If they pulled that off it would mean the government effectively repealed the notion of copyright (I could read any book I wanted to on rapgenius). I'm not sure how likely that is.
In United States copyright law, fair use is a doctrine that permits <<limited>> use of copyrighted material without acquiring permission from the rights holders. Examples of fair use include commentary, search engines, criticism, news reporting, research, teaching, library archiving and scholarship. It provides for the legal, unlicensed citation or incorporation of copyrighted material in another author's work under a four-factor balancing test.
-- They will need to overcome the spotify issue, presumably [1]
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[1] The underlying issue is the model appears to be leveraging in-copyright source material. The rights holders will argue its a for-profit platform for re-publication, rather than a permitted use in a limited capacity. That is the issue at hand for the market and/or courts to decide.
viz:
17 U.S.C. § 107
Notwithstanding the provisions of sections 17 U.S.C. § 106 and 17 U.S.C. § 106A, the fair use of a copyrighted work, including such use by reproduction in copies or phonorecords or by any other means specified by that section, for purposes such as criticism, comment, news reporting, teaching (including multiple copies for classroom use), scholarship, or research, is not an infringement of copyright. In determining whether the use made of a work in any particular case is a fair use the factors to be considered shall include:
1 the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes;
2 the nature of the copyrighted work;
3 the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and
4 the effect of the use upon the potential market for or value of the copyrighted work.**
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However, there is reason to think a deal could be structured that benefits all parties. The business has potential to add real value, as it is a new channel for adding new life into legacy content libraries (for example).
One of the biggest questions will be how transformative annotations are, and whether that will give adequate protection if users upload large chunks of copyrighted text. Google's use of thumbnails in image search wound up being covered by fair use[1] for this reason, and a judge recently ruled that book scanning was covered by fair use[2], as well. From the article:
> "The use to which the works in the HDL are put is transformative because the copies serve an entirely different purpose than the original works: the purpose is superior search capabilities rather than actual access to copyrighted material," wrote Judge Baer. "The search capabilities of the HDL have already given rise to new methods of academic inquiry such as text mining."
This might set precedent for a showdown over annotations that quote extensively from the source text, since online annotation systems also "[give] rise to new methods of academic inquiry."
The main point here is that laws about fair use are pretty vague, and new technologies always shake things up. We don't know what is legal and what isn't until it's put before a judge. In the case of Google's book scanning, the court case took seven years, which shows just how tricky this area of law can be.
Over annotations that quote extensively from the source text
The page they have up with the Topic Blog post, however, is just a 100% reproduction with flyover notes. If You were to reprint the entire Harry Potter series, and add notes to the margins, it might seem similar. I believe that was already a subject of legal debate, though. Which might be precedent [see notes 1,2].
That being said, I don't per-se disagree with any of the issues being raised in your post. Also, I wouldn't rule out they will find a way to license content. The issue is just at what price? That's the spotify connundrum, IMHO.
Judge Patterson said that reference materials were generally useful to the public but that in this case, Vander Ark went too far. He said that "while the Lexicon, in its current state, is not a fair use of the Harry Potter works, reference works that share the Lexicon's purpose of aiding readers of literature generally should be encouraged rather than stifled." He said he ruled in Ms. Rowling's favor because the "Lexicon appropriates too much of Rowling's creative work for its purposes as a reference guide."
[2] Another example, might be you-tube. Who has its "annotations" listed below each work of art. These are commonly referred to as "Comments". Some of the comments can now even be time-inserted into flyovers, more similar to the "flyover" type annotations currently up on the linked article. This is an example where there is both licensing and unlicensed content as a hybrid model.
That's a great point about the Harry Potter Lexicon case. One thing that's interesting about that ruling is how narrow it was, and the implication that if the Lexicon contained more extensive commentary it would be legal.
Here's a question[1]. Let's say you took a work that was not in the public domain but has been the subject of extensive academic study, like A Perfect Day for Bananafish. Every line of that short story has been quoted in an academic paper at this point, and each quote was fair use. What would happen if you compiled all of those papers in a single website? That website would contain the full text of A Perfect Day for Bananafish, but in a fragmented form. Would it still be fair use?
Now let's say you pieced the quotes together like a jigsaw puzzle, and included the extensive commentary in flyover annotations. Is it still fair use? Probably not, would be my guess.
What if only half of the quotes were pieced together, and the rest was summarized? What if the annotations of the summaries included quotes that fill in the rest of the story? Where exactly is the line drawn?
I'm not arguing for the sake of arguing, I promise. I just find it interesting. It's like we're facing the metaphysics of copyright, sort of a Borges As IP Lawyer thing.
[1] Posed as a thought experiment, because I have no idea what the answer is.
That website would contain the full text of A Perfect Day for Bananafish, but in a fragmented form. Would it still be fair use?
This is a good question. The Academic purpose, however, would seem to be very useful as a criterion for Fair use (under point 1). The completeness of a compendium, however, may create its own issues (under point 4).[1]
The closest commercial example, might be sampling of music. Perhaps the early 80's, with the emergence of DJ culture etc. Small pieces of extant art, repurposed. This did not usually impact the original adversely. And the issue is not that no new value is being created -- it most certainly is -- its just that these things tend to end up in court. So, to avoid that, people settle or license.
I would be open to hearing other arguments or cases, but I think that we would need to start with something that has at its origin a commercial endeavor. Another example that comes to Mind is Shep Farley, the Obama Hope poster. This had a good amount of transformation on top of a sample of an image from a photograph. But ended up being settled out of court. See eg: