Thursday, January 31, 2008

Correction on Detail of Tasini Ruling

Allow me to bust myself for stating, in my January 2 post "Objections, Year 4 -- Resetting the Issues," http://freelancerights.blogspot.com/2008/01/objections-year-4-resetting-issues.html, that the dissenters in the Supreme Court's 2001 Tasini v. Times decision were Stevens and Souter. The second dissenter was actually Breyer. So I've edited out altogether the reference to the details of the Court's alignment in that opinion.

In previous comments on Tasini, I've said variations on the line, "When you have a 7-2 opinion with Scalia and Ginsburg both in the majority, you've got a pretty darn good consensus." And I think that's the point.

Sunday, January 27, 2008

Has Anyone Figured Out What the Amazon.com Amendment Was About?

In the last post I talked about how new-generation infringer HighBeam was casually slipped into the now-dying settlement at the last minute.

You'll note that I didn't say anything specific about Amazon.com, which was also grandfathered in by the settlement amendment. That's because the objection team has never been able to pin down what Amazon.com was supposed to cover. Does anyone out there have any insights? If so, please drop me a line at info@muchnick.net.

We do know that the publication list at the official settlement website (http://copyrightclassaction.com) has HighBeam and Amazon lists, consisting of hundreds of publications, to supplement the "original" list of thousands of publications. But that still doesn't tell us where these publications are accessed through Amazon. At the time of the filing of the amendment in the summer of 2006, an Amazon-owned search engine in development, called A9, was up on the Amazon page. A9 is no longer there. And if you go directly to the A9 site, you don't get any clues -- at least none that I see.

Edward Hasbrouck, author of the Practical Nomad travel books, believed that the Amazon amendment was designed to legitimate infringements by Amazon's "search inside the book" feature. See Edward's compelling emails with class counsel in the September 7, 2006, item on this blog headlined "Author Edward Hasbrouck: Why I'm Opting Out." See also Edward's own September 24, 2006, blog post headlined "Lies from 'my' lawyers in copyright class action lawsuit," http://hasbrouck.org/blog/archives/000812.html .

Hasbrouck supplied a declaration discussing much of this, which points to one of the fundamental flaws of the settlement -- something that very well could invalidate its injunction against future lawsuits by class members. The settlement purports to release "supplemental participating publishers," but no one knows who they are!

Friday, January 25, 2008

HighBeam, Johnny-Come-Lately Willful Infringer (The Settlement Is Dead, Part 4)

HighBeam Research, a successor to a brand called eLibrary, was launched in 2004. It is an online resource for, among other things, newspaper and magazine articles. Much of HighBeam’s content appears to come from aggregators such as Gale Group and ProQuest.

HighBeam content has been embedded in the content of various other brands. Most notably there was something called FindArticles, from a company called LookSmart. But these days if you type in findarticles.com you get sent to a successor called BNET, which is part of CNET Networks.

There will be a pop quiz on all this in 20 minutes.

I bring up HighBeam because when the global copyright class action settlement – now dead for all intents and purposes – was announced in the spring of 2005, one of the first and most important questions was, “What about HighBeam?” It seemed grossly unfair that Gale Group and other core elements of the defense group could blithely hook up with new partners and licensees during the pendency of mediation talks. (And they really did some pending – four years’ worth.) The reason this seemed grossly unfair was that it was grossly unfair.

As it happens, writers were already gunning for HighBeam. On March 2, 2005, the National Writers Union, an associational plaintiff in the settlement but evidently oblivious to what was going on with it, posted a website item headlined, “Copyright violations by FindArticles.com?” (You can still find the item by searching the NWU site, but in case it gets removed you can view a reproduction at http://muchnick.net/FindArticlesNote.pdf.

After the settlement was announced, the NWU and the other two associational plaintiffs, the Authors Guild and the American Society of Journalists and Authors, set up an informational website, freelancerights.com, which was supposed to answer writers’ questions. The site only sowed further confusion and it was quickly abandoned. One of the emailed questions was about HighBeam. The authoritative reply: “Highbeam.com is not a party to the Settlement and nothing in this litigation or the settlement permits highbeam.com to infringe freelance works.” (You can still find the freelancerights.com page, but in case it disappears you can view a reproduction at http://muchnick.net/HighBeamNote.pdf.)

My own article from The Washington Monthly (referenced in this entire series of posts) was among the infringements at HighBeam. However, after I noted this in a declaration to the court on April 26, 2005, HighBeam pulled the piece.

In July 2005 – after first blowing their own deadline to the court – counsel submitted an amendment to the settlement grandfathering in both HighBeam.com and Amazon.com. The settlement fund remained at $10-million-to-$18-million. So not only was HighBeam retroactively released, but now the burden of contributing to a peanuts settlement fund, “syndicated” across the entire industry, was even further divvied up.

This is real, real sleazy stuff, folks.

Maybe plaintiffs’ co-counsel A.J. De Bartolomeo sincerely thought there was “no” evidence of willful infringement, as she declared to the court in the process of applying for attorneys’ fees. Or maybe she thought putting it that way was preferable to saying:

“We could have begun to establish willful infringement by lifting one pinkie.

“Failing that, we could have held the line against additional willful infringements concocted in the broad daylight of ‘settlement’ ‘negotiations.’

“But, gee, why bother?”

Plaintiffs' Brief Cheats Again

In the file labeled "Desperation," we find that the plaintiffs' lawyers are up to their old tricks in their petition to the Second Circuit to reconsider the ruling that would void the settlement on jurisdictional grounds.

Even though it has nothing whatsoever to do with that ruling, Michael Boni slipped into the petition a footnote vaguely asserting, with no verification, that analysis of claims now shows that there would be no "C Reduction" (a subject covered at length earlier on this blog).

As he did in 2006 when the appellees made illegal outside-the-record inserts into an appellate brief, objectors' attorney Charles Chalmers has filed a motion to strike these sentences. Our motion, with all the background, can be viewed at http://muchnick.net/PetitionStrike.pdf.

What's notable is that in 2006, representations about the claims had a specific value, and were made by both the plaintiffs and the defendants. As a result of Chalmers' scrutiny, the other side then admitted that the numbers were wrong and filed embarrassing "corrections." This time there's just the equally unilateral, out-of-context, and improper statement that the $18 million settlement fund capped was not breached.

