Copyright Office Section 108 Study Group Releases Report

March 31, 2008. The Copyright Office's (CO) Section 108 Study Group released a report [252 pages in PDF] titled "The Section 108 Study Group Report".

This CO group has twenty members. It is stacked with representatives of universities, libraries, archives, and their allies. However, it also has five publishing industry members, two entertainment industry members, and one software industry member.

This CO group held several public roundtables around the U.S., and reviewed two sets of public comments. The movie and record industries were active in this process, along with text publishers, universities, libraries, archives, and museums.

This massive report contains a library sector wish list of exemptions to liability for copyright infringement. However, this list is tempered by the involvement of several well organized copyright sectors -- especially the movie, music, and software industries. Many other copyright interests would be harmed if the proposals in this report were enacted into law.

17 U.S.C. § 108 is titled "Limitations on exclusive rights: Reproduction by libraries and archives". It provides exemptions from liability for infringement for libraries and archives.

The report contains numerous recommendations for amendment to Section 108. Also, it states that the CO "will propose draft legislation for amending section 108". If enacted, these proposals would greatly expand the ability of libraries, archives, and museums to reproduce, distribute, and perform copyrighted works, without license. It would also enable users of libraries, archives, and museums to make and obtain infringing copies of copyrighted works.

The primary losers would be authors and owners of text and web based copyrighted works.

The proposals would not greatly affect the interests of the music, movie, and interactive games industries. For example, it rejects the idea of creating an exception to the ban on circumvention for Section 108 purposes. It also rejects expanding the scope of affected works to include any of the currently excluded categories of "musical work, a pictorial, graphic or sculptural work, or a motion picture or other audiovisual work".

Also, the report's proposals do not contain many things that might have harmed the book publishing industry. For example, it rejects the idea of providing a Section 108 exemption for Google Books type copying. It also contains no legislative proposal to allow abrogation of contract terms in agreements between publishers and libraries for the licensing of digital works. It also rejects an exemption for electronic reserve reading materials at university libraries.

The report asserts that "Section 108 is out of date and in many respects unworkable in the digital environment." It adds that "To ensure that section 108 is workable in the digital environment ... its provisions should be amended to address current technologies in a manner that is fair to rights holders and the users of libraries and archives alike."

While some provisions of Section 108 are out of date, much of what the library sector seeks in this report is the creation of new exemptions to facilitate an expanding mission for libraries. The library sector also seeks greater freedom to copy works in many contexts.

Beneficiaries of Section 108. Section 108 applies to "libraries and archives" and employees acting within the scope of their employment. Neither Section 108, nor Section 101, the definitional section of the Copyright Act, define either "library" or "archive". However, the Act sets forth some minimal criteria for eligibility.

The report recommends that "Libraries and archives should be required to meet additional eligibility criteria. These new eligibility criteria include possessing a public service mission, employing trained library or archives staff, providing professional services normally associated with libraries and archives, and possessing a collection comprising lawfully acquired and/or licensed materials."

This recommendation is notable for what it omits. For example, there is no requirement that the entity possess either a physical building or any physical works, such as books, papers, photographs or drawing. An exempt entity could be entirely virtual, and possess nothing but digital copies of protected works. The "lawfully acquired" requirement would not forestall Section 108 protection for virtual library whose collections consist of unlicensed works which have been acquired lawfully under exemptions provided by Section 108.

However, much later the report states that "Currently there are very few examples of virtual-only libraries and archives that meet the existing and recommended criteria for section 108 eligibility. The Study Group discussed, but did not agree on, whether it is premature to determine if virtual-only libraries and archives should be covered by section 108."

The report recommends that eligible entities should have a "public service mission", whatever that term might mean. Notably, there is no proposal to restrict eligibility to "non-profit", "university", "government" and/or other defined categories.

The report elaborates that "When section 108 was adopted in 1976, there was a shared understanding that libraries and archives were trusted, stable institutions with missions to collect, preserve, and make available materials and resources of cultural or scientific significance. As a result, it was not necessary to explain or define which types of libraries or archives were intended to be covered".

But now, "Widespread use of digital technologies to save and aggregate documents has encouraged the use of the terms ``library´´ and ``archives´´ in a broad sense to include various collections of information in digital form."

