32 Information Licensing

Celeste Feather, Sharla Lair, and Jill Grogg

Chapter 32, “Information Licensing,” focuses on the ways that digital content can be shared and used by many through different licensing agreements. Understanding licensing is particularly important for information professionals given the proliferation of online content. Authors Celeste Feather, Sharla Lair, and Jill Grogg, all from digital services company LYRASIS, explore the development of best practices in creating license agreements.

Feather, Lair, and Grogg provide tables that depict usage terms and key licensing concepts. In crafting licensing agreements, information professionals need to understand who can use materials and under what conditions, the relevant legal issues, specific details of the business relationship, and technical aspects. All of these components are combined when creating either an individual or group Licensed Business Model that includes pricing. The authors explain several of these options—from a one-year licensing model to perpetual access with flat rates or rates based on usage.

While the authors note that most publishers’ worries have been overblown, there are still issues that are problematic for publishers such as the technological advances in interlibrary loan, specifically e-books, which make lending of materials much easier. Licensing is an ever-evolving field that will continue to change and adapt with digital advances. Information professionals will need to stay abreast of these changes to best run their information organizations and serve their communities.

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Information licensing is a maturing specialization in the information professions. For centuries, information professionals purchased printed materials in a straightforward purchase model from content providers. Even in more recent decades as information moved beyond the printed word, physical copies of images, video, and audio materials were still being acquired on microfilm, cassette, CD-ROM, and DVD. These items were placed on shelves and in storage cabinets to be used by one user at a time, similar to printed materials.

Digital content was well established in information organizations at the arrival of the twenty-first century. The acquisition of digital content, now mostly delivered to desktops and devices via the internet, is a transaction with different dimensions between the information organization and the content provider. As information organizations began to move into the realm of digital acquisition, one of the key aspects of the changing work was that the newly acquired content could be used by more than one user at a time. Use of digital content is also not necessarily limited by a user’s physical access to a building. As a consequence of the explosion of information via the internet and the ease of information access, user expectations increased dramatically. Many information organizations now choose to license digital content rather than purchase content in traditional physical formats. The dynamics and techniques of content licensing continue to evolve along with information technology.

After completing this chapter, the reader should have an understanding of the origins and development of information licensing, key terms in license agreements, the underlying business models for structuring digital content for acquisition, and the critical evolving drivers of this field of work. With this introduction, the new information professional will be positioned to understand the dynamics of licensing in information organizations.

TEXTBOX 32.1

New Issues in Licensing

Without the constraints of use that were present in the print environment, new realities needed to be addressed by publishers and information organizations. These include:

• How would access to online content be controlled and limited to the appropriate clientele? In what ways could the content be used?

• How would the quality and reliability of content delivery be ensured?

• Absent a physical copy of information, how would continuing rights to purchased content be guaranteed?

• How would the information be archived and preserved?

THE ORIGINS OF LICENSING

Commercial online information services originated from technology developments during the 1970s. Some of the earliest services such as Dialog,1 LexisNexis,2 and Westlaw3 remain major players in the licensed information services marketplace today. In the late 1980s and 1990s, several factors drove information licensing forward rapidly. Widespread adoption of the internet, the development of personal computers and user-friendly interfaces, the proliferation of information available on the World Wide Web (WWW), and a corresponding rise in user expectations all encouraged information providers to make online content available to information organizations under a new set of business practices. After centuries of stable business models, libraries and publishers had to adapt quickly to meet the demands of a world in which online content became the primary means of information exchange (see also chapter 20: “Change Management”).

A specialized field of digital content licensing emerged during the 1990s as information professionals began to address new challenges. Publishers and information organizations were accustomed to one-time acquisition of physical content based on the first-sale doctrine.4 The new availability of online content presented new challenges for accessibility, usability, and deliverability due to constantly evolving technology. Business relationships had to be reconfigured to support fast, flexible access to continually updated content.