Now back to our regularly scheduled programming: our series of posts THE SETTLEMENT IS DEAD.

Thursday, January 24, 2008

Dialog's Dialogue with Willful Infringement (The Settlement Is Dead, Part 3)

In his comment yesterday, Francis Hamit offers a hint at just how many digits might have been missing from the damages model that drove the now-doomed global copyright class action settlement. See http://freelancerights.blogspot.com/2008/01/more-from-francis-hamit.html.

Now let’s move on to another factor: willful infringement. The law specifies special damages for willfulness.

In her declaration to the court in support of the lawyers’ application for fees, class counsel A.J. De Bartolomeo attempted to explain why the case against the tiny UnCover fax delivery service (on which, as she noted, both she and I had worked) yielded a $7.25 million recovery, while the consolidated class actions here, against every other major similar infringer combined, yielded a grand total of $18 million. In the earlier case, according to De Bartolomeo, “plaintiffs obtained considerable evidence suggesting defendants’ copyright infringements were willful. In the present action, by contrast, Plaintiffs have obtained no evidence of willful infringement. On the contrary, all indications are that before the Tasini case, publishers did not believe their electronic use of freelancers’ works constituted copyright infringement.”

No other statement in the record of In re Literary Works better illustrates the collusion of the parties in this horrible sellout of a settlement, which thankfully was stopped just before it could be consummated.

For the next actions, your humble blogger is going to try to make sure plaintiffs “obtain” such evidence. One way to obtain it would be to engage in meaningful, adversarial discovery to review internal industry documents. De Bartolomeo and co-counsel did no such discovery. They didn't even get the defendants to file a formal response to their complaint.

Another way to "obtain" willfulness evidence is to look at public statements and coverage of the electronic rights issue in the industry trade press. I’ll be rolling out examples of these in the coming weeks.

Yet another way is to follow the timeline of new infringing products that were started both before and after the Supreme Court’s Tasini ruling and other pertinent developments.

Again, there are a zillion examples, and I’ll get to as many as I can, as efficiently as I can. Let’s start with DialogSelect Open Access.

Dialog is one of the first-generation database brands. Like Gale Group, it is now owned by Canada’s Thomson Corporation. For most of the period covered by the UnCover lawsuit, UnCover was part of the Dialog family. Thus, when the parties settled for $7.25 million, the payments were divided into $6.5 million from Knight-Ridder Information, Inc. (which owned Dialog) and $750,000 from Knight-Ridder Information’s short-lived successor, a British company called Dialog Corporation plc. The settlement was completed early in 2000. It was spurred by two victories by the plaintiffs in the UnCover case: October 1998 summary judgment on interpretation of Section 201(c) of the Copyright Act – the precise issue that would be affirmed once and for all by the Supreme Court in Tasini – and January 1999 class certification.

On October 4, 1999, Dialog announced the start-up of a new product, DialogSelect Open Access. “Yes, hard as it is to believe, Dialog has finally opened its doors to the unwashed masses,” reported Information Today NewsBreaks. “You can now buy Dialog content by the document, with a credit card.” See http://newsbreaks.infotoday.com/nbReader.asp?ArticleId=17899. DialogSelect Open Access still exists (though subsequent to my court declaration in 2005, my Washington Monthly article, the subject of my blog item a couple of days ago, got removed from it without explanation).

Let’s review this slowly. In October 1999, Dialog was putting the finishing touches on a multimillion-dollar settlement driven by negative findings in a lawsuit against one of its products. At the exact same moment, Dialog was launching a new product with the exact same infringing model.

No evidence of willfulness, indeed.

Attention Canadian Freelancers: CanWest Media Works Wants (All of) You

I pass along the cross-posted, and self-explanatory, item below about a familiar all-rights-contract fight, this one in Canada.

***************

(SPECIAL MEETING of Media Club members and concerned writers. Saturday, January 26, SEE below...)

Thousands of freelance writers across Canada who are being bullied into signing an inimical Freelance Agreement sent to us in late-2007 by Canadian media giant, CanWest MediaWorks.

You can see a copy of this contract and the response one writers' group had by clicking on the URL below. Other groups have also protested including the Professional Writers of Canada (PWAC) and soon, the Canadian Association of Journalist (CAJ) and the Canadian Freelance Union (CFU):

http://www.travelmedia.ca/r_canwest.shtml

The covering letter sent to Ottawa Citizen writers stipulates that unless contributors sign by December 31/07, they will not be paid for their articles. Many have refused to capitulate.

Freelancers who sign such a contract no longer own their work after it has been published by CanWest MediaWorks and therefore have no opportunity to re-sell it. Taken to absurdity, if a freelance writer published a weekly gardening column for several years and then wanted to compile these articles into a book, under the contract, they would not be allowed to.

This new contract does not allow for any additional money for articles that are reprinted throughout the chain and there is no remuneration for electronic rights. This in particular runs counter to a newly proposed Federal bill, C-60. The 50% a freelancer might receive from
commercial use syndication is something we have not heard about before and needs
explanation. It may be for sales to third or fourth parties but this is something freelancers have always done themselves; it's part of our livelihood.

Freelance journalists all over Canada are in an uproar over this contract. Many continue to write regular columns and to submit work but will they be paid?

There is also a concern that not all freelancers received the contact and one wonders what criteria is being used here. Once one signs the contract, there is no room for negotiation and yet those who don't receive the contract, they seem to have carte blanche. One colleague who publishes a column in the Citizen told me that he receives three times what others receive, he does not give up his rights, and he gets 10% for electronic rights. Why is this when the work is essentially the same?

As chairman of the Freelance Policy Committee of the Canadian Association of Journalists, my committee has been looking into systemic problems in our print media. Radio and TV fare better because there is the CRTC to adjudicate; we need to do something about safeguarding print.

Since writers in Ottawa, and perhaps across the country, who have refused to abrogate their rights by signing the contract are not being paid for work that is being published, or worse, have been dismissed, it is important to have a quick response.