Also, Section 108 currently applies only to libraries and archives. It does not extend to museums. The report recommends that Section 108 should be amended to cover museums. However, the report adds that "there was not agreement on the inclusion of for-profit museums."

Outsourcing and Google Books. The report recommends that entities covered by Section 108 be allowed to outsource activities permitted by Section 108, subject to certain limitations. However, it does not go so far as to recommend allowing outsourcing to a commercial entity, such as Google, that will also commercially benefit from the copying.

The report recommends as follows:

Google has a Google Print for Libraries (GPL) program that involves the scanning of books in the collections of large libraries, including the University of Michigan (UM), Oxford, New York Public Library (NYPL), Harvard and Stanford.

The UM has stated that it will make available for scanning all books, including those under copyright. UM wrote in its web site that "We get a copy of the digital files with no significant constraints on our ability to use them in ways that are consistent with copyright law."

On October 19, 2005, five book publishing companies filed a complaint in U.S. District Court (SDNY) against Google alleging that its GPL infringes copyrights. The plaintiffs are McGraw Hill, Pearson Education, Penguin, Simon & Schuster, and John Wiley & Sons. All are members of the Association of American Publishers (AAP). (Wiley, Penguin and the AAP have participated in the Section 108 Study Groups proceedings.) See also, story titled "Major Book Publishers Sue Google for Digitizing Copyrighted Books" in TLJ Daily E-Mail Alert No. 1,237, October 20, 2005.

On September 20, 2005, the Author's Guild and others filed a similar complaint in the same District Court against Google alleging copyright infringement in connection with the same GPL. See, stories titled "Author's Guild Sues Google for Copyright Infringement" in TLJ Daily E-Mail Alert No. 1,218, September 21, 2005, and "University Publishers Accuse Google of Systematic Infringement of Copyright on a Massive Scale" in TLJ Daily E-Mail Alert No. 1,142, May 25, 2005.

See also, story titled "Google, Publishers and Authors Debate Google's Print for Libraries Program" in TLJ Daily E-Mail Alert No. 1,239, October 25, 2005.

Google pled Section 108 as an affirmative defense to allegations of copyright infringement in pending litigation.

Subparts a and b of the above quoted recommendation would preclude Google from claiming a Section 108 exemption.

The just released report recommends that "contractors be contractually prohibited from conducting any section 108 activities on their own behalf or for their own benefit, other than for direct compensation for services. Activities conducted in whole or in part for a business-related purpose of the contractor or where the contractor retains copies for its own purposes are not currently covered under section 108 and should not be covered by any new provision permitting libraries and archives to authorize others to perform the section 108-excepted activities."

The report continues in a footnote that "The Google Books Library Project, in which Google scans books from a partner library’s collections and then retains copies for its own independent business purposes, is an example of the type of activities conducted by a contractor for its own purposes that would not be covered under this recommendation."

The report adds, "State-operated entities performing section 108 activities through the use of contractors should be required to waive or agree not to invoke sovereign immunity, if it is legally possible for the state-operated entity to do so."

Web Site Copying. The report recommends providing Section 108 protection for large scale unlicensed copying and distribution of entire web sites, and software that runs web sites.

It recommends that "A new exception should be added to section 108 to permit libraries and archives to capture and reproduce publicly available online content for preservation purposes, and to make those copies accessible to users for purposes of private study, scholarship, or research."

It adds that "Libraries and archives should be permitted to make the captured content available remotely to their users ..."

Once libraries make copies, and make these remotely available, there is little or nothing that these libraries can or will do to ensure that further copying and distribution does not take place.

Allowing libraries to copy and make available web sites would decrease the traffic to, and hence the revenues of, advertising supported web sites. Moreover, to the extent that libraries make copied content available without ads, users might prefer the libraries' copied versions.

This proposal would also undermine the ability of web site operators to make new content available for free, but sell access to archived content. The archived content might be available for free in library web sites.

The report adds that "Libraries and archives should be prohibited from engaging in any activities that are likely to materially harm the value or operations of the Internet site hosting the online content that is sought to be captured and made available." It does not state how this should be implemented.

The report also states that "Libraries and archives should be required to label prominently all copies of captured online content that are made accessible to users, stating that the content is an archived copy for use only for private study, scholarship, and research and providing the date of capture."

