Special Report on Electronic Rights


Freelancers win online copyright case

Overwhelmingly, ASBPE members who responded to a recent survey support the July decision of the U.S. Supreme Court that freelance writers own the electronic database rights to their work unless they have legally transferred them.

ASBPE e-mailed 515 questionnaires about the court decision to its members and received 115 responses (22.3%).

To Agree Or Not To Agree
Nevertheless, 85 (74%) of the respondents agreed with the high court’s decision. Twenty members did not agree and six were unsure.

Thirty-four said their publication’s copyright policy changed in light of the court ruling, and 65 members said their magazine’s policy did not change.

Most members (70 to 75%) said their publications now seek all rights. Five members (5%) said they still seek only print rights. The rest (19 — 20%) said their publications have variations on the “all rights” theme.

Only six knew with certainty that they are paying freelancers more than they did for print-only rights. The additional compensation ranged from 10%–25%.

Freelance facts 74% of members agree with Supreme Court Decision 18% disagree 8% are unsure 75% of members say their pubs seek all rights from freelance writers 5% seek print only 20% seek some variation of all rights Of pubs that pay more for all rights

Many members explained more fully the copyright policies of their publications and companies.

One technical publication at a large publisher used to negotiate custom agreements with each author, varying the compensation and level of rights secured. Generally, its authors were not interested in electronic rights, but
they did want to retain book rights.

In light of the court decision, the publication now buys all rights, exclusive for 30 days. Afterward, rights become shared and both parties have full rights to the material.

Editors at another large publishing house would not always comply with company policy to secure all rights; they feared the loss of quality freelancers.

Subsequently, the policy changed to allow the freelancer to own the copyright, but to give the company exclusive first rights and a “nonexclusive worldwide perpetual license” to reuse the material in any form.

This new license also granted the company, retroactively from January 1, 1999, the right to a given freelancer’s work to create derivative or compilation works. And, like at other companies, freelancers are not paid until they sign such agreements.

Still another large company seeks “work for hire” agreements, but if the writer balks, the company will allow the writer to retain the copyright if the company also gets publication rights.

In a related issue, a letter posted on the Web site of the National Writers Union and sent to U.S. Sen. Patrick Leahy of the Senate Judiciary Committee, indicates the NWU is a party to a class action lawsuit against several publishers for damages related to the past copyright infringement. But the letter also states that that the NWU prefers to negotiate with publishers.

Furthermore, the letter states that the NWU believes that some publishers want to change the copyright law, but it does not state how or who the publishers are.

ABM Not Trying To Change Copyright Law
The American Business Media (ABM), the trade association for business magazine publishers, has neither taken a stance on the issue of changing the copyright law nor has it announced agreement or disagreement with the high court ruling, ABM president Gordon Hughes told ASBPE on Sept. 7.

However, Hughes said that ABM is urging publication companies to obey the law, let freelancers know upfront how their material would be used, and to then negotiate. He said that ABM is not lobbying to change the law.

Whatare the ramifications?

By Lloyd L. Rich, attorney
©2001 by Lloyd L. Rich

Editor’s Note: This article is not legal advice. Consult an attorney before you make decisions or if you have legal questions.

When the United States Supreme Court issued its opinion in The New York Times, et al v. Tasini, et al on June 25, the result was a victory for freelance writers seeking to keep the electronic copyright of their work.

Specifically, the Supreme Court held that the “revision” privilege for collective works does not include republication of the writers’ works in electronic databases. This decision also means that unless a freelancer specifically grants electronic rights to a publisher of a collective work, such as a magazine, then the freelancer controls these rights. (For the complete opinion, click here.)

For many business publishers, the ruling has few implications for the short-term since they already are securing all rights from their freelance authors (see related story, left). However, questions remain about compensation for previous actions by publishers, the “fine-tuning” of what will pass as a revision, and possible changes to the law.

The Lawsuit
Tasini and other freelance writers licensed [one time, North American print publication rights] the publication of their articles to The New York Times and other publications. The writers retained copyright ownership of their articles while the publishers held copyright ownership of the collective work, i.e., the publication as a whole, which contained the writers’ articles.

After publishing the print version of the articles, the publishers permitted electronic publication of them in online databases and CD-ROM products. Consequently, the writers brought legal action against the publishers alleging that the electronic publication of their articles infringed their copyright since the publishers had not been granted electronic publication rights.

