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Wednesday, September 21, 2011

Reselling courtesy copies and the terms of employment

In a time of noise about law-school scams and lazy, pampered, overpaid law professors stealing money, perhaps this is the type of question that just highlights some complaints about our profession. Still, it came up in a conversation among colleagues (none of whom has or is thinking about trying to do this) and seems to raise and interest issue:

My university recently handed down a prohibition on faculty reselling courtesy copies of books. We are permitted to gift them, donate them, and take them home, and we can keep them if we leave the university to teach elsewhere; we just cannot sell them. The question is whether the university can impose this restriction. Obviously, the publishers can restrict what we do with these books (West and Foundation now place stickers on courtesy copies explicitly prohibiting resale). But can a third party, a stranger to the relationship between the faculty member and the publisher, do that?

So is this prohibition valid? What is the rationale or justification for such a rule? Does the rule interfere with property rights? Is the university impermissibly changing the terms of an employment contract without consideration?

Posted by Howard Wasserman on September 21, 2011 at 09:31 AM in Howard Wasserman, Teaching Law | Permalink

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Didn't you read the EULA that you clicked through when you first signed on to the University's network? You agreed that they can change your employment terms at any time without notice!

Posted by: billb | Sep 21, 2011 10:07:22 AM

This seems like a version of an employer saying, "any frequent flyer miles you earn on business trips can only be used for free business trips." Or is the University worried about getting sued (vicarious liability) for professors violating the terms of the courtesy copy?

Posted by: Geoff | Sep 21, 2011 10:19:38 AM

Interestingly enough, Howard, it's more likely that publishers cannot enforce the prohibition on reselling courtesy copies, at least as a matter of copyright law. In Bobbs-Merrill Co. v. Straus, 210 U.S. 339 (1908), a publisher attempted to set the minimum resale price with a printed notice inside its book, claiming that any retailer who sold the book for less than a dollar infringed its copyright. The Supreme Court concluded, under the copyright statutes of its day, that a publisher could not set a minimum retail price for its book pursuant to its statutory "sole right to vend." The Bobbs-Merrill case is seen as the progenitor of the "first sale" exception to the owner's exclusive right to distribute its work under the current copyright act, codified at 17 U.S.C. § 109.

Recently, the Ninth Circuit held that record labels could not enjoin the resale of promotional copies sent to radio stations. UMG Recordings, Inc. v. Augusto, 628 F.3d 1175 (9th Cir. 2011). The court in Augusto concluded that sending the discs as a gift to the radio stations effected a transfer of ownership, even though the discs bore labels claiming that "[a]cceptance of this CD shall constitute an agreement to comply with the terms of the license" including a ban on resale of the work.

However, for software licensed to customers, the first sale exception does not apply, and reselling the software without permission violates the licensor's exclusive right to distribute or authorize distribution of the software under 17 USC § 106(3). Vernor v. Autodesk, 621 F.3d 1102 (9th Cir. 2010).

And in ProCD v. Zeidenberg,86 F.3d 1447 (7th Cir. 1996), the Seventh Circuit enforced a shrinkwrap/clickwrap license designed to let the software manufacturer price discriminate between personal and commercial users. Upon opening the package, the consumer received a written contract enjoining commercial use of the software. In addition, every time he ran the program, he had to click a box agreeing not to use the software for commercial purposes. The court concluded the license was binding, assuming (perhaps counterfactually) that the software could be easily returned for a full refund once it was opened. It's thus not clear to me that every court would be equally skeptical of the argument in Augusto that accepting the CD also accepts the terms of the "shrinkwrap" license barring resale.

Under the logic of ProCD, a publisher might succeed on a breach of contract claim, even if the copyright claim failed. The claim of breach is likely stronger if you request the courtesy copies instead of receiving them unsolicited.

That's a roundabout way of saying I'm skeptical that your institution can force you to observe the custom, although informal pressures or strongly worded suggestions may have the same effect for the vast majority of your colleagues.

For my part, I benefit, and I think my students benefit, from my ability to consult several different casebooks as plan how best to teach particular topics. I'm therefore content not to resell the books as a courtesy to the publishers and authors who allow me to use their work for free, even though they do so in the hope that I will adopt the casebook so they can sell multiple, expensive copies to my students.

Posted by: Jake Linford | Sep 21, 2011 10:42:52 AM

I think the core issue here is employment law, not copyright. It's fairly clear under Augusto that the books are the property of the recipients and that first sale applies to them. But the university doesn't need to rely on copyright: it can just discipline or fire professors who resell the books. (Note that the policy applies to books that are sold but not to books that are given away, even though both are distributions under copyright law.)

I see the policy as more of an anti-corruption measure. It's unseemly, at best, for professors to use their affiliations to request free books that they then sell. A university could quite reasonably prefer that its professors not use its name to line their own pockets in this way.

Posted by: James Grimmelmann | Sep 21, 2011 11:25:20 AM

Coincidentally while reading this thread a LexisNexis rep knocked on my office door. I asked him what they recommend doing with the books I don't want and he promised to send me a postage-paid stamp via PDF so that I can return Lexis books. Problem solved--at least with the Lexis pile.

Posted by: César Cuauhtémoc García Hernández | Sep 21, 2011 12:39:55 PM

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