Sales of physical volumes declined as subscriptions to online content increased, ensuring access to the most recent information. Since the presentation of information was no longer bound to the physical page, content was reformatted in ways that enhanced access and usability in the online environment. Dictionaries and encyclopedias became online databases of content, and journal articles were accessible via links from large multi-publisher online indexes. One-time purchases of content in the print era turned into annual subscriptions to online resources.

Legal contracts, or licenses, between content providers and information organizations became the norm as all parties endeavored to reach agreement on these critical questions related to online information. Specialized information professionals obtained the skills necessary to conduct these negotiations with content providers, often with support from legal teams at their organizations. The points of negotiation increased as technology and user expectations evolved.

In the late 1990s and early 2000s, information organizations and content providers focused on usage statistics as a key tool to analyze the impact and effectiveness of online content delivery for their clientele. Efforts by the International Coalition of Library Consortia5 (ICOLC) and Project COUNTER6 led to the creation of guidelines for gathering and reporting usage in standardized ways. Compliance with the Americans with Disabilities Act (ADA)7 of 1990 and other accessibility issues entered the discussions and negotiations between information organizations and content providers as time passed (see also chapter 5: “Diversity, Equity of Access, and Social Justice” and chapter 29: “Information Policy”). The full array of terms that are now commonly considered in content licenses is discussed later in this chapter.

The arrival of abundant online information delivered immediately with flexible and user-friendly interfaces forever changed the world of information organizations in significant ways. The model of individual organizations acquiring separate collections was no longer effective or efficient. The demands by users required information organizations to create new ways to expand access to content (see also chapter 4: “Diverse Information Needs”). In response to these demands, information organizations joined group purchasing collaboratives to leverage buying power with better prices and terms of use. Content providers shifted costs from print production to digital hosting, and business models now focus on content creation costs as there are no longer significant ongoing production costs. As a result, opportunities increased for group purchasing with creative business models. The variety of current purchasing and business models is discussed later in this chapter.

Discussion Questions

Information organizations always need to maximize their purchasing power and obtain the best terms of use. What strategies will be most effective when negotiating licenses? Can these goals best be accomplished by individual organizations or groups?

TERMS OF A LICENSE

License documents range from short and simple to lengthy and complex. However, four major types of license terms are commonly included in the document: usage, legal, business, and technical. Through years of experience, the library and information professional community has established best practices that address these major license issues.8 Nevertheless, information professionals should forge partnerships with all local stakeholders, including the procurement office and general counsel, to stay apprised of local requirements related to licenses and to negotiate appropriate language as needed.

Elements of a License

• Usage terms

• Legal terms

• Business terms

• Technical terms

Usage Terms

The usage terms of a license define who is permitted to use the content and what they are allowed to do with the content. How many pages of the content can be printed? Is interlibrary loan allowed? Can alumni access the content? It is important to note that usage terms override national copyright law in the United States (see also chapter 31: “Copyright and Creative Commons”). Therefore, license negotiators should be careful not to sign away existing rights under copyright law and thereby narrow the ways that users are permitted to use the digital content.

Licenses always include a definition of authorized users, the persons who are permitted to use the content. Employees, card holders, faculty, staff, and students are generally in the core group of users. Other authorized users can include the extended community such as on-site guest users or “walk-ins,” alumni, and temporary contract research staff.

Lists of authorized and restricted uses in the license establish what can and cannot be done with the content. If there is a statement that a use is not permitted unless explicitly listed, information organizations may be giving up rights normally permitted under copyright law. Key usage concepts and reasons why they are important appear in table 32.1.

