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Distance Learning and Copyright in the For-Profit Environment

Oct 1, 1998
Laura Gasaway

Copyright law can create significant stumbling blocks for courses and programs offered via distance learning. Using copyrighted works in face-to-face teaching often is exempted, but the law is more restrictive for uses of the same works for distance learning

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Copyright law can create significant stumbling blocks for courses and programs offered via distance learning. Using copyrighted works in face-to-face teaching often is exempted, but the law is more restrictive for uses of the same works for distance learning. Most of the discussions of how copyright affects distance learning have focused on courses taught by nonprofit educational institutions whether as a part of the regular curriculum or as continuing education courses. This column addresses potential copyright difficulties that may be encountered by corporations, which provide courses and programs for their employees, or that for-profit organizations offer as degree programs or training courses.

Section 110(1) of the Copyright Act of 1976 and the accompanying guidelines exempt uses of copyrighted works for nonprofit educational purposes when the works are used or performed in face-to-face teaching in a classroom in the course of instruction. Distance learning in a nonprofit educational institution also enjoys some exemptions, but they are narrower than the "classroom exemption." For example, for distance learning, under Section 110(2) the performance of copyrighted works without permission from the copyright holder is limited to nondramatic literary and musical works even if that performance is directly related and of material assistance to the teaching content of the course. There are additional restrictions on where the reception must take place.

Distance learning courses offered by for-profit or commercial organizations enjoy none of these exemptions, however, and providers must either seek permission to use copyrighted works or rely on general fair use. Fair use of a copyrighted work is judged based on four factors, according to Section 107: (1) purpose and character of the use, (2) nature of the copyrighted work, (3) amount and substantiality used and (4) market effect. Nonprofit educational use is one of the uses under the first factor that tends to be favored, although not all such educational uses so qualify.

Commercial entities that reproduce, perform, transmit or display copyrighted works for a distance learning course will find it difficult to argue successfully that the activities are fair use, at least under two factors. The commercial nature of the undertaking makes it unlikely that courts will find that such use satisfy the first factor. Under the fourth factor, after Texaco, courts probably would find that using copyrighted materials in commercially-produced distance education courses negatively impacts the potential market for the work, at least the copyright owner's right to license the use of their works for such purposes.

Factors two and three might favor use of copyrighted works in distance education courses offered by for-profit organizations: the nature of the work and amount and substantiality. Depending on the nature of the work, a court could find that this factor favors a for-profit entity's use. If the work is an audiovisual work, however, this is unlikely. Since not even nonprofit educational institutions can perform audiovisual works under the Section 110(2) exemption, a commercial entity's performance of an audiovisual work for distance education certainly would not be exempted. The third factor, amount and substantiality used, may give commercial providers some comfort. If the portion of the copyrighted work used is de minimis, then use of the portion may be exempted under this factor. A court would consider all of the factors together, however, and on balance, use of copyrighted works in distance education courses by a for-profit provider would not be a fair use in all likelihood.

The only solution for corporate distance education is to seek permission, obtain a license to use copyrighted works and pay royalties. Establishing a

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