Copyright Considerations for Fee-Based Document Delivery Ser

Copyright Considerations for Fee-Based Document Delivery Ser

Postby admin » Fri Nov 24, 2017 8:42 pm

Copyright Considerations for Fee-Based Document Delivery Services
by Laura N. Gasaway
© 1999




Document delivery has significant copyright implications for libraries. Despite our bias as librarians toward free universal library service for all, the reproduction of copyrighted works for outside users raises serious concerns for both content providers and for libraries that strive to follow the law. These copyright issues can be addressed by the organization so that users of the document delivery service are still well served while the document delivery service (DDS) complies with the law.

The following discussion makes several important assumptions. (1) The material reproduced is copyrighted. (2) The DDS provides either single or multiple copies upon request. (3) Users of the service are primarily outside the organization and are “customers.” (4) Fees are charged for providing the copy of the document. (5) Fees may be cost recovery or may be greater than just cost recovery. (6) In many instances content providers have valid claims for royalties for reproduction and distribution of their works.

Even with the importance of these issues to both libraries and to copyright holders, to date there has been no litigation involving DDS in nonprofit libraries. In fact, there has been only one case involving a commercial DDS.[1] There certainly has been some posturing on the part of the Association of American Publishers as evidenced in a position paper it published in 1992.[2] This paper made a number of claims that demonstrated a lack of understanding of the differences in document delivery and interlibrary loan as well as the differences between profit-generating and cost-recovery activities. Further, at best, it over stated the law, and at worst, misstated the copyright law to prove its position that libraries which operated a fee-based DDS were violating the copyright law.[3]

A review of the relevant law, examination of the Association of American Publishers (AAP) Position Papers and considerations from the new Digital Millennium Copyright Act[4] provide a foundation for principles that should guide DDS’s.

Copyright Law Basics

Copyright law in the United States is grounded in the Constitution which states that “The Congress shall have the Power … To promote the Progress of Science and useful arts, by securing for limited times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”[5] Promoting learning is thus the goal of copyright; it is not a welfare provision for content providers. The rights given to them under the copyright law are all aimed at furthering the public good of promoting learning among the populace. Thus, there is a balancing of rights between copyright owners and users in the law.

Section 102 of the Copyright Act of 1976[6] provides that copyright exists in any original work of authorship that is fixed in tangible media of expression currently known or later developed. Thus, a work is protected by copyright from the time it is created (the mental part of authorship) and transferred to any tangible form such as paper and ink, print, videotape or computer disk (the physical part). The copyright subsists for life of the author plus 70 years;[7] if there is no personal author, then the term of copyright is 95 years after date of first publication or 120 years after creation, whichever comes first.[8]

When the copyright holder produces a work, she receives five exclusive rights which may be described as a bundle of five rights: reproduction, distribution, adaptation, performance and display.[9] The owner may retain all five rights or may transfer some of them or only certain of the rights. For printed works, at a minimum, the copyright holder generally must transfer the reproduction and distribution rights in order for the publisher to publish the work. If the Copyright Act stopped after § 106 users would still have the right to read works without infringing the exclusive rights of the copyright holder, and libraries could still purchase materials or receive them through a gift and loan them to users. The first sale doctrine says that owner of copy of a copyrighted work may dispose of that copy however he sees fit, including loaning the copy to others.[10] Thus, when libraries lend books and other materials to users they are exercising their rights under the first sale doctrine. The first sale doctrine, however, does not permit libraries to reproduce materials, even for users. There are two important exemptions in the statute that apply to libraries and ensure that reproduction of even copyrighted works for the library itself and for users is permitted under certain conditions.

The first of these is fair use. Fair use is called the safety valve of U.S. copyright law; it is a privilege in someone other than the copyright owner to use a copyrighted work without seeking permission of the copyright owner or paying royalties. In other words, activity that ordinarily would be infringement is excused if the use is fair. It often applies to research and scholarly uses as opposed to commercial uses. Fair use must be judged on a case-by-case basis, so it is difficult to predict whether a particular use is fair or not. Fair use was incorporated into the statute when it was revised in 1976; it states:

… [T]he fair use of a copyrighted work, including such use by reproduction in copies or phonorecords or any other means specified by that section for purposes such as criticism, comment, news reporting, teaching (including multiple copying for classroom use), scholarship or research, is not an infringement of copyright.[11]

