Authors in the New Information Age A Working Paper on Electronic Publishing Issues September 14, 1995 Copyright 1993,1995, National Writers Union. All rights reserved. The NWU grants permission for non-commercial redistribution with attribution. National Writers Union (UAW Local-1981) National Office West National Office East 337 17th St. #101 873 Broadway #203 Oakland, CA 94612 New York, NY 10003 510-839-0110 212-254-0279 nwu@netcom.com http://www.nwu.org/nwu/nwu_index.html ftp://ftp.netcom.com/pub/nw/nwu This document began as a draft by Bruce Hartford and Jonathan Tasini in April 1993. The NWU Delegates Assembly adopted the draft as a working paper in June 1993. After revision and expansion it was re- adopted by the NWU Delegates Assembly in August 1995. Many union members have contributed to revisions, including Alice Sunshine, Maria Pallante, Phil Mattera, and Alec Dubro. We thank Nancy Van Zwalenburg and Keith Watson for help in correcting the manuscript. Introduction The more we look at the emerging information technologies, the clearer it becomes that we are in the midst of an information revolution as profound and far-reaching as the one triggered by Gutenberg's printing press. The printing press was not merely a more efficient hand-scribe -- it totally transformed the way in which information was created, reproduced, sold, and consumed. It created information markets and formats undreamed of in the medieval quill-pen universe. The printing press brought into being new economic institutions and relationships and altered old ones beyond recognition. We are experiencing a similar revolution, but instead of time measured in centuries, it is happening in a decade or less. Today's computer networks are the forerunners of the GII (Global Information Infrastructure) of tomorrow. This world infosphere will provide intellectual property -- information, art, and entertainment -- on demand from public and private sources in a multitude of formats: written, visual, audio, and multimedia. Although we do not know the exact contours the markets will assume ten years from now, the world infosphere has the potential to become a large electronic marketplace for authors where commercial vendors, including us, will transmit and license the intellectual property that we create in a variety of formats. Do not think of these electronic markets as mere extensions of existing institutions. Think of them as the electronic Main Streets of the so-called global village. You will enter and travel these digital Broadways via your computer, or your telephone, or your TV set, or via gadgets not yet conceived. Fronting on these conceptual boulevards will be libraries, academic and research institutes, entertainment centers, and electronic emporiums selling all kinds of intellectual property. If you want a book, an article, a film, a piece of art, or a database, it will be downloaded in minutes to the device you possess. And instead of stocking 10,000 titles, the electronic bookstore will stock millions from all over the world. This is developing into a new type of marketplace without a physical location. The products sold here will have no physical embodiment until after they are purchased, and maybe not even then. What these new types of markets may offer and who has access to their goods will be determined by those who are active in shaping them. The National Writers Union would like to see these cyberspace agoras nurture a new flowering of intellectual freedom and experience. These forums could be shaped to encourage the development of new forms of information and intellectual property -- for example, dynamic books with which users interact and that change as they are used. They could provide exciting new multimedia genres and information formats, virtual-reality education and entertainment environments, and entire new art forms. On the other hand, they could be reduced to no more than Madison Avenue hucksterism, the digital equivalent of TV shopping channels. We hope they will provide new avenues for human creativity and communication, but we fear that, like mass-market television, they could be turned into vast wastelands of lowest-common-denominator mediocrity, consumerism, and indoctrination. If authors want to influence the direction these new markets take, the time to speak up and act is now. The laws and customs that govern commerce in our traditional trading centers will not necessarily apply to this new type of bazaar. Moreover, the electronic Main Street will be a world boulevard for those able to access it. The applicability of any single nation's laws is a total unknown. This means that we have to think on a global, not national, scale. Technology is changing the nature of those for whom we work. We must rid ourselves of vestigial thinking about the "American publishing industry." Forced together by rapid technological change, the five industries we once considered separate pieces -- computing, consumer electronics, entertainment, communications, and publishing -- are transforming themselves into global, vertically-integrated, multimedia leviathans. Just as the different disciplines blur and merge, so do the economic giants that dominate those fields. Sony buys movie studios; Viacom buys Paramount, which owns Simon & Schuster. The phone companies are muscling into cable TV, and the cable TV companies want to sell long-distance phone service. Time Warner is developing networks based on cable-TV lines, while Oracle Corporation is researching information networks delivered via radio frequencies. One CEO quoted in The Wall Street Journal said, "You sort of see the point where the world will team into two, three, maybe four global alliances over the next five years." That is their world-view. We advocate one that is more egalitarian. Meanwhile, our government is rushing to bestow upon the already rich and powerful a resource that could otherwise belong to all humankind. Just as a century ago, when Washington handed out enormous tracts of public land to the railroad robber barons and oil tycoons, many of today's elected officials are selling off the communications spectrum to multinational monopolies at prices so low they make a mockery of "free market" rhetoric. The scheme includes turning over to private control statistics, databases, and satellite imagery that were created and collected at taxpayer expense. To further enhance the private windfall, our representatives are working on deregulation to remove community-service and equal-access requirements from the airwaves and communications networks. The Economics of Technological Change Economics drives the pace of new technological innovation. In turn, technology alters economic relationships. Before the early 1800s, most book authors self-published their works by hiring a printer or by doing it themselves, like Ben Franklin. The growth of national markets in population and geography and the introduction of larger, more expensive presses led to the emergence of publishing companies with increasing production and distribution capacity that made the self- publisher marginal. Today, self-publishing carries the stigma of inferiority. Tomorrow, however, desktop publishing and the electronic marketplace will reshape and, in some instances, eliminate, the need for typesetting, printing, binding, trucking, warehousing, shelf-stocking and inventory maintenance. If electronic distribution is implemented to allow individual authors or small co-ops access to the world electronic marketplace, the role of currently powerful publishing giants could be seriously challenged. As these new economic models emerge, who