Table 32.1. Usage Terms in Licensing. Usage Term Description Commercial vs. Noncommercial use Limits the purposes for which the content can be used. Generally, users at educational organizations are restricted to noncommercial uses. E-reserves and Course Management Systems Permits content to be linked or temporarily stored (cached) in educational courseware for assignment to students in classes. Printing and Downloading Allows a user to obtain a printed or digital copy in addition to reading in a browser. There may be issues with how much can be printed and the ease of printing usable portions. Remote Access Allows authorized and authenticated users to access content when they are not in the library. Resource Sharing and Interlibrary Loan Allows libraries to share resources in compliance with Section 108 of U.S. Copyright Act (https://www.copyright.gov/title17/92chap1. html#108), and CONTU Guidelines (http://digital-law-online.info/CONTU/contu24.html). Scholarly Sharing Permits users to share limited content occasionally with scholarly colleagues who are not authorized users. Text and Data Mining Permits researchers to use computer-based services to search, index, and extract information from the licensed content and load the results onto their own servers. The purpose is to discover new knowledge from existing information.

Legal Terms

Other terms in a license relate to legal matters such as liability, warranty, and which jurisdiction’s law governs the contract. How will a dispute related to the license be resolved? Under which state’s laws will the agreement be interpreted if there is a dispute? Who, if anyone, is liable if a natural catastrophe restricts either party from fulfilling obligations outlined in the license? Sometimes these terms need to be customized to meet the requirements of local or state laws. When no agreement can be reached on the precise language to address these matters, one negotiation strategy can be to omit some of the clauses, also known as “being silent.” Under this strategy, if a dispute ever arises, the parties will address the conflict at that time. Legal terms that are common points of negotiation and the reasons they deserve special attention appear in table 32.2.

Table 32.2. Legal Terms in Licensing. Legal Term Description Breach Violation of the license terms by either party or an end user. The terms specify how to cure the breach as well as what happens if it is not cured. Confidentiality License terms may be subject to open records laws and Freedom of Information Act requests in a state organization. The license may need to acknowledge an organization’s need to disclose. User confidentiality is often stated explicitly. Dispute Resolution Procedure to follow if parties to license cannot resolve a conflict. Force Majeure French for “Act of God,” acknowledging that certain events are out of the control of human beings, such as catastrophic weather-related system downtime. Governing Law and Jurisdiction Designates the law and court system that will be used to govern the license and address any related legal matter. Indemnification Protection by paying for the cost of damage or loss. Vendors generally indemnify licensees in the event that a third party sues the licensee for violating copyright in their use of the content. Many state laws prevent public organizations from indemnifying vendors for misuse of the content by users. Warranty Guarantees that specific facts are true. Vendors will warrant that they have the right to license all content and use of the content as specified will not violate any copyright.

Business Terms

Practical aspects of business relationships are also established in licenses. What fees are required and when will they be paid? Does the license cover a one-time purchase of content or an annual subscription? When can an organization cancel a subscription? Under what arrangements will the organization be able to access content in the future after it makes a one-time purchase?

The purpose of carefully negotiated business terms in a license is to ensure that both parties know the conditions that will govern their relationship in the present and future. Some contracts have a definite termination date, some renew annually unless one party decides to cancel, and others establish conditions for content licensed with perpetual access rights such as annual hosting fees that extend indefinitely. Table 32.3 provides key business terms to consider.

Table 32.3. Business Terms in Licensing. Business Term Description Cancellation In a multiyear agreement, specifies the conditions under which a library can cancel the contract, including budget reductions and the date by which vendor must be notified. Fees and Payment Specifies amount of fees to be paid, payment deadlines, and offsetting credits due, such as those for an increasing amount of open-access content in licensed collections. KBART For journal content, vendor will supply a title holdings list with metadata in compliance with the KBART (http://www.uksg.org/KBART) initiative. License Grant States type of acquisition: annual lease, one-time purchase with perpetual access, etc. Post-license Access Methods through which content acquired with perpetual rights will be accessible if license is canceled, including third-party archiving and rights to create/obtain local backup copy. Preservation Provides for the long-term accessibility of content on a known preservationhosting platform, including data format migration as technology continues to evolve. Also provides assurance that content will remain accessible if the current publisher or host ceases to exist. Portico (http://www.portico. org/digital-preservation/) and LOCKSS (https://www.lockss.org/) are two established preservation organizations. Transfer When journal content moves from one vendor to another, the original vendor is obligated to make certain that the access and perpetual rights transfer to the new site. The Transfer Code of Practice (http://www.niso. org/workrooms/transfer/) provides guidance. Withdrawal of Content If content is removed that renders the product significantly less useful, specifies how licensee will be compensated.

