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.

Prof. Katz on Fair Dealing, Copyright, and the Haggadah

This post is cross posted on Prof. Katz's blog. 

The Supreme Court of Canada heard five copyright cases over dense two-day hearings on Dec. 6-7.  One of the cases involved the application of the concept of fair dealing with copyrighted works in education.  At the heart of this appeal was a key distinction made by Copyright Board between copies of works made by students or at their initiative, which could be fair dealing, and copies made by a teacher for students with instructions to read them, which could not.  The distinction is summarized in para. 118 of the Board’s decision:

a copy made by a teacher with instructions to read the material, whether or not it was made at a student’s request, and a copy made for a group of students are simply not fair dealing.  Their main purpose is instruction or non-private study.

In the submission filed by the Centre for Innovation Law and Policy, we argued that not only the categorical exclusion of the teacher-initiated copies lacks any basis in the language of the Act, its purpose and its legislative history, it leads to absurd results that Parliament could not have intended to create. For example, the categorical exclusion of any copying prescribed by a teacher would mean that a motivated and assertive student who knows what to request would receive better education than one who is not so informed and fortunate, because the teacher could help the former but not the latter.

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.

The Linguistic and Trust Functions of Trademarks: A New Paper by Professor Ariel Katz

Modern trademark scholarship and jurisprudence view trademark law as an institution aimed at improving the amount and quality of information available in the marketplace.  Under this paradigm—known as the search-costs theory of trademarks—trademarks are socially beneficial because they reduce consumer search costs, and as a consequence provide producers with an incentive to maintain their goods and services at defined and persistent qualities.

Working within this paradigm, my recent paper refines the search-cost theory of trademarks.  It highlights an important point whose significance hitherto has largely escaped notice, namely that reducing search costs and providing incentives to maintain quality are distinct functions, although they are related.  The paper first develops a distinction between two functions: the linguistic and the trust functions of trademarks.  It then shows how recognizing their distinct nature enriches our understanding of trademark law and provides a better framework for evaluating the normative strength of various trademark rules and doctrines.  The paper demonstrates how different rules can be regarded as normatively stronger or weaker depending on the degree to which they are compatible with both, one, or neither of these functions.  

In addition to its theoretical contribution, the paper has important practical implications, especially as courts struggle to decide trademark cases involving non-traditional circumstances, such as those involving keyword advertising by search engines, or claims based on trademark dilution.  The paper can be freely downloaded here.  

Profs. Trebilcock and Iacobucci - "Patent protection, the new mother of invention"

This commentary was first published on the Globe and Mail website on September 22, 2009.

After years of effort, a Toronto startup company called i4i invented an important piece of technology to dramatically enhance software programs, such as Microsoft Word. Recognizing its potential, i4i obtained a U.S. patent to protect, and hopefully prosper from, the invention. The company also began marketing the technology as a separate product that worked with Word. A Texas court ruled last month that in 2003, Microsoft began to bundle i4i's patented technology in its dominant software without i4i's knowledge or consent. The smaller company was successful in establishing willful patent infringement, winning damages for the past and an injunction to protect i4i in the future. Microsoft strongly objects to these remedies, arguing at trial that i4i is analogous to a banker seeking a bailout. This analogy is entirely inapposite, and the remedy the court awarded is entirely appropriate in light of its finding of infringement.

Patents are essential to the modern system of innovation. Once produced, information can be transmitted at zero cost. In the absence of patent protection, would-be inventors become vulnerable to competition that would drive the value of their discovery to zero, leaving them with no compensation for the costs of producing that information in the first place. Patent protection allows inventors the benefit of limited competition for a limited time period, giving them an incentive to invest without concern about their innovation's appropriation by others.

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.