will have a voice in determining these new relationships? We know the publishers and vendors will look out for their interests. To what extent can we make heard the voices of those who create intellectual property in the first place? But before we ask to be heard, we have to know what we want to say. All of this brings us to the task of formulating our positions. This paper addresses four areas related to online distribution of our work through computer networks: * Access Issues * Commerce Issues * End-User Issues * Illegal Sales Each of these four areas contains several specific issues of importance to writers. We present some basic principles to help explain what underlies our positions on these issues. Then we provide some explanation, followed by an outline of those positions we feel best represent the interests of writers, as well as of the general public. After the sections on these four categories, the paper takes up three related topics: * The production of books on disks such as CD-ROMS * The development of online systems of payment * The role and funding of libraries in the digital age Access Issues One must consider issues related to access to information from two perspectives: * Access for information consumers * Access for information creators and publishers Consumer Access Consumer Access: Basic Principles In the broadest sense, the infosphere is the collective product of all humankind and the birthright of every individual. That means that: * Information should be free -- politically. There should be no censorship and no forbidden subjects. * Information should be available to all -- economically. While creators have a right to be paid for their labor, it is in the interests of society as a whole to ensure that no one is locked out of the world infosphere because he or she cannot afford access. Consumer Access: Discussion These new information technologies offer the possibility of unprecedented opportunity for education and communication among the people in this country and throughout the world. Through these new technologies, we hope to witness a new flowering of democracy as information flows into the hands of individuals who then participate in the world of ideas and politics. The danger is that the costs and training required to enter this new information universe will be out of reach or unavailable to some, dividing society into information haves and have-nots. As writers and union members, we understand and support the principle of collective advancement of humankind. It is in the long-term interest of society as a whole to provide basic educational opportunities to all, rich and poor. We have free public schools, libraries, hospitals, and highways not out of soft-hearted charity, but because we have learned from human history that cultures and societies grow and advance as collectives, not just as individuals. Today we benefit from the investments our ancestors made in the education of all, regardless of wealth. The return on that investment has enriched our individual lives a thousand fold. It is short-sighted to deny to anyone in our society the opportunity for education and advancement. Thus, we are committed to the fight for full access to the new information universe for everyone, regardless of income. Access, however, costs money. Business Week estimates revenues generated by these new technologies might reach $1 trillion. Yet neither the government nor private industry, which stands to profit from those revenues, has presented a plan to pay for the fully interconnected society they promise. With state and federal budgets strapped for the foreseeable future, where, for example, will the California Department of Education get the half-billion dollars it says it needs to outfit schools with the equipment of the infosphere? (And that figure does not include dial-up costs.) Instead, we are treated to phrases such as "the information superhighway," or "National Information Infrastructure" or, the newest, hottest concept "Global Information Infrastructure." In reality, a system of "toll-roads" is being created. Most people will be able to get video-on-demand and games. But access to information critical to a functioning democracy will be in reach of only a portion of society. Pay a fee and get into the private information reserve. This is already happening as previously free databases of government information are being privatized. Consumer Access: We Advocate 1. AFFORDABLE EQUIPMENT. The systems should be designed so that citizens can access the world infosphere using inexpensive equipment. In the future, the user will not necessarily need computers as we know them today to access these networks. It is vital that supporters of democratic access to information support the research and development of simple devices -- for example, a device that you attach to your phone line or that hooks into your cable TV. This minimal equipment, costing no more than a typical TV set, should be all that is required to access the infosphere. 2. EDUCATION. Training in use of the infosphere should be a mandatory part of school curricula. Adult education in these technologies should be offered through libraries, public schools, job training programs, and other appropriate venues, not the least of which should be online lessons. Some educators are already pioneering online lessons in using the Internet. 3. LOW ACCESS FEES. The basic access fees to the world infosphere should be kept as low as possible. Like the phone and power companies, access providers should work on the principle of universal service. Through "life-line" rates to low-income users, the costs are evened out and shared by all of society. These minimal life-line rates should be no higher than the actual cost of adding a low-income person to the provider's pool of subscribers. Rates for other users have to cover the provider's infrastructure costs (hardware, software, cable, buildings, satellites, staff, etc. plus profit), but adding a small number of life-line users does not require additional infrastructure. Therefore, life-line rates can be based on the cost of servicing only those accounts. 4. LIBRARY UPGRADES. Historically, public libraries have always served the information needs of society's low-income sectors. Even with low-cost rates and universal service from providers, many working people, children, the poor, the homeless, travelers, and others will have to rely on libraries for access and a road- map to the information universe. Therefore, public libraries must be upgraded so they can provide both training and access for those who do not have the means or cannot afford access on their own. 5. FREE GOVERNMENT INFORMATION. All users should have access to databases and other material created or assembled at taxpayer expense at no more than the cost of providing online access. Government data should not be licensed to vendors for commercial exploitation. Where taxpayer-funded data has already been licensed for commercial distribution, the fees should be regulated to maximize access and minimize exploitation. Publishing Access Publishing Access: Basic Principles The National Information Infrastructure (NII) must be operated as a common carrier. Just as the phone companies do not regulate what you can say over their lines, the information super-highway must carry every person's or group's information traffic without regard to content. As a common carrier, basic charges must be reasonable, fair, and equal. The same principles apply to the Global Information Infrastructure (GII). Publishing Access: Discussion They say that freedom of the press applies only to those who