Tag Archives: Limitations and exceptions to copyright for libraries

Libraries mean Business : IFLA to celebrate World IP Day on 26 April

In four weeks’ time, the World Intellectual Property Organisation (WIPO) is inviting representatives of governments and civil society to celebrate World Intellectual Property Day, under the theme “Small and Medium-sized Enterprises: take your ideas to market”.

IFLA will be taking the opportunity to celebrate the importance of the work done by library professionals to support and accompany small and medium-sized businesses.

Whether they are family businesses, start-ups or otherwise, small and medium-sized enterprises often have limited resources, and do not always have the opportunity to receive professional and strategic advice on how to work with intellectual property.

As a result, access to curated information, resources and services such as coaching, training and guidance provided by library professionals can be crucial for these businesses. This can help them understand how to support the development of a business model related to intellectual property, such as patents, trademarks, trade secrets or copyright.

As OCLC has reported, in the United States alone, public libraries were used 2.8 million times each month to support small businesses.

On World Intellectual Property Day 2021, IFLA and its partner EIFL are therefore pleased to present a webinar on 26th April at 16:00 CET entitled: Libraries mean business.

This webinar will allow us to highlight the work of three library organisations working to support small and medium-sized enterprises in particular on intellectual property issues, through three speakers:

Jeremy O’Hare, Information Expert: Intellectual Property, Business and IP Center, British Library in United-Kingdom.

Tara Radniecki, Head of DeLaMare Science & Engineering Library, Patent and Trademark Resource Center Librarian, University of Nevada, in the United-States of America.

Bernadette Cogan, Divisional Librarian, Central Library Services, Dublin City Council, in Ireland.

If you are interested in this event, join us thanks to the registration link.

A quick word about an exceptional exception (you should get to know or start to consider using)

As part of the fair use and fair dealing week, IFLA is delighted to welcome Eric Chin, from the General Counsel at the National Library Board of Singapore, to share his views on the importance of making the best use of the flexibilities provided by the fair use and fair dealing provisions.


  1. Your mission as a librarian is to enable teaching, learning and research.  How much you can achieve depends on the extent to which libraries can collect, preserve, give access, present and exhibit library materials.  This in turn depends a lot on copyright laws that govern how library materials can be used.


  1. For example,  one of the exclusive rights of a copyright owner is the right to make a copy.  This impacts your day to day work ranging from the request by a teacher to make a copy of a photograph for a lesson, to whether the much used book that is deteriorating and is out of print (but still in copyright) can be digitised to preserve the content from being totally lost, to whether a video in an obsolete format (but still in copyright) can be migrated to a new digital format;  and to whether the non-profit museum down the road can make a copy of part of a map for an exhibition.


  1. Before we go further, it must be said that there is nothing wrong about the principle that copyright owners have exclusive rights for a period of time as just reward for endeavours and ability and it is beneficial to society because, among other things, it does create incentives for the production of more library materials.  It is not often said but it is not unfair to say that copyright is partly the lifeblood of a librarian’s job!  The question is about how this is balanced against what rights or exceptions there are to also ensure that exclusive rights do not act as unintended and undue barriers to progress in science, in the preservation of heritage and culture and the dissemination of knowledge.


  1. So copyright laws typically include a set of provisions that act as exceptions that will  allow for your mission as a librarian.  I say “typically” because copyright law is territorial in nature and each country has its own set of copyright laws. This means the scope of exceptions can vary (very) widely from country to country.  To see where you stand in the wide spectrum of copyright laws, it is useful to look at this study covering 191 countries: https://www.wipo.int/edocs/mdocs/copyright/en/sccr_35/sccr_35_6.pdf (the Study on Exceptions).


  1. Starting by knowing where you stand allows you to consider if you need to advocate for copyright exceptions that fellow librarians in other parts of the world can already use but you simply cannot.  What you cannot do will have a negative impact on the amount of teaching, learning and research that can be done in your own country. In an ideal world for librarians,  all countries will learn from one another and all will level up until all countries share the most useful exceptions in common. However,  it must sometimes start with ground up advocacy to the right powers that be in our countries, which is partly in our own hands.


