Agents and Agreements
from The SFWA Bulletin #157, Spring 2003
Copyright: Theory and Practice
As codified in the Copyright Act of 1976, the use of a copyrighted work “for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship or research, without the consent of the copyright owner” is not an infringement of copyright. In other words, fair use can be a legitimate defense to an infringement claim.
How do courts decide what is fair use? The Copyright Act requires courts to weigh at least the following four factors (although they can consider any other relevant factors as well): “1) the purpose and character of the use, including whether the use is of a commercial nature or for nonprofit educational purposes; 2) the nature and character of the copyrighted work; 3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole (and sometimes in relation to the defendant’s work); and 4) the effect of the unauthorized use on the market for or value of the copyrighted work.”
To illustrate how a court balances these, consider the landmark case in which a portion of President Gerald Ford’s memoirs were printed in an article in The Nation before Time magazine could exercise its exclusive first serial right to run an excerpt. The court found that 1) The Nation’s intent was to scoop the competition rather than provide the more socially beneficial dissemination of news; 2) creators have the right to decide when and where they will present unpublished works to the public; 3) the 300-word excerpt, small though it was, was nevertheless the “heart of the book;” and 4) it hurt the value of the material since Time refused to run or pay for the contracted excerpt.
Whether a parody infringes on an original work is even more difficult to determine, but a major factor is that “The claimed parody must actually comment on the original work, not on a different topic.” For example, a book using the characters and rhyme scheme of The Cat in the Hat to comment on the O. J. Simpson murder trial was found to infringe because the topic of the parody was the trial and not the original book. But when 2 Live Crew put out “Big Hairy Woman” despite being denied permission to parody Roy Orbison’s “Oh, Pretty Woman,” the court extended fair use “to include the transformative nature of the second work as a key part of the fair use analysis” and allowed the parody to stand.
The Copyright Act overthrew long-standing practices by schools and libraries and a group put together the CONTU Guidelines (www.cni.org/docs/info.policies/CONTU.html) to help them decipher what copying is fair to do. Even better, the University of Texas system has a more extended and user-friendly “Guide to Fair Use of Copyrighted Materials” at www.utsystem.edu/OGC/intellectualproperty/COPYPOL2.HTM. [If you have the Authors Guide Bulletin, note that both URLs in the text are incorrect.] As a thumbnail, “brief portions of copyrighted works may be used for a class if an individual teacher independently decides to copy them, the copyright notice in the owner’s name appears on the materials, and the use is not repeated systematically (for example, through a school system or a class semester).” That last clause is the kicker, as heavy damages have been placed on systematic uses.
In a second article, “Copyright Questioned,” Kay Murray and Michael Gross discuss the Supreme Court’s decision to review a challenge to the Copyright Term Extension Act (CTEA). Professor Lawrence Lessig of Stanford University, a prominent critic of the law, sought a ruling that the CTEA’s extension of copyright by 20 years violated both the First Amendment and the Copyright Clause of the Constitution.
The trial court ruled that there was no First Amendment right to publish another’s copyright work and that Congress had “significant discretion” to decide what constitutes the “limited times” mentioned in the Constitution. The Court of Appeals for the District of Columbia agreed.
However, Murray and Gross believe that the Supreme Court has decided to review based on the argument that Congress failed “to promote the Progress of Science and useful Arts,” the Constitutional phrase, when it extended an already lengthy term of copyright. “How, the logic goes, does bestowing additional protection on an existing work ‘promote Progress’? If an Act of Congress fails to create incentives to invent new works, then it violates its constitutional mandate, and is void.” The current Court has limited Congress’s authority to pass legislation in a number of earlier cases and may follow its own precedents.
A Contract is a Contract
But somewhere along the line, the publisher decided that the book did not “fit within [West’s] current product mix and management no longer thought highly of its ‘market potential.’” They admitted that the decision was not due to a lack of quality in the 1247-page manuscript itself. Chodos sued for breach of contract.
A lower court found no breach but the Appeals Court reversed the decision, ruling that West had a right to terminate the contract only if it found the work to be “unacceptable” in form and content and if it gave the author 30 days notice to correct the claimed defects. The Ninth Circuit reading of the words “form and content” held that these were literary standards and could not be applied to commercial motivation.
The court’s language was very strong, and highly encouraging to authors: “It would be inequitable, if not unconscionable, for an author to be forced to bear this considerable burden solely because of his publisher’s change in management, its poor planning, or its inadequate financial analyses at the time it entered into the contract, or even because of an unexpected change in the market place. Moreover, to allow a publisher to escape its contractual obligations for these reasons would be directly contrary to both the language and the spirit of the standard Author Agreement.”
The Internet and Defamation
Before the days of the mass media, courts followed the multiple publication rule, in which “each time a party communicated a defamatory statement to a third party, it constituted a separate publication for which the statue of limitations began to run anew.” When mass media allowed millions of copies of a book (or magazine or newspaper) to become widely available, often over a period of time, this rule was too cumbersome and a “single publication” rule was substituted. “The statue of limitations runs from that single publication or release date even though sales of a book from stock may continue indefinitely thereafter.”
