a different perspective

On 12 September 2018, the Edmonton Journal published an article of mine in print and online editions, where I emphasize the role of exceptions in the growth of billion-dollar media and content industries. Below is the original, longer form, of that article.

As the summer recess ends, Members of Parliament are returning to Ottawa to resume the business of the nation, including a review of the Copyright Act. Judging from transcripts of meetings held last spring, tensions run high among stakeholders. The general dispute is one of control versus legitimate unauthorized uses, education being a particularly thorny issue.

Transcripts of similar meetings from the 1980s, 1990s, and the 2000s, reveal that relations between educational institutions and copyright owners have always been strained. Institutions cite statutes that position copyright as a means of encouraging learning, while owners swear by the rights of the author. Both perspectives have roots in history. The Anglo-American common-law tradition placed the control of copyright, with measures of unauthorized use, as integral to developing publishing sectors. Whereas the civil-law tradition led by France argued that intellectual effort was nothing less than a living part of its creator and must be protected as such.

Yet both themes were relevant on both sides of the Atlantic. Differences were only a matter of timing. Nation-states eager to build their publishing sectors favored lesser control in the name of copyright. After creative assets were amassed, those same states offered holier-than-thou pronouncements about copyright. However, in neither tradition were authors, or students, central players in the various statutes.

Despite this, the figure of the starving author is the principal exhibit during any discussion of copyright. It appeared in 1710—when copyright attained a legal persona—and returned with each copyright expansion thereafter. If, 308 years later, authors are still starving, perhaps it is time to acknowledge that copyright alone cannot assure prosperity for an author. First and foremost, an author needs readers.

For Canadian authors, this challenge is not new. Even without competitors—beginning with Charles Dickens and continuing well past Harper Lee—Canada’s population was not enough to sustain Canadian authors. Even increasing the control exerted through copyright and holding students as a captive market cannot guarantee returns to Canadian authors. Particularly as foreign educational and research-oriented publications dominate the material read in post-secondary institutions.

As MPs wrestle with this review, they might consider a different perspective concerning the system of copyright—that it is not merely about what we read, view or listen to, but how we read, view and listen. Media development is enabled not by copyright, but by exceptions to copyright. Those uncontrolled spaces, where content is unprotected, allows new media to thrive, legitimately, to the benefit of a country’s economic and creative growth.

For instance, in the early twentieth-century, player pianos were in vogue. That success is directly attributable to a copyright law that did not protect music represented and conveyed through mechanical means. According to historian Harvey Roehl, in 1923 the player piano industry produced over 347,000 pianos and achieved over $100 million in sales. (In today’s American dollars, approximately $1.5 billion.) People feared that the technology would spell the death of music, but the new market for piano rolls spurred original composition. The leading player-piano manufacturers were eager to represent popular composers, selling not only their existing works, but also music composed expressly for piano-roll distribution (George Gershwin’s tale is legendary).

Another media technology worth remembering is the video cassette recorder. American film executives fought tooth-and-nail to have it killed; but in 1984, the United States’ Supreme Court ruled that the equipment was lawful. By the 1990s, the film industry was praising the new markets made available by the technology. Consumers were eager to pay for personal copies of favorite movies, which led to increased production of new films. Drawing from data compiled by the U.S. Department of Commerce and the U.S. International Trade Commission, in 1992 earnings via direct-sale to North American consumers reached $2.5 billion and in 1993 earnings from global markets were approximately $5 billion. All this out of a technology that Jack Valenti, then-president of the Motion Pictures Association of America, had likened to the Boston Strangler a decade earlier.

With respect to contemporary technology, MPs might find U.K. research to be helpful. In 2010, then-Prime Minister David Cameron ordered a review of their intellectual property law to enhance innovation and creativity in the digital age. In the ensuing report, the lead investigator Ian Hargreaves wrote: “Could it be true that laws designed more than three centuries ago with the express purpose of creating economic incentives for innovation by protecting creators’ rights are today obstructing innovation and economic growth? The short answer is: yes.” A year later, Hargreaves explained that Cameron had been particularly interested in the role exceptions had played in the development of search engines, namely Google.