own one. And as presses have become more and more expensive, publishing has been concentrated into fewer and fewer hands. New information technologies provide the opportunity to reverse that historical trend. The technology exists to enable individual authors, small presses, and writer co-ops to publish and distribute on the network and have their payments and royalties electronically collected and transferred to them. This is possible without any investment in impossibly expensive equipment or payment of prohibitive usage and carrier fees. But just because it is possible to allow low-cost publishing does not mean that the electronic marketplace will be implemented that way. Publishing Access: We Advocate 1. INVESTMENT COSTS WITHIN THE REACH OF SMALL PUBLISHERS. The electronic marketplaces should be designed so that the capital and human investments required to license and distribute creative work can reasonably be made by individual authors, small presses, or author co-ops. 2. LOW SELLERS' FEES. Likewise, the charges and fees for licensing intellectual property in the electronic marketplace and collecting appropriate royalties and use-fees should be set within reach of small independent publishers. 3. FAIR ACCESS. Individuals and small presses must have fair access to the means of electronic publishing and promotion. Commerce Issues Commerce Issues: Basic Principles It is a basic human right that everyone should receive fair pay for his or her labor. As creators, we have a right to expect to earn a decent living from our profession. It is in society's interest to maintain and support professional, independent freelance creators. If the freelance book author, investigative reporter, and creative artist are denied the ability to make a decent living, the only information and art that will be available will be that produced by the independently wealthy or by those who labor under orders from corporate media conglomerates, big businesses, government agencies, and other institutions that hire talent to speak for them. Copyright law was originally developed to guarantee these principles for creative people. The idea, which dates back two centuries in Europe and is embedded in the U.S. Constitution, is to protect creative people from outright theft of their labor. In the European Union, copyright goes further than in the United States and covers the moral rights of artists, writers and other creators. These moral rights include protection of the form of the work. In the U.S., copyright lawprimarily protects economic rights, giving authors exclusive rights to their own work for a limited time. This enables authors to live while they create. Later, when their work enters the public domain and is no longer protected, the public has free use. Commerce Issues: Discussion Commerce issues are those that shape our livelihoods; these address how intellectual property is bought and sold in the electronic marketplace. In the the future, authors and artists will be able to sell a variety of electronic distribution rights in a variety of ways. For example: * The restricted or unrestricted right to read, view, or otherwise use a work * The restricted or unrestricted right to make digital (electronic) copies * The right to redistribute the work to others * All electronic distribution rights An author or artist can be paid for these rights in a variety of ways. For example: * Per-use royalty * Lump-sum fee * Income share * Time rental or time access period These fees can be paid on a variety of bases. For example: * Each person's access/use * Each machine's access/use * Site license All of which means that negotiations and agreements for the sale and transfer of intellectual property are going to be more complex, but potentially fairer to authors who are able to assert themselves by acting collectively. Writers & Publishing on Commerce Issues We urge writers to advocate and defend the following positions and to fight for them in their electronic marketplace dealings: 1. COPYRIGHT. The legitimacy and sanctity of copyright law should be applied to electronic marketplaces and the electronic distribution of intellectual property. 2. FAIR PAYMENT. Authors and other creators of intellectual property have the right to negotiate and receive fair payment for commercial use of the material they create. Further, since U.S. copyright law allows the author to license each individual right associated with a work (for example, movie right, paperback right, syndication right, etc.), creators should be able to negotiate each right separately, free of coercion to license all rights in a blanket deal. These points are self-evident to creators who, like other working people, rely on their labor to earn a living. But one faction of the technology community distorts the "information should be free" principle to mean that no one should have to pay writers for the fruits of their labor. Certainly information should be free in the political sense; we oppose all forms of censorship. Writers should be able to distribute their work at no cost if they so choose. Likewise, those who want to make a living and support their families from years of study and the practice of writing have a right and a need to do so. 3. CONTROL OF ELECTRONIC DISTRIBUTION RIGHTS. Contracts dealing with electronic distribution rights need to cover two aspects: control and payment terms. Control over electronic distribution rights determines who decides when and for how much rights are to be sold to other parties. Payment terms determine how much the author receives for these rights. Publishers often try to pressure writers into surrendering control for very poor terms. Authors should negotiate vigorously. Whenever possible, authors should retain control over these rights and surrender them only in return for favorable payment terms. Also, authors have already begun to deal directly with online distributors who will handle electronic transfers. In the same vein, authors should define very specific terms and not surrender control of their rights to distributors in these transactions. 4. ROYALTIES FOR BOOKS. When publishers buy the right to sell or distribute electronically individual copies of a work to individual consumers, they must pay the author a royalty for each copy sold rather than a flat fee for an unlimited distribution right. These sales should not be treated as lump-sum sales of subsidiary rights. 5. COMPENSATION SHOULD REFLECT VALUE ADDED TO THE PRODUCT. When books are sold and distributed electronically, the publisher has none of the traditional printing, binding, warehousing, shipping, stocking, returns, and spoilage costs. Therefore, payments to authors for books and book-like works that are sold or distributed electronically by publishers should be based on how much value was actually added to the product by the author compared to what the publisher added. Considering the much smaller input by the publisher, when such works are sold by an author to a publisher for electronic distribution, the minimum fair royalty for the author should be at least 50 percent of the sales price paid by the consumer. Depending on how much (or little) the publisher expends for promotion and to what degree the author provides typesetting via desktop publishing, indexing, artwork, and so forth, the author's share may be greater than 50 percent. In cases in which the author bypasses the publisher and goes directly to an online distributor, the royalty split should reflect the effort and skills of the principal participants. Some distributors will simply "slap" the work onto the computer network, doing very little with