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Guidance for CSU Policies on Intellectual Property“The Congress shall have Power . . . To promote the Progress of Science and the useful Arts, by securingfor limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries.”United States Constitution, Article I.Intellectual Property, Fair Use,and the Unbundling ofOwnership RightsFurthering the Mission of Public Higher EducationThe Academic Senateof theCalifornia State UniversityMarch 2003

Copyright NoticeCopyright 2003, The Trustees ofThe California State UniversityPermission is hereby granted to reproduce anddistribute copies of this publication for nonprofiteducational purposes, provided that copies aredistributed at or below cost, that the source iscredited, and that this copyright notice is includedon each copy. This permission is in addition torights granted under Sections 107, 108, and otherprovisions of the U.S. Copyright Act.This publication is the final report of the TaskForce on Intellectual Property of the AcademicSenate of The California State University (CSU).An electronic version of this publication is available on the home page of the Academic Senate:http://www.calstate.edu/AcadSen/.To simplify management of this publication, thecopyright to this work is held by the Trusteesof CSU for the benefit of CSU. Permission to makeuse of this work beyond the rights of use describedhere may be obtained by contacting:Academic Senate of the CSUCSU Chancellor's Office401 Golden Shore, Suite 139Long Beach, CA 90802-42102

Task Force on Intellectual PropertyBuckley B. Barrett, LibrarianCSU, San BernardinoJohn Charter, Student Body PresidentCSSA RepresentativeCSU, Monterey BayKenneth D. Crews, Task Force ConsultantProfessor of Law and DirectorCopyright Management CenterIndiana University School of Law – IndianapolisRolland K. Hauser, Professor EmeritusDepartment of GeosciencesCSU, ChicoPaul S. Spear, Chair of Task ForceProfessor and Chair of PsychologyCSU, ChicoMarshelle Thobaben, ProfessorDepartment of NursingHumboldt State UniversityCher Thomas, DirectorAcademic Technology ApplicationsCSU Chancellor’s OfficeMark Thompson, ProfessorDepartment of EnglishCSU, Stanislaus3

Table of ContentsEXECUTIVE SUMMARY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6INTRODUCTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8PART I The Foundation for Intellectual Property PoliciesIn the Academic Setting . . . . . . . . . . . . . . . . . . . . . . . . . 11Section 1University Guidelines for Intellectual Property . . . . . . . 11Section 2Principles of Good Practices in the Academic Setting . . . . 13PART II Fair Use of Copyrighted Works . . . . . . . . . . . . . . . . . . . . . 16Section 1The Imperative for Sound University Policyon Copyright . . . . . . . . . . . . . . . . . . . . . . . . . . 16Section 2Fair Use and the Pursuit of Higher Education:A Statement of Principle . . . . . . . . . . . . . . . . . . . . 19Section 3Fair Use: Overview and Meaning forHigher Education . . . . . . . . . . . . . . . . . . . . . . . 22Section 4New Copyright Law for Distance Education:The TEACH Act . . . . . . . . . . . . . . . . . . . . . . . . 30Section 5Illustrative Scenarios . . . . . . . . . . . . . . . . . . . . . . 47Section 6Obtaining Permission . . . . . . . . . . . . . . . . . . . . . . 53PART III Unbundling of Ownership Rights . . . . . . . . . . . . . . . . . . . . 57Section 1Why Pay Attention to Ownership ofIntellectual Property at the University? . . . . . . . . . . . . 57Section 2Ownership of New Works and Inventionsat the University . . . . . . . . . . . . . . . . . . . . . . . . 64Section 3Fundamentals of Copyright Ownership:Overview and Meaning for Higher Education . . . . . . . . . 66Section 4Unbundling of Rights: A Decision Framework . . . . . . . . 79Section 5Unbundling of Rights: An Increasingly Important Role forUniversity Policy . . . . . . . . . . . . . . . . . . . . . . . . 854