The statute then lists four factors that a court must consider when making a determination about whether a particular use if a fair use: (1) purpose and character of the use, (2) nature of the copyrighted work, (3) amount and substantiality used and (4) effect on the potential market for or value of the work.[12] In evaluating the purpose and character of the use, courts favor nonprofit educational uses over commercial ones. On the other hand, not all uses even for education are fair use. In Marcus v. Rowley,[13] the court held that when one teacher copied sections of another teacher’s cake decorating booklet and incorporated the sections into a short work she developed for her students at a community college, even though the use was for nonprofit educational purposes, it was not a fair use.[14] Nor are all commercial uses per se unfair. In Campbell v. Acuff-Rose,[15] the U.S. Supreme Court found that even commercial use may be fair under certain circumstances.[16] Courts also continue to favor productive uses, as opposed to those that merely reproduce a copyrighted work. Thus, extensive quoting from a work to produce a criticism of that work is favored over “slavish copying,” a term used by courts when they are critical of especially photocopying.

Nature of the copyrighted work focuses on the work itself. The legislative history states that there is a definite difference in reproducing a short news note and in reproducing a full musical score, just because of the nature of the work. Moreover, there are some works that by their nature have no fair use rights attached such as standardized tests and workbooklets that by their nature are meant to be consumed.[17] Certain types of works have greater fair use rights attached, for example, factual works such as scientific articles.[18]

Amount and substantiality used considers how much of the copyrighted work was used in comparison to the copyrighted work as a whole. Generally, the smaller the amount used, the more likely a court will find the use to be a fair use. There is no bright line, however, for determining if a certain percentage of a work, number of words or bars of music used qualify as a fair use. It is clear, however, that the larger the portion used of a work, the less likely it is to be fair use. Amount and substantiality also is a qualitative test; even though one takes only a small portion of a work, it still may be too much if what is taken is the “heart of the work.”[19]

The fourth fair use factor, effect on the market for or value of the work, is the economic test for the copyright holder. Courts use this factor to determine whether there has been economic loss to the owner. Even if the loss an owner incurs from a particular use is not substantial, courts have found that should the loss become great if the practice become widespread, then market effect favors the copyright holder.[20]

Although fair use is available to all types of users including libraries and applies to all of the rights of the copyright holder, librarians do not often have to rely on fair use. The second exemption, called the library exemption, is found in § 108 applies to most of the reproduction and distribution that libraries do.

The Library Exemption

All of Section 108 is written so that the library does not have to pay royalties. If the library can operate within the confines of the exemption, then there is no reason to seek permission from copyright owners or pay royalties. Should the library need to go beyond the exemptions in § 108 and § 107 fair use, then it must seek permission and pay royalties if requested. In order to qualify for the § 108 exemption, libraries must meet several criteria. First, the section applies to making single copies of works such as a single copy for a user. Second, the reproduction and distribution must be made without direct or indirect commercial advantage. Third, the library must either be open to the public or to researchers doing research in the same or a similar field. Fourth, copies reproduced by the library must contain a notice of copyright.[21] Each of these criteria has specific implication for document delivery services.

Single as opposed to multiple copying does not present many problems for the typical DDS. The only wrinkle may be in providing fax copies to users. Too many libraries have both faxed a copy of a requested article to the patron and then mailed the photocopy to the user. Even with a legend on the mailed copy that the recipient agrees to destroy the faxed copy upon receipt of the photocopy, this violates the preamble statement in § 108, a library may provide only single copies to a user. Instead, the library should, on the cover sheet accompanying the fax, include a warning that the recipient should check the transmission received and report any problems within a number of hours, such as 48 or 72. If a problem is reported, the library can re-send the bad pages.

The “direct or indirect commercial advantage”[22] limitation is more problematic. The meaning of this phrase has never been litigated, and the legislative history is not abundantly clear. Certainly, if the library is selling copies of articles and other materials for a profit, there is a commercial advantage. If the library charges a fee for providing copies, but that fee is based solely on cost recovery, to include supplies, personnel costs, mailing or delivery costs, electricity, and the like, the transaction is revenue neutral for the library and there is neither direct nor indirect commercial advantage. Therefore, no royalties are due based on § 108(a).

Even a nonprofit library could decide to operate a for-profit DDS to serve business and industry in its area. For this activity, the library must pay royalties. In fact, it could decide to charge a fairly healthy administrative charge in addition to the royalties to compensate for the library for its handling of the fee payment. Even if commercial document delivery services could meet the other § 108(a) requirements, they cannot qualify for the § 108 exemption since the entire purpose is providing the copy is commercial advantage to the DDS.

