University of Toronto Law School Faculty Blog

The GSU Copyright Case: Some Canadian Perspectives

This post was originally published on Prof. Katz's blog.

In April 2008, three publishers, Cambridge University Press, SAGE Publications, and Oxford University Press, filed a copyright infringement lawsuit against Georgia State University, alleging that GSU infringed their copyrights by allowing professors to upload excerpts from books onto the university’s electronic reserve system (ERes). The complaint alleged “systematic, widespread, and unauthorized copying and distribution of a vast amount of copyrighted works”, and argued that GSU “has facilitated, enabled, encouraged, and induced Georgia State professors to upload and post to these systems - and Georgia State students simultaneously to download, view, print, copy, and distribute - many, if not all, of the assigned readings for a particular course without limitation.” Unless GSU’s “infringing digital distribution practices are enjoined", the complaint asserted, "Plaintiffs, authors, and the publishing community at large will continue to face a certain, substantial, and continuing threat of loss of revenue, which will in turn threaten Plaintiffs' incentive to continue supporting and publishing the cutting-edge scholarship upon which the academic enterprise depends.”

On Friday, the US District Court issued a 350 pages decision, dismissing 94 out of the 99 claims of copyright infringement.

The Best Possible Outcome for Universities, Really?

This post was posted originally on Prof. Katz's blog.

Access Copyright and the Association of Universities and Colleges of Canada (AUCC) announced yesterday that they had negotiated a Model Licence that would allow universities to reproduce copyright protected materials in both print and digital formats. In a joint media release issued by Access Copyright and the AUCC, Paul Davidson, president of the AUCC, was quoted as saying "We believe that this negotiated agreement provides the best possible outcome for universities, their students and faculty." Really, Mr. Davidson, Really?

Governance Issues: The UofT-Access Copyright Agreement

First posted on Prof. Katz's blog.

In addition to serious copyright, privacy, and academic freedom problems arising from the Agreement signed last week between UofT and Access Copyright, the way it has been handled so far raises some questions about whether it is consistent with UofT’s governance procedures.

No serious consultation or discussion has taken place before the Agreement was signed, although, interestingly, s. 22 of the Agreement does contemplate it being conditional upon “applicable Governance approval”. It seems only natural that an agreement with wide, deep, and long-term implication such as this one would be subject to governance approval, yet it is less clear that UofT's Administration is going to seek the appropriate approval. The Administration has not done it yet, and in fact, there are worrying signs that the Agreement will not get the scrutiny that it deserves. I hope I'm misinterpreting these signs.

Universities and Copyright: Contrast and Compare

Originally posted on Prof. Katz's blog on Feb. 1, 2012.

On Monday evening, Access Copyright and the Universities of Western Ontario and Toronto announced that they have entered into a new licensing deal.  The UofT agreement is available below, and I was told that the terms of the agreement with Western are identical.

Although the joint media release announcing the deal was gleeful, as a UofT Faculty member I am disappointed and concerned.  The agreement is one big step backwards for UofT, and one giant leap for Access Copyright.  Access Copyright could not have hoped for more, and UofT lost an opportunity to stand up, show leadership, and ensure that copyright law will be used for the encouragement of learning and not for suppressing it.

Katz: The First Sale Doctrine - What Antitrust Law Can (and Cannot) Teach

I have posted a new paper on SSRN.  The paper is based on a presentation that I gave at the Exhaustion and First Sale in IP Conference held at Santa Clara Law School last November.  Here’s the abstract:

The first sale doctrine (or exhaustion) limits the exclusive rights that survive the initial authorized sale of an item protected by such rights.  The first sale doctrine has always been under pressure by owners of intellectual property rights, and courts have never been able to precisely outline its contours, or fully articulate its rationale. Recently, and somewhat counter-intuitively, insights borrowed from modern antitrust law and economics are invoked to provide a seemingly robust theoretical foundation for undermining exhaustion rules or narrowing their scope, and thereby strengthen IP owners’ control over downstream distribution and use of the goods they produce.

This article shows why this trend is misguided and agues that it should be resisted, not because the insights from modern antitrust are irrelevant, quite the contrary.  Indeed, the insights from modern antirust law and economics can help underpin some of the first sale doctrine’s missing theoretical foundations and help drawing its proper contours.  However, as this article demonstrates, the insights from modern antitrust do not support the case against the first sale doctrine.  When taken seriously, these insights ultimately support its continued vitality.

The paper can be downloaded here: http://ssrn.com/abstract=1845842.  Comments are welcome.

 

Prof. Katz on Copyright Dogma and the Denied Google Books Settlement

Last month Judge Chin denied the proposed Google Books Settlement (the Amended Settlement Agreement, or ASA). While I’m pleased with the outcome, I’m troubled with some aspects of the opinion.