it. Others will add considerable packaging, presentation and perhaps other services. The royalty split should reflect this. 6. AVOID WORK-FOR-HIRE OR ALL-RIGHTS CONTRACTS. Work-for-Hire contracts and All-Rights contracts for works intended for general mass publication are coercive, unfair, and improper. They are often used as subterfuges for gaining electronic distribution rights without fair payment. In this context, general publication is understood to include books, newspapers, magazines, and analogous electronic formats in which the reader is primarily buying the work of the author. [NOTE: The NWU accepts that sometimes the author's words are an adjunct to what the customer is actually buying and that this circumstance may justify a Work-for-Hire or All-Rights contract. Examples would include technical manuals accompanying a product, a report describing the results of someone's research, or written material that is not offered for sale directly to the public, such as advertising copy, grant proposals, and corporate newsletters and reports. Also, Work-for-Hire is appropriate when the writing is within the scope of the writer's employment as part of his or her normal job duties, such as when a staff reporter for a newspaper writes a story. In this case, the newspaper owns the copyright, not the reporter.] The Government's Role in Commerce Issues We also advocate that the following points be established through new laws or government regulations: 1. COPYRIGHT LAW. When intellectual property is sold or electronically distributed across national boundaries, the Berne Convention copyright laws apply to that work. The Berne Convention is an international treaty on intellectual property. 2. NO CHANGE OF TERMS VIA CHECK ENDORSEMENT. Authors should be free to retain any and all electronic distribution rights and should not be coerced into selling them against their will. It is not uncommon for a writer to find the following written on the back of a paycheck: "signing this check signifies release of all rights to the publisher." By signing the check, the writer appears to give up everything; by not signing she may give up rent or mortgage money. The practice of using a form on the back of a payment check to enumerate additional rights the author surrenders to the publisher by cashing the check is immoral and invalid, and should be made illegal. 3. ONLY RIGHTS THAT EXIST CAN BE SOLD. Currently, many "all-rights" contracts contain explicit "now or in the future" language, which is unfair. Because it is impossible to determine the value of rights before such rights exist (for example, TV rights didn't exist before the invention of the television), authors should not be forced to grant rights to media or technologies that do not exist at the time the grant is made. Even without such explicit language, the courts have consistently ruled that "all rights" automatically include any rights that come into being after the contract is signed. While the courts currently do not support the concept that you cannot sell something that does not yet exist, this could be changed by legislation. The NWU urges Congress to amend the Copyright Act to state explicitly that "all-rights" contracts are valid with respect to only those rights that exist at the time the contract is signed. 4. FAIR USE. Authors are users of information as well as intellectual property owners. The interpretation of the "Fair Use" provision of the Copyright Act should continue to take into account the need for an unimpeded flow of information, while at the same time taking into account the legitimate interests of those who own copyrights. 5. NO PRE-REGISTRATION REQUIREMENT. Current law requires that a work have been pre-registered for the creator to collect statutory damages and attorneys fees for copyright infringement. Because the Berne Convention eliminated the requirement of copyright registration to protect a creator's rights, U.S. copyright law should be amended to eliminate the copyright registration requirement as a barrier against collecting these damages. Without such an amendment, individual writers are effectively precluded from using the courts to enforce their rights. 6. CLEAR TRACKING OF WHAT PROFIT-MAKING DATABASES OWE TO AUTHORS. Networks and data carriers must provide technology that allows automatic transfer of payment to the copyright holder each time they collect money from a user who accesses the book, article, artwork, or file. They must also provide a mechanism for tracking use information and providing timely, accurate, and understandable reports to copyright holders regarding the electronic use of their material. Computers are designed to track this sort of data, and it can easily be accomplished using ISBN numbers or other tracking methods. However, this data must be tracked in such a way as to ensure the privacy of users. 7. LET USERS KNOW WHO OWNS THE COPYRIGHT. When databases containing intellectual property are compiled, each piece of information must include the author's name and the various rights to that piece of information that are owned by the author and the publisher respectively. 8. THE RIGHT TO ENCRYPT. Authors and the owners of intellectual property should have the right to encrypt their data to protect their copyrights. The right of persons to encrypt their data by any means they choose should not be abridged, denied, or limited. We oppose legislation requiring encryption hardware and software to contain loopholes or backdoors that governments can use to decrypt and read encrypted information. Creators, publishers, and distributors should not be required to decrypt their data except through due judicial process. End-User Issues End-User Issues: Basic Principles We are not concerned with the personal, private use of information by consumers. End users have always been able to lend books to friends, photocopy cartoons and articles to pass around the water cooler, and quote (and misquote) things they have read. For creators, the crucial dividing line between permissible private use and copyright violation is the division between commercial resale and personal use. We do not oppose an individual making a copy of information for personal, private use. What we oppose is anyone making money from someone else's creativity without the creator's permission and, unless the creator gives the work away, without passing a share of the income generated back to the creator. End-User Issues: Discussion End-user issues pertain to what people do with the intellectual property that they obtain electronically. For writers, end-user issues raise three critical problems: duplication, plagiarism and authentication. Duplication (bootlegging) How many of us have made an illegal duplicate of some piece of software and given it to a friend? Or perhaps some of us have used some software passed on to us? Soon our books and articles will be bought over the telephone and downloaded into viewing/storage gizmos in a few minutes. And in a few more minutes, anyone may be able to make a copy and give it to a neighbor. What then? The fact is that the technology of information duplication and distribution has far outrun the technology of information protection. In the coming information environment, any technical method of preventing unauthorized duplication will be so expensive, or so annoying to the user, as to be prohibitive for intellectual property aimed at mass audiences. Moreover, while technology enhances the ability for illegal duplication and copyright violations, we faced this same problem in the print age. It is only through societal education -- explaining why copyright