Also, the library’s collection must be open to the public or to non-affiliated researchers doing research in a specialized field,[23] and certainly many libraries in nonprofit educational institutions as well as public libraries meet this criteria. For other libraries, this criteria might be met even if the collection is not open to the public generally by appointment only for qualified users, such as researchers. Libraries that are not open to any outside users have a more difficult time qualifying under this criteria. It could be argued that a library that is not open to outsiders but which will loan any of its published materials through interlibrary loan also qualifies for this exemption, but the matter has never been litigated.

Each copy reproduced must contain a notice of copyright. This newly amended section now states that the reproduction and distribution must contain a notice of copyright that appears on the copy. If there is no notice, then the library may include a legend “Notice: This work may be protected by copyright.”[24] In other words, the library no longer has any choice about whether it will use the American Library Association notice stamp or the real copyright notice.

Section 108 provides three subsections dealing with the reproduction and distribution of copies to library patrons. Section 108(d) states that the section’s rights of reproduction and distribution apply when the user requests no more than one article from a periodical issue, one chapter from a book or other collective work.[25] So, when a patron ask the library to provide a copy of an article, etc., the library may supply the request if three conditions are met: (1) the copy must become the property of the user, (2) the library must have no notice that the copy will be used for other than fair use purposes, and (3) the library place the Register’s warning on order forms for copies and display prominently the same warning where orders are placed.[26] With DDS patrons, the entire assumption is that the copy will become the property of the user. Because the patron more likely is a distant user, there is little opportunity for the user to report any intended use of the material to a staff member even were the library interested. Instead, the statute simply requires that the library have no notice that the user is requesting the copy for non-fair use purposes. The single article from a journal issue restriction could be a problem when the user or client requests more than one article from an issue. DDS’s not paying royalties, should restrict themselves to one article per periodical issue, one chapter from a book, except as provided by the narrow § 108(e) exemption.

Copies made under § 108(d) must become the property of the user and the library must have no notice that the copy will be used for other than fair use purposes. Additionally, the library must place on the order form and on a sign located where the orders are placed, the Register’s warning.[27]

The copyright law of the United States (Title 17, United States Code) governs the making of photocopies or other reproductions of copyrighted material. Under certain conditions specified in the law, libraries and archives are authorized to furnish a photocopy or other reproductions. One of these specific conditions is that the photocopy or reproduction is not to be “used for any purpose other than private study, scholarship, or research.” If a user makes a request for, or later uses, a photocopy or reproduction for purposes in excess of “fair use,” that user may be liable for copyright infringement. This institution reserves the right to refuse to accept a copying order if, in its judgement, fulfillment of the order would involve violation of copyright law.[28]

Today libraries need to consider modern ways to provide this warning in advance of providing copies to users. For example, if the library receives the request via email, then a sign at a physical location in the library is not sufficient, and instead, the library should forward an email warning before providing the copy of the article to a user.

Section 108(g)(1) is the second subsection that relates to the reproduction for users done under § 108(d). It places other requirements on the library that is making the copy. For example, the reproduction and distribution rights under this section extends to “isolated and unrelated reproduction and distribution of a single copy.”[29] Provision of copies through a DDS to satisfy individual requests are unlikely to be other than “isolated and unrelated.” If however, a user should initially request copies of all or several article from a periodical issue, the DDS should return the request to the user with an indication that the library can provide a copy of only one article from that issue, and that the user should designate which one she wants. The other alternative is for the DDS to pay royalties on the copies beyond the first copy of the first article from that journal issue that the user requests or to require the user to do so.

The exemption found in § 108(d) also applies to copies of the same material on separate occasions.[30] Therefore, the library is not required to retain internal records to determine which items have been requested by someone else. The fact that over time, multiple users request a copy of the item is no problem. In other words, each user is treated as an individual.

