NWU Opposes UK Scheme for “Extended Collective Licensing” for Digital Rights

Feb. 5, 2018 — This week the NWU responded to a public consultation by the U.K. Intellectual Property Office (IPO) — the British counterpart of the U.S. Copyright Office — to oppose an application by the U.K. Copyright Licensing Agency (CLA) for authorization to operate an extended collective licensing (ECL) on behalf of all writers of all written works published anywhere in the world, including rights to digitzation and distribution of digital copies.

That’s quite a mouthful of acronyms and jargon! What does this mean? Why does it matter to U.S. writers? Why is the NWU opposing this application?

What is “extended collective licensing (ECL)?

There’s a backgrounder on extended collective licensing and why the NWU opposes it for digital rights here. The essential idea of an ECL scheme is to authorize an organization of writers, or of writers and publishers (even if those publishers hold none of the rights in question) to license and collect payments for copying, scanning, distribution, or other uses of copyrighted works, regardless of whether the creators are members of the organization or have given their permission.

CLA’s existing licenses cover works written and published by its members in the U.K., and works by U.S. and other foreign writers that CLA has been explicitly authorized to offer for licensing through the Copyright Clearance Center or other licnesing agencies. If the ECL application now pending before the IPO is approved, CLA will be able to offer licenses to any written work from anywhere in the world. If CLA is given that authority, it plans to use it, as discussed further below, to license new schemes such as scanning and digital distribution of the world’s largest magazine collection, much of which was published in the U.S. 

Why does the NWU oppose ECL for digital rights? How would this undermine our rights and revenues?

Our essential argument for many years has been the same one we made in the comments we submitted to the IPO this week:

In general, and with respect to this application, the NWU opposes extended collective licensing (ECL) of digital rights.

We have explained the basis for this position in detail, most recently in a joint submission to the US Copyright Office in response to the request of that office for comments concerning possible legislation to authorize a pilot program ECL for mass digitization in the US. (After consideration of the public comments, the US Copyright Office decided to recommend against any such legislation.

As we said in our most recent comments to the US Copyright Office on ECL for digital rights, “Our primary concern is that any ‘extended collective licensing’ (ECL) for mass digitization of library or archival holdings will, regardless of any attempted limitations on the included works or authorized uses and any ‘opt-out’ provisions or nominal ‘royalty’ payments, inevitably result in the granting of licenses for new digital editions that will compete unfairly with, and cannibalize larger potential revenues from, our own digital editions of our work.”…

Our objection is not to collective licensing in general, or to ECL in general.

As we said in our most recent comments to the US Copyright Office, “The NWU and SFWA have supported collective licensing systems, and certain secondary uses of many NWU and SFWA members’ work are available for licensing through the [Copyright Clearance Center] or other such agencies…. The NWU, SFWA, and many of our members receive money from … ECL schemes for photocopying in foreign countries of books, articles, etc. by US writers.”

Our objection is specifically to extended collective licensing for digital rights.

To reiterate the explanation we provided to the US Copyright Office:

“The test for the legality of these ECL schemes is whether they interfere with the normal commercial exploitation of writers’ rights to our ‘backlist’ works. Very few US writers are actively exploiting the rights to photocopying in foreign countries of editions of their work that were previously published in books, periodicals, or journals. And photocopies made in foreign countries are unlikely to make their way back into the US to compete with other editions of the same works….

“On the other hand, ECL schemes for digitization, rather than photocopying, fail the same test. Digital copies made under ECL licenses directly compete with, and divert readers and revenues from, other authorized digital editions.

“Many writers are actively exploiting our digital rights, including our rights to works previously published on paper in books, periodicals, or ephemera, and potentially held by libraries or archives in these formats. The primary source of continuing revenues from the rights to most ‘backlist’ written works previously published in books, printed journals, ephemera, or other printed formats, and included in library or archival collections, is not photocopying or the publication of new hardcopy editions but the distribution of new digital editions. These new digital editions, often self-published, take the form of e-books, paid PDF downloads of digital ‘offprints’, content on our own revenue-generating websites, smartphone app content, etc.