violations undermine creators as a valuable cultural resource -- that we can hope to reduce this practice. We support an ongoing educational campaign on this issue. Plagiarism When information is in digital form, it is much easier for plagiarists to lift portions of someone else's work and claim it as their own. With new technologies, plagiarists do not have to re-key, recopy, or repaint a work to appropriate it. Various technical schemes have been proposed to enable original creators to prove their authorship and disprove that of the pirate. For example: * PUBLIC DEPOSITORIES. All texts, including the author's name or chosen pseudonyms, can be submitted to publicly accessible document depositories in such a way that the date of submission becomes part of the public record. These facilities would preserve the contents in non-erasable, non-changeable media in the order they were submitted. Persons claiming plagiarism would simply show that their work reached such a depository earlier than the text they are calling into question. * ELECTRONIC SIGNATURES. It is feasible to embed invisible electronic signatures in digital documents and works of art. These digital signatures are automatically reproduced when pirates make illegal copies for sale or plagiarists use a computer to copy out portions for their own use. If a plagiarist digitally copied a portion of an author's work, the author could prove it was the author's. (However, if the plagiarist re-typed your work, as they do today, the digital signature would not be present.) Attribution and Authentication When end users make use of work created by others, they have a moral obligation to give proper attribution to the original author. When information is in digital form, it is easy to alter someone else's work and pass on the amended version as the real article. Fortunately, it is technologically feasible to attach authentication "checksums" to documents. These checksums (and other similar devices) automatically reveal whether the document has been altered in any way. By consulting an authentication checksum, the person receiving a document could tell instantly if the document was an authentic copy. End-User Issues: We Advocate 1. PUBLIC DEPOSITORIES. Public depositories of record should be set up and maintained. 2. DIGITAL SIGNATURES. It should be easy and inexpensive to embed hidden digital signatures in creators' works. 3. AUTHENTICATION CHECKSUMS. It should be easy and inexpensive to embed authentication checksums in works. Unfortunately, while methods such as these will allow us to prove ownership of our work, our ability to track down plagiarists will be no better than it is now. In fact, it will be worse because we will be dealing in a global market. Unless someone happens to bring a plagiarism problem to our attention, we are unlikely to know about it. Illegal Sales Two illegal-sales issues are of immediate concern to writers: disputed copyrights and outright piracy. The National Writers Union is taking strong action on these. Disputed Copyrights Disputed Copyrights: Discussion This is one of the biggest problems writers currently face. Copyright law stipulates that the copyright to one's work is divisible, meaning an author need not transfer the copyright title in bulk. Rather, each of the many, independent rights that comprise one's copyright may be transferred individually to a buyer. But some publishers -- especially the largest and most powerful -- are claiming that their purchase of One-Time North American Print Rights for newspaper and magazine articles automatically gives them electronic distribution rights. Similar disputes can arise from book contracts signed before these new technologies were conceived. Eleven freelance writers, all members of the National Writers Union, filed suit in December 1993 in New York charging some of the largest purveyors of full-text, online information with violating the writers' copyrights. The writers argue that by reselling their work on computer networks without paying them, the sellers are denying them an important new market in which they could earn part of their freelance writing income. Meanwhile, more than 100 NWU members are protesting the sale of their work at high prices to users without a dime being paid to writers. Of the many databases engaged in this practice, we have focused our efforts on one of the largest, Information Access Company (IAC), to play fair. (IAC operates full-text dabases on CompuServe, Dow Jones News Retrieval, and other sites.) While we hope that the lawsuit and the protests will establish principles of fairness and justice in electronic prublishing, the NWU is also interested in finding practical solutions to problems. Therefore, in line with the principles set forth in this document, we have established the Publication Rights Clearinghouse (PRC), a collective-licensing agency inspired by the music industry's ASCAP. PRC has set up a transaction-based writers' electronic-rights marketing and royalty collection system with the UnCover Company. Uncover operates the world's largest magazine and journal article database, and is an affiliate of Knight-Ridder, Inc. We look forward to further developments in this area. Disputed Copyright: We Advocate 1. ONE-TIME RIGHTS ONLY. An author should always sell intellectual property rights by written agreement. However, in the case of a journalist who chooses to sell rights to a publisher via an oral agreement, it should be assumed by all parties that in the absence of a specific written agreement, the writer is granting One-Time North American Print Publication Rights only. The grant of One-Time North American Print Publication Rights, or Primary/Exclusive Book Print Rights, does not include the right to distribute the material electronically, nor does it include the right to sell electronic distribution rights to others. Note that most book contracts signed today explicitly deal with electronic distribution rights, but most articles are still sold without explicit understandings on such rights. 2. ELECTRONIC RIGHTS REMAIN DIVISIBLE. Like translation rights or dramatic rights, electronic rights may be divided into separate sub-categories. Some of these include resale on full-text article databases, posting via a computer network, digital copying or publication on a CD-ROM, digital tape, laser disc, the World Wide Web, or other electronic media. Electronic rights are separate and distinct from all other rights. In addition, electronic rights may be sold on a non- exclusive basis. None of these electronic distribution rights is automatically included in the purchase of another right. 3. RESPONSIBLE BEHAVIOR BY ONLINE SELLERS. Data carriers and networks should determine whether a vendor of intellectual property has the legal right to sell it before allowing the vendor to use the carrier's links and networks. The carrier should at least require each vendor to sign a statement that the vendor has that legal right. A data carrier should also be legally required to prevent its links and networks from being used for the illegal sale of intellectual property. If a carrier is properly notified by an author that a vendor lacks the legal right to sell a particular piece of that author's intellectual property, the data carrier should be required to suspend electronic transmission of that piece until the matter is adjudicated. Vendors who are convicted of repeated copyright violations should be denied vending access by data carriers. Piracy Piracy: Discussion Piracy occurs when someone sells illegal copies of intellectual property without even the pretense of a valid copyright. With the new technology's ease of duplication, this problem is raised to a new order of magnitude. Piracy: We Advocate 1. COOPERATION AGAINST PIRACY. Writers should form, or ally with, organizations similar to those of long standing in the music industry, and currently under development in the film industry, to monitor use and track down out-and-out pirates who illegally resell other people's work. 2. ACTION AGAINST PIRATES. The electronic marketplaces should be structured so that it is feasible to, first, suspend electronic distribution of a protested work by a publisher, vendor, or distributor pending adjudication, and, second, deny data carrier access to convicted pirates. Parties from nations that consistently violate U.S. copyright laws must be denied access to those data carriers and transmission links that are funded in whole or part by U.S. taxpayers. The mail service may provide a model. It is illegal to use the mails for criminal activity. 