Section 6Illustrative Scenarios . . . . . . . . . . . . . . . . . . . . . . 92PART IV Recommendations for Policymaking and Educational Actions . . . . 104Section 1Recommendations on Fair Use . . . . . . . . . . . . . . . . 104Section 2Recommendations on Ownership . . . . . . . . . . . . . . . 106Section 3Recommendations on Educational Actions . . . . . . . . . . 109References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111Appendix A – California Education Code –Sections 66450, 66451, 66452 (in full) . . . . . . . . . . . . . 116Appendix B – A Practical Guide to Intellectual Property Rights –California State University, Chico (Including SampleLicensing Forms) . . . . . . . . . . . . . . . . . . . . . . . . 118Appendix C – Some Historical Notes . . . . . . . . . . . . . . . . . 1235

Executive SummaryThis 2003 publication is an update and extension ofearlier work published in 1995 and 1997 in the subjectarea of intellectual property rights (copyright) in thesetting of large multicampus systems of public highereducation. It continues the efforts, supported by theStatewide Academic Senate, of California State University (CSU) faculty, students, staff, and administrative, working jointly in task force and committee settings, to come to grips with the complex and changingimplications of intellectual property laws and courtdecisions as they affect teaching and learning.The document is intended to educate the CSU community on important issues regarding both copyrightand patent rights, and it makes recommendationswhich call on the CSU and its local campuses to initiate copyright and patent educational programs for itsfaculty, staff, students, and administrators.The two major themes of the document concern thefair use doctrine as it applies to copyrighted materialsand the use of licenses as the mechanism for the unbundling of ownership rights within the universitysetting. The importance of both these themes is increasing, and will continue to increase, as a consequence of the application of electronic and digitaltechnologies in public higher education.Specifically, the document addresses the issues of: author’s rights in light of new technologies andthe current legal context; multiple author’s rights, including situations inwhich one or more students are involved in thecreation of intellectual property; ownership as it regards classroom materials created in electronic formats, made available on theWorld Wide Web, or otherwise distributed electronically.Recommendations are made which are intended toprovide the CSU faculty, staff, students, and admini-6

stration with necessary tools for effective teaching,research, and learning in the 21st century: 1) the continued aggressive application of the fair use doctrine;2) the accelerated development of licensing so as tooptimally distribute and manage intellectual propertyownership rights associated with new works and inventions created by members of the CSU community; 3)educational programs for all members of the CSU community; and 4) university assistance in negotiating intellectual property agreements with publishers and withthird-party entities which develop and commerciallyexploit new works and inventions.A special section is devoted to the recently enactedTEACH Act and to its requirements and implicationsin the field of distance learning. Both its benefits andthe new requirements and responsibilities it places onthe CSU are addressed.7

IntroductionIn 2001, the Executive Committee of the AcademicSenate of the California State University (CSU)created a Task Force on Intellectual Property to reviewlocal campus and systemwide policies in the subjectarea of intellectual property in light of the work donein the early and mid-1990s by the CSU-SUNY-CUNYWork Group on Ownership, Legal Rights of Useand Fair Use. The Task Force also was charged toconsider the implications of recent legislation andjudicial decisions, new technologies, and the wideruse of electronic technologies as they apply to theownership of intellectual property. Finally, the Executive Committee charged the Task Force to reviewand update as necessary the publications Fair Useof Copyrighted Works: A Crucial Element in EducatingAmerica (1995) and Ownership of New Works at theUniversity: Unbundling of Rights and the Pursuit ofHigher Learning (1997), and specifically to: Address the issue of author's rights in light of newtechnologies and the current legal context. Address the issue of multiple authors' rights,including situations in which one or more studentsare involved in the creation of intellectual property. Address ownership issues regarding classroommaterials created in electronic formats, madeavailable on the World Wide Web, or otherwisedistributed electronically.The Task Force began its work in September 2001 andmade interim reports to the Academic Senate meetingin plenary session in January and May 2002. The finaldraft of this publication was delivered to the AcademicSenate on 15 November 2002. The final report to theAcademic Senate was made at its 6 March 2003 meetingwhere it received the Senate’s endorsement. Copies ofthese reports are available from the Academic Senate office.The two publications mentioned above are listed in theReferences section of this publication, and in the Appendix some historical information is given about theearlier effort, the products of which appeared under8