  1. Looking at the range of exceptions in each country in the Study on Exceptions, you will see a fair few countries that do not list what is called “fair dealing” or “fair use” (collectively Fair Use) among the exceptions. Fair Use is a general exception that anyone can use and is not a specific exception available only to libraries but libraries can benefit greatly from it.  Each country will of course have an argument to make for its own copyright traditions and doctrine that their society may be comfortable with, but in my own view,  countries that do not have this exception may be missing out on an exceptional exception.


  1. Most library specific exceptions are generally prescriptive in nature with fixed criteria that must be met in an unchanging way in order to become applicable and this oftentimes can make it challenging for us especially in the fast changing digital era. On the other hand,  Fair Use is special because it is normally stated in a flexible way.  Certain broad factors (that are also usually not exhaustive) are set out as matters to be considered in a fair use analysis such as whether there is transformative use (i.e. use of the original library material or part of it in a beneficial way to society that is different from the intended use of the original) and whether the amount of the original library material used is appropriate in the circumstances including bearing in mind whether it would unfairly eat into or destroy the livelihood of the owner of the copyright.  Those who have had the benefit of using Fair Use will know that these broad factors for fair use analysis are such that the law in Fair Use can automatically adjust to new, evolving and challenging situations that you will face in your daily work.


  1. Around the world, in countries that have the Fair Use exception, it has been crucial in allowing for the use of library materials (including copying to an appropriate extent only) for research or study, criticism or review, reporting of news, to support teaching and learning,  to publicise library programmes, to create exhibitions, to preserve at risk items, to enabling use for those who are disabled and to making a record of ephemeral but culturally significant matters posted on the internet.


  1. This short piece cannot hope to set out all the details of what the best practices and exemplars are for Fair Use that gets the balance right between your mission and the rights of creators and publishers,  but urges you, as a librarian, to see where you stand in the spectrum of copyright laws that may be available across the world to support your mission.  As it is Fair Use Week,  and if you are one of those that does not have the benefit of Fair Use or actually do have the benefit of such an exception but have not used it,  go find out about it through the lawyer or other experts supporting your library and see how it can be fairly used.  If you then think it is useful, consider how you can advocate for it to be introduced or used as part of your workplan in the not too distant future.


  1. In the meantime,  it is Fair Use week and time to use those research skills to discover and read more about an exceptional exception that is not a fair weathered friend to librarians!


Eric Chin

General Counsel (and would be librarian and archivist)

National Library Board, Singapore


Note:  The views set out here are personal and do not represent the official view of any organisation I am associated with.


Use of Works in Teaching Activities – Article 5 of the EU-DSM directive by Soile Manninen

Soile Manninen is an Information Specialist at Helsinki University Library (Finland) and a member of the working group on legal issues of The Finnish Research Library Association. The mission of the group is to track legislation concerning libraries, and keep Association members up to date about these issues.

Can you explain to us what article 5 of the EU-DSM Directive contains?

This new mandatory educational exception/limitation allows the digital use of works and other subject matter for the purpose of illustration for non-commercial teaching for cross-border uses. “Use of works” covers reproduction (scanning, printing, copying, uploading, downloading, making screenshots, etc.), communication to the public, and making available to the public. “Non-commercial teaching” refers to the nature of the teaching, not the organizational or funding background of the educational establishment.

The responsibility belongs to the educational establishment. Teaching should happen on its premises or at other venues (e.g. libraries, museums), or through a secure electronic environment that is only available for the pupils or students and teaching staff educational establishment. Cross-border teaching follows the legislation of that country where the educational organisation is established. During teaching activities, it is always required to indicate the source and give the author’s name, unless this turns out to be impossible.

Member States may provide that this exception or limitation adopted does not cover specific uses or types of works, e.g. materials that are intended for the educational market or if licenses are easily available. If Member State supports a license-based solution, it has to ensure that these licenses are available and visible in an appropriate manner, and there shouldn’t be any administrative burden to educational establishments. Member States should clarify those situations where this exception or limitation is applicable and when uses require a license. Member States can decide in favor of fair compensation for the right holders for the use of their works.

Some EU countries have already implemented allowed educational exceptions or limitations based on InfoSoc Directive (2001/29/EC) and Database Directive (96/9/EC) but the legislation still differs between Member States so there is demand for common ground to take care digital teaching cross-border activities.

Why is this provision important for libraries?

Libraries support education and are educators. In higher education or school environment the connection between library and education is easy to see because libraries take care of material acquisition and agreements with service providers, but how does this work in public libraries or special libraries? Public libraries are one of the key information resources for education at every level, most importantly for students at primary and secondary levels, and of course, every self-motivated citizen who takes part in non-formal training activities.