Technical Terms

Licenses also include clauses that address the technical aspects of how the online content will be provided (see also chapter 25: “Managing Technology”). What are the responsibilities of the actual hosting site and the content provider to make the content available? How will users receive support and technical troubleshooting? Will the content be available in a way that is accessible to all users? How is usage data gathered and shared? Can the content be linked to other services that will help users discover information of interest?

Users now have high expectations about online availability, linking, and accessibility of digital content. Table 32.4 lists key technical issues that merit careful attention by license negotiators so that acquired online content meets users’ needs.

Technical Term Description Authentication Procedures Supported The technical means by which users will be permitted to have access, usually either by password and/or IP address recognition. Disabilities Compliance Vendor may state compliance with the Americans with Disabilities Act and provide a VPAT (https://www.state.gov/m/irm/impact/126343.htm) form to show compliance with federal standards. Hosting Platform, Access Requirements, and Compatibilities Establishes the technical requirements for accessing the content at the host site. Persistent Links Vendor will comply with the OpenURL (http://www.niso.org/apps/group_public/project/details.php?project_id=82) standard and provide durable links to licensed content. Providing Metadata to Discovery Systems Vendor is obligated to make licensed material accessible for indexing and retrieval by the discovery service used by the licensee. Required Performance and Remedies Establishes the acceptable level of downtime in a year and what remedies are appropriate if a vendor does not meet this requirement. Usage Data Vendor will provide information about available usage reports. COUNTER and SUSHI (www.niso.org/workrooms/sushi) are the current usage data collection and reporting standards. User Support Hours during which vendor will provide user support and the expected response time.

BUSINESS MODELS AND PRICE STRUCTURES

Key components of a license are establishing what resource(s) will be accessed, for what period of time, by which organizations and users, and the price to be paid. The combination of these components is a licensed-content business model. As digital resources, organizational needs, and budgets evolve, business models and price structures must as well. Currently, there are several common business models for digital resource licenses.

“Key components of a license are establishing what resource(s) will be accessed, for what period of time, by which organizations and users, and the price to be paid.„

While an annual license for one resource is the most common approach, there are other variations. Table 32.5 includes variations for licensing and indicates when they typically are used. These variations can apply to content licensed either by annual subscription or by one-time purchase with perpetual access rights. They also apply whether the license is one year or several years in duration or for single institution or group licenses. These variations do not always stand alone, but can be combined to create a hybrid license.

Table 32.5. Business Models in Licensing. Business Model Description Title Level Access to one title; typically a single e-book or e-journal title. These types of licenses are typically negotiated directly with the publisher at the singleinstitution level. Database Access to one electronic database. May be established directly with the publisher or via a third party. A relationship with a single publisher may include multiple databases covered by the same license. A publisher may bundle multiple databases together and offer more attractive pricing. Aggregation Database(s) of content from multiple publishers selected based on subject matter or a spectrum of interests to be covered. Content access may vary widely depending upon embargoes from publishers and will typically not provide perpetual access or the complete range of a publisher’s content. Collection Multiple e-books, e-journals, or other digital content, including streaming audio or video, from a single publisher typically selected based on subject, interest, year, or any other criteria and sold as a single collection or database. This includes both current and archive content.

Pricing Models

Agreement as to how the price for a resource will be determined is a vital part of licensing digital resources. Some digital content may be priced at a flat rate regardless of library size, type, or other attributes, but many resources are priced based on one or more attributes of the licensing entity. The most common of these are full-time enrollment (FTE), for academic/school/special libraries, and size of population served, for public libraries. The price may be calculated based on the exact value of the attribute (e.g., FTE is exactly 1,534) or arranged in tiers (e.g., all libraries with FTE from 1,000 to 1,999 pay the same price).

