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18 October 1999
The insatiable appetite of the Internet for content has precipitated a dispute caused by an ambiguity in Canada's copyright law. Contributors to periodicals are objecting to their articles appearing not only in the print version but also in online versions, or in the case of reviews, being 'rented' to online book and record sellers. Freelance contributors rarely have a written licence or assignment with the publisher for whom they write. Twenty years ago both authors and publishers regarded the asset value of an article to have been fully depreciated once the article had appeared in print. Now that extra revenue can be generated by making articles available through different channels, this ambiguity has led to disputes over the sharing of the extra revenue.
In February 1999 a class action in Ontario on behalf of authors of articles published in Canadian periodicals without written agreement was certified (ie, allowed to proceed). While the decision in Robertson v Thompson Corp (1999), 43 OR (3d) 161 (Gen Div) did not determine that the plaintiffs' rights had been violated, it did decide that it is possible that such a situation might occur and therefore a trial is necessary to settle the question.
A second class action in Electronic Rights Defence Committee v Southam is presently being pursued in Quebec Superior Court with respect to electronic distribution of articles submitted by freelancers to the Montreal Gazette. The case, as of the writing of this article, had not been certified to proceed.
The struggle over who controls printed articles and how the revenue is to be shared is not confined to Canada. In the United States, there have been at least two actions concerning the rights of a periodical to make its publication available through other media, with somewhat different results. The two US actions are interesting because they involved the interpretation of a provision of Title 17 of the United States Code (the equivalent of Canada's Copyright Act). Section 201(c) of Title 17 provides:
"Contributions to Collective Works. Copyright in each separate contribution to a collective work is distinct from copyright in the collective work as a whole, and vests initially in the author of the contribution. In the absence of an express transfer of the copyright or of any rights under it, the owner of copyright in the collective work is presumed to have acquired only the privilege of reproducing and distributing the contribution as part of that particular collective work, any revision of that collective work and any later collective work in the same series."
The first of the two cases, Tasini v The New York Times, 972 F Supp 804 (SDNY 1997), involved versions of The New York Times on CD-ROM and a subscription database service. The CD-ROM The New York Times OnDisc and the NEXIS database contained the text of articles, but none of the artwork or photographs. The articles in both versions were prepared from the tapes used to typeset the paper. However, the layout data were not used in the electronic version. Only the information regarding the author and the page and date of publication were available electronically. The CD-ROM General Periodicals OnDisc was a full image-based reproduction of The New York Times Book Review and Sunday Magazine which displayed images of those sections of the paper as they had appeared in print.
The usually verbal agreements between freelancers and the Times dealt with the subject of the article, its length, the deadline and compensation, but generally not the respective rights of the Times and the authors in the articles submitted.
The question with which the court had to grapple was whether the electronic versions were a "revision of that collective work" or an entirely different collective work. The freelancer plaintiffs contended that a revision must be very much like, if not nearly identical to, the original. Since layout was such an important part of the collective work, an alternate source of the articles that had none of the attributes of the original work must be a new work, not a mere revision. The court did not agree. It pointed to other provisions of Title 17 that contemplate the creation of a 'derivative work' by means of editorial revisions to a pre-existing work. In other words, establishing that a different work had come into existence did not determine whether it was a "revision of that collective work".
The court held that Section 201(c) prohibited a publisher from selling the right to publish an article in another publication. For example, The New York Times could not license Newsweek magazine to reproduce an article from the Times in the magazine. However, the court also held that the section did not prevent a publisher from making its publication available by other means.
Relying in part on an earlier US Supreme Court decision in Feist Publications v Rural Telephone Service, 499 US 340 (1991), the district court held that the test was whether enough attributes of the original work in either layout or selection of articles survived for the new work to be called a "revision of that collective work". The CD-ROM and NEXIS version of The New York Times were held to satisfy the test. The CD-ROM version of the Book Review and Sunday Magazine was also held to satisfy the test.
The plaintiffs had argued that by separating the section from the rest of the paper, the Times no longer fell within Section 201(c). Without explanation, the district court held that the Sunday Magazine and Book Review were self-contained collective works.
