The U.S. Court of Appeals for the Second Circuit recently ruled in favor of several freelance writers in a major copyright dispute, also affecting publishing heavy-hitters such as The New York Times Co., Mead Data Central Corp. (the owners of NEXIS) and Time Inc. Magazine Company. The controversy centered around whether publishing companies would be required to obtain additional permission from freelance writers when their work was reproduced in electronic and CD-ROM databases after being published in various print periodicals. Defense lawyers have not yet decided if they will appeal.

The decision is the latest ruling in a 1993 lawsuit brought by the National Writers Union and a group of freelance authors. The plaintiffs alleged that the publishing companies infringed on their copyrights by placing individual articles, previously published in periodicals, on electronic databases without any additional authorization from the writers. At the time, the publishers sold their print archives to electronic database companies without seeking the permission of freelance authors whose works had previously appeared in print.

On cross motions for summary judgment, the U.S. District Court for the Southern District of New York held that the publishing companies’ use of the articles was protected under the "collective works" privilege under Section 201(c) of the Copyright Act of 1976, 17 U.S.C. 201(c). The collective works privilege limits the owner of a copyright in a collective work (e.g., a newspaper or magazine) to use individually copyrighted contributions only in 1) the original collective work, i.e. the particular edition of the periodical; 2) any revision of the collected work; or 3) any later collective work in the same series.

Because the electronic databases in question were neither original collective works nor later works in the same series, the issue in dispute was whether the databases could be considered "revisions" of the original collective work, as the publishers contended. The district court held that the scope of the privilege was broad enough to permit the inclusion of the authors’ works in the databases, and that making the articles in question available to electronic publishers constituted a revision under section 201(c).

In the latest opinion by Chief Judge Ralph Winters, the 2nd Circuit examined the process through which the articles are placed in the databases and the nature of the databases themselves. Before appearing in a database such as NEXIS, the periodical is stripped down to its individual articles becoming one of millions of individually retrievable articles, losing the content and arrangement of the original periodical. The selection, coordination and placement of pre-existing material in the original periodical are the copyrightable attributes of a periodical which represent the unique efforts of the author or editor. The court reasoned that under these circumstances, when the copyrightable attributes of the originals are lost, the electronic databases could hardly be considered "revisions" of the original periodicals.

The immediate impact of the ruling on freelancers and the periodical publishing industry is not clear, although there is a broad potential. Conceivably, publishers may be required to pay an extra fee to freelance writers for articles already reproduced in electronic databases or be forced to delete them. The National Writers Union has stated it is ready to pursue thousands of claims for retroactive fees, but has proposed a licensing system that would allow publishers to obtain electronic rights to freelance works through a clearinghouse that would end the litigation.

However, many publishers have already instituted agreements specifying that no additional fees are to be paid for reproduction in databases. The New York Times Co. has required freelancers to sign such agreements for the past four or five years, and more publishers are likely to move in a similar direction, if they have not done so already.