Related to the question of factors is Vernor v. Autodesk, Inc. case, which sort of helps clarify the question of when is a sale and sale vs a license. The distinguishing factor in my opinion is that Autodesk “(3) imposes notable use restrictions.” significantly beyond just the language of the shrink wrap agreement.
“Autodesk takes measures to enforce these license requirements. It assigns a serial number to each copy of AutoCAD and tracks registered licensees. It requires customers to input "activation codes" within one month after installation to continue using the software. The customer obtains the code by providing the product's serial number to Autodesk. Autodesk issues the activation code after confirming that the serial number is authentic, the copy is not registered to a different customer, and the product has not been upgraded. Once a customer has an activation code, he or she may use it to activate the software on additional computers without notifying Autodesk. ” Vernor v. Autodesk, Inc., 621 F.3d 1102, 1104-5 (9th Cir. 2010)
Where in UMG the record label was sending promotional CDs without any controls on their eventual use, discard, etc. My feeling is that the important question is what controls does The Chronicle actually implement and at least attempt to enforce.
Perhaps there will be future litigation involving copies of movies only available on streaming platforms that are sent to members of various trade groups that give out awards, this isn’t just limited to the Oscars, but also local and regional bodies like the New York Film Critics. Those screeners aren’t sent just out in the hopes somebody will listen to it or play in on the radio, but for the specific purpose of viewing a film that has been nominated for an award, and I think screeners are supposed to return the films after voting. I know some libraries have been able to acquire physical media for movies that should be only online through the second hand market, aka bought on Ebay for example. Perhaps as a sign of good judgement, or because the effect on the distribution of those films is so limited, nobody as sued (yet)
The type of activity that the Chronicle is engaging in is not unheard for print content providers, the restrictions imposed on Harvard Business Review Case Studies takes my breath away. Of course HRB’s business model doesn’t sell Case Studies to libraries. HBR also restricts the use of their journals 500 most popular articles, and had some onerous restrictions when they were a print only publication.
Best,
Jonah
Date: Mon, 28 Feb 2022 20:01:08 +0000
In terms of legality – copyright holders can put significant license restrictions on downstream use (e.g., library loans), but efforts to do so aren’t always effective. The courts have developed a set of factors to determine whether any given transfer of a copy constitutes a “sale” or actually a “license.” If it’s actually a “sale” then the “first sale” doctrine applies and copyright law doesn’t restrict further transfer, lending, or sale.
For example, in UMG Recordings v. Augusto, UMG sent out promotional CDs with the following text on a sticker that came with it:
This CD is the property of the record company and is licensed to the intended recipient for personal use only. Acceptance of this CD shall constitute an agreement to comply with the terms of the license. Resale or transfer of possession is not allowed and may be punishable under federal and state laws.
Augusto sold a bunch of these copies on eBay and UMG sued. The court said that downstream distribution did not constitute copyright infringement in violation of the license because the initial distribution constituted a sale (transfer) of the CD, and therefore the “first sale” doctrine applied. Among the factors that the court looked at in that case were 1) whether the license was designated as a “license”, 2) whether the purported license reserved title in the copy to the original owner, and 3) whether it required eventual return of the copy to the owner. Ultimately, it was looking for whether UMG still held “sufficient incidents of ownership” to “sensibly be considered the owner of the copies,” or whether in fact ownership of the CDs had been transferred.
In this case, the text that The Chronicle includes does call itself a “license” but… it seems to me, that’s about all The Chronicle has going for it to assert that these print copies are actually just “licensed” and not sold to libraries. CHE isn’t otherwise asserting continued physical title over the copies sold, or requiring eventual return of the copies, and (aside from the restriction on distribution) isn’t making any other meaningful restrictions on uses of the copies.
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Dave Hansen
Lead, Copyright & Information Policy
Associate University Librarian for Research, Collections & Scholarly Communications
Duke University Libraries
(m) 704-747-4314