Wayne Kines of World Media Institute has secured the meeting room at his condo for a SPECIAL MEETING of Media Club members and concerned writers. Please meet with us this coming weekend. Here are the details:

WHAT: A discussion about freelance writer rights and what to do about contracts that don't uphold them. Moderated by Rosaleen Dickson.

WHERE: 20 The Driveway (18-storey condo between McLaren and Somerset West
on Queen Elizabeth Driveway by the Corktown Footbridge) Buzz 107 for the Meeting Room aka Party Room, watch for directional signs.

WHEN: Saturday, January 26/08, 3:00 p.m. to 5:00 p.m.

WHY: Because we're fed-up and not going to take it any more

Refreshments served. No need to RSVP. Just come!

For more information, please email shannon@slmannion.com

Shannon Lee Mannion (613) 594-9128
Photo-Journalist to the Cars
Ottawa, Canada
www.slmannion.com

Wednesday, January 23, 2008

More from Francis Hamit

Settlement opt-outer Francis Hamit posted a comment on our item yesterday. It's so valuable that it deserves repetition and better play, so here goes. Thanks, Francis.

***************

My own research indicates that between 30 and 75 percent of the gross revenues from database subscriptions flows back to the original publishers. The aggregators obviously do not do "due diligence" by checking to the Copyright Office online database to see if the copyright on an article is registered but rely upon the warranties in the contract with the publisher. In my experience, most publishers have a very fuzzy notion of what rights are transfered in an oral contract. One of mine thought that he could declare something "work for hire" and have that stick, when the law specifically says that there must be a written contract. It cost him a lot of money to find out how wrong he was because he arrogantly ignored my letters and those of my attorney. He forced us to file; a commonly used tactic that prejudices the Court against the defendant.

And you are quite right that individual articles can be tracked. Library usage is reported that way, and you can get the reports from your local public library simply by saying you are an interested tax payer and want to see how tax money is spent. The big surprise here is how little the databases are actually used compared to the population served. My local library pays about $1.65 for every article downloaded for free by a library patron.

Divided among all possible users, it works out to about four tenths of a cent each for everyone in the county. That's ten thousand or so downloads per year in a population of over 800,000 people.

Gale Group brags that is has 60,000 libraries in 60 nations as customers (This was in a press release). Multiply that by the $20,000 per year my local library pays for
its subscription and you have 1.2 billion dollars a year, half of which goes to the original publishers and belongs, in part, the freelance writers. As we determined during the Fairness Hearings, there are about 32,500 freelance writers in the USA, plus those abroad, whose work is being infringed. It gets complicated and we really need something like the ALCS here to handle the details.

Tuesday, January 22, 2008

Congratulations to The Washington Monthly on Two Decades of Willful Copyright Infringement! (The Settlement Is Dead, Part 2)

Open letter to Markos Kounalakis, Publisher, The Washington Monthly <markos@washingtonmonthly.com>

Dear Mr. Kounalakis:

I am a freelance writer who authored an article, “The [Thwak!] Deregulation of [Thump!] Pro Wrestling,” which was published in the June 1988 issue of The Washington Monthly. It is a chapter of my book Wrestling Babylon, which was published last year.

I understand that you are the white knight who a few years ago rescued the feisty little magazine founded by neoliberal guru Charlie Peters. Protocol therefore calls for me to begin by touting the indispensable role that TWM, and other serious political magazines of similarly precarious economics, play in American civic life.

But forgive me, Mr. Kournalakis, if I quickly move past the violin solo and get to the point. You are part of a community of publishers – small, medium, and large – that systematically and willfully steal the works of freelance writers. If a government institution or another private industry so flouted the law and the commonweal (in this case, by thumbing your nose at the clear Congressional intent of the Copyright Act of 1976, and the clear consensus and direction of the Supreme Court in the 2001 ruling in Tasini v. New York Times), you and other news organizations would be all over it. As it is, the story barely makes a ripple.

For the full background, see my blog, http://freelancerights.blogspot.com. I point you, in particular, to the January 2 post, “Objections, Year 4 – Resetting the Issues,” http://freelancerights.blogspot.com/2008/01/objections-year-4-resetting-issues.html, and the January 21 post, “Introducing THE SETTLEMENT IS DEAD,” http://freelancerights.blogspot.com/2008/01/introducing-settlement-is-dead.html. See also my recent interview with Library Journal’s LJ Academic Newswire, http://www.libraryjournal.com/info/CA6514628.html.

The overall record is as damning as the obfuscations of the politicians whose skewering is TWM’s stock-in-trade. The question is whether you are going to do anything about it. Will you work toward a fair and equitable royalty system, which is the obvious solution for writers, publishers, and information consumers alike? Or will you and the industry continue to play legalistic rope-a-dope and “catch us if you can” – additional and ongoing infringements, expansion of infringing products, creation of more and more “facts on the ground”?

The history of your piracy of my TWM article might bring the issue into sharper focus for you.

In 1994, as a volunteer activist, I organized a National Writers Union campaign to confront publishers and their electronic database licensees and partners over the illegal remarketing of freelancers’ individual pieces without permission or compensation. Before you start promoting the benefits of public access and the promise of the information superhighway, you should know that the NWU’s work in this area was consistently supported by information users; both the American Library Association and the Association of Research Libraries would file amicus briefs with the Supreme Court on behalf of the Tasini case plaintiffs. Unbiased observers, not bent on parodying where smart writers stand on this issue, know that this is not about a draconian regime of charging for every bit and byte; it is about getting a fair share of the revenues generated by the for-profit enterprises with which you and other publishers associate.

By 1995 I was the NWU’s assistant director and founding administrator of its collective-licensing agency, Publication Rights Clearinghouse. In that capacity, I wrote to your predecessor publisher about the issue of the infringement of my article. I was referred to David Linker, TWM’s production manager. This was one of many examples over the years of publishers treating the matter of policy on revenue distribution to their writers as the charge of middle managers, even office flunkies.

Linker wrote to me: “I spoke with Ms. Sally Roberts [of the copyright department of Information Access Company, now known as Gale Group]…. She is familiar with your particular situation and grievances, and she informed me that you have spoken with IAC in the past and have gotten the same information that she gave to me. In particular, she informed me, very specifically, that at this time IAC does not have the ability to track the sale of individual articles. They are only able to track the publication name and the revenues received per each publication. As a result, unfortunately, we are unable to determine the amount of revenue, if any, that has been generated by the sale of your article.”

