Can A Contract Remove Fair Use Rights?

from the we-may-soon-find-out dept

Fri, Feb 11th 2011 12:54am — Mike Masnick

Last year, we wrote about a ridiculous situation in which the Association for Information Media and Equipment (AIME) threatened UCLA, after discovering that the school had set up an online video service, that let UCLA professors put up legally licensed video clips so that students could watch them from their computers. AIME claimed that UCLA's license did not allow for such uses. UCLA claimed this was fair use. After initially taking down the videos, UCLA decided this was worth fighting over and put the videos back up last March. At the time, we thought a lawsuit from AIME would come quickly, but apparently it took until December. UCLA recently filed a motion to dismiss the lawsuit, setting up a few reasons why -- including the claim that, as a state university, it has sovereign immunity from copyright lawsuits and, also, that AIME is not the copyright holder in question, and thus has no standing.

However, as Kevin Smith (not the filmmaker we've been talking about recently, but rather someone at the Duke University Library) notes in the post above, there is an interesting claim in the motion, where UCLA suggests that the breach of contract claim (which comes under a state law) is preempted by federal copyright law. If I remember the details correctly (and you copyright lawyers out there, feel free to correct me), with the Copyright Act of 1976, that law basically superseded any state laws that covered the same grounds. Mostly, people have thought this meant that state copyright laws effectively were wiped out (though, as we've seen, some awful remnants of those laws remain).

However, what UCLA seems to be arguing, is that federal Copyright Law could also wipe out portions of state contract law as well, if those aspects are covered by copyright. It's a creative way of saying that you can't contractually give up aspects of copyright, such as fair use. Now, there are some areas where it's known you can't give up what copyright says via contract. You can't, for example, contractually give up your termination rights (which let you take back a copyright you assigned to someone decades later). Also, it's not quite the same thing, but the recent ruling in the Augusto case has suggested that there are situations where you don't give up copyright exceptions (in that case, first sale) -- but it's distinguished by the fact that the court effectively said there was no license on promotional CDs (despite a stamped on "license" text).

So rather than relying on something like that, UCLA seems to be relying on preemption of state contract law, to say that even if you signed a license agreement, fair use rights can still apply. It's an interesting point. I'm of a mixed opinion on whether or not it's a good thing, however. I am a fan of such copyright exceptions, and would be worried if we started to see fair use "licensed away" in more situations. However, would that also mean that we couldn't license away other aspects of copyright law? Would that cause trouble for certain types of licenses, like Creative Commons licenses?

I'm guessing that the court may skip over this issue entirely, in that it can just hand UCLA a victory on the sovereign immunity or lack of standing claims and just move on without addressing this issue. However, I do expect that it will show up again in other lawsuits at some point.

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Filed Under: contract, copyright, fair use
Companies: aime, ucla

56 Comments

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TechnoMage (profile), 11 Feb 2011 @ 2:21am

I've actually wondered if licences/contracts could influence copyright and vice versa.

GPL / Creative Commons, are more of a reaction to old copyright laws(/practices), and less of an "ideal" solution. (IMHO)

If nothing else, it would be an interesting thought experiment to play around with licences/contracts being null/void (to differing degrees) when it comes to copyright.
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Anonymous Coward, 11 Feb 2011 @ 3:14am

Another sterling example of why copyright law causes more trouble than it's worth; if this monopoly didn't exist, there wouldn't be this conflict between laws.
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Rob8urcakes, 11 Feb 2011 @ 3:17am

The accepted precedent in the UK is that one may NOT 'contract out' of any rights, obligations or duties as specified in legislation or case law made thereunder.

Is it not similar in the USA?
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Anonymous Coward, 11 Feb 2011 @ 3:46am

Isn't the point about GPL/CC licences that they give the recipient /more/ rights than copyright does? There's no contract until someone uses those rights. One can still use a CC/GPL work under normal fair use etc. without having to obey the restrictions.

So I'm saying this shouldn't impact those licences, either way.
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Bengie, 11 Feb 2011 @ 5:06am

No you can't
My understanding is you can't sign away any rights via contract.

By signing this contract, you forfeit your right to no cruel or unusual punishment. In the case that you break this contract, police will be allow to torture you.

