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Licensing

Licensing Electronic Resources: Strategic & Practical Considerations (Jan. '97)

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Prepared by

Patricia Brennan, Information Services Coordinator, Association of Research Libraries
Karen Hersey, Intellectual Property Counsel, Massachusetts Institute of Technology
Georgia Harper, Office of General Counsel, University of Texas System

January 1997


Introduction

Increasingly, information resources are available electronically. In this exciting but uncertain environment, information providers who need to protect their investments are turning to licenses to define and control the use of their products. As a result, in addition to copyright, libraries and information resource centers must now manage the use of their information resources under the terms agreed to in a license. Because licenses are becoming standard business practice for providing access to and use of electronic information in library settings, we must pay attention to both the details and the cumulative effect of these agreements on users, institutions, and the process of scholarly communication.

The Copyright Act of 1976 includes provisions for the educational use of copyrighted materials within a framework that delicately balances the rights of authors, publishers, and other copyright owners with society's need for the free exchange of ideas. The principles of copyright law are believed by many to be applicable in the emerging electronic environment. The rapidly changing technology, however, makes agreement on which principles to apply difficult. In the meantime, library and information resource center managers are faced with negotiating terms of use for each electronic resource that satisfy both the information provider and the user.

Generally, a license is negotiated between the provider of the information resource--the original rights holder or publisher--and a designated representative of the user community, often the library. Negotiating such a license is not a solitary task, however, since the implementation of a license usually has implications throughout the institution. Experience is demonstrating that a well-developed team process for review and revision of every license helps to ensure broad access to a wide array of resources for an institution. This booklet presents a checklist of strategic and practical issues academic and research library contract teams should consider in negotiating licenses for electronic resources.

The electronic resources acquired by libraries and information centers include:

  • computer software
  • databases
  • news feeds
  • daily financial information sources
  • stock market reports
  • multi-media works
  • image collections
  • information collections
  • maps
  • encyclopedias
  • electronic journals
  • copyrighted/trade secret reference materials accessed via computer
  • CD-ROMs—stand alone or networked

Strategic Considerations

Digital materials tantalize with exciting possibilities, but to realize the benefits fully, institutions should understand the overall context clearly before they focus on the fine points of license negotiation. Otherwise, institutions may discover that the licenses they sign box in and restrict their users in ways that would be unacceptable in any environment, print or digital.

The objective of review and revision is the same in each case: to ensure broad access to a wide array of resources. It is best to coordinate decisions on license terms with other departments or units that may use the materials. For example, negotiating the broadest possible definition of "site" in any site license may be important if the information resource would be of value to affiliated campuses or research laboratories.

Other strategic considerations to keep in mind:

Consider Your Institutional Policy:

Does your institution already have an established policy for review and approval of license terms? Does it help or hinder? If it hinders, can you change it for the better? Whose involvement will facilitate more effective coordination? At various stages in the process of license review, each of the following offices may have a role to play:

  • Office of Legal Counsel/Intellectual Property Office
  • Library: Collection Development/Public Services/Budget Office
  • Institutional Purchasing
  • Information Systems Office

Strive to establish "contract expertise" through consistency in procedural review.

Clearly Define the Goals of License Review:

What elements are objectionable?

What needs to be removed/changed/altered?

What needs to be added?

Does the license cover fair use of the material?

Are the definitions of uses and users acceptable?

Can you live up to all of the obligations/restrictions in the license?

Focus on Costs:

Who is acquiring the material?

Does cost vary if the material will be used by multiple departments within or outside the library?

How is price affected if you acquire multiple formats, such as electronic journals available in both print and electronic form?

Does cost vary if you are acquiring a license, lease, or subscription?

Think About Location:

Where will the electronic resource be located--mounted locally in the library or accessed through the Internet?

Will the resource be used at one central location, such as from within the library, or accessed remotely by the user community?

Is the product compatible with the institution's computer infrastructure?

What technical support will be needed?

Consider Ownership Issues:

What does the vendor actually own--all of the data or only the compiled database?

What about data obsolescence? Must the institution destroy or return all copies of the data upon termination of the license?

Does the institution retain a right to archive the data?

Indemnification:

Does the license require the institution to indemnify the provider of the material?

Does the license require the institution to accept responsibility for the actions of users of the material?

Does the license require the institution to police the use of data, for example, insuring that the data is used for academic purposes only?

Does the provider of the material guarantee that they do not infringe intellectual property rights of a third party and/or promise to indemnify the institution if the material does infringe?

Practical Considerations: The Fine Points

1. Who Does the Library Wish to Serve by Making these Materials Available?

Contrary to your goals, providers may wish to restrict who may access their materials. This means that the institution must pay very close attention to the definition of "user." Considering the nature of the resource, try for a carefully defined but broad user group.

These are sample categories of users which may be included in the overall definition of "user" for a particular electronic resource:

  • university faculty
  • university staff
  • university students
  • campus
  • branch campuses
  • specific colleges, departments
  • specific non-university patrons
  • walk-in users
  • authorized visitors/visiting faculty
  • individuals with access to the university's computing services-- authorized account holders
  • distance learners
  • consultants
  • public libraries
  • consortia, state institutions
  • local academic libraries
  • network or consortia of several libraries serving a variety of users
  • all university library users defined geographically, for example, an entire state or group of states

2. From What Locations Will Your Users Want to Access the Information?

Considering the nature of the resource (and whether the user community is defined by identifying authorized users or by identifying authorized machines), it may be appropriate to limit access, but consider this carefully. As a general rule, negotiate the broadest range of access options you reasonably foresee needing.

