From Library Law Blog:
Minow: The central question I’ve been asked to explore is whether museums, archives and libraries can charge for the use of scans they’ve made of items that are in the public domain.
Edwards: I believe that the answer is a qualified “Yes”. The qualification depends in part upon the financial situation of the institution. In our case it’s very important to us. It’s about 15% of our revenues. Our budget is only about $20,000 a year and we’re all volunteers. Also, I would suggest that there needs to be a service charge included to cover the institution’s cost to provide the copy. It’s also true that many institutions do not require additional funding enabling them to provide copies of photos at nominal prices. If the provided photos are to be used for a commercial endeavor, why shouldn’t the institution receive some additional benefit for its efforts. We price a personal use 8”x10” photo at $8 to members and as much as $50 for commercial use in a publication. Over the course of the lawsuits against us, we learned the importance of the “value added” to these photographs by the society. The collecting, researching, cataloguing, digitizing, protecting and preserving of the photographs makes it possible for people to use and enjoy them. And these benefits are not accomplished without costs. When providing these images, you need to have a contract signed by the user that specifies exactly what the authorized use will be, such as personal study, one-time use for publication, etc. Regarding the value added concept, we’ve had Archives Committee meetings during which we’ve reviewed photos and have found them useless. Without the context – who’s in the picture, who took it and when and where – historic photos can be of little value. When we find such pictures without any context, we often sell them for about 25 cents, because that’s all they’re worth.
Minow: Tell me about the lawsuit.
Edwards: Actually, there were two. In the first in 2004 a local author sued us in state court. The claims were 1) defamation of character, 2) interference with contract and 3) interference with business advantage. We attended a full day of mediation, with the mediator going back and forth between two private rooms stating positions and concessions. Then the attorney would explain the legal terms to me. I thought we had an agreement, but afterwards, our counsel gave us a 4 or 5 page letter that had us relinquishing much more than I had originally thought, so we rejected it. Plaintiff subsequently dismissed the suit. I believe that plaintiff and his counsel were aware that our insurance-funded counsel would defend us so long as the law suit was for damages. By suing us in federal court seeking declaratory relief and costs of the suit and counsel, plaintiff knew that BHS would be stranded without insurance-paid counsel.
Minow: What happened next?
Edwards: As expected, the author filed in federal court, making a copyright claim. Since the photos were in the public domain, he said that trumped our contract agreement [17 U.S.C. § 301 Preemption clause]. We received great pro bono attorney help from Howard Rice (Simon Frankel and Shannon Scott), but we (really me and the BHS) couldn’t afford the expense nor the time to litigate. We settled out of court.
Minow: Can you tell me anything about this settlement?
Edwards: As with the first law suit, it was dismissed by plaintiff. In fact, there was a settlement agreement, but the terms are confidential. I’m unable to comment on any of the events that led up to these dismissals which are not part of the public record. The only statement that I was authorized to make is: “The Berkeley Historical Society and [the author] have resolved their dispute regarding access and use of photographs of the Berkeley Historical Society. The resolution permits [the author] to continue his historical efforts using the copies he has obtained of photographs of the Berkeley Historical Society, while at the same time preserving Berkeley Historical Society’s policies for usage of its photograph collection. To clarify any possible misunderstanding of any previous statements or emails, there was no judicial determination regarding the claims of either party in the previous lawsuit between [the author] and the Berkeley Historical Society.”
Minow: Tell us about the role of insurance.
Edwards: This is extremely important. We belong to the California Conference of Historical Societies. Through our membership with CCHS, we had a policy that defended us since we were sued for damages [money]. We were paying about $500 / year for the policy and we had $2 million aggregate liability coverage. Our insurance company, Nonprofits’ Insurance Alliance of California (arranged through Truex Insurance), served up counsel which defended us in the state lawsuit.
All our state case expenses were paid by the insurance. Separate from one’s organization’s liability insurance, it’s important for the individual to have an umbrella policy as part of home owner’s insurance. I was sued both in a personal capacity and in my role as the society’s president. My personal insurance did not cover these claims. Lesson learned: Get an umbrella policy as part of your homeowner’s insurance if you volunteer with a historical society or similar group. Make sure the group has a liability policy that protects you, or don’t volunteer.
Minow: Didn’t the insurance pay to defend you in the federal case?
Edwards: No. That suit did not ask for damages. [It asked for a declaration that our policies were unenforceable as violating the Copyright Act. It also asked for attorneys’ fees and costs.] We asked everyone we knew for help. Thanks to a Board member’s connection we received a recommendation to approach the law firm Howard Rice. Partner Simon Frankel generously agreed to accept our defense on a pro bono basis. As an all-volunteer organization with a $20,000 annual budget, this law suit could have bankrupted us without pro bono counsel.
Minow: What about using technological protection measures, like digital watermarks?
Edwards: We started “selling” photos in the late 90s, and that was all new territory for us. Remember, we’re all volunteer. It required much effort for us to assemble our original One-Time-Use agreement, and commercial sales were rarely made. More recently, we’ve discussed the introduction of digital watermarking, but we have a certain inertia, with limited resources and a vast need for technically savy volunteers. We still don’t use digital watermarking, but we would if we had the resources.
Minow: So how do you control the images today?
Edwards: For a start, we no longer provide photos in a digital format. We make exceptions on rare occasion, but these have to go through our Archives Committee. Our normal resolution is 300dpi which doesn’t support further quality copying or scanning. We require users to sign our vastly improved one-time use agreement.
Minow: What would you do if you found someone was violating the use agreement? Your insurance wouldn’t pay if you’re the plaintiff, right?
Edwards: That’s right. But we could go to small claims court. I think the filing fee is on the order of $70. You can file it yourself if your claim is under $5000, as I’d expect ours would be.
If I had it to do over
1) Ensure that your organization has liability insurance with coverage extending to its directors and volunteers. BHS is a member of the California Conference of Historical Societies; University of the Pacific; Stockton, CA http://www.californiahistorian.com/ which offers such insurance. This paid our defense costs in the state case.
2) Individually, I would have an umbrella policy. I was sued in both an official capacity, as President of the historical society, and as an individual in the state law suit. This points to the importance for a volunteer to have umbrella coverage with one’s home owner’s or renter’s insurance. I’d had umbrella coverage in my State Farm homeowner’s policy some years earlier, but I had let it lapse without appreciating the potential consequences.
3) Invest some time, money and effort in developing a tighter one-time use agreement for sharing your photos. We thought it was satisfactory, but we know more now, and have tightened it up. Now it reads: [ed. note: click here: BHS-OneTimeUseAgreement.doc]
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