On the other hand, the rights of reproduction and distribution granted under § 108(d) also do not apply if the library or its employees is “aware or has substantial reason to believe that it is engaging in related or concerted reproduction of single or multiple copies of materials described in Subsection (d).”[31] Related or concerted reproduction has never been defined by a court. An example might be when a user requests multiple articles from a journal issue and the library refuses to copy more than one article due to the restriction of one article per issue for copying under § 108(d). So, the user comes back each day and requests another article until she has received the entire issue. If the library was aware that it was doing such copying in contravention of the statute, it should refuse to make the copies. If the DDS is paying royalties, then making copies of articles, even all of the article from an issue for a user is not infringement.[32]

Section 108(g)(1) does not exempt the library if it engages in systematic reproduction of single or multiple copies of portions of works described in § 108(d).[33] Systematic copying has not been defined by a court, but there are cases which held that systematic cover-to-cover copying of commercially-produced newsletters in multiple copies was not fair use. There have been some discussions that DDS’s are engaged in systematic copying but not as the legislative history describes it. Interlibrary loan networks and other arrangements involving the exchange of photocopies is specifically not systematic.

The most common example of systematic copying is cover-to-cover copying of commercially produced newsletters. Two for-profit entities have been sued for such activity. Although the earlier case settled, Pasha Publications, Inc. v. Enmark Gas Corp.,[34] was decided in the Northern District of Texas. The library subscribed to both the printed and fax editions of Gas Daily; when each version was received by the company it reproduced copies and distributed to employees. The court held that such activity was not fair and that the company infringed the publisher’s copyright.[35] Television Digest, Inc. v. U.S. Telephone Association,[36] was a similar case except that the plaintiff, U.S. Telephone Association is a nonprofit trade association which copied the newsletter Communications Daily for distribution to its members. The court said that the fact that the plaintiff was nonprofit was immaterial. Newsletter copying is not fair use whether the copying entity was for-profit or nonprofit.[37]

Section 108(e) provides another exemption for libraries to reproduce an entire work or a substantial portion thereof if certain conditions are met. First, the library must conduct a reasonable investigation to determine that a copy cannot be obtained at a fair price.[38] The legislative history indicates that normally this would require consulting commonly known U.S. trade sources such as wholesalers, retailers, jobbers, etc., contacting the publisher or author, if known, or using an authorized reproducing service, i.e., one that has permission from the copyright owner to reproduce the entire work.[39] Unlike § 108(c), this section even requires searching for a copy of the work from used book stores. After such an investigation turns up no copy of a work at a fair price, then the library may reproduce a copy of it for a user. Then the three requirements from § 108(d) also must be met: (1) the copy must become the property of the user, (2) the library must have no notice that the copy will be used for other than scholarship, research, teaching, etc., and (3) the library provides the user with the Register’s warning in advance of providing the copy.[40]

Is Interlibrary Loan Document Delivery?

In the broadest sense interlibrary loan (ILL) is a type of document delivery. Traditionally, however, ILL is a library-to-library transaction, but the newer ILL systems that provide copies directly to end-users blur this distinction somewhat. Publishers have suggested that if the library charges for an ILL transaction, the fees create a commercial advantage for the library. Most libraries that charge for ILL transactions simply use the fees to cover a small portion of the copying, mailing and staff costs. Very few libraries conduct ILL operations even to provide cost recovery, much less to make a profit.

ILL is permitted under the § 108(g)(2) proviso which states:

…Nothing in this clause prevents a library or archives from participating in interlibrary arrangements that do not have as their purpose of effect receipt of copies in such aggregate quantities as to substitute for a subscription to or purchase of a work.

The CONTU interlibrary loan guidelines[41] then go on to specify what are such aggregate quantities to substitute for a subscription to or purchase of a work. The guidelines say that each year a borrowing library may make five requests from a periodical title going back over the most recent five years (60 months). The guidelines take no position on materials older than five years. If the library either owns the title but it is missing from its collection, or if the title is on order, the library does not count the ILL copy in its suggestion of five. If the work is not a periodical, the library may make five requests per year for the entire life of the copyright. The borrowing library must maintain records for three calendar years. The lending library’s responsibility is to require a certification that the request conforms to the guidelines.[42]

As libraries have been forced to cancel expensive journal titles because of escalating costs, many are relying on both ILL and document delivery to provide access to materials for their users. In fact, academic libraries now often are members of the Copyright Clearance Center and directly pay royalties for ILL copies beyond the suggestion of five or from a document delivery service that is not paying the royalties. Libraries may determine that the better alternative is to order the copies for articles beyond the five permitted in the guidelines from a DDS that handles the royalties. The decision as to the route to pursue is based most often on the need for speed, the charges of the document delivery service, and the like. Because libraries are now using both commercial and noncommercial DDS as well as ILL, often these concepts are blurred since the end result for the requesting library is the same: the user receives copies of requested materials, and royalties are paid for copies in excess of the ILL guidelines.