In the first place, it makes no difference if the for-profit model of TWM’s infringement was based on per-article downloads, a blanket license, advertising, or even a brand-building loss leader. But there turned out to be one other fairly significant problem with what IAC told TWM: the statement that IAC lacked the ability to track individual article sales was not true. As I subsequently pointed out in an exchange of faxes with Morris Goldstein, then CEO of IAC, we had acquired a copy of a 1994 IAC royalty statement to Harper’s magazine. That statement broke down the number of “hits’ on a particular IAC product for Harper’s articles, at $4.90 per hit.

(For a fuller explication, see the series of June 2005 posts on my blog under the headline “The Crimes of Thomson/Gale/Information Access Company.” See also paragraphs 5 through 10 of my July 2005 Declaration in Support of Objections to Settlement, filed in U.S. District Court for the Southern District of New York, and viewable at http://muchnick.net/Muchnick.pdf.)

The upshot of these efforts was that IAC blocked the availability of my articles on products I cited, but went right on infringing on products I didn’t yet know about. For years on end, a ridiculous game of cat-and-mouse has ensued. For example, through IAC, my Washington Monthly piece has been available in various configurations of LexisNexis since August 11, 1995, according to the published “load date.” My exchange with IAC’s chief executive dated from August 21 through August 28, 1995! For the sake of brevity, I will not burden you with the many examples of “blocks” of that work on some online products and new and ongoing infringements of it on others. Trust me – the documentation of your and IAC’s combined serial piracy is exhaustive.

Is this evidence of a partially guilty conscience? A clumsy attempt to mitigate exposure? Stupidity contrived to the point of fraud? A bizarre “single infringement” theory promulgated by lawyers? The legal system will sort all that out at the appropriate time. Either that, or you can start negotiating at last in good faith on a royalty system, as the Supreme Court suggested. The technology exists to do the right thing by writers and the public, as well as to screw them.

Sincerely,

Irvin Muchnick

Monday, January 21, 2008

Introducing THE SETTLEMENT IS DEAD

Part 1 – Why It Happened … What’s Next for Freelance Rights
 

Settlements, like organisms, have morphologies. Today the settlement in In re Literary Works in Electronic Databases Copyright Litigation is in the throes of its death rattle.

Exactly how much more time elapses before formal burial depends on the vagaries of the legal system. For years, the settlement has stumbled along like a poorly conceived Broadway play. It did the equivalent of bombing in previews in New Haven; through sloppy last-minute amendments, tortured explanations, even procedurally and factually incorrect court filings, the lawyers proceeded to beat up the script, hire new co-stars, fire the choreographer.

Nothing worked. Now the settlement faces a ruling by the Second Circuit Court of Appeals that it is invalid on jurisdictional grounds. In a split decision by a three-judge panel, the court two months ago held that holders of unregistered copyrights – comprising well over 99 percent of the infringements covered by this consolidated class action – are ineligible not only to sue, but also to participate in a settlement initiated by holders of registered copyrights.

I reemphasize that the objectors believe this ruling is wrong. It arose sua sponte from the judges themselves – in other words, it was not a basis of our appeal.

By the same token, the current ruling is not exactly our problem, either. In their petitions for reconsideration by the appellate court, both the plaintiffs and the defendants argue for reversal of the jurisdiction ruling. In our own petition, objectors’ attorney Charles Chalmers cites authority that our own “merits” issues – most notably, that the class was inadequately represented by counsel and named plaintiffs – are “dispositive” (i.e., they should be addressed before the judges even get to considering the jurisdiction question).

One way or another, the settlement’s goose is cooked.

In upcoming posts I’ll explain the legal and political landscape I expect to emerge from the settlement’s collapse. The short description is: more litigation, less “closure.” I believe this is a good thing, not because I’m lawsuit-happy but because lawsuits are part of the mix for improving the world. (Other parts of the mix involve effective organizing of freelance writers to improve contract terms, including elimination of all-rights contracts, and lobbying Congress to reform the burdensome registration requirements of American copyright law not seen anywhere else in the world.) The industry wants “closure”? Fine. Then it can agree to the fair and equitable royalty system suggested by the Supreme Court in Tasini v. Times.

But first – what happened here?

Seven years ago (seven years ago!) freelance writers appeared to be on the brink of an historic breakthrough. In 2000, the case against the relatively dinky UnCover document delivery service – the first-ever use of class action to redress infringement of authors – settled for $7.25 million. The next year, the Tasini plaintiffs won across-the-board in the Supreme Court, clarifying beyond a shadow of a doubt that publishers did not, by default, have the privilege of remarketing individual works on electronic databases without permission or compensation.

Yet the consolidated class actions, originally filed in August 2000, announced a global settlement in March 2005 for a cap of $18 million. Let’s repeat that. UnCover: $7.25 million. Every other similar infringer in the known world combined: $18 million. Does not compute, ladies and gentlemen. Not to mention that the latter even snuck in a giveaway of future rights!

In retrospect, I think it’s clear that one of the things that killed In re Literary Works was its very pretense of comprehensiveness. By this I mean not just that too many cooks spoiled the broth. I mean that the class reps and their mouthpieces accepted as their charge the fool’s errand of devising an all-encompassing solution to the electronic rights problem in one fell swoop. It was a solution to a problem held by only one side – the defendants, the publishers.

Litigation is not supposed to be about plaintiffs enabling illegal behavior by defendants. It is about plaintiffs winning damages for illegal behavior by defendants. If the Damoclean sword of damages motivates the bad guys to clean up their act and cooperate on a future regime that is fair to writers, fair to them, and fair to the public of information consumers, that’s great. Otherwise, let’s talk about damages, and talk about them seriously, with a transparent damages model and a real threat of a jury trial prosecuted by attorneys with the determination and resources to go to the mat for their clients. Let’s not leave our fate to the saber-rattling fantasies of a National Writers Union president, immediately diluted to near-zero by his impertinent rhetoric about how he doesn’t want to “destabilize the industry.”