Setting aside the issues of adequacy of representation, notice, privacy, and whether a class action settlement should be used to establish future and ongoing arrangements, etc, I’m pleased with the outcome because in my view, the main problem with the ASA was its anti-competitive outcomes.    The forward-looking element of the ASA consisted of two separate parts: first, it created what is, effectively, a new Collective Rights Organization for works whose copyright owners are known and locatable (I’ll call them the “locatables”), aka The Book Rights Registry (“the Registry”), then it offered a solution to the orphan books problem (books whose copyright owners are unknown or unlocatable).  The first part part involved a problematic solution to to a problem that does not exist.  The second part, however, involved a solution, albeit flawed, to a real problem.  Both aspects were subject to an opt-out rule, namely they would not apply to copyright owners who actively opt-out of the arrangement.

Continue reading on my blog.

Ariel Katz: Substitution and Schumpeterian Effects Over the Lifecycle of Copyrighted Works

I have posted a new paper on SSRN.  The paper, titled Substitution and Schumpeterian Effects Over the Lifecycle of Copyrighted Works, develops the following two key insights. First, copyrighted works are affected by two types of competitive forces: substitutive competition and Schumpeterian competition. Second, the relevant magnitude of each of these competitive forces changes at various points over the lifecycle of copyrighted works. The earlier stages of a work's lifecycle are dominated by substitution effects, whereby many other works can function as very close substitutes. As the work develops to a full product, to which many other inputs have been added, it becomes less easily substitutable. This process intensifies as network effects of various kinds secure successful works' market position and render them less vulnerable to competition from close imitations. The competitive threat to which such works may be exposed becomes more Schumpeterian in nature: competition from other works which offer something new, and potentially preferable. Generally, copyright law unequivocally discourages merely substitutive competition, but is much less interested in discouraging Schumpeterian competition. This paper's time-based analysis provides both a justification to this distinction, as well as grounds to evaluating various existing rules and doctrines. It suggests that broader copyright protection (perhaps broader than the current) may be desirable at the early stages of works' lifecycle, whereas narrower protection (perhaps narrower than the current) may be justified as later stages.
The paper is freely available here; comments are welcome.

Collectivizing Rights; Privatizing Taxation: The Unarticulated Function of Copyright Collectives

The recent proposal from the Songwriters Association of Canada to fully legalize peer-to-peer file sharing of music by adding a $5 monthly charge to the cost of Internet access (and similar proposals floating south of the border) has brought renewed attention in the role of levies and tariffs collected by copyright collectives in Canada.  I am now beginning a research project that looks at the broader implications of the expansion of collective administration of copyrights and the use of levies and tariffs.  Since the topic is current, I thought I'd use the blog not only for sharing some of my initial thoughts, but hopefully, to solicit some ideas that will help me to shape them.  Therefore, I'm posting below the description of the project and the questions  it seeks to answer.  Comments on or off the blog will be highly appreciated.  Here it is:

New Articles Available Online: On Competition Law and Intellectual Property, and on Patents and Phramaceuticals Regulation

Two articles of mine have been recently published and are available online.  The first article, published in 49 Arizona Law Review is Making Sense of Nonsense: Intellectual Property, Antitrust, and Market Power.  Here's the abstract:

While the economic rationale for intellectual property ("IP") rights rests on the concepts of "monopoly" or "market power," the U.S. Supreme Court, in Illinois Tool Works v. Independent Ink, has recently joined a "virtual consensus" among antitrust commentators believing that no presumption of market power should exist in antitrust cases involving IP. This Article critically analyzes this consensus, and clarifies the relationship between IP and market power, shows why IP rights often do confer market power in the antitrust sense, but also explains why acknowledging this should not necessarily lead to oversized application of antitrust law to IP.

Copyright Board's New Ringtone Decision

The Copyright Board issued yesterday its decision certifying SOCAN's Tariff 24 for ringtones.   The Board set a base rate of 6% of the price paid by the subscriber for the ringtone (net of any network usage fees) with a minimum of $0.06 per ringtone.  The main legal controversy before the tribunal was whether the delivery of ringtones is "communication to the public" but I don't want to comment on that here.  Instead, I want to comment on a more fundamental issue, and ask why should the royalties be set by a tribunal at all?  Why wouldn't copyright holders and ringtone suppliers enter into voluntary agreement and decide who should pay and how much?  Ordinarily, prices are determined by the "market".  Why then are these prices set in a strange way in which one seller (SOCAN) proposes prices and then, over a period of three years lawyers, prominent economists and other experts try to convince a tribunal what those prices should be?