This past summer, social media were buzzing in anticipation: would Google become the first trillion-dollar company? (Strictly speaking, it would have been Alphabet, parent company of Google, who could claim that title.) Apple emerged the winner; regardless, lawmakers should not forget that Alphabet exists because of Google and employs nearly 90,000 people worldwide. Of course, billion-dollar media industries with plentiful jobs do not arise solely from flexible exceptions within the system of copyright. But such industries could not arise without them.

Opponents of exceptions will criticize any amendment that appears to favour industries over authors. MPs might find strength of resolve through the work of Nick Mount, a professor of English at the University of Toronto, who is respected by authors and educators alike. In his landmark book, Arrival—the Story of CanLit, Mount illustrates that general economic prosperity enabled CanLit to reach the success we see today, and concludes by saying Canada “is producing many more writers and many more books than ever before.”

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For those interested, further reading:

James Boyle (who served as an expert adviser for the British Review) on the Hargreaves Report: “Copyright is supposed to make, not to break, markets. Yet the Review found that innovative digital businesses were strangling in the tangled web of licensing copyright has created.  As technologies have developed, copyright has created right after right to deal with them, each jealously guarded by its own collection society. Pity the poor entrepreneur who wants to create a new legal business and finds that technological happenstance means multiple rights are involved. This is good for no one (except the middle-men.)”

Stephen Advokat, A new era for Hollywood, Chicago Tribune, 3 January 1986.

Fred von Lohmann, “Fair Use as Innovation Policy,” Berkeley Technology Law Journal (2008). “This article contends that copyright law’s historical tolerance for such copying as a fair use has served as an important element of both copyright and innovation policy. This is because, to the extent it permits private copying, fair use creates incentives for technology companies to build innovative new products that enable such copying. Far from being an unfair “subsidy” from copyright owners to technology innovators, this aspect of fair use has yielded complementary technologies that enhance the value of copyrighted works.”

second circuit stays on message

Last week, the United States Court of Appeals for the Second Circuit added to an already-healthy body of American affirmative decisions concerning fair use. In this instance, Authors Guild, Inc. v. HathiTrust, the scanning of entire books to allow for a full-text search of the content was given resounding support. In the process, the judges further explored the nuance of the commercial and transformative considerations inherent to discussion of fairness. Moreover, as Pamela Samuelson observes and Kevin Smith draws explicit attention to, the decision shows a coalescing of opinion with respect to transformative use among multiple circuits. The end result is strong guidance in the United States, and a discussion which benefits any jurisdiction that must mediate between control and use of copyrighted works, via the language of fairness.

Like the Google Books project (see here for my coverage of that district court decision), the roots of this case were established in 2004 with a scanning project in partnership with Google. Briefly, several American research universities arranged to have their library book holdings scanned and stored in electronic form. HathiTrust was established to operate the HathTrust Digital Library (HDL); currently, over 80 colleges, universities and non-profit organizations can apply full text search capability to over 10 million works spanning a myriad of languages and subject matter. But, unlike Google Books, snippets of content are not made available; instead, members can only obtain bibliographic and referential information. Exception is made only for the print-disabled; under such circumstances, content is provided.

It is more than curious that authors and their representatives should take issue with this venture; any project that enables people to find information about books, become interested in them, and possibly acquire them, would seem to be of benefit to authors. Apparently not so. The Authors Guild and its allies brought litigation forward. Losing on the grounds of fair use at the district court in 2012, the Guild pressed on with an appeal. And now that too has been declared a loss. James Grimmelmann, (Professor of Law, University of Maryland) succinctly evaluates the decision:

… mass digitization to make a search engine is fair use, and so is giving digital copies to the print-disabled. The opinion on appeal is sober, conservative, and to the point; it is the work of a court that does not think this is a hard case.

But the fun is in the details. As readers likely know, four factors come into consideration with fair use.

(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes

Consistent with other fair use decisions of the past few years, transformative use is a key determinant. As such, the meaning of transformative was the necessary starting point. The judges turned to the American standard bearer of fair use case law, Campbell v. Acuff-Rose (1994) which draws from the writings of Pierre Leval (attorney and subsequent judge):

A use is transformative if it does something more than repackage or republish the original copyrighted work. The inquiry is whether the work “adds something new, with a further purpose or different character, altering the first with new expression, meaning or message . … [T]he more transformative the new work, the less will be the significance of other factors that may weigh against a finding of fair use” (p.16-17).