“Someone who reads a digital copy of one of our previously-published works made under an ECL scheme doesn’t pay to download a PDF offprint or self-published new e-book edition, and doesn’t click on any of the ads on the pages of our website on which we have republished all or parts of the work (or of a new edition of it).

“In a world where most revenues for Web publishing come from advertising, clickstream diversion deprives writers of revenues and interferes directly with the normal commercial exploitation of digital rights.

“Extended collective licensing for digitization would, in this way, deprive writers of income and violate the Berne Convention. ECL may be appropriate for photocopying and perhaps some other secondary rights, but not for digital copying or digital format conversion (scanning) rights — the primary and most valuable rights to most backlist works.”

Most writers need publishers, distributors of physical copies, and/or collective licensing agencies to exploit our rights to physical copying and making available our works abroad in hardcopy formats. Not so much, if at all, with respect to rights to digital copies, which we can distribute directly worldwide.

By enabling writers to distribute our work directly to readers abroad, and to generate revenues from that distribution, the Internet makes it unnecessary, in most cases, for us to rely on collective licensing agencies to exploit our digital rights.

Many writers, of course, would prefer to assign the exploitation of those rights to a collective licensing agency, just as many writers would prefer to assign the exploitation of print rights to a publisher. Those who wish to do so can. But many writers would choose to exploit these rights ourselves, and this is a choice to which we are equally entitled. Writers must be free to make this choice for ourselves. It should not be imposed on us by law or regulation.

Our opposition to this proposal should come as no surprise to the IPO or to CLA. We’ve taken a consistent position against ECL for digital rights for the last decade in lawsuits, with the U.S. Copyright Office, with the U.K. Intellectual Property, and with the European Union.  Over and over, we’ve explained how ECL schemes — from the proposed settlement of the Google Books lawsuit (a de facto ECL scheme proposed as a settlement, which we opposed and which was rejected by the court as unfair) to ECL schemes for works deemed “orphaned” if they were published anonymously, or “out of commerce” if they were included in an edition that is out of print — interfere with writers’ own efforts to earn money from these same rights and to chose whether or how to license, copy, and/or distribute new editions in new formats. Other organizations of U.S. writers have often joined us.

In addition to the general problems with all ECL schemes for digital rights, there are problems with the scope and procedures of this one in particular.

Would U.S. writers be able to “opt-out” of this ECL scheme, if we want to exploit our digital rights in some other way?

CLA has asked for the authority to issue licenses for certain uses of any written work published anywhere in the world. But there is no evidence that CLA represents US or other writers outside the UK, or understands how we are trying to earn a living from our wwriting.

CLA says that writers can “opt out” of having our work included in their licenses. But as we show with examples, CLA’s database of works available for licensing includes books by writers who have alreeady opted out, books for which neither the publisher nor the author has given CLA permission, books published in the U.S. listed as having been published in the U.K., and other errors. In addition:

CLA fails to note that its search tool returns results only for names of authors of entire books, and for titles of entire books or titles of periodicals. It does not appear to return results for authors or titles of articles, stories, poems, or other works included in periodicals, anthologies, or collections.

The CLA search tool is thus completely useless for authors of short-form works. It cannot be used to determine whether or which of their works are being offered for licensing by CLA, or to verify whether their opt-out requests have been acted on.

Of course, CLA will have received no complaints about those listings in its database which writers can neither search for nor review. In the absence of any means for writers to verify the completeness, accuracy, or opt-out status of these entries in the database for short-form works included in periodicals, anthologies, or collections, it would be premature to make any finding that the database is accurate or complete, or provides an adequate basis for an opt-out scheme.

The U.K. ECL regulations require a public list of every writer who has opted out, and their works. As we explain to the IPO:

With respect to a writer who has chosen to publish her work anonymously, a “right” to opt out which is contingent on identifying herself as the author of that work, and having her name and that identification made public, is no right to opt out at all….