3. SANCTIONS AGAINST PIRATES. The electronic marketplace should be designed so that effective sanctions can be imposed against nations that condone or refuse to prosecute intellectual piracy on the part of their citizens. Works Distributed On Disk Eventually, it is likely that most electronic distribution of creative work will take place via networks. Right now, however, an increasing volume of intellectual property is available on various types of physical media. Publishers are putting books on floppy disks and adding software that helps readers analyze texts. Huge quantities of text are being put on CD-ROMs each of which has a capacity of 600 megabytes, more than enough space for an entire multi-volume encyclopedia with pictures. A smaller volume of material is appearing on videodisks. These new media share some characteristics of electronic networks, yet they appear in the form of tangible commodities that are sold in stores, like traditional books. This makes it easier to monitor their distribution than it is to monitor distribution on networks. Nonetheless, a battle is emerging between writers and publishers about the terms of that distribution. The enormous potential profits in electronic books have tantalized publishers into pressuring authors and their agents to cede control of all electronic rights. Unlike most databases, book publishers are not asserting the right to exploit the material in new media without compensating the author. Rather, they simply want to be sure that they -- rather than the author -- control that exploitation and that the division of the proceeds is in their favor, not the author's. This conflict is best understood by looking at traditional book contract bargaining. Each contract grants to a publisher certain rights, usually including the right to publish the book in hard cover in a defined geographical area. Also, publishers are usually granted exclusive rights to license the work to others for use in other formats or media, such as paperback reprint, book clubs, foreign-language editions, or TV and film rights. These are called subsidiary rights. The publisher pays royalties to the author based on sales of its own edition of the book. The publisher also shares with the author proceeds from licensing the subsidiary rights according to splits specified in the book contract. In both areas of income, traditional authors' rights are being weakened. Publishers are eroding royalty rates by offering poor terms to authors for control of electronic rights to books. Also, publishers are again seeking to prevent authors and agents from retaining exclusive control over certain subsidiary rights. The same fight happened previously when book club rights developed into something profitable. If the publishers succeed in their power grab, the immediate effect for authors will be reduced income. But over the longer term, the consequences could be much more profound. Increasingly, electronic publishing consists of products that combine text with sound, video, animation, and other digital content; in some cases the written portion may be a minor part of these multimedia productions. Publishers want complete control over copyright and all other rights for the various elements that go into these products. It is likely that writers will be pressured to produce material on a work-for-hire basis, terms that multimedia developers are now trying to impose on other creators of intellectual property. If publishers succeed in gaining control over electronic rights in the context of traditional book contracts, they will be that much closer to making authors just another group of routine suppliers who produce material, are paid a flat fee, and have no say over the use of their work. Works Distributed on Disk: We Advocate 1. EDUCATION FOR ALL AUTHORS. Authors should be aware of the issues described above when negotiating a book contract and should consult with NWU contract advisors before signing the contract. Creators should either reserve their electronic rights or at least get fair compensation for them. 2. HIGHER ROYALTY RATES FOR ELECTRONIC BOOKS. When authors negotiate royalty percentages, or other fees, for work that is to be distributed on disk-based media, they should remember that the publisher's costs for producing, shipping, and storing a disk- based product are far lower than for comparable paper-based products. Since the publisher's costs are lower, the value added to the final product by the writer is higher. Therefore, an author's royalty rate for a disk-based work should be a significantly higher percentage of the list price than for a comparable paper-based work. Online Transactions The growth of the Internet has brought with it a remarkable outpouring of independent publishing. The Net contains a wealth of electronic newsletters, journals, information services and other textual material that is self-published or issued by informal publishing groups. Now we see the emergence of online transaction systems that allow individual authors and other independent publishers to receive payment for their online efforts (if they so wish). These systems -- which are focused on the World Wide Web portion of the Net -- involve electronic debits, digital cash, and other techniques for transferring even tiny sums of money between online accounts. Some of these transaction systems are setting up what amount to online newsstands or bookstores -- sites at which readers can browse through descriptions of works offered for sale and order those items that are of interest. These systems hold the potential to create a new realm of financially viable independent publishing. Some of the features that such systems should incorporate to suit the needs of writers include: * Low costs for writers * The ability to process transactions as small as a few cents * Flexibility with regard to works produced by multiple authors * Non-exclusivity * Copyright protection * The capacity for anonymous transactions Online transaction systems also could be used for the payment of royalties to freelance writers when articles they previously wrote for print publications are reused on commercial online information services. Libraries and Authors A future together Being members of the public as well as writers, we support an expanded, rejuvenated public library system. Unfortunately, until our elected officials realize that in the information age, "national security" rests far more on the powers of the mind than on weapons of death, library budgets will face increasingly short-sighted budget reductions. It is imperative that some portion of the cost-savings and potential new services inherent in electronic publishing be used to rescue