The District Court ruling was a victory for the publishers. The court rejected the publishers’ claim that their purchase of print publication rights automatically included electronic rights. However, it ruled that their electronic reuse did not violate the writer’s copyright because the electronic revision of the print publication was permissible under Section 201(c) of the Copyright Act and did not require permission from the writers.

According to Section 201(c), the copyright in an author’s contribution to a collective work belongs to the author unless the author transfers copyright ownership to the publisher. Copyright ownership of the collective work belongs to the publisher. A copyright owner of a collective work who does not have copyright ownership of the individual contributions to the collective work is only permitted to reproduce and distribute

1) the contribution as part of the collective work,

2) any revision of the collective work, and

3) any later collective work in the same series.

The Appeal
On appeal the Second Circuit Court reversed the District Court’s decision, ruling that the Section 201(c) revision privilege did not protect the publisher against copyright infringement. The Second Circuit held that an electronic database was not a revision of the original print publication because when a user searched the database for a particular article that article appeared as a stand-alone and was not displayed within the context of the print publication to which it was contributed. The Circuit Court considered the electronic database as a “new” collective work since it no longer had the creative coordination and arrangement aspects of the print publication, and therefore, was not a revision permitted under Section 201(c).

The Supreme Court decision affirmed the writers’ victory because an article is displayed to the user of the electronic database only as an individual article, without the context provided by the original print edition, including the opportunity to flip page to page to view the complete print edition.

The Supreme Court passed the case back to the District Court to determine the damages the publishers owed the writers. However, the parties could reach an agreement about the continued use of the articles in electronic databases, or if necessary, the courts and Congress could establish a model for the electronic distribution of copyrighted works and the compensation the copyright owners would receive for such distribution.

Immediately after the Supreme Court decision, the Times announced and ran ads stating that it would remove numerous articles written by freelance writers between 1980 and 1995 unless the writers released the Times from liability for previous copyright infringement and waived their rights to receive compensation for an article that had been included in an electronic database.

Tasini, the National Writers Union, and Authors Guild then filed new class action lawsuits against the Times that were subsequently dropped when the Times agreed to cease publication of the ads. My understanding of this new class action lawsuit was that the Authors Guild thought the Times campaign was coercive and an improper settlement.

Meanwhile, many publishers are thought to be deleting freelancer articles from their electronic databases and have implemented new “work made for hire” contracts that require writers to relinquish the complete copyright in their work without receiving additional compensation.

Finally, the Tasini decision stills leaves unanswered questions, such as what should be a freelancer’s compensation when their work is in an electronic database. Although this could be simply negotiated between author and publisher, it is also possible that Congress could establish a compulsory fee or royalty payment for the authors.

Also, would it be a non-infringing revision of a collective work if a search program displayed the print publication in its entirety so that the user, after locating a particular article, could flip through the entire publication? For example, the Supreme Court decision may not preclude a PDF file from being generated of an entire magazine issue, which could be downloaded for printing on a user’s laser printer or viewed in a Web browser, or perhaps the entire print publication could be converted to html and viewed in the browser. This might be considered similar to what occurs with microforms of collective works.

An example of a permissible revision would be an afternoon edition of a newspaper that is a revision based upon the morning edition. Another example could be different editions of a magazine, such as one having different regional covers.

Moreover, because of Section 201(c), publishers who sell printed reprints (and post articles in online databases) of articles must, at the very least, get written permission for reprint rights from the author, even if they cannot secure the copyright. This applies whether the freelancer is paid for the article or not.

When a publication wants the electronic rights to any freelancer’s creative work then the contract with the freelancer must state that these rights are granted to the publication. The publication should negotiate use and compensation issues with freelancers in those situations in which the freelancer had not previously granted electronic rights and electronic publication has already occurred or is planned in the future.

Lloyd L. Rich is an attorney practicing publishing, cyberspace and intellectual property law. Mr. Rich represents a variety of print, electronic and multimedia publishing companies. He writes frequently on publishing issues, and you may sign up for his free newsletter on his Web site.

You may reach him at rich@publishingattorney.com or 1163 Vine Street, Denver, CO 80206; phone (303) 388-0291; fax: (303) 388-0477.