That'll keep people from messing with you. Just make them give up their rights.
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OldMugwump (profile), 11 Feb 2011 @ 5:10am

Isn't that what a NDA does?
The accepted precedent in the UK is that one may NOT 'contract out' of any rights, obligations or duties as specified in legislation or case law made thereunder.
Hang on. Isn't that exactly what a non-disclosure agreement does? If I receive information from someone and sign an NDA agreeing not to disclose it, and to use it only for a particular purpose, it seems to me I've contracted away any fair use rights that would otherwise apply. I'm pretty sure NDAs are enforced by courts, even in the UK.
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Bengie, 11 Feb 2011 @ 5:16am

about NDAs
An NDA isn't considered free speech because it requires access to someone else's information. It's more akin to defamation than free speech.
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Anonymous Coward, 11 Feb 2011 @ 5:22am

Re:
I would say you could sign away rights on your own copyrights, but not someone elses.
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Richard (profile), 11 Feb 2011 @ 5:26am

Re: Isn't that what a NDA does?
I'm pretty sure NDAs are enforced by courts,
I've seen lots of NDAs - I've never seen a case where one was actually enforced. Does anyone have an example?
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Anonymous Coward, 11 Feb 2011 @ 5:28am

Re:
So, say I'm a student at UCLA (I'm not) and I get a CC licensed work that requires attribution. I decide to reproduce it for educational purposes with no attribution. According to this, that'll be fair use, and I can safely ignore the CC license, right? I mean, if this argument holds... which may not be the case.
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Richard (profile), 11 Feb 2011 @ 5:39am

Re: No you can't
Lots of UK employment contracts make you sign away "the moral right to be identified as the author" of works created under your contract of employment. (Although they usually say that the employer will try to be fair if possible - but doesn't want to be absolutely bound)
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Rob8urcakes, 11 Feb 2011 @ 5:53am

Sorry guys, but many of you are missing the point.

If something is in legislation, then it's law and CANNOT be dismissed by you or anyone else via a contract.

However, if a law also states that you're allowed to opt out, then that's OK. But if there's no specific law covering the terms of your agreement with another party, then that's your contract and the signatories have to abide by that.

It's really that simple. Honest.
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Steve R. (profile), 11 Feb 2011 @ 5:55am

Bastardization of Contract Continues
My initial reaction is the question of whether there even was a legitimate contract. Anonymous makes a good comment "I would say you could sign away rights on your own copyrights, but not someone elses."

But there is a darker aspect to the bastardization of contracts that really has not received sufficient scrutiny. That is two parties enter into an agreement to "manipulate" a third party. (Essentially depriving the third party of an ability to negotiate.)

For example, go into most computer stores and try to buy computer without the Windows Operating system. You will be told something along the lines that it can't be done because of licensing restrictions or other lame excuse. You should be able to freely negotiate the terms of purchasing a computer.
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Anonymous Coward, 11 Feb 2011 @ 5:59am

Re:
Are you 100% sure about that? Where I leave we have "un-renounsable" rights (the right to free speech and the right to work wherever you want whenever you want, for instance) that make things like NDAs and non-competition contracts unenforceable, because you can't renounce your rights via a contract. But not every right (and not every law) is like that. American companies that contract here usually makes us sign their NDA and non-competition stuff... but it's a mere formality for us, as it is signed here and thus has no validity. That doesn't mean they can't sue you for lost revenue if they can prove that you said something covered by the NDA and that made them lose money. I too have never seen that actually be enforced.
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Anonymous Coward, 11 Feb 2011 @ 6:07am

Re: Re:
where I live
(sorry)
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Anonymous Coward, 11 Feb 2011 @ 6:11am

MODOK says you owe MODOK money for the use of these video's. AIME will take you to court for this money.
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Chris-Mouse (profile), 11 Feb 2011 @ 6:22am

Fair use and the CC licenses
So, say I'm a student at UCLA (I'm not) and I get a CC licensed work that requires attribution. I decide to reproduce it for educational purposes with no attribution. According to this, that'll be fair use, and I can safely ignore the CC license, right? I mean, if this argument holds... which may not be the case.