Frequently used attributes, often in combinations, are included in Table 32.6 along with the type(s) of library/information organization or licensing institution(s) to which it is typically relevant.

Table 32.6. Pricing Attributes. Attribute Definition Organization Type Full-Time Enrollment (FTE) Number of students enrolled at a given point in time, typically measured annually. Can also be a subset of FTE, applied to a specific school or program(s) of study for more specialized resources. • Academic • Community/Technical Colleges • K–12 Population Served Number of eligible users of the library or institution’s resources. • Public Cardholders Number of registered patrons with a library card. • Public Carnegie Classification Institutional assigned level based on established methodology; only for accredited, degree-granting institutions in the United States (http://carnegieclassifications.iu.edu/index.php). • Academic
Attribute Definition Organization Type Simultaneous User Number of users able to access the resource at the same time. Most suitable for specialized databases and user groups. • All Specific User/Seat Assigned to specific users. While this is a potential model in all types of libraries/institutions, it is largely applied to corporate libraries. • Corporate Budget(s) Typically annual materials or operating budgets. • All Buildings/Sites Number of physical buildings or locations (branch libraries or campuses) where the resource will be accessed. • All Hospital Beds Number of beds in a hospital. • Medical Faculty Number of full-time faculty. • Academic • Community/Technical College Historical Spending The current level of spending for publisher content is used as a basis for establishing the price to be paid. This attribute was the widespread basis for many group licenses to publisher electronic journal collections. Often referred to as the “Big Deals.” • All

Single Institution versus Group Licensing

The growth of group-based approaches to purchasing content has been a hallmark of the licensing evolution. Library groups (most commonly known as consortia but also networks or systems) are plentiful and diverse. Most institutions are members of more than one group through which licensing options are available, and membership in multiple consortia allows a single organization to take advantage of various opportunities for group licensing. All of these groups’ licensing activities are intended to help organizations extend their purchasing power over individual approaches. When making a purchase, it is important to consider not only the price, but all the license terms negotiated via each group before entering into any agreement. The lowest cost might come with license terms that do not meet the needs of an individual organization in other areas.

Consortia can be based on geography, areas of focus, member attributes, or any other criteria that might help to create a beneficial relationship for the members of the consortia. Types of consortia range from loosely affiliated small groups with one or two common goals and no centralized staff or resources, to a large group with highly centralized and well-funded resources (county and regional systems, state libraries, and state-based education and higher education systems are prominent examples). Groups that engage in licensing are diverse, and so are the ways in which they fashion their business models.

Through a consortium, each information organization may, regardless of what other members of the group decide, choose to license a resource at a reduced price. Commonly, this approach is called an opt-in group license. An opt-in group license may include terms that encourage higher participation among members via even more favorable prices and terms. Another type of group license is known as an all-in license, where common decision making may be required across group members and may offer the widest access and greatest price efficiency across the group if all the members participate. Consortia vary in their use of the opt-in, all-in, and other licensing techniques. They also vary in whether administration and payment of the license will be direct between each library and the publisher or coordinated through the consortium.

Group licenses may also be paid by a group centrally on behalf of constituent members. State libraries are a prime example, as they may provide statewide access to some resources. Such access may include public, K–12, and academic libraries in some combination. Other consortia may also fund group licenses all or in part, especially if they are affiliated with publicly supported education or higher education systems.

CONCLUSION

How will licensing evolve? Licensing is far from a static enterprise. Technological innovations and economic developments will continue to drive licensing evolution, as will changes in pricing models and core terms.