the auspices of the Consortium for EducationalTechnology for University Systems (C.E.T.U.S.) –the members of which were California State University, State University of New York, and CityUniversity of New YorkBoth the earlier effort and this one were approachedfrom the premise that good university policy arises asthe result of shared governance and the work of theTask Force benefited from the inputs of faculty, staff,students, and administrators.A major difference between this publication and theearlier ones is that the Task Force has attempted toaddress topics associated with patents as well ascopyright. The work in the 1990s focused solely oncopyright.PurposeThis publication addresses several important points: The effectiveness of higher education requires athorough understanding of the fair-use doctrine. Faculty and students, in particular, necessarilyapply the fair-use doctrine as they perform theirwork. Newly enacted copyright law pertaining to distanceeducation known as the TEACH Act will assistthose who are teaching in this arena, but it is complex and requires a substantial effort by the university so as to qualify for access to its benefits. The initial ownership of newly created intellectualproperty in traditional university settings, and thesubsequent disposition of the associated ownershiprights, often has been unguided – sometimes to thedetriment of teaching, learning, and research. The effectiveness of higher education requires abetter understanding of how ownership rightsassociated with new intellectual property promotethe mutual benefit of faculty, staff, and studentsand their learning communities.9

New models for the allocation of intellectual rights,based on licensing agreements which anticipate theinfluence of new technologies on teaching, learning,research, and creative activity in American universities must be designed and implemented.10

PART ITHE FOUNDATION FOR INTELLECTUALPROPERTY POLICIES IN THE ACADEMICSETTINGSECTION 1University Guidelines for IntellectualPropertyThe following guidelines are an attempt to providethe nexus between the subject of intellectual property and the mission of higher education. Themanagement and administration of matters relatedto university contracts, licenses, policies, andguidelines which bear on the creation, ownership,storage, transmission, and use of intellectualproperties should: Foster the creation of the best possible qualitynew intellectual properties so as to further theacademic mission of higher education. Foster the dissemination of new knowledgeand the maintenance of high academic standards. Provide incentive for university faculty, staff,and students to fully participate in the creation anduse of intellectual properties. Recognize that newly created intellectual properties in a university setting come in a widevariety of specific contexts and media. Nonetheless, strong mutual interests are sharedamong the university, the faculty, the staff, andthe students in the appropriate allocation of theownership rights associated with intellectualproperties which are created and invented in theacademic setting. Support the concept that the ownership of intellectual property rights is not necessarily an“all-or-nothing” proposition. Rather, the set ofrights that belongs to the owners of intellectual11

properties should be allocated so as to optimallysupport the mutual interests of the university,faculty, staff, and students. Foster within the university community thecontinued collective and individual ability toaccess, acquire, and store information and copyrighted works, to help scholars and studentsin the proper use and citation of the works ofothers, and to maintain coordination and contactwith the world of publishers and other information providers. Foster within the university community the continued collective and individual ability to invent,develop, and perfect patentable creations anddevices, to make lawful uses of the patents heldby others, and to maintain contacts and coordination with the world of technology developmentand transfer. Ensure that university contracts, licenses, policies,and guidelines appropriately address the challengesand opportunities presented as technologies andcultures continue to evolve and affect the practicesof higher education.12

SECTION 2Principles of Good Practicesin the Academic SettingThe following principles of good practices provide some operational interpretation which canbe used in designing and improving intellectualproperty policies in the CSU.Intellectual property arrangements andresolution of intellectual property concernsshall not chill the creative development anddissemination activities that are essential toacademic freedom and to the mission ofhigher education. Practical arrangements for intellectual propertyownership, for the licensing of ownership rights,and for the allocation of revenues (if any) shalloptimally support and foster the ongoingdevelopment and dissemination of intellectualproperties in the CSU. Local campus policies shall address faculty, staff,and students as creator(s) of intellectual properties. Decisions regarding the ownership of intellectualproperty in the academic setting shall be decidedsuch that ownership resides and remains with thefaculty, staff, and student creator(s) of the propertyunless a prior, written agreement to the contraryexists. In all cases, matters of ownership of intellectualproperty – and subsequent licensing of intellectualproperty rights, and the allocation of revenues(if any) – shall be decided in a fair and equitablemanner. Students shall be deemed to own their creationsand inventions made in pursuit of their academicinstructional program.13