I don't see why this wouldn't be the case. With any work covered under copyright, you automatically have all permissions granted under fair use. With a CC license, you are granted additional permissions as long as you adhere to the terms of the license. If you fail to do so, your license disappears, and you're back to the copyright default, which is fair use.
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vivaelamor (profile), 11 Feb 2011 @ 6:27am

Re: Fair use and the CC licenses
"So, say I'm a student at UCLA (I'm not) and I get a CC licensed work that requires attribution. I decide to reproduce it for educational purposes with no attribution. According to this, that'll be fair use, and I can safely ignore the CC license, right? I mean, if this argument holds... which may not be the case."

If it's fair use then the CC terms wouldn't apply anyway. A CC licence doesn't give you more rights, only more control.
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Anonymous Coward, 11 Feb 2011 @ 6:28am

Here is one of those great questions:

Is fair use a "right", or something granted by the law itself?
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jilocasin (profile), 11 Feb 2011 @ 6:32am

Unfortunately there are no such safeguards in the US
It would be nice, and perhaps we should be pestering our congress critters about it, but there is no laws protecting basic consumer rights from being 'contracted out'.

Therefore Americans daily find themselves in the situation of having to contract away their basic consumer protections. Most/all companies do it.

Some of the more common gems include:
Agree to have all disputes tried in the company's home state (Sony's trying to use that one against George Hotz)

Agree to have all disputes settled by binding arbitration with with a firm of the contracting company's choosing. At your own expense.

Agree that in the event that their product goes disastrously wrong, all they are liable for is the purchase price or some token amount (like $5).

Agree that there can be no class actions law suits (recently successfully challenged in the 9th circuit I believe).

Agree that you can't use their product to disparage the company or write 'naughty' things. (Think can't use Microsoft Word to write papers disparaging Microsoft. I think this one was challenged successfully in New York.)

And my all time favorite, which should instantly render any contract immediately null and void. The ever popular:

"We reserve the right to change any of the terms of this agreement, at any time, and for any reason."

If companies want to contract all sorts of things between themselves that's fine, but they shouldn't be allowed to legally do the same to consumers.

Before someone jumps in with the usual;

"If you don't agree with the terms then just don't buy the product/service"

That doesn't work since they are standard terms used by everyone. Take it or leave it doesn't work with, and shouldn't be legal with the public.
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Overcast (profile), 11 Feb 2011 @ 7:00am

Still - in the end, regardless of the layers of confusion they pile on... most copyrights don't meet this core requirement: "To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries."

In the majority of these cases, they hamper progress - not promote it.
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vivaelamor (profile), 11 Feb 2011 @ 7:06am

Re:
'Is fair use a "right", or something granted by the law itself?'

Those options aren't mutually exclusive. Copyright is technically a lawful right, regardless of whether it is a right outside of law. Fair use would seem to be a more natural right, as it is protecting something that you'd be free to do regardless of the law.
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Anonymous Coward, 11 Feb 2011 @ 7:19am

Copyright misuse
Can A Contract Remove Fair Use Rights?

On first look, there may also be a copyright misuse argument here.
Fair use is a matter of public policy. Contracts contrary to public policy are void. Thus, contracts purporting to take away fair use of copyrighted works may amount to copyright misuse.
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Anonymous Coward, 11 Feb 2011 @ 7:47am

But wasn't part of the reason for having these copy 'right' laws to also replace contract laws to some extent as well?
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Anonymous Coward, 11 Feb 2011 @ 7:48am

Re:
(or, rather, to replace contracts).
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average_joe (profile), 11 Feb 2011 @ 8:15am

I've read a couple cases on this issue:

In Vault Corp. v. Quaid Software, 847 F.2d 255 (5th Cir. 1988), Vault contended that Quaid breached its license agreement by decompiling or disassembling the program in violation of the Louisiana Software License Enforcement Act. Louisiana�s License Act permitted a software producer to impose a number of contractual terms upon software purchasers such as prohibition of copying, and modifying and/or adapting the program in any way. The Fifth Circuit held that the License Act conflicts with the Copyright Act: (1) the Copyright Act allows archival copies to be made while the License Act authorizes a total prohibition on copying, (2) the Copyright Act grants protection for a period of time while the License Act is perpetual, and (3) under the License Act all programs may be protected while under the Copyright Act only original works of authorship can be protected. As such, the License Act is preempted by the Copyright Act and the license agreement is unenforceable.

