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Fair Use Assumptions

While there is no  Supreme Court case or statute that definitively answers
the issue, I think the law is going in the direction that license
agreements can be more restrictive than the fair use provisions of the
federal copyright law.  The copyright law establishes a framework for the
protection of intellectual property in the absence of contract. It attempts
to strike a balance between protecting the creators of original material
(by, among other things,  granting them property rights in their work) and
ensuring the free flow of information necessary for further creativity (by,
among other things, permitting the fair use of coprighted materials).  

All this, however, can be altered by a valid contract.  If the parties wish
to enter into an agreement that includes giving up rights that they
otherwise would have, they can do that.  At least some courts, including
the United States Court of Appeals for the Seventh Circuit, are willing to
enforce those contracts.  (See Pro-CD v. Zeidenberg, in which the court
ruled that a shrink wrap agreement prohibiting the copying of  a database
was enforceable, even if the underlying database might not be  protectible
by copyright.)

Now one issue that is more unclear is the effect of the license agreement
on third parties who are not signatories to the agreement--i.e., the
patrons of the library.  Here, the best guess is that the contract itself
could not be enforced against the the third-party user.  Therefore, the
fair use provisions would apply to the user, and the user could not be sued
by the copyrgiht holder for breach of contract.  (This is assuming that the
user has not entered into some sort of agreement for use of the material,
even by signing something from the library or school governing use of
copyrighted materials, or agreed to some on-screen limitations to use.)
However, many license agreements with libraries provide for the termination
of the license if the library fails adequately to police its users. 

So, if a library signs an agreement that expressly limits copying or other
use of the licensed materials in ways that are more restrictive than the
copyright law, the best bet is that that contract is valid and enforceable
against the library.  The library should not assume that notwithstanding
the provisions of the agreement it can use the materials in the same it has
used materials not covered by a license agreement.  To ensure that
libraries can use materials consistent with the fair use provisons,
libraries should insert language in the license agreement expressly
permitting those uses.

Very truly yours, 

Rodney L. Stenlake
655 Orange Street, Unit 5
New Haven, Connecticut 06511
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