With time, many initial publisher fears about the economic threats related to the sale of digital content have been overcome or never materialized. However, some issues remain contentious, such as technological advances in interlibrary loan (ILL), specifically e-books. New supporting technologies for ILL provide different capabilities, and publishers are increasingly interested in finding a way to capture revenue for the temporary use of their content. While licensing terms regarding ILL and other types of content sharing have been negotiated and discussed since the advent of digitized materials, issues surrounding both are not settled and require continued dialogue between publishers and libraries. Other user demands, such as data mining, force all stakeholders to remember that as access to and use of digitized content mature, so do the accompanying technologies.

Discussion Question

There is a growing pressure for information organizations to license digital products and services that are outside of traditional purchasing parameters. How might this phenomenon impact the development of licensing for information professionals?

Economic developments, such as publisher consolidation and large company mergers, also affect how libraries license materials. While the number of libraries and consortia remain relatively constant, there are fewer and fewer independent companies on the other side of the negotiation table. Entities such as EBSCO and ProQuest continue to diversify and purchase smaller content providers, as well as other service-based companies including book jobbers and integrated library system (ILS) products, among others. Additionally, increased publisher consolidation introduces challenges. When two previously independent publishers with unique cultural and business norms merge, libraries can find themselves renegotiating terms once thought settled and standard.

Pricing models will continue to evolve to meet changing user expectations, organizational needs and budgets, and publisher needs and product offerings. This arena will likely be very active as organizations work to meet rising user expectations with limited resources. New and evolving collaborations among groups of libraries will continue to form for this purpose. Publishers will continue to package their content as effectively as possible to maximize purchases and subscriptions. Yet publishers and libraries both continue to feel the effects of open-access (OA) initiatives (see also chapter 33: “Open Access”), both established and emerging. Traditional pricing and usage models do not apply in the OA realm, and it remains to be seen how radically OA will alter the licensing landscape.

The basics of licensing have fallen into place since the 1990s, and evolution of core terms will continue based on changing needs (e.g., text mining) and technology changes (e.g., mobile technologies). With this maturity and widespread prevalence of licensing as the primary avenue through which organizations acquire access to information, there is a movement to use the license as a vehicle to advocate for, and obtain new, organizational and user rights that may not be in current licenses. Author publishing rights beyond those offered directly by publishers to authors is one example. Consortia have become the strongest voices in advancing best licensing practices through their consolidated representation of many information organizations.

Perhaps the familiar axiom, “the only constant is change,” best describes licensing in the twenty-first century. Terms that information organizations thought were settled become unsettled; what was once unambiguous in licensing becomes less so, and vice versa. Unforeseen changes in technology and economics ensure that licensing remains a vital and imperative core function.

NOTES

1. “ProQuest Dialog,” Wikipedia, 2015, https://en.wikipedia.org/w/index.php?title=ProQuest_Dialog&oldid=695448199.

2. “LexisNexis,” Wikipedia, 2017, https://en.wikipedia.org/w/index.php?title=LexisNexis&oldid=765933156.

3. “Westlaw,” Wikipedia, 2017, https://en.wikipedia.org/w/index.php?title=Westlaw&oldid=766510750.

4. United States Department of Justice, “1854. Copyright Infringement—First Sale Doctrine,” 1854, U.S. Attorneys’ Manual, 2017, https://www.justice.gov/usam/criminal-resource-manual-1854-copyright-infringement-first-sale-doctrine.

5. “Guidelines for Statistical Measures of Usage of Web-Based Information Resources, 1998, revised 2001, 2006,” International Coalition of Library Consortia, 2006, http://icolc.net/statement/guidelines-statistical-measures-usage-web-based-information-resources-1998-revised-2001-0.

6. “COUNTER,” Project COUNTER, 2017, https://www.projectcounter.org/.

7. United States Equal Employment Opportunity Commission, “Americans with Disabilities Act of 1990,” 2017, https://www.eeoc.gov/eeoc/history/35th/1990s/ada.html.

8. “Liblicense: Licensing Digital Content,” Center for Research Libraries, 2014, http://liblicense.crl.edu/licensing-information/model-license/.