But that's not the end of the story...

In ProCD v. Zeidenberg, 86 F.3d 1447 (7th Cir. 1996), the Seventh Circuit held that rights created by contract are not equivalent to any of the exclusive rights within the general scope of copyright. They explained that while copyright is a right against the world, contracts only affect their parties and they do not create exclusive rights. For example, if someone who found a copy of a copyrighted program on the street, they would not be affected by the license agreement of the parties, though federal copyright laws would limit the finder�s ability to copy or transmit the application program. Courts usually read preemption clauses to leave private contracts unaffected. Section 301 does not interfere with private transactions in intellectual property, and it does not prevent states from respecting those transactions. Contracts between private parties takes nothing from the public domain. Since a contract is not equivalent to any of the exclusive rights within the general scope of copyright, therefore the contract may be enforced.

Note that Section 301 of the Copyright Act prevents states from passing or enforcing laws equivalent to copyright.

If you read the notes to Section 109 of the Copyright Act, which deals with the first sale doctrine, it states that a contract limiting a user's first sale rights may be enforceable by an action for breach of contract, but not by an action for copyright infringement.

In Storage Tech. Corp. v. Custom Hardware, 421 F.3d 1307 (Fed. Cir. 2005), the Federal Circuit held that to succeed in a copyright action, the source of the copyright holder's complaint must be grounded in a right protected by the Copyright Act. However, rights granted by contract can be much broader. For example, say a copyright holder grants a licensee a license to make exactly one copy or a book and to read all but the last ten pages. If that licensee makes 100 copies, that is copyright infringement. But if that licensee reads the last ten pages, that is breach of contract.

What does all this mean? I believe that a contract whereby the parties agreed that the licensee would not make particular use of material would be enforceable as a breach of contract, but not copyright infringement.
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average_joe (profile), 11 Feb 2011 @ 8:18am

Re: Re:
So, say I'm a student at UCLA (I'm not) and I get a CC licensed work that requires attribution. I decide to reproduce it for educational purposes with no attribution. According to this, that'll be fair use, and I can safely ignore the CC license, right? I mean, if this argument holds... which may not be the case.

I believe that would be a breach of contract, but not copyright infringement.
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Anonymous Coward, 11 Feb 2011 @ 8:41am

Re: Re: Re:
breach of contract

Privity.
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Spaceman Spiff (profile), 11 Feb 2011 @ 8:42am

Re: Attribution
Well, to my mind, any use of contents that are not one's own invention, ESPECIALLY in an academic setting, absolutely requires attribution whether or not it is required by license, law, or whatever. At the least, it is a simple mark of respect for the work and efforts of others. At the very least, it is a quid pro quo kind of situation if you expect recognition of your own work sometime in the future.
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The eejit (profile), 11 Feb 2011 @ 8:42am

Re:
Thank you for the cites, AJ.

That's pretty interesting, especially with regards to contract/fair-use interaction.
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average_joe (profile), 11 Feb 2011 @ 8:50am

Re: Re:
Sure thing. The copyright-contract boundary is a particularly interesting issue.
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average_joe (profile), 11 Feb 2011 @ 8:52am

Re: Re: Re: Re:
Privity.

Is there not privity between the right holder and the licensee? Can you explain what you mean? Thanks.
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Anonymous Coward, 11 Feb 2011 @ 9:32am

Re: Re:
No, simply because as a student you are not an "instrumentality of the state government".

In other words, you are not eligible for immunity, as is the state, under the 11th Amendment.

Of course, as an idividual you are entitled to raise all defenses otherwise provided by Title 17, the statutory provisions comprising US copyright law.
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Anonymous Coward, 11 Feb 2011 @ 9:35am

Re: Re: Re: Re: Re:
...between the right holder and the licensee? Can you explain what you mean?

You're a law student. Do some student stuff.

Here's the outline: You alleged "breach of contract". In order to allege breach, you must first allege contract.