Set upon this language, the analysis gets off to a brisk start:

The creation of a full‐text searchable database is a quintessentially transformative use. …  the result of a word search is different in purpose, character, expression, meaning, and message from the page (and the book) from which it is drawn (p.18).

The decision includes a plethora of examples of transformative uses, taken not only from the corpus of the Second Circuit but also from the Ninth and Fourth Circuits (p.19).

(2) The nature of the copyrighted work

This factor can be troublesome by virtue of the vagueness of the language. Whether the source of copying was unpublished or published, whether the work was creative or utilitarian, have been fodder for discussion. But as fair use has evolved, this factor is likely to be set aside when transformative use is established (p.20).

(3) The amount and substantiality of the portion used in relation to the copyrighted work as a whole

The Judges remind their readers that the position of the Second Circuit is: “[t]here are no absolute rules as to how much of a copyrighted work may be copied and still be considered a fair use (p.20).” As sufficient precedent exists which sanction the copying of entire works; they do not have to dwell too much upon this issue:

In order to enable the full‐text search function, the Libraries, as we have seen, created digital copies of all the books in their collections. Because it was reasonably necessary for the HDL to make use of the entirety of the works in order to enable the full‐text search function, we do not believe the copying was excessive (p.20-21).

Adjudication of fairness sets bounds to words like necessary and reasonable by virtue of the use the source work was put to. It is increasingly unlikely that any future court will be swayed by mere quantification of the amount used.

However, as the Guild took issue with the copies made to achieve technological efficiency and disaster preparedness, the Judges were required to devote some time to what ought to be routinely accepted by now – that copying happens when infrastructure is predicated upon digital technology:

 HDL’s services are offered to patrons through two servers, one at the University of Michigan (the primary server) and an identical one at the University of Indiana (the “mirror” server) … According to the HDL executive director, the “existence of a[n] [identical] mirror site allows for balancing the load of user web traffic to avoid overburdening a single site, and each site acts as a back‐up … in the event that one site were to cease operation (for example, due to failure caused by a disaster, or even as a result of routine maintenance).” (p.21)

The use of two encrypted tape backups was also deemed an appropriate precaution, should disaster bring about large-scale data loss at both servers.

(4) The effect of the use upon the potential market for or value of the copyrighted work

Here, the judges’ language bodes particularly well for fair users, but not so well for the larger avarice of some copyright holders:

…  it is important to recall that the Factor Four analysis is concerned with only one type of economic injury to a copyright holder: the harm that results because the secondary use serves as a substitute for the original work…. In other words, under Factor Four, any economic “harm” caused by transformative uses does not count because such uses, by definition, do not serve as substitutes for the original work (emphasis mine, p.22).

Thus, despite the Guild’s claim that the use of each book represents a lost license-to-search-the-book, the judges determined that no economic harm has been inflicted as full-text search capability is not a substitute for the original works.

Grimmelmann observes the lack of reference to American Geophysical (1996) but its ghost is there. That case contributed greatly to fair use’s dysfunctional period in the United States, when any use was deemed unfair because it could have been licensed. (Canada has avoided such circular reasoning; our Supreme Court nipped that in the bud with its insistence during CCH Canadian (2004) that the presence of a license was irrelevant to a decision of fair dealing.)

The route by which the Court rebuts the lost-license argument is puzzling. In the initial explanation of the four factors (p.16-17), the fourth factor is deemed the “most important” (citing Harper & Row v. Nation (1985)—the famous scooping from Gerald Ford’s as-of-then-unpublished memoir). But in its analysis, the Court quickly invokes Campbell’s reminder that only secondary uses that poach the market for the original are subject to censure. Given, as Smith notes, that Campbell is the leading Supreme Court decision, the Second Circuit took an odd route to get there.

But it is hard to believe that the trio of judges were casual or careless in the composition of their decision. In judicial opinion, words are chosen with the utmost of care. Which invites the question: why this route?

Campbell also ushered in a change in procedure; when examining potential fair use, judges must avoid imposing a hierarchy among the four factors. To return to a hierarchy of factors would seem either dangerous, or at least ill-advised. Or, this might be a calculated effort on the part of the Second Circuit to irrevocably consign any apparition of American Geophysical to the dustbins of history.

