The Library Copyright Alliance (LCA) filed a friend of the court brief today in support of Georgia State University in the appeal of Cambridge U. Press et al. v. Mark P. Becker et al. In its brief, LCA argues that GSU’s e-reserves policy is consistent with widespread and well-established best practices for fair use at academic and research libraries, and that these uses have no negative effects on scholarship. LCA is represented by Jonathan Band and attorneys from the Electronic Frontier Foundation. The case is on appeal with the U.S. Court of Appeals for the 11th Circuit.

The case began in 2008 when Cambridge University Press, Oxford University Press, and SAGE Publishers sued GSU for alleged copyright infringement. The publishers argued that GSU’s use of excerpts from copyright-protected materials in password-protected course e-reserves and class sites was a violation of the copyright law. Notably, the Association of American Publishers and the Copyright Clearance Center, the licensing arm for much of the academic publishing industry, organized and funded the lawsuit.

In May 2012, Judge Orinda Evans of the U.S. District Court in Atlanta ruled in favor of the university in a lengthy decision that reviewed each of 75 alleged infringements, finding only 5 infringing uses. In her ruling, the Judge saw little evidence of market harm to the publishers, and clearly understood that current teaching practices were beneficial to teachers and students, as well as being reasonable and fair. Because of GSU’s overwhelming victory, and the publishers’ aggressive litigation strategy, Judge Evans ordered the publishers to pay GSU’s attorneys’ fees and costs (nearly $3 million), an important ruling that could help discourage future aggressive lawsuits against good faith fair users.

Now that the issues are narrowed and clarified on appeal, LCA is one of several groups filing on the side of GSU in a striking show of solidarity across the academic community. The American Council on Education, the Association of American Universities, the Association of Southeastern Research Libraries, and the American Association of University Professors, among others, are all represented in briefs defending the fair use rights of faculty, students, and librarians.

The US Department of Justice might have seen the light and decided not to side with foreign publishers against a US public university, but it appears that the US copyright system in general takes the side of foreign companies against the US public.

That’s the inference I draw from an important new report, Foreign Ownership of Firms in IP-Intensive Industries and handy infographic by Jonathan Band and Jonathan Gerafi, which shows that the US’s rightsholder-friendly copyright laws amount to a kind of reverse protectionism: we punish US taxpayers, domestic industries, and the public interest in order to protect foreign corporations.

The numbers are striking, especially in the publishing industry. Simply put, the vast majority of the publishing industry is foreign-owned - over 80% of the revenue flowing to the “big 6” publishers is flowing overseas. When you focus on STM publishers, the numbers get even worse - around 90% of the STM publishing industry is foreign owned by revenue.

The recording industry is nearly as bad, with around 75% of the revenue of the “big three” labels flowing overseas. Gaming console makers are similarly dominated 3-to-1 by foreign companies.

The motion picture industry looks like a star-spangled standout, with most of the industry owned by US companies, but Band and Gerafi dig deeper to show that there is still a good chunk of work and revenue flowing overseas for shooting locations, production work, foreign talent, and the like.

In short, the tangible benefits of the US copyright system with its extravagant term of protection, its punitive statutory damages, and all the other well-known and documented dysfunctions, seem to flow mostly to huge foreign corporations.

It wasn’t always thus. It’s a truism among copyright wonks that the US used to be a “pirate nation” - US law for many many years did not award copyright to foreign works. Indeed, Benjamin Franklin, who was one of the country’s first librarians, was also arguably one of our first pirates - he ran a press in Philadelphia that profited from the unlicensed printing and sale of the works of European authors.

What a difference a couple of centuries makes. In addition to the overwhelming foreign domination of the copyright industries, American copyright law on its face is definitively tilted in favor of foreign authors and foreign rightsholders. Their works were airlifted out of the public domain by the Uruguay Round Agreements Act, which was challenged and vindicated in the Supreme Court in the Golan case. Foreign rightsholders are not subject to the requirement of registration prior to bringing lawsuits. And the list goes on.

Together with the growing consensus that some of the worst problems in our copyright system owe to our accession to an international copyright treaty called the Berne Convention, this report should give momentum to the movement to recalibrate copyright so that it returns to its Constitutional purpose of “promoting Progress” for the benefit of the US public at large.

At last year’s Fall Membership Meeting of the Association of Research Libraries here in Washington, D.C., the refrain was, “libraries are under siege.” Copyright litigation against libraries was proceeding on several fronts, and the rejection of the Google Books settlement had library directors worrying about the next shoe to drop.

What a difference a year makes. In May the federal district court in Atlanta gave a decisive victory to Georgia State University (GSU) in the lawsuit over its electronic course reserves. (Read my summary of the holdings in the case here (PDF).) On October 3, a court in California dismissed for the second time a complaint against UCLA over streaming video. Then, on the opening night of this year’s ARL Fall Meeting, came the coup de grace: Judge Harold Baer of the Southern District of New York handed down a sweeping victory for the HathiTrust and its partner libraries, which had been sued for their mass digitization of library books. (ARL is hosting a free webcast about the case tomorrow, featuring four attorneys directly involved in the case.)

It seems that, in literally every corner of the US, courts are siding with libraries as they work in good faith to bring their collections and services into the 21st century. The siege appears to be lifting, or at least on hold pending any (misguided) appeals. This is a good time to pause with the advantage of hindsight and ask what was really going on in these cases, and what lessons we can learn from the trials.