Going a little bit further... a "license" (in this context) amounts to a "promise not to sue". Not all promises are enforcable. Elsewhere in this thread, someone has mentioned quid pro quo. Along with privity goes "consideration".

As I said, you're a law student: Do some student stuff. This is really basic.
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Anonymous Coward, 11 Feb 2011 @ 9:39am

Re:
Rights under law an individual may possess are waived all the time under contract law.

As noted in the article, there are some instances where the statutory scheme specifically states that some rights are, in essence, "non-waiveable", but even as to these there are invariably exceptions. Renewal of copyright is one example, but there are means in the law by which they can be truncated.
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Anonymous Coward, 11 Feb 2011 @ 9:43am

Re: Re:
I know of no state that embraces by law that NDAs are unenforceable.

NCs are stated under California law as unenforceable under law as against public policy, but this is unique to California. I am aware of no other state that has adopted this position.
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average_joe (profile), 11 Feb 2011 @ 9:46am

Re: Re: Re: Re: Re: Re:
No need to be such an asshole.
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Matt (profile), 11 Feb 2011 @ 9:51am

Re: Bastardization of Contract Continues
An agreement between Microsft and Company A doesn't force you to always accept terms that include a copy of Windows.

You can either accept the terms Company A is willing to accept or you can shop elsewhere. There are companies that will sell computers without Windows.
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average_joe (profile), 11 Feb 2011 @ 9:56am

Re: Re: Re: Re: Re: Re:
Despite you're being a complete and total asshole about it, I see that you are correct that a CC license is not a contract, so it cannot restrict the licensee's rights under the Copyright Act. I gladly and fully admit that I was wrong, and I thank you for pointing out my error. I am, as always, excited to be proved wrong, because it means that I learned something new. Thank you for making me see something in the proper light.
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Anonymous Coward, 11 Feb 2011 @ 10:12am

Re: Re: Re: Re: Re: Re: Re:
You might want to think about this a bit longer.

One of the first lessons you learned in contract law is that a contract is, to use an semi-equation, O+A+C=K.

Measure each term under a CC scenario and you may well identify circumstances where a contract has indeed been formed, and specific performance may be ordered by a court.
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Anonymous Coward, 11 Feb 2011 @ 10:20am

Re: No you can't
Yes you can - you can waive a great many rights, which is essentially the same thing in this context. For example, you have the right to be free from unreasonable searches by the state, but you can give up that right by consenting to a search of your dwelling. However, there is often a limit on a person irrevocably waiving their rights�consent to a search can be withdrawn (to a point). Further, giving up rights granted by statute vs giving up rights granted by the constitution (especially fundamental rights) will be treated differently by courts.
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btr1701 (profile), 11 Feb 2011 @ 10:20am

Re: No you can't
> My understanding is you can't sign away any
> rights via contract.

Sure you can. The Constitution guarantees your right to keep and bear arms, but you can certainly contractually agree with someone else not to own firearms in exchange for consideration, and that contract would be fully enforceable.

Likewise, you can forgo your right to free speech for consideration (non-disclosure agreements, etc.) and they will be upheld as well.
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average_joe (profile), 11 Feb 2011 @ 10:41am

Re: Re: Re: Re: Re: Re: Re: Re:
That is interesting, thanks. I really haven't read up too much on CC licenses, GPL, copyleft, etc. I'm thinking it through, and I don't see how a grantee of rights is contractually bound with the grantor. I'm sure there's an argument, but I'm not seeing it. It seems to me that the only action available would be in copyright, not contract. I'll have to give it some more thought. I'd look up caselaw on this, but I don't think there is any in the U.S. Is there any caselaw on point?

You know, I go to school in Louisiana, and we have our own civil law tradition that differs from the other 49 states. To us, the requirements for a valid contract are: (1) capacity, (2) consent, (3) cause, and (4) object. Offer and acceptance fall under consent. What's interesting is that consideration is not necessary for a contract to be binding in my state. We're also the only state not to adopt Article II of the UCC.
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Anonymous Coward, 11 Feb 2011 @ 11:08am

Re: Re: Re: Re: Re: Re: Re: Re: Re:
I'm sure there's an argument, but I'm not seeing it.

Reliance.
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Anonymous Coward, 11 Feb 2011 @ 11:41am

Re: Re: Re: Re: Re: Re: Re: Re: Re:
Is there any caselaw on point?

