Richard Poynder
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What Price Copyright? New Concerns

By RICHARD POYNDER

1st December 1999

Intellectual property--the fuel of the information industry--is in danger

In the knowledge economy, surely intellectual property gains importance and becomes the primary source of competitive advantage. Certainly for the information industry, copyright should be an essential weapon for companies as they migrate their businesses to the Web. Yet in the face of legal uncertainty, misinformation, and disinterest, there is a danger that the industry could be conspiring in the degradation, and possible extinction, of its most vital source of protection.

Trouble in the Air?

This was highlighted for me in August when, out of the blue, I received e-mail from the Dow Jones Journal Reprints department. The message referred to two hyperlinks on my Web site pointing to articles I had written for the Wall Street Journal Europe that were subsequently published on the newspaper's Web site.

Dow Jones was contacting me to demand that I pay for those links--a payment, moreover, consisting of an annual fee four times as high as I had originally earned from writing the articles! "Any republication of our material without our permission is a violation of our copyrights," explained Dow Jones.

The assumption was that in linking to the articles I was "republishing" them. And while it was eventually conceded that I should keep the links without payment, Dow Jones genuinely seemed to believe I had been infringing its copyright. A view, points out Keith Kupferschmid, intellectual property counsel at the Washington-based Software & Information Industry Association (SIIA), unlikely to be endorsed by the courts. "There has in the U.S. been case law with regard to whether linking is a copyright infringement," he said. "But I do not believe that linking in itself is copyright infringement."

However, the incident raised another question. As I had never assigned the electronic rights in the articles to the Wall Street Journal Europe, then rather than my infringing Dow Jones rights, was the company infringing mine in putting the articles online? My correspondents demurred, "Dow Jones disagrees with your suggestion that it does not have the right to electronically post these articles."

Changing Tides

Interestingly, the Second Circuit Court of Appeals in Manhattan addressed this issue a month later. Ruling on a long-standing dispute over electronic rights (Tasini v. The New York Times Co. Inc.), the court concluded that several publishers, including The New York Times and Newsweek along with their co-defendants UMI and Mead Data Central (former owners of LEXIS-NEXIS), did not have the right to put freelance journalists' articles into electronic databases without the authors' permission.

Alan Fisch, an Internet and intellectual property law expert with Howrey & Simon in Washington, DC, explained that this ruling impacts the Web too. "Although the Tasini court was only presented with a question about commercial database content, the court's reasoning leaves little doubt that the ruling also extends to works of authorship placed on the Web."

Fisch added: "Tasini does not create an electronic rights compulsory license. Therefore, an author and a publisher must each agree to the terms of the license before the work can be made electronically available." In practice, this means that publishers that have failed to obtain an electronic rights license to freelance articles prior to placing them online, no matter the cause, must now remove them from all electronic media.

"The Tasini ruling is a very, very big issue for the online industry," concludes Kupferschmid, "because database providers like LEXIS-NEXIS have a lot of information that was created--and is therefore still owned--by freelance writers."

Impact on the Industry

Yet, the online industry has greeted the news with surprising disinterest. When, 11 days after the Tasini ruling, I spoke with Bert Corelli, director of content strategy and acquisition for the Americas for Dow Jones Reuters Business Interactive (DJRBI), he appeared unaware of, or at least unconcerned about, the decision. (I should add that Corelli was not involved in my earlier e-mail correspondence with Dow Jones, and works in a separate part of the business.)

When I informed him that prior to our interview I had done a search on DJRBI's

Publications Library and found a whole bunch of my articles for which I had never assigned electronic rights, Corelli replied, "In the contracts we have with our data providers, Dow Jones Reuters Business Interactive has written assurance from the publishers and aggregators who have supplied this content to us that they do in fact have all the rights required to deliver this material to us."

LEXIS-NEXIS seemed similarly relaxed, issuing a statement in which it insisted that the Tasini decision would have "no material adverse effect" on LEXIS-NEXIS due to the "customary practice in the information industry ... [for the publisher] ... to be responsible for obtaining all necessary copyright interests for online distribution."

Are Dow Jones and LEXIS-NEXIS really not perturbed by the implications of having to withdraw huge swaths of content from their services?

