Writers assume that if they do not explicitly sell a part of their copyright, they retain it. That principle has been turned on its head by a federal district court in the case of Tasini v. New York Times and used to support a result in which failure to discuss certain electronic rights means that they are transferred to publishers. The case is now before the Court of Appeals for the Second Circuit.

In December 1993, Jonathon Tasini, president of the National Writers Union, and 11 other freelance writers sued The New York Times; Newsday; The Atlantic Monthly; Mead Data Central Corporation (former publishers of the Lexis-Nexis databases which are now owned by Reed Elsevier, Inc.); Time, Inc.; and University Microfilms Inc., now called UMI.

The suit involves articles published by the defendants between 1990 and 1993. The New York Times and Sports Illustrated began selling articles from both staff and freelance writers to the Nexis database in the early 1980s with Newsday following later in the decade. The sales made the full text of articles available to subscribers of the database, and in their suit, the writers charged that the publishers and other defendants had infringed on their copyrights.

After four years of legal maneuver and trial, federal district court judge Sonia Sotomayor issued her decision in August 1997, supporting some of the writers' claims but ruling that the Copyright Act of 1976 allowed the publications to sell electronic versions without compensating writers. (Before Judge Sotomayor's decision, The Atlantic Monthly settled with one plaintiff and four writers dropped from the case.)

Writer and attorney Harry Youtt advised the plaintiffs in preparing their complaint and is assisting with the appeal. Youtt, who practiced law for 20 years in New York specializing in intellectual property issues, said that historically writers who wrote an article for a (national) periodical were considered to have sold one-time North American print rights.

"After the article runs, if there isn't a written contract that specifies rights, by general convention the copyright on the article reverts to the writer who is free to sell second rights or reprint rights," Youtt said. When writing for regional papers, authors typically sold one-time rights for print use in the paper's normal distribution area, allowing resale in other cities and states. The widespread posting of newspapers and magazines on electronic databases and on the internet reduces a writers ability to resell stories.

"Almost every single paper is available on Dialogue or on Lexis, or on West Law," said Patricia A. Felch, and attorney with Paterson & Ross in Chicago who specializes in creative property rights, trade, and copyright law. Felch is leading the appeals effort for the writers.

Judge Sotomayor noted in her decision that freelancers generally wrote for both The New York Times and Newsday on the basis of an oral agreement between the writer and an editor. Typically, the agreements specified the topic of the article, the deadline, and the amount of money to be paid. The discussions seldom involved rights, and Sotomayor wrote, "Indeed, there were no such negotiations between The New York Times and any of the plaintiffs, all of whom submitted their articles for publication... without any written agreements."

Newsday attempted to lock up electronic rights with contract terms printed on its checks, tipping of Jonathon Tasini about the issue. "I got a check from Newsday, and on the back of it there was an endorsement stamp that said when I endorsed the check, I would be signing over my rights to electronic archives," said Tasini. "I had no idea what that was."

The writers union tried to negotiate electronic rights when it realized what was happening, Youtt said, but The New York Times "just blanket said no, and said it was part of their rights" and continued to sell articles without compensating the writers.

While Lexis-Nexis traces its history to 1966, Lexis itself, described by the company as "the first commercial, full-text legal information service" began in 1973. It primarily deals with legal documents in the public domain. Nexis, a database of news articles and business information, began six years later in 1979.

To put the fight over electronic rights into further context, it is important to remember that until the growth of personal computers electronic databases catered almost entirely to large businesses, universities, and government. The first major home computer, the Apple I, premiered in 1976, and still required an external tape drive. Radio Shack's TRS-80 Model I hit stores in 1977, with an internal disk drive. The Apple II followed in 1978.

Sports Illustrated first sold its articles to Nexis in 1982, The New York Times in 1983, and Newsday in 1988, according to Judge Sotomayor's record of the case.

The court rejected Newsday's claim that the contract clause on the back of Jonathon Tasini's check had transferred the copyright, ruling that the clause was not binding because the endorsement came after the formation of the contract and thus did not transfer rights.

