Coursepacks-outsourcing online distribution

I have a question about fair use in the preparation of coursepacks. I know that many people do not feel there is such a thing after Kinko's and MDS, however, I have determined for my institutions (Univ. of Texas System Universities) that there is an important and significant distinction between a for-profit copy shop and a nonprofit, internal University operated copy shop and that it is appropriate for the latter to utilize fair use in the preparation of coursepacks for classes at the institution, in accordance with guidelines that we have created that limit the amount that can be used without permission and the period of time over which that amount can be used without permission. This determination is NOT the subject of my question, though I recognize that it may be hard to resist saying something about it.

My question is about the effect on the ability of such a non-profit internal University copy shop to claim fair use and thus not pay copyright permissions on that portion of its coursepacks that is considered under our policy to qualify for fair use if the copy shop involves a *for-profit entity* in some aspects of its service, in particular, its distribution, as follows:

The for-profit entity will
1. create electronic coursepack files (pdf) 2. provide a secure server on which pdf coursepack files will reside

    (encrypted/password protected) with an interface that permits     students to select and read coursepacks online or print them out,     but not "download" the digital files

The for-profit entity will collect a per-student fee of $5.00 for "membership" that gives the student access to the secure server/user interface. When a student "selects" a coursepack to purchase, the price of the coursepack is the price determined by the nonprofit internal University copy shop, based on its costs to make the coursepack available (administrative personnel costs, plus copyright fees, if any, and some part of the overhead of running the shop). This money does not involve a profit and would go directly to the University copy shop as it does now and.

The for-profit entity makes its money (profit) from the student membership fees and from advertising it sells on its site. It may also make money if a student uses an advertising link to go to the external advertiser's site and actually buys something there.

Assuming that the internal nonprofit University copy shop enjoys a modest claim to fair use, does it lose its claim entirely if it utilizes the for-profit coursepack online distribution system described above? If you think it does lose its claim to fair use, is it a matter of the shop's no longer really being entirely nonprofit, or might this activity only negate the claim for those coursepacks that are actually distributed online?

Georgia Harper
University of Texas System
Office of General Counsel
Phone: 512 499-4462
Fax: 512 499-4523
Email: gharper[_at_]utsystem.edu
Visit the Copyright Crash Course at
<http://www.utsystem.edu/ogc/intellectualproperty/cprtindx.htm> Received on Mon Apr 12 1999 - 16:33:08 GMT