In the end, the legal issue of the inclusion of unregistereds in the settlement was just a microcosm of the settlement’s master defect: its illusion that it could be all things to all people. As a result, publishers used a “standstill” during years of pointless mediation to continue infringements, expand infringing products, invent new ones, and create still more “facts on the ground,” putting writers in an even deeper hole.

A real lawsuit does none of these things. It is surgical, not theoretical. It produces evidence, not absurd and mendacious settlement assertions – by plaintiffs’ counsel, no less – that there is “no” evidence of willful infringement. I have been working on this stuff for 14 years. I know better. So do the readers of this blog.

More soon.

Friday, January 18, 2008

'Universities Offer Digital Copyright Pact'

The headline above is that over a new article in Publishers Weekly, http://www.publishersweekly.com/article/CA6523686.html?nid=2286&source=title&rid=1433253538.

According to the piece, the agreement between the Association of American Publishers with Syracuse, Marquette, and Hofstra Universities (echoing an earlier one at Cornell) addresses the concerns of publishers "that unlicensed copyrighted materials -- from book chapters to magazine articles -- are being distributed for use in electronic courses, university webpages, school libraries and course management platforms."

It is curious that the institutional world works so hard on by-the-book licensing for educational uses, which at least arguably fall under fair-use privilege, but pay no attention to the illegal practices of the for-profit sources of many of the "copyrighted materials -- from book chapters to magazine articles."

Thursday, January 10, 2008

'Tasini Settlement Critic Argues for Moving On'

That's the headline over an item by blogger Debbie Mack, http://writing4hire.blogspot.com/2008/01/tasini-settlement-critic-argues-for.html.

Tuesday, January 08, 2008

Settlement Objections from a British Perspective

One of the under-analyzed bad aspects of the settlement -- which pretty clearly is about to be kaput -- is the way it proposed to impact non-U.S. authors. I expect to have a lot more to say about this in the near future.

In the meantime, I turn to Mike Holderness, an activist with Britain's National Union of Journalists (which, with one of its peculiar twists of the mother tongue, insists on calling us "freelances" rather than "freelancers"). His website is http://www.holderness.eu.

Mike writes:


NO COUNTRY, other than the US, has a [copyright] registration requirement. Not even a mechanism for registration.

Why?

On the face of it, the US requirement to register to get effective remedies is in breach of the Berne Convention:

5(2) The enjoyment and the exercise of these rights shall not be subject to any formality;

And the very next section specifies "national treatment":

5(3) Protection in the country of origin is governed by domestic law. However, when the author is not a national of the country of origin of the work for which he is protected under this Convention, he shall enjoy in that country the same rights as national authors.

Putting these together, I as a UK-based author of unregistered works am arguably entitled in international law to the same protection as is a US-based author of registered works. But does this extend to the validity of proposed civil settlements under US law?

So, if I have no need to register to protect my rights against what is, after all, a global infringement, why should I not be included in Category A?

Monday, January 07, 2008

Second Circuit Ruling in Recent Case Blows Settlement's 'License by Default' out of the Water

As noted in the previous post, the objectors' petition for rehearing by the Second Circuit Court of Appeals asks the three-judge panel to set aside its jurisdiction ruling and look first at one of our core merit arguments: inadequate representation of the class. In legal parlance, our issue is "dispositive." See attorney Charles Chalmers' brief, http://muchnick.net/PetitionForRehearing.pdf.

Today Chalmers also filed with the court a letter submitting what is known as supplemental authority. This means that there was a recent decision by the court, subsequent to the filing of our briefs, that bears directly on one of the questions we raised and argued.

And the answer to that question just does not look good for the settlement's "License by Default" -- the provision whereby the class representatives took it upon themselves to bargain away the future rights of all other class members.

As our letter (viewable at http://muchnick.net/SupplementalAuthority.pdf) explains, a 2007 Second Circuit ruling in another copyright case, Davis v. Blige, adds to the growing mountain of legal authority against the License by Default. Chalmers notes:

A party in Davis was trying to equate a license to a release, by calling it a “retroactive license. Here we have parties trying to equate a license to a release, by calling it a “release of future claims.”

The court held in Davis, as courts surely will hold here, that a license and a release are two different things. A class action can legally release claims for past damages, but it cannot license on behalf of others any and all future use.

In short, the License by Default is dead as a doornail.

So -- I think detached observers would agree -- is the settlement as a whole. It's time to get on with devising solutions to writers' rights in new technologies that aren't straitjacketed by this historic, and now abortive, sellout.

Petition for Rehearing: Rule First on Inadequate Representation

The appellants' (objectors') petition to the Second Circuit Court of Appeals for rehearing has been filed. It is viewable at http://muchnick.net/PetitionForRehearing.pdf.

The court ruled on November 29 that the copyright class action settlement could not include the claims of Category C (unregistered) copyrighted works. In our brief, we do not engage that issue, which is addressed by the appellees (the defendants and the named plaintiffs, the parties to the settlement).

Instead, we argue that the court should vacate the decision and determine first if there are Rule 23 (class action law) issues, such as adequacy of representation, which precedents suggest should be disposed of prior to the issue of jurisdiction.

The conclusion of the ten-page brief states:

Objectors believe that this litigation, and the related issue of historical

content of databases, can be resolved. In Tasini the Supreme Court

suggested that there were models in existence in the area of copyrighted

music which might serve as models for an agreement. The Court even

noted that such agreements had apparently been reached in France

and Norway. Instead the parties undertook an entirely novel

approach, purporting to grant licenses in the copyrights of authors from

around the world. These are not just licenses to the existing databases,

but licenses to a huge category of unnamed recipients who would also

be entitled to grant further licenses and the right for further sublicensing

ad infinitum. No class action in history has undertaken such scope.

The Supreme Court understood that arriving at a solution might

be complicated when it said that it would leave “remedial issues open for

initial airing and decision in the District Court.”

Addressing this problem has taken a long time, though perhaps not all

that time was focused on the proper structure to achieve the result

Congress intended by enhancing the rights of authors versus publishers in

the 1976 Copyright Act. See, Tasini, at 496 n.3. Settlement negotiations

started in November 2001, the mediation started in February 2002 and

the principal terms were agreed in April 2003. The only explanation of the

next two years before it was brought to the district court is negotiation

of language for the settlement and notice.