This is especially significant with respect to digital publications. In the hardcopy world, a writer typically needs a publisher as an anonymizing proxy in order to exploit rights to her work anonymously. In the digital environment, there are numerous ways that works can be profitably self-published anonymously. Revenues can be generated through advertising, through payments for digital downloads or subscriptions by PayPal to an account associated with an anonymous e-mail address, or through licensing of editions in other digital formats.

The greater ease of anonymous exploitation of rights in the digital environment has led to a publicly beneficial explosion of anonymous publication. Muckrakers, whistleblowers, writers on stigmatized subjects or in stigmatized genres, writers who would fear stalking, harassment, or retaliation if their identities became known, and writers who want to write on intimate topics without themselves or their intimate friends or families being identified, all have new options in the digital environment for earning a living from their writing. The public benefits from the availability of these works.

Many of these writers could not afford to produce these works if they were not able to exploit their rights to them. Many of them would not publish these works if publication or exploitation of rights required being publicly identified.

What kinds of works will be scanned and made available in digital form if if this ECL scheme is approved?

A key goal of CLA in applying for a mandate from the IPO to license works written and published worldwide is for CLA to be able to issue a license to the Hyman Archive to scan and distribute digital copies of what it claims is the world’s largest private collection of magazines. The Hyman Archive is in London, but many of the magazines in its collection were published in  the U.S.

The Hyman Archive owns physical copies of magazines. But the archive doesn’t own any of the rights to reprint them or distribute them in digital or other formats. In our submission to the IPO, the NWU quotes from an interview given in 2015 by James Hyman:

We are working with the Copyright Licensing Agency (CLA) and industry stakeholder groups (publishers, authors and photographers) to obtain an Extended Collective Licence (ECL) which will enable us to digitise and commercialise the contents of the Archive.

Having obtained an ECL, we will then digitise the archive’s contents – which is continually growing, both with back-issues and new edition issues – highly meta-tag it, as well as add social & cultural analytical functionality to enable people to visualise and manipulate the data.

Undoubtedly, it will be the biggest and most important new print digitalisation project taking place in the world today.

Mr. Hyman and Lewis Chester, the hedge fund manager and investor who has partnered with him to try to commercialize his magazine collection, have said the same thing about their plans in meetings with NWU leaders since 2015.

We’ve told them the same things we told the IPO this week: Many NWU members and other U.S. writers are earning good money from new editions — in print, as short-form e-books, on the Web, as app content, and in other formats, many of them self-published and digital– of articles and stories that were licensed for one-time publication in magazines or periodicals. According to the U.S. Supreme Court decision in New York Times v. Tasini, the NWU’s landmark lawsuit, digital rights to those articles belong to their authors, and don’t have to be shared with publishers of print periodicals or anyone else. Writers are free to reuse or reissue their works. The ECL scheme that the Hyman Archive and CLA are proposing for these articles would divert readers, undermine current revenues, and violate the rights of U.S. writers under both U.S. copyright law and the Berne Convention copyright treaty, to which the U.K. is a party. A purported license from CLA would be no defense against what we assume would be the inevitable, and likely successful, copyright infringement lawsuits in U.S. courts.

Were the NWU or other organizations of U.S. writers consulted about this proposal?

The NWU submission to the IPO notes that, “We are disappointed that CLA and its members chose to submit this application without first consulting us.” The NWU has asked the IPO to reject the ECL application or, at a minimum, to limit it to print (not digital) rights to works published in the U.K. and exclude works published anonymously.

The IPO held meetings in London about the ECL application. But stakeholders oversees, like the NWU, were limited to written comments.  We’ve urged the IPO to hold further meetings by conference call or online conferencing with the NWU and other U.S. and non-U.K. writers before making further decisions about our rights to our work. U.K. lawmakers and regulatory agencies like the IPO need to understand how their decisions in the U.K. will affect the livelihoods of writers in the U.S. and around the world.

What will happen next?

The IPO has said that, “The Government will consider all comments received and issue a formal response alongside the Secretary of State’s decision on whether to authorise the application. The Government intends to make a decision on the application by the end of the 2017/18 financial year,” which would mean by March 31, 2018.

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