3. What Will Users Want to do With the Information?

Some licenses prohibit quotations, modifications, or manipulation of data. These types of restrictions may be unacceptable in an academic environment. Other providers may want to review or restrict publications containing their data. And some providers may claim rights to any research results or inventions derived from the use of their products. These extremely onerous terms should be removed. They will likely conflict both with rights granted in sponsored research contracts and with university policies.

4. Does the License Limit the Right of the Institution and its Users to Download and Print Portions of the Material?

Review the copying provisions carefully to ensure that the license does not deny rights granted under current copyright law including fair use, educational, and library exemptions.

Does the license prohibit copying and/or disclosure of the data itself, or do such restrictions apply only to the database as a whole?

5. Can the Institution Control/Restrict Access to the Material as Required by the License?

Consider your technical resources. Do not agree to technical controls to prevent unauthorized access if they are beyond your capabilities.

Next Steps

Consult with those requesting the resource to determine unacceptable terms that need revision.

Revising the Language:

Do not hesitate to write new language that meets the users' needs. Talk to your legal counsel and purchasing department before contacting the vendor with changes.

Conducting the Negotiation:

Know your "bottom line," the minimal acceptable terms that meet your needs, before you contact the vendor.

If the license requires only minimal changes, think about marking those changes directly on the contract and returning it to the vendor initialed (where changed) and signed.

Ensure each license contains an authorized signature on behalf of both parties.

Informing the User Community:

Consider how to inform users of the restrictions and their obligations in using these materials. One way to accomplish this is to develop a "required read-me" file that outlines restrictions and terms, such as nondisclosure provisions or academic use only restrictions.

Copyright Issues

In 1994, the Association of Research Libraries adopted Intellectual Property: An Association of Research Libraries Statement of Principles. The issue of licensing is addressed as follows:

Licensing agreements should not be allowed to abrogate the fair use and library provisions authorized in the copyright statute.
Licenses may define the rights and privileges of the contracting parties differently than those defined by the Copyright Act of 1976. But licenses and contracts should not negate fair use and the public right to utilize copyrighted works. The research library community recognizes that there will be a variety of payment methods for the purchase of copyrighted materials in electronic formats, just as there are differing contractual agreements for acquiring printed information. The research library community is committed to working with publishers and database producers to develop model agreements that deploy licenses that do not contract around fair use or other copyright provisions.

A license may not explicitly mention fair use, educational and library copying rights, or other rights permitted under the Copyright Act. This does not mean, however, that such rights are not protected or have been given up.

It may be most helpful to follow one clear rule: focus on your users and their needs. A good license will permit them to make all reasonable educational uses of the materials. Delete unreasonable restrictions on a use that you know is important to your user community. On the other hand, if the language of a contract leaves you feeling unsure how users may use the materials, clarify the contract by writing in what you need.

If your users cannot do at least as much with electronic materials as they could with print equivalents, the license needs attention.

Copyright vs. License

A license can grant all of the user rights protected by copyright law or much less.

For instance:

Uses Permitted under Copyright

  1. Right to lend to the public
  2. Right to quote and excerpt for commentary and criticism
  3. Right to make and distribute copies under fair use and for local and remote library patrons via interlibrary loan
  4. Character of use governed by fair use principles
  5. Right to display works in face-to-face teaching

Conditions Introduced by a License

  1. "Lending" of the materials may be tightly controlled; only "users" as defined in the license may use them
  2. Prohibitions against copying and/or nondisclosure requirements may require permission before quoting or excerpting
  3. License may prohibit distributing copies outside the institution; may eliminate public loans, disclosure, interlibrary loan
  4. Type of use may be restricted, for example, academic or non-commercial use only
  5. No right to transmit electronically, therefore no use in distance learning

Conclusion

Licenses are a fact of life in conducting business in the electronic environment. Providers of electronic information resources have embraced licenses as a legal means of controlling the use of their products during a time when technology and legislation are still evolving. As responsible agents for an institution, one must be able to negotiate licenses effectively and efficiently and ensure that the user community is informed of its responsibilities under the agreement.

The most effective strategy for dealing with licenses is to be prepared. Develop a process for license review if one does not already exist within your institution. Create a contract team made up of appropriate staff from the library, legal office, purchasing department, and information technologies division to provide information and develop contract expertise. Assign a single individual or office to coordinate license review, negotiation, and management. Define your users and how they wish to access and use electronic information resources. Understand institutional policies on security, privacy, and intellectual property issues. Be aware of the technical capabilities of your institution, including modes of access, authentication, and security.

The details of any individual license may take time and careful attention to review and revise. With a process, a team, and a knowledge base in place, however, license negotiation should proceed much more quickly and effectively.

Additional Resources

Association of Research Libraries

Includes a range of materials including statement of principles, analyses of legislation and court decisions, as well as links to other sites.
http://www.arl.org/pp/ppcopyright/

Massachusetts Institute of Technology

Includes information on appropriate use of MIT's campus wide information system, exclusive copyright related information, and a copyright FAQ.
http://web.mit.edu/copyright/

Stanford University Libraries
Copyright and Fair Use Web Page

Contains a comprehensive set of documents and links related to libraries, copyright, and fair use.
http://fairuse.stanford.edu/

University of Texas System

Contains a range of resources related to copyright in the library. Includes an interactive Software and Database License Agreement Checklist.
http://www.utsystem.edu/ogc/intellectualproperty/cprtindx.htm

Yale University Library

LIBLICENSE, a world-wide Web resource on licensing. Includes sample license language and commentary.
http://www.library.yale.edu/~llicense/index.shtml

CNI-Copyright

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