Unbundling the exclusive rights of copyright andpatent ownership (by means of exclusive andnon-exclusive licensing) is the best way to advancethe mission of the CSU. Thus, the main purposeof intellectual property ownership in the academicsetting is to provide the means of appropriatelylicensing ownership rights and legal uses. Where the copyright to a work or the patent to aninvention created at the CSU is owned by the author(s)or inventor(s) – the usual case – the local campus oruniversity might be interested in a standard agreementwith the author(s) or inventor(s) which allocates(licenses) to the university the ability to exercise rightswithout obtaining permission from the intellectualproperty rights owner(s). If the copyright to a work or patent to an inventioncreated at the CSU is owned by the university, thecreator(s) or inventor(s) of the work might be interested in a standard agreement with the universitywhich allocates (licenses) to a creator or inventor theability to exercise rights without obtaining permissionfrom the university owner.The faculty, staff, students, and administrations ofthe CSU must adhere to federal and state intellectualproperty laws and regulations. The CSU is responsible for providing an on-goingeducational program which shall inform the faculty,staff, students, and administrators of the universityabout the law and policy relevant to the four areas ofintellectual property: copyright, patent, trademark, andtrade secret. Current trends in American public higher educationincrease the importance of and the role played byintellectual property. The administrative support for thenecessary activities related to intellectual property – forexample, copyright management, copyright clearance, andpatentability – must be increased. Initiatives are necessary at both the systemwide and local campus levels.14

Faculty, staff, students, and administrators need tobecome better informed about the real costs associatedwith traditional stewardship of intellectual property –the cost of multiple licensing agreements or the loss ofaccess that sometimes follows for assignment of copyright to academic works. The mission of the university is advanced when itsfaculty, staff, and students honor, protect, and aggressivelyuse the fair-use exclusion that is provided by the federalcopyright law.In the cases of faculty and staff, collectively bargainedMOU language shall be used whenever possible toaddress and clarify such concepts as compensation,normal and ordinary university support, and extraordinary university support. Any extraordinary university support provided for afaculty member, a staff member, or a student does notinclude such things as the reassigned time, paid or unpaidleaves, and the normal and ordinary university support orfacilities that are accessible in connection with normalduties or academic instructional programs.15

PART IIFAIR USE OF COPYRIGHTED WORKSSECTION 1The Imperative for Sound UniversityPolicy on CopyrightCopyright law is in transition, and many of the changeshave direct and profound consequences for universities.Not only are universities increasingly affected by thelaw, but they have an extraordinary opportunity to influence the development of copyright law and relatedpractices. If universities fail to provide initiative oncopyright issues, other parties will exert their influenceto shape the law for purposes which do not necessarilyadvance teaching, learning, and scholarship.Examples of recent developments in the law include: The enactment of the Digital Millennium CopyrightAct in 1998, which secures “technological restrictions”on access to copyrighted works, and has the potentialof placing many of our own materials outside thethe reach of scholars, teachers, and students. The extension of the term of protection for copyrightto life of the author plus 70 years, which has the directeffect of keeping more materials under copyright protection and outside the public domain. The proposal of various interpretation standards offair use from the “Conference on Fair Use,” most ofwhich standards are highly meticulous and wouldhave the effect of constraining the law. The expansion of copyright protection to the transmission of sound recordings, which puts in placean elaborate set of regulations with a detailed feeschedule for many uses of music and other soundrecordings.16

