Recent Copyright Developments in the Courts The progress and eventual outcomes of several court cases may significantly influence developmental directions for copyright compliance and intellectual property management in university and research institutions. ARL's interest in these copyright cases reflects its long-standing position as an advocate of the public interest in copyright and in maintaining a balance between the rights of the copyright owner and the rights of the user. Court Addresses Fair Use in Texaco Case On November 21, in supporting Texaco's petition for rehearing, ARL and other library and academic organizations continued their amicus stance on copyright issues raised by the corporate giant. Texaco's petition followed on the heels of the majority appeal decision handed down on October 28 by Judge Jon O. Newman. The U.S. Court of Appeals for the Second Circuit upheld the July 1992 ruling by Judge Pierre Leval that the photocopying of single articles in scientific and technical journals by employees at Texaco was not fair use under the U.S. copyright law, even though Texaco itself carried three subscriptions to the Journal of Catalysis, on which the case devolved. Judge Newman agreed with the earlier district court decision but for somewhat different reasons. Some analysts feel that Judge Newman's characterization of the first fair use factor (character and nature of the use) may lay a foundation to generalize about the kinds of copying that routinely take place in not-for-profit research and educational institutions. In considering the first fair use factor, the court assessed Texaco's copying to be non- transformative (i.e., not directly resulting in the creation of new or enhanced knowledge). Judge Newman also deemed the copying to be archival because it assembled a set of papers for future reference (the same reason for which libraries buy subscriptions). And in a somewhat different slant, the court agreed with Texaco that even though the company's for-profit status was significant, the earlier Leval decision had placed undue emphasis on the for- profit nature of the corporation. Judge Newman reinforced Judge Leval in affirming that the third fair use factor (amount and substantiality of the use) favored the copyright owners, in that an article is an entire work; Texaco employees were copying the whole rather than parts of it. In considering the fourth fair use factor (effect on the marketplace) Judge Newman emphasized the Copyright Clearance Center as an established, viable mechanism for collecting license fees. Even though evidence of income loss from single articles was not particularly strong, owners have the right to seek licenses and to make markets, he wrote. Since the market exists, it is appropriate to consider the effect upon that market. The opinion clearly gives copyright owners an incentive to register with the CCC or like agencies. The opinion may have possible implications for higher education users. While Judge Newman carefully limits the decision to the specific facts of the case, the decision does nonetheless raise questions in the minds of at least some copyright analysts about whether a non-profit status or affiliation would be enough to swing the first factor in the other direction. What are, after all, transforming uses? Judge Newman raised this very question by writing, "If the issue were open, we would seriously question whether fair analysis that has developed with respect to works of authorship alleged to use portions of copyrighted material is precisely applicable to copies produced by mechanical means ... Mechanical copying of an entire document, made readily feasible and economical by the advent of xerography, ... is obviously an activity entirely different from creating a work of authorship." The decision also raises questions about the definition of the term "archival." Are items gathered for personal collections for future use, archival? For how long may they reside in such collections without being archival? Need they be organized so they are easily accessible (the working definition of "archival" as used by libraries)? A discussion of the decision and its potential effects on higher education can be found on the World Wide Web site of Georgia Harper, Copyright Counsel for the University of Texas system (http://gold.utsystem.edu/OGC/Intellectual-Property/cprtindx.htm). U.S. Case Re Coursepacks On Appeal In the fall, ARL became a signatory to another amicus brief in a copyright case that addresses the rights of professors and students to make excerpts available, under fair use, of educational materials in connection with teaching and classroom studies, and to have copies of those materials reproduced for them by a third party. The amicus brief was written by Professors of Copyright law including L. Ray Patterson, School of Law, University of Georgia. It was presented to the U.S. Court of Appeals for the Sixth Circuit in support of an appeal by Michigan Document Services, Inc. in the case Princeton University Press v. Michigan Document Services. ARL became a signatory to the brief because the statement clearly articulates the constitutional foundation for copyright law in the United States and, in this context, elucidates the application of the Copyright law's four fair use factors. According to attorneys representing Michigan Document Services, "The Court's decision will have a significant impact upon the right of educators and students to use excerpts of copyrightable works in connection with teaching, and will determine the extent of the right of fair use in educational environments." Additional information is available from MDS's attorney Susan M. Kornfield of the firm Bodman, Londley & Dahling, 110 Miller, Suite 300, Ann Arbor, Michigan 48104. Australian Court Rules on Coursepacks Last fall, Australian research universities won the first round of a coursepack case against Australian publishers and their licensing agency, Copyright Agency Limited (CAL). Production of "anthologies," or compilations of material drawn from several sources published in booklet form for distribution to students, may resume, provided that (a) they are made for use in connection with a particular course; and, (b) if a charge is levied, it can be demonstrated that what is sought is cost recovery and not a profit. This is the effect of the judgment of Justice Gummow in Copyright Agency Limited v. Victoria University of Technology (Federal Court, 30 September 1994). CAL had argued that production and sale of anthologies to students was not permitted by the part of the Australian Copyright Act of 1968 which covers copying by educational institutions. Justice Gummow held that the educational purposes proviso would be satisfied where copies are made for use in connection with a particular course. A difference between the North American and Australian legal settings is that Australia has a statutory license scheme which (roughly) permits the reprographic reproduction, including multiple copying, of literary works by educational institutions for the educational purposes of the institution. In the ordinary case, only a statutorily defined "reasonable portion" can be copied. Further copies must be paid for on a "reasonable remuneration" basis. This scheme has been in operation since 1981 and is a separate licensing arrangement specifically provided for in legislation and regulations. Since 1981, there have been some statutory reforms and re-draftings of the legislative text, some co-operative test- case litigation to determine a benchmark for "reasonable remuneration," and some genuinely adversarial litigation between disputing parties. Just as the copyright owners have formed a collecting society to promote and protect their interests, the universities have formed a common policy and largely negotiate through the Australian Vice Chancellors Committee (AVCC). Indeed, the role of collecting societies is now embraced by the legislation. The Victoria University case was about the limits of the wording of one part of the legislation. Copyright owners were testing whether the words of the statute allowed the copying of disparate items that were intended to be distributed together as an anthology. Owners argued that this was a form of publishing and therefore beyond the limits of mere "copying"- i.e., going beyond the reproduction right to the publishing right. The argument was not accepted by Justice Gummow. Much of the argument in the case was about the meaning of the word profit in the section of the law and differing views about methods of calculating costs. The trial judge took an "intention of the parties at the time of copyingS approach. Justice Gummow found no "profit" in circumstances where anthologies are produced solely for the use of students of the particular institution and when that institution levies a charge to recover the costs of production. He specifically allowed that this may involve much more than simple printing and paper costs and may include salaries, insurance, telephones, packaging, maintenance, and more. In this context, Justice Gummow discussed the 30% markup levied by the VUT bookshop in order to recover such costs and to attempt to break even on its operating budget. On October 18th, the 12 publishers and CAL announced that they will appeal the case. This article was assembled by Ann Okerson, OSAP, with reference to analyses from Laura Gasaway, University of North Carolina; Jane Ginsburg, Columbia University; Sanford Thatcher, Pennsylvania State University Press; Georgia Harper, University of Texas System; Edward Lim and Nicholas Pengelley, Monash University; and Phillip Griffith, AVCC.