Licensing

Schools, libraries, prisons, museums, student clubs, companies…from time to time, these places just want to hand out snacks, and let people watch a movie.

The problem is, the simple act of gathering people to watch a movie is governed by an intricate web of copyright law, and the legal filaments of that web change from place to place.

To help institutions navigate this variability, movie studios and agencies (including Swank, the agency mentioned in the question) offer suites of “licensing” options.  Swank’s website even features helpful[1] copyright guides to help customers assess their needs and obligations, so they can select the right license—including an array of broad permissions called an “umbrella license.”

Under an “umbrella license,” movies that the agency has the rights to may be shown by the licensee (under an array of qualifying circumstances).  And as the member writes, this can include showing movies from a borrowed physical copy (like a DVD), even if the copy isn’t supplied by the service.

How does that work?  Here’s an example:

Let’s say my daughter’s kindergarten teacher wants to show the class “My Neighbor Totoro.”[2] The teacher stops at a local library to obtain a copy on DVD, which bears the warning “licensed for home viewing only.” 

Next, the teacher checks in with the school and confirms that the school is licensed to show “Totoro” under the school’s umbrella license.  My daughter’s class can now watch a masterpiece of Japanese animation, without fear of copyright infringement.

Now let’s switch the scenario up: the teacher wants to stream the movie from his iTunes.  The school still has that same umbrella license.  Can the teacher use his personal account to show the movie?

No.  Unless Apple has changed their “Terms of Use” (usually some version of “You agree that your use will be for personal, noncommercial purposes”[3]), the use would be in violation of the teacher’s license. 

That said, depending on how broad it is, the school could try and claim the “umbrella license” to get the school out from under a claim of direct infringement.[4]  But that could leave the teacher twisting in the wind!  - Not very good for union relations.

To switch the scenario one last time: let’s say the school has an “umbrella license” from an agency like Swank, and also subscribes to a streaming movie service (Amazon Prime).  Before a class views a movie via the Prime stream, the school would need to review both licenses to ensure the Prime license was consistent with, or trumped by, the “umbrella.”[5]

This issue here isn’t really about streaming v. hard copies.  It’s about licenses.  In our first scenario, the “generic” license on a hard copy is (potentially[6]) trumped by the “umbrella license” held by the school.  In the second scenario, the personal license held by the teacher could be violated when he uses his account for more than “personal” use—even though the school is licensed to show the movie.  And in the third scenario: well, it depends.

The key to this question is license alignment.  If an institution has a license to view a movie, and gets the copy it views from another source, there must be no contradictory provisions in the stack of licenses—or, the umbrella license must clearly trump the previous license.  This is true whether the institution is using a hard copy or a streaming copy, and regardless of who the physical copy belongs to. 

The member’s question alerts us to this complexity, and the member is right to approach this issue with caution. 

So.  What constitutes “a legally owned copy?”  I wish I had a simple and rock-solid answer, but these days, that can be a tough call.  Reading the fine print on licenses might not be fun,[7] but it is an essential part of answering this type of question, and it needs to be done on a case-by-case basis.  This is why careful planning during procurement, and attention to details when negotiating licenses and services, is critical.

Thanks for a question that pulls the focus to this issue.

[1] “Helpful” in the sense that they inform potential customers as to why they need Swank’s service!  But the “help” is based on reality.

[2] This is a fantasy example.  But they did show her “The Little Mermaid.”  Sigh.

[3] As seen on December 9, 2019 at https://www.apple.com/legal/internet-services/itunes/us/terms.html.  That said, each work can have its own terms, so always read carefully.

[4] But not, perhaps, “contributory infringement” (assisting in infringement by another).

[5] This answer is esoteric enough, so we won’t dive into the further implications of streaming movies under the TEACH Act…but commentary on that can be found in earlier answers.

[6] Always check you umbrella license!

[7] Okay, I’ll admit it: I find reading the fine print fun.