It should be pointed out that this exception cannot be overridden by contract but there might be some things to follow when libraries negotiate with service providers. What kind of clauses we have to consider and does this have some effects on the prices of information resources when the potential amount of users is going to bigger? If Member State decide in favor of fair compensation for right holders, how is it organized and who pays all this?

What is the best implementation libraries could hope for with this article?

Libraries and cultural heritage institutions should be mentioned as educational establishments so there will not be any confusion that libraries can carry out educational activities.

Article 5 concerns digital uses, and it does not say anything about printed material, but digitization is allowed. This exception/limitation allows using part of the work and Member States can decide on what extent works can be used. Hopefully, there won’t be specific quantitative measures because those numbers treat different types of works unequally (there is a difference are you using 20% of novel or photo).

In those countries where licensing is the option, there should be clear guidance and awareness of how materials can be used and the compensation system should be transparent for all sides. Based on Article 25 of the DSM Directive it is possible to adopt wider exceptions and maintain possibilities that InfoSoc Directive already offered. If there are exceptions/limitations that have been regulated earlier and they have proven to be functional, there isn’t any reason to make these any worse.

What is your government’s position on the issue?

Implementing the DSM Directive in the Finnish government belongs to the Ministry of Education and Culture. In May 2019 the Ministry started to organize open workshops and discussions where stakeholders worked together to understand what the DSM Directive means and which is the best way to implement the new Directive into our legislation.

Discussion around Article 5 has been quiet. Finland and other Nordic countries have active collective management organisations (CMOs) which represent authors, performers, and publishers, and extended collective licensing (ECL) is not new to us. It seems that copyright societies are now seeking new licensing solutions, and this gets support from the DSM Directive’s Article 12 “Collective licensing with an extended effect”.

Moving towards license-based solutions seems to be the worst-case scenario for many Member States where this kind of arrangement is not common but the license-based solution is reality in some countries. The Finnish National Agency for Education takes care of licensing negotiations with CMOs for primary and second-degree education and the costs of licenses are paid from the national budget. Higher education institutions have to pay these licenses from their budgets. This is how teachers, pupils, and students can use printed and digital material and copyright holders get their compensation of the use.

In Finland, education is public (in copyright language: communication to the public). Teachers make most of the education materials themselves and the basic rule is that they hold the copyright for their material. According to the recent copyright study published by the Center for Cultural Policy Research (2019), the main issue of the primary and second-degree education is the lack of digital material that can be modified, further developed and combined.

It is not always clear when uses fall under copyright law, licenses, or when there is a need to get separate permission from the copyright holder (e.g. using audiovisual material) and these issues arise daily while using digital platforms. Libraries have been actively promoting Open Educational Resources (OER), consulting about copyright and Creative Commons licenses and this work continues.

Preservation of Heritage: Article 6 of the EU-DSM by Renata Petrušić

Renata Petrušić, senior librarian at the Croatian Digital Library Development Centre of the Croatian Institute for Librarianship, National and University Library in Zagreb. Responsible for copyright and licencing issues, access and rights management.

1. Can you explain to us what article 6 of the EU-DSM Directive contains?

Article 6 refers to the preservation of cultural heritage. It contains a mandatory exception that allows cultural heritage institutions to make, in any format or medium, preservation copies of all works that they have permanently in their collections.

Recitals 25-29 of the EU-DSM Directive provide details of the scope and objective of Article 6. They state that, in order to achieve preservation goals, cultural heritage institution are allowed to establish cross-border preservation networks, enabling cross-border cooperation and sharing of means of preservation. Recital 29 provides a broad definition of works that are considered to be permanently in the collection of a cultural heritage institution, including works that are “result of a transfer of ownership or a licence agreement, legal deposit obligations or permanent custody arrangements”. In addition, Article 7 stipulates that contractual provision contrary to the exceptions are unenforceable and that technological protection measures should not prevent the creation of preservation copies.

2. Why is this provision important to libraries?

Ensuring the preservation and accessibility of works from their collections for this and future generations have always been the fundamental mission of libraries. In order to achieve this mission, libraries and other cultural heritage institutions need a clear legal framework adapted to the digital age. It is essential to have legislation that allows libraries to take all necessary steps in order to carry out their duties and fulfil a public purpose.