When the State of New York put an allegedly defamatory report about his management online, George Firth sued the state claiming that “his reputation was injured anew each day that the article was available on the Web,” and that the one-year statute of limitations did not apply.
The New York Court of Appeals didn’t agree. It said that there is “no rational basis upon which to distinguish publication of a book or report through electronic means by making a copy of the text of the Report available via the Internet.” The purpose of the single publication rule, to ensure that the statue of limitations does not extend indefinitely, rules the Internet as well.
Ohio Law Stops Voice Auction
Category Management at Borders
Borders's new tactic is known as category management, which started in the grocery business in the late 1980s.
The plan calls for Borders to choose publishers to co-manage each of 250 categories, ranging from thrillers to sports, based on their expertise. These "captains" will be involved in determining which titles will be carried, the number of titles, and how those books will be displayed. In return, they will help pay for market research. [$110,000 per year, plus $5,000 for each employee Borders trains in this.] Category captains are expected to influence which books will be chosen in their discipline, but Borders itself has the final say on which books will be purchased.
Borders will also rethink where sections are located in its stores; how much space should be allocated to each category; whether books should be configured by author, by subject, by age; and what is stocked. Other issues: Will stores be heavy on best sellers, or do they need key books in, say Native American herbal medicine?
Gary Ruskin immediately helped organize a letter to Borders chair Gregory P. Josefowitz, signed by 28 authors. Ruskin said, as quoted in the Fall 2002 Authors Guild Bulletin, that “It’s all right for chicken cutlets, but this is all about the dissemination of ideas.” The full text of the letter can be found at Ruskin’s Commercial Alert site, http://www.commercialalert.org/PDFs/borders.pdf . It begins: “There is a difference between books and pop-tarts. It should not be necessary to point this out to a man who sells books, but apparently it is. … We urge you to reconsider. Borders is not Albertson's. Such pop-tart marketing likely will slash the range of book titles and ideas available to the public. It will jeopardize smaller presses; and worst of all, it will further strengthen the hand of publishing conglomerates that have too much power already.”
The first implementation of the plan has been seen in the Careers category. According to Gary Matthews on the Publishers Marketing Association web site (www.pma-online.org/scripts/shownews.cfm?id=717), “the Careers book category has been put through the ‘preliminary assortment process’; this is the first step in a multi-step category management program expected to require 16-20 weeks per category to complete. The result of this very basic first step in that category, according to Borders, was a 10% reduction in the inventory stocked and a 4% increase in sales. This was achieved, they say, after the slowest-selling 20 titles out of a typical Careers shelf of about 100 titles were dropped and more copies of the best-selling ones were added.”
The September 2002 Romance Writers Report says that HarperCollins is the lead supplier for the romance category and Random House for cookbooks. Each paid $100,000 for the privilege. Random House is also the lead for the children’s books category, says the September-October 2002 issue of the Society of Children’s Book Writers & Illustrators Bulletin.
Barnes & Noble Flexes Its Own Muscle
B&N’s top brass told Wall Street analysts that its initial focus will be on children’s and popular general-interest titles, both hardcover and trade paperback, because these have the highest gross margins and sales. Chairman Len Riggio has long complained that book prices are too high, so the B&N titles will be more popularly priced while also being better-packaged.
B&N is already doing stealth publishing. “The bestseller by ‘Sex and the City’s” Kim Cattrall and her husband, jazz musician Mark Levinson, Satisfaction: The Art of the Female Orgasm, January 2002, was a joint venture between B&N and Warner Books – but many booksellers didn’t know because B&N’s name isn’t on either spine. B&N touted it is – creating an instant national presence and helping push it onto bestseller lists.”
Robbie Mayes, Farrar, Straus and Giroux’s senior children’s editor, predicted that “B&N will be publishing the equivalent of bargain books, and the most-challenged publishers will be the ones who focus on that market.”
Alas, the suit ended amicably. In December of 2002, the two companies entered into a partnership “in which Random House will grant to RosettaBooks the exclusive rights to publish e-book editions of mutually agreed-upon titles,” to quote from their press release. “For each of the titles it publishes, RosettaBooks will pay an advance and a royalty to the authors and the publisher, much as a paperback publisher or audio book publisher compensates these parties for a license.”
While this does set an informal precedent, the real issue was contract language and the rights of authors to retain rights not specifically assigned. If Random House could, in essence, argue that the term “book” in its older contracts meant any form of book, including electronic ones, so could any number of other publishers. The issue remains open, and could come back to haunt others.
Organization, Publication, Address, Web Address
Association of Science Fiction & Fantasy Artists, ASFA Quarterly, P. O. Box 151311, Arlington, TX 76015-7311, www.asfa-art.org
Authors Guild, Bulletin, 31 E. 32nd St. 7th Floor, New York, NY 10016, www.authorsguild.org/
Romance Writers of America, Romance Writers’ Report, 16000 Stuebner Airline Dr., Suite 140, Spring, TX 77379, www.rwanational.org
Society of Children’s Book Writers & Illustrators, Bulletin, 8271 Beverly Blvd., Los Angeles, CA 90048, www.scbwi.org
Back to the top of the review