Libraries themselves may have caused some of the blurring of the distinction between traditional library loan and document delivery. Often these two operations are performed in the same section of the library and it may be called the DDS. Libraries may be better advised to keep the distinction between ILL and document delivery differentiated for the library so that staff and clients understand the difference.

A further complicating factor is whether the library pays DDS royalties for its commercial clients while not doing so for ILL requests that it fills from its collection. The borrowing library is responsible for staying within the CONTU guidelines and therefore for paying royalties for copies obtained beyond the suggestion of five. So, when a lending library treats the two activities differently for purposes of copyright royalties, there is no problem with liability. There may, however, be a management difficulty in training staff to recognize the difference and fulfill the requirements of the statute.

Electronic copies

May a DDS provide electronic copies of printed works to its clients as opposed to photocopies? The Copyright Act itself is technology neutral. It always uses the word “reproduce” as opposed to “photocopy,” and many argue that providing an electronic copy to a user is permitted under the library exemption as long as the other requirements of §§ 108(d)-(e) are met. Because one of these requirements is what the copy become the property of the user, the library would not be permitted to maintain a database of scanned articles to use for providing electronic copies in lieu of scanning an article in response to a particular request from a user.

Another consideration is, however, the fact that the CCC has not generally been licensed by publishers to collect royalties for electronic copies. Thus, if the DDS wanted to pay copyright royalties for their clients, individual permission would have to be obtained from publishers. Further, the AAP has stated its express disapproval of scanning as a method to provide copies of documents.[43]

Assuming that these concerns could be solved, there is a question about electronic delivery of copies. The DDS could email the electronic copy to the client or it might consider posting the article on a password protected website. The web posting is likely to raise more concerns on the part of publishers, but the DDS could develop a procedure to post the article, deliver the password to the client, and then remove the article from the web as soon as the client has downloaded the article. The problem with this activity is that it, in effect, involves multiple rather than single copying. One could argue, of course, that the end result is the same: the client ends up with one copy and the other copies are simply incidental to making that copy, and the incidental copies disappear.

Publishers are also likely to be concerned that converting their materials to HTML format compromises the integrity of the information. Therefore using PDF format which discourages alteration of the data may be preferable.

Before deciding to undertake such a project, however, the DDS should be aware of Carl v. Ryan.[44] CarlUncover operates a commercial document delivery service. It charges its clients both for the service of providing copies and for royalties that it pays to the copyright holder. Even if the end user’s use is fair use, Carl still charges for and pays royalties. Over the years Carl has negotiated agreements with publishers to permit it to scan articles whenever a client requests a particular article so it can provide either a faxed or printed copy to the client. When another client requests the same article, Carl then uses its database to provide the copy, but it still pays royalties for the reproduction. All of this is done under agreements with publishers.[45]

Carl was sued by freelance authors because they were not receiving royalties for reproductions of their articles. Instead, publishers received the royalties from Carl. Authors argued that either they transferred to publishers the right to sell individual copies of article or their individual permission was required for Carl to be able to sell individual copies of articles.[46] Carl relied on Tasini v. New York Times Co.,[47] which also concerned the relationship between freelance writers and their publishers. In this case, writers argued that they were entitled to additional royalties when publishers now made their journals available in electronic format in addition to print. When writers transferred reproduction and distribution rights, electronic journals were not envisioned, and the transfers were silent about electronic rights.[48]

The Tasini court held publishers could include freelance authors’ entire collected works in databases without permission or further compensation to authors. The court held that conversion to electronic format was a permissible revision to the collected work.[49]

In Carl, the court found that Tasini was inapplicable. It agreed that authors retained all rights not specifically transferred. While publishers owned the rights in the collective work, such as the journal issue, all they could grant to Carl was the right to reproduce the entire collective work and not individual author contributions.[50] This was contrasted with Tasini where the publishers were creating electronic versions of the journal not copying individual articles.[51] CarlUncover has indicated that the suit will be appealed. If Carl is upheld, then a library operating a for-profit DDS will have to deal with individual authors as well as publishers. In the long run, publisher agreements with authors will probably cover making individual copies of articles available, but such agreements are not likely to be retrospective. Despite creation of the Authors Registry[52] for handling permissions and royalties for individual authors, this likely will discourage many DDS’s.