Given that under copyright law, authors have the exclusive right of reproduction, it is crucial to have an exemption to copyright protection which allows libraries to make preservation copies of works without the need to seek permission from the copyright holder. Such an exemption must apply to all types of works or another subject-matter that libraries own or permanently have in their collections, to all formats and media. It is particularly important to emphasize that technical protection measures and contractual provisions must not affect the possibility of making preservation copies.

Although most European countries already have legal provisions that allow acts of reproduction for preservation incorporated in their national laws, inconsistency in the current legal provisions of  EU Member States brings legal uncertainty to preservation efforts carried out by cultural heritage institutions and their partners. Not all libraries have the technical resources and required expertise to carry out preservation programmes and they in that regard need to rely on external contractors and partners. The new mandatory exception will harmonize this exception across the EU, allowing libraries to cooperate across borders, use preservation networks and work with third parties when making preservation copies.

3. What is the best implementation Libraries could hope for with this article?

The provisions of Article 6 are a welcome addition to European legislation ensuring the improvement and harmonisation of exceptions relating to the preservation of cultural heritage throughout the EU. The adoption of the provisions of Article 6 and the definitions in the Recitals as they are set out in the Directive, would ensure that libraries are allowed to:

make preservation copies of all the works from their collections (by the appropriate preservation tool, means or technology, in any format or medium, in the required number, at any point in the life of a work),

– cooperate cross-border,

– share the means of preservation,

– rely on third parties for the making of copies,

– establish cross-border preservation networks,

– make sure that contractual provisions and technological protection measures do not prevent preservation of works.

However, it is possible to go beyond what is set out in the Directive. Ideally, broader exceptions would include permission to make copies of works for all internal uses in libraries, such as indexing and cataloguing, and other activities necessary for management of collection.

4. What is your government’s position on the issue?

Croatia is one of the first EU Member States to introduce a proposal of the transposition of the EU-DSM Directive into national law. A public consultation on the Draft Proposal on Copyright and Related Rights Act was conducted from April to May 2020. The proposed Bill received more than 730 comments. The government is now in the process of preparing a report on the consultation.

The current Croatian Copyright and Related Rights Act includes an exception benefiting cultural heritage institutions to reproduce copyrighted works from their own copy to any media for the purposes of preservation and safeguarding.

The new proposal of the Croatian Copyright and Related Rights Act implements the provisions of Article 6 as they are prescribed by the Directive. Article 182 of the proposed Croatian Copyright Law closely follows the wording of  Article 6, stating that “cultural heritage institutions […] are authorized, without the approval of the right holder and without payment of remuneration, to reproduce copyrighted works and related rights that are a permanent part of their collections, in any format or on any medium, for the purpose of their preservation and to the extent necessary for that purpose”. The same article also states that contractual provisions that are contrary to this exception are null and void, and defines the types of works that are considered to be part of the collections of cultural heritage institutions (as they are defined in Recital 29 of the Directive).

Importantly, proposed Croatian Law has retained the provisions of the current law that go beyond what is allowed in Article 6 of the Directive. Article 184 of the proposed Croatian Law, which refers to exceptions of the reproduction rights, for benefit of particular institutions, states that cultural heritage institutions “may, without the authorisation of the right holder and without payment of remuneration, reproduce a copyrighted work or another subject-matter […], on any medium, for their special needs that are in accordance with their public purposes, such as the needs of preservation and safeguarding of the materials, technical restoration and reparation of the materials, collection management and other own needs, if not acquiring thereby any direct or indirect commercial benefit”.




Text and Data Mining: (Articles 3 and 4 of the EU-DSM) by REBIUN’s Copyright working group

The Copyright working group of REBIUN (the network of university libraries in Spain) is formed of Silvia Losa, as coordinator of the group, and librarian in the Universitat Pompeu Fabra in Barcelona, Paloma Jarque, librarian in the Universidad Carlos III in Madrid, Rosa Mª Sánchez, librarian in UNED, and Patricia Sanpera, librarian in the Ilustre Colegio de la Abogacía de Barcelona. The group studies topics of interest on copyright for university libraries in Spain. We are currently monitoring the transposition process to guide REBIUN in the actions to be carried out in order to get legislation in line with the interests of libraries.