This is notable for what it does not require. There is no requirement that the library reproduce information about authorship or copyright. Thus, it authorizes the creation of what representatives of the library sector call "orphan works". Libraries are lobbying for separate legislation to substantially reduce the ability of rights holders to enforce their copyrights in "orphan works".

The report also states that there should be an opt out procedure for web sites, and a procedure for rights holders to send notices requesting that libraries take down copied web sites.

To the extent that most rights holders would not have the ability to monitor and police copying by hundreds of thousands of libraries, archives and museums, the opt out and notice proposal would not protect the interests of rights holders.

Library User Copying. The report proposes that "Subsection 108(f)(1) should be amended so that nothing in section 108 is construed to impose liability for copyright infringement upon a library or archives or its employees for the unsupervised use by a user of the user’s personal reproducing equipment, provided the library or archives posts notices visible in public areas of its premises stating that the making of a copy may be subject to the copyright law."

That is, libraries would escape liability, either direct or vicarious, when their users come in to their premises with scanning or other copying equipment to copy protected works. So long as the library does not supervise the copying, and posts a "subject to the copyright law" notice in a hallway, no amount of knowledge, encouragement, or assistance could result in library liability.

Interlibrary Loan Programs. The report also proposes converting existing interlibrary loan (ILL) programs for hard copies into another venue for copying and distributing copyrighted works in digital format.

It proposes the amendment of Section 108 to allow libraries to digitally copy a work, and then make ILLs by "electronic delivery of digital copies".

The report acknowledges that "if libraries and archives are permitted to provide electronic copies to users, there is a greatly increased risk that users may further distribute copies of those works, potentially displacing sales", but makes the recommendation nevertheless.

No Expansion of Section 108 for Music and Movies. Currently, Subsection 108(i) provides that Section 108 exemptions do not apply to "musical work, a pictorial, graphic or sculptural work, or a motion picture or other audiovisual work other than an audiovisual work dealing with news".

The report recommends a narrowing, but recommends further study. This protects the interests of the record industry, the movie industry, photographers, and others.

Abrogation of Contracts. The report reflects that libraries wish to continue to contract with content providers, but not be bound by the contracts that they have executed to the extent that they limit library use of licensed content. However, the report does not go so far as to propose legislation abrogating contract terms.

The report states that "The Study Group agreed that the terms of any negotiated, enforceable contract should continue to apply notwithstanding the section 108 exceptions, but disagreed as to whether section 108, especially the preservation and replacement exceptions, should trump contrary terms in non-negotiable agreements."

What then are "non-negotiable agreements"? The report suggests that these include contracts that libraries have negotiated. when the rights holder has "the upper hand" and the offer is "take it or leave it".

The report elaborates that "Libraries and archives now obtain access to many digital materials through license rather than through the purchase of physical copies. Licensing provides significant benefits to libraries and archives in terms of efficiency, flexibility, and storage. At the same time, many librarians and archivists are concerned about those license terms that restrict the ability to use the section 108 exceptions and the increasing predominance of licensed over purchased materials, which could render section largely irrelevant, particularly for licensed, born-digital works."

Circumvention. The report states that "The Study Group discussed proposals to allow the circumvention of TPMs for the purposes of exercising the section 108 exceptions, and while all agreed that the role of libraries and archives in preserving copyrighted works is a matter of national concern, there was not agreement on whether a recommendation in this area was needed and, if so, what kind of recommendation would be appropriate." This protects the interests of the record, movie, interactive games, and software industries.

Online Reserve Reading at Universities. The report states that "The Study Group discussed whether to recommend any changes to the copyright law specifically to address e-reserves and determined not to recommend any such changes at the present time."

Remedies. "The Study Group discussed, but did not agree on, whether section 505 should be amended at this time."

17 U.S.C. § 504 already has an exemption from liability for statutory damages for libraries and archives acting in good faith. The question is whether to carve out another exemption for attorneys fees.

The report also contains numerous other proposals not reviewed in this article.

See also, stories titled "Library of Congress to Examine Digital Copying Under Section 108" in TLJ Daily E-Mail Alert No. 1,318, February 27, 2006, and "Library of Congress Comments Section 108 Exemptions and Book Scanning" in TLJ Daily E-Mail Alert No. 1,321, March 2, 2006.