Flying at 10,000 feet, the answer to the first question is: if the class in in person (not online), AND the institution is non-profit, AND the only viewers are the instructor and the students enrolled in the class, AND the viewing is in the classroom or academic facilities, AND the content is part of the curriculum, AND the copy was legally obtained…then the showing is allowed under Section 110(1) of the Copyright Act (“110”).[1]

The answer to the second question is: if use of the precise copy is controlled by a SWANK license, then despite authorization under 110, the showing must be consistent with the terms of that license.  For that matter, the use of any other content service for viewing movies (Netflix, YouTube, etc.) must also conform to the terms of the service’s license.

Swooping a bit lower to the ground (but not into the weeds): exercising rights under 110 is why it is important that: 1) class syllabi show the relationship of materials to the goals of a course, 2) institutions maintain lists of enrolled students, and 3) institutions have designated spaces for instructional activities.

This is why reading the fine print on content licenses is important, since contractual obligations can over-ride rights otherwise granted by law.

How does a school librarian help instructors stay within the bounds of the law or the license?  A good rule for educational institutions is to have clear and pro-active policies and outreach[2] for instructors who need to show movies.  In this world where education gets hit with new laws, regulations, and policies every year, while clear policies are important, a simple message to instructors: “Need to show a movie in class?  Ask us how!” is a great place to start.

[1] Here is the full text of sub-section (1) of 17 U.S. Code Section 110: [Notwithstanding the provisions of section 106, the following are not infringements of copyright:] “performance or display of a work by instructors or pupils in the course of face-to-face teaching activities of a nonprofit educational institution, in a classroom or similar place devoted to instruction, unless, in the case of a motion picture or other audiovisual work, the performance, or the display of individual images, is given by means of a copy that was not lawfully made under this title, and that the person responsible for the performance knew or had reason to believe was not lawfully made….”

[2] What’s a sign that your institution’s policy is sufficiently “clear and pro-active?”  Instructors not using their own personal Netflix accounts is Exhibit #1.

I must be very clear: Unless I obtained a written representation signed by an officer of Netflix, I would never advise a corporate client[1] to rely on the Swank umbrella license to show a video from a “personal and non-commercial” Netflix account.

Why is this?  Because the one license does not trump the other.

To illustrate this concern, here is the best analogy of I could come up with[2]: if it’s bow hunting season and I get a bow hunting license, I can bow hunt.  I can commune with nature, test my skills, and if I’m lucky, come home that night and make some venison stew.[3]

But if, while eating my dinner, the police stop by to investigate an allegation that I shoplifted the bow and arrows, they won’t say: “Oh, you have a license?  Sorry, back to your stew.”

The same principle applies here.  A Swank license can definitely allow your institution to watch a covered movie you lawfully obtain.  But the Netflix license quoted by the member does not allow the movie to be shown beyond the account holder’s “household.”  And the language makes it clear the account is for “non-commercial” uses.  In other words: a copy used to further institutional operations was not lawfully obtained. 

Unfortunately, Swank is pretty coy about this concern.  Here is the language from the link provided by the member:[4]

Where can I acquire movies after we receive our license?

You can use movies that are secured from any legal source (DVDs, digital copies or any other legal format). While we cannot speak for other companies, we recommend checking the terms and conditions of any streaming service used to confirm that they do not prohibit public performance.  [emphasis added]

Now, in copyright law, everything is up for debate.  If I put this topic on the table at a gathering of three copyright attorneys, I guarantee you’d get six answers (maybe seven).  And of course, attorneys love it when their clients test the boundaries of the law: it gives us a chance to engage in high-stakes, nuanced, and learnedly arguments—and sometimes, it comes with a paycheck.

But one thing most attorneys in the business world respect is risk.  There is a risk that Netflix[5] could view the use as unauthorized.  And I stated above, unless there is rock-solid assurance from the vendor (in this case, Netflix) that it is authorized, use of a personal Netflix account for an institutional purpose is just too risky. 