The most important lesson for the antagonists in these cases is that it’s time to stop looking to libraries for a copyright windfall. In every one of these cases the plaintiffs were looking to profit on content that libraries had already purchased, and from library programs that did not require a license. It’s time to give up on what seems to be an obstructionist, backward-looking strategy and focus instead on adding value for libraries and their users.

These lawsuits were wasteful because the plaintiffs generally had little or nothing to offer to libraries as an acceptable substitute for the supposedly infringing uses they sued over. Every time the trial courts looked at the market realities in these cases, they found that libraries were using technology along with lawfully purchased collections in order to fill a need that markets could not, would not, or should not meet. The plaintiffs expected libraries to do all the work of making valuable new uses of collections materials, and then pay for the privilege. As Duke University Scholarly Communications Officer Kevin Smith has explained persuasively, these plaintiffs have fundamentally misunderstood the Copyright Act as a blanket entitlement to profit from any activity that involves books or videos, without regard to the consequences for society at large.

For example, information disclosed at trial in the GSU case shows that publishers often withhold licenses to use digital excerpts, partly in hopes that students might have no choice but to purchase an entire book in order to read a few relevant pages. One of the reasons many of the GSU uses were found to be fair was that the excerpts assigned were often not available for licensed use in the appropriate format. Even where licenses are available, Judge Evans observed in her decision that licensing agents like the Copyright Clearance Center (CCC) don’t sell actual content or technological services; they only sell permissions. Libraries who pay CCC’s fees still have to find and digitize material from their own collections, and mount the digital excerpts on their own platforms. The ultimate irony is that it was made clear at the GSU trial that if course reserves were to require a fee, faculty would simply stop using them. But Oxford University Press, Cambridge University Press, and SAGE (with funding from CCC and the Association of American Publishers) were still willing to sue.

Similarly, the court in the HathiTrust case found that there simply was no workable market for the mass digitization uses that the libraries had made, and that, in any event, fair use would not allow the formation of a market to extract payment for such socially valuable, transformative uses. And, again, the Authors Guild and the other plaintiffs had made no effort to enable libraries to embark on mass digitization projects. It is unlikely the plaintiffs have the ability to authorize such a project, as they represent a tiny minority of authors of library collections materials, and they may not even possess the necessary rights. (Once they get past these lawsuits over digitization, there will surely be more litigation over whether authors or publishers are the owners of the right to authorize ebook publication.) These plaintiffs don’t seem interested in providing libraries with any kind of service or solution to make books searchable or accessible to the print-disabled, so why should they profit when libraries take on these transformative tasks?

The UCLA case is a bit of an outlier, here, in that one of the plaintiffs, Ambrose, claimed to offer a streaming video product that would be cheaper and more useful than UCLA’s homegrown solution. However, it turned out that Ambrose had already sold UCLA the right to stream the films when it sold UCLA the DVDs long before it began to offer its own streaming service. That fact makes this an especially vivid case of double dipping. In any case, the market is a better judge of value than the courts; if Ambrose has a fantastic and affordable streaming service, libraries who need it are sure to sign up. If the product has disappointing sales, they should invest in improving it, rather than investing in legal fees to sue libraries.

In general, rather than sue to shut down or monetize library services they cannot or will not provide, the plaintiffs should refocus their energy on publishing and selling useful new content and services that libraries will want to buy. Libraries spend many millions of dollars every year acquiring content and services for their users. Collectively, ARL libraries spent over $1.4 billion on library materials in 2010-2011, about $12 million per library on average. That money is significant, but as Penn State Associate Dean for Research and Scholarly Communications Mike Furlough pointed out at a recent meeting of the AAUP, it is not infinite: every dollar libraries are forced to spend defending frivolous lawsuits and paying for fair uses of works they already own is a dollar they cannot spend on new books, serials, videos, and services. The courts in these cases recognized that imposing such a needless tax on educational use is contrary to the purpose of copyright. Everyone would be much better off if those suing libraries would return to copyright’s constitutional design: profiting by promoting, rather than halting, progress in science and the useful arts.

The lesson for libraries is equally important: there is a critical need to stand up, and be united, in defense of your rights. For years rightsholders relied on the uncertainty around copyright to force individual libraries into settlement agreements without having to actually win a court case. Libraries were worried that even if their work is fair and socially beneficial, the Copyright Act might not give them the tools they need to defend themselves. Multiply that uncertainty by the potentially dramatic statutory damages in the law and the cost of defending a lawsuit, and you can see why even a library that believed its activities were perfectly reasonable might nevertheless agree to curb them in deference to an assertive plaintiff. Many libraries were effectively intimidated before GSU, UCLA, and HathiTrust (together with several HathiTrust members) tested their claims in court.

In addition to those three brave stands, the community collectively stood up for its rights with the publication earlier this year of the ARL Code of Best Practices in Fair Use for Academic and Research Libraries. That document has since been endorsed by a wide variety of library and academic groups, including the American Library Association, the Association of College and Research Libraries, the Music Library Association, the Visual Resources Association, the Art Libraries Society of North America, and the College Art Association. As I’ve noted on this blog, the GSU and HathiTrust cases both offer further confirmation of the consensus in that document. Academic and research libraries around the country have already taken the Code as a new standard for their practices. I believe libraries have happily learned the lessons of this exciting year. It remains to be seen whether the plaintiffs will get the message.