The Second Circuit has worked diligently towards rehabilitating fair use, to make it a robust exception. Notably, in two key decisions in 2006 (Bill Graham Archives v. Dorling-Kindersley and Blanch v. Koons), less attention was paid to market consideration, with a conspicuous disinterest in adding to licensing revenue even when mechanisms of licensing existed. Yet, that message does not appear to have been widely received. Perhaps the Second Circuit has decided to make their message more explicit by deliberately invoking the earlier edict that the market reigns supreme, but under the strict boundary of the original market.

Given that Second Circuit’s jurisdiction includes the nerve-centre of American publishing, this could have significant ramifications. At the very least, it ought to give the Authors Guild something to reflect upon before the Guild moves ahead on the Google Books Appeal. [see update below]

With a nod to the late Lyman Ray Patterson, the events that gave rise to copyright and fair use were the competitive (or anti-competitive) actions of professional publishers. Copyright’s reach only extended to the regulation of sales of substantially similar works. Effectively, the Authors Guild gave the Second Circuit a reason to offer up language that ensures future market consideration must expressly reject rent-seeking behavior and only support copyright holders when a new work trespasses into the same market as that of the original work.

The four factor analysis concerning the provision of works for the print-disabled was also handled well and the provision deemed fair use. It would be nicer though, if everyone could simply say it is the right thing to do, and leave it at that. With the anniversary of the Marrakesh Treaty approaching, there is more to come on the subject of making copyrighted works accessible to print-disabled communities everywhere.

Update July 11 The Authors Guild appears intent on pursuing the appeal against Google Books. Readers may recall that this scanning project was deemed fair use at its district court hearing. The Authors Alliance has a nice post describing their support for Google Books (with a link to their amicus brief).

Google Books – another fair use illustration

No doubt, readers have already taken in the good news: on 14 November 2013, the Google Books Project was deemed fair use by Judge Denny Chin of the Southern District of New York. Hailed as a stunning victory for libraries and their patrons, the visually disabled, and continued high-tech innovation, the details almost seem mundane – of course displaying snippets of a work is not a violation of copyright. That the law should uphold common sense seems only appropriate.

Yet this was a story that began with an uncertain ending. At its outset in 2004, the actions of Google struck many as audacious. The Google Books project necessarily involved scanning entire books. While there was always an argument for legitimate fair use – library books were scanned with permission from libraries, the majority of books were out of print, only snippets would be displayed, Google did not engage in any direct profiteering from its action, etc. – the dialogue of copyright did not yet embrace nuanced examinations of copying with open consideration of public benefit. To some, once a copy is made without permission, the copyright owner’s rights have been infringed and heads should roll.

If the Author’s Guild had successfully shutdown Google Books at the start, the public benefits of the project would never have seen the light of day. And it was those benefits that Judge Chin emphasized in his decision, even before providing the analysis of fair use. Paraphrasing some of the key elements from his list (starting on page 9): 

• “Google Books provides a new and efficient way for readers and researchers to find books. … It provides a searchable index linking each word in any book to all books in which that word appears.” Chin emphasizes that Google Books has become an essential research tool and part of our information society landscape.
•  “Google Books greatly promotes a type of research referred to as ‘data mining’ or ‘text mining.’” Chin pays particular attention to the brief prepared by Matthew L. Jockers, Matthew Sag and Jason Schultz on behalf of Digital Humanities and Law Scholars, and extolls the merits of the newer form of scholarship.
• “Google Books expands access to books.” Chin draws attention to the “traditionally underserved populations,” and points out that not only are the books themselves more easily found but that “digitization facilitates the conversion of books to audio and tactile formats, increasing access for individuals with disabilities.” He also champions the “remote and underfunded libraries that need to make efficient decisions as to which resources to procure for their own collections or through interlibrary loans.”
•  “Google Books helps to preserve books and give them new life.” Chin is clearly aware that older, and potentially out-of-print, books are falling apart. Scans will at least preserve the content.
•  And, quite apart from merit of the project with respect to reading, research, under-served populations and preservation, “Google Books benefits authors and publishers.” With any selection of a snippet, users are easily connected to sellers of the books thereby increasing the potential for sales.

