Friday, March 13, 2009

What the Freelance Settlement Objections Are All About

A blog commenter who goes by "Moxie" distinguishes himself or herself from others not in agreeing with me -- he is wrong about the settlement -- but in at least doing the work to understand the settlement while he misguidedly defends it.

This morning he posted a new comment, and it's another opportunity for all of us to reflect on what this dispute is really about. Below, in bold, is Moxie's comment. Below that is my response.



You said, incorrectly:

"A prospective royalty system cannot compensate for past infringement. Unfortunately, the settlement as written gives away prospective rights (via the license-by-default) as a condition for compensating claimants -- and not very well -- for past infringement. That is the crux of the objections."

In truth, the settlement has two components: One part of the formula provides compensation for past infringement (which, as you've said, cannot be address in a royalty system) & only for past infringement; it does NOT give away future rights. And the second component makes an offer to compensate for future use (in effect, to "buy" the rights); it contains an opt-out clause for those who want to retain future rights (via, perhaps, a royalty system).

And then you wrote:

"The logistics of a royalty system would, indeed, be complicated.
Complicated but doable. There are a number of ways to skin this cat other than the settlement's way -- which is basically paying off a handful of the infringed insiders for pennies on the dollar, while simultaneously stealing billions of dollars in collective revenues from future products that would be illegally sanitized by the default license. Or, as the Supreme Court put it in Tasini, there are "numerous models."

Just who, esactly, are these "infringed insiders"? Thousands of us filed claims.
Are the thousands of us the "infringed insiders"?
If not, what the heck are you talking about?

And, you keep forgetting that all of the works covered by the settlement were written prior to 2001. You might think that future use of these is worth "billions"; I happen to think that most of these works are now outdated and worth about zero. And for those very few that still have market value, the "opt-out" could have been used.



Moxie dutifully, and somewhat faithfully, recites the provisions of the settlement that seek to make it an airtight container of the class action it is trying to resolve. The lawyers on all sides have been firing away, and will continue to fire away, exposing each other's technical mistakes, large and small.

But I'd like to challenge Moxie's underlying assumption: that the settlement, even if clerically airtight (which it most certainly is not), is fundamentally legitimate.

Moxie is correct that more than just the few disproportionately rewarded named plaintiffs and their insider cronies stand to collect money under the settlement. We don't know the numbers, but surely some thousands of others have also filed for claims ranging from the token to the somewhat better than nothing.

Is that the point?

I said that Moxie's account, technically, is close to being faithful. Where it falls short was well put by objectors' attorney Charles Chalmers at the time of the Second Circuit's odd ruling to vacate the settlement on jurisdictional grounds:

"The C class, not to mention the much better paid B and A classes, were only getting compensation because they purported to bargain away the copyrights of those freelancers, from virtually every country in the world, who did not receive notice of the settlement, or understand what it was doing. The objectors found this to be an unprincipled action, and they are pleased that for whatever reason it will not happen."

That is a powerful point, which Moxie seems not to grasp.

Nor would I stop there. The settlement also arose in a context. That context was the 1976 revision of the Copyright Act (and its policy background and legislative history) and the 2001 decision of the Supreme Court in Tasini.

By written contracts, and more importantly by industry custom and practice, freelance journalists throughout history had controlled and profited from secondary rights. Prior to the emergence of new technologies, those secondary rights mostly involved things like syndication rights and anthology rights. The question now became: Was it in our society's best interest for freelancers also to have the real-world ability, not just the abstract opportunity, to exploit electronic database and related digital rights?

I do not think it is intellectually honest to read the plain language of Section 201(c) of the Copyright Act and conclude that the answer to that question is anything other than "yes."

In 1993 -- 1993! -- Jonathan Tasini began working long and hard to put that question before the courts. And by a vote of 7-2, the Supreme Court justices in 2001 agreed with the freelancers. Antonin Scalia agreed with the freelancers. So did Ruth Bader Ginsburg, who made reference to a royalty system solution. You couldn't get a more across-the-board victory for writers than Tasini.

Yet at that point, the publishing industry, with its collective market muscle and lawyered-up firepower, essentially said, "We don't care about the stinking law of the land. We can write a new contract that forces freelancers to give away rights that Congress and the Supreme Court clearly intended for them to have, and we can set aside a pot of peanut shells to make our past infringement go away, while using tiny-print legalistic tricks to create the illusion that a small percentage of the class can sign off on a comprehensive global deal for the future on behalf of millions of absent class members the world over, and can sell to the global community of information users that the problem has been solved."

On that one, Moxie, I say: "No sale." That is why I intervened as an objector early in 2005 and that is why I am still fighting the settlement today.

When all is said and done, it may be that a class action settlement is not the proper container for a comprehensive solution. The Tasini decision said that, if necessary, the courts and Congress could help in the design. As far as I and many others are concerned, that design would include a prospective royalty system, not a license-by-default giveaway that makes a mockery of everything our public institutions have said about the logic of concentrating all of our intellectual property rights in the hands of a few corporate entities.

If it makes you feel better, nitpick and complain about the objectors to your heart's content. We are not going away. And now we're back at the Supreme Court, which just may have a thing or two to say about how their clear intent eight years ago has been perverted in the interim.


Anonymous Moxie said...

Irv, once again, you neglected to answer my question:

Just who are you talking about when you use the terms "insider" and "insider cronies"?