Unnervingly, their relaxed attitude reflects a generalized indifference towards copyright issues within the industry. While researching this article, I sent all the major online services plus many aggregators a list of questions about copyright. Many never got around to answering, with several simply replying that they had no one in the company able to answer the questions. Dialog returned the list with the words "No comment" under most of them.

The problem, suggests Tim Bradbury, senior vice president for business development at the Gale Group, is that events are moving so fast that copyright is in danger of being neglected. "Does the industry give copyright the same amount of attention in the electronic environment as it did 10 years ago?" he asked rhetorically. "Probably not. And we are as guilty as the next organization in this."

True, the Tasini ruling could yet be overturned by the Supreme Court. It would be dangerous, however, to assume that the "copyright question" would simply go away if it did. Rather, the Tasini decision should be a wake-up call for an industry that has fallen asleep at the helm--at the very moment when the danger is greatest. For in the inevitable migration to the Web, copyright--certainly as it relates to content--faces its greatest challenge.

First, as Paul Maidment, editor of FT.com (the Financial Times Web site), points out, increased accessibility brings increased risk. "The day of the proprietary charged-for electronic database is past," he said. "The trend is for content providers to make their material more readily accessible, and most Web sites now run on an advertising/transaction business model that requires them to get their content in front of as many eyeballs as possible. The greater the exposure, the greater the risk."

Second, in selling to multiple (anonymous) end users rather than known corporate entities, the security of the contractual relationship disappears, making enforcement more difficult. As Martin Hackemann, a lawyer and member of the personnel department of FIZ Karlsruhe (the European partner of STN International), explained: "While anyone wishing to infringe copyright can do this regardless of whether a database is protected by a password, the risk of being detected is far greater where that person is a contractual partner. This is because, as well as the protection provided by copyright laws, the content owner will have a contractual claim against the infringer."

Third, in migrating to the Web, the industry may discover that some of its databases are not even protected by copyright. In 1991 a U.S. court concluded that a modicum of creativity in the selection, coordination, or arrangement of a database is required for it to be copyrightable (Feist Publications v. Rural Tel. Serv. Co.). "So if you consider the files on LEXIS-NEXIS for instance, while many of the NEXIS databases are probably protected by copyright, it is questionable whether some of their other databases are," explained Kupferschmid.

True, governments are busy updating legislation. Last year, for instance, the U.S. introduced the Digital Millennium Copyright Act (DMCA), and the European Community is finalizing its own Copyright Directive. Additionally, the European Union has passed a separate Database Directive, and in the U.S. two controversial--and competing--database bills are currently being lobbied over.

However, the most vociferous lobbying surrounding this new legislation is being conducted not by the information industry, but by the Web community--whose interests are often diametrically opposed to those of content owners. To date, therefore, ISP liability has attracted the most attention of lawmakers at the expense of clarification on what constitutes infringement in a Web environment. So while the DMCA makes it clear that, in linking to infringing material, an ISP may not be held liable for copyright infringement, it fails to clarify whether linking itself is an infringement. "On this issue, the DMCA is silent," said Kupferschmid.

The Risks of Free Information

But perhaps the greatest danger for the industry is not the ease with which data can be copied, or its greater exposure to infringement, or even the question of linking. Rather it is the radical proposition that copyright is no longer relevant to content on the Web. Internet conferences are packed with Web-heads asserting that "information wants to be free" and new economy gurus sketching out freshly minted revenue models based on advertising or e-commerce. In this scenario, note that content is free.

If this philosophy triumphs, the online industry will be roadkill. "Trying to protect current revenue streams as they go through the transition and watching as business models start to break down would be extremely painful," concedes Gale's Bradbury. "At some point something would give."

Put simply, unless the industry begins to treat copyright more seriously and sets about winning hearts and minds to its way of doing business, it could find its very raison d'etre evaporating. High-profile litigation with the creators of its assets--or pursuing them with extortionate demands for linking to their own intellectual property--is unlikely to win the PR battle.

"If we don't continue to educate ourselves and our users, and try to learn and craft what the future will be," concludes Bradbury, "then it will be decided for us without our participation."

After all, as the flood of free content continues to flow onto the Web, what price copyright if no one is prepared to pay for the content it was designed to protect?

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