UnCover copyright case

[Irvin Muchnick <irvmuch@yahoo.com>]

                FEDERAL COURT AFFIRMS AUTHORS=92 RIGHTS
                   IN CLASS-ACTION COPYRIGHT SUIT
                      AGAINST DIALOG=92S UNCOVER

A federal court in San Francisco has ruled against the Dialog
Corporation=92s UnCover service on the issue of authors; rights in
commercial copying as part of a class-action copyright infringement
lawsuit by freelance authors. In a summary judgment order issued October
13, United States District Court Judge Fern M. Smith ruled that, under
Section 201(c) of the Copyright Act, permission from authors is required
for reproduction of their articles from collective works such as magazines
and journals.

In October 1997, the authors sued UnCover, which is owned and operated by
the CARL Corporation and Dialog, charging that UnCover violates authors'
copyrights by reselling previously published articles without permission.
UnCover sells over 1,000 articles a day via an Internet index from 17,000
magazines and journals. Customers pay up to $10 per article copy.

The district court's ruling coincided with the emergence of new evidence
that UnCover's practices included permanent storage of scanned articles on
optical disks. The evidence called into question sworn statements made to
the court by Ward Shaw, chairman and CEO of CARL and one of the founders
of UnCover.

In a declaration to the court dated October 15, Shaw admitted that he had
made "inaccurate" statements in prior testimony. Shaw had stated that
articles were electronically stored for resale only when publishers
granted permission. Shaw's admission confirmed the plaintiffs' allegations
that UnCover stores optical images of every article it delivers without
regard to prior permission. Shaw added that the company henceforth would
stop this practice. Judge Smith then directed the defendants to certify to
the court by October 23 that UnCover's electronic storage devices - known
as WORM disks - have not been altered since the filing of the lawsuit.

John D. Shuff, an attorney for the plaintiff-authors, said: "We are
pleased with the court's affirmation of authors' rights under Section
201(c) of the Copyright Act. We are also disturbed by the defendants'
misrepresentations about permanent storage, which tended to mislead
libraries, information consumers and the court into viewing UnCover as a
harmless transitional copying service. Our discovery that UnCover has been
creating its own digital anthology of articles, often without
authorization from any rights holder, compounds the legacy of the
defendants' longstanding "sell first, ask permission later" practices, and
reinforces that this is a classic case of piracy against both publishers
*and* authors."

UnCover was started by CARL in 1988. Both Denver-based companies were
purchased in 1995 by Knight-Ridder Information, Inc. Last year
Knight-Ridder Information was sold to the British information company
M.A.I.D, which renamed the combined entity the Dialog Corporation plc.

The plaintiffs in the class-action lawsuit against UnCover, CARL and
Dialog are being represented by Robins, Kaplan, Miller & Ciresi and the
Law Offices of Daniel A. Reidy.

Media coverage of the 201(c) ruling has appeared in the Associated Press,
the *Chronicle of Higher Education*, and the website of the *National Law
Journal*. The latter article can be accessed at <www.ljx.com/LJXfiles/
freelance.html>.

I am a consultant for the plaintiffs' attorneys. Authors or others are
invited to contact me at <irvmuch@yahoo.com>.

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