Only plaintiff David Whitford had a written contract which, as detailed in Judge Sotomayor's decision, gave Sports Illustrated three main rights:

• Exclusive first rights to the article for publication in the magazine;
• The non-exclusive right to license republication in other publications, with a 50/50 split of "all net proceeds it receives for such republication"; and
• The right to republish all or part of the article in other Time, Inc. publications "provided that you shall be paid the then prevailing rates of the publication in which the Story is republished."

Despite the clearly limited rights transferred by the contract, Judge Sotomayor said that because it was silent as to the electronic rights involved, she had to turn to the copyright act to determine ownership. She applied the same argument to the oral agreements writers had with the other publishers.

The court then "dove into" Section 201 (c) of the 1976 copyright act, Felch said:

"Copyright in each separate contribution (e.g. story or article) to a collective work is distinct from copyright in the collective work (e.g. newspaper, magazine, or anthology) as a whole, and vests initially in the author of the contribution." (Bracketed explanations added.)

The section then lists three exceptions to an author's ownership:

"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 [1] as part of that particular collective work, [2] any revision of that collective work, and [3] any later collective work in the same series." (Bracketed numbers and emphasis added.)

When they agreed to produce articles for the defendants, the writers clearly anticipated the first exception, publication in the magazine itself. The third exception, publication in a later collection in the same series - use of an article in an annual "year in review" issue, for example - was not challenged by the plaintiffs.

"The question for the court to decide was whether or not these publications on line were a revision, meeting the second exception," Patricia Felch said.

Judge Sotomayor ruled that the electronic databases and CD-ROMs being challenged by the case were simply revisions of the publications and were not new collective works or the individual resale of the articles.

When a publication is sent to Nexis or Lexis "it changes shape, dramatically, grotesquely, into a database as opposed to a newspaper," Youtt said. "If you just kept the metaphor within the print medium, it would justify the New York Times licensing today's entire issue to the Chicago Tribune to run later today under the Tribune's head as The Chicago Tribune version of today's New York Times... That's ridiculous."

The second common example of a revision, and the only one cited in the legislative history, is an encyclopedia that carries over articles from edition to edition, Felch said. The publisher, however, can not revise the contribution itself or include it in a new anthology or an entirely different magazine or other collective work.

"We argued that not only are Lexis and Nexis and University Microfilms new anthologies, they are entirely different collective works. The trial judge rejected that, claiming that the word revision was very, very broad," Felch said. "To me, that is contrary to logic, contrary to how the publishing world operates, and contrary to the legislative history, which is what we have argued to the Second Circuit. Revision couldn't be that broad, because that would mean that any publisher could make any use out of an article, even those prohibited in the legislative history."

Bruce P. Keller, a partner in Debevoise & Plimpton of New York, argues firmly that Congress anticipated the wide use of electronic databases when it wrote the 1976 law. "The legislative history is replete with mention of electronic databases and electronic libraries," he said. "Has it become more prevalent? Absolutely. Was Congress aware that it would become more prevalent? Absolutely." Keller has led the defense in the case since the trial.

When Congress granted publishers revision rights, it did not limit it to a particular media. "They did not say you get to use this in microfilm editions only, or you get to keep back issues on the library stacks in bound copies only, or it didn't even say you could do it in electronic versions only. It said it doesn't matter what versions you use. These are the narrow bundle of rights that you get." In addition, Keller said, one of the electronic versions that is being challenged by Tasini is a CD-ROM that is identical to microfilm, because it is scanned and produces exactly the same image as a microfilm reader.

"I've always taken the position that the case is not nearly a big a change in the law as Jonathon Tasini has represented it to be, and as a corollary, I've taken the position that it's not nearly as significant a case as Jonathon Tasini has represented it to be," said Keller. It's a very narrow decision based on "quite specific facts, and does not have wide application to most on-line situations.