and nourish our starving libraries. Just as they are funded now to buy physical books and periodicals, the libraries of the future should be funded to buy electronic works and subscriptions to data services that the public can use for free or on a discount basis. The costs of these programs should be paid by tax revenues or subsidized by surcharges on other library electronic services. In the new information universe, libraries will have to be reinvigorated. There are at least three obvious roles for libraries: * REPOSITORIES & DISTRIBUTION CENTERS. Libraries should become the repositories and electronic distribution points for intellectual property not under copyright, as Project Gutenberg today is bringing online works into the public domain. Libraries are the logical distribution entities for government information and taxpayer-financed data. Public data should be made available through libraries at a reasonable cost. In this context, "reasonable cost" could include moderate surcharges used to subsidize library services to those who cannot otherwise afford access to the world infosphere. * TRAINING & ACCESS CENTERS. We assume that children will learn information-accessing skills in school, although that assumption may be optimistic given current debates over funding schools. For the adult population, one logical place to learn these new skills is a library. Libraries should also provide data access terminals and devices for students and those who cannot afford to have them in their own homes and provide subsidized access to commercial data services for those who cannot afford personal subscriptions. * INFORMATION SEARCH CENTERS. The greatest problem most of us will face in the infosphere will not be gaining access to information, but knowing where to look for what we want. When you can choose from 100,000 commercial and public data services and access nodes, how do you know where to go? The answer is that you ask a trained data-retrieval expert -- in other words, a librarian. Moreover, the indexes and catalogs created and maintained by libraries are themselves a valuable form of intellectual property for which libraries can charge business, commercial, academic, and government users on a fee-for-service basis, using the money so earned to subsidize other public services. Preserving the Culture There is an ominous trend beyond budget cuts that could undermine libraries' ability to serve the whole public. Publishers are beginning to offer electronic material on a high-cost, limited licensed basis that must be renewed in order to continue access to past information. Under this system, a library will lose control of and access to our cultural and historical records if it can no longer afford the fees to keep the electronic portal open or if the publisher decides it is no longer economical to store a certain record. Writers must oppose this practice. There is another danger that could further undermine the ability of libraries, or anyone else, to preserve our cultural records. In some ways, paper is hardier than electronic information. While paper may yellow or become brittle, it has been shown to have a life-span of generations. Electronic information, however, can become obsolete as digital formats evolve and change. What value does a disk using the now outmoded CP/M computer language have today? Zero. We must ensure that shifting digital formats do not leave libraries unable to use their information because of the costs of conversion. Such costs to libraries must be shared by those entities that profit from the electronic marketplace. Rights of Writers and Readers In the print-on-paper world, there has been a clear convenience-of- access differential between buying/owning a book or magazine and obtaining a temporary loan of the work from a library. This allows the library system to coexist with commercial publishing. The principle of coexistence must be extended to cyberspace. In the electronic world, we need to rethink the role of libraries as lending institutions. The model of a library buying a piece of intellectual property, and then loaning it out on a temporary basis to users, one at a time, is not easily applied to information in electronic form. When entire encyclopedias can be downloaded in minutes to be digested at one's leisure, the concept of sequential loans loses its meaning. Why would end users pay fees to vendors, publishers, or authors to download intellectual property if they could just as easily download it for free from a public lending library? Creators and publishers have the right to earn their living from their craft and conduct business in an equitable marketplace. Libraries have to be capable of providing information at no cost to those who cannot afford to pay. Clearly there is a tension between these imperatives, and a common-sense balance must be struck. These are not insurmountable problems. If cooperation and common sense prevail, we can develop solutions that accommodate the legitimate needs of both information consumers and information creators. The infosphere is still in its infancy; it is far too early for anyone to take rigid stands on specific methods to resolve this conflict. But it is time to consider various approaches. Methods by which these conflicting needs might be reconciled include: * TIME EMBARGOES. The publisher of a periodical may simply choose not to sell any electronic copies to any library until a day, week, or month after the issue became available on the open info- market. Similarly, the writer or publisher of a book could withhold electronic library sales for some amount of time after the book is made commercially available in cyberspace. A best-seller, for example, could be withheld from library distribution until it drops from the best-seller list. This is similar in principle to movie studios that do not market videotapes until after the film's theater run. Some librarians find this to be a poor solution because they want to provide information to their patrons in a timely manner. However, if no alternative method is adopted, publishers will have the power to impose time embargoes unilaterally. * METERING. With print on paper, libraries operate on the principle of discrete sequence. In other words, a book is a discrete item, and only one person can borrow it at a time. That principle could be adapted to downloading material from the library to the reader's home or viewing material on-screen at the library by metering the number of downloads or accesses. For example, if a library buys one electronic copy of a book, only one person per day or one per hour would be allowed to download or view it. In the case of a periodical, the library would buy one electronic copy and limit the number of accesses to so many per day or hour according to the purchase terms. * COMMERCIAL VS. NON-COMMERCIAL. Throughout this paper, we make a distinction between private/personal use of information and commercial use of information. That distinction could be extended to libraries by instituting procedures that allow individuals to access library-stored information for free, while business, government, organizations, and institutions would be charged for that service. The money received from commercial access could be split among the library, creator and publisher. Electronic library cards could distinguish between individual and commercial users, or libraries could petition the world standards bodies to create a new top-level Internet domain address for individuals (.IND to go along with .COM for commercial, .EDU for educational, and .GOV for government). These domain endings could help libraries