  1. Can you explain to us what Articles 3-4 of the EU-DSM Directive are?

Articles 3-4 of the DSM Directive introduce two exceptions to copyright for text and data mining.

Text and data mining (TDM) is defined as “any automated analytical technique aimed at analysing text and data in digital form in order to generate information which includes but is not limited to patterns, trends and correlations”.

Article 3 focuses on text and data mining for the purposes of scientific research.

The article covers the reproduction, and extraction from databases, made by research organisations and cultural heritage institutions (and their members) but only for scientific research purposes. It also covers the storage and retention of copies, for the same purposes, including the verification of research results.

A cultural heritage institution includes “publicly accessible library or museum, an archive or a film or audio heritage institution”. Art. 2(3)

Research organisations are basically not-for-profit entities or entities tasked by a Member State with a public service research mission, according to art. 2(1).

The exception covers text and data mining of “works or other subject matter to which they have lawful access”. That means all the collections of institutions like libraries but also those contents freely available online.

This exception is not subject to remuneration (recital no. 17) and is protected against contract override. Art. 7(1)

Rightholders may establish measures to ensure the security of their systems but they should not prevent the application of the exception. Copies generated by text and data mining should be stored securely. Member States may regulate both aspects after negotiation with stakeholders (including, therefore, libraries).


Article 4 allows acts of “reproductions and extractions of lawfully accessible works and other subject matter for the purposes of text and data mining”.

Text and data mining can be done for any purpose and the reproductions “may be retained as long as necessary for the purposes of text and data mining.” Art. 4(2)

The exception benefits all kind of users, institutions or individuals, who have lawful access to contents. That means all the collections of the organisation but also the open web.

This exception, unlike the previous one, can be overridden by contract.

According to art. 4(3) “the exception or limitation shall apply on condition that the use of works […] has not been expressly reserved by their rightholders in an appropriate manner, such as machine-readable means in the case of content made publicly available online”.


  1. Why are these items important to libraries?

An exception for ‘text and data mining’, TDM, as stated in articles 3 and 4 of the EU-DSM Directive, grants libraries the right to mine in copyright works to which they have lawful access.

Text and data mining, TDM, is important for research and academic libraries because this exception allows them to support researchers and other legitimate users from different disciplines to undertake data mining. This support includes giving them access to legally accessed materials, not only on-site but remotely, and with the right to keep secure copies.

There are some aspects of the activity of libraries that can be closely related to text and data mining.

Libraries are supporters of Open Science, as they do with their institutional repositories. Open Science, including, inter alia, open access, open data, and FAIR data, is a loyal friend for TDM. With such a friend, researchers and other legitimate users will successfully carry out automated text and data analysis. Open Science is based on the possibility of checking out researchers’ methods and data. Without the opportunity to look at the datasets used for analysis, other researchers cannot confirm, or disapprove, findings, undermining overall scientific progress.

Libraries are used to work together with IT and Legal Departments. For the sake of an ideal use of the exception in favour of researchers and other legitimate users, libraries can help TDM workflows and infrastructures to be applied and developed.

As beneficiaries of the exception, and as advocates of researchers and other legitimate users from their institutions, libraries can have the necessary power when negotiating with publishers, so the right to mine is not overridden by contracts, and no additional information about the research is requested by publishers. And, as well, ensuring that any technical issues or access-blocking experienced by the institution are resolved quickly. Libraries pay for subscriptions to academic publications, there is no need to pay again to text and data mine contents already subscribed.

Furthermore, with a TDM exception libraries could, in short terms:

–       Perform TDM without requirement to inform or seek permission from publishers

–       Remove or ignore contractual provisions in licenses in conflict with TDM

–       Promote actions (including legal action) if access is blocked and not quickly resolved by the publisher

–       Protect personal data and privacy of researchers and other legitimate users from publisher requests for further information about TDM activities


  1. What is the best implementation you could hope for with these articles?

In short, our aspiration would be that the legal text allows the maximum use of text and data mining techniques for research purposes, and also to the legitimate users; with the only limitation that such uses do not conflict with a normal exploitation of the works and do not unreasonably prejudice the legitimate interests of the rightholders.

Specifically, we believe that there are a number of issues that it is important to incorporate or clarify in the law:

Data mining exception should allow acts affecting the right of transformation. It is not always clear when the use of these techniques can affect this right, so the express inclusion of this right would create legal certainty for researchers and legitimate users.