"It applies only to a situation where a publisher, having paid a freelancer for a contribution, and nothing having been said at all - either orally or in writing - about the scope of the publisher's rights," Keller said.

Several observers were surprised that plaintiffs did not win on the basis of their oral contracts, believing that in the absence of language giving up electronic rights, the writers should have retained them.

"It looks to us as if Judge Sotomayor wrote the first part of the decision leaning toward a judgement in the plaintiff's favor, and somehow changed her mind," said Felch. If you read carefully between the lines, it "looks as if the first part of the opinion was written by one person, and the second part was written by another." That could, however, just mean that different law clerks had worked on the opinion or that the judge started with one mind-set and then changed her mind-set, Felch added.

Several of the attorneys interviewed questioned the knowledge of the plaintiff's trial attorney. Christine Valada noted that the trial attorney was a labor lawyer and not a copyright lawyer. During her work with the American Society of Media Photographers she learned the importance of the trial attorney in cases involving creative rights. "At ASMP, we'd always get people who called us after the trial when they had to go to appeal. We needed to hear from them at the trial level."

Patricia Felch said, "I believe the judge was concerned that this other (electronic) medium was somewhat similar to microfilm. The differentiation I make is that libraries have always been protected by fair use." Libraries are there so the public can obtain information and the storage of microfilm just made it easier for patrons to go in and read issues of old newspapers, she said. "When (readers) were doing that, they were spinning through the whole paper, with its original ads and original layout. What the NY Times sends to Lexis is just the article, not in context of the paper. We argued that it couldn't be a revision, because they took out everything. The ads, the classified, the crossword puzzles, they take everything out and send the articles alone to Lexis."

"Judge Sotomayor had a problem with that, and I'm not sure it was clarified to her, the difference between a library's fair use and the millions of dollars these companies have made on distributing for fees."

Christine Valada recalls that when the briefs were filed, the case was on a "fast track," and is also surprised that oral arguments have not been set.

Bruce Keller, however, believes that the court is simply dealing with a massive workload. When the briefs were filed in April of last year, he said, the average time to oral arguments was about six months. "That would take you till the fall, but in that gap you have the summer vacation months, so that the Second Circuit gets even further behind. I expected November or December, and have not been surprised that it slipped into the second quarter of the year." He has heard that the court is tentatively considering oral arguments for April, but that if Tasini is not heard then, it could slip for some time.

Wizards has cited the "revision" finding of Tasini as justification for issuing the CD-ROM and that the CD is the same as standard microfilm, without paying the reprint fees called for in their contracts.

"Wizards of the Coast's position is crap," said Christine Valada. "All of these stories are covered by written contracts, and the written contracts call for repayment for any kind of reprint."

Likening the proposed CD to microfilm and applying a fair use principle does not work either, in Valada's opinion. "Their intention is not to sell it to libraries, but to sell it to individuals and make money." In addition, the contracts she has seen say that no reprint may occur without "TSR first having obtained the written approval of the seller to do so." (Wizards of the Coast recently purchased gaming company TSR, obtaining Dragon Magazine in the deal.)

In science fiction and fantasy, SFWA agent Eleanor Wood, founder and head of the Spectrum Literary Agency, said last December that "everybody's staggering around in the dark" over electronic rights, especially the subsidiary rights people working for publishers. Writers must be careful to hold on to electronic rights whenever possible, she said.

"One of the reason prose people (may) have lost that fight is that they have no respect for small publishers," Christine Valada said. She recalled that in the comic book industry the imposition of work-for-hire contracts spawned the small publishers and independent publication of comic books. "In comic books, that's very much accepted. In our organization, it is very much frowned upon." There is an opportunity for a small publisher to say that writers are important and offer fair contracts as a way to compete against the major publishing houses.

"But SFWA doesn't want to recognize small publishers, and given some of the ones we've had trouble with, I can understand why, but there should be a little bit more room for negotiation there too," she said.

Copyright 1999, James W. Fiscus. Reprinted with permission from the SFWA Bulletin, Summer 1999.