Of course, Chin does not omit the examination of fair use; he performs the analysis with ease and clarity.  Before, and after, he reminds us that the listed four factors need not be the only consideration in questions of fair use. He emphasizes that they are only a general guidance and that there might be other considerations. Although, for the purposes of this case, he only needed the traditional four factors:

(1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes

While fair use analysis allows for consideration of any purpose and character, American case law has long emphasized that transformative uses are fair. Chin has no difficulty assessing Google’s Book Project as transformative. “Google Books digitizes books and transforms expressive text into a comprehensive word index that helps readers, scholars, researchers, and others find books (p.19).” Pointing to past successful arguments of fair use in the use of thumbnail images, Chin writes: “The display of snippets of text for search is similar to the display of thumbnail images … [to] help users locate books and determine whether they may be of interest (p.20).” And, with recourse to a fair use standard-bearer, the work of Judge Pierre Laval, Chin concludes the first factor by saying, “[Google Books] adds value to the original … [through] the creation of new information, new aesthetics, new insights and understandings (p.21).”

[Chin refuses to let the mere word “commercial” misdirect the claim of fair use. He points out that Google does not engage in direct commercial behaviour in connection to the snippets of text or the scans. “Even assuming Google’s principal motivation is profit, the fact is that Google Books serves several important educational purposes (p.22).”]

(2) the nature of the copyrighted work

With the majority of the scanned holdings being published books, the availability of the snippets for the public is only an asset to the claim of the fair use.  Drawing from past case law, Chin writes: “Whether or not a work is published is critical to its nature under factor two because the scope of fair use is narrower with respect to unpublished works (p.23).”

(3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole

Chin begins with the reminder that the copying of entire works can be considered fair use. He then easily explains why Google’s entire copies are necessary and, happily enough, would never be available to serve as a substitute for the original:  “… as one of the keys to Google Books is its offering of full-text search of books, full-work reproduction is critical to the functioning of Google Books. Significantly, Google limits the amount of text it displays in response to a search (p.23).”

(4) the effect of the use upon the potential market for or value of the copyrighted work

To the complaints voiced by the Author’s Guild that Google Books would negatively impact the market and that the snippets could be collected into a substitutable book, Chin details the lack of logic within their arguments:

 Neither suggestion makes sense. Google does not sell its scans, and the scans do not replace the books. While partner libraries have the ability to download a scan of a book from their collections, they owned the books already — they provided the original book to Google to scan. Nor is it likely that someone would take the time and energy to input countless searches to try and get enough snippets to comprise an entire book. Not only is that not possible as certain pages and snippets are blacklisted, the individual would have to have a copy of the book in his possession already to be able to piece the different snippets together in coherent fashion.

And, the final rebuttal to the oddity of arguing that exposure would decrease sales:

An important factor in the success of an individual title is whether it is discovered — whether potential readers learn of its existence. Google Books provides a way for authors’ works to become noticed, much like traditional in-store book displays. Indeed, both librarians and their patrons use Google Books to identify books to purchase. Many authors have noted that online browsing in general and Google Books in particular helps readers find their work, thus increasing their audiences. Further, Google provides convenient links to booksellers to make it easy for a reader to order a book. In this day and age of on-line shopping, there can be no doubt but that Google Books improves books sales.

In his concluding remarks, Chin again returns to the merits of Google Books with respect to public benefit. The decision as a whole is only 30 pages and well worth reading.

With the Author’s Guild already positioning itself for appeal, this story is not yet over.  But with such a decisive endorsement of fair use, and keeping in mind that this examination was expressly ordered by the Second Circuit Court of Appeals, the likelihood of this decision being overturned is slim.

Update October 2015

As was to be expected, Google Books met with success at the Second Circuit.  See here for my commentary.

And yet, the saga is not over. The ink was barely dry before the Authors Guild stated its intentions to appeal, claiming that this acceptance of fair use is a “faulty interpretation.” There is an air of desperation about the Authors Guild stance; rather than focusing upon the law, it emphasizes “Most full-time authors live on the perilous edge of being able to sustain themselves through writing as a profession …”

Canadians are accustomed to hearing such emotion as a substitute for argument; in August, Access Copyright heightened its pitch with a distorted assessment of fair dealing and the purported impact upon authors in Canada. As I have written since, and is apropos on both sides of the border, if authors continue to struggle after 300 years of expansion of copyright, “perhaps copyright is neither the problem, nor the solution.”