'Freelancers' Settlement All But Dead -- Now What?'

Sunday, January 06, 2008

FREELANCE RIGHTS Flashback: 'Promised Bang Could Be a Whimper'

By January 2005, my email exchanges with Spencer Hosie, co-lead plaintiffs' counsel in the consoliated class action copyright infringement mediation talks, had convinced me that the settlement that was about to be announced was a pig in a poke. Five years earlier I had consulted on the launch of the first of the cases that wound up being consolidated. All this background is explained in my July 2005 declaration in support of the objections to the settlement, http://muchnick.net/Muchnick.pdf; see in particular the 37th and final paragraph.

Before finding attorney Charles Chalmers and organizing a slate of objectors -- who now stand on the brink of scuttling the settlement before the Second Circuit Court of Appeals -- I wrote an article explaining what I intended to do and why I was doing it. The essay was submitted, without success, to many trade publications. The text is below.

***************

The Promised Bang of the Upcoming
Copyright Class Action Settlement for Authors
Could End Up Being a Whimper

All of you haven’t forgotten, have you, the huge landmark copyright class action case to redress freelance writers for the systematic piracy of their previously published works by for-profit database companies?

The sad truth is that I can hardly remember that lawsuit myself. And I’m the person who launched the darn thing nearly five years ago.

On the cyberstreet, the word is that this hydra-headed
monster, a consolidation of copycat cases now known as
In re Freelance Works in Literary Databases Copyright
Litigation
, Multi-District Litigation No. 1379, Judge
George M. Daniels, Southern District of New York, is
thisclose
to settling. Then again, that’s been the word
almost from the get-go. Two major authors’ organizations
– the National Writers Union and the Authors Guild –
have pieces of the action. Every once in a while I
check the latter’s website, with results reminiscent of
the Bill Murray movie Groundhog Day. Here’s the Guild’s
February 2005 “update”:

Authors Guild Lawsuit Against Major Databases in Mediation
The class-action lawsuit filed by the Guild, ASJA and
several writers alleging massive copyright infringement
of freelance articles by major electronic databases,
including Lexis-Nexis, Dow Jones Interactive, Dialog and
others, is now in court-ordered mediation.


Others who have pieces of In re Freelance Works – and
thereby stand to share in many millions of dollars in fees
whenever they can finish their Kabuki dance with the
defendants and their insurers and indemnifiers, and then
persuade the judge to approve the settlement – include
three distinct teams of plaintiffs’ attorneys. To give you
an idea of the strange bedfellows found in litigation land,
one team paired the general counsel of the United Auto
Workers, parent of the National Writers Union, with a guy
named Gary Fergus, whose previous claim to fame was his
role in counseling Enron on those notorious memos plotting
the manipulation of
California energy markets.

Indeed, the folks with fingers in the pie of authors’
copyright class actions, that briefly hot sub-discipline of
the lawyering dodge, run the gamut from Enron to the
company’s very own book-cooking, and now defunct,
accounting firm, Arthur Andersen. In 2000 the first-ever
copyright class action on behalf of authors, Ryan v. CARL,
settled for $7.25 million, including $2.9 million to the
attorneys; Andersen skimmed an additional $500,000 off the
top for doing practically nothing as “settlement claims
administrator.” (That is, unless you define doing something
as erroneously rejecting a number of legitimate
infringement claims and failing to list dozens of others on
the public online claims database.)
As Mencken might have put it, no one ever went broke
underestimating the altruism of lawyers. Yet even if the
esteemed advocates of In re Freelance Works, the first
important writers’ rights case of the 21st century, actually
have their clients’ best interests at heart (as I believe
many do), the passage of time and the accompanying
realignment of interests conspire against a happy ending.
In the absence of a stunning reversal, the settlement is
certain to whiff on its threshold challenge: creation of a
comprehensive and equitable industry-wide regime of
prospective secondary-rights management.
Without a legal leg to stand on, but armed to the teeth in
the tools of attrition, publishers are only too happy to
greet a denouement consisting of a single large check to
make those pesky writers and their mouthpieces go away once
and for all. In the interim, the industry successfully
shoved down the throats of most of its freelance
contributors all-rights and work-for-hire contracts that
henceforth will allow it to take through the front door in
broad daylight what used to get slipped onto the freight
elevator in the dead of night.
Which is why, if the settlement winds up reading more or
less as I expect, I intend to use my standing as a member
of the plaintiff class to object at the fairness hearing
before Judge Daniels. If necessary I’ll organize a “counter-
class” of objectors. Whether it’s next week, next month, or
next year, I’ll hope that a display of dissidence
sufficiently unnerves the court and the parties to the
point where they conclude they have to reset the mediation
and knock their heads together still more. And this time
bring everyone inside the tent.
Of course derailing a major settlement is no easy sell.
Some experts go so far as to call it quixotic. Most notably,
if successful, the effort would leave tens of millions of
dollars in infringement claim settlements on the table,
making any objector, at least initially, less than wildly
popular with fellow writers. (In reality, this isn’t such a
big deal; on an individual basis, these awards tend to track
the pay scale of our common chosen profession – something
approximating minimum wage.) But that doesn’t faze me. The
same experts were saying similar things back in 1997, when I
was shopping an innovative lawsuit against an article fax
delivery service called UnCover to class-action law firms in
the Bay Area – a suit that turned into the aforementioned
Ryan v. CARL.
In 2001, the year after Ryan settled, the U.S. Supreme Court
issued its crucial ruling in Tasini v. New York Times, a
case brought nearly eight years earlier by Jonathan Tasini,
then president of the National Writers Union. By a 7-2 vote,
spanning Antonin Scalia to Ruth Bader Ginsburg, the justices
determined that there was, after all, nothing ambiguous about
Section 201(c) of the Copyright Act. The statutory default is
that republication rights of individual articles, whether
print or electronic, belong to the freelance writer, not to
the first-print publisher. Period.
“The Publishers’ warning that a ruling for the Authors will
have ‘devastating’ consequences, punching gaping holes in the
electronic record of history, is unavailing,” the High Court
said in the most pointed passage. “… The Authors and
Publishers may enter into an agreement allowing continued
reproduction of the Authors’ works; they, and if necessary
the courts and Congress, may draw on numerous models for
distributing copyrighted works and remunerating authors for
their distribution.”