The enactment of California law addressing rights tolectures and other instructional materials but raisingnew responsibilities for good management of classroom activities. The new copyright provisions signed into law in2003, known as the “TEACH Act,” allows greateruse of copyrighted works in distance education,subject to the careful and thorough implementation of policies, procedures, and restrictions.Most of the latest developments in copyright law area direct response to changing educational needs andinnovative technologies. New technology allowsdigital conversion of images and text, creation ofmultimedia composite works, transmission of datato remote locations, and teaching of students who arelocated far beyond the campus bounds. These activeties often are central to innovative and effectivescholarship. They also are imperative to the exchangeof ideas upon which the academy is based and to thesuccess of America's commitment to mass highereducation in a democratic society.Several recent events dramatize the fluid state ofcopyright law, the ever-present opportunity forchange, and the fragility of the university's interestin safeguarding fair use as a crucial aspect of theinnovative deployment of essential informationresources.Erosion of Fair UseA series of court rulings threatens the applicationof fair use to such common pursuits as photocopying for research, teaching, learning, scholarship,and even quoting from historical manuscripts. Thereasoning in these cases will no doubt extend tonewer technologies. Other developments relatedto fair use: The “Conference on Fair Use” held meetingsthrough the mid-1990s, and in 1998 issued afinal report with proposed “fair-use guidelines”on such topics as creation of multimedia tools,distance learning, and the use of digital images.17

Those guidelines are largely endorsed by copyright owners, but have faced intense criticismfrom some educators and librarians. The DMCA, enacted in 1998, purported to preserve fair use, but as a practical matter the DMCAsecures the right to “lock” materials behind technological controls. If they cannot be accessed,they cannot be used – even if within the law. The growth of licensing has established greaterreliance on contractual terms for the proper useof materials, rather than a primary reliance onthe law. The result may be greater or less restricttion, but the “rules of use” will vary from oneresource to the next, and will depend on the attitude and bargaining strength of the parties to thelicensing agreementMany of these developments often have the effectof placing more materials farther from the reach offaculty, librarians, and students, and the availabilityof those materials for study increasingly will besubject to payment of a license fee.18

Section 2Fair Use and the Pursuit of HigherEducation: A Statement of PrinciplesThe Need to Address Fair UseIt is urgent, timely, and in the best interests ofhigher education that our universities raise acoordinated voice to address the topic that isknown as the “fair use” of copyrighted works.For many years, the fair-use doctrine has beenunder debate in several different forums –locally, nationally, and internationally. The debateinvolves both public and proprietary interests.It arises because of the changing dynamic betweenthe broad sweep of “intellectual properties” and thedeployment of powerful and rapidly evolvingcommunications techniques and infrastructures.These developments already have demonstrated their significant consequences for highereducation and will have more pervasive effectsin the future. Thus, we advance this statementof educational principle.The Legal Framework of Fair UseFair use today is embodied in Section 107 ofthe U.S. Copyright Act, and it exempts limiteduses of materials from infringement liabilities.As detailed in Part II, Section 3 of this publication,the full text of the fair-use statute makes clearthat the right of fair use is specifically applicableto teaching, research, and scholarship, and thatits scope depends on the four statutory factors.These four factors are open to diverse interprettations; the law offers virtually no details fordetermining which activities may be safely allowed.The Statement of PrinciplesThe law's flexibility is an opportunity and a challenge. It is an opportunity to expand and applythe fair-use doctrine to diverse and changingrequirements in an effort to be fair to all parties.It is also a challenge to apply fair use amidst rela-19

tive uncertainty, and new interpretations oftendo not favor educational needs. The four principlesstated below serve to focus attention on these needs.Higher education's legitimate right to usecopyrighted works must be protected.The fundamental mission of higher educationis to advance and disseminate knowledge. Thismission is realized through the use of variousinformation formats, learning environments, andmodes of delivery without unreasonable copyright restrictions. The goals and objectives thatwe set in order to accomplish our mission requirethe ability to explore, analyze, and exchangeinformation. The effectiveness of our workdepends on our right to make creative and balanced fair use of copyrighted works.To succeed, all members of the college anduniversity community must have reliable accessto a wide variety of materials for teaching, learning, scholarship, and personal study. The materialsalso need to be stored and retrieved across the fullrange of the ever-richer diversity of useful electronic and traditional formats.Fair use in the electronic era must allow thataccess when and where it is needed, withoutthe burden of myriad negotiated transactions,and consistent with the constitutional objectivethat copyright “promote the progress of science.”Freedom of access to information, regardless of its format, is essential for the creativeand learning processes.Higher education must make use of the full rangeof means for accessing and utilizing various workswhich are protected by copyright law in both electronic environments and in traditional environments.Fair use is a historically important doctrine whichis essential to fulfilling our higher education objectives. Fair use allows the academy to respond tothe dynamic nature of the educational process andto the evolving formats of information resources.20