How does this play out in the real world?  Large services like Netflix look for “teachable moments,” to bring lawsuits.  They send out private investigators, track IP addresses, and look for evidence of broad misuse.  Once they gather the evidence, they select a victim, and sue[6] (although in the case of Neflix, Section 7 of the License allows for them to resolve the matter via private arbitration).

What is the protection against that?  An institutional policy that bars use of personal accounts for professional purposes. 

There are some approaches to this educational dilemma that do pass my “sniff test.”  Some colleges encourage students to get Netflix accounts if they are taking a film class, so they can watch movies at home.  Near as I can see, unless Netflix starts putting some new “not for class” terms in its license, this is okay (but does not extend to the entire class using one student’s account…unless they are all in the same household).  

Similarly, if a history teacher wants to use their Netflix account to view “13,” at home, even if it is to prepare for a lecture or a discussion of the film in class the next day, that strikes me as a “personal” use.  But if their institution asked them to do it, or they wanted to use their account to watch the movie in class, that would not be allowed.[7]

I wish I could give the member clever answer informed by Fair Use, or coming up with some special rule that applies to libraries.  But licensing is a creature of contract, and if you accept the terms, they will generally govern.

So, just like this member, read those licenses carefully!

[1] I know it sounds rather cold, but in liability-land, schools are “corporations.”

[2] You should see the analogies I left on the cutting-room floor!  My favorite involved a building permit and pirated architectural plans.

[3] I do not bow hunt, but if I hunted at all, that is how I’d do it.  I have a friend who bow hunts; she is like Wonder Woman, but with white hair a much more practical gear.

[4] As of December 18, 2019 (I took a screen shot).  We’ll see if it’s there in a year or so.  I’m such a media influencer, maybe once Swank hears about me calling them “coy,” they’ll switch it up!

[5] As discussed in other columns, Netflix does have an “educational use” license for some documentaries. Their instructions to see if a movie is available that way is here: https://help.netflix.com/en/node/57695

[6] ASCAP, BMI, RIAA, MPAA, and DirectTV were the pioneers of this tactic. 

[7] I would like to thank Jim Belair (who gave me permission to credit him here) at Monroe 2 Orleans BOCES for a great discussion on the implications of this issue for New York public schools.  Most institutions don’t invest in DVD players anymore, which means that streaming is the way the access content.  But if the streaming service isn’t in the name of school (just the teacher or the administrator) use by the school risks violating their license.

The answer to all of the questions is: Yes, buying an MP3 audiobook on CD, copying it, and putting the copy on a drive accessible to others, unless the CD’s license authorizes it, would be copyright infringement [1].  

An audiobook’s license is what that defines the permission a user has to copy the file.  A typical license for an audiobook contains something like this:

When you purchase [Vendor] Content, [Vendor] grants you a limited, revocable, non-exclusive, non-transferable license to download or stream such [Vendor] Content to your computer and/or other device(s) solely for your personal, non-commercial use. You agree to not otherwise copy, reproduce, distribute or use the [Vendor] Content other than as expressly set forth herein. You will not sell, transfer, lease, modify, distribute or publicly perform the [Vendor] Content in any manner and you will not exploit it commercially. ”[2]

Some licenses do allow transfer of audio books onto multiple devices, and some may even provide for one person to transfer the MP3 to another; the permutations are only limited by the soft and hardware containing the copies, and the business plans of the publisher.

Which brings me back to the member’s question.  In the scenario presented, it is not quite clear if “transferable” (as used on the cover of a CD) means transferable between devices, or between owners; only by checking the actual licensing information on the product would you be able to determine that.  

It is rare for the owner of an audiobook to simply offer limitless transferability, but the fine print, not the cover, is where you’ll find out for sure.  And that is the dynamics (a good word for something as in flux and digital rights management)!

[1] Unless the recording is in the public domain, the conversion is for ADA accessibility purposes, if the use is a “Fair Use,” or some of the other very narrow exemptions apply.  But we’ll just focus on conventional, copyright-protected audiobooks that a publisher is selling for money.