Another important question arises when the DDS is asked to provide a copy of an article from an electronic journal to which the library subscribes. In that instance the license agreement will control, and the library is bound by the terms of that agreement. When negotiating licenses, libraries should clarify whether e-journals to which they subscribe may be used for traditional ILL and for document delivery to paying clients. It might be possible to negotiate a two-tiered agreement, for example, one that provided one rate and a set of conditions for nonprofit educational use by students, faculty and staff at a university and a different rate for document delivery to outside entities.

To pay or not to pay royalties

Libraries that provide document delivery services may or may not have to pay royalties to copyright holders to compensate for these reproductions of copyrighted works. There are three possible alternatives: (1) the DDS operates on a cost-recovery basis and expects the client to compensate copyright holders if royalties are due; (2) the DDS operates on a cost recovery basis but determines that, as a part of its service to outside clients, it will include royalty fees in its charges and then pay royalties to the Copyright Clearance Center or directly to the copyright holder, or (3) the DDS operates as a for-profit center within the nonprofit library and must pay royalties.

As previously discussed, one important factor is whether the library makes a profit on its document delivery activity or whether the fees it charges are cost recovery or less. Even if the library itself operates its DDS on a cost recovery basis, the client of the DDS still may have to pay royalties to the copyright holders for reproductions of protected works. For example, if the client is in a for-profit library that has a Copyright Clearance Center license for in-house copying, it must pay individually for copies of works obtained from outside entities. Many libraries in the for-profit sector prefer to do business with a DDS that handles the royalties as a part of its service. However, should the company use a library DDS that charges fees only at the cost recovery level for the service, then the end user, the requesting entity, must ensure that permission is sought and royalties paid if due. This raises a question of what the DDS should do to alert the client that it is responsible for any royalties. Some DDS’s stamp each article reproduced with a legend to the effect that if royalties are due for the copy, the client is responsible for them. A for-profit DDS that pays royalties for clients is more likely to mark copies of articles with a legend “royalties cleared” or “royalties paid.”

A number of DDS’s have determined that even if their fees provide cost recovery only, they will offer as a part of their service, taking care of the royalties. Not only do they charge their regular fee to the client, but they also include fees for the royalties and even an additional administrative charge for taking care of the copyright royalties and record keeping. These DDS’s generally establish accounts with the CCC.


In his excellent book chapter on ILL, DDS and recent litigation, James S. Heller suggests some guidelines for libraries that operate a DDS.[53] With one change necessitated due to the Digital Millennium Copyright Act, the guidelines remain a good advice for today. (1) The library pays royalties when appropriate regardless of whether the work is registered with the Copyright Clearance Center. (2) The library limits copying to one copy for a user without paying royalties. (3) Multiple copying for a user is done only when royalties are paid. (4) The library limits copying to no more than half of a periodical issue without seeking permission and paying royalties. (5) If the library faxes the copy to a user, the library destroys the incidental photocopy made. (6) If the library sends the user a digital copy, the library does not retain a digital copy for itself. (7) A library that requests materials through ILL follows the CONTU guidelines. (8) Lending libraries do not provide ILL copies if they know that the request exceeds the CONTU guidelines.[54]

Only the final guideline must be changed based to reflect the new requirements on reproducing the copyright notice that appears on the work. Heller recommends that copies be stamped with” This material may be protected by Copyright Law (Title 17, U.S. Code).” Due to the changes effected by the Digital Millennium Copyright Act, each copy must reproduce the actual copyright notice and use the legend Heller suggests only if there is no notice on the work.[55]

There are benefits to DDS’s that simply handle the royalties for all clients as a part of the service it provides. Others find it more advantageous to expect the client to take care of any royalties due to the copyright holder for reproduction of articles. Whether a library DDS determines that including the payment of royalties is a service it wants to offer depends on a number of factors. Some considerations might be: (1) whether clients willing to pay an administrative charge to reimburse the DDS for its efforts, (2) whether the library has combined a DDS and ILL into the same management unit, (3) the scope of the library’s collection, (4) level of DDS activity, (5) advertising activity or plans for such, and (6) client demands. Since a DDS in a nonprofit library is only one unit of a complex organization rather than the entire business of a commercial service, the decisions made about how to handle the copyright issues may vary from one library to another.

One thing remains clear. If the DDS operates on a fee schedule that is greater than cost recovery, then the library is receiving a commercial advantage for this activity and it has moved outside of the § 108 library exemption and it must pay royalties.