Fair use allows an otherwise rigid copyright systemto respond to the fluctuating volume of availableinformation and to the changing demands for its use.Fair use allows all members of the university community to sample the broadest possible range ofideas, to build new works upon the old, and to facilitate equal access to copyrighted works within thereasonable limits of the law.Higher education's right of fair use in theelectronic era must continue unencumbered byterms of commercial licenses or transaction fees.Fair use is the crucial legal provision that allowsour educational system to be assured of enrichingthe student experience and of realizing its researchobjectives with the widest array of knowledge andinsights. It provides the necessary educational opportunity that enables our institutions of highereducation to prepare students for success in theworld economy.Colleges and universities have supported, andwill continue to support, the economic and creativeincentives of copyright owners. But higher education also must support an expansive and flexibleview of fair use in order to assure the fullest possible sharing of knowledge and to meet the unpredictable demands of teaching, learning, andscholarship, regardless of information format,learning environment, or mode of delivery.Higher education has an obligation to educateits constituencies about intellectual propertiesand about the lawful uses of copyrighted material.The remainder of this part of this publication ispresented as a first step in the discharge of thiseducational obligation among the constituenciesof higher education. In this regard, it is important for higher education to take the initiative inan effort to achieve the appropriate balance inmatters related to the evolving interpretation ofthe fair-use doctrine.21

SECTION 3Fair Use: Overview and MeaningFor Higher EducationCopyright law begins with the premise thatthe copyright owner has exclusive rights tomany uses of a protected work, notably rightsto reproduce, distribute, make derivative works,and publicly display or perform the work. Butthe Copyright Act also sets forth several important exceptions to those rights. Key statutesmake specific allowance for concerns such asdistance learning, backup copies of software,and some reproductions made by libraries. Thebest known and most important exception toowners' rights is fair use.The Fair-Use StatuteThe following is the full text of the fair-use statutefrom the U.S. Copyright Act.Section 107 of the Copyright Act of 1976.Limitations on exclusive rights: Fair useNotwithstanding the provisions of sections 106and 106A, the fair use of a copyrighted work,including such use by reproduction in copies orphonorecords or by any other means specified in thatsection, for purposes such as criticism, comment,news reporting, teaching (including multiple copiesfor classroom use), scholarship, or research, is notan infringement of copyright.In determining whether the use made of a workin any particular case is a fair use the factors tobe considered shall include –1) the purpose and character of the use, includingwhether such use is of a commercial nature oris for nonprofit educational purposes;2) the nature of the copyrighted work;3) the amount and substantiality of the portion usedin relation to the copyrighted work as a whole; and22

4) the effect of the use upon the potential market foror value of the copyrighted work.The fact that a work is unpublished shall not itselfbar a finding of fair use if such finding is made uponconsideration of all the above factors. (Emphasis added)The Meaning of the Four FactorsWhile fair use is intended to apply to teaching,research, and other such activities, a crucial pointis that an educational purpose alone does not makea use fair. The purpose of the use is, in fact, onlyone of four factors that users must analyze in orderto conclude whether or not an activity is lawful.Moreover, each of the factors is subject to interprettation as courts struggle to make sense of the law.Some interpretations, and their subsequent reconstruction

CSU, Chico Paul S. Spear, Chair of Task Force Professor and Chair of Psychology CSU, Chico Marshelle Thobaben, Professor Department of Nursing Humboldt State University Cher Thomas, Director Academic Technology Applications CSU Chancellor’s Office Mark Thompson, Profess