Freelancers win online copyright case

Here are some comments by respondents to ASBPE’s exclusive survey on the decision.

When the United States Supreme Court issued its opinion in The New York Times, et al v. Tasini, et al on June 25, 2001, the result was a victory for a group of freelance writers who were seeking to keep the electronic copyright of their work.

Specifically, the Supreme Court held that the “revision” privilege for collective works does not include republication of the writers’ works in electronic databases.

This decision also means that unless a freelancer specifically grants electronic rights to a publisher of a collective work, such as a magazine, then the freelancer controls these rights.

You can see the complete opinion here.

In an e-mail questionnaire sent to 515 members, ASBPE asked for comments about the decision and about how companies are changing their contracts, if at all. Below are comments from those members who agreed to be published. These comments reflect the opinions of the individual members and not necessarily that of ASBPE as a whole.

ASBPE does not vouch for the accuracy of information contained in the comments. Let the reader beware!

“We treat online as part of the print publication’s overall offering and therefore include it as a basic part of the deal. We also pay competitive rates, and believe our rates compensate fairly for the online use just as they do at every major tech and business publisher we are aware of. As most publishers have discovered, online publishing does not increase profits, though it does help keep a magazine more relevant to the reader and thus boosts overall magazine success, which lets us commission more articles and pay competitive rates.”

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“We buy rights to use the work in perpetuity in any medium, but the freelancer may, after a specified period of exclusivity, resell the piece to other media…. No freelancer has refused to sign. But few have actually returned the contracts sent out approx. 30 days ago.”

« « « 

“If an author sells a story or an article to a publisher, then it belongs to that publisher. Putting it online is no different than having a copy of a magazine or newspaper in the archives at a library. It’s just that the ‘online library’ is more accessible than the local library. However, if the magazine or publication is only an online publication, then they should pay the author (I suspect they already do). We put our magazine online at no cost to the recipient. Some magazines and newspapers do the same. They are not receiving income from the sale of the online articles, therefore they should not have to pay the author a separate or increased fee.”

« « « 

“We communicate, as clearly as we can, the scope of our intentions with the work we purchase. We aim to please our readers, and we want to keep good writers, not alienate them. It is to the writer’s long-term advantage to allow unlimited — or nearly unlimited — use of the material by the purchaser. Exposure, i.e., publicity, is an advantage, not a disadvantage. Most writers do not have the resources to maintain their work, hence, a commercial presence, on high-profile Web sites. We’re not talking about Charles Bukowski, Joyce Carol Oates or Stephen King here. But even with their work, exposure reinforces the brand, which yields yet more sales.”

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“…[W]hile we sell advertising to help offset expenses, Food Distributor is a not-for-profit publication. A company reaping large post-publication profits in electronic media from the work of a freelancer should find a way to reward that writer. It is, of course, entirely possible for editorial staff to be entirely unaware of the ultimate profit rendered from its work!”

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“I agreed with the decision and think that writers should be paid for their work when it’s published online. Magazines put this material on their Web sites in order to draw traffic to the sites, thus creating revenue (through increased ad sales, etc.). If a publication is making money off of online that it paid a writer to produce just for print, then that writer should be better compensated. I know I would want to be paid.”

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“The decision has little or no effect on publishers who do not make their content available via electronic networks. This is a large-publisher issue.”

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“Most of our freelancers have long-term relationships with us, so we don’t feel the need to change our policies. The overwhelming majority are willing work with us and are very agreeable to our requests…. If a writer objects or will not sign or waiver, his/her material does not go on the Web; it remains print only.”

« « «

“Before the decision, there was no effort made to specify web rights in our agreements and we had a long standing policy that we purchased all rights. Since the decision, we specify web rights on the agreements.

“Having spent time on both sides of the issue, I think that the decision is great for freelance writers. That being said, I have yet to run into an author who balked at turning over the web rights. One exception asked for a 10% charge over and above the earlier rate. He is a good writer, so I just looked upon the extra fee as a raise for his past efforts.”

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“We use very little freelancer material that is not on an ongoing pre-negotiated basis. I don’t think we’ve used any since the decision, but we would make sure that any letter of acceptance of freelance material would spell out all rights purchased, including electronic.