Public communication should also be allowed to enable researchers to carry out text and data mining activities where they have better tools for this, through a remote controlled system. That would prevent them from having to move, for example, to library facilities in order to analyse digitisations of their collections.

It should also ensure that the application of the exception entails the possibility of disseminating the results generated by it provided that such dissemination does not conflict with a normal exploitation of the work and does not unreasonably prejudice the legitimate interests of the author.

With regard to libraries and other cultural heritage institutions, the law should specify that they may use the exception of article 3 to conduct research in the context of their main activities. A restrictive interpretation of the concept of scientific research will make the exception useless for our institutions.

The storage of copies generated by the mining of text and data should be made where the researcher or the legitimate users choose, provided that they are protected against unauthorized access. Moreover, imposing different storage conditions in each European country may be an impediment to the development of cross-border projects.

It must be ensured also that, in the case of technological protection measures, the beneficiaries of the exception may have an extraordinary remedy requiring rightholders, or their intermediaries, to lift such mechanisms within a maximum of 72 hours, including financial penalties in case of non-compliance, where appropriate.

Since the exception (both exceptions of article 3 and 4) should not be subject to fair compensation, it should be ensured that suppliers of works and services do not impose a higher price on their subscription to enable text and data mining activities.

Finally, regarding specifically article 4, and according to the EU-DSM Directive, the law should also ensure that in cases of accessible resources that have been made publicly available online, rightholders can only object to the exception through the use of machine-readable means; otherwise the exception will become useless, as a manual review of terms of use and legal notices of websites cannot be intended.

  1. What is your government’s position on the issue?

We have no information about this aspect at the moment. The government launched a public consultation on December 2019 but they did not expose any kind of explanation or clarification on the positions of the government regarding the transposition of the EU-DSM. As far as we know (https://www.notion.so/Spain-64ff430a3fec4ed2a17895bd82ceb6e8), they will probably publish a draft of the legislative text when the State of Alarm ends.


The HathiTrust Digital Library: A Fair Use Story

Sara R. Benson, Copyright Librarian, University of Illinois.

If you are unfamiliar with the work of the HathiTrust Digital Library, fair use week is a great time to familiarize yourself with it.  The HathiTrust Digital Library “is a not-for-profit collaborative of academic and research libraries preserving 17+ million digitized items.”[1]  Essentially, partner libraries digitize volumes of in-copyright and public domain books for preservation and access through the library.  The library makes the works available to the fullest extent possible under United States copyright law.  Thus, for public domain works, the works are fully available to read and access through the digital library.  (The HathiTrust also works with library partners to review works to determine whether they are in-copyright or have fallen into the public domain due to failed formalities).[2]  For in-copyright works, researchers can search to see how many times a particular term is used in the book and on which pages the term is used.  This search feature has been deemed a quintessential fair use by the Second Circuit Court of Appeals[3] and paved the way for the broader Google Books fair use court decision.[4]

Select member affiliated researchers can also engage in text mining with in-copyright books through a special Data Capsule.  This capsule allows researchers to use a secure online environment to engage in research and text mining with the book corpus.

If you are unfamiliar with the HathiTrust Digital Library and the HathiTrust Research Center, fair use week is as good a time as any to get familiar with it.  What are you waiting for?  Dive into the resources available through the HathiTrust and discover a whole new text-mining world!

[1] https://www.hathitrust.org/about.

[2] https://www.hathitrust.org/copyright-review.

[3] Authors Guild v. HathiTrust, 755 F.3d 87 (2d Cir. 2014).

[4] Authors Guild v. Google, Inc., 804 F.3d 202 (2d Cir. 2015).

Costs Cost: Key Considerations when Making Choices about Remuneration for Uses of Copyrighted Works

Modern creative industries have, to a large extent, built themselves on the basis of copyright. Their business models depend on having – or acquiring – rights to sell or use content, which they can then sell in exchange for remuneration.

These rights are what lies behind the need to pay for initial access to a work. They are also the reason why, once a library or other user has legitimately bought or licensed a work, they may also need to pay extra in order to make certain uses of it.

For example, restaurants often need to get a licence in order to play music which they have already bought, schools and universities may have to pay to be able to copy legitimately acquired works for students, and libraries can be asked for money to put copies of works in their collections on the internet.

These payments can represent a source of revenues for creators and publishers. However, they also represent a cost to users.

