
> to waive rights against age, sex, or race discrimination in exchange
> for a
> higher salary, and the "free market" would find that to be just
> dandy, but we,
> as a society, would not tolerate it.
>
> As a matter of pure copyright law, when
> the grant of section 106 rights is made expressly "subject to sections
> 107-122," those sections would lose much of their value if copyright
> owners
> could license section 106 rights only on condition that the licensee
> waive the
> limitations in 107-122, don't you think?
>
> John
>
> John T. Mitchell
> http://interactionlaw.com
>
> On Dec 6, 2008, at 8:32 PM, Kathrine Henderson
> wrote:
>
> > This restriction has been there for more than two years.  I suspect
> that the
> > publishers are within their rights to restrict usage--contract law
> trumps if
> > nothing elese, but it seems yet another example of copyright being
> out of
> > balance.  Ultimately, I think that publishers are going to have to
> change
> > their business model; but I don't think there's enough pressure in
> the
> > market.
> >
> > My $.02,
> >
> > Kat Henderson
>
>
>
>
> --
> Georgia Harper
> Scholarly Communications Advisor
> University of Texas at Austin Libraries
> 512.495.4653 (w); 512.971.4325 (cell)
> gharper@xxxxxxxxxxxxxxxxx