“As a consumer, I’m disappointed that some online archives are disappearing. As a writer, however, I want to be paid for that additional use. In an archive situation, I wouldn’t demand the same amount as for the original article, but there should be some extra compensation.”

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“[We are] rigorously policing reprint permission requests to make sure we own the necessary rights to grant permission.

“We pay at or above industry standard and have specified print and online rights for some time, so adding the possibility of including the piece in a database (which we interpret to include our magazine’s online archive) doesn’t seem to warrant additional pay.”

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“Before and since the Supreme Court’s decision, our standard agreements have the following provision (‘in any medium or form of, now existing or hereafter developed’):

“You hereby grant and assign to the [name of publication] the following rights to your Work:

“(1) the exclusive right of first publication of the Work worldwide as part of the above-named publication;

“(2) the nonexclusive worldwide right to edit, reproduce, distribute, perform, and display the Work and to license or syndicate use of the Work, or any part thereof, in any medium or form of communication, now existing or hereafter developed, to others; and

“(3) the nonexclusive worldwide right to use the Work, or any part thereof, in any publication produced by the [name of publication]. In addition, you assign the nonexclusive worldwide right to use the Work to promote and publicize the [name of publication] …, including the right to use your name and likeness biographical data in such promotions. If published, you will be identified as the author of the Work, or co-author if applicable.”

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“Before editors get too hard-nosed, they ought to remember that they are one layoff away from being on the other side of this question. What goes around….”

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“We have been buying electronic publishing rights for about 5 years. Many of our print stories are published on our Web site, so we felt it was necessary.”

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“…. We have recently instituted a policyregarding reuse of one-time photography; a 10 percent of bill gratuity is sent to photographers if original art shot (for cover, corporate features, etc.) is used in a reprint.”

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“We have tightened up the language in copyright agreements to specifically mention electronic version of articles.

“The court seemed sympathetic to what I would presume were writers/columnists that are probably syndicated. I have not studied the court ruling, but that’s my guess.

“If so, the decision is a poor fit with the trade press area where industry specialists author articles for the publication’s readers, which are (by design) their prospective customers. When articles are posted to the publication’s web site, further exposure to their company’s products/technology enhances their ability to compete in their given markets. Most print publications running a significant Web effort hope to break even with Web ad revenues, but few do that well.

“So, it’s silly for authors to expect additional remuneration. If an author is a well-known individual in an industry (e.g., high visibility consultant or sage), then copyright agreements are negotiated so that author has certain rights, like posting the article as is on his/her site.”

« « « 

“We believe our contributors’ work should be available on our Web site but — in the interest of maintaining good relations with them — [we] intend to place it there strictly on a voluntary basis. Thus far, they have been quite to join us in this effort. They understand that we’re not using the work in this manner to gain additional revenue from it, and they are just as eager as we that their material be freely available as widely as possible.”

« « « 

“We’re double-checking our freelancer files for signed contracts. We took a couple of items off of our Web site because we can’t find the signed contracts from a couple of people. I know that they signed the paperwork, [but] it’s not worth digging through the warehouse or trying to track them [overseas].”

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“…[O]ur policy already assumed that they had digital rights so we have taken no action in light of the decision. If we raised our rates next year, it would probably not be directly because of the digital rights issue anyway.

“Freelance writers should have digital rights to their work. The Supreme Court’s decision was appropriate. Unfortunately, the end result may be negligible since most freelancers don’t have the clout to demand more money and just end up signing away those rights when they get the job.”

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“Writers don’t seem to be reluctant to include e-rightsto articles, if that’s stated as part of the deal up front. We won’t pay extra for e-rights, but we pay well and quickly for all work, so our freelance writers build trust with us.

“Remember, niche publications like ours are using freelancers for very narrow industry stories. Realistically, where else are they going to sell them? To one of our few competitors? Better not, unless they want to be cast out into the darkness where there’s wailing and gnashing of teeth — cut off from any hope of assignments in the future. (Why would we want someone that unethical to write for us again?)

“On the other hand, if they can manage to repackage a story for another field entirely, with different quotes, and without our graphic design, it would be hard to object. Trust has to work both ways. I’ve got to trust my writers to give me their best stories; they’ve got to trust me not to demand things retroactively or unreasonably.