Jacobsen v Katzer (Fed.Cir. 2008)
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average_joe (profile), 11 Feb 2011 @ 11:53am

Re: Re: Re: Re: Re: Re: Re: Re: Re: Re:
Thanks. I'm reading it now.
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Jeff Rife, 11 Feb 2011 @ 12:08pm

Re:
GPL / Creative Commons, are more of a reaction to old copyright laws(/practices)

The important thing to remember is that GPL does not restrict the end user more than copyright...instead it explicitly grants more rights, as long as you observe the limitations on those extra rights.

Since there are hundreds (thousands?) of CC licenses, I can't say that all of them are also just extensions to right, so some might be more restrictive than normal copyright.
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DandonTRJ (profile), 11 Feb 2011 @ 12:09pm

Yes, you can lose fair use rights via contract law. That's the essence of an end user license agreement. Check out the 2004 case of Davidson & Associates v. Internet Gateway. Defendants reverse-engineered Blizzard products to emulate its Battle.net services, violating its EULAs/TOSs. The defendants claimed the EULA (which is a valid clickwrap/shrinkwrap contract under the ProCD case another commenter mentioned before me) was preempted by the Copyright Act, and the court shut them down. Preemption only occurs when a state law "infringes one of the exclusive rights provided by the Copyright Act" � and a right to restrict certain otherwise lawful fair use activities (like reverse engineering) is one that wouldn't exist without the EULA, so it wasn't preempted.
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Steve R. (profile), 11 Feb 2011 @ 12:50pm

Re: Re: Bastardization of Contract Continues
Yes, there are companies that will sell computers without Windows. However the logical implication of what you are saying is that it is acceptable for companies to lock out a third party because there are alternatives??? This logic begs the question of whether the onerous business practice under evaluation is legitimate or not.
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Anonymous Coward, 11 Feb 2011 @ 3:53pm

Fair use? This is America. Nothing's fair.
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Bengie, 12 Feb 2011 @ 7:19am

Re: Re: No you can't
You can't forfeit your right to unreasonable searches because as soon as you agree, it is no longer unreasonable.
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Mike Linksvayer (profile), 12 Feb 2011 @ 2:52pm

Re: Re:
No CC license has ever been designed to be more restrictive than default copyright; they only grant permissions. If fair use or other exceptions and limitations apply, one can ignore any CC license offered. If this is not the case for any CC license, it is a severe bug. See �public domain� and �other rights� on license explanations, eg http://creativecommons.org/licenses/by-sa/3.0/ and the relevant FAQ at http://wiki.creativecommons.org/Frequently_Asked_Questions#Do_Creative_Commons_licenses_affect_fair_ use.2C_fair_dealing_or_other_exceptions_to_copyright.3F
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just a lawyer, 16 Feb 2011 @ 9:13am

Re:
there is a case directly on point - bowers vs. baystate. you can contract away fair use and may other copyright and other IP related rights.
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Niall (profile), 20 Feb 2012 @ 3:00am

Re: Re: Re: No you can't
It might be an anreasonable agreement though: Sign this or we will never ever give your car/property back under any circumstances ever. Why do we have your car? Well, you were driving on the public highway at 1 mile an hour under the posted speed limit, you might go over it you PIRATE!
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Lawrence Stanley, 22 Jul 2013 @ 5:46am

Pre-emption
The Copyright Act provides for preemption under Section 301(a). For decades, federal courts have ruled that the Copyright Act preempts contracts when the contract provisions at issue cover rights equivalent to exclusive federal copyright rights. See, e.g., Health Grades Inc. v. Robert Wood Johnson University Hospital, 634 F. Supp.2 1226 (2009) ("Thus, even though the state contract rights Health Grades seeks to protect here may be narrower than those provided by the Copyright Act, because they prohibit these uses for commercial purposes, there is no extra element that renders these rights qualitatively different from the rights granted by the Copyright Act.")

Generally speaking, a contract cannot remove fair use rights.
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Kent Henricksen, 6 Mar 2016 @ 9:51am

fair use
I wonder if this could be used against youtube with the current fair use fiasco?
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