On Monday, June 2, 2014, the U.S. House Committee on the Judiciary, Subcommittee on Courts, Intellectual Property and the Internet continued with its copyright review with a [field hearing held in New York, NY](Greg Cram of The New York Public Library to Represent Library Perspective on the First Sale Doctrine at House Judiciary Subcommittee Hearing). This hearing focused on the first sale doctrine, a principle that provides that after the first sale of a lawfully made copy of a copyrighted work, the copyright holder’s distribution rights in that particular copy terminate.
The panel included nine witnesses: Stephen M. Smith, President and CEO of John Wiley & Sons, Inc.; John Ossenmacher, CEO of ReDigi; Ed Shems of edfredned illustration & graphic design; Jonathan Band representing the Owner’s Rights Initiative, Matthew B. Glotzer, Greg Cram, Associate Director of Copyright and Information Policy at The New York Public Library; Sherwin Siy, Vice President of Legal Affairs at Public Knowledge; John Villasenor, Professor of Electrical Engineering and Public Policy at UCLA Luskin School of Public Affairs; and Emery Smith, Counselor for BSA – The Software Alliance.
The Library Copyright Alliance endorsed Cram’s statement, which highlights the importance of the first sale doctrine to the mission of libraries. Cram also states support for the Supreme Court’s ruling last year in Kirtsaeng v. John Wiley & Sons, applying the first sale doctrine to a lawful physically copy of a work regardless of the place of manufacture or sale. He also discusses the issue of first sale in the context of the digital marketplace.
Importance of First Sale to Libraries
In his statement, Cram notes that throughout American history, even prior to the founding of the nation, libraries have promoted democratic values by lending books and other materials. In discussing the history of libraries providing access to information, Cram quotes Thomas Jefferson: “I have often thought that nothing would do more extensive good at small expense than the establishment of a small circulating library in every county, to consist of a few well-chosen books, to be lent to the people of the county under regulations as would secure their safe return in due time.”
Cram’s statement points out that Americans borrow books and other materials from libraries 4.4 billion times a year and that per capita circulation grew by 26.1% between 2000 and 2009. Between 2008 and 2012, NYPL saw a 44% increase in circulation with 28 million items circulated in 2012. The vast majority of library collections represent physical copies of works, highlighting the importance of the first sale doctrine, without which library lending would not be possible.
Kirtsaeng v. John Wiley & Sons
In his written testimony, Cram expresses support for the Supreme Court’s ruling in 2013 in Kirtsaeng v. John Wiley & Sons, an opinion which found in favor of international exhaustion, a rule applying the first sale doctrine to lawful copies of copyrighted works regardless of the place of manufacture or sale. Without a rule of international exhaustion, library lending would be seriously threatened as more than 200 million books in U.S. libraries have foreign publishers. Books published by U.S. publishers are often manufactured by printers in other countries, often without any indications on the copyright page of where they were printed. As a result, libraries have no way of knowing whether the books were manufactured domestically or abroad. With large portions of collections manufactured abroad, the Kirtsaeng decision is crucial in allowing libraries to continue their acquisition and circulation policies. Cram concludes, “This is the right rule for libraries and for American consumers, and Congress should not disturb it.”
Digital First Sale
Cram’s statement also explains the complexities of the use of digital resources as libraries increasingly license electronic resources. Licenses set the terms under which a library can make the content available and such terms can vary:
Often, the content is hosted on the server of the publisher or other intermediary, and the library is buying access to the server for its users. An authorized user might be able to download the content onto her computer or device, and digital rights management software will allow the content to reside there until it is automatically deleted in accordance with the license term … Currently, for most popular trade titles a library contracts with vendors to enable users to check out a licensed title based on the print “one copy, one user” model. Libraries must license additional e-book files in order to lend to more than one user at the same time. After a prescribed period, the book is automatically returned and becomes immediately available for digital check out by another user. Other licenses might not allow digital download, but instead permit a user to print out a limited number of pages, e.g., a journal article. Other licenses permit users to access content only when the user is connected to the Internet, e.g., streaming access.
While acknowledging that the digital marketplace has provided certain advantages over the traditional model (libraries no longer need to repair torn pages or place the books on a physical shelf), Cram also points out several drawbacks. Under the print model, a book can remain in a library’s collection until it wears out, but in the digital environment, a library can only provide access when it has paid the licensing fees and the terms of renewal licenses may vary. Cram explains that under some licensing models, arbitrary circulation limits are enforced and that license rates for e-books “can be more expensive than its print counterpart, and sometimes more than ten times the consumer e-book price.” Furthermore, some publishers do not license e-books to libraries at all. The current model also raises serious concerns regarding preservation of materials.
With respect to the digital marketplace, the Cram concludes:
Congress needs to consider whether to prohibit the enforcement of contractual limitations on copyright exceptions in certain circumstances. Significantly, the suite of statutory instruments for amending the UK copyright law that will come into force on June 1, 2014, prohibit the “contracting out” of many exceptions in the research and education context. Congress therefore needs to closely monitor the evolving digital marketplace to ensure that it is sufficiently competitive to provide widespread public access to works.