In the wake of the combination of the Tasini decision and the
Ryan
class action success, I believed that marketplace
solutions were at hand. I thought the second class action I
packaged, Posner et al. v. Gale Group et al., filed in August
2000, stood a fighting chance of spurring the missing reform
of the information revolution: a genuine and equitable
royalty system analogous to the music industry’s ASCAP.
(While on the staff of the writers union from 1994 to 1997,
I had started a fledgling collective-licensing agency called
Publication Rights Clearinghouse, which was quickly followed
by the Authors Guild’s Authors Registry.) Now the Supreme
Court itself was inviting such an approach, and the Damoclean
sword of punitive damage awards for past infringements would
seemingly motivate publishers to negotiate in good faith at
last.
But I was wrong. I failed to account adequately both for the
breathtaking arrogance of the publishers and for the awesome
imagination deficit of the lawyers.
The former manifested itself in actions by The Times and
others to purge electronic archives of material they’d never
had the right to license. These turned article databases and
the historical record into “Swiss cheese.” Sometimes the gaps
were disclosed to information consumers, sometimes not; but
in any event all attendant imperfections were duly blamed on
Tasini. (Right: The Supremes merely said that publishers
“may” enter into agreements with authors allowing continued
reproduction, not “must.”)
As for the lawyers, at the beginning of the second round of
authors’ copyright class actions they were full of the usual
self-promotional blather about a public-interest breakthrough.
The silence of the ensuing half-decade, however, has been
ominous. Today it’s vital for the creator community, as well
as for librarians and information professionals, to understand
that this mother of all class actions morphed into a bad deal.
Bad for us. Bad for you. Bad for the vitality and diversity of
our culture in the digital age.
For in retrospect it’s apparent that publishers, by and large,
were never seriously interested in negotiating. The proof is
in their two favorite tactics of the copyright class action
era. First, by using their full leverage, including the hiring
blacklist, to impose contracts that thwart the spirit of the
Copyright Act of 1976 and the Supreme Court ruling of 2001,
they were saying in effect: Sure, our claim-jumping licensing
practices in the eighties and nineties were about as wholesome
as a round of three-card monte on a Times Square sidewalk …
but, presto, no more, that’s all in the past!

Their second tactic – thumbing their collective nose at the
future – is the one that really sticks in my craw. Even as
mediation has dragged on for half-a-decade, publishers and
their database partners, like settlers in occupied
Gaza, have
created new “facts on the ground.” These colonialists go by a
variety of new models, such as HighBeam, KeepMedia, and
findarticles.com, and boast content from Gale/Thomson, one of
the class-action defendants. Blatant and willful infringers
all, they’re revoltingly confident that the ultimate
settlement will simply grandfather in their outlaw ways. So
confident that they didn’t even bother to wait for a judge to
approve the settlement before boring full-speed ahead.
Meanwhile a multimillion-dollar check to “settle” “claims” of
past wrongdoing constitutes the most prosaic cost of business
– the outrageously antidemocratic business of hoarding
“intellectual property for me but not for thee.”
My friends, only one outcome from Multi-District Litigation
No. 1379 could begin to justify the forests that were
denuded, the thousands of hours of paralegal time that were
squandered, and the feeble redistribution of funds that was
exacted. No anti-lawyer ideologue am I. There’s genuine value
in litigation … and in legislation … and in organizing and
labor action. Each has a role to play in improving our world.
At this juncture of information industry and legal history,
though, fair-minded observers will conclude that the
litigation card was overplayed. Resisting a glib settlement
of the class-action copyright litigation is the first step
toward restoring a proper balance.

Opt-outer Francis Hamit's New Year Comments

Francis Hamit opted out of the settlement, traveled to the fairness hearing in district court in New York at his own expense, and maintains a blog called "The Fight for Copyright." I don't agree with everything Francis says, but his views are always well rendered and he does his homework.

In his new post, at http://thefightforcopyright.forwriters.org/index.php?year=2008&month=1&PHPSESSID=9d9f3903cc25dc160e8cf17a3af9bbdf,

Francis discusses the implications of the collapse of the settlement.

Thursday, January 03, 2008

FREELANCE RIGHTS Flashback: October 10, 2005

"We've Not Seen the Last of the Copyright Class Action"
by Carol Ebbinghouse
Information Today NewsBreaks

http://newsbreaks.infotoday.com/nbReader.asp?ArticleId=16105

Wednesday, January 02, 2008

Library Journal Interview

My interview with Library Journal's Andrew Albanese will be republished soon in slightly longer form at the LibraryJournal.com site. We'll have a link when it's up. The original version, in the December 20 edition of LJ Academic Newswire, is at http://www.libraryjournal.com/info/CA6514628.html.

Objections, Year 4 -- Resetting the Issues

Writers, publishers, information consumers – all of us – have a fine mess on our hands these days over at the Second Circuit Court of Appeals, and it has nothing to do with Google. Yet even many of the most seasoned students of copyright, class action, and complex legal procedure can follow the goings-on only by rumor and a single cryptic report in The Newspaper Of Record. I suggest this has something to do with the fact that the case involves the economic interests of every newspaper and magazine in the land.

Nearly three years ago three authors’ organizations announced a global settlement with periodical publishers and their electronic database licensees and partners (LexisNexis and the like) in a consolidation of copyright class-action cases inspired by the 2001 Supreme Court decision Tasini v. New York Times. The Court had ruled that freelance contributors, as opposed to staff writers, retain control of the secondary rights to works originally published in newspapers and magazines unless there is explicit agreement to the contrary. In a nutshell, individual downloadable articles from products such as databases and website archives aren’t the same as new editions of entire collective works, such as library microfilm, which publishers are free to license and profit from without the consent of the copyright holders.

The Second Circuit case is an appeal by ten objectors to the district court’s approval of the settlement.

