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Monday, August 01, 2005

More on shrink-wrap licenses for print books

G.M. Filisko, Shrink-Wrap Contracts Ďbookedí, ABA Journal, July 29, 2005. (Thanks to an anonymous poster to LibLicense.) Excerpt:
Shrink-wrap agreements, which assert that a customer has entered a contract just by opening a productís wrapping, have surfaced on reference books sent to libraries, lawyers and doctors, but itís unclear whether the agreements are always enforceable --or whatís next in the land of shrink-wrap licensing. The Maryland State Bar Association is using a shrink-wrap agreement to limit use of its member directory. It states the MSBA will license the contents of the directory to members only if they accept all of the terms in the agreement. Among the terms is a requirement that the directoryís contents "may not, in whole or in part, be reproduced, copied, disseminated Ö except for the userís individual, personal and confidential reference."...Librarian Paul Deane from Arlington Heights, Ill., says heís seen shrink-wrap agreements on at least five books in the past four months, one a directory of medical practitioners, the others reference books. "Basically, they say that if you open the shrink-wrap, youíre agreeing to the publisherís licensing agreement. The thing that gets me," Deane says, "is thereís no information about the licensing agreement."...Jorge L. Contreras, who specializes in Internet, e-commerce, and new media law in Washington, D.C., also has doubts about the enforceability of such agreements. The most obvious, he says, is that "in cases where the license agreement isnít attached, it would be difficult to enforce." Contreras also notes the difference between software and books. "On one hand," he says, "thereís a pure contract law issue. You can agree to do whatever you want within the bounds of the law. If a license says that if you rip open the shrink-wrap and read the book, youíll be bound by certain terms as a contractual matter, the license could be enforceable." On the other hand, Contreras says, the underlying justification for shrink-wrap licenses in software --protecting the publisher from repeated and illegal copying of the data on the physical CD or disk-- is much less applicable for books...."The whole idea of putting a licensing agreement on a book is probably to limit fair use of books," [Henry] Gabriel [professor of commercial law at Loyola University New Orleans School of Law] says. That probably wonít succeed, Contreras says. "If the license agreement says you can read the book but canít make fun of it, or you canít excerpt even a small portion even for educational purposes, it would violate the fair-use doctrine," Contreras says. According to Contreras, the MSBA's agreement prohibits copying, and "itís not entirely clear whether such a contractual prohibition would trump the fair use doctrine." He adds, "It's very possible the contractual prohibition would not be enforceable to prevent a fair use."

Comment. The last time this came up, I blogged Ed Foster's excellent column from August 2002. It's worth another read. Also see Bowers v. Baystate Technologies (August 20, 2002, affirmed in relevant part January 29, 2003). In Baystate, the First Circuit Court of Appeals held that when a shrink-wrap license (for software) and the federal copyright statute conflict, then the licence takes precedence. Baystate will be cited in any future case on whether shrink-wrap licenses preempt fair-use rights or vice versa. Here's what I wrote about the case at the time: 'Librarians know well that licensing terms often negate fair-use and other rights granted by the copyright statute. There have been two windows of hope for challenging such licensing terms: federal preemption of state contract law, and the general invalidation of shrink-wrap licenses as contracts of adhesion imposed on parties with essentially no bargaining. This case closes both windows, though only the first of the two issues seems to have been fully litigated here.'