The premise of both transactional and institutional licensing is that universities need permission to use works beyond fair use and the rights they acquire with access. This premise is often true in today's digital environment and that is why we will discuss these licenses.
Transactional Licensing
Transactional licenses allows us to license permission as needed, one transaction at a time. It requires that we establish relationships with the Copyright Clearance Center, and work harder to educate and inform students and employees of their rights and responsibilities under copyright law so they know when to ask for permission.
Transactional licensing lowers our risk of lawsuits, but it does not eliminate it entirely for two reasons:
Institutional Licensing
In 2007, the Copyright Clearance Center (CCC) introduced the first generally available institutional annual license for universities. Institutional licensing could help us comply with copyright law, especially where a license covers a broad range of copying types, such as reserve and research copies, administrative copies, and other rights including rights to create, display and transmit digital copies and to make print copies from digital works. The CCC indicates that it takes journal and database subscriptions into account in a rough way by providing lower per student fees for large research institutions that most likely license far more content than smaller colleges.
Legal risks in institutional licensing
Most institutions will likely rely on fair use for some or all uses that are not covered by the scope of an institutional annual license (for example, for publishers' materials that are not included), so even with such a license we will be exposed to some risk regarding our liability for the quality of fair use determinations.
Although institutional licensing proposals usually include an offer by the licensor to indemnify participating universities against suits from publishers, such an indemnity would not cover uses outside the license - the fair uses exempted from its terms. Thus, the more an institutional license covers, the better, because any remaining vulnerability to suit significantly diminishes the value of the license.
Many are concerned that we risk the erosion of the scope of fair use if we sign institutional licenses. The fear revolves around two points: For any materials included in a license, whether the use might have been fair or not becomes a moot point. Thus, we don't "exercise" our right, and if we don't use it, we'll lose it. The other concern is that only large institutions will be able to afford the subscription prices leaving the smaller, poorer schools on their own to defend fair use, which, of course, they can't afford to do any more than they can afford to subscribe.
I am skeptical of both arguments because the evidence I see in the court cases that have addressed the kinds of systematic, high-volume copying and distribution that combined e-reserves and course websites constitute (for example, the Texaco, Kinko's and Michigan Document Services cases), suggests that in the presence of a mature, efficient permissions market, a plea to characterize such uses as fair use will not fare well. Thus, it is questionable that the courts would agree we have a "fair use" to lose in this context where we are facilitating a large number of uses.
That is not to say that other types of fair use are similarly threatened. On the contrary, creative, transformative uses are gaining strength in the courts. Google's use of images in search engines and a publisher's use of small images of posters from Grateful Dead concerts provide two examples where courts upheld fair use. Online access to course materials is not likely to qualify as creative and transformative however, especially given its duplicative nature (simply making copies) in the face of the availability of a permissions market for just these kinds of copies.
Retain rights to publicly archive faculty-authored scholarly works
So long as universities use others' works, they are bound to pay the owners their price. To the extent universities can retain the right to publicly archive faculty-authored scholarly works, they contribute the the lowering of costs of both access and use. It's possible that online publishing could drastically alter the dynamic among authors, publishers and consumers of scholarly works. Users want wide, affordable access and publishers and authors want reasonable remuneration. Since the university community includes authors, publishers and users under the same roof, we ought to be able to take advantage of this situation.
The internet offers a unique opportunity to the university community to create publishing alternatives, transact business with more user-friendly publishers, and publish its works in fields dominated by the most problematic, over-priced publications with publishers who are a part of our community or who are in any event willing to deal with users in a reasonable manner. We should capitalize on the strength we have naturally because we are all part of the same enterprise.
Summary
The web of interdependencies among universities, their faculty members, libraries and publishers may be rewoven by the process of adapting our policies to the realities of the electronic world, but it will not disappear. To avoid harming the relationship between libraries and university presses, or the relationship between universities and for-profit publishers, we must focus on the overall goal of facilitating educational objectives, including but not limited to facilitating scholarly communication, rather than on preserving traditional roles and institutions. We must find solutions wherein our libraries, authors and presses can be partners rather than adversaries.
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