And please do not, once again, stray from the subject. Just answer that question, please.

1:17 PM  
Blogger Irv Muchnick said...

Definition of insiders:

(a) the named plaintiffs

- plus -

(b) friends of the named plaintiffs

See, for example, the June 26, 2006, post at this blog, "Named Plaintiff Paula 'Pinocchio' McDonald -- No. 2 of the Category B Goldust Twins."

2:50 PM  
Blogger Irv Muchnick said...

My comment above should have cited the entire series of posts at this blog on June 26, 2006:

* "Named Plaintiffs Mary Sherman and Paula 'Pinocchio' McDonald -- The Category B Goldust Twins (Introduction)"

* "Named Plaintiff Mary Sherman -- No. 1 of the Category B Goldust Twins"

* "Named Plaintiff Paula 'Pinocchio' McDonald -- No. 2 of the Category B Goldust Twins"

* "Why Do I Call Her Paula 'Pinocchio' McDonald?"

2:58 PM  
Anonymous Moxie said...

So, the anonymous thousands of us who have filed claims are not among the group of "insiders" who have repeatedly drawn your ire?

Just wanted to clear that up.

4:09 PM  
Blogger Irv Muchnick said...

I have no beef with the thousands who simply filed claims, expecting to get compensated for past infringement, but not realizing the whole background and that they were being brought along on an illicit ride.

An illicit ride it is, however. That ride cannot go forward just because those people rightly think they deserve money for their claims. The class action settlement as structured both is fatally flawed internally and damaging to writers' rights for generations to come.

6:06 PM  
Anonymous Moxie said...

The settlement covers claims for works created prior to 2001. Period.

There is not one word in the settlement that sets legal precedent and/or policy for works created in 2001 and beyond.

If you are so worried about what might happen for future generations, perhaps your personal efforts and/or legal resources should be directed at fighting the current freelancer contracts that give away all future rights.

To repeat, since it is not clear to me that you understand this: The settlement does not set precedent for anything other than works created prior to 2001.
It will have zero effect on future generations (except, possibly, for the heirs of the few people who are in line for very large settlements), since copyrights are not held for generations.

6:27 AM  
Blogger Irv Muchnick said...

Let's start by noting that there are plenty of serious, deal-killing problems with what is only the settlement's treatment of works created prior to 2001. Here are just three: the inadequacy of representation of the class, the C Reduction, the license-by-default for those who chose not to file claims because they didn't understand the settlement, or because they never heard of it.

Now let's get to Moxie's master point. It is naive to believe that this global settlement would not impact the effort to improve future contracts for freelancers. And it is doubly naive not to realize that that impact would be to maim that effort, perhaps permanently.

Much of the work of organizing does have to take place outside the four walls of this litigation. But to acknowledge as much is not to concede that a line of lawsuits designed to strengthen the hand of writers can be allowed to be turned inside-out to strengthen the hand of publishers. (This isn't any old private lawsuit, either; it's the heavily hyped comprehensive solution pushed by three authors' organizations.) The purpose of the particular provision of the Copyright Act that was in supposed dispute (and that no longer is) is to spell out rights, which freelancers were to be given the capacity to exploit, but which publishers systematically stole for decades (and continue to steal even during the pendency of this case). These illegal actions by the publishing industry have thrown the dynamics of electronic rights negotiations out of whack, not only for creators but also for the public.

We shall see, but I do not expect the Supreme Court justices, who ruled so emphatically in Tasini, to accept Moxie's static and nonchalant view of how this settlement proceeded to seek to implement the outcome of that landmark case.

7:37 AM  
Blogger Anita Bartholomew said...

Moxie's premise seems to be that it's okay to give away the future rights of countless writers for nothing because those rights are worthless.

First,if future rights are worthless, why have the databases and publications spent $millions trying to acquire them through the defense of the original lawsuit? Why don't they just give in right now, rather than spending perhaps more $millions in legal fees to hang on to all that worthless content?

Second, the value of the FUTURE use of the property is not an issue in the original lawsuit. FUTURE use shouldn't be part of this at all as that would concern entirely different property rights.

Plaintiffs' attorneys went beyond the scope of the complaint (about past infringement), appropriated future rights of all writers of covered works forever unless owners affirmatively demanded otherwise.

The Plaintiffs' attorneys had no authority to appropriate and distribute future rights that were not part of the lawsuit.

Third, the now-overturned settlement proposes to give the Defendants the rights to use the works in the databases in all the ways that a copyright owner may, per Chapter 17, ยง 106, "Exclusive rights in copyrighted works," (see:, not just the right to re-print.

For example, it appears that the original author's name could be removed and a new author's name could be inserted. Or, a Defendant or Participating Publisher could combine several articles to create a new one. While this is unlikely to occur with stories that are no longer timely, magazine stories (a considerable chunk, and possibly the majority of articles involved), are often "evergreen" -- stories that never go out of fashion.

Last (for now), Moxie may not be aware that Reader's Digest has just launched two new magazines that will consist entirely of recycled magazine articles from other publications -- yes, "evergreen" articles to which it owns the rights under work-made-for-hire agreements. It's unclear how far back they will reach for such articles but, when it comes to magazine stories, some simply never get noticeably old. With a word change here or there, it's unclear when the pieces were originally written (which is why some magazines keep "inventoried" articles for years prior to publishing them).

8:42 AM  

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