By Dennis Crouch
CCC v. Oblon Spivak (license agreement)
The Copyright Clearance Center (CCC) is a collective agent for many copyright holders and serves as a one-stop-shop for folks to license copyrights for use. CCC offers licenses to many (perhaps most) of the academic publications (non-patent literature) submitted to the USPTO under the Rule 56 duty of disclosure. In recent years, CCC has implemented a buffet license approach that allows a business to use their entire catalog for a fixed negotiated price.
Until recently, few patent law firms have seen any copyright infringement risk associated non-patent prior art because the copies are most typically obtained from a licensed database and the submission to the PTO and file-copies are both likely fair use and therefore would not constitute copyright infringement. Thus, most firms have developed their its patent prosecution practices with an implicit belief that its prosecution related uses of scientific journal articles are noninfringing uses of the articles. In the spring of 2012, the publisher John Wiley began suing patent law firms – taking the contrary view that (1) making file copies; (2) sharing copies with clients; and (3) submitting copies to the USPTO each constitute actionable copyright infringement. These lawsuits are ongoing.
The CCC license would allow both internal copying and submitting copies to the USPTO, although it does not allow the sharing copies with clients. Of course, these actions were all previously thought to be fair use. Professor Jamie Boyle has an interesting essay from 2007 discussing the problems with this license. His main point is that once we start paying for fair use material it stops being fair use going forward and moves toward a "culture of permission" that, in his view, is normatively bad.
I contacted the CCC folks and received some information from CCC's General Counsel Frederic Haber. The first point is that the Wiley articles that are the subject of the lawsuits are included within the license (still, the blanket license still does not include sharing articles outside of the firm). The second point is costs. CCC uses a model of basically charging on a per-professional-employee basis. For patent law firms, their current negotiated going rate is around $300 per year per registered attorney. The third point is that the form license includes a waiver of any unasserted claims of past infringement (with the caveat that the waiver only takes effect after one-year of license coverage). The fourth point is that the downside of losing a lawsuit is statutory damages.
Oblon is in a special case because the firm has the highest patent throughput of any firm in the country. Because of that, the firm would have likely been part of any upcoming second round of lawsuits. On that note, Oblon's Managing Partner Brad Lytle writes that the "license allows us to go about our business and focus our efforts on protecting the intellectual property of our clients." In other words, the license allows the firm to avoid the annoyance of a lawsuit. The question for firms and attorneys moving forward is (1) whether the fair use argument is sufficient and (2) whether your firm is small enough to fly under-the-radar. And, of course, there is the remaining problem that the license does not allow for the sharing of the articles with folks outside of the firm.
Update: A further communication from the folks at CCC indicates that, although "the repertory license is specifically designed for the internal use of the licensed organization", "one exception to that general rule is that the licensee may provide individual copies (paper or electronic) to prospects, clients or customers of the licensee in response to requests from those outside people."