[2] The mystery is killing you, right? This is an excerpt from the Audible license.

Two questions about a creative use of resources!  Truly a joy to behold.  Unfortunately, this is one of those questions where I have to be a killjoy.

Before I dig into why, let’s clarify: both members have asked about the “Digital Movie Codes,” or alphanumeric keys, on (or in) the packaging of certain DVD’s, Blu-rays, and 4K/UHD discs.  Through a process called “redemption,” the holder of such a code can download a copy of the movie in the package. 

After “redeeming” the code, the holder can download the film to their phone, tablet, or computer.  The idea is that once you’ve paid for the hard copy, even if it is copyright-protected, the purchaser should be able to view the movie on the medium of their choice.[1]

So, can these fantastic codes be used, transferred, or raffled off by a library?  Because of the diversity of licensing terms[2], there is no one, definitive answer.  But my time researching showed that a growing number of these codes are supported at the back end by a company called “Movies Anywhere.” 

Sensing their model is vulnerable to access code re-sale, Movies Anywhere’s Terms of Use firmly state:

Digital codes originally packaged in a combination disc + code package (for example, a combination package that includes a DVD, Blu-ray, and/or 4K/UHD disc(s) and a digital code) are not authorized for redemption if sold separately. By redeeming one of these codes, you are representing that you, or a member of your family, obtained the code in an original disc + code package and the code was not purchased separately. Your representation is a condition of redemption of the code and of your obtaining a license to access a digital copy of the movie. To read all terms and conditions applicable to using your Movies Anywhere account, click here. If you agree, click the REDEEM button above.

See that clause “you…obtained the code in an original disc + code package”?  THAT is what kills the joy and puts the kabosh on the clever transfers and re-uses posed by the members.  Simply by redeeming the code, the person who acquired it from the library (whether by gift, purchase, or luck of the draw) would be in violation of the terms of the license…not a very patron-friendly practice (although some patrons might disagree)!

But wait, there’s more.

Wouldn’t it be nice if the library could have a DVD-viewing room where the digital content of purchased movies was watchable?  That, too, is likely forbidden, since as of this writing, participation in “Movies Anywhere” is limited to “individuals.”[3]  “Companies, associations and other groups may not register for a Movies Anywhere account or use the Movies Anywhere Service,”  states Section 1.a.  Libraries, while not generally thought of in such terms, are “companies,” so arguably, even redeeming the codes to put the content on library-owned technology is not allowed.

Of course, when it comes to these codes, check the fine print.  If they are through a service that doesn’t bar transfer (or on the flip side, doesn’t require the actual purchaser of the package to be the redeemer), you may be able to proceed as envisioned.  That said, I doubt many movie companies will depart from the Movies Anywhere model.  Content providers have had almost two decades since the “RIAA[4] wars” to get this right, and they don’t want to leave any revenue on the table. 

How enforceable are these license restrictions?  We’ll see.  The industry is suing when the terms are violated, and defendants are fighting back (see ongoing case Disney Enterprises, Inc. et al v. Redbox Automated Retails, LLC, in federal court in the Central District of California).  That said, libraries are in a different place than most “companies,” when it comes to restrictions on information.  If there is ever a compelling, information-access reason—or a disability accommodation reason—to use one of the codes, that should be explored. 

P.S. I saw a lot of reasons why libraries can’t give away or sell these codes, but I saw nothing that stops patrons from buying the hard copy, using the code, and eventually donating the hard to the library.  THAT would be within the “First Sale” doctrine.  So while I know that’s the obverse of what the members envisioned, perhaps that can restore some joy to these questions.

Thank you.

[1] Of course, “redemption,” which requires an account, also means the content provider gets a view into your movie choices, viewing habits, and choice of media.  But I will save a privacy rant for another day!

[2] Disney, Lionsgate, Fox…each studio has its own special formula for redeeming these codes. 

[3] Who are “legal residents” of the U.S., no less.

[4] The fight over digital copying of music, eventually leading to many fans swearing off Metallica.