Legal and Business Considerations ofLegislating Collective Rights

in the U.S.

Lois F. WasoffKernochan Center Symposium 2011

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Copyright and Digitization

• Copyright law “technology neutral”• Digital technology creating challenges• Numerous discussions about possible changes:– Overall reform (Copyright Principles Project)– Specific issues (Orphan Works (2005), Section 108 report

(2008))• Licensing is an important tool for managing copyright,

especially in digital context• Collective licensing being considered as means of

resolving certain issues raised by digital copying and distribution

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Key Terms

• What “rights” can or should be managed by collective licensing?– GBS/BRR: collective license of broad rights, not

typical of U.S. uses of collective licensing• “Collective licensing” should not be conflated

with “agency” even when the “agent” is the collective rights manager

• “Orphan works” and “Out of Print works” are not synonymous

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Collective Management vsLimitations and Exceptions

• Orphan works– U.S. attempted approach: exception; limitation of

remedies• Mass digitization– Section 108 study group approach: creation of a

“preservation only” exception to permit library digitization of “at risk” works

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Reasons for Mass Digitization of Analog Works

• Preservation• By rights holders, for more effective

distribution• By third parties, to distribute works to which

rights are owned by others (who may or may not be findable)

• To be able to make aggregated use of the digitized materials (i.e. “non-consumptive uses”)

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Concerns of Rights Holders• Considerable discussion during Section 108 Study about impact of

digitization• Libraries wanted broad rights to distribute digitized copies to library

patrons• IN CONTEXT OF THOSE DISCUSSIONS (no remuneration; copying

being done under an exception) rights holders wanted to limit off-site distribution and place access restrictions on preservation copies

• Reason for concern: digital (on-line) distribution is becoming a core activity for rights holders

• But even in a collective licensing context, for core activities, rights holders will want to protect their markets and their ability to manage their works by doing direct licensing were it is available and effective

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Commercialization and public dissemination

• Copyright protection extends to published works, unpublished works, and works never intended for publication.

• Concerns may be different for publicly disseminated works and works that have never been publicly disseminated

• Concerns may be different for works that are “commercially available” and those that are not (GBS settlement is an example)

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Possible Ways of Addressing Rights Holder Concerns

• Diligent search• Distinctions between types of works (publicly

disseminated or not; commercially available or not)

• Voluntary participation or “opt out”• Limitations on purposes for which licenses can

be granted• Limitations on rights that can be licensed• Non-exclusivity

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Relevance of international experience with collective licensing

• Smaller vs. larger markets; smaller and less diverse vs. larger and very diverse rights holder groups

• Traditions in other countries of strong rights organizations with ability to license collectively vs. tradition of individual, negotiated transactions

• Fewer available alternatives to licensing vs. U.S. “safety valve” of fair use

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Conclusion

• Collective licensing (including extended collective licensing) has advantages but should be approached with caution in the U.S.– Pros: can provide a means for rights holders to get some

remuneration for certain uses; may reduce pressure on copyright law generally for expanded exceptions and broad applications of “fair use”

– Cons: if not carefully crafted, can damage ability of creators to fund creation of future works and reduce copyright to a “remuneration only” system, ignoring other important aspects of the law that protect creators and facilitate the creation of works of authorship

• For some purposes, a properly limited exception could be more effective, less costly and simpler to implement