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Copyright in the LibraryAcquisition Under Contract |
As discussed in Subsection (f) Limitations, there is some controversy over the effect of contractual arrangements that purport to affect library's rights under Section 108, but for purposes of this discussion, we will assume that contracts to acquire materials for patrons' use that restrict the library's rights under Section 108 only affect the particular materials covered by the contract. The issues we shall consider here are related not to the legal effect of such contracts, but to the practical effect on the library's function, its patrons' use of the materials, and whether or to what extent libraries have the power to negotiate better deals for their patrons. We will focus on the questions you should ask yourself as you review proposed license agreements and the terms and conditions you should question or request, as the case may be.
Many contracts contain provisions that are objectionable and should be deleted; on the other hand, they may also fail to provide assurances that libraries should reasonably expect. The Office of General Counsel reviews such license agreements and will offer specific recommendations for modifications. We have learned that there are typical problems that appear in nearly every license and so have developed an interactive form to guide the review and modification of typical vendors' software, database and online journal contracts. Our office is available to work with those individuals in U.T. System's libraries who must review these agreements to help develop and refine their ability to spot these problems and correct them. Additional online resources are becoming available too: check Licensing Resources for up-to-date information. Most importantly, we have learned that very rarely do vendors refuse to negotiate their terms.
Protecting expected uses is one of the most important issues in library licensing. Once acquired, electronic access invites a wide range of uses. For example, faculty may assign course readings by simply pointing to them from a departmental Web server. This, in turn, will mean that students will wish to download and print portions of licensed data.
At one time, I would have characterized suitable contract language covering how much data may be transmitted, downloaded or printed for personal, research or scholarly uses with a phrase such as "consistent with fair use." But publishers' beliefs about the scope of fair use raise concerns that their idea of fair use may be much too restrictive to accomodate typical expectations. Users' beliefs about the scope of fair use are being challenged successfully in the courts,1 so we must acquire enough rights to eliminate the need to ask for additional permission to make customary and expected uses of licensed resources.
This may not be easy. Database publishers are very concerned about their legal protections under copyright law and often try to obtain the security they feel they need with restrictive contract provisions. They may be unwilling to give open-ended rights to use their data. It is possible to define more specifically what users need, but it is important to avoid too narrow a definition. For example, limiting portions that can be copied, etc., to one article or one chapter from a defined unit of some sort may not be realistic. Coursepacks often exceed these limitations. If we expect to replace coursepack permission fees with database licenses that cover the most frequently requested works, we must be sure we have acquired the rights we need to accomplish that objective.
Before placing a limit on amounts that can be transmitted, downloaded and printed, discuss the question with the campus Copy Center, then choose an amount that is based on actual use, rather than ideals.
Of the issues addressed in our interactive form, one of the most difficult is indemnification. Indemnifications may run from the Vendor to the Customer, from the Customer to the Vendor, or both. We will discuss each side's indemnification separately.
There is little basis for our being asked to indemnify the Vendor of a database for anything. The Vendor chooses the data, has the responsibility to obtain all needed rights to distribute the data, and will profit from the use of the data; thus the Vendor should bear financial responsibility for harms caused by the use of the data in accordance with the terms of the Agreement.
Software is more complicated. We may use licensed software in a way that creates risks of harm to third parties that could result entirely from our use, irrespective of anything the Vendor could do to limit those risks. For example, if we license patient tracking software, we could fail to enter data into the program resulting in a record that hurts someone's health care. If the software Vendor had to accept responsibility for harms that result from our use of its product, the Vendor probably could not sell the product for a reasonable price.
When it makes sense to accept responsibility for harms to third parties resulting from our use of a Vendor's software, we must be sure to limit our liability in accordance with State law by prefacing any such Customer indemnity with the words, "To the extent authorized by the Constitution and laws of the State of Texas,".
We should expect that Vendors will develop their products without infringing the intellectual property rights of others, that is, without appropriating others' protected ideas or expression. There are two common ways to address this concern in a contract. The first is to ask the Vendor for a warranty. A warranty is the Vendor's guaranty that the software or database does not infringe. Many Vendors are not willing to make such a guaranty, especially in the case of software, because it requires that they perform patent searches to make sure that no one has a patent on the idea embodied in their software. If someone has patented the idea of the Vendor's software, it does not matter whether the Vendor independently developed its software; even completely unaware, the Vendor would be an infringer.
For many reasons we do not insist on a warranty. Nevertheless, even in the absence of a warranty, we do expect that if the software or database infringes someone else's rights, the Vendor will take care of any expenses we might incur were we to be sued or asked to stop using the software or database because of alleged infringement. This is a fairly reasonable request and should normally be made in any software or database license, although in the following situations we are not very likely to get such an indemnity:
Usually a Vendor's agreement to indemnify means acceptance of substantial risk of financial loss. The first three situtations above illustrate circumstances where the Vendor may not make enough money on the product to justify assuming this risk. In effect the Vendor is saying, "If you want this software or database at this price, you'll have to accept the risk that it might infringe. If you want us to accept that risk, it would cost you alot more money."
The fourth example illustrates the circumstance where the risk of harm to a third party is so unlikely that we can comfortably agree to take the risk.
In these and analogous circumstances, the fact that the Vendor has a reasonable basis for refusing to indemnify us weighs in favor of our accepting a contract even though it falls short of our normal expectations. Other times, however, such refusal would be unreasonable, as where the product is being developed especially for us (and we would be a prime target of an infringement suit), or is commercially successful and widely available, in which case the Vendor is making enough on the product to accept the risk.
It is the role of counsel to advise System personnel who review contracts of the terms that should be included or avoided and of the implications of accepting nonstandard terms. Ultimately, it is a business decision whether to accept a contract that does not meet our normal expectations.
1 Basic Books, Inc. v. Kinko's Graphics Corp., 758 F. Supp. 1522 (S.D.N.Y. 1991); American Geophysical Union v. Texaco, Inc., 37 F.3d 881 (2nd Cir. 1994); Princeton University Press v. Michigan Document Services, Inc., 1996 FED App. 0357P (6th Cir.)
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