“Even if we bought the e-rights to a piece, we’d probably grant specific use of the article text (not graphics, photos or design) back to the writer who created it if they asked for it — provided, as always, it wasn’t for use by a competitor.”

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“It’s the job of the editor to think through usage and negotiate with writers before handing out assignments. Any business person who doesn’t have written agreements with vendors is not much of a business person.”

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“[We are] revising our freelancer contracts to clarify that the article we are soliciting also includes rights for our company’s current and future electronic products and Web sites, as well as all rights.”

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“[We are] making sure that all editors adhere to a policy of getting a signed contract from the freelancer before we print anything. Accounts payable will not sign any invoice unless such a contract is submitted.”

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“[We are developing] new contracts, and also requiring freelancers to have a contract on file before payment will be made.

“I’d like to see some analysis of this decision. Also, does this mean companies only need to make a change in contracts to get the new rights or are they still protected (i.e., you can’t own a freelancer’s work)?”

« « « 

“While I haven’t been able to look at the decision myself, I feel that a publication has the right to use the material for an online version of the publication.

“For example, all the publications I write for post the magazine online — in as close to magazine format as you can get on the web — on the day [the] printed version is officially published.

“However, I disagree with the ruling that publications can repurpose freelance material to a database service … and draw additional revenue off the material without either providing additional payment on the material or having specifically purchased repurposing rights. Publications usually [ask for] first publication rights; adding material to a database exceeds definition in my mind.

“My preference is that database/repurposing rights cannot be sold; if such rights can be sold, then the standard contract will demand them and freelancers will have ‘sold’ these rights without actually gaining any additional income for them. This is effectively giving ownership of the piece to the publication (i.e., who will buy a piece when another publication already has the right to use that piece in any and every market?).”

“Consider: what would stop a newspaper from publishing a book/collection of columns and keeping all the income? Technically, this would just be repurposing of the material.

“The model the music industry uses — where artists receive residuals every time a piece is played — strikes me as a cumbersome but fair way to protect freelancers. To allow a newspaper to pay me $60 for one of my … columns and then own the rights to it for all time in any and every format — potentially generating thousands of dollars over time — seems unbalanced at best.”

« « « 

“Many, if not all, of our nonaffiliated writers are volunteers to start with, so I don’t see much impact on our particular publication. These writers are eager to have their bylines and companies highlighted in the magazine. Our staff and contributing writers’ published works are already property of the magazine.”

« « « 

“We currently do not have an electronic format for the magazine. We may in the future, which will change everything in terms of rights for printed/electronic material, but as of right now, we have no concern over it.

“I might also add that as a freelance writer (above and beyond my job as an editor of a trade publication), I would push for print-only rights for the publisher, and renegotiate my contract if and when electronic rights came into play.

“Frankly, if my material is being printed twice in two different formats, I should be paid for each format. Granted, the initial contracted amount should exceed the second printing (in this case, electronic printing), but there should still be compensation for any extra rights granted.”

« « « 

“[Before the court decision, we] would negotiate custom agreements with each individual author, varying in price, level of rights, etc. For example, few technical writers really cared about electronic rights, but they did want to retain book right to their materials for future book deals.

“[Now we] buy all rights exclusive for a stated time period (30 days) and then shared rights revert back to the authors. We can do anything we want with it, and so can they, but we get a head start on publishing (any and all forms).

“[Companies are] taking away any ability editors had to negotiate, reword, or tailor licensing agreements, even to our longtime, loyal writers. They did allow “shared” rights, but that ends up being confusing overall.

“We have no leverage and are losing at least half of our contributors because they will not sell all rights. Also, the wording is contradictory in the contract, still the lawyers for our company will not allow changes.

“And the wording also uses very broad terminology to suggest the new “all rights” contract applies to ‘all works submitted to [name of publication] for publication both before, if any, and following the effective date.’ This makes writers nervous that the company will try to apply the new contract to anything they’ve written for us over the past 10 years.

“Frankly, in a very specialized, technical market, we don’t have that many contributing writers to choose from in the first place. This change in policy is offensive to our freelancers, who feel like they’ve been loyal to our magazine only to be sold out to the parent company that does not value their contribution.

“In the end, I think the current approach will end up lowering the quantity and quality of technical content we can get into our magazines.”


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