By the time Tasini, originally filed in 1993, finished wending its way through the courts, periodical publishers had been off and running for a decade or more with the marketing of individual articles via digital technology. In the publishers’ narrative, the ensuing hassle illustrates only the irrationality of the law. I have a different perspective. Even before Jonathan Tasini, then president of the National Writers Union (NWU), launched the litigation to clarify Section 201(c) of the Copyright Act of 1976, individual writers, groups of writers, and authors’ organizations were confronting publishers and database operators about their dubious practices. Almost invariably, the infringers responded with some combination of blowing off complaints, playing dumb, passing the buck, and quietly deleting the material of the squeakiest wheels.

Not nearly as much energy was put into parallel announcements to institutional customers and individual users that these databases, some with hefty time or retrieval fees, were no longer as comprehensive as advertised. After the Tasini decision, however, publishers were quick to make sure the world knew that databases were being turned into “Swiss cheese,” a consequence successfully spun as the dirty deed of freelance authors, those notorious enemies of access. (Among those picking up on this theme was The New Republic’s Jeffrey Rosen, who failed to note that both the American Library Association and the Association of Research Libraries had supported the Tasini plaintiffs.)

From 1994 to 1997, I was assistant director of the NWU and founding administrator of its Publication Rights Clearinghouse. PRC was one of several initiatives by creators to set up a default royalty system loosely modeled after the music industry’s ASCAP, whose roots were in the advent of recording equipment. This approach was suggested as a model by the Supreme Court in Tasini but consistently rejected by the publishing community, which preferred to shove all-rights contracts down the throats of freelancers. Screenwriters have learned how to exercise collective muscle (as we see in the current Writers Guild West strike), but their poorly organized journalistic brethren mostly stand around watching management use marketplace power to nullify their court victories.

Even so, there is the not-insubstantial matter of damages for the publishers’ past, systematic, and – in my opinion – willful ongoing infringements. What is their value? And how much leverage can they give writers in devising a fairer future regime not only for them but for the concept of a diverse and vital culture in new communications media?

My own answer to those questions was to quit NWU and package the first class-action copyright cases on behalf of authors in the history of American jurisprudence. My initial case as a consultant, Ryan v. CARL Corporation, recovered $7.25 million (including $2.9 million in attorneys’ fees) for freelancers who were knocked off by a small and now-defunct service called UnCover. When word of our success got around, naturally, the sharks circled. Within days of the filing of “my” second class action, in August 2000, two copycat cases were in the books, one of them courtesy of the Authors Guild. The law firm with which I was working responded by bringing in its own writers’ organization, NWU, as a plaintiff, and I was soon out of the picture. The three cases got consolidated in U.S. District Court for the Southern District of New York.

The lawyers and their “associational plaintiffs” – Authors Guild, NWU, and the American Society of Journalists and Authors – proceeded to turn freelance writers’ leverage to dust. Tasini, a loud-walking, small-stick sort who had crowed that the case was worth billions, soon was saying he didn’t want to “destabilize” the industry. The litigation had none of the elements one normally associates with the term; the plaintiffs never engaged in adversarial discovery and, indeed, never got the defendants to so much as formally answer the complaint. Instead, the parties jawboned for half-a-decade before almost getting away with a 2005 settlement that will go down in the annals of all-time sellouts. The objectors hired attorney Charles Chalmers to oppose the settlement in district court and appeal to the Second Circuit.

In Austin Powers, Dr. Evil emerges from a time capsule with a nuclear device with which he blackmails the United Nations for “one million dollars.” Something similar happened with this settlement. It called for the princely sum of $18 million, $11.8 million of which would go to writers after deduction of attorneys’ fees and administration costs – this for a generation of infringements, by hundreds of publishers and database companies, of somewhere between many tens of thousands and some millions of articles, in scores of new for-profit products.

In November 2007, The New York Times and others reported in mysterious tones that the settlement was struck down by the Second Circuit. (Only The Wall Street Journal bothered to point out that the three-judge appellate panel hadn’t parachuted in out of nowhere after two-plus years but was actually deciding an appeal by objectors.)

Ironically, the judges haven’t even addressed the objectors’ merit arguments. We maintain that the settlement is fatally flawed on many grounds, but let’s focus on three. One is inadequate representation of the class, which is evident in several ways – by the generally passive conduct of the lawsuit, and specifically by how the named plaintiffs and a circle of insiders gamed undisclosed registration deadlines and the settlement fund’s structure.

A second fatal flaw is that settlement fund structure. Of the $11.8 million, nothing will go to holders of unregistered copyrights, which constitute more than 99 percent of the universe of infringements, if enough of the higher-paying registered claims were filed. The objectors believe the “C Reduction” has happened; claims closed in 2005 and the data are in, but the settlement parties refuse to publish them.

Finally, there is the outrageous provision we call the “license by default.” The class representatives took it upon themselves to grant a release in perpetuity for the defense group to exploit all works for which rights holders did not opt out or file claims. That means everyone the world over, English-speaking or not, alive or not, even if they never got wind of the settlement or didn’t drill into the fine print after discovering that the onerous claims paperwork stood to secure for them a whopping $5.

The reason the appellate judges didn’t get to our issues was that they raised one of their own: jurisdiction. Copyright holders do not have standing to sue until they register their works with the Copyright Office, but the settlement proposes to settle claims for both registered and unregistered works. Two judges of the three-judge panel held that unregistereds not only can’t sue but can’t even be included in a settlement. Here the objectors agree with the defendants and the plaintiffs that unregistereds should be able to participate in a settlement (though I should add that the “complete peace” that publishers seek from the settlement is not really our problem).

If the ruling stands after requests for rehearings and appeals are exhausted, then thousands of unregistered copyright holders, having been belatedly alerted to what a pig in a poke this settlement was, will be free to register their copyrights and file a never-ending wave of new actions.

If the ruling is overturned, then the objectors will be front-and-center again with their substantive, non-procedural criticisms.

A better way: the three authors’ organizations acknowledge here and now that the settlement is dead for all practical purposes, and get out of the way. And the publishers finally sit down with writers, photographers, graphic artists, librarians, and other interested parties for good-faith negotiations on a royalty system that would share new-tech revenue fairly while fulfilling the promise of the information superhighway.