As such, when thinking about whether obliging such payments is a good idea – for example in the context of a copyright reform – it is important to think about whether they are really desirable from a public policy perspective. This blog sets out some of the key questions that policy-makers need to bear in mind.


How High are the Transaction Costs? Making a payment isn’t necessarily free – ‘transaction costs’ refer to the costs that are linked to how a seller and buyer (or in our case, rightholder and licensee) are connected.

For example, a library may incur costs simply to count the number of times a certain use was made, or how much was used. This will almost always require an investment in people’s time and may require financial investment in technical infrastructure to do the monitoring. Administering the sourcing and distribution of payments also costs money, both in terms of staff and operational costs. All of this represents an inefficiency that reduces the overall sum of money that goes to authors and publishers.

Clearly in many cases, it is possible to limit the costs of collecting information – for example by using simpler tools – and by reducing the costs of administering the scheme it will make it fairer . However it is also possible that the costs of running a licensing system are too high be worth it.

Recommendation 1: Governments need to ensure that, when designing copyright systems, the relative costs of administering payments are not so high as to make it pointless.


Is there a Way of Controlling Moral Hazard? Collecting societies and other intermediaries like publishers who are responsible for distributing money collected for the uses of in-copyright work have a duty to work hard to identify and pay out revenues to authors.

When the rightholders are stronger – for example publishers who are members of such collecting societies – they can work to ensure that they receive payments. However, where rightholders – such as authors – have fewer resources, they may find this more difficult.

Strong regulation can help ensure that collecting societies and publishers pay out royalties to authors where these are due. However, where such regulation is lacking, there is a risk that money will be used for other purposes, for example lobbying or payments only to the more influential or famous members, there is a risk to the legitimacy of the system as a whole.

Recommendation 2: Governments need to ensure that there is effective regulation to ensure that the distribution of royalties and fees is efficient and legitimate.


What is the Impact on Users’ Decision-Making? When anyone makes conscious choices, they are carrying out a form of cost-benefit analysis – i.e. is it worthwhile to do something, or at least more worthwhile than doing something else.

In digitisation projects, for example, it is rare that there are sufficient resources to do all that you might want to, and so a project manager will need to select what to prioritise. Questions such as the importance of a work, or the risk of it being lost will favour digitisation, but the need to pay for a licence can undermine this.

Indeed, this may lead to project managers choosing to spend resources on digitising works which are less important, or less vulnerable, simply because this is cheaper. Effectively, mis-judged licencing obligations can skew priorities. It is important to ensure that imposing costs does not lead to sub-optimal decision-making in heritage institutions.

Recommendation 3: Governments need to ensure that the introduction and design of remuneration systems do not lead to distortions in decision-making which harm the public interest.


Does it Even Make Sense? Ordinarily, it would make sense to impose costs on a user – such as a heritage institution – when their actions in turn impose costs on a rightholder. This can happen, for example, if library copies substitute for sales of works, and so reduce income.

This is why, for example, the ‘Three-Step Test’ in international law underlines that exceptions should only apply where there is no conflict with normal market uses, and where there is no unreasonable impact on the legitimate interests of rightholders.

The key question then, in deciding whether to impose costs on users, is whether there is an unreasonable  impact on rightsholders. This is keenly debated of course, as we have seen in Canada, where a Parliamentary Committee dismissed claims that an expanded education exception had led to a sharp decline in sales, and instead suggested that more credible research was needed.

But there are other areas, such as preservation, where the actions of heritage institutions do not harm markets, but rather provide a valuable service by ensuring the survival of works into the future. This is essential if works are to be available in the medium to long term.

In this case, it can seem absurd to want to impose costs, when in fact it is the heritage institution taking on a responsibility on behalf of rightholders.

Recommendation 4: Governments need to ensure that they do not introduce remuneration obligations for uses where there is no clear impact on markets, and indeed where this may end up working against the interests of rightholders. 


As highlighted at the beginning, copyright lies at the heart of the dominant business model for today’s creative industries. Beyond payments for access in the first place, there are ongoing discussions about where and whether to ask for further payments for use.

In trying to draw the line between where such payments are desirable or not, policy makers need to take considered decisions, based on the reality of the situation they are in. Transaction costs, managing moral hazard, the potential to skew decision-making, and simply good sense should all be borne in mind.