[1] Ryan v. Carl Corp., 23 F. Supp.2d 1146 (N. D. Cal.1998).


[3] Id.

[4] Pub. L. No. 105-304, signed October 28, 1998.

[5] U.S. Const. Art. I, § 8 (1994).

[6] 17 U.S.C. §§ 101-1332 (1994, as amended by Pub. L. 105-298, October 27, 1998 and Pub. L. 105-304, October 28, 1998).

[7] Id. § 302(a), as amended by Pub .L. 105-298, October 27,1998.

[8] Id. § 302(c).

[9] Id. § 106.

[10] Id. § 109(a).

[11] Id. § 107.

[12] Id. § 107(1)-(4).

[13] 695 F.2d 1711 (9th Cir. 1983).

[14] Id. at 178-79.

[15] Luther Campbell a/k/a Luke Skywalker v. Acuff-Rose Music, Inc., 510 U.S. 569 (1994). In this case the rap group Two Live Crew produced a music parody of the Roy Orbison hit “Pretty Woman.”

[16] Because the rap group sold the CD on which the song parody was found, the use of the copyrighted Orbison song was a commercial use. The Court stated that even a commercial use may be a fair use. Id. at 584-85.

[17] S. Rept. No. 460, 94th Cong., 1st Sess. (1975), reprinted in 13 OMNIBUS COPYRIGHT REVISION LEGISLATIVE HISTORY 64 (1977).

[18] American Geophysical Union v. Texaco, Inc, 37 F.3d 881, 893 (2d Cir. 1994).

[19] Harper & Row Publishers v. Nation Enterprises., 471 U.S. 539, 564-65 (1985).

[20] Texaco, 37 F.3d 896.

[21] 17 U.S.C. § 108(a) (1994).

[22] Id. § 108(a)(1).

[23] Id. § 108(a)(2).

[24] Id. § 108(a)(3), as amended by Pub.L. No. 105-304, § 404, Oct. 28, 1998.

[25] Id. § 108(d).

[26] Id.

[27] Id.

[28] 37 C.F.R. § 201.14 (1998).

[29] Id. § 108(g)(1).

[30] Id.

[31] Id. § 108(g)(1).

[32] Id.

[33] H. Rept. No. 1476, 94th Cong., 2d Sess. (1975), reprinted in 17 OMNIBUS COPYRIGHT REVISION LEGISLATIVE HISTORY 77-78 (1977) [hereinafter House Report].

[34] 22 U.S.P.Q.2d 1076 (N.D. Tex. 1992).

[35] Id. at 1076-77.

[36] 47 P.T.C.J. 32 (D.D.C. 1993).

[37] Id. at 33.

[38] 17 U.S.C. § 108(e) (1994).

[39] House Report, supra note 33, at 76.

[40] 17 U.S.C. § 108(e) (1994).

[41] Conf. Rept. No. 94-1733 2d Sess. (1975), reprinted in 17 OMNIBUS COPYRIGHT REVISION LEGISLATIVE HISTORY 71-74 (1977)

[42] Id. 72-73.

[43] See Association of American Publishers, AAP POSITION PAPER ON SCANNING (1994).

[44] 23 F. Supp.2d 1146 (N. D. Cal.1998).

[45] Id. at 1147.

[46] Id. at 1149.

[47] 972 F. Supp. 804 (S.D.N.Y. 1997).

[48] Id. at 806.

[49] Id. at 826-27.

[50] Carl, 23 F. Supp.2d, at 1149-50.

[51] Id. at 1150.

[52] See

[53] James S. Heller, “The Impact of Recent Litigation on Document Delivery and Interlibrary Loan,” in Laura N.Gasaway, GROWING PAINS: ADAPTING COPYRIGHT FOR LIBRARIES, EDUCATION AND SOCIETY 189, 212-15 (1997).

[54] Id. at 212-14.

[55] 17 U.S.C. § 108(a)(3)(1994), as amended by Pub.L. No. 105-304, § 404, October 28, 1998.

James S. Heller, “The Impact of Recent Litigation on Document Delivery and Interlibrary Loan,” in Laura N.Gasaway, GROWING PAINS: ADAPTING COPYRIGHT FOR LIBRARIES, EDUCATION AND SOCIETY 189, 212-15 (1997).

Id. at 212-14.

17 U.S.C. § 108(a)(3)(1994), as amended by Pub.L. 105-304, § 404, October 28, 1998.
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