determine the type of user. This is similar to the current practice whereby institutions pay a higher subscription rate for professional and academic journals than do individuals. * ROYALTY PURCHASES. Today, libraries have, or should have, a budgets to buy new books and subscribe to periodicals. It would be easy for creators or publishers to sell their work to libraries on a royalty basis. Every time a reader accessed or downloaded the work, some small royalty would be transferred from the library's purchasing budget to the author or distributor's account. This would allow libraries to acquire works without up- front cost while paying only as much as actual reader usage required. Of course, they would run the danger of bankruptcy with some wildly popular item. Most likely no one would use this method for popular works; it might work better for the technical and scientific fields. None of the above are proposals of the National Writers Union. These are merely some possibilities that we and society should consider. No doubt other ideas will be proposed as the electronic information market develops. The potential conflict between free libraries and creators' pay most likely will be resolved by some combination of methods. When One Copy Gets Around Digitally We assume that in the information age, people will access a library's electronic information by viewing the work on a computer screen or by downloading it from the library to their home or office system. We also assume that most libraries will store digitized intellectual property at a central location that can be accessed directly or remotely by users. This means that the print-on-paper pattern, in which a library system purchases multiple copies of a book or publication so that every neighborhood branch library has its own copy, will not apply to electronic works. Whereas, writers and publishers once sold thousands of copies to libraries across the land, a central library could conceivably buy a single digital copy of a work and provide universal access to it. The prices creators and publishers charge libraries (public, corporate, and institutional) for copies intended for multiple-access depositories will be higher than the prices charged to individual consumers. These multiple-access prices must be structured to balance the competing needs of each community. First, publishers must share the income received from higher-priced multiple-access pricing with the work's creators. Second, a portion of the cost savings inherent in electronic publishing and distribution must be passed on to the libraries so that they can supply information to those who need it at less cost than is now the case with print-on-paper. In other words, neither creators, libraries, nor publishers should be allowed to reap all the benefits of the digital age. Conclusion, More to Come Writers, and creative people in general, revel in change, even when the change causes problems for us. This is not the first time that technological change has challenged us. The huge corporations that are stampeding into the technological revolution may try to trample us, but we will not let them. In times of tremendous change, there is plenty of opportunity for us to assert ourselves, both as creators who need to earn a living and as members of the public who would reinforce democratic values and the vitality of human culture. Every writer, photographer, artist, musician -- all creative people whose work will appear on computer networks -- can play a role in guiding change toward fairness, openness, and opportunity for everybody in the information age. Glossary All-rights contract: A contract in which the author agrees to transfer all individual copyrights to a work to someone else, usually a publisher. An author who signs an all-rights contract no longer has any meaningful rights to that work. Author/creator/writer: Throughout this document, these three terms are used interchangeably. Unlike popular usage, in which author usually refers to the writer of a book, in law and official documents the word author is an inclusive term refering to anyone who creates a work. As used here, all three terms are meant to include writers of all kinds, artists, cartoonists, photographers, software designers, composers, etc. Common carriage: Under the principle of common carriage, the operators of a utility, such as a railroad or telephone line, are required to provide the same services to all, and to charge the same prices for those services to everyone. Thus, for example, if Internet providers are required to operate as common carriers they cannot refuse to provide someone access because of the content that person posts, nor can they charge different prices to different people for the same services. GII (Global Information Infrastructure): The world-wide network of computer harware and software, phone-systems, satelliets, cables, transmitters, and other devices used to store, transmit, and receive information in electronic form. The NII (National Information Infrastructure) is the U.S. portion of the GII. Intellectual Property: Any form of literature, art, music, plans, procedures, software, or other form of knowledge or entertainment in a fixed form that has, or might have, commercial value. License/sell: When the owner of a copyright allows someone else to use the copyrighted work in exchange for money, the owner is said to license the work. A license sets limits on what the other person can do with the work. Sell indicates giving up the copyright in its entirety. Moral rights: The right to protect the integrity of a work. When authors retain moral rights they can protect their work from changes or uses that distort the author's intent. Work for hire: A form of employment in which copyright vests with the publisher or an author's employer, rather than with the actual author. For example, when a staff reporter writes an article for a newspaper, the publisher owns the copyright. Comments The National Writers Union welcomes your comments on this document. Please send comments to the New Technologies Campaign at one of the two NWU offices listed below. The National Writers Union The NWU is the trade union for freelance writers. We have locals in more than a dozen cities across the country. If you are a self- employed journalist, book author, poet, technical, business, or instructional writer the NWU is for you. The NWU is affiliated with the United Auto Workers and the AFL-CIO. For more information about union membership , or about the NWU Supporters Circle (for non- writers), please contact one of the two NWU offices. Available from the NWU The NWU Guide to Freelance Rates & Standard Practices A comprehensive overview of the publishing industry (202 pages). $19.95 ($13.95 for NWU members). Free NWU position papers on electronic publishing (send SASE): * Discussion guide to assist group study of Authors & the Information Age * Recommended Principles for Contracts Covering Online Book Publishing * Contracts Between Writers and Electronic Book Publishers * Freelance Writers and Online Commerce Members of the NWU and of the NWU Supporters Circle also may request a range of documents dealing with publishing contracts, agents, small claims court and other topics. Contact your NWU local or one of the NWU National Offices for a directory. National Writers Union (UAW Local-1981) National Office West National Office East 337 17th St. #101 873 Broadway #203 Oakland, CA 94612 New York, NY 10003 510-839-0110 212-254-0279 Email: nwu@netcom.com Email Infobot: nwu-info@netcom.com Web Site: http://www.nwu.org/nwu/nwu_index.html FTP Site: ftp://ftp.netcom.com/pub/nw/nwu