In the subsequent case, Ryan v CARL Corp, 23 F Supp 2d 1146 (ND Cal, 1998), CARL ran a database which indexed various articles, but did not contain the content of the articles. When a party wished to have a copy of an article it had located on the database, it would place an order and CARL would photocopy it from the original publication and send it to the requesting party for a fee. CARL also sent a cheque to the publisher for a licence fee and, on the first occasion for a particular publisher, requested permission to do so in future. If permission was granted or the cheque was cashed without comment, CARL would carry on as before. If permission was refused CARL would block the entry in the database so as not to accept orders in future for the blocked publication or article. No attempt to contact the copyright owner of the original article was made.
Prior to certification of the class action, the plaintiffs sought partial summary judgment based on Section 201(c). The defendants argued as their defence that they acted under licence. The district court did not decide that the defendants had infringed the plaintiffs' copyright. While it held that authors and not publishers had the right to reproduce individual contributions to a collective work, it did not decide whether copying the article reproduced the original article or the collective work. It therefore allowed the defence of licence to proceed to trial.
What are the differences in the Canadian statutory scheme that will influence the reasoning of the courts having to address the issue? First, the Canadian legislation raises an issue between the rights of freelance and employee-authors. Section 13 of the Copyright Act provides that the author of a work shall be the first owner of the copyright, but then provides:
"Where the author of a work was in the employment of some other person under a contract of service or apprenticeship and the work was made in the course of his employment by that person, the person by whom the author was employed shall, in the absence of any agreement to the contrary, be the first owner of the copyright, but where the work is an article or other contribution to a newspaper, magazine or similar periodical, there shall, in the absence of any agreement to the contrary, be deemed to be reserved to the author a right to restrain the publication of the work, otherwise than as part of a newspaper, magazine or similar periodical."
By contrast, Section 201(b) of Title 17 provides that for 'works for hire' all rights vest in the employer who is considered the author of the work. Thus, employee-authors in the United States have no copyright under Title 17 respecting their article while in Canada there is a restricted right to prevent publication of the work, "otherwise than as part of a newspaper, magazine or similar periodical".
Issues remain. For example:
All of these questions are yet to be answered by case law. The Canadian Copyright Act defines a collective work as "(a) an encyclopaedia, dictionary, year book or similar work; (b) a newspaper, review, magazine or similar periodical; and (c) any work written in distinct parts by different authors, or in which works or parts of works of different authors are incorporated." However, there is no statutory provision that attempts to define the respective rights of the authors of the individual articles and the owner of the right in the collective work.
It appears that the drafters of the legislation proceeded on the basis that since the publisher of a collective work would require a licence from each author in order to publish, the question of the extent of the licence being granted would be an essential part of the negotiation.
Publishers, in the long run, have the most to lose by not managing the risk to which they are exposed. Every day that publishers sell access to information for which their legal rights are unclear increases their risk. Remedies under the Copyright Act include those provided by Section 35 which provides:
"(1) Where a person infringes copyright, the person is liable to pay such damages to the owner of the copyright as the owner has suffered due to the infringement and in addition to those damages, such part of the profits that the infringer has made from the infringement and that were not taken into account in calculating the damages as the court considers just.
(2) Proof of profits. In proving profits, (a) the plaintiff shall be required to prove only receipts or revenues derived from the infringement; and (b) the defendant shall be required to prove every element of cost that the defendant claims."
The court has the additional power to require delivery-up of all infringing copies. If such an order were made in a class action suit, the effect could effectively destroy the database, and that which remained could be of little commercial worth.
The challenges the Canadian courts and lawyers acting for authors and publishers face will require creative solutions if they are to be overcome, but the problem can not simply be ignored.
For further information on this topic please contact Peter EJ Wells at Lang Michener by telephone (+1 416 360 8600) or by fax (+1 416 365 1719) or by email (email@example.com).
The materials contained on this web site are for general information purposes only and are subject to the disclaimer